December 30, 2007 (LPAC) -- The big investment banks promised billions of dollars of loans to private equity firms like KKR and Blackstone this year to fund leveraged buyouts (LBOs), with the expectation that they could then resell those loans to investors. Then the market collapsed (oops!), leaving the banks holding the bag. Now, according to Bloomberg, banks like Citigroup, Goldman Sachs, Morgan Stanley and J.P. Morgan Chase are offering discounts of as much as 10-cents on the dollar to clear out a backlog of $231 billion of junk bonds and junk loans which have piled up on their stressed-out books. Bloomberg said the banks have already unloaded about a third of their LBO paper since July--pension managers and trustees of widows and orphans funds are advised to check their portfolios carefully!--but a ten-percent discount doesn't seem like anywhere near enough lipstick for these pigs.