August 8, 2007 (LPAC)--Unable to find buyers for $200 billion in debt to fund leveraged buyouts, the following firms will be stuck with the loans themselves, and could suffer losses of 10% on the illiquid "assets", according to a UBS analyst cited by the New York Times. This loss would represent about 25% of the banks' 2007 earnings.

Goldman Sachs had $71.5 billion in leveraged loans; Merrill Lynch, $49 billion; Lehman Brothers, $43.9 billion; Morgan Stanley, $34.8 billion; Bear Stearns, $19.6 billion.

A German economist says the losses in the investment banks are going to be big between now and the end of the third quarter. Reports he has seen say between $60 billion and $75 billion of corporate bond issuance (mainly junk, some investment-grade) have been "eaten" by them so far. They will lose about $10 billion at minimum on this, having to repackage them at significantly higher interest rates and/or buy them for their own accounts. They will lose $8-10 billion in fees on takeovers; and these combined losses will take off most of their combined profits.