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Damn banks are at it again. - 7/10/2009 2:23:40 AM

blacksword404

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By Pierre Paulden, Caroline Salas and Sarah Mulholland
July 8 (Bloomberg) -- Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.

Morgan Stanley is selling $87.1 million of securities that it expects to receive top AAA ratings and $42.9 million of notes graded Baa2, the second-lowest investment grade by Moody’s Investors Service, according to marketing documents obtained by Bloomberg News. The bonds were created from Greywolf CLO I Ltd., a CDO arranged in January 2007 by Goldman Sachs Group Inc. and managed by Greywolf Capital Management LP, an investment firm based in Purchase, New York.

Two years after the credit markets began to seize up, costing the world’s biggest financial institutions $1.47 trillion in writedowns and losses, banks are again taking so- called structured finance securities and turning them into new debt investments with top credit ratings. While the Morgan Stanley deal is the first to involve CDOs of loans, banks have been doing the same with commercial mortgage-backed securities in recent weeks.

A lot of banks and insurers “cannot buy anything but AAA,” said Sylvain Raynes, a principal at R&R Consulting in New York and co-author of “Elements of Structured Finance,” which is due to be published in November by Oxford University Press. “You’re manufacturing AAA out of not AAA, therefore allowing those people who have AAA written on their forehead to buy.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=aeTzfvEedKpQ

Now maybe I am seeing shit. But where have I seen this before? You want to take worthless trash and give it a AAA rating so it can be sold because otherwise people would be able to see it as trash?

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RE: Damn banks are at it again. - 7/10/2009 3:06:46 AM

DarkSteven

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It's very simple to me. Take crappy loans, repackage them as AAA - should be fraud charges and jail terms, not bailouts. Why WOULDN'T the banks try this crap again?

< Message edited by DarkSteven -- 7/10/2009 3:07:16 AM >

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RE: Damn banks are at it again. - 7/10/2009 4:22:44 AM

mefisto69

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forget jail terms - these scum bags won't learn until they start taking lead to the head

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RE: Damn banks are at it again. - 7/10/2009 7:19:49 AM

blacksword404

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quote:

ORIGINAL: DarkSteven

It's very simple to me. Take crappy loans, repackage them as AAA - should be fraud charges and jail terms, not bailouts. Why WOULDN'T the banks try this crap again?

They seem not to be able to learn until some bars slam behind them. Cause one recession and start seeding the next one before you recover from the last one.

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Post #: 4

RE: Damn banks are at it again. - 7/10/2009 10:19:09 AM

DemonKia

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FR, after read thru

But see, Bernie Madoff was supposed to pay for all those sins. His head has rolled, the cell doors are closing on him, & we're all supposed to get on with ignoring all the less-obvious fraudsters in finance . . . .. . Wall Street & all the financial players aren't the problem, they're not perpetuating problems, it's those other 'bad guys', over there . . . . . .

Okay, seriously. The credit agencies should be bankrupt & their segment of industry should be subject to some basic regulations to limit the blatant conflicts of interest that led to all this garbage debt being laundered as AAA secure assets . . . . .

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RE: Damn banks are at it again. - 7/10/2009 11:04:00 AM

DomKen

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Moody's said they were going to be more careful in grading securities. Sounds like they are trying to go back to business as usual. Maybe a for profit business isn't the best organization to be grading such securities.

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Post #: 6

RE: Damn banks are at it again. - 7/10/2009 11:16:21 AM

DemonKia

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From: Chico, Nor-Cali
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lol

The financial & political players are doing everything they can to turn the clock back to 2005 or 2006, when the boom times were swingin' . . . . . . & there don't seem to be many mad rushes to regulate stuff that's clearly broken . . . . . *shrug* . . .. Of course, we're nowhere near a bottom on this whole economic kerfluffle . . .. . Seems to be nothing like a 'good econ purge' to reset priorities, & it may take a while before the powers that be finally get with reality & take care of business . . . . .

Like, here in Cali, Prop 13 has wreaked serious fiscal grotesqueries but we're still a few years away from fixing those problems . . . . . .

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Post #: 7

RE: Damn banks are at it again. - 7/10/2009 11:55:37 AM

pahunkboy

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they took gold and silver down today. Quite a bit. But that is fine. Nice of them really. A chance to buy abit more. :-)

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Post #: 8

RE: Damn banks are at it again. - 7/10/2009 12:23:35 PM

Anarrus

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quote:

ORIGINAL: DemonKia

FR, after read thru

But see, Bernie Madoff was supposed to pay for all those sins. His head has rolled, the cell doors are closing on him, & we're all supposed to get on with ignoring all the less-obvious fraudsters in finance . . . .. . Wall Street & all the financial players aren't the problem, they're not perpetuating problems, it's those other 'bad guys', over there . . . . . .

Okay, seriously. The credit agencies should be bankrupt & their segment of industry should be subject to some basic regulations to limit the blatant conflicts of interest that led to all this garbage debt being laundered as AAA secure assets . . . . .

I agree, but do you really think that's going to happen when a good portion of the people in Wash, DC running and overseeing everything are former employees of Wall Street? I mean c'mon... let's get real.

