"One of irony's greatest accomplishments is that one cannot punish the wrongdoing of another without committing a wrongdoing himself"
Anonymous
Man, you have to love the the mystical world of private equity... Not only most of the PE heads are treated like royalty in the financial press but now in a bazaar twist, marquis private equity shops that have been able to profit handsomely from the leveraged buyout craze, now stand to benefit once more on essentially the same transactions... Here is a quote from a WSJ article:
"Private-equity firms helped create billions of dollars in debt during the leveraged-buyout boom. Now some of those funds are eyeing and buying that very same debt at discounts as its value plunges...Borrowed money has been the fuel of the deal boom in recent years. Private-equity firms loaded up the companies they purchased with huge debts -- bank loans and bonds -- to finance their purchases. Those loans, arranged by Wall Street, were then sold to hedge funds and other investors in a deal machine that chugged along energetically for years.
But the recent credit crunch has thrown a wrench in the gears by frightening off many buyers of those loans. That has left the banks that arranged the financing holding some of the debt while other debt issued before the current turmoil in the debt market rapidly drops in value.
Three weeks ago, with investors increasingly spooked, the banks that arranged financing for private-equity giant Kohlberg Kravis Roberts & Co.'s buyout of Goodlettsville, Tenn.-based retailer Dollar General agreed to sell some of that debt for as little as 87 cents on each dollar owed. Hedge funds led by TPG-Axon, an affiliate of TPG, swooped in, attracted by returns of close to 18%..."
I mean this is almost as hilarious as the recent "developments" in the mortgage world- mortgage brokers that helped to fuel the mess in the real estate market by pushing the "liar" payment-in-kind subprime loans now trading at 10 cents on the dollar, but who are now switching sides and accepting "new" jobs as credit "counselors" who will certainly help the same "duped" customers to work through the foreclosure process...
"Legislation approved by Congress and signed into law by President Bush in December provides $180 million of federal funding this year for counseling aimed at helping borrowers avoid foreclosure. NeighborWorks America, a nonprofit organization chartered by Congress 30 years ago, is charged with distributing those funds among state agencies and government-approved counseling organizations...
While the mortgage industry shrinks, many nonprofit groups are expanding to cope with a surge in the number of distressed borrowers seeking advice on how to keep their homes.
Mortgage brokers like Bill Whitehouse thrived on commissions during the housing boom amid lax lending standards. Now, with mortgage defaults soaring and lending volumes plunging, some former brokers and loan officers have converted to a new occupation: counseling borrowers who are trying to avert foreclosure."
I thought a little irony might help you to lighten up the mood...
Stay safe and cheers,
