Eat what you kill? Hell, eat what’s ill!

ARTICLE: “Bank of America Invests $2 Billion in Countrywide,” by James R. Hagerty, Valerie Bauerlein and Lingling Wei, Wall Street Journal, 23 August 2007, p. A1.

Such infusions of capital in faltering companies aren’t made out of humanitarian concern for the targets involved. The major players typically greet such flame-outs in market sectors with a certain greedy glee: now a chance to expand in a new direction at bargain prices.

Survivors are most prized (you want damaged goods at cheap prices, but not too damaged).

For those of us watching this unfold, I say, be grateful the market is doing something to clean up its own.

Comments

[Mike McGovern]

Tom the greedy glee is still there, Ill bet a box of donuts that the bank is also shorting the stock via one of it's offshore conduits, so after they cashed in that quick $600MM at the strike price of $18, they also collect their 7.25% while waiting for all the short pressure and declining economic trends to tank the stock, putting their short sale in the money. Then, when the company fails (soon), they buy back the shorted stock and try to get the best pieces of what's left from the bankruptcy court, to blend into their own operation.