Proving that some of the biggest dopes have some of the fattest wallets:
FOR TROUBLED FIRMS, A FLOOD OF BIG LOANS
They Gain Time to Fix Woes---or Delay a Fix; Hedge Funds Play Role
By Bernard Wysocki Jr.
Bally Total Fitness Holding Corp., a Chicago health-club operator, is deep in debt and has periodically been considered a candidate for bankruptcy.
That didn't prevent Bally from borrowing $284 million last October. A unit of JP Morgan Chase & Co. arranged the loan, with investment banks and a hedge fund participating.
"I'll never forget being in a board meeting and saying to our investment bankers: "How on God's earth was this so easy?" says Steven Rogers, a finance professor at Northwestern University who was then a Bally director. "They said: 'There's a lot of money out there.'"
In a world awash in investable funds, even many of the most troubled companies are finding lenders willing to offer them big money. This rescue financing, as it is sometimes called, can give companies time to clean up their balance sheets and avoid a trip to bankruptcy court. US filings for bankruptcy reorganizations---a painful experience for employees, creditors and shareholders alike---are at a 10-year low. Also at historic lows are US corporations' debt defaults.
Rescue financing gives the economy more flexibility to work through some of its problems, says Dhruv Narain of Goldman Sachs Group Inc. "Today, a lot of this is being done out of court, outside of Chapter 11," says Mr. Narain, co-head of the US restructuring group at Goldman, a big player in emergency financing.
But some worry that all the money flowing to troubled companies deters them from solving their problems. It just lets them "kick the can down the road," says William Derrough, co-head of recapitalization and restructuring at investment bank Jefferies & Co.
It can also be risky to have so much debt sloshing around the economy's shakier regions. When rescue lending fails, the extra debt can make a bust just more spectacular. Among lenders that risk taking it on the chin are hedge funds, which have largely replaced banks as lenders in this kind of finance. Says Mr. Derrough: "To quote Alan Greenspan, there's some irrational exuberance on the part of investors."
How and when the credit cycle might turn isn't known. But nearly all economists believe that interest rates will eventually rise for loans on risky assets. Lenders will become more cautious and the result will be tighter credit, possibly even a so-called credit crunch....
Rescue money can come in the form of bonds or even equity infusions, but many of the recent deals involve credits known as leveraged loans---those carrying interest rates of at least 1 1/4 to 1 1/2 percentage points above the London interbank offered rate, or Libor. This leveraged-loan market is booming. It has tripled over five years to $500 billion....A slice of this sume is rescue financing....Leveraged loans are often used in buyouts that load up companies with debt, and more such loans could be injected as "rescue" finance if companies hit trouble.
The Federal Reserve is watching the leveraged-loan market as an "area of possible financial risk," a Fed governor, Randall S. Kroszner, said in a recent speech. He said the Fed was "mindful that high levels of leverage can lead to credit problems relatively quickly for both borrowers and lenders when conditions turn."
The frothy late-1980s era of high-yield "junk" bonds gave way in the early 1990s to a recession, the collapse of the savings-and-loans and the downfall of the main junk-bond underwriter, Drexel Burnham Lambert Inc. A severe credit crunch ensued, with all but blue-chip companies having trouble securing debt funding.
In 1998, a crisis at hedge fund Long Term Capital Management, amid turmoil in global debt markets, brought on a milder credit squeeze. Three years later the combination of the dot-com meltdown, another recession and the Sept. 11, 2001 terrorist attacks led to a wave of bond defaults....
The Bally case illustrates that in today's Wall Street, a slew of bad news over a period of several years doesn't preclude a company from raising large amounts of cash that give it another chance to work out its problems.
Bally, an operator of nearly 400 fitness centers...has posted big operating losses as its membership revenue has declined. It piled up a mountain of debt, more than $800 million....
In 2006, as losses mounted and the stock fell, Bally's chief executive departed. The company named a former Bear Stearns investment banker, Donald Kornstein, as chairman. In late 2006, Bally concluded it couldn't make a crucial debt payment.
The $284 million loan JP Morgan then arranged helped Bally dodge that bullet. It pushed the company's next deadline---on $300 million of debt---forward six months to next October....
"Thanks to an electric jolt to its economic heart, Bally came back to life..." wrote Peter Cohan, a Babson College business professor, in a blog which he recommened selling Bally stock short, or betting on a decline.
The help was short-lived. In March, Bally didn't file its 2006 financial statements on time. The New York Stock Exchange delisted its shares after the price fell below $1....With the October deadline looming...Mr. Kornstein started intensive talks with Bally's largest stockholders and variosu creditors. On May 31, Bally announced a complex plan, approved by key creditors, under which it would go private after a quick trip to bankruptcy court.
The filing would wipe out existing shareholders and reduce debt by $150 million....Mr. Kornstein declined to be interviewed. He hailed the agreement in a written statement, noting it wold cut Bally's annual interest bill by $29 million. Bally's announcement said "while the company is in the process of restructuring, investments in its securities will be highly speculative."