Anarrus

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RE: Damn banks are at it again. - 7/10/2009 12:57:43 PM

Vendaval

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"You can fool some of the people, all of the time."

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RE: Damn banks are at it again. - 7/10/2009 1:09:49 PM

Lucylastic

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Interesting commentry in Newsweek
http://www.newsweek.com/id/205981
"But if you think this is ultimately going to be like the 1980s, when Wall Street's not-so-finest were cuffed and marched off to jail in front of the TV cameras, think again. Despite much fanfare a year or so ago from the FBI and the Justice Department, which said they were investigating major financial firms, most of the cases you are likely to hear about will be small fry like Sky Capital"

Lucy

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Post #: 11

RE: Damn banks are at it again. - 7/10/2009 3:19:36 PM

blacksword404

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quote:

ORIGINAL: DemonKia

FR, after read thru

But see, Bernie Madoff was supposed to pay for all those sins. His head has rolled, the cell doors are closing on him, & we're all supposed to get on with ignoring all the less-obvious fraudsters in finance . . . .. . Wall Street & all the financial players aren't the problem, they're not perpetuating problems, it's those other 'bad guys', over there . . . . . .

Okay, seriously. The credit agencies should be bankrupt & their segment of industry should be subject to some basic regulations to limit the blatant conflicts of interest that led to all this garbage debt being laundered as AAA secure assets . . . . .

It seems nothing has been learned. At least not by them. And if we allow them to do this stuff again then not by us either.

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Don't fight him. Embrace your inner asshole.

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Ego sum erus.

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Post #: 12

RE: Damn banks are at it again. - 7/10/2009 3:29:16 PM

blacksword404

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quote:

ORIGINAL: Vendaval

"You can fool some of the people, all of the time."

Sembra così.

I say we stand out in front of some of their buildings and sharpen swords while we stare at them. Don't do anything. Just sharpen. That might subtly get the point across.

Get enough people just showing up everywhere they go and they might quit. Probably not.

_____________________________

Don't fight him. Embrace your inner asshole.

Tu fellas magnus penum meum...iterum

Genuine catnip/kryptonite.
Ego sum erus.

The capacity to learn is a gift, the ability to learn a skill, the willingness to learn a choice. Dune HH

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Post #: 13

RE: Damn banks are at it again. - 7/11/2009 12:49:27 AM

Vendaval

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Subtle gestures are lost on that crowd of thieves and scoundrels.

< Message edited by Vendaval -- 7/11/2009 12:50:50 AM >

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Post #: 14

RE: Damn banks are at it again. - 7/11/2009 12:56:25 AM

Ialdabaoth

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quote:

ORIGINAL: Vendaval

Subtle gestures are lost on that crowd of thieves and scoundrels.

Well, there's always PROJECT MEYHEM...

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Post #: 15

RE: Damn banks are at it again. - 7/11/2009 12:56:45 AM

blacksword404

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quote:

ORIGINAL: Vendaval

Subtle gestures are lost on that crowd of thieves and scoundrels.

It would be funny to see though. Next time they mess it up, I say no bail outs.

_____________________________

Don't fight him. Embrace your inner asshole.

Tu fellas magnus penum meum...iterum

Genuine catnip/kryptonite.
Ego sum erus.

The capacity to learn is a gift, the ability to learn a skill, the willingness to learn a choice. Dune HH

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Post #: 16

RE: Damn banks are at it again. - 7/12/2009 12:11:40 AM

ienigma777

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you are getting what you deserve. Eat it up.

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Post #: 17

RE: Damn banks are at it again. - 7/12/2009 4:33:34 AM

Goddess2002

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Nothing is going to happen...the banks are going to do exactly what they want because they can. the media frenzy over Bernie Madoff, while he was certainly a scoundrel and crook, was simply a means for the banking industry to offer a distraction in order to continue with business as usual.

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Post #: 18

RE: Damn banks are at it again. - 7/12/2009 6:45:20 AM

openmindedslave

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The banks really have no clear idea how many loans on record will fail or will have to be adjusted.. The reported recently that people who were never close to losing their homes, were falling behind in paying their morgages on time ..That is scarry when your looking at unemployment of over 9.5 %. And lets not think that is high . In the some parts of the country unemployment is over that .. and in the black community the numbers in some cities and states have been reported to be over 30%. Think about if on your street 3/ 10 home owners were not working or taking jobs that earned less than they need to pay their bills on time.

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Post #: 19

RE: Damn banks are at it again. - 7/12/2009 7:06:29 AM

ThatDaveGuy69

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As abjectly cynical as I am, I'm holding out a small glimmer of hope. Just this week the administration announced that the Justice Dept would start looking at that quaint little notion we have here called aint-trust. I never got my panties in a bunch over Apple allowing AT&T to be the exclusive seller of their phones. But what I am hoping is that we're seeing the beginnings of the anything-goes corporate mindset starting to be reigned-in. iPhone marketing probably isn't all that much in the great scheme of things, but if it's a start toward creating real business ethics then I'm all for it. So once Justice gets their feet wet with Apple & AT&T, maybe they'll start looking into Wall Street.

Before you fall down laughing, I said "maybe"...

~Dave

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