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Sorry to interject here, but could someone explain that thing to me? Maybe the problem is me not knowing enough about financial terms, but i don't really understand that article.
Bank buys stuff at a credit, stuff loses money, bank has to pay interests for the borrowed money, and somehow the bank still makes money out of it through accounting tricks and is able to pay everyone dividents? And the investors love those assets because they are constantly profitable for some reason that i can not really understand despite losing money.
My common sense tells me that you can not make money from losses, and thus someone is getting screwed here and/or the whole thing has to blow up at some point, but i don't really see who that someone is because according to the article everyone involved is happy with the situation. Which is really weird.
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it's not too surprising you don't understand, people who make the deals in the first place hire extra super smart and expensive experts in the required fields to check all the legalities and such.
the "schwäbische hausfrau" logic does not apply to those deals, they are that complex and intricate and set up to undermine regulations that you cannot punish it in court. it's basically fucking over some people and still "playing fair" because of many many holes in regulations/flawed regulations etc. because technically most of those deals are legal.
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Cayman Islands24199 Posts
what about hiring competent people to manage these pension funds instead of letting pols treat them as budget piggy banks. false choice between outright privatization and negative returns. privatization is even okay if the process wasn't akin to russia after yeltsin
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SecDef Chuck Hagel resigns?
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On November 25 2014 01:12 RCMDVA wrote: SecDef Chuck Hagel resigns?
More like asked/told to step down. Get ready for war in 2015 folks it's coming.
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On November 25 2014 01:25 Kickstart wrote:More like asked/told to step down. Get ready for war in 2015 folks it's coming. Not likely -- and not with this president. Obama folds like a cheap suit when it comes to international conflict.
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Show nested quote +This kind of finance is hard, and people, at hedge funds, pensions, and banks alike, get paid lots and lots of money (smart people, mind you) to do their homework and make sure these kinds of things don't happen.
An average hedge fund, filled with smart people, fails to beat a simple index. (http://www.bloombergview.com/articles/2014-11-20/why-some-money-managers-succeed-by-losing) Getting paid lots of money and being very smart does not appear to have predictive powers in terms of market performance (LTCM was the smartest fund until it wasnt). The only funds that are kind of the exception are the pure quant funds, but even their performance is getting worse (http://web.mit.edu/alo/www/Papers/august07.pdf page 23, quant funds leverage has increased 4x while their returns have declined significantly). RenTech's internal fund has posted massive gains but the public fund, and the one that its prospectus specifically indicates the internal fund can trade against, is much more muted in performance. PE funds are the same, the best predictive power of a PE funds returns over 10 years is whether year 7-9 are a hot IPO market and whether year 1-3 were bubbly in terms of price paid. If either the market isnt hot for IPOs or the funds overpaid when they were first locked in you get a bunch of index performance.
The point of my statement wasn't that these people get paid to produce above-market returns -- it was that they get paid a lot of money to do their financial due diligence and not buy things that are bad and going to blow up. Small and/or underperforming hedge funds fail and close up shop all the time, by the way, you probably just don't hear about it.
I agree that beating the market is hard and mostly random, so just index, man!
Good on you for linking to Noah Smith, I don't always agree with what he writes but he is usually a good read.
Show nested quote +case in point: the argument that investors were "duped" into buying toxic CDO's -- this is a big "maybe" and has been a huge point of debate when it comes to this issue Its not a big maybe. Some investors were duped, which is why the SEC has been collecting a decent amount of pocket change in the fraud lawsuits and why Fabrice Toure owes Uncle Sam a million plus. And its also why S&P offered a billion dollar settlement -- as their opening position -- to Uncle Sam to take it easy on them. The question "were all investors duped" is closer to a maybe. Some investors simply were hungry for yield or were genuinely stupid or maybe some of them just didnt care because of an agency problem that faces almost all of finance. The CIO of some midlevel German bank hunting for yield doenst care how long the CDO lasts because hes out of there after he collects his bonus.
I'm less sympathetic to the fund managers here for reasons Jonny stated earlier in the thread:
Pension funds have the resources to evaluate investments on their own. This isn't ma and pa getting suckered. If you think the pension fund is mismanaging its assets, that's something to take up with the fund as they may have legitimate reasons for making the decisions that they make.
