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ML III Report: Fed feels the pinch of CRE downgrades (just in time for that audit!)
Remember those wacky CDO’s that Goldman underwrote, hedged with credit default swaps, then promptly collected 100 cents on the dollar for (courtesy the US taxpayer) after lighting up the AIG switchboard with collateral calls? The late night restuffing of those commercial real estate CDO’s sure paid off, even as Joe Cassano was recovering from hyper-salivation induced by the sure-thing insurance premiums Goldman was shoveling at him.
Neil Barofsky may have had some harsh words for the Fed today, but kindly, the FRNY released only yesterday its quarterly report on Maiden Lane III (a non-accelerated filer?), which gives us a glimpse into the festering CRE that has sat on the Fed’s balance sheet since the halcyon days when Fed Chicken Littles told us that knowing AIG's counterparties would pose systemic risk.
A short three months later:
Only time will tell just how many quarters it will take for these US taxpayer-owned vintage 2007 CRE assets to descend into junk status.
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15 Maiden Lane is a 1936 American crime film about an insurance investigator (Claire Trevor) who infiltrates a gang planning to steal jewels from the eponymous building on Maiden Lane in the Fulton Street District of Manhattan.
ML III may be a lot of things, but she's no maiden.
If it wasn't fertilizer it wouldn't have been shoveled to Maiden Lane. This is a garbage dump ladies and gentlemen. Someday discounted assets will be sold to the friends of GS and BB from this cesspool. Right now it is festering nicely without raising too much of a stink...except for you guys sensitive noses.
Go back to bed.
How do YOU spell Kaka?
If the full faith and credit of the US Gov't is backed by its taxpayer base and its tax payer base is growing increasingly dissonent with respect to paying taxes, how then will it sustain its ability to finance future debt, even at higher rates?
While these bailout shenanigans continue the Republic is burnt beyond repair and looking more like post-reconstruction 1860's than the 1930's. There is only one way out of this and it is to overthrow the government and put power back into the hands of small business which in turn creates resources and gets the unit circle moving at a more responsive and predictable pace. Our sovereign wealth has evaporated and the continuous pandering to Wall Street without any sustainable trickle down is treason.
Our future remains in grave doubt as a sovereign nation.
Here's my rating on every dollar denominated treasury / government backed security. "P" as in urine.
I forgot to log in first. Anonymous#133937=Mad Greek.
EB - Thanks for the forensics and crime scene investigation. You are detective in charge of CSI Maiden Lane III, a horrific crime scene.
Ditto from Lionhead EB. I thought Maiden Lane was a chain of bowling alleys in the NY area that expanded from increasing public interest in bowling for dollars? Looks to me like someone made a "Lucky Strike."
Maiden Lane is actually a street in SF just off Union Square that used to be
full of whore houses and one took their life in their hands walking this street.
Now it is the street where financiers and their wives get their haircuts, brazilian waxes and spa treatments. These days the whores are still there just prettier.
Timmy must have been there.
The ratings were a fantasy to begin with of course.The real question is what percentage of them default.Junk?Oh yes.
You're implying the ratings actually mean something?
They must see this as a tactical challenge with historical consequence.
Nice work, EB. And what entity issued these ratings ?? Much of it is probably junk status already.......simply not yet defined as such.
Historically, financiers have always looted the public treasury, right? Tell me this is no big deal and not a blatant robbery in broad daylight....
Yes, financiers have always looted the public treasury.
However, maybe...just maybe...the CSI of Maiden Lane III by detective EB will prompt a prosecutor (and his/her little friend "RICO") to prosecute the greatest financial crimes in U.S. history.
BINGO! This has got RICO written all over it.