Rolfe Winkler

Private equity’s Trojan Horse of debt (Morgenson, NYT) Great piece from Gretchen. Another example of private equity — in this case TPG and Apax Partners — taking cash out of a corporate balance sheet by loading it with debt. See also the case of Thomas H. Lee Partners and Simmons.

Must Read — In hard times, lured into trade school and debt (Goodman, NYT) This is an issue close to my heart and, actually, it’s the same story as above. The only difference is that instead of finding corporate balance sheets to use as an ATM, for-profit education looks for vulnerable people trying to improve their lot in life. Find a warm body eligible for taxpayer-guaranteed federal loans and it matters little the quality of education you provide….you’ve already taken the cash out, cash the government provides. This article is loaded with colorful details, but Goodman saves the best for last. The government requires that only 10% of tuition money come from students themselves or private sources. On this portion, the companies set aside “roughly half” (!) to cover bad debt. But “they’re making so much money off their federal student loans and grants that they can afford to write off their own loans…”

Promises, promises (David Merkel) When all others fail, the last balance sheets that can be used to take cash out are governments’.

Lehman examiner punted on valuation (Partnoy, NC) Lehman examiner Anton Valukas is getting lots of credit for his very thorough report. Even so, at nearly 2300 pages, the report only glosses the surface in some respects. Lehman’s operations were so complex they’re impossible to properly catalog. No doubt the same is true of all the large investment banks: C, GS, MS, JPM, even BAC. We think 1) that these behemoths can be properly regulated? And 2) that when they get into trouble new “resolution authority” will enable them to be shuttered without causing financial contagion?

Science fails to face the shortcomings of statistics (Siegfried, Science News) “…if you believe what you read in the scientific literature, you shouldn’t believe what you read in the scientific literature.”

We bought a toxic asset, you can watch it die (NPR, ht Reje)

Say goodbye to unlimited wireless data plans (Gizmodo)

Black Cobra (Swedish) gang steals selection of small cakes (thelocal.se)

I’m with CoCo artist: My life has totally changed (TMZ)

I want one of these in my office…

Fed repeats “exceptionally low” for “an extended period” (Fed statement) The Fed maintains that it isn’t raising rates for the foreseeable future, but repeated that it plans to end MBS asset purchases by April next year. Too bad we can’t get a surprise rate hike in order to chase risk back out of credit markets…

Wells’ CLO deal called “landmark” (Paulden, Bloomberg) The return of CLOs would be the latest sign that Wall Street is dancing again.

Big decision looms on Fannie and Freddie (Timiraos/Hagerty, WSJ) Suggests Obama could expand his commitment to Fannie and Freddie beyond $400 billion while he’s still able to unilaterally. If he waits till next year, Congress would have to approve.

Man of the Year: Ben Bernanke (Time) Ha! Ben should have said thanks but no thanks. Ten years ago Time christened Rubin/Greenspan/Summers as The Committee to Save the World. In the fullness of time, all have been proven failures. Time’s endorsement is final confirmation that Bernanke too is a failure.

Norway raises rates (Kremer, Bloomberg) More fodder for yesterday’s Norway thesis. Higher rates make for a more attractive currency…

Some debt-laden graduates wonder why they bothered with college (ABC News) Full of choice quotes: “You’re led down this path of needing to go to college,” [says one indebted grad]. “The college diploma is the new high school diploma.”

Spend more. Get less. The worst fun city in America (Wachs/Eskenazi SFWeekly)

The year in photos, part 1, part 2 and part 3 (The Big Picture) More from the best photo blog on the web.

Canadian ice-fishing…