Comments on: Capco: WTF? http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: traducere daneza romana http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-53648 Mon, 29 Sep 2014 14:02:07 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-53648 I keep listening to the news bulletin speak about receiving free online grant applications so I have been looking around for the most excellent site to get one. Could you advise me please, where could i acquire some?

]]>
By: DanO http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4918 Mon, 03 Aug 2009 18:15:30 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4918 Konnie, your end-run comment says it all. Might add ‘ruse to circumvent the law’. Why bother with due process when this one shoud just be taken. No lawyers, just marshalls and vacuum cleaners.

]]>
By: ChewYourGrouse http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4899 Sun, 02 Aug 2009 13:43:30 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4899 @Gaute

Many thanks. That was informative.

]]>
By: bonddude http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4895 Sat, 01 Aug 2009 19:24:46 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4895 Don’t forget the government regulators who double talked more but did even less than
Mr. Kimball. ;-)

]]>
By: Jamey http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4894 Sat, 01 Aug 2009 18:43:44 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4894 That’s it. America is now officially Hooterville. Wall Street firms are switching hats like they’re Sam Drucker and they have the business ethics of Mr. Haney.

]]>
By: Gaute Solheim http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4893 Sat, 01 Aug 2009 18:34:53 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4893 The name is a give-away; CAPtive COmpany. Traditionally captives have been used to avoid taxes or as a mean of asset protection (euphemism for cheating creditors). This time it is probably something else.

I know captives from the tax world, so this is at best a quallified guess. My guess is that it has been used to game Basel or similar rules the same way they did with loans that were transformed to CDOs or other papers with high ratings and lower demand of reserve capital than the original loanes.

If you want to save taxes or cheat creditors, you will be best served by a 100 % owned captive. If you want to game Basel, you probably will have to gang up with other companies that live under the Basel rules so each participant is a minority owner. The captive insurance company then sell insurance to it owners, and the rulemakers have decided that if you have insurance from a company that obey by the rules that govern the insurance companies, you have zero risk.

The most important rule for insurance companies is the rule that they must have enough funds to cover any possible scenario within a 99 % probability. It is for all practical purposes a version of VAR.

So the Capco structure could probably relive the participants for a collective reserve demand of lets guess 1000 by allocating 100 of capital split among them to Capco. Or they may avoid booking mark to market losses since they are insured.

]]>
By: ChewYourGrouse http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4890 Sat, 01 Aug 2009 13:20:48 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4890 When I called Fidelity in October following the “breaking the buck” freak out, I was told that SIPC plus Capco coverage protected my shares if not their value (as if the latter were an issue at that point in time). As of February: poof goes CAPCO.

I’m not generally one for the general free for all pile on Goldman and Wall St in general thing, but it seems that, to the extent that the remaining big banks and other CAPCO participants may have $11 billion unfunded liabilities emerging from Lehman litigation, that some of the YTD profits could have been steered to a recapitalization.

If anything, this should raises red flags for customers of Fidelity which, as a private company, is itself pretty opaque.

]]>
By: Tim Smyth http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4879 Fri, 31 Jul 2009 20:59:12 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4879 I have to look into it more but I am seam to have recollection that former Vermont Gov Howard Dean was a big proponent of allowing lightly regulated “captive” insurerers such as CAPCO to set up in Vermont with limited disclosure requirement.

Tim

]]>
By: konnie http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4874 Fri, 31 Jul 2009 18:54:09 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4874 ever hear about sarbanes oxley?

you remember that big government watchdog that was spose to protect Amerka from the likes of Enron……….

every business has to provide proof of insurance to every other business they do business with.

this was an end run around that rule………..

]]>
By: Ken http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/comment-page-1/#comment-4857 Fri, 31 Jul 2009 15:09:45 +0000 http://blogs.reuters.com/felix-salmon/2009/07/31/capco-wtf/#comment-4857 The non-working phone is a particularly nice touch. It’s evocative of the confidence games where the aftermath is a hastily-vacated office.

]]>