I've been in Japan for 12 years and on LBO list since just before 9-11 (I think the usual cryptoreactionaries were still arguing about Pilger on Yugoslavia until 9-11).
The Carlyle Group's website is less forthcoming than the yakuza sites Hakki sent me to. Heck, I found more 'hidden' forgotten pages at Enron than the CG; it's been cleaned up no doubt.
Carlyle made a big move into 'distressed properties' in S. Korea. I've got something from a Korean-American site on how that works and will post it later.
It's a real trend that these HUGE equity holding groups should take their overvalued portfolios and move into E. Asia in a big way. But the conflicts of interest here are so obvious that we don't even need the word 'conspiracy'. The pro-Carlyle code words in Bush's speech in Japan are: clean up the loans and carry out reforms.
'Clean up the loans' means strip assets from any bank that dares call itself one and hold a firesale for private, unregulated equity groups/merchant banks. Who is doing the ratings of these loans? The FSA of Japan under the supervision and expertise guidance of plants from S&P and Moody's (the guys who steered the whole world wrong on Enron btw).
When they make the pips squeak at the small and medium size companies, I don't think it's going to kick off robust economic growth. For one thing, many are now arguing that it will take a yen close to purchasing power parity with the dollar to reflate the Japanese economy, which means 150-160 yen to the dollar. The US isn't going to go that far--135 seems to be the level O'Neill (Alcoa can't wait) has in mind because he has to keep old industry Republicans happy, and what the US can't import from Japan because of the high yen/cheap dollar it can always import from Korea, Taiwan and China.
I've got a real bad feeling about this.
'Carry out reforms' means continue with the legislative efforts to 'deregulate' banking and finance in Japan so as to get the Japan client state ready to back the US on this issue at the next round of WTO talks. Oh, and sell off the huge postal savings and insurance while you are at it, no matter what the millions of account and policy holders want (Koizumi made a name for himself because when he was a lesser politician he would fight with the bureaucrats, and of course, once put in charge of the Postal Ministry, he fought all the time with that ministry. The bureaucrats view of him was that he was incompetent and had no attention span to get anything done and had no coherent view of anything he wanted to get done.
In many ways, in fact, Japan is further along than the US is on reform and deregulation of banking and finance (perhaps adding to all the problems?)! I know both sides because I reside in Japan but am a US citizen, and I can tell you, the Japan resident side of me has far less paperwork to do and far more freedoms to do what I want with my money than the US citizen side of me has (even before 9-11, the Dept. of Treasury wanted annual reports of ANY bank or equity accounts I had overseas; in Japan they don't care--if only the bin Ladens had to do the paperwork I have to!).
Even if you aren't rich, the US has to be one of the OECD countries with the most hassles over taxes, reporting of income, and setting up savings for retirement (none of the Canadians, Britons or Australians I talk to have to do anything like what I have to do as a US citizen). No, this isn't just Jannuzi shooting off his mouth. Here is one example. I started my own private savings for retirement with a UK offshore insurance firm (rip off fees and all) since I think retiring on a Japanese public retirement isn't going to happen, but I don't pay social security in the US (which, remember, is really supposed to be a supplement to retirement income anyway). The amounts are so small that one has to go through firms like this. Everyone else wants at least 50,000 USD minimum up front before they even consider you a potential customer. Once this UK insurance company (Scottish Provident International to name names) bought something in the US it had to DUMP all its US citizen clients. Which means I had to switch to another company (Hansard) and pay all the initial fees again. None of this would be a problem for the Japanese citizen--or apparently Canadians, Australians or Britons.
I guess only if you are a rich American do you get to avoid all the all the problems. Of course the rich guys also get help at the US embassy and consulates here BY APPOINTMENT, while the rest of us get a number and the run around.
Next, consider, although the Dow hasn't fully crashed it hasn't gone anywhere for two years either. Companies like Enron were never going to pay dividends anyway, were they? They were going to just keep the pyramid going on increased value of the stock (Dow 36,000 here we come!). That need to earn more and more to keep the whole game going is going to go somewhere, and the world of distressed Asian assets make sense. So why not send the US president to loosen things up a bit?
It's a real trend that interests like Ripplewood and Carlyle and American and British banks are going into this. I actually think that allowing some selling and buying of loans might help many financial institutions. I have my doubts though what Carlyle's qualifications are in rehabilitating legitimate banks or the legitimate businesses they have lent money to. Other than how much money they have and their political connections, that is. They will also benefit, by the way, by being the first wave of foreign capital back into E. Asia. Buy low, sell high. That's the name of the game.
Poppa Bush is real proud of his boy today, 'cause it looks like not only defense but 'distressed assets' are going to pay beaucoup to the family portfolio. Sooner than later. I predict that's the end of the line for Koizumi because everyone will realize, too late, there is no magic in letting the US turn your economy's financial system into a temperate Philippines. There won't be any big scandal or 'told you so's' from Japan. Even if there were, BW and FT and FEER will just report that the reforms would have worked, if only Japan hadn't waited so long. Too little, too late. It's not reporting, it's clipping and pasting from previous articles.
Charles Jannuzi
PS: more stuff on Carlyle to follow