The announcement was a reminder that while some rescue loans clearly work...others are at least partial failures...
> Proving that some of the biggest dopes have some of the fattest > wallets:
> FOR TROUBLED FIRMS, A FLOOD OF BIG LOANS
> They Gain Time to Fix Woes---or Delay a Fix; Hedge Funds Play Role
> By Bernard Wysocki Jr.
> Bally Total Fitness Holding Corp., a Chicago health-club operator, is > deep in debt and has periodically been considered a candidate for > bankruptcy.
> That didn't prevent Bally from borrowing $284 million last October. A > unit of JP Morgan Chase & Co. arranged the loan, with investment banks > and a hedge fund participating.
> "I'll never forget being in a board meeting and saying to our > investment bankers: "How on God's earth was this so easy?" says > Steven Rogers, a finance professor at Northwestern University who was > then a Bally director. "They said: 'There's a lot of money out > there.'"
> In a world awash in investable funds, even many of the most troubled > companies are finding lenders willing to offer them big money. This > rescue financing, as it is sometimes called, can give companies time > to clean up their balance sheets and avoid a trip to bankruptcy > court. US > filings for bankruptcy reorganizations---a painful experience for > employees, creditors and shareholders alike---are at a 10-year low. > Also at historic lows are US corporations' debt defaults.
> Rescue financing gives the economy more flexibility to work through > some of its problems, says Dhruv Narain of Goldman Sachs Group Inc. > "Today, a lot of this is being done out of court, outside of Chapter > 11," says Mr. Narain, co-head of the US restructuring group at > Goldman, a big player in emergency financing.
> But some worry that all the money flowing to troubled companies deters > them from solving their problems. It just lets them "kick the can > down the road," says William Derrough, co-head of recapitalization and > restructuring at investment bank Jefferies & Co.
> It can also be risky to have so much debt sloshing around the > economy's shakier regions. When rescue lending fails, the extra debt > can make a bust just more spectacular. Among lenders that risk taking > it on the chin are hedge funds, which have largely replaced banks as > lenders in this kind of finance. Says Mr. Derrough: "To quote Alan > Greenspan, there's some irrational exuberance on the part of > investors."
> How and when the credit cycle might turn isn't known. But nearly all > economists believe that interest rates will eventually rise for loans > on risky assets. Lenders will become more cautious and the result > will be tighter credit, possibly even a so-called credit crunch....
> Rescue money can come in the form of bonds or even equity infusions, > but many of the recent deals involve credits known as leveraged > loans---those carrying interest rates of at least 1 1/4 to > 1 1/2 percentage points above the London interbank offered rate, or > Libor. This leveraged-loan market is booming. It has tripled over > five years to $500 billion....A slice of this sume is rescue > financing....Leveraged loans are often used in buyouts that load up > companies with debt, and more such loans could be injected as "rescue" > finance if companies hit trouble.
> The Federal Reserve is watching the leveraged-loan market as an "area > of possible financial risk," a Fed governor, Randall S. Kroszner, said > in a recent speech. He said the Fed was "mindful that high levels of > leverage can lead to credit problems relatively quickly for both > borrowers and lenders when conditions turn."
> The frothy late-1980s era of high-yield "junk" bonds gave way in the > early 1990s to a recession, the collapse of the savings-and-loans and > the downfall of the main junk-bond underwriter, Drexel Burnham Lambert > Inc. A severe credit crunch ensued, with all but blue-chip companies > having trouble securing debt funding.
> In 1998, a crisis at hedge fund Long Term Capital Management, amid > turmoil in global debt markets, brought on a milder credit squeeze. > Three years later the combination of the dot-com meltdown, another > recession and the Sept. 11, 2001 terrorist attacks led to a wave of > bond defaults....
> The Bally case illustrates that in today's Wall Street, a slew of bad > news over a period of several years doesn't preclude a company from > raising large amounts of cash that give it another chance to work out > its problems.
> Bally, an operator of nearly 400 fitness centers...has posted big > operating losses as its membership revenue has declined. It piled up > a mountain of debt, more than $800 million....
> In 2006, as losses mounted and the stock fell, Bally's chief executive > departed. The company named a former Bear Stearns investment banker, > Donald Kornstein, as chairman. In late 2006, Bally concluded it > couldn't make a crucial debt payment.
> The $284 million loan JP Morgan then arranged helped Bally dodge that > bullet. It pushed the company's next deadline---on $300 million of > debt---forward six months to next October....
> "Thanks to an electric jolt to its economic heart, Bally came back to > life..." wrote Peter Cohan, a Babson College business professor, in a > blog which he recommened selling Bally stock short, or betting on a > decline.
> The help was short-lived. In March, Bally didn't file its 2006 > financial statements on time. The New York Stock Exchange delisted > its shares after the price fell below $1....With the October deadline > looming...Mr. Kornstein started intensive talks with Bally's largest > stockholders and variosu creditors. On May 31, Bally announced a > complex plan, approved by key creditors, under which it would go > private after a quick trip to bankruptcy court.
