Roman Catholics have fish Fridays. Boxing fans have Friday Night Fights. For distressed investors, like Jon Winick, president of Clark Street Capital, there’s Friday night Failure. 
 
“You can count of Friday failures for the next six to twelve months,” Winick said at a distressed investing conference in New York this week. He forecasts bank failures to rise to 200 through next year.
 
There have been 14 bank failures so far this year, according to the Federal Deposit Insurance Corp, with filings every Friday since Jan. 16 after the year end and New Year’s Day holidays.
    
The FDIC seized 25 banks last year. In just the first seven weeks of 2009, the 14 bank failures mean the FDIC is on pace to close more than 100 banks in 2009.
     
Distressed investors say they are expecting a record wave of bankruptcies this year, marking unprecedented opportunity for investors and a feeding frenzy on Fridays. The filings on Fridays are procedural, as the FDIC posts the failures at the end of the week. That allows the declaring bank to give regulators the weekend to sort things out, and it prevents a big run on the bank because branches are closed.
 
Brad Hunter, national director of consulting at Metrostudy, a housing industry research firm, thinks things are just getting started. He said bank takeovers ultimately could exceed 1,000. 
 
“Option ARM loans are coming due, and that will trigger another wave of foreclosure,” he said.

Former AIG CEO Hank Greenberg has had plenty of nasty things to say about what he sees as government mismanagement of his once mighty empire. AIG’s slash-and-burn asset sales are finding only tepid interest in a global market struggling to keep its head above water. Michael Flaherty reports that only three potential bidders are still interested in a large stake in AIG’s $20 billion Asian life insurance unit, with the auction heading into its final week and hopes for a sale fading fast.

This should worry Citigroup shareholders concerned about the government’s intentions toward the bank. Reports are surfacing that Citi may sell its Japanese investment bank and brokerage as it looks to raise more cash from a sale of global assets. Having been taken to task for keeping the naming rights to the New York Mets’ new baseball park — something any big retail company might consider a reasonable marketing expense — Citi execs are reported scratching their heads, trying to figure out what hoops the government wants them to jump through. Markets hate uncertainty, so the current ambiguity about what Washington wants is particularly hard to stomach.

Like many a routine financial blog, DealZone has danced around the definition of nationalization. Reader Alan Macdonald argues we should refer to the process as “democratization.” Pundits are increasingly suggesting the process should be considered more a government receivership, which has a less onerous and deathly long-term tone than nationalization.

The Obama administration has resisted referring to what the government will do with the banks as nationalization. Addressing Congress last night, President Barack Obama said the goal of any government involvement in bailing out the financial sector must be to get lending going again. Presumably, he was not talking about the same lending market that supplied the financial amphetamines for the bubble that burst last year.

A few hours before Obama’s address, senators took taxpayer-funded Northern Trust to task over millions it spent at a golf tournament, so it’s obvious there are still a few political pounds of flesh to be rung out of the money industry. Perhaps the biggest problem facing the salvation of modern finance is the ambiguity of the political arena.

Other Deals News:

* Lawson Inc, Japan’s second-largest convenience store chain, said on Wednesday it has agreed to acquire smaller rival am/pm Japan Co for $149 million, boosting its presence in Tokyo area.

* A fund created by French president Nicolas Sarkozy to come to the rescue of companies hit by the credit crisis unveiled its first investment, saying it had bought 2.35 pct of car parts maker Valeo for 19 mln euros.

* British Airways would accept a 55 percent stake in the enlarged company resulting from a planned merger with Spanish carrier Iberia, the El Economista newspaper reported.

* Sanofi-Aventis finally clinched its $2 billion takeover of Czech drugmaker Zentiva on Wednesday, boosting its presence in generic medicines and setting the stage for further acquisitions.

* South Korea’s KT Corp said it would buy back $330 million worth of shares and pledged hefty shareholder returns to defend its share prices ahead of a planned merger with its mobile unit KTF.

* A federal bankruptcy judge approved the sale of luxury retailer Fortunoff Holdings LLC to a group of seven liquidators, setting the stage for it to begin liquidating as early as Wednesday.

(PHOTO: The dome of the US Capitol is visible through a window on Capitol Hill in Washington, February 24, 2009. REUTERS/Jonathan Ernst)

It seems that private equity fund sales are heating up so much they need their own market.

SecondMarket said today it is opening trading in limited partnership interests in private equity funds, venture capital funds, hedge funds and fund of funds (the intention to launch into this market was reported a few weeks ago by our sister publication peHUB).

The firm also hired Jeffrey Bollerman, previously at Citigroup Wealth Management, to help lead its LP interest market.

The intensifying pace of activity in the secondary market has been well documented, although its a skewed market with one insider reporting five times as many sellers than buyers.

SecondMarket CEO Barry Silbert told Reuters that the firm has already listed about $500 million worth of limited partnership interests in funds for sale. ”You have seen a lot of the funds have some poor performance and for investors, there are sellers who need to get out, and there are actually buyers who want to get in,” Silbert said. 
Silbert said he believes such trading of partnership interests could reduce some of the risks to the hedge fund industry from a surge in redemption requests. 

After this recent economic turmoil, “our view is that the hedge fund business is going to have to develop,” Silbert said.  ”(Trading of partnership interests) will reduce the withdrawal and redemption risk in the hedge fund business, and reduce the risk that private equity funds face in investors being unable to fulfill their capital call obligations.” 

Silbert said trading could also increase transparency in the hedge fund business, as investors would remember in the future if their partnership interest was tough to sell, or was trading at a steep discount.  

Under SecondMarket’s trading mechanism, funds will be able to limit who participates in trading to whoever they want, from a strict group of existing limited partners, to a wider group of investors, or the general public, Silbert said.  

SecondMarket charges a fee equal to a percentage of the consummated sale to both sellers and buyers. 
(Reporting by Megan Davies and Emily Chasan)