Comments on: Counterparties http://blogs.reuters.com/felix-salmon/2010/11/18/counterparties-252/ 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: hsvkitty http://blogs.reuters.com/felix-salmon/2010/11/18/counterparties-252/comment-page-1/#comment-21292 Fri, 26 Nov 2010 00:12:29 +0000 http://blogs.reuters.com/felix-salmon/?p=6201#comment-21292 Danny black obviously knows more then some of us about what wallstreet is doing, but I daresay more as a Wallstreet (Goldman) insider and apologist.

If there was a way for AIG to sue much as the SEC did (they had to give up that right in the bailout…) I think you would have to eat a lot of your words on here and elsewhere. Sadly, many former Goldman cronies were all too willing to forgive Wall-street of this mess.

That the banks were stuck with the hot potatoes were merely because they couldn’t offload it fast enough. That they built the house of cards in the air, by trading it amongst themselves should no longer be in dispute. It was a feeding frenzy of piranhas trying not to let the cards fall to the ground, lest the buyers who were still trickling in see their hand.

If anyone is willing to listen to Danny Black over the article then I suggest you read the source information to see whether there really was fake demand or believe Danny who says as usual we make a tempest in a teapot with our faux outrage…

]]>
By: Danny_Black http://blogs.reuters.com/felix-salmon/2010/11/18/counterparties-252/comment-page-1/#comment-21160 Sat, 20 Nov 2010 13:08:14 +0000 http://blogs.reuters.com/felix-salmon/?p=6201#comment-21160 walt9316, don’t think even at my most obnoxious have I been censored….

]]>
By: walt9316 http://blogs.reuters.com/felix-salmon/2010/11/18/counterparties-252/comment-page-1/#comment-21144 Fri, 19 Nov 2010 20:10:50 +0000 http://blogs.reuters.com/felix-salmon/?p=6201#comment-21144 Again, Danny_Black, thanks for your comment. Felix, if you really are moderating, please don’t let my comments knock off Danny_Black’s visibility.

]]>
By: Danny_Black http://blogs.reuters.com/felix-salmon/2010/11/18/counterparties-252/comment-page-1/#comment-21124 Fri, 19 Nov 2010 04:35:01 +0000 http://blogs.reuters.com/felix-salmon/?p=6201#comment-21124 Number of comments on the CDO piece:

1) The piece implies that AIG nearly went bankrupt because of losses on CDS contracts. It didn’t. It got into trouble because of collateral triggers in those contracts – which would have been manageable – but also because it decided to loan out liquid assets it had and invest the cash in illiquid assets, mostly ABSes.
2) Following on from that, despite paying out 100 cents on the dollar and despite a punitive interest rate on the loan from the Fed, the two SIVs are showing pretty healthy profits.
3) They are happily comparing apples and oranges. From recollection the hit the pension companies took were on **equity** investments not trading positions with AIG. ALL of the equity holders got killed. Ditto with Freddie and Fannie. Ditto their debt holders got made whole.
4) The FCC(sic i think they mean SEC) didn’t sue GS for a similar instrument as what was insured by AIG
5) The “banks” were not self-dealing. Firstly, the CDOs explicitly were investments in other securitised instruments. Secondly, it is clear even from the data they provide that pretty much the only person coming close to what they claim is true was Merrills. Even there, the claim this was happening towards the end to “artificially” drive demand is clearly untrue.
6) The banks typically kept the SS portions of the debts because they were next to impossible to offload because of the derisory spread they offered.

But hey who cares when we can have faux outrage?

]]>
By: bmozaffari http://blogs.reuters.com/felix-salmon/2010/11/18/counterparties-252/comment-page-1/#comment-21116 Fri, 19 Nov 2010 00:27:00 +0000 http://blogs.reuters.com/felix-salmon/?p=6201#comment-21116 Link missing for Peter Eavis’s tweet. I’m assuming it was the following:

a solution: have the exposed banks put equity into ire banks. not gonna happen, but fair, protects txpyrs, and avoids default.

(http://twitter.com/petereavis)

]]>