Description: A slew of internal e-mails from the leading credit rating agencies show employees at those firms knew of the dangers in subprime mortgages, but gave them the seal of approval anyway. Source: CNNMoney.com Date: 04/24/2010 Link: http://money.cnn.com/2010/04/23/news/economy/credit_rating_agencies_hearing/index.htm  Questions for discussion: Do you agree with the analysis presented? What actions should be taken by… Read more »
Posts Tagged: Risk Management
Competition, lack of data drove flawed credit ratings
Description: During the buildup to the financial crisis, major rating agencies Moody’s Corp. and Standard & Poor’s Inc. were understaffed, didn’t have enough data about the mortgage securities they were rating and were pressured by each other and investment bankers to issue overly rosy ratings, a lawmaker said Friday. Source: Marketwatch.com  Date: 04/23/2010 Link:… Read more »
SEC Risks Harm With High-Frequency Trading Curbs, CME CEO Says
Description: Regulators would harm U.S. equities trading if they toughened restrictions on computer-driven strategies that have largely replaced human market makers, CME Group Inc. Chief Executive Officer Craig Donohue said. Source: Bloomberg.com  Date: 04/24/2010 Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=aVkTbg7q8Lwo Questions for discussion: Do you agree with the concerns expressed by Donohue? Can this type of activity be… Read more »
SEC director talks tough about Goldman
Description: Director of Enforcement Robert Khuzami discusses the charges against Goldman Sachs during a panel at Tulane University’s Corporate Law Institute. Source: CNNMoney.com – video report  Date: 04/16/2010 Link: http://money.cnn.com/video/news/2010/04/16/n_Goldman_SEC_lawsuit_Khuzami.cnnmoney/ Questions for discussion: Summarize the accusations against Goldman and Paulson. Is this just a matter of full disclosure? What impact do you think this… Read more »
Goldman charged with fraud over Paulson CDO trade Shares of investment bank drop 13% on news of SEC lawsuit
Description: The Securities and Exchange Commission on Friday charged Goldman Sachs Group Inc. and one of its vice presidents with defrauding investors by misstating and omitting key facts about a financial product related to subprime mortgages. Source: Marketwatch.com  Date: 04/016/2010 Link: http://www.marketwatch.com/story/goldman-charged-with-fraud-over-paulson-cdo-trade-2010-04-16?pagenumber=1 Questions for discussion: Are there any explanations that can mitigate the damage… Read more »
Abacus Allowed Goldman to Shuffle Mortgage Risk Like Beads
Description:Â From July 2004 through April 2007, as credit markets boomed, Goldman Sachs Group Inc. created 23 financial transactions called Abacus, the word for a relatively crude counting tool involving the shuffling of beads. Yesterday, the Securities and Exchange Commission sued the bank for securities fraud in what would be the penultimate offering in the… Read more »
Whitney: Housing set to fall again
Description: Bank analyst Meredith Whitney predicts more foreclosures are on the way and the housing market will not rebound smoothly. Source: CNNMoney.com – video report  Date: 04/08/2010 Link: http://money.cnn.com/video/fortune/2010/04/08/f_sl_meredith_whitney_housing.fortune/ Questions for discussion: Do you agree with the predictions made by bank analyst Meredith Whitney? What investing strategy would make sense if she is right?… Read more »
Merrill Units Win Dismissal of Some MBIA Claims in Lawsuit
Description: Merrill Lynch & Co. units now owned by Bank of America Corp. won dismissal of claims in a lawsuit filed by MBIA Inc. last year over protection sold against mortgage-debt defaults. Source: Bloomberg.com Date: 04/10/2010 Link: http://www.bloomberg.com/apps/news?pid=20601208&sid=ac_igSnXiHDw Questions for discussion: What is the significance of the judge’s decision in this case? What are the… Read more »
At Lehman, Watchdogs Saw It All
Description: Almost two years ago to the day, a team of officials from the Securities and Exchange Commission and the Federal Reserve Bank of New York quietly moved into the headquarters of Lehman Brothers. They were provided desks, phones, computers — and access to all of Lehman’s books and records. At any given moment, there… Read more »
Apax, Private-Equity Firms Say Retail LBOs Return With Recovery
Description: Private-equity firms looking to buy retail and consumer companies said they’re now able to finance deals and pay reasonable prices after the credit crisis and global recession triggered a buyout slump. Source: Bloomberg.com Date: 03/12/2010 Link: http://www.bloomberg.com/apps/news?pid=20601109&sid=a1CarvonDlcU&pos=15 Questions for discussion: Does this news bode well for the economy? What has changed in this industry… Read more »
