BEAR STEARNS $275 MILLION SETTLEMENT REACHED
Bear Stearns has been ordered to pay $275 Million dollars to investors that lost money with Bear Stearns. According to a recent CNBC.com article, Bear Stearns misled their investors about the true and deteriorating state of the company before JP Morgan purchased Bear Stearns. Bear Stearns was one of the first prominent companies to fail after […]
Behringer Harvard REITs Estimated Value Down 46% From Last Year
Behringer Harvard Opportunity REIT I dropped in value at the end of 2011, according to this article from investmentnews.com. The value per unit of the non-traded REIT went down to an estimated $4.12 per unit value, down from $7.66 a unit value from the previous year. The reduction in value for the Opportunity REIT I […]
UBS Cannot Quantify Subprime Exposure
Miles Costello of The Times Online reports that the cloud of uncertainty hanging over the credit markets was thrown into sharp relief yesterday as UBS told investors that it still could not be sure about the full financial impact of the credit crunch. UBS is preparing for writedowns of $13.4 billion (£6.8 billion) against its […]
Subprime Lawsuits Increase
Alistair Barr of Marketwatch reports that State Street Corp’s decision to set aside $618 million to cover subprime litigation costs has increased concern that insurers offering policies covering such expenses could be hit with big claims from the credit crisis. State Street said the reserve was needed to pay for lawsuits and possible settlements stemming […]
CDOs Face Ratings Downgrade
Paul Davies of FT.com reports that almost $6.5bn worth of complex debt securities face fresh downgrades by Standard & Poor’s because of their exposure to US mortgage-backed bonds, the credit rating agency said Friday.The news will add to the pain for investors in such instruments and follows downgrades issued to $3.7bn worth of similar instruments […]
“Subprime” Is Word On The Street
CNNMoney.com reports that even the American Dialect Society knows how risky home mortgages are these days.The group of wordsmiths chose “subprime” as 2007’s Word of the Year at its annual convention Friday. “‘Subprime’ has been around with bankers for awhile, but now everyone is talking about ‘subprime,”‘ said Wayne Glowka, a spokesman for the group […]
Subprime Laxity Hits CDOs
Michael Hudson and Aparajita Saha-Bubna of the WSJ report that turmoil in the subprime-mortgage market fanned out yesterday, hitting a group of investments that are exposed to this struggling class of home loans. Moody’s Investors Service said yesterday it may cut its credit ratings on slices of 91 collateralized-debt obligations, or about $5 billion of […]
Follow the Mortgage
Michael Hudson of the WSJ reports that twelve years ago, Lehman Brothers Holdings Inc. sent a vice president to California to check out First Alliance Mortgage Co. Lehman was thinking about tapping into First Alliance’s lucrative business of making “subprime” home loans to consumers with sketchy credit. The vice president, Eric Hibbert, wrote a memo […]
Mortgage CDO Basics
Carrick Mollenkamp and Serena Ng of the WSJ report that in recent years, as home prices and mortgage lending boomed, bankers found ever-more-clever ways to repackage trillions of dollars in loans, selling them off in slivers to investors around the world. Financiers and regulators figured all the activity would disperse risk, and maybe even make […]
Merrill Lynch Probed in Subprime CDO Sale To City
Sree Vidya Bhaktavatsalam of Bloomberg reports that Merrill Lynch & Co. was subpoenaed by Massachusetts regulators after the value of collateralized debt obligations the brokerage firm sold to the city of Springfield plunged 91 percent because of losses tied to subprime mortgages.Secretary of State William Galvin yesterday issued the request for information to New York-based […]
