Lunchtime Links 10-5

October 5, 2009

Buyout firms profited as a company’s debt soared (NYT) Good piece. Shows how private equity/leveraged buyouts can end up as nothing more than looting operations. To be sure, someone has to be stupid enough to buy bonds that fund special dividends for private equity owners. They end up losing, as they should. But so does the company in question.

Borrowing for Dividends raises worries (WSJ) Liz Rapaport files a timely story in light of the above. Reason #256 that we’ve learned nothing from the financial crisis. Our own Agnes Crane blogged on this last week. It is just one company. But with corporate issuance on fire, it’s probably only a matter of time before more companies raise money to pay special dividends or buy back stock.

Condé Nast to close 4 magazines (Media Decoder)

The Puma Index (Slate, ht DH)

BofA: How much should bond holders be haircut to restore solvency? (Chris Whalen, ht JPM)

Mahmoud Ahmadinejad revealed to have Jewish past (Telegraph, ht Marco) Caveat emptor here: It would be nice if the column had the close-up of the photo they say confirms their theory.

FTC: Bloggers must disclose payments for reviews (AP) Or face an $11k fine. Ouch!

Twittering to protest in Iran? Good. Twittering to protest in Pittsburgh? Bad. (NYT)

Caught 1.5 miles offshore while fishing (animaltalk.us)

One comment

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I’m pretty confused by the bit on the bond holders.Reducing bondholder claims in bankruptcy? First, that sounds like just as bad an idea as the Chrysler/GM mess. Second, as far as a BANK is concerned, the FDIC doesn’t have to hear bondholder claims anyway.In any case, the question of bondholders sharing the pain of the taxpayer shouldn’t be on the table. OUGHT the bond holders share the pain? Sure, if there is any pain to be had. However, that’s not the rules of the game that the government agreed to. The gov’t has preferred stock, which is subordinate to debt, end of story. Want to argue it should be done differently in the future? Fine. Sounds great. Want to argue that the gov’t should go back and change the rules because “we wish we’d done this” then I think that’s a rotten idea.

Posted by Andrew | Report as abusive