Lest We Forget, That’s Why We Call It a Market

Tight Credit Could Stall Buyout Boom

Crunch Complicates Some Pending Deals

Washington Post Staff Writers
Sunday, August 12, 2007; Page A01

The severe turmoil in the credit markets last week has raised serious questions about the future of the buyout craze that gave rise to the biggest deals in U.S. corporate history.
For the past few years, a group of elite Wall Street players have been buying up major American icons and taking them private. These massive acquisitions have depended on access to cheap credit, which is supplied by a complex relationship between investment banks and hedge funds.

That ‘complex relationship’ is called a bubble. Let’s not lose our perspective, Mr. Cho, and get all sweaty about what these massive acquisitions ‘have depended upon.’ When buyouts are fueled by cheap money, they lose all relationship to core value and–thank god–that’s what the market is presently saving us from.

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