In the video below, it appears that Steve Liesman of CNBC has access to deposition or other facts in the SEC case. Perhaps he has been talking to Paolo Pellegrini, Paulson’s former head trader who is believed to be a key witness for the SEC. We have found no one else that is reporting on case specifics beyond what was in the SEC complaint. Liesman reports that the Abacus 2007-AC1 deal was somewhat unique in that it was Paulson’s only CDO that used a neutral third party manager to select collateral (ACA management) or “bespoke” deal. Pauslon did other CDO deals where they picked the collateral directly and it was disclosed as such. What is not clear is if Paulson’s economic interest in those deals failing was also properly disclosed. The implication is if Goldman loses this case it will not lead to a precedent that will spread to many other CDOs.
The Bernanke debate in the senate has started. Readers can watch it live on CSPAN. The latest Bernanke tally is as follows.
A milestone in Bernanke’s nomination was reached this morning …. the Sunday political talk shows. John McCain came out this morning against Bernanke. So here’s what we know. As of this morning (noon CT, January 24) … Bernanke needs 60 votes to end a filibuster of his nomination (known as cloture). After cloture, he then needs 51 to be reappointed. So, the bogey is 60 for cloture.
Reverse Repo Failure Confirmation, Primary Dealers Want Exemption From Tier One Capital Requirements To Do Reverse ReposSubmitted by Tyler Durden on 11/06/2009 15:30 -0500
A few weeks ago we speculated that the Federal Reserve's attempt to conduct a reverse repo test as part of a liquidity drainage failed. In a stunning piece of news, Zero Hedge friend Jim Bianco sent us the following. Little commentary is necessary: the banks are about to unleash the massive leverage ploy all over again, this time with the pretext that they are happy to soak up liquidity, yet in the same time, their stupidity and inability to gauge risk will blow up the financial system once again when Tier One ratios for dealers are allowed to go back to 100:1. Zero Hedge will forward this information to all of our correspondents in Washington as what the Primary Dealer community is doing is extortion, pure and simple, and it is likely to be endorsed by their cronies at the Federal Reserve (which, in turn, has already received a carte blanche to do so by its purported master, Goldman Sachs).
Citadel Calls Former Head Of HFT Trading's Current Venture, "A Veritable Pirate Ship Of Illegal Activity"Submitted by Tyler Durden on 10/09/2009 16:54 -0500
A peculiar escalation developing in Chicago (what is it about that city) was today's development in the Citadel - Teza Technologies lawsuit. As a reminder, Teza is the firm run by former Citadel head of HFT and quantitative trading, Misha Malyshev, who got unmasked when it was made clear that he had recruited Sergey Aleynikov from Goldman, and was preparing to launch a quant trading group despite his non-compete with Citadel (which may very well be the reason for the entire Aleynikov fiasco after all). What was surprising in today's hearing was the proclamation by Citadel lawyers that Teza is a "veritable pirate ship of illegal activity."
Much has been said on Zero Hedge about the Fed's monetization of Treasuries, usually via the NY Fed's POMO activities, which on occasion buys back Treasuries as promptly as 5 days after any one given auction. Yet we were dumbfounded by this piece of information, presented to us by Jim Bianco, which demonstrates that the Fed's monetization of Agencies is far more blatant than anything even encountred in Treasuries.