Frontrunning: October 27
- Must read, and word of the day is, as always, Collateral: the NY Fed's secret choice to rape America by taking no haircut on AIG toxic crap "Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public." (Bloomberg)
- The great lobby war by the cephalopod continues: Goldman tells SEC dark pools and short sales are the market manipulator equivalent of unicorns and rainbows (Bloomberg)
- Hypocrisy 101: Ken Griffin op-ed - "It is shameful that the citizens of Main Street were forced to “bail out” Wall Street" (FT)
- Goldman mutedly realistic, while Merrill blatantly stupid on housing recovery, Drew Matus must have at least 5 "dramatically affordable" Hamptons' properties lined up in escrow (Bloomberg)
- Lending to companies in Eurozone falls for first time on record (BBC)
- Goldman Conviction Buy Textron reports revenue falls 27%, profit down 98% as business-jet deliveries "plunge" too bad Goldman does not have double secret ultra turbo buy category which these results would prompt an upgrade to (MarketWatch)
- Chinese paper accuses Google of hampering search (Taiwan News)
- India stocks tumble as Central Bank exits monetary stimulus, and advance look at what will happen in the U.S. eventually (Bloomberg)
- Why everyone is depressed about the economy (NY Post)
- Einhorn's next call won't be as easy as Lehman (Bloomberg)
- Daimler pushes the optimism button (Bloomberg)
- Another upcoming LBO casualty: Harrah's loss widens, revenue falls (WSJ)
- Goldman's "Chainsaw Massacre" costume party (MarketWatch)
- Is the US Economy turning Japanese (WSJ)
(1 vote)
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on Tue, 10/27/2009 - 08:18
#111554
that Bloomberg article on the Fed and AIG will hopefully gain some traction in the rest of the media -
on Tue, 10/27/2009 - 08:25
#111561
first article i read this morning. gave me morning sickness again.
President Obama: in addition to a couple of other reasons, this one is purely a gem as a reason to fire Timothy Geithner now. We've known all along that Geithner paid out 100 cents on the dollar and it was just plain wrong. Here's yet another reminder and more proof.
Grow a set of stones Barack and cut out the pussyfooting...you're messing up my kids future.
on Tue, 10/27/2009 - 09:14
#111600
Obama's been a fraud since day one. what a disappointment. Sorry Deadhead, our kids are fecked.
on Tue, 10/27/2009 - 09:50
#111645
+1000
I didn't vote for him, dreaded the thought of him in office, but despite that still thought he might do some of the "Change" he was proposing. He is the biggest fraud in US political history. He is so obviously a puppet it's incredible. News from The Onion is starting to be closer to reality than news from the major networks.
on Tue, 10/27/2009 - 10:13
#111669
And we still have another 3 years+ of self destruction remaining in the Changemeister's term. I doubt Geithner will survive at DOT through the remaining period. But I am much more concerned with the survival of the USA.
There are many snakes hiding under the rocks. AIG is just one of them.
on Tue, 10/27/2009 - 10:34
#111696
I expect things will start to get "interesting" within just a few months, and probably "really interesting" within a year or two. Until then, living my life normally, but with preparations in mind. The collapse of the USSR happened with incredible speed.
on Tue, 10/27/2009 - 08:27
#111562
Here's what one could glean from reading some of these articles, especially the Bloomberg AIG article (excellent):
WE'RE A BANANA REPUBLIC!!
on Tue, 10/27/2009 - 08:50
#111575
awaiting cooked Consumer Confidence number.....Uncle Goldy must have gotten his copy of it 10 mins prior, judging by the sudden tanking of certain inverse ETFs (prior to the "announcement").....but it's a total, UTTER coincidence, no? yep, totally.
on Tue, 10/27/2009 - 08:51
#111577
If Geithner is forced to resign immediately and face criminal charges we need to force congress and senate to impeach our president. The level of fraud is unbelievable.
on Tue, 10/27/2009 - 08:58
#111584
Wasn't there some talk of Griffin running for public office a while back?
on Tue, 10/27/2009 - 09:01
#111588
lil Kenny Griffin may be hypocritical, but more / less he's on the mark: if this immaculate cluster-mess of historical & epochal impact passes without any real reform to the derivatives market, then the running joke continues. Central clearing & pricing mechanisms are needed. OTC, credit derivatives, all of it needs to be included.
on Tue, 10/27/2009 - 11:48
#111809
The banks will never give up their OTC privilege. After a 15 year carreer as a floor trader, I ran a hedging desk where we traded with all the big-name institutions. If I ever made a market on the floor like they did on swaps, I would have been thrown in jail.
on Tue, 10/27/2009 - 11:50
#111812
The banks will never give up their OTC privilege. After a 15 year carreer as a floor trader, I ran a hedging desk where we traded with all the big-name institutions. If I ever made a market on the floor like they did on swaps, I would have been thrown in jail.
on Tue, 10/27/2009 - 09:11
#111594
I am revolted and yet I am not yet a revolutionary...Cheny(sic)'s secret meetings to plan the Iraq WAR with Oil XXXs, and now this. CHANGE WE CAN SPIT ON!
wtf is it gonna take?
tj3
on Tue, 10/27/2009 - 09:13
#111596
So.... Audit the Fed?
on Tue, 10/27/2009 - 09:40
#111633
It says Barofsky's report on the AIG swaps issue may be released next month. That is a crucial report.
on Tue, 10/27/2009 - 10:03
#111659
Re: the AIG story
If we're a Banana Republic then this is what Chiquita Capitalism must look like.
