"A possible outcome could be that California, NY and Illinois band together and invade Texas. Texas will prove to be the balance of power as the “beggar my neighbor’s state” policies unfold."
Austerity has arrived in America. At this point, it is not a formal, mandated austerity like we have seen in Europe, but the results are just the same.
No Federal Preemption by a Trustee of a Mortgage Backed Security Trust from Senior Counsel of the Office of the Comptroller of the CurrencySubmitted by 4closureFraud on 01/10/2011 16:25 -0400
In short, the Banks’ authority to act as trustees under federal law does not insulate the assets the Banks hold in trust for the benefit of investors from state law requirements otherwise applicable to those assets.
As we discussed in detail in March it would be only a matter of time before the AG would file some sort of suit against E&Y for the firm's involvement in Lehman's Repo 105 end of quarter window dressing violations. And as we reported yesterday, Andrew Cuomo has now officially filed civil fraud charges against Ernst & Young. While overdue following Anton Valukas' "examiner Lehman" report which obliterated all integrity E&Y may have had, and while we are confident there will be a settlement in this case as well, at least this final act by Cuomo as NY AG pretends to give the impression that the US judicial system is not completely corrupt.
It was only a matter of time: back in March, following revelations of the Lehman Repo 105 scam, we speculated that the days of Ernst & Young are numbered. Back then we said "we are confident that (again, with the assumption that we live in some
semblance of a sane/ration world), E&Y's Financial Services Office
and quite possibly the entire firm. Integrity is the number one
currency for an auditor, and just like Anderson, E&Y's just went out
in a puff of green-colored smoke." Today we learn that Andrew Cuomo is about to make E&Y's life a whole lot more difficult. Per the WSJ "State Attorney General Andrew Cuomo is close to filing the case, which
would mark the first time a major accounting firm was targeted for its
role in the financial crisis." Too bad - E&Y was surely hoping that just like everything else in this corrupt country, out of sight would mean out of mind, and soon everyone would forget about the firm's involvement in the biggest bankruptcy in history. Better luck next time...
FINRA oversees the broker dealers, and 70% are calling for increased transparency. FINRA blew them off. Those 70% represent America more than the large banks located on Wall Street. What truly amazes me is how little attention is being paid to this outfit.
Are Expert Networks About To Be Exposed As The Ringleader In The Biggest Insider Trading Bust In History?Submitted by Tyler Durden on 11/20/2010 12:04 -0400
Over a year ago, Zero Hedge published an expose in three parts (two of them in the form of direct letters to Andrew Cuomo) discussing the possibility that so-called "expert networks" are nothing less than legalized insider trading rings for the uber-wealthy, operating largely unsupervised, and leaking selective information to preferred clients. For those who may be new to this topic, we suggest catching up on Part 1, Part 2 and Part 3. Subsequently, we also suggested that expert networks would be implicated in the bust of Galleon Partners, the Goldman "Huddle", the collapse of FrontPoint Partners and, most recently, that expert networks may have been directly or indirectly involved in facilitating the record historical P&L of such hedge fund "titans" as SAC Capital. Today, via the Wall Street Journal, we realize that not only have the good folks at the SEC been diligently reading us for the past 13 months, but that we may have been right all along (once again). To wit: "Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter. The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say." Good bye expert networks (and many, many hedge funds) - we hardly knew you.
My take on the election and what it might mean.
I have one question: Are Lloyd Blankfein, Lawrence Summers and Robert Rubin members of the NYC Harvard Club? If not, they should be...
BN *AG CUOMO EXPANDS PROBE OF NEW YORK FORECLOSURE ACTIONS
BN *CUOMO DEMANDS INFORMATION FROM BANK OF AMERICA, WELLS FARGO
BN *CUOMO DEMANDS INFORMATION FROM WELLS FARGO, GMAC MORTGAGE/ALLY
BN *AG CUOMO ALSO CALLS FOR SUSPENSION OF SOME FORECLOSURES
BN *CUOMO CALLS FOR SUSPENSION OF SERVICERS ENGAGED IN ROBO-SIGNING
Well, come on, the guy is running for some political office somewhere.
FINRA not only failed, but the question that needs to be fully explored is whether it acted on material, nonpublic information as it liquidated its ARS bonds in 2007, at the expense of the investors it was supposed to be protecting.
How Goldman's Counterparty Valuation Adjustment (CVA) Desk Saved The Firm From An AIG Blow Up (And Opens Up A Whole New Can Of Wormy Questions)Submitted by Tyler Durden on 07/25/2010 17:23 -0400
In today's NYT, Gretchen Morgenson does a good summary of how Goldman was demonstratively net short net short AIG (or net long its CDS, depending how one looks at it) via nearly 100 counterparties to the tune of just over $1.7 billion in net notional, after Chuck Grassley released several previously classified documents disclosing Goldman's CDS position as of September 15, 2008, the day of Lehman's bankruptcy. As Gretchen summarizes: "According to the document, Goldman held a total of $1.7 billion in insurance on A.I.G. from almost 90 institutions. Its exposure to A.I.G. at that time was $2.6 billion. Goldman bought most of the insurance from large foreign and domestic banks, including Credit Suisse ($310 million), Morgan Stanley ($243 million) and JPMorgan Chase ($216 million). Goldman also bought $223 million in insurance on A.I.G. from a variety of funds overseen by Pimco, the money management firm." While the topic of how the world's biggest asset management firm in the face of Pimco (and specifically its massive Total Return Fund) could have a net short CDS position (i.e., unlimited downside exposure), and how this is supposed to demonstrate prudent capital management, is ripe for evisceration, we will leave it for another day, as there is something more notable in the Grassley disclosure that has to be discussed. While Gretchen is correct that the external position of Goldman's exposure vis-a-vis AIG is indeed a total of $1.7 billion in long CDS, if one were to actually present the gross number, the truth would be starker: as the Grassley document reveals, the firm's gross exposure for its IG flow and structured finance desks goes from a positive $1.7 billion net exposure, to a ($2.9) billion net exposure, a massive $4.8 billion swing! What is it that in one fell swoop moved the firm from having a huge long bet on AIG, to a major short CDS position, one that nearly entirely covered the firm's $2.6 billion in legacy risk exposure? Enter Goldman's Counterparty Valuation Adjustment desk.
SEC's announcement of a paltry and ridiculously small $550 million Goldman settlement a few minutes before market close means all is well with the economy (and presumably the resignation of Lloyd Blankfein now that Goldman admits it is not admitting fraud). We presume whatever backdoor cash is involved will also stop the Cuomo criminal case into Goldman. The tactical surgical strike to ramp the market also coincided with last minute announcement that BP has halted a leak - which was the expected pressure test and is not news at all, but who cares -buy buy buy! In other news: ES and SPY disconnect massively, as nothing makes sense any more.
As the heat wave sizzles North America and Europe, global pension heat is rising. Let's hope stock markets keep sizzling instead of fizzling because at this rate, it won't take long before we reach the pensions boiling point.