Credit crunch shouldn't be a reporter's crutch

There’s some intellectual laziness floating through the world of finance lately. Everyone knows that the subprime mortgage mess has reduced demand from investors and lenders for riskier stuff. And everyone knows some leveraged buyout deals are in trouble. Harman International’s (Symbol: HAR) deal fell apart last week and the much bigger, $25 billion bid for Sallie Mae (SLM) looks headed that way as well. So must be A caused B, no? The answer is no, not really. In both the case of Harman and Sallie Mae, the companies’ own fundamentals were deteriorating and the buyers likely would have wanted out even before the great credit crunch of ‘07. The same is true of many of the other troubled buyouts. The $6 billion takeover of Affiliated Computer Systems (ACS) was a hairy and contentious mess from the get-go as the company’s board resisted a bid to go private led by its own chairman, Darwin Deason. Database manager Acxiom is suffering directly from the real estate downturn, where many of its customers do business.

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