Financial Crisis was the Perfect Storm, Say Wall Street Bankers

[youtube http://www.youtube.com/watch?v=n0XIF84AtYg&w=420&h=315]

In this video, Wall Street bankers who were testifying before Congress explained how the recent financial collapse was the perfect storm. Hear Dylan Ratigan and Eliott Spitzer, among others, discuss the recent financial crisis and what should be done about it.

Joint Castle Harlan Champ Private Equity Purchase

transactionCastle Harlan – together with Champ Private Equity (its Australian affiliate) – sold United Malt Holdings for $655 million. This transaction accords Castle Harlan with “a nice return on its investment.” GrainCorp – the fourth largest malt producer in the world – was the buyer.

 
A total of $90.54 million in equity was invested by Castle Harlan and Champ Private Equity in the company when it made the purchase a few years earlier from Tiger Brands and Congara Foods. Castle Harlan paid up approximately 55 percent of the equity; Champ made up the difference. Together, this investment makes the total dollar return (to both firms) 4.5 times the equity that they invested. There is an internal rate of return of around 80 percent.

General Electric Co. Warns of Touch Economic Times Ahead

When a major company, such as General Electric Co., warns of economic hardships, it’s certainly time for the rest of the American economy to listen. In a discouraging report on Friday, GE posted a 46% drop in their fourth-quarter earnings and warned that they, and many other companies, may be in for a difficult year.

As GE’s Chief Executive Jeff Immelt told analysts on an investor conference all, “The environment in total is very tough.” The quarterly revenues slipped 5% to $46.2 billion.

U.S. Economy Showing Signs of Recession

While the U.S. economy is on the brink of a recession, the economy did expand at a .6% annual pace during the first quarter. Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina, said that, “If you were to take out the swing in inventories, these numbers would be negative.” In an interview with Bloomberg Television, he continued by saying,“We think we’re in recession, but I don’t know that the GDP numbers are going to turn negative at all in 2008.”

The largest part of the economy, household spending, grew during the last quarter at the slowest rate that it has since 2001, during the time when the U.S. was in a recession.