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The way things are going now, iTulip may need a completely separate forum for the subject. Some of this stuff actually belongs also to "You just can't make this stuff up" thread.
Today's harvest from Bloomberg:
1) Moral hazard:
http://www.bloomberg.com/apps/news?p...veU&refer=home
2) Housing lending at BAC is not a problem anymore :rolleyes:
http://www.bloomberg.com/apps/news?p...efer=exclusive
3) The usual suspects ....
http://www.bloomberg.com/apps/news?p...efer=exclusive
Today's harvest from Bloomberg:
1) Moral hazard:
http://www.bloomberg.com/apps/news?p...veU&refer=home
Northern Rock Made Risky Loans After Brown Rescue (Update1)
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By Mark Deen
March 20 (Bloomberg) -- Prime Minister Gordon Brown’s government allowed Northern Rock Plc to keep writing risky loans even after the lender tapped the Treasury for support, the National Audit Office said.
The government’s auditor also found that Treasury officials failed to adequately examine the bank’s books before they took it over in February 2008, allowing it to pursue a business plan that resulted in a 1.4 billion-pound ($2.3 billion) loss.
[...]
“You didn’t want to create a situation in which you were closing Northern Rock down, that you were preventing them from carrying on some normal business activity, because the alternative would have been to put the entire business into receivership, and obviously you didn’t want to do that,” Cabinet minister Peter Mandelson said on BBC television today.
[...]
[NR And if you wonder how could that happen, here is the answer
:]
[...]
The NAO report also said the Treasury’s own expertise was stretched in the early stages of the credit crunch, forcing ministers to rely on advice from Goldman Sachs Group Inc. and others. The government spent 27 million pounds on advisers and Northern Rock another 39 million pounds.
Goldman Sachs has been paid a total of 4.8 million pounds for its work on Northern Rock.
Share | Email | Print | A A A
By Mark Deen
March 20 (Bloomberg) -- Prime Minister Gordon Brown’s government allowed Northern Rock Plc to keep writing risky loans even after the lender tapped the Treasury for support, the National Audit Office said.
The government’s auditor also found that Treasury officials failed to adequately examine the bank’s books before they took it over in February 2008, allowing it to pursue a business plan that resulted in a 1.4 billion-pound ($2.3 billion) loss.
[...]
“You didn’t want to create a situation in which you were closing Northern Rock down, that you were preventing them from carrying on some normal business activity, because the alternative would have been to put the entire business into receivership, and obviously you didn’t want to do that,” Cabinet minister Peter Mandelson said on BBC television today.
[...]
[NR And if you wonder how could that happen, here is the answer
:] [...]
The NAO report also said the Treasury’s own expertise was stretched in the early stages of the credit crunch, forcing ministers to rely on advice from Goldman Sachs Group Inc. and others. The government spent 27 million pounds on advisers and Northern Rock another 39 million pounds.
Goldman Sachs has been paid a total of 4.8 million pounds for its work on Northern Rock.
2) Housing lending at BAC is not a problem anymore :rolleyes:
http://www.bloomberg.com/apps/news?p...efer=exclusive
Bank of America Stuck With Real-Estate Chief’s Unsold House
March 20 (Bloomberg) -- Barbara Desoer, who runs the largest U.S. housing lender, can speak from experience about tumbling property prices: She couldn’t sell her own home.
Desoer, 56, put her 4,500-square-foot house in Charlotte, North Carolina, on the market Aug. 1 for $1.675 million. She had just been named head of Bank of America Corp.’s real-estate unit, Countrywide Financial Corp., in Calabasas, California.
The home, which she and her husband bought in 2000 for $1.15 million, sold in December for a price that wasn’t made public. The buyer: Bank of America, according to a proxy the lender filed March 18. Now the house is for sale again, at $1.295 million, $380,000 less than the original asking price, according to listing agent Allen Tate Realtors.
March 20 (Bloomberg) -- Barbara Desoer, who runs the largest U.S. housing lender, can speak from experience about tumbling property prices: She couldn’t sell her own home.
Desoer, 56, put her 4,500-square-foot house in Charlotte, North Carolina, on the market Aug. 1 for $1.675 million. She had just been named head of Bank of America Corp.’s real-estate unit, Countrywide Financial Corp., in Calabasas, California.
The home, which she and her husband bought in 2000 for $1.15 million, sold in December for a price that wasn’t made public. The buyer: Bank of America, according to a proxy the lender filed March 18. Now the house is for sale again, at $1.295 million, $380,000 less than the original asking price, according to listing agent Allen Tate Realtors.
http://www.bloomberg.com/apps/news?p...efer=exclusive
March 19 (Bloomberg) -- The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts.
As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year’s peak of 567,518 failed trades on July 30.
The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days.
“We had another word for this in Brooklyn,” said Harvey Pitt, a former SEC chairman. “The word was ‘fraud.’”
While the commission’s Enforcement Complaint Center received about 5,000 complaints about naked short-selling from January 2007 to June 2008, none led to enforcement actions, according to a report filed yesterday by David Kotz, the agency’s inspector general.
The way the SEC processes complaints hinders its ability to respond, the report said.
Twice last year, hundreds of thousands of failed trades coincided with widespread rumors about Lehman Brothers. Speculation that the company was being acquired at a discount and later that it was losing two trading partners both proved untrue.
[...]
Trade failures rose for Bear Stearns as well last year. They peaked at 1.2 million shares on March 17, the day after JPMorgan announced it would buy the investment bank for $2 a share. That was more than triple the prior-year peak of 364,171 on Sept. 25.
As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year’s peak of 567,518 failed trades on July 30.
The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days.
“We had another word for this in Brooklyn,” said Harvey Pitt, a former SEC chairman. “The word was ‘fraud.’”
While the commission’s Enforcement Complaint Center received about 5,000 complaints about naked short-selling from January 2007 to June 2008, none led to enforcement actions, according to a report filed yesterday by David Kotz, the agency’s inspector general.
The way the SEC processes complaints hinders its ability to respond, the report said.
Twice last year, hundreds of thousands of failed trades coincided with widespread rumors about Lehman Brothers. Speculation that the company was being acquired at a discount and later that it was losing two trading partners both proved untrue.
[...]
Trade failures rose for Bear Stearns as well last year. They peaked at 1.2 million shares on March 17, the day after JPMorgan announced it would buy the investment bank for $2 a share. That was more than triple the prior-year peak of 364,171 on Sept. 25.
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