Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 21 members and 144 guests online.
Recent Recommendations
To some extend schools are part of the public infrastructure, you don't stretch too far saying that they are almost part of the government.
The banks did a big mistake by cheating the schools. This time they will pay, probably a lot.
Too early for Irony ?
It is never too early.
lambs to slaughter....
They are suing in an "orderly fashion".
aw, irony doesn't go well with cornflakes.
oops, anonymous is me. just clearing it up in case u couldn't live w/out knowing who made that brilliant insight...
The question isn't what the schools and districts SAID but what they WROTE. Where these districts had documented Investment Policy Statements or restrictions against risky investments and those documents were accessible to the bankers, they have a strong case. It's the advisor's or seller's duty to understand documented investment restrictions.
The other question is whether the sellers represented themselves in such a way as to have a fiduciary duty to the schools.
Slightly OT,
So the BofA official that was saying the gig was up last month was quite prophetic, was he not?
aw, irony doesn't go well with cornflakes.
You are correct. It is much better savored in the late afternoon, over a neat sherry and a Balkan Sobranie in the Senior Common Room, whilst waiting for one's companions to dress for dinner.
But like total bummer dude, that's not what we get.
mmm, slaughtered lamb...this is the tastiest comments ever!
There is a wrinkle here: Bank of America in February announced it entered into a ``leniency agreement'' with the U.S. Justice Department. In exchange for cooperating with the government's massive investigation into municipal market swaps, which came to light last November, the bank gets immunity from criminal prosecution.
That is one generous agreement. Hopefully enough dirt will be found to make the lawsuit extra-special painful.
Equal Opportunity Screwers; they treat the buyers and sellers with the same contempt.
I don't know how they are going to explain this to a jury. In its complaint, the school says it paid too much for its swap. The swap provider, BNP Paribas, then secretly passed on the excessive markups back to Bank of America through a mirror swap transaction.'' The bank paid BNP a kickback of $2.58 million, which it calledupfront fees,'' and was able to make so much money on the swap that it also made ``undisclosed payments to others who had no apparent role in the financings.''
This sounds like a test suit to me. No jury in the world will understand this, and no jury in the world will find for BofA.
These suits will last for years.
Criminal immunity is not civil immunity. And as an extra dollop of irony, the evidence they provide to assist the investigation (and preserve the terms of keeping themselves out of prison) is usually admissible for the civil case.
So, no prison time, but a weakened defense against the civil suit. money, jail, money, jail...
Here's some more irony, curtosy of Rob Dawg:
Bear Stearns Caymans Filing May Hurt Bankrupt Funds' Creditors
Aug. 7 (Bloomberg) -- Bear Stearns Cos.' decision to liquidate two bankrupt hedge funds in the Cayman Islands instead of New York may limit creditors' and investors' ability to get their money back.
While most of their assets are in New York, the funds filed for bankruptcy protection July 31 in a court in the Caymans, where they are incorporated. The bank also used a 2005 bankruptcy law to ask a U.S. judge in Manhattan to block all lawsuits against the funds and protect their U.S. assets during the Caymans proceedings.
The Bear Stearns cases may establish a precedent that would let other failed hedge funds liquidate in the Caymans, where judges have a track record of favoring management. The local monetary authority estimates that three out of four hedge funds globally are incorporated in the islands.
...
Dammit
I broke a tooth on that irony...
Max, those BSC folks ... what a swell group of guys and gals, eh?
Follow the money....
our dog ate the prospectus
my little sister threw it in the trash
our cat peed on it
Max, those BSC folks ... what a swell group of guys and gals, eh?
You have to wonder what the point of this action is? They're already facing a huge crisis of confidence; if you had your money in a Bear fund, wouldn't you pull it out now, even if it's doing well? Why allow them the privilege of investing your money if this is how you're treated when times are tough? This seems like a desperate and stupid action.
Dog-eat-dog indeed.
Did'nt Geritol have lots of irony in it?
Max - good observation on the BSC Cayman filing. It's an option open to many of these outfits, though.
As for the BoA lawsuit, it's a lawyer's job to make the jury understand it, and there's enough money at stake to hire a very good lawyer.... BoA looks very bad from what I've read about this one (and I've been following it).
Reminder that the G.19 Consumer Credit report should be coming out today. May saw a 6.5% increase at annual rate with revolving credit increasing 9.8%.
oh this is too much for me...Tanta sitting in the common room drinking sherry and smoking a pipe? Do u have a smoking jacket? i've been thinking about buying one for a while now so i can feel fancy as i drink my evening cognac.
Don't Panic About the Credit Market - WSJ.com
Don't panic, all is well, says BSC chief economist.
Translation : PANIC!!!!!!!!!!!!!
Anyone hearing anything on Bear Stearn's lines of credit? I'm hearing conflicting info.
Irony? I ordered flapjacks!
(Too early for flapjacks?)
You all missed the best part of this :
"There is a wrinkle here: Bank of America in February announced it entered into a ``leniency agreement'' with the U.S. Justice Department. In exchange for cooperating with the government's massive investigation into municipal market swaps, which came to light last November, the bank gets immunity from criminal prosecution."
Lovely. BofA as its own Tiger Team.
This is in part a correction from the sharp global equity run-up through mid-July. Current prices still signal growth ahead.
But in case our bet on that growth goes the wrong way, we will liquidate what little of your money we have left in the Caymans so you're sure to lose it all.
