Largest LBO Ever

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Jan 15, 2009 8:59 pm

Isn’t whats really going on the largest LBO in the history of finance?  How is it ever going to be paid off? A default is all i can really think of, maybe some more currency debasing.

  BOA shoudl just spit ML back out. They are covering their own losses along with their brilliant Country Wide aquasition with the new money writing down bad loans from ML for taxes but don't want to be held accountable. Sounds like a good deal for BOA if they can survive.
Jan 17, 2009 7:02 pm


Jan 17, 2009 7:08 pm

the banks are already technically insolvent from a GAAP perspective. What should happen is the 10 largest banks create an SPC, which will be minimally capitalized by the TARP, the SPC will ‘buy’ the remaining assets of the banks AND THE ONES that have been writen down to zero. By bundling these together the banks get rid of the bad and the not yet bad w/o an adverse accounting hit. The banks, in exchange, get some kind of income participation note, at a deeply subordinated level, and the SPC sells the same income part notes to the public as ‘distressed’ securities. The SPC operates sturcturall;y like a closed trust wherein its asets simply disappear as losses are recovered. This is imanently doable, and I can’t believe they still are f…k ing around. 

Jan 18, 2009 8:01 am


Thats almost exactly what the Swiss Fed did for UBS. Its already in place.

The bad news is The Swiss fed gets to vote on ALL bonuses (Im a UBS BOM). I may be delivering Pizza soon!