Mortgage crisis as opportunity

On Monday night, Mr. Grayken’s private investment company, Lone Star Funds, agreed to pay $6.2 billion for most of the toxic, mortgage-linked investments held by Merrill Lynch.

The deal was classic Grayken: Lone Star, which has a long history of swooping down on troubled assets, paid 22 cents on the dollar for investments with a face value of nearly $31 billion. Mr. Grayken’s firm even got Merrill to finance 75 percent of the purchase price. If the investments turn out to be worthless, Merrill, not Lone Star, will be on the hook for most of the losses. (NYT)