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NEW YORK (AP) - A mortgage-backed investment fund created by the Carlyle Group faltered near collapse Thursday, in what analysts saw as a sign that more bad investments need to be cleared out before markets can begin righting themselves.
Shares of Carlyle Capital plummeted nearly 90 percent and rattled stock markets around the globe after the fund said late Wednesday that it expected creditors to seize all of its remaining assets — investment-grade mortgage-backed securities — because negotiations to prevent liquidation had failed.
"Someone somewhere has got to fail and this is it," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC. "I think there comes a point when you need to see some of this stuff get flushed out. The bad news just keeps getting deeper every day."
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