National City Corp.

Dumbest Bubble Deals

As rotten mortgages continue to cripple the balance sheets of large companies, beleaguered executives face yet another looming risk to their stock prices.

Massive writedowns related to past M&A deals, where companies bought up en masse bad mortgage mills and finance companies during the go-go bubble years.Many of these M&A deals were made at the worst possible time, epic bad bets made right around the peak of the housing bubble in the summer of 2006--or right when the bubble burst a year later.The looming writedowns are a sobering comeuppance for executives who went on a spectacular, speculative merger bender during the housing and credit bubble.Lured by the glitz and glamour of dramatic newspaper headlines, the rampant dealmaking tossed pixie dust in the eyes of top executives, blinding them to the impenetrable foolishness of their deals and to the danger they put their companies, shareholders and eventually taxpayers, in.In fact, some of the bad deals have helped cause companies to be...

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