Wednesday, February 27, 2013

Carlyle Group’s Rubenstein Gives Bernanke High Marks

There's nothing like an insider who operates on leveraged deals, he will always give high marks to Fed chairman Ben Bernanke for pumping out more money. The money being pumped out ends up in the banking system, where it is then loaned out, often as part of leveraged financial deals.

One of the largest borrowers of this cheap Bernanke created money is Carlyle Group, which was co-founded by David Rubenstein. The below chart shows the increase in Bernanke created money since the 2008, the year the financial crisis hit. Rubenstein likes this

He spoke with Bloomberg TV’s Cristina Alesci in Berlin, Germany. He said that buyout firms will put “much more” money to work this year as deals pick up.  He said, “We are going to see a pickup in M&A activity and a pickup in corporate buyer activity…I do think that this year we will see much more money deployed than you did see last year.”

Rubenstein also said, “I think the Fed has done an extraordinary job for the United States and is really the hero of the last four years…The Fed has been a real hero to the U.S. economy and the global economy…I suspect they will keep interest rates pretty low for a while.”

Why would Rubenstein think Bernanke money printing, which distorts the economic structure and will eventually lead to significant price inflation, this makes Bernanke a hero? 

Maybe this is why:

In addition to making it easier for Carlyle to borrow money, the Bernanke money has been flooding the stock market.

Here's the performance of Carlyle stock over the last year. It has shown a gain of approximately 45%

Yup, Bernanke the hero.

(HT Alan at PEUreport)

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