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The bubble is all pervasive, but this was a good article about an alarm being sounded in the sector I (and Agnes) know well, and it was a good illustration of the phenomenon.

As you point out, those in the know are deeply worried.

I have actually used this argument with a good client, which appreciates us, but has received more aggressive financing offers from other banks than from us on a recent deal. I told them quite directly that if they took these offers, they'd get a better return, but they would threaten the likelihood that the financing would ever be repaid in full. They'd lose very little money, but it would still destroy their reputation as a prudent investor. Since then, they've failed to take a decision, and seem to be taking steps to make the transaction more complex - which looks to me like they are looking for excuses to take a less aggressive offer. Maybe I'm kidding myself that we ca nstill win the deal, but it would fit with their disciplined business practice, and their reputation not to overbid for assets (and thus to often lose bidding contests). But many others do not have such scruples.

Casino capitalism it is - except that with low interest rates and lots of liquidity, all players win ... until (blank not filled yet).

Good to see you around here, De.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 30th, 2006 at 06:07:59 PM EST
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