When UK mortgage lender HBOS Plc went to market to raise capital, the outcome was a bust. The company sold only about 8% of the securities. In the end, HBOS's underwriters -- Morgan Stanley (NYSE: MS) and Dresdner Kleinwort Ltd. -- were stuck with $7.6 billion in unwanted paper.

In light of this, it's going to be tough for UK financial institutions to bolster their balance sheets. But there is an alternative: private equity.

In fact, it looks like The Blackstone Group LP (NYSE: BX) is taking a look at Paragon, a UK mortgage lender. It appears that Paragon is opening up its books to engage in some initial due diligence.

Of course, this is still nascent, and deals can easily fall apart, especially in tough markets. However, investors are certainly excited. In London trading, Paragon's shares spiked 23%.

Even so, the value of Paragon is still down 87% over the past year, so it should be no surprise that the private equity folks sense opportunity.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

MAJOR PAPERS:

• The books of Fannie Mae -- Federal National Mortgage Association (NYSE: FNM) -- and Freddie Mac -- Federal Home Loan Mortgage Corporation (NYSE: FRE) -- are being examined by the Federal Reserve and the Office of the Comptroller of the Currency to review their financial condition, according to the Wall Street Journal.
• The Wall Street Journal also reported that the Chevy Volt, an electric car from General Motors Corporation (NYSE: GM), is slated to roll out in two years and it received a major boost from 36 utilities that operate in 40 states who agreed to work together to make the plug-in vehicle possible. Among the utilities are American Electric Power Company Inc (NYSE: AEP), Consolidated Edison Inc (NYSE: ED), Duke Energy Corporation (NYSE: DUK), and Edison International (NYSE: EIX).
• Struggling mortgage lender Paragon is reportedly in talks with The Blackstone Group LP (NYSE: BX) about a potential takeover by Blackstone, the Financial Times reported.

OTHER PAPERS:

• The New York Times reported that TiVo Inc (NASDAQ: TIVO) will today introduce a "product purchase" feature in partnership with Amazon.com Inc (NASDAQ: AMZN). Under TiVo's plan, the television remote control will be turned into a tool for buying products that are advertised and promoted on talk shows and commercials.

Editor's Note: This post was written by Fil Zucchi, one of Minyanville's many sharp minds.

Drybulk shippers have been slammed over the last few days courtesy of a plunge in capesize spot rates. However, according to the sharp eyes at Dahlman Rose, the volume of new spot fixtures has been exceedingly low of late. And taking a slightly longer perspective, spot rates are up more than 100% since last year.

A few things to keep in mind:

• Not all shippers are created equal: Dryships NASDAQ:DRYS) plays in almost strictly in the spot market and therefore it stands to reason that it should swing hard with spot rates. After closing the purchase of Quintana Marine, Excel Maritime (NYSE:EXM) now has a decent balance of long term and short term fixtures contracts. And then you have an outfit like Paragon Shipping (NASDAQ:PRGN) with most of its fleet leased out on long term - fixed price contracts.
  
  
• Despite the vast differences in the business models of these three companies, the market has not been very discerning in how it has treated its stocks, which suggests that there may be some arbitrage opportunity, should one wish to play it that way.
  
  
• Despite growing economic risks in China, it's tough to envision a collapse of infrastructure build-outs, or a sudden change in food needs in the BRIC countries and around the world in general. As long as these two activities hold up, it's tough to see a collpase in the shipping business;
  
  
• I can't stress enough that my long side interest in EXM and PRGN is heavily influenced by some sizable, and so far not so succesful, shorts in broad commodity ETF's.
  
  
• And lastly, the volatility in the shippers offers some very attractive options selling opportunities.
  
  (Positions in EXM, PRGN)