So much irony this morning, I'm going to choke.
I'm not sure I understand the importance of the jurisdiction.
When funds fail, remaining assets go first to creditors then to equity holders. I know the Cayman's are friendly to managers, but why does this matter?
As for the BoA lawsuit, it's a lawyer's job to make the jury understand it, and there's enough money at stake to hire a very good lawyer....
And it's the defense lawyer's job to make sure the jury doesn't understand it, though if the jury can't quite understand what the facts are, then it comes down to Bible School vs. Investment Bank (from New York City).
I'm confused, what does a BIBLE school have to do with any municipality. We are still talking about the U.S. and we still have the 1st ammendment barring the establishment of religion...Oh i forgot we have a fundimentalist religious lunitic as POTUS.
This makes me want to throw up my protein shake.
Geoff, go see barry's review of that piece at the Big Picture (link on CR main page, right column).
The Chutzpah of Bear Stearns!
"The local monetary authority estimates that three out of four hedge funds globally are incorporated in the [Cayman] islands."
Now there's a country we should invade.
The BSC/Cayman's thing should make things entertaining...
What with the mega-wealthy (R)/libertarian types' pending squeals on the unfairness of bankruptcy 'reform' and armies of lobbyists screeching to the government on their behalf to do something to help the poor dears.
Good thing I take my irony black, no sugar.
Jezzz, don't youse guys learn anything? Read your morning CR and only then pour your morning beverage. I'll be "beveraging" with one of the directors of our County's (Ventura) investments group soon and I'll "suggest" that BofA be suspended from bidding or executing deals pending outcome of this ongoing litigation. Wanna see BofA settle real fast and real quiet? All it will take is a few regular customers expressing reticence. And that's my greatest fear. Justice can only be served if the discovery and terms of settlement are public.
$ 2.58m fee to BNP Paribas? What sort of notional amouint were they supposed to be hedging?
Either they're playing around with $ 100m+ of notional (Gutenberg 1st edition for every kid?), or the banks have been charging 4/5% fees on a product where you'd normally pay under 0.5%.
Cutting operations like this aren't going to help the IBs P&L.
OK, I'll see your 23rd Psalm and raise you a Hemingway: Debt In The Afternoon (2005) - starring GSE guru Peter Wallison as THE MATADOR; costarring S&P bond analyst Mike DeStefano as THE BULL; with special guest Bert Ely as THE PICADOR.
Provides some (old) insight in just how AAA Fannie's senior debt is without the implicit guarantee.
If Impac is having this trouble then CFC can't be far behind.
When that happens the talk will be much different.
The trial lawyers are licking their collective chops.
It's not a Bible School--as in where Protestants send their kids during the summer so they can only have sex with like-minded people--but a College/University. So the size of the swap was likely large enough that the upfront payment, while large, wasn't too egregious for retail.
That defence worked for Gibson Greetings, but in that case there were 20somethings taped saying they were going to do their girl friend what they had just done to Gibson. (One has to assume the girl friends in question were bottoms.)
Discovery will be interesting.
The opportunities are almost endless: The banks have now entered an arena that is absolutely fraught with covenants. Are we operating under the new or old? If the former then let us slice a little bacon in which to wrap or lamb.
(I am still working on a connection between lightning and board meetings...)
I have been involved in a very limited way with the bankruptcy of a Bermuda insurance company that has been going on for several years. I assure you that creditors and equity holders in an offshore entity receive only the protection they can afford to pay for.
First, in preliminary proceedings in U.S. district court, the judge gave away the solvent part of the business to the managers. As Luther, leader of a gang called the Orphans once said, "No reason, I just like doing things like that." Then the court dismissed the case to Bermuda, where it is basically impossible to find out what is going on.
Fortunately some vultures came along and bought up a bunch of the preferred stock. Since then the Bermuda authorities appear to be proceeding in a somewhat fair and reasonable fashion. The price of the preferred stock has actually been going up recently.
With regard to the Bear Stearns WSJ editorial, someone remind me why we are supposed to care that Rupert Murdoch is buying this outfit?
Tanta smoking a pipe ? no way.. Surely its more likely to be Sobranie Black Russian Cigarettes as per
Sobranie - Wikipedia, the free encyclopedia
a quote from that article:
"Sobranie produces several styles geared specifically for ladies, some slimmer than standard cigarettes and others brightly colored."
I only reached the slums of the JCR but even there one could extend to Black Russians every so often.
OT - and no, don't answer this - do they even allow smoking in SCRs and JCRs nowadays ?
-K
I only reached the slums of the JCR but even there one could extend to Black Russians every so often.
Hey--I went to Cheesehead State where we drank Point and smoked Marlboros. All I know about the SCR I read in a Dorothy Sayers novel.
"If you're out of Point, you're out of town."
Still the second-greatest beer slogan ("Get Moody with Huddy")
I'm confused, what does a BIBLE school have to do with any municipality. We are still talking about the U.S. and we still have the 1st ammendment barring the establishment of religion...Oh i forgot we have a fundimentalist religious lunitic as POTUS.
As I understand it, the bonds issued by Biola were supposed to be tax exempt (same basic critter as muni bonds) and the same games (the blow up sheep kind) the Banks played with Biola they also like to play with their municipal clients. BTW: Not for profit Religious institutions have been tax exempt far longer than W has been in power.