Friday, August 29, 2008

Insiders Are Ready To Start Bank Buying Binge

Randal Quarles, the ultimate insider,--current managing director of Carlyle Group, former Treasury Undersecretary and former Treasury liaison to the Plunge Protection Team, who, since early in the year, has accurately called the play by play developments in the banking crisis (See Carlyle Group's Plan to Takeover the Banking Industry)-- told Reuters that he expects to see Private Equity start buying into the banking sector before the year is up:

Private equity firms have been eyeing troubled banks and thrifts as investment opportunities as the credit crisis has taken a toll on share prices.

Randal Quarles, managing director at Carlyle Group CYL.UL, one of the world's largest buyout firms with $83 billion under management, forecasts that many of the investments will be minority stakes -- which can be accomplished without dramatic changes in the Fed's rules.

Quarles, previously undersecretary of the U.S. Treasury, said there could be an uptick in investment activity before the end of the year.

"It is going to be hard to raise (capital) in the public markets, particularly for depository institutions," he said. "I think that's going to drive a lot of private equity deals."
Interesting situation, we have a very smart guy in Quarles ready to take the plunge in bank stocks, while we have Bernanke about to the torpedo the entire economy (see Crashing Money Supply Numbers Signal Depression). If Bernanke doesn't start pumping M2 money and if Quarles starts buying without that M2 money pumping, Quarles is going to have his ass handed to him, courtesy of Bernanke.

On the other hand, if Benanke figures out that he has launched a torpedo at the economy, he may actually start printing money again and Quarles will make a fortune.

Stay tuned. We are watching money supply very closely and will report on what we see.

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