banval

Market Losing Patience with AIG

Can't AIG reinsurer blocks of business to raise capital? NO DILUTION

Which Banks Will Survive?

MOST PEOPLE WHO MAKE THE CALL THAT AIG'S CDO PORTFOLIO WILL NEED TO BE WRITTEN DOWN TO MERRILL LEVELS FORGET THAT AIG'S CDO PORTFOLIO IS MUCH BETTER QUALITY THAN WHAT THE MONOLINES TOOK. AIG PULLED OUT AND MONOLINES JUMPED IN DUE TO THE DETERIORATION OF THE MARKET. MERRILL KEPT WHAT IT COULD NOT SELL TO THE MONOLINES, THE WORST OF THE WORST.

Auction Rate Securities: Who's To Blame?

Another kicker, is that one of the big German i-banks/broker-dealers put derivatives into the Auction Market at off-market levels. Orange County Redux! The securities were never worth par in the first place. These investors got toasted, and it was inevitably going to blow up. The subprime crisis was just the spark.

Citigroup Fined $100MM for ARS; ABCP Fiasco Remains Untouched

Caisse de dépôt et placement du Québec should be demanding the repurchase at par of the $12billion of ABCP they bought, still hold, and are misvaluing at at any value, on behalf of all those "little guys", and widows and orphans, that are their beneficiaries. Rousseau slipped out in a nick of time!

Cuomo Takes Action Against Citigroup, as ABCP Buyers Wait in Vain

In Canada, what happened was much closer to fraud than anything in the US. Deutsche Bank and DBRS invented the leveraged super senior trade which was based on credit derivatives and rated for the Canadian Conduit market. Because it was worth much less than 100% day 1, the investors were ripped off from the start. They relied on an explicit liquidity put to prevent them from losing their money, however, if they had looked closely at the language they would have realized that Deutsche never had to deliver on it. It was based on technical wording that required the entire Canadian Banking system to be failing before the liquidity put was triggered. At least all the SIV/CDO/ARS paper in the US was worth par when it was sold, and they may have had varying degrees of liquidity protection, but the US agencies never rated that component. Without DBRS, Deutsche could never have crushed the Canadian pension the way it did..those Canadian pensioners now own $12billion of worthless paper....