More Trouble On PE Deals Ahead

Now that the Alliance Data buyout is supposedly “back on" (after an attempted shutdown by Blackstone), some in the financial press might anticipate that future private equity buyouts will go more smoothly than the Alliance Data deal.  It would be a mistake, however, to believe that other buyout deals have an easy road ahead.  Many [...]

CFC Cuts Ad Spending But Why is the Real Question

Here is some very interesting data posted by Paul Kedrosky over at Infectious Greed which shows that Countrywide’s online ad spending fell off a cliff in January.  Yet, it wasn’t just Countrywide that cut back, financial servicers advertsing was off by 17% on a month-to-month basis.  The Prince isn’t surprised by this since anything that [...]

Monoline Ambac Breakup

22 Feb 2008 - Here is an interesting piece of commentary from Accrued Interest which presents yet another viewpoint on the Monolines.  It specifically makes the case for why breaking Ambac into two companies is the best course of action right now.  Worth a read through after you take a look at the blogger’s posts [...]

The Prince’s Monoline Roundup

The Prince has come to the conclusion that the financial blogosphere is doing a much better job covering the monoline (i.e. bond insurers) debacle than the traditional financial press.  There has been a plethora of interesting analysis and thought provoking work done on the recent trauma involving bond insurers by bloggers. 
The Prince has contributed [...]

Fitch: Insurers have Enormous Unrealized Losses

The WSJ is out with an article about how much exposure life insurers have to subprime assets as estimated by Fitch.  The Prince is just smiling as the contagion from the subprime crisis just continues to be felt in new and unanticipated areas and ways.
Excerpt from the WSJ:
Fitch Ratings said U.S. life insurers have an [...]

Speculation and Fraud in Mortgages? A Blind Eye.

One angle of the mortgage crisis that has been incredibly under-covered by the financial and mainstream press is the adverse role that fraud and speculation played in the crisis.  The Prince first began to seriously consider the scale and reach of fraud in obtaining mortgages by single home homeowners, originators, originating mortgage brokers, wholesale originators, [...]

What M&A Slowdown?

There have been a number of articles recently saying that M&A in January was not as far down as the financial media has been claiming.  MarketWatch’s David Weidner recently wrote, "that despite dire predictions of a M&A slowdown, the M&A rush that fueled the market’s outsized gains last year may not be slowing after all [...]

Buyout Debt: You Can’t Get Rid of It

When the leveraged loan and high yield debt markets shut down this July the speed of the problems shocked many.  I remember hearing the heads of sponsors and leveraged finance teams say that the pullback of investor demands was the swiftest they had ever seen.  From early July and throughout the summer the problems continued [...]

For Ratings Firms Holding AAA Sacrosanct is Foolish

The Prince has been astonished at the recent decisions of the three major credit rating firms (Moody’s, Fitch, and S&P).  In many cases, with their reputations already seriously tarnished, the firms are still foolishly trying to not downgrade mortgage related tranches they originally rated AAA.  The ratings firms would be wise to take a page [...]

Merrill Writedown: Under Promise and Over Deliver

If you are wondering why analyst reports are expecting Merrill to take  an additional charge of $15bn on Thursday, just take a look at the chart below which shows prices out to mid-November.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Here is a rough estimate of how much subprime exposure, ex SIVs and conduits (excluding this is tricky considering that Citi took SIV [...]