January 11, 2008
Smart Money in Troubled Times
Lots of investors that are supposed to be the "smart money" are losing big by looking for opportunities in these troubled markets. Bank of America's $2 billion investment to shore up mortgage lender Countrywide Financial has turned out so badly that the only way for Bank of America to salvage it is to buy the whole company (See NYTimes, Bank May Buy Troubled Giant in Home Loans; WSJ, Countrywide Seeks Rescue Deal) Other investors that have been burned include: billionaire investor Joseph C. Lewis (invested in Bear Stearns), China Investment Corp. (took stake in Blackstone Group); Citadel Investment Group (invested in E*Trade). Of course, if they stick it out for the long term, some of these investments may yet pay off. NYTimes, Burned by Investing in Troubled Times.
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