Newspapers to go bust? Perhaps, but some bankers are still out there buying shares

One of the City’s more careworn nostrums suggests that calling the bottom of a market is a bit like trying to catch a falling knife. Another (offered with apologies to Mr Dylan) suggests that the darkest hour comes right before the dawn.

The former is a charter for cautious investors, the latter for risk takers. Both are around in abundance at the moment.

This morning, at the Guardian, Jane Martinson asks something that was previously unsayable in polite company: “Which newspaper group will be the first to go bust?” (Previously, the only person allowed to mention this kind of thing was Richard Desmond.)

Simultaneously, however, it emerged that Goldman Sachs — the only one of Wall Street’s investment banks to emerge broadly untroubled from the credit crunch — waded into the market last Wednesday to spend approximately £18m on Trinity Mirror shares.

Goldman Sachs now owns 7.8% of Trinity Mirror. Patently, this is not the kind of thing you do if you believe that administration (or liquidation) is a real possibility.

Others have bought more modestly in recent weeks. Two weeks ago, Schroders — already Trinity Mirror’s biggest institutional investor — shelled out some £1.5m to take its holding in Trinity Mirror up to 14.5%. Another fund manager, Old Mutual, spent slightly less than £1m to increase its stake to 5%.

The world is rapidly dividing into those who believe that the recession will claim some big corporate victims — and those who believe that they can profit from the carnage. Take your positions, ladies and gentlemen: the dance is about to begin. . .

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