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“And what follows the debt binge? The hangover.” August 30, 2007

Posted by Sacha in Finance.

In Barrons, a very good summary of the current embarrassment on the financial markets, by Jacqueline Doherty:

IN EVERY BUST THAT FOLLOWS A BOOM embarrassing details emerge showing just how eager the players were to participate in the insanity. In the current bust, these revealing nuggets are buried in the lending commitments of some of the largest pending LBOs.

Over the past three or four months, bankers have committed to lending LBO targets about $300 billion to fund buyouts. Their plan was to sell the loans to institutional investors. But demand for leveraged debt has evaporated in the recent market turmoil, even as yields on existing leveraged loans have risen.



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