> The filing would wipe out existing shareholders and reduce debt by > $150 million....Mr. Kornstein declined to be interviewed. He hailed > the agreement in a written statement, noting it wold cut Bally's > annual interest bill by $29 million. Bally's announcement said "while > the company is in the process of restructuring, investments in its > securities will be highly speculative."
> The announcement was a reminder that while some rescue loans clearly > work...others are at least partial failures...
lisa lisa, nice article. it goes to the heart of what i feel, that the real culprit of all of the financial mis-dealings in this country is because of deregulation and those obscene tax cuts for the wealthy, that includes the corporate ones also. libertarians blame government, to a point its true, if government is controlled by conservatives and libertarians. stuff like this would have been nipped in the bud real quick, if it even had a chance to become reality in the period from 1933-1968, after that milton friedmans insanity gained power and the rest is history.
> On Jun 12, 9:50 am, Lisa Lisa <mando...@verizon.net> wrote:
> > Proving that some of the biggest dopes have some of the fattest > > wallets:
> > FOR TROUBLED FIRMS, A FLOOD OF BIG LOANS
> > They Gain Time to Fix Woes---or Delay a Fix; Hedge Funds Play Role
> > By Bernard Wysocki Jr.
> > Bally Total Fitness Holding Corp., a Chicago health-club operator, is > > deep in debt and has periodically been considered a candidate for > > bankruptcy.
> > That didn't prevent Bally from borrowing $284 million last October. A > > unit of JP Morgan Chase & Co. arranged the loan, with investment banks > > and a hedge fund participating.
> > "I'll never forget being in a board meeting and saying to our > > investment bankers: "How on God's earth was this so easy?" says > > Steven Rogers, a finance professor at Northwestern University who was > > then a Bally director. "They said: 'There's a lot of money out > > there.'"
> > In a world awash in investable funds, even many of the most troubled > > companies are finding lenders willing to offer them big money. This > > rescue financing, as it is sometimes called, can give companies time > > to clean up their balance sheets and avoid a trip to bankruptcy > > court. US > > filings for bankruptcy reorganizations---a painful experience for > > employees, creditors and shareholders alike---are at a 10-year low. > > Also at historic lows are US corporations' debt defaults.
> > Rescue financing gives the economy more flexibility to work through > > some of its problems, says Dhruv Narain of Goldman Sachs Group Inc. > > "Today, a lot of this is being done out of court, outside of Chapter > > 11," says Mr. Narain, co-head of the US restructuring group at > > Goldman, a big player in emergency financing.
> > But some worry that all the money flowing to troubled companies deters > > them from solving their problems. It just lets them "kick the can > > down the road," says William Derrough, co-head of recapitalization and > > restructuring at investment bank Jefferies & Co.
> > It can also be risky to have so much debt sloshing around the > > economy's shakier regions. When rescue lending fails, the extra debt > > can make a bust just more spectacular. Among lenders that risk taking > > it on the chin are hedge funds, which have largely replaced banks as > > lenders in this kind of finance. Says Mr. Derrough: "To quote Alan > > Greenspan, there's some irrational exuberance on the part of > > investors."
> > How and when the credit cycle might turn isn't known. But nearly all > > economists believe that interest rates will eventually rise for loans > > on risky assets. Lenders will become more cautious and the result > > will be tighter credit, possibly even a so-called credit crunch....
> > Rescue money can come in the form of bonds or even equity infusions, > > but many of the recent deals involve credits known as leveraged > > loans---those carrying interest rates of at least 1 1/4 to > > 1 1/2 percentage points above the London interbank offered rate, or > > Libor. This leveraged-loan market is booming. It has tripled over > > five years to $500 billion....A slice of this sume is rescue > > financing....Leveraged loans are often used in buyouts that load up > > companies with debt, and more such loans could be injected as "rescue" > > finance if companies hit trouble.
> > The Federal Reserve is watching the leveraged-loan market as an "area > > of possible financial risk," a Fed governor, Randall S. Kroszner, said > > in a recent speech. He said the Fed was "mindful that high levels of > > leverage can lead to credit problems relatively quickly for both > > borrowers and lenders when conditions turn."
> > The frothy late-1980s era of high-yield "junk" bonds gave way in the > > early 1990s to a recession, the collapse of the savings-and-loans and > > the downfall of the main junk-bond underwriter, Drexel Burnham Lambert > > Inc. A severe credit crunch ensued, with all but blue-chip companies > > having trouble securing debt funding.
> > In 1998, a crisis at hedge fund Long Term Capital Management, amid > > turmoil in global debt markets, brought on a milder credit squeeze. > > Three years later the combination of the dot-com meltdown, another > > recession and the Sept. 11, 2001 terrorist attacks led to a wave of > > bond defaults....
