KKR buyout of TXU is imploding

The tanking investment banks in particular and economy in general have folks like JPMorganChase at the throat of Kohlberg Kravis Roberts and allies who took over Texas utility company TXU in 2007.

And, we ain't seen the worst yet:

The company ... it still faces a $20 billion balloon payment coming due in 2014. To leap that hurdle, the private equity owners have a handful of options: persuade bondholders to swap their debt at a discount for debt that matures later; sell a stake of the company in an I.P.O.; or sell assets.

Since KKR et al bet on natural-gas prices, this is one of the best arguments for commodities speculation regulation I can think of.

Second, it's a great argument for not giving a dime to Gang Green environmentalists like NRDC and Environmental Defense who endorsed the takeover. (EDF is now providing green flak for Walmart, among others.)

Third, it's a call for more regulation of the broader financial industry. You know that KKR, Texas Pacific and Goldman Sachs' investment arm will do anything and everything they can to dodge more losses.

Fourth, it's a call to re-regulate utilities.