Wall Street Folly

• Questions Raised About Evidence on Goldman
• SEC vs Goldman Sachs
• Goldman exec Cohn to attend Obama speech-source
• Blankfein attacks ‘political’ SEC case
• Tourre Expected Before Senate Panel
• Obama Says SEC, White House Didn’t Discuss Goldman
• Along with SEC, other investigators and suits may target Goldman Sachs
• Obama Doesn’t Intend to Give Back Goldman Campaign Donations Read the rest of this entry »

Tags: Barack Obama, Campaign contributions, CDO, fraud, Gary Cohn, Goldman Sachs, lawsuits, Lloyd Blankfein, Politics, SEC, Subprime mortgages

• Paulson & Co tells investors it was ‘open’
• Paulson & Co. Says Its Role in Goldman CDO Was ‘Appropriate’
• Suspecting politics in Goldman Sachs charges, Rep. Issa asks SEC for information
• It’s Lloyd’s of Washington next week
• Goldman takes aggressive line on fraud claims after bumper profits
• Goldman mounts defense on SEC charges, saying clients knew its products well
• Goldman Sachs Says SEC Case Hinges on Actions of One Employee
• Bank Says Losses Prove No Ill Intent
• Goldman Sachs Donations Loom Over Republicans, Democrats Alike Read the rest of this entry »

Tags: CDO, fraud, Goldman Sachs, John Paulson, Lawsuit, Lloyd Blankfein, Paulson & Co, Politics, SEC, Subprime mortgages, Witchhunts

• Goldman Tops Forecast, With $3.46 Billion in Earnings
• Goldman Employees Rally Around Blankfein
• What the Committee Knew
• Goldman’s London Units Face Formal U.K. FSA Probe
• Financial News: FSA Goldman Probe May Spark Intl Crackdown
• Goldman Sachs CDO Lawsuit Split SEC Commissioners in 3-2 Vote
• The SEC’s Impeccable Timing
• AIG eyes action on Goldman over CDOs
• Goldman ‘Shenanigans’ to Be Barred by Bill, Dodd Says
• Kirk to Return Goldman Donations in Illinois Campaign Read the rest of this entry »

Tags: AIG, CDO, fraud, FSA, Goldman Sachs, Hedge funds, John Paulson, Lloyd Blankfein, Paulson & Co, Politics, SEC, Subprime mortgages, Witchhunts

• The SEC vs. Goldman
• SEC faces fight to produce an open-and-shut court case
• SEC Probes Other Soured Deals
• Paulson May Face Litigation Following Goldman Suit, Whalen Says
• Top Goldman Leaders Said to Have Overseen Mortgage Unit
• Fabrice Tourre email is key to SEC’s evidence
• Goldman Sachs SEC Case May Hinge on Meaning of Word ‘Selected’
• Goldman May Face U.K., German Inquiries After Suit
• Brown Says He Wants Special Investigation of Goldman Sachs
• Goldman attacked by UK premier Read the rest of this entry »

Tags: CDO, Emails, fraud, Goldman Sachs, John Paulson, Lawsuit, Paulson & Co, Politics, SEC, Subprime mortgages

A must read: Check out the NY Magazine piece written by Michael Osinski. "I wrote the software that turned mortgages into bonds."  It's pretty fascinating stuff….

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Tags: CDO, Credit Crunch

Merrill Lynch CEO John Thain expressed doubt that the industry-wide bail-out plan for the credit insurers would ever get off the ground but that infusions into individual companies would be more likely.

In other Merrill news, the firm is cutting back on structured finance and CDO’s…..

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Tags: Bond Insurers, CDO, John Thain, Merrill Lynch

The Wall Street Journal goes through a list of some of the likely winners and losers in the market meltdown:

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Tags: Atticus, Bruce Kovner, Caxton, CDO, Credit Crunch, Dan Loeb, GLG Partners, Hedge funds, Jim Simons, Renaissance Technologies

In a sign of how quickly investment banks
are moving to scale back businesses hit by the turmoil, RBS said it had shed a
quarter of the just over 20 staff on its collateralised debt obligation team,
which repackages mortgage-backed securities and other instruments. Rick Caplan,
co-head of CDOs at RBS Greenwich Capital, the bank’s US capital markets
subsidiary, left two weeks ago as a result of the cutbacks.

The reductions at RBS mark a sharp reversal
from the expansion of recent years, when the bank beefed up its CDO team to take
advantage of demand from investors for new structures. CDO volumes jumped 134
per cent in 2006, according to RBS Greenwich’s annual review, and the bank
ranked in the top three underwriters of CDOs based on asset-backed securities.

RBS staff in US hit by subprime turmoil - Financial Times

Tags: CDO, investment banking, Revolving Door

Edward Cahill, who headed Barclays European CDO effort quit last Monday after returning from vacation; Barclays so far is being mum about why.  The spin is that he quit, but who knows?:

Barclays Capital refused to comment on the
reasons for his departure. However, Mr Cahill’s resignation appears to be the
first in recent weeks in the City or on Wall Street in this particular field of
finance.

His departure may promote scrutiny as it
comes at a time when several structures arranged by Barclays Capital appear to
have run into problems due to losses on subprime assets.

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Tags: Barclays, CDO, Revolving Door

We had to laugh at the email that one of our friends sent us: Presenting "Constant Obligation Leveraged Originated Structured Oscillating Money Bridged  Asset Guarantees":

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Tags: CDO, Derivatives, Email, Humor

Fidelity U.S. High-Yield Fund Has No Subprime Debt Pressure mounts on US mortgage groups Bankers try and digest effects of subprime disorder Buy-out deals may be on hold for months CDO Managers Feel Pain of Subprime Slide

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Tags: CDO, Fidelity, LBO / MBO, Private equity

The subprime flu has spread to another Australian hedge fund.  First it was Basis Capital that disclosed major problems with subprime exposure.  Now Absolute Capital Group Ltd, a Sydney based investor in collateral debt obligations, has disclosed that it won’t process any withdrawals until October 25 after forecasting losses in two of its fund. The two funds, Yield Strategies Fund and Yield Strategies Fund NZD, manage about $177 million and are run by Bill Entwistle.  ABN Amro’s Australian unit owns 50% of Absolute Capital.

Absolute Capital, which says it doesn’t
invest in the riskiest portion of CDOs, is suffering from the widening impact of
delinquencies on U.S. home loans to people with poor credit. Basis Capital Fund
Management Ltd., another Australian hedge fund battered in the North American
market, has hired Blackstone Group LP to negotiate with bankers to help it limit
losses.

“Because of the contagion from subprime, all of the credit sectors are
re-pricing,” Sydney-based Entwistle said. “There are lots of sellers and no
buyers, the market has to settle down before we can get some clarity.”

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Tags: CDO, Hedge funds

Emerging-Market Bonds Fall on Growing Subprime Mortgage Concern KKR, Homeowners Face Funding Drain as CDO Machine Shuts Down S&P may cut $1.76 bln in ABS CDOs backed by subprime Potential CDO downgrades climb to $1.4 bln – Fitch US’s Paulson says subprime woes ‘containable’

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Tags: bonds, CDO, Emerging Markets, Henry Paulson, Private equity, Ratings