> > The Bally case illustrates that in today's Wall Street, a slew of bad > > news over a period of several years doesn't preclude a company from > > raising large amounts of cash that give it another chance to work out > > its problems.
> > Bally, an operator of nearly 400 fitness centers...has posted big > > operating losses as its membership revenue has declined. It piled up > > a mountain of debt, more than $800 million....
> > In 2006, as losses mounted and the stock fell, Bally's chief executive > > departed. The company named a former Bear Stearns investment banker, > > Donald Kornstein, as chairman. In late 2006, Bally concluded it > > couldn't make a crucial debt payment.
> > The $284 million loan JP Morgan then arranged helped Bally dodge that > > bullet. It pushed the company's next deadline---on $300 million of > > debt---forward six months to next October....
> > "Thanks to an electric jolt to its economic heart, Bally came back to > > life..." wrote Peter Cohan, a Babson College business professor, in a > > blog which he recommened selling Bally stock short, or betting on a > > decline.
> > The help was short-lived. In March, Bally didn't file its 2006 > > financial statements on time. The New York Stock Exchange delisted > > its shares after the price fell below $1....With the October deadline > > looming...Mr. Kornstein started intensive talks with Bally's largest > > stockholders and variosu creditors. On May 31, Bally announced a > > complex plan, approved by key creditors, under which it would go > > private after a quick trip to bankruptcy court.
> > The filing would wipe out existing shareholders and reduce debt by > > $150 million....Mr. Kornstein declined to be interviewed. He hailed > > the agreement in a written statement, noting it wold cut Bally's > > annual interest bill by $29 million. Bally's announcement said "while > > the company is in the process of restructuring, investments in its > > securities will be highly speculative."
> > The announcement was a reminder that while some rescue loans clearly > > work...others are at least partial failures...
> lisa lisa, > nice article. it goes to the heart of what i feel, that the real > culprit of all of the financial mis-dealings in this country is > because of deregulation and those obscene tax cuts for the wealthy, > that includes the corporate ones also. > libertarians blame government, to a point its true, if government is > controlled by conservatives and libertarians. > stuff like this would have been nipped in the bud real quick, if it > even had a chance to become reality in the period from 1933-1968, > after that milton friedmans insanity gained power and the rest is > history.- Hide quoted text -
Yes, but it wasn't a total loss. Bally's shareholders were wiped out.
> Proving that some of the biggest dopes have some of the fattest > wallets:
> FOR TROUBLED FIRMS, A FLOOD OF BIG LOANS
> They Gain Time to Fix Woes---or Delay a Fix; Hedge Funds Play Role
> By Bernard Wysocki Jr.
> Bally Total Fitness Holding Corp., a Chicago health-club operator, is > deep in debt and has periodically been considered a candidate for > bankruptcy.
> That didn't prevent Bally from borrowing $284 million last October. A > unit of JP Morgan Chase & Co. arranged the loan, with investment banks > and a hedge fund participating.
> "I'll never forget being in a board meeting and saying to our > investment bankers: "How on God's earth was this so easy?" says > Steven Rogers, a finance professor at Northwestern University who was > then a Bally director. "They said: 'There's a lot of money out > there.'"
> In a world awash in investable funds, even many of the most troubled > companies are finding lenders willing to offer them big money.
[snip]
You have two things going on here, both of them influenced by governments role in the economy. 1) Folks are willing to risk fairly large amounts with the chance to possibly make higher returns. The folks arranging these loans rarely hold them but in fact sell them to people hoping to make more income. This is influenced in many ways by the fact that capital gains are taxed at a lower rate than income. So the loans get bought and sold, and folks hoping they sell and make cash, because they'll get taxed less on the capital gain, than on the interest paid. So there is only so much interest in actually having the load serviced.
2) Folks often are looking for investments that have some loss risk aspect to them. "Losses" can be sold, or bought, to adjust ones tax position. They are traded and as such a very risky loan can become a potential loss to be used, or sold, to counter the tax effects of other risky but successful investments.
Treat capital gains like any other income, and hinder the ability of losses to be traded like assets, and much of this phenomenon goes away.
On Jun 13, 9:23 am, me <oconn...@slr.orl.lmco.com> wrote:
> You have two things going on here, both of them influenced by > governments role in the economy. 1) Folks are willing to risk > fairly large amounts with the chance to possibly make higher > returns. The folks arranging these loans rarely hold them but > in fact sell them to people hoping to make more income. This is > influenced in many ways by the fact that capital gains are taxed at > a lower rate than income.
correct, that is one of the cornerstones of conservative free market economics. so it makes a difference in who controls the government. the new dealers understood that the wealthy will speculate wildly, and they needed to shackle them. one way was a far more progressive tax formula. under the conservatives tax's have been slashed only for the rich, so walla, speculation is now running wild creating massive bubbles and wild complicated schemes to get even richer. history tells us that this will not end well.
