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Collateralized Debt Obligations

Moral Blindness on Wall Street

Hoyt Hilsman | Posted 05.25.2011 | Business
Hoyt Hilsman

One of the most shocking elements of the testimony by Goldman Sachs executives this week was the moral blindness they showed when evaluating the role of their firm in the economic collapse.

CDO Market -- Rife With Collusion and Manipulation?

Thomas Adams and Yves Smith | Posted 05.25.2011 | Business
Thomas Adams and Yves Smith

Despite extensive credit crisis postmortems, many of the widely accepted explanations of what happened are at odds with facts on the ground.

SEC Sues ICP Asset Management

Huffington Post | Nathaniel Cahners Hindman | Posted 05.25.2011 | Business

The Securities and Exchange Commission today filed civil fraud charges against ICP Asset Management and its founder, Thomas Priore, for fraudulently m...

John Paulson Defends His Toxic CDOs by Insulting Everyone's Intelligence

David Fiderer | Posted 05.25.2011 | Business
David Fiderer

There are countless ways to discredit Paulson's recent statements, just as there are countless ways to discredit his claim that he operated in "good faith."

Misadventures in Collateralized Debt Obligations | NELSON D. SCHWARTZ and ERIC DASH | Posted 05.25.2011 | Business

But now, after so much financial pain, Wall Street is nervously tallying the potential legal costs from its misadventures in collateralized debt obli...

The (Only) Important Lesson from the SEC vs. Goldman

Bob Rice | Posted 05.25.2011 | Business
Bob Rice

Wall Street "innovation," like synthetic CDOs, are just new casino games that generate big profits for the house, but only huge risks for our economy.

Who is Next in the SEC's Crosshairs? Some Possible (and Heretofore Overlooked) Suspects

Thomas Adams and Yves Smith | Posted 05.25.2011 | Business
Thomas Adams and Yves Smith

Both the traditional media and the blogosphere have taken an almost obsessive interest in the suit the SEC filed against Goldman last week with regard...

SEC: Goldman Sachs Charged With Civil FRAUD Over Mortgage Securities

AP/Huffington Post | Posted 05.25.2011 | Business

The government has accused Goldman Sachs of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the h...

Arthur Delaney

Goldman Sachs' Alleged Fraud Explained: How It Worked (PHOTOS) | Arthur Delaney | Posted 05.25.2011 | Business

Goldman Sachs defrauded investors by failing to disclose a conflict of interest on mortgage investments it sold as the housing market went sour, accor...

A Hedge Fund Show Tune: Ditty Lampoons Magnetar's 'Betting Against The American Dream' (VIDEO)

Posted 05.25.2011 | Business

As part of their segment this week on the hedge fund Magnetar, This American Life and Planet Money asked Broadway composer Robert Lopez to write a sho...

Do Business Schools See Why CDOs Are Compared to "Springtime for Hitler"?

David Fiderer | Posted 05.25.2011 | Business
David Fiderer

New reporting offers hard evidence that Magnetar, a hedge fund group based in Chicago, had designed a series of subprime mezzanine CDOs that were all but guaranteed to fail.

Regulating Collateralized Debt Obligations, the Elephant in the Room Untouched by Financial Reform Bills

Louis M. Guenin | Posted 10.24.2012 | Business
Louis M. Guenin

Surprisingly and inexplicably, the Senate and House financial reform bills fail to institute any significant regulation of CDOs. Both bills are entirely silent on synthetic CDOs, and thus have missed the elephant in the room.

CDO Capital: Banks Fight For Their Right To Keep Buying | By Yalman Onaran and Jody Shenn | Posted 05.25.2011 | Business

June 8 (Bloomberg) -- U.S. banks are fighting to preserve the use of securities that help them appear better capitalized, even as their investments in...

Scott Patterson and Janet Tavakoli Debate: Did Quants or Malfeasance (and Leverage) Cause the Financial Crisis?

Janet Tavakoli | Posted 05.25.2011 | Business
Janet Tavakoli

What really caused the financial crisis? High leverage against assets that could only go down in value -- and the subsequent seize-up of funding due to nervousness about malfeasance.

CDO Independent Director Collects $400K A YEAR-- Just For Signing His Name

Reuters | Matthew Goldstein | Posted 05.25.2011 | Business

...CDOs have been very good to Donald Puglisi, a retired University of Delaware finance professor who remains fond of them. In fact, he and others are...

Ask Goldman Sachs to Give it Back!

Cenk Uygur | Posted 05.25.2011 | Business
Cenk Uygur

When we paid $62 billion to AIG "counterparties," we weren't saving the economy, we were paying off the bookies. The money we gave them didn't go toward saving one house or one mortgage -- it went to Wall Street.

Debunking Michael Lewis' The Big Short

Yves Smith | Posted 05.25.2011 | Business
Yves Smith

The shortcomings of Lewis' superficially pleasing work is that it runs the risk of fitting facts to the Procrustean bed of a tidy, satisfying narrative.

The CDOs That Destroyed AIG: The Big Short Doesn't Quite Reveal What They Knew and When They Knew It

David Fiderer | Posted 05.25.2011 | Business
David Fiderer

It's been eighteen months since AIG collapsed, and Congress has yet to seriously focus on the most important questions: What did they know and when did they know it?

Morgan Stanley Investigation: Fed Looking Into Firm's Mortgage Deals

AP | STEPHEN BERNARD and STEVENSON JACOBS | Posted 05.25.2011 | Business

NEW YORK — Fears of a growing investigation of Wall Street banks sent Morgan Stanley's stock falling Wednesday even as the company said it knew ...

Congress Exposes Potential Profiteering in AIG's Deals: Delay Enabled Further Cover-Up

Janet Tavakoli | Posted 05.25.2011 | Business
Janet Tavakoli

Goldman is not solely responsible, but it has a large role in AIG's crisis and a unique position of conflicted interest and influence over the terms of the bailout. Now that the crisis is over, this issue should be reopened.

One Year Before Crisis, I Told Jamie Dimon and Warren Buffett AIG Had Serious Trouble (and Goldman Sachs Knew Too)

Janet Tavakoli | Posted 05.25.2011 | Business
Janet Tavakoli

The mark-to-market losses were just one part of the problem. AIG had a grave problem just from this position alone, and AIG had other serious problems.

Is Wall Street Full of Human CDOs?

Elise Coroneos | Posted 05.25.2011 | Business
Elise Coroneos

After the fiasco of the last year, the financial community should be getting back to the fundamentals of its job, which is to be stewards of the community's wealth.

Washington's Bipartisan Betrayal: The 2015 Global Financial Crisis

Janet Tavakoli | Posted 05.25.2011 | Business
Janet Tavakoli

The economy did not just have a heart attack; we are suffering from financial appendicitis. Instead of doing the necessary surgery, Congress is prescribing potent addictive painkillers.

Wall Street Is More of a Threat to Obama's Domestic Agenda than Afghanistan

Joseph A. Palermo | Posted 05.25.2011 | World
Joseph A. Palermo

Whatever Obama decides to do in Afghanistan is of little consequence compared to Wall Street's ongoing "plutonomy."

Ralph Cioffi: Off the Hook for a Long Time Pattern of Behavior

Janet Tavakoli | Posted 05.25.2011 | Books
Janet Tavakoli

I worked at Bear Stearns in the late 1980s and remembered amiable newcomer Ralph Cioffi -- just acquitted -- to be Bear Stearns' most talented and successful salesman of mortgage-backed securities.