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IDS World Markets Mon 2nd March 09


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More deleveraging is on the way....debt exchanges were already all the rage....that activity is about to pick up BIG TIME

 

Some will argue this is good news.....skeptics will argue it just prolongs the inevitable....

 

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Thanks to the economic-stimulus legislation, companies now get a tax break for doing this. Critics argue that the tax-law change rewards companies that took on too much leverage during the credit bubble, such as those that were bought by private-equity firms.

 

Typically, forgiving debt can result in a big tax bill. For example, if a company issues $1 billion in debt but later runs into trouble and exchanges it for new debt worth $700 million -- or buys it back for $700 million -- the remaining $300 million is taxable income.

 

The new law allows companies to defer tax payments on so-called cancellation of debt income for five years and then pay the tax over the next five years.

 

wsj.com

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The coming Treasury market crash will wipe out more wealth and people than even imaginable with the hedge funds.

 

Correct-a-mundo....

 

Herd the sheep to the corner of the meadow that looks safe and far away from the wolves, take out the hatchet.....

 

and then, as Shorty would say...

 

CHOP

 

CHOP

 

CHOP

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