So the loans get bought and sold,
> and folks hoping they sell and make cash, because they'll > get taxed less on the capital gain, than on the interest paid.
another conservative scheme for even more wealth for a few.
> So there is only so much interest in actually having the load > serviced.
they have even cleverly repackaged debt as collateral, amazing.
> 2) Folks often are looking for investments that have some > loss risk aspect to them. "Losses" can be sold, or bought, > to adjust ones tax position. They are traded and as such > a very risky loan can become a potential loss to be used, > or sold, to counter the tax effects of other risky but > successful investments.
yep, who cares who gets hurt as long as they make more.
> Treat capital gains like any other income, and hinder the > ability of losses to be traded like assets, and much of this > phenomenon goes away.
not under conservatism we won't. lets hope that type of economics is in its last throes.
you know, here are a bunch of "left wing ass-sniffing goons" out there. hopefully , one day, you will all be rounded up and put into concentration camps where you cannot lie and hurt anyone, anymore.
>>under the conservatives tax's have been slashed only for the rich, >> walla, speculation is now running wild creating massive bubbles and >>ld complicated schemes to get even richer. >>History tells us that this will not end well.
How so? Isn't it those so called rich people that funded the loans to begin with?
> On Jun 13, 9:23 am, me <oconn...@slr.orl.lmco.com> wrote:
> > You have two things going on here, both of them influenced by > > governments role in the economy. 1) Folks are willing to risk > > fairly large amounts with the chance to possibly make higher > > returns. The folks arranging these loans rarely hold them but > > in fact sell them to people hoping to make more income. This is > > influenced in many ways by the fact that capital gains are taxed at > > a lower rate than income.
> correct, that is one of the cornerstones of conservative free market > economics. > so it makes a difference in who controls the government. > the new dealers understood that the wealthy will speculate wildly, > and they needed to shackle them. one way was a far more progressive > tax formula. > under the conservatives tax's have been slashed only for the rich, > so walla, speculation is now running wild creating massive bubbles and > wild complicated schemes to get even richer. > history tells us that this will not end well.
> So the loans get bought and sold,
> > and folks hoping they sell and make cash, because they'll > > get taxed less on the capital gain, than on the interest paid.
> another conservative scheme for even more wealth for a few.
> > So there is only so much interest in actually having the load > > serviced.
> they have even cleverly repackaged debt as collateral, amazing.
> > 2) Folks often are looking for investments that have some > > loss risk aspect to them. "Losses" can be sold, or bought, > > to adjust ones tax position. They are traded and as such > > a very risky loan can become a potential loss to be used, > > or sold, to counter the tax effects of other risky but > > successful investments.
> yep, who cares who gets hurt as long as they make more.
> > Treat capital gains like any other income, and hinder the > > ability of losses to be traded like assets, and much of this > > phenomenon goes away.
> not under conservatism we won't. lets hope that type of economics is > in its last throes.
> >>under the conservatives tax's have been slashed only for the rich, > >> walla, speculation is now running wild creating massive bubbles and > >>ld complicated schemes to get even richer. > >>History tells us that this will not end well.
> How so? Isn't it those so called rich people that funded the loans to > begin with?
> > On Jun 13, 9:23 am, me <oconn...@slr.orl.lmco.com> wrote:
> > > You have two things going on here, both of them influenced by > > > governments role in the economy. 1) Folks are willing to risk > > > fairly large amounts with the chance to possibly make higher > > > returns. The folks arranging these loans rarely hold them but > > > in fact sell them to people hoping to make more income. This is > > > influenced in many ways by the fact that capital gains are taxed at > > > a lower rate than income.
> > correct, that is one of the cornerstones of conservative free market > > economics. > > so it makes a difference in who controls the government. > > the new dealers understood that the wealthy will speculate wildly, > > and they needed to shackle them. one way was a far more progressive > > tax formula. > > under the conservatives tax's have been slashed only for the rich, > > so walla, speculation is now running wild creating massive bubbles and > > wild complicated schemes to get even richer. > > history tells us that this will not end well.
> > So the loans get bought and sold,
> > > and folks hoping they sell and make cash, because they'll > > > get taxed less on the capital gain, than on the interest paid.
> > another conservative scheme for even more wealth for a few.
> > > So there is only so much interest in actually having the load > > > serviced.
> > they have even cleverly repackaged debt as collateral, amazing.
> > > 2) Folks often are looking for investments that have some > > > loss risk aspect to them. "Losses" can be sold, or bought, > > > to adjust ones tax position. They are traded and as such > > > a very risky loan can become a potential loss to be used, > > > or sold, to counter the tax effects of other risky but > > > successful investments.
> > yep, who cares who gets hurt as long as they make more.
> > > Treat capital gains like any other income, and hinder the > > > ability of losses to be traded like assets, and much of this > > > phenomenon goes away.
> > not under conservatism we won't. lets hope that type of economics is > > in its last throes.
yes it was. then they resold them beal. to institutions, or countries that think they are being treated fairly, or are run by someone from beals world.
