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Schwarzman and his press spokesman tried to discourage the story, without success, and it came out just as the huge Equity Office Properties deal reached its climax.
The banks' huge equity portfolios, until recently the source of unrealised gains which they have used to pay for bad-loan disposals, are now full of losses.
And huge equity deals like the sales of shares in Telefonica Moviles and Orange have been delayed and are likely to go forward only at reduced levels.
Many central bankers had to be appeased; Japan, for instance, managed to let its banks count some of their unrealised gains on their huge equity portfolios towards their capital.
The long-awaited filing, made in federal bankruptcy court in Manhattan, will wipe out the bulk of Blockbuster's nearly $1 billion debt, while handing over a huge equity stake to senior bondholders led by the investor Carl C. Icahn.
By helping banks to reduce their huge equity portfolios, the central bank hopes to shield them from further falls in the stockmarket, which hit a 19-year low earlier this month.America's industrial production unexpectedly fell by 0.3% in the month of August, the first decline this year.
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Those firms include Blackstone, a huge private equity firm and the nation's largest private landlord of rental houses.
The credit markets had already begun to fray at that point, and after Hilton, the parade of huge private equity deals came to a halt.
Several huge private equity deals also made waves this year.
"Our name has huge brand equity in educational institutions everywhere in the world," says Prem Vrat, a former director of the IIT Delhi campus.
But, like the U.S. Federal Reserve, both central banks are now between a rock and a hard place as they also seek to avert a global slowdown sparked by the subprime mortgage debacle in the United States and the consequences of the era of cheap credit that only last year prompted a wave of huge private equity takeovers.
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