2009-05-15

Banks are insolvent

“It’s a sham. The banks are insolvent. The US government is trying to sedate the public because they are down to the last $100bn (£66bn) of the $700bn TARP funds. They think they’re doing this for the greater good of society,” he said, speaking at the Qatar Global Investment Forum.

Mr Patterson said it would be better for the US to bite the bullet as Britain has done, accepting that crippled lenders must be nationalised. “At least the British are not hiding the bail-out,” he said.

MatlinPatterson said private equity and hedge funds were deluding themselves in hoping to go back to business as usual after the trauma of the last 18 months.

“This is not a normal recession and there will be no V-shaped recovery. The crisis has destroyed leveraged companies. We’re going to see a catastrophic increase in the number of LBO’s (leveraged buyouts) going into default because they’re knee-deep in debt and no solution exists since they can’t refinance,” he said.
Read the whole thing.

Update 1: The article is now gone from the Telegraph website. Here's Zero Hedge reporting why:
It appears that the Daily Telegraph has gotten major cold feet about the incendiary interview (incendiary, at least, to the administration) it had posted last night with Mark Patterson. One can only speculate why that may be the case, but if you try to connect to the article that had received the biggest number of hits yesterday, you just get a big gaping 404 hole now.

Luckily, ZH expected some potential foul play, which is why we copied the entire piece in its entirety and still have it available for readers who would rather be exposed to the truth instead of watching CNBC and other increasingly more censored media outlets.

As Zero Hedge anticipates getting a take down notice from the DT any minute, I would love to get the feedback of any lawyer readers as to what recourse ZH would have in that case.
There's also an update from Mark Patterson's lawyer posted, who says there are factual inaccuracies. It'll be interesting to see what happens here. The quotes may be misattributed, wholly fabricated, etc, but given that his firm is involved with the public-private partnership with the U.S. government, and the government threatened Chrysler bondholders, who knows what the real story is here.

Zero Hedge has the full article available.

Update 2: At least one blogger received a cease and desist notice.

Update 3: Letter from Mr. Patterson says the story is a complete fabrication.

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