Merrill Lynch has been under investigation by the Massachusetts state attorney general’s office over the sales of CDOs to Springfield that had fallen in price by 91%. The issue was that Springfield had made clear that its investment policies were conservative and these instruments were clearly inappropriate. There was further fuel for the fire in […]
Read more...We had been wondering when subprime-related securities litigation would get going in earnest. New York attorney general, Andrew Cuomo, along with Connecticut attorney general Richard Blumenthal, has been investigating whether underwriters failed to disclose relevant information to investors in subprime deals. The latest development, according to the Wall Street Journal, is that Cuomo has issued […]
Read more...Bloomberg reports that hedge fund Pershing Square’s chief Bill Ackman has increased pressure on bond insurers and regulators by circulating a new analysis of potential losses to MBIA and Ambac, the two biggest bond insurers, that concludes the damage to each could reach $11.6 billion. This calculation is arguably more accurate than Ackman’s previous estiimates, […]
Read more...The bad numbers get bigger all the time. This eyepopping $534 billion figure for the amount of debt that Standard and Poor’s plans to either downgrade or put on negative watch was released a couple of hours ago after the exchanges were closed (sorry, I saw it but was unable to post till now). The […]
Read more...John Dizard, in “Prepare for return of a direct lending world,” argues that central bankers believe that securitization is not coming back in any meaningful way in the foreseeable future, and banks will therefore have to roll up their sleeves and do old-fashioned lending in much greater volumes than before. That may seem like a […]
Read more...$14 billion? I thought I’d be inured to big negative numbers coming from investment banks by now, but I caught my breath when I read the headline of the Bloomberg story reporting that UBS is taking a further $14 billion in writedowns, resulting in a $11.4 billion loss for the fourth quarter. Remember, when UBS […]
Read more...Despite the seeming absence of news on the bond insurer rescue front (the only development reported was the selection of the boutique M&A advisory firm Perella Weinberg to assist the State of New York in its efforts to put a deal together), the Financial Times has four articles on it today, from the neutral to […]
Read more...A Bloomberg story today points out that the snowballing credit market crisis is an indictment of the use of quantitative measures of risk, particularly one of the longer established and still widely used approaches, value at risk. VAR uses historical trading patterns to determine the probability of loss to a certain percentage of certainty. Firms […]
Read more...Another day, another sovereign investment fund check to an investment bank. How the mighty are fallen. The story in the Telegraph makes clear the proposed Qatar Investment Authority acquisition of 5% of Credit Suisse, worth roughly $3 billiion, is not a done deal but seems likely to go through. And the article goes to some […]
Read more...Thomas Palley posts only occasionally, but just about everything he writes is first rate, and today’s offering is no exception. Palley argues one of our favorite views, that the Federal Reserve interest rate cuts have had more to do with trying to prop up asset values than with stimulating growth. He points out that this […]
Read more...Don’t get too excited, this move by New York City and State to sue lead manager Goldman, 25 other underwriters and accounting firms over a Countrwide stock offering is routine securities fraud, in this case making misrepresentations about the company’s prospects. No one has yet to develop a legal theory to go after Goldman for […]
Read more...The knives are out on Wall Street,, the cyclical ritual has begun. First the story is that the firms are excising businesses and people who were there only by dint of being in the right place during the frenzied upswing, but truth be told, really aren’t up to the firm’s standards, or so goes the […]
Read more...Some readers go ballistic when I suggest that tougher credit markets regulation is an important and not sufficiently considered part of the remedy to our current economic woes. In their eyes, regulation is always and ever a bad thing. John Coffee, Columbia Law professor and long standing expert in the securities industry, tells us that […]
Read more...Now it is hard to suggest that giant brokerage firm Merrill Lynch is being treated kindly by the press these days, given the deserved harsh scrutiny resulting from its staggering fourth quarter writeoffs. Nevetheless, we noted an oddity today. The Journal is running a story, “Springfield, Mass., Takes Aim at Merrill Over Subprime Losses,” that […]
Read more...Generally speaking, unhappy investors seeking recourse for their broker’s alleged bad actions aren’t noteworthy unless the dollars at issue are large. A New Jersey family, the Mahers, had sold their business Maher Terminals LLC, the largest container operator at the Port of New York and New Jersey. UBS and Lehman were each given a portion […]
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