Vide...@tcq.net wrote: >On Jun 14, 2:21 pm, Foobar <bamberb...@gmail.com> wrote: >> >>under the conservatives tax's have been slashed only for the rich, >> >> walla, speculation is now running wild creating massive bubbles and >> >>ld complicated schemes to get even richer. >> >>History tells us that this will not end well.
>> How so? Isn't it those so called rich people that funded the loans to >> begin with? >yes it was. then they resold them beal. to institutions, or countries >that think they are being treated fairly, or are run by someone from >beals world.
You must have been around too many extremely stupid people. The financial types I know would all assess the risk, based on the party they were dealing with and the securities they are buying. If there are any as stupid as you imagine, they are not gong to be in the world of finance very long. Financial Darwinism will almost certainly have weeded them out before they get enough money to invest heavily in such mortgages. I guess it's just my "rugged individualism" showing through, but those who lost or will lose money on those mortgages don't get much sympathy from me--they took a risk in anticipation of high potential return, and this time it didn't pay off. That's life.
Now, if the mortgagor was induced to enter into the contract through fraud or deceptive marketing practices, that's a whole 'nother kettle of fish. If that can happen, maybe the truth in lending laws need to be strengthened. -- Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
> Vide...@tcq.net wrote: > >On Jun 14, 2:21 pm, Foobar <bamberb...@gmail.com> wrote: > >> >>under the conservatives tax's have been slashed only for the rich, > >> >> walla, speculation is now running wild creating massive bubbles and > >> >>ld complicated schemes to get even richer. > >> >>History tells us that this will not end well.
> >> How so? Isn't it those so called rich people that funded the loans to > >> begin with? > >yes it was. then they resold them beal. to institutions, or countries > >that think they are being treated fairly, or are run by someone from > >beals world.
> You must have been around too many extremely stupid people. The > financial types I know would all assess the risk, based on the party > they were dealing with and the securities they are buying. If there > are any as stupid as you imagine, they are not gong to be in the world > of finance very long.
there are a lot of them. they have purchased perhaps billions, but i have read perhaps a trillion or more dollars worth.
Financial Darwinism will almost certainly have
> weeded them out before they get enough money to invest heavily in such > mortgages.
not so. this is just the beginning. you will see later many so-called solid institutions with many many bad loans on there hands. later on you and i will be discussing this as they implode. you might be shocked, i will not be.
I guess it's just my "rugged individualism" showing
> through,
self inflicted gullibility, how does that one sound.
but those who lost or will lose money on those mortgages
> don't get much sympathy from me--they took a risk in anticipation of > high potential return, and this time it didn't pay off. That's life.
if they were sold these packages with all knowledge of what they were buying then who cares, let them eat crow. but since when would crooks who steal from the poor enter into any financial transaction with transparency?
> Now, if the mortgagor was induced to enter into the contract through > fraud or deceptive marketing practices, that's a whole 'nother kettle > of fish.
i just posted a article on just that subject. it was not aimed at you because you do have some feelings on right and wrong.
If that can happen, maybe the truth in lending laws need to
> be strengthened. > --
they are trying.
> Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
this is out a article i just posted, "Often these loans are securitized and sold to investors such as insurance companies and pension funds."
and here is another one, " Brokers, bankers play subprime blame game The head of the mortgage banking industry's trade group claimed mortgage brokers and lenders focused only on short-term profits benefited from the housing boom, but didn't do enough to examine whether borrowers could repay.
Harry Dinham, president of the National Association of Mortgage Brokers, replied by saying that, because most residential mortgage loans are quickly resold to investors, most lenders are actually "just brokering the transaction but afraid or ashamed to admit it."
and of course these loans that involve outright fraud, falsifications, and even forgery are repackaged and sold to investors. so if investors are so smart, how come they have bought perhaps billions or trillions of dollars worth of these loans?
> so if investors are so smart, how come they have bought perhaps > billions or trillions of dollars worth of these loans?- Hide quoted text -
Here's one group of investors who don't feel so smart these days. And Bush apparently has limited sympathy for them:
Bush Administration Rebuffs Investors at High Court (Update4)
By Greg Stohr
June 12 (Bloomberg) -- The Bush administration dealt a setback to lawsuits that accuse Enron Corp.'s investment banks of helping defraud shareholders out of billions of dollars, refusing to back investors in a similar case at the U.S. Supreme Court.
The Justice Department decided not to file a brief in support of investors in a securities-fraud case the high court will consider later this year. The administration still has the option of backing the defendants in the case, Motorola Inc. and Cisco Systems Inc., by filing later on.
The Securities and Exchange Commission had asked the Justice Department to side with investors. That put the securities regulator at odds with President George W. Bush's White House and other executive branch agencies, which voiced concern that so- called third party lawsuits -- those targeting a company's business partners -- would harm the U.S. economy.
