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Christopher Flowers Finds the Bloom May Be Off

Stocks in this article: GS BAC

But Shinsei has struggled in the past two years, in part because of investments in Flowers' private equity funds, Bloomberg News pointed out in an article last week. And, according to The Wall Street Journal, Shinsei still hasn't paid back Japanese taxpayers for bailing it out in 1998. The paper says shares would need to reach 745 yen to make the government whole -- more than 800% above their Wednesday close of 81 yen.

Fed officials might also look to Europe, where the chess-playing Flowers is involved in a battle of wits with the German government over the future of Hypo Real Estate. Flowers invested $1.3 billion in Hypo in June at 22.50 euros -- an investment that now looks to be nearly worthless, with Hypo on the verge of nationalization. Flowers has said he wants to retain a stake rather than have the government buy him out.

Done Deals
Hypo Real Estate
Hypo Real Estate Holdings AG -2008
HSH Nordbank
HSH Nordbank AG
2000 & 2008
2006 & 2008
Near Misses
Merrill Lynch
Sallie Mae
Merrill Lynch
Sallie Mae
Lehman Brothers
Lehman Brothers
Washington Mutual
Bear Stearns
Washington Mutual
Bear Stearns

Flowers declined to comment on either Hypo or Shinsei to But while it has been a rough year for his investments, Flowers sees tremendous opportunity amid the wreckage.

"Governments everywhere -- this government and around the world -- are going to own a lot of stuff, and they're going to be not very adroit and not very commercial as they work their way out of that," Flowers said at Source Communications breakfast. "That's what history has shown, and therefore, just like the Resolution Trust Corp. in the early '90s and buying busted banks from the FDIC and so forth, there's going to be a lot of money to be made around the edges of this crisis in corporate restructurings."

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