Why is Friedman not getting beat up in jail with Sir (sic) Allan Stanford? We just sit and take it, and take it, and take it....
on Tue, 10/27/2009 - 10:12
#111666
RBI looks like a more credible institutions when it comes to managing the asset bubbles. May be, i should keep moving my money.
on Tue, 10/27/2009 - 10:18
#111675
ZH, have you gotten a copy of the 55 page GS report on HFT/dark pools?
on Tue, 10/27/2009 - 10:36
#111700
RBI looks like a more credible institutions when it comes to managing the asset bubbles. May be, i should keep moving my money.
on Tue, 10/27/2009 - 10:37
#111703
I see the answer is above and below me
Be Seeing You,
tj3
on Tue, 10/27/2009 - 10:48
#111716
I see the answer is above and below me
Be Seeing You,
tj3
on Tue, 10/27/2009 - 10:51
#111721
Still, officials at AIG object to the secrecy that surrounded the transactions. One top AIG executive who asked not to be identified says he was pressured by New York Fed officials not to file documents with the U.S. Securities and Exchange Commission that would divulge details.
Unelected officials with control over YOUR money... and this is what they think of you.
on Tue, 10/27/2009 - 10:56
#111726
re: Bloomberg - NY Fed
Of course the NY Fed told AIG to pay 100% on the credit default swaps. Why would the Fed want Goldman to receive only 40 cents on the dollar? (Their true value) That makes no sense.
Geithner and Bernanke TOOK OVER negotiations for AIG? What a surpirse.
Secret meetings. No minutes taken. Oh my, how could that be?
This article is now confirmation of what many of us suspected all along.
on Tue, 10/27/2009 - 11:03
#111738
I see the answer is above and below me
Be Seeing You,
tj3
on Tue, 10/27/2009 - 11:03
#111740
Good Bloomberg article.
One thing it missed, though, was precendence for the payments.
Only a month or two before, Financial Guarantors, with similar exposures, and identical counterparties in some cases, settled for around what the CFO was trying to settle for - 40 cents, or less, on the dollar.
Paying 100 cents on the dollar was, I believe, literally a crime.
Monday, August 4, 2008
"
Ambac Financial Group Inc. has agreed to pay Citi $850 million to settle one of its largest collateralized debt obligation exposures, improving the excess capital position of insurer subsidiary Ambac Assurance Corp., the companies announced Friday.
The agreement terminates the guarantee on a $1.4 billion collateralized debt obligation squared transaction, a CDO of a double-A rated CDO of asset-backed security tranches - most of which have now fallen below investment grade. Ambac Financial nevertheless expects to record a pre-tax $150 million gain on the settlement, because it had already recorded approximately $1.0 billion of mark-to-market losses on the instrument. It reports its second-quarter earnings Wednesday."
"
The deal follows another announced last Monday night in which Security Capital Assurance Ltd. agreed to pay Merrill Lynch & Co. $500 million to commute eight credit-default swaps. Along with a separate agreement between SCA and its former parent XL Capital Ltd., the termination helped SCA avoid insolvency, New York insurance regulators said.
New York insurance superintendent Eric Dinallo said that pact between SCA and Merrill could serve as "template" for others between insurers and counterparties. Merrill has said it is negotiating settlements on CDO hedges with MBIA Inc. and other lower-rated bond insurers."
http://www.bondbuyer.com/issues/117_147/-293049-1.html
on Tue, 10/27/2009 - 11:05
#111744
here's another
http://www.bloomberg.com/apps/news?pid=20601087&sid=aw32gMpyHp4c&refer=home
"
By John Glover
Aug. 1 (Bloomberg) -- Merrill Lynch & Co.'s agreement to tear up bond insurance contracts sold by Security Capital Assurance Ltd. may provide a template for Wall Street, Bank of America Corp. analysts said.
SCA will pay Merrill $500 million to cancel $3.7 billion of the guarantees it provided on collateralized debt obligations, the analysts wrote. Both companies said they were discussing ways of terminating guarantees with other counterparties when the transaction was announced July 28.
``We expect further deals to emerge from here,'' analysts Michael Barry, Seth Levine and Brian Turner in New York wrote in a report yesterday. Tearing up the contracts in exchange for some payment ``can be an important part of a securities firms' broader strategy of stepping away from their mortgage woes,'' the analysts wrote."
on Tue, 10/27/2009 - 11:25
#111776
I see the answer is above and below me
Be Seeing You,
tj3
on Tue, 10/27/2009 - 20:53
#112549
I vote for Carmen Miranda. If we are going to be a Banana Republic we might as well have someone who can wear it well.