``We think the SEC is the right entity to bring those lawsuits,'' rather than individual shareholders, Allan Hubbard, director of Bush's National Economic Council, told reporters on a conference call today. ``We are a society that is overly litigious. And that is very harmful for our economy and very harmful for investors.''
The Enron shareholders are suing the bankrupt energy trading company's investment banks, including Merrill Lynch & Co. and Credit Suisse Group.
Rule of Law
U.S. Solicitor General Paul Clement, the Justice Department's top courtroom lawyer, had until yesterday to file a brief supporting investors in the Motorola case. His refusal prompted an angry reaction.
It is ``an unprecedented example of politics trumping the rule of law,'' said Dan Newman, a spokesman for William Lerach, a lawyer representing Enron shareholders in the related case. ``It's a crass slap in the face'' to the victims of Enron's fraud, Newman said.
John Engler, president of the Washington-based National Association of Manufacturers lobbying group, praised Clement's decision. Engler said his group is ``doing everything we can to encourage'' the Bush administration to support the other side in the case.
``This is one that is going to have a very united business community,'' Engler said. ``There is still time for them to come in on the opposition,
Vide...@tcq.net wrote: > Lisa Lisa <mando...@verizon.net> wrote: > >[...]
> libertarians blame government, to a point its true, > if government is controlled by conservatives and > libertarians. stuff like this would have been nipped > in the bud real quick, if it even had a chance to > become reality in the period from 1933-1968, after > that milton friedmans insanity gained power and > the rest is history.
When the population grew from one million to one hundred million, what was the change in human "footprint" compared to the size of the planet? When the population grew from two billion to 6.5 billion, what was the change in "footprint" compared to the size of the planet?
It would be much more equitable having each individual fight the flu on his own, rather than waste resources having armies fight each other over resources. By stopping the suppression of influenza, everyone could be on the front lines, instead of just a few good men. . . --
> Vide...@tcq.net wrote: > > Lisa Lisa <mando...@verizon.net> wrote: > > >[...]
> > libertarians blame government, to a point its true, > > if government is controlled by conservatives and > > libertarians. stuff like this would have been nipped > > in the bud real quick, if it even had a chance to > > become reality in the period from 1933-1968, after > > that milton friedmans insanity gained power and > > the rest is history.
> When the population grew from one million to one > hundred million, what was the change in human > "footprint" compared to the size of the planet? > When the population grew from two billion to > 6.5 billion, what was the change in "footprint" > compared to the size of the planet?
> It would be much more equitable having each individual > fight the flu on his own, rather than waste resources > having armies fight each other over resources. > By stopping the suppression of influenza, everyone > could be on the front lines, instead of just a few good men. > . > . > --
another messiah? once the comet passes you will see the saucer. it will take us all to the promised land of milk and honey.
> > It would be much more equitable having each individual > > fight the flu on his own, rather than waste resources > > having armies fight each other over resources. > > By stopping the suppression of influenza, everyone > > could be on the front lines, instead of just a few good men.
> another messiah?
Your great-grandchildren will have to deal with a world 50% more crowded, but you would prefer not to? . . --
> > > It would be much more equitable having each individual > > > fight the flu on his own, rather than waste resources > > > having armies fight each other over resources. > > > By stopping the suppression of influenza, everyone > > > could be on the front lines, instead of just a few good men.
> > another messiah?
> Your great-grandchildren will have to deal with a world > 50% more crowded, but you would prefer not to? > . > . > --
> > Your great-grandchildren will have to deal with a world > > 50% more crowded, but you would prefer not to?
> i have no idea what you are talking about.
The projections for world population are 9-10 billion. We're at 6.5 billion now. Whenever I suggest we control population by stopping the suppression of influenza, people say "You first!" So, if you are O.K. with the projected population increase to 9-10 billion, you should also be willing to live in a city that is 50% more crowded than it is now! . . --
> > > so if investors are so smart, how come they have bought perhaps > > > billions or trillions of dollars worth of these loans?- Hide quoted text -
> > Here's one group of investors who don't feel so smart these days. And > > Bush apparently has limited sympathy for them:
> What exactly is the people's case against Enron's investors?
There isn't one. LOL! You can't read. The shareholders are suing the investment banks, perhaps because they passed on fraudulent information regarding the financial health of Enron.
There's plenty of info on Enron. Research: Enron, Arthur Anderson, shell companies, etc. You'll come up with a lot.
> There's plenty of info on Enron. Research: Enron, > Arthur Anderson, shell companies, etc.
The projections for world population are 9-10 billion. We're at 6.5 billion now. Whenever I suggest we control population by stopping the suppression of influenza, people say "You first!" So, if you are O.K. with the projected population increase to 9-10 billion, you should also be willing to live in a city that is 50% more crowded than it is now! . . --
> > > > so if investors are so smart, how come they have bought perhaps > > > > billions or trillions of dollars worth of these loans?- Hide quoted text -
> > > Here's one group of investors who don't feel so smart these days. And > > > Bush apparently has limited sympathy for them:
> > What exactly is the people's case against Enron's investors?
