Small(ish) world

The US Mortgage Crunch that turned into a US Capital Market crunch that turned into the Worldwide Credit crunch serves to bring lots of things to light.

The British Bank, Northern Rock, holding lots of US Mortgage-backed securities, and a large British residential lender, has struggled like more than 150 other US lenders and banks. Smelling blood in the water, Cerberus (a group I have written about here on several occasions), and a similar company named JC Flowers, run by former Goldman Sachs exec Chris Flowers, have stepped up their bid for taking over the bank.

They intend to leave the bank open and running, leaving a "strong British presence" on the bank's board.

They believe the current credit crunch will be temporary. And when that is the case, those with ability and capital can pick through the trash to find the gems. As mentioned earlier here, Cerberus owns several lenders here in the US, as well as their recent acquisition of Ford Motor Co.

Flowers, along with two US banks, has a $50 per share bid in to buy Sallie Mae, the US Government sponsored student loan co. Their bid WAS $60 per share, but they lowered that to $50 earlier this week, stating a lack of fundamental performance on the part of the company, and general market conditions.

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