Thursday, December 21, 2006

Beware the overpriced debt

Private Equity uses LBO to leave most of the debt to banks. It needs to be wary of the banking industries. When there’s not any boom sustained corporate sales, then the earning of corporate dwindled, finally the binge would come to an end.
Hope banks with most of the LBO debts without structured could survive.

But thanks to the spree of credit derivatives recently. The risk of the defaults would bear by investors evenly not only banks. The question is who’s the investor. So look into the portfolio of your mutual fund just in case you are the scapegoats.

In the harbor, one rookie of investment banking asked his chief where are the yachts of the clients. It’s a joke but cruel to show the reality there’s no boat left for us. The LBO binge stumps up fees to the private equities for their orgy. And left the bourgeois like us sank.

See what the Buttonwood said this week. 〈http://www.economist.com/finance/displaystory.cfm?story_id=8459490〉

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