> There isn't one. LOL! You can't read.
Yes I can. What do you think an investment banker is?
> The shareholders are suing
...anyone they can get money out of? I put a question mark there because I don't, which is why I ask you: what is their case?
> the > investment banks, perhaps because they passed on fraudulent > information regarding the financial health of Enron.
I am just curious why you apparently assume they have a case. You don't even seem to know what they allegedly did wrong.
> > There's plenty of info on Enron. Research: Enron, > > Arthur Anderson, shell companies, etc.
> The projections for world population are 9-10 billion. > We're at 6.5 billion now. Whenever I suggest we > control population by stopping the suppression of > influenza, people say "You first!" So, if you are > O.K. with the projected population increase to 9-10 > billion, you should also be willing to live in a > city that is 50% more crowded than it is now!
Why am I suddenly getting a lecture on population?
> On Jun 17, 9:07 am, Lisa Lisa <mando...@verizon.net> wrote:
> > On Jun 16, 4:58 am, Beal <bealrabbitsla...@hotmail.com> wrote:
> > > On Jun 14, 10:53 pm, Lisa Lisa <mando...@verizon.net> wrote:
> > > > On Jun 14, 9:25 pm, Vide...@tcq.net wrote:
> > > > > so if investors are so smart, how come they have bought perhaps > > > > > billions or trillions of dollars worth of these loans?- Hide quoted text -
> > > > Here's one group of investors who don't feel so smart these days. And > > > > Bush apparently has limited sympathy for them:
> > > What exactly is the people's case against Enron's investors?
> > There isn't one. LOL! You can't read.
> Yes I can. What do you think an investment banker is?
> > The shareholders are suing
> ...anyone they can get money out of? I put a question mark there > because I don't, which is why I ask you: what is their case?
> > the > > investment banks, perhaps because they passed on fraudulent > > information regarding the financial health of Enron.
> I am just curious why you apparently assume they have a case. You > don't even seem to know what they allegedly did wrong.
According to Enron's shareholders, the banks ran a ponzi scheme that enriched their top execs at the expense of the gullible investors.
Lisa Lisa <mando...@verizon.net> wrote: > "(David P.)" <imb...@mindspring.com> wrote:
> > The projections for world population are 9-10 billion. > > We're at 6.5 billion now. Whenever I suggest we > > control population by stopping the suppression of > > influenza, people say "You first!" So, if you are > > O.K. with the projected population increase to 9-10 > > billion, you should also be willing to live in a > > city that is 50% more crowded than it is now!
> Why am I suddenly getting a lecture on population?
You're not smart enough to give up on partisan politics-as-usual by yourself. You need some help. . . --
> On Jun 17, 8:14 pm, Beal <bealrabbitsla...@hotmail.com> wrote:
> > On Jun 17, 9:07 am, Lisa Lisa <mando...@verizon.net> wrote:
> > > On Jun 16, 4:58 am, Beal <bealrabbitsla...@hotmail.com> wrote:
> > > > On Jun 14, 10:53 pm, Lisa Lisa <mando...@verizon.net> wrote:
> > > > > On Jun 14, 9:25 pm, Vide...@tcq.net wrote:
> > > > > > so if investors are so smart, how come they have bought perhaps > > > > > > billions or trillions of dollars worth of these loans?- Hide quoted text -
> > > > > Here's one group of investors who don't feel so smart these days. And > > > > > Bush apparently has limited sympathy for them:
> > > > What exactly is the people's case against Enron's investors?
> > > There isn't one. LOL! You can't read.
> > Yes I can. What do you think an investment banker is?
> > > The shareholders are suing
> > ...anyone they can get money out of? I put a question mark there > > because I don't, which is why I ask you: what is their case?
> > > the > > > investment banks, perhaps because they passed on fraudulent > > > information regarding the financial health of Enron.
> > I am just curious why you apparently assume they have a case. You > > don't even seem to know what they allegedly did wrong.
> According to Enron's shareholders, the banks ran a ponzi scheme that > enriched their top execs at the expense of the gullible investors.
> There's lots of info on this. Look it up.
> Lisa
he knows lisa. it is just that he thinks enron behavior is legit.
On Jun 18, 11:50 pm, "(David P.)" <imb...@mindspring.com> wrote:
> Lisa Lisa <mando...@verizon.net> wrote: > > "(David P.)" <imb...@mindspring.com> wrote:
> > > The projections for world population are 9-10 billion. > > > We're at 6.5 billion now. Whenever I suggest we > > > control population by stopping the suppression of > > > influenza, people say "You first!" So, if you are > > > O.K. with the projected population increase to 9-10 > > > billion, you should also be willing to live in a > > > city that is 50% more crowded than it is now!
> > Why am I suddenly getting a lecture on population?
> You're not smart enough to give up on partisan > politics-as-usual by yourself. You need some help.
You can't even follow a conversation. How is a discombobulated fool like yourself going to help me?
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