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Felix Salmon on Money-Laundering

Wow:

Felix Salmon: Citi-KKR: The Ouroboros is Go: Yes, folks, it's on: it's not just fantasy, but moving towards reality. Citigroup has a bunch of loans to KKR that it can't get off its books. So KKR is going to buy those loans, using $8 billion borrowed from -- wait for it -- Citigroup. You can't make this stuff up.

What is presumably going on is that Citigroup is replacing loans to undercapitalized KKR vehicles with loans to the presumably well-capitalized KKR itself. Why this replacement is a good deal for both parties is not clear to me.

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