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What happened to the cushion?

Remember the one about all the "dry powder" opportunity capital poised on the sidelines to "cushion" any market fall? That was a favorite line from the industry savvy back in 2006 and 2007. The only problem was those same people were still investing, using ample leverage and spinning...

By Jonathan D. Miller | Updated on April 27, 2009

Remember the one about all the “dry powder” opportunity capital poised on the sidelines to “cushion” any market fall? That was a favorite line from the industry savvy back in 2006 and 2007. The only problem was those same people were still investing, using ample leverage and spinning markets out of control. Now, it seems like forever since people have been saying they are primed to invest in bad debt, buying loans and CMBS positions at cents on the dollar, and making RTC style killings as the markets recover. And sure, there are some funds out there with capital ready to deploy. But my sense is certainly not as much as advertised, and those capital pools are shrinking.

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