And yet, that hardly means there’s a surfeit of happy endings right now. The Wall Street Journal takes a hard look at how a blood war over talent between Mizuho Financial and Calyon's parent, French bank Crédit Agricole, ultimately helped neither.

They brought aboard the Dream Team, but the result was nightmarish.

Looking to charge into the red-hot U.S. business of subprime debt two years ago, Mizuho Financial Group Inc.'s brokerage poached 11 bankers, traders and salespeople, headed by structured-finance ace Alexander Rekeda, from investment bank Calyon. Mizuho wanted to quickly ramp up its business of packaging mortgage loans into collateralized-debt obligations.

Calyon's parent, French bank Crédit Agricole SA, was so upset, it sued Mizuho. Turns out, though, the expertise both banks prized has backfired on them, harming their profitability.

When Mizuho releases earnings Thursday, it projects its losses from mortgage-related investments will total at least $5.1 billion -- nearly $4 billion of it from the former Calyon team's trading positions. That will whittle earnings for the fiscal year ending March 31 to about 310 billion yen ($3.01 billion). That is less than half of the year-earlier level. Mizuho has ousted the ex-Calyon team it once coveted.

On Tuesday, Crédit Agricole, reported that first-quarter net profit fell to €892 million ($1.38 billion) from €1.18 billion a year earlier, hurt by a subprime-related write-down of €1.21 billion. While it is unclear how much, if any, of that stems from securities packaged on Mr. Rekeda's watch, Calyon's zest for subprime instruments continued into 2007.

For Mizuho, the loss is small compared with those booked by Western banks such as Citigroup Inc. and UBS AG. Still, the projected damage for Mizuho, Japan's third-largest commercial bank by market capitalization, far exceeds that of other Japanese banks, which have been leery of risky overseas forays. Such ventures bring back bad memories of ill-fated Japanese investments in the 1980s, such as the Mitsubishi Estate Co. purchase of New York's Rockefeller Center.

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