Friday, May 22, 2009

Oligarchs Gain Control of Bank United

What banks the government isn't nationalizing, they are directing into the hands of the oligarchs.

A group including Blackstone, Carlyle, and WLRoss have acquired BankUnited.

Blackstone founder Pete Peterson was instrumental in getting Treasury Secretary Geithner his position at the New York Fed that led as a stepping stone for Geithner to his Treasury post. Carlyle founder, David Rubenstein, plays tennis with President Obama's top economic adviser, Larry Summers.

It's a small club.

The deal includes a loss-sharing agreement on $10.7bn of the bank’s $12.8bn in assets. The government will take 80 per cent of the first $4bn in losses and 95 per cent of any remaining losses, people familiar with the transaction said, according to FT. Sweet, very sweet.

The federal government will receive some warrants giving it a share of any future upside.

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