These weren't casual investors -- they were sophisticated investors. They all had access to Reuters or Bloomberg terminals, and as the potential clients to these banks, were provided with the pitchbooks and details of these assets. The "duping" that gets spoken of wasn't that the list of assets in the CDO's wasn't disclosed (they were), it was that the details of the underwriting of those assets was muddy (this part is very shady, and a real thing -- if you read the pitchbook for, say, abacus, for example, one of the first thoughts that pops in your head would probably be something along the lines of "what the hell is this"). Also some people get upset that the banks said "so and so is on the other side of the trade" when they weren't, but this doesn't strike me as too egregious since if you're buying something, someone's obviously going to be selling -- whether it's Paulson, Goldman's flow desk, or Goldman's prop desk. I do think though that knowing who's on the other side of your trade is a critically important piece of information, but banks and brokers aren't supposed to disclose that anyway for anonymity and conflict of interest reasons. If you're buying, someone's selling -- think a little bit about why they want to sell (it's also important to note that in these transactions everyone on every side of the trade thinks they're getting a good deal -- it's the analyst's job to decipher who's right).
These managers and analysts got full and detailed lists of the assets, kicked the tires and sniffed around, became suspicious of what they saw and... bought them anyway. It's a real shame, and the people who were truly harmed by this (homeowners, etc) deserve better. If I were running a book and my team of analysts came to me and said, "Well, we read through it and ran some credit analysis on it and uhh, the thing's pretty clever, and a little confusing? But it was put together by a bunch of Harvard grads, and Paulson's buying it too, so let's buy it I guess" I'd fire them right there. We probably need a system where investors can trust their managers/bankers without needing to do their own full detailed analyses of trades, but this is a little idealistic as there will always be bad apples at banks (who are minuscule in number compared to the good ones) who are looking to rip clients off.
One more thing -- if you're using SEC settlements as evidence that the banks committed all kinds of fraud and duped everyone, you're misguided. Fab's case was easy to prove because he had loads of embarrassing e-comms attached to him, but the nine and ten digit settlements you see aren't really the banks saying "ok, we lied and duped people" or the SEC very clearly exposing them as crooks. Going to trial and dragging these things out is time consuming, expensive, and bad for banks that want to repair their reputation -- the SEC wants them to be punished, but that kind of crime isn't easy to prove (insider trading is another one). So instead, they settle. Everyone knows that banks did bad stuff leading up to the financial crisis. How shady, and whether or not the investor should have been able to spot it, is another story -- this stuff isn't binary. They just want the SEC to leave them alone so they can get back to doing business.
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On November 25 2014 02:18 xDaunt wrote:Show nested quote +On November 25 2014 01:25 Kickstart wrote:On November 25 2014 01:12 RCMDVA wrote: SecDef Chuck Hagel resigns? More like asked/told to step down. Get ready for war in 2015 folks it's coming. Not likely -- and not with this president. Obama folds like a cheap suit when it comes to international conflict.
It's hard for me to get a read on this move. Part of me thinks that they asked him to step down because of his stance on Iran/Syria (which is why I blurted out look out for the war, Hagel seemed to exercise restraint when dealing with Iran/Israel when others definitely wanted a larger scale conflict). For example when Israel wanted us to bomb Iran Hagel told them to fuck off it isn't happening. But then I wonder if it isn't because of Hagel not touting the President's message on ISIS that they got rid of him because Hagal was constantly saying ISIS is a huge threat while the administration is trying to downplay it.
Still, Hagal was pretty anti all-out boots on ground conflict so this move worries me a bit. Will have to let things play out I guess.
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On November 24 2014 17:53 Simberto wrote:Sorry to interject here, but could someone explain that thing to me? Maybe the problem is me not knowing enough about financial terms, but i don't really understand that article. Bank buys stuff at a credit, stuff loses money, bank has to pay interests for the borrowed money, and somehow the bank still makes money out of it through accounting tricks and is able to pay everyone dividents? And the investors love those assets because they are constantly profitable for some reason that i can not really understand despite losing money. My common sense tells me that you can not make money from losses, and thus someone is getting screwed here and/or the whole thing has to blow up at some point, but i don't really see who that someone is because according to the article everyone involved is happy with the situation. Which is really weird. Read it quick, but here's what I got:
Basically they don't own 100% of the toll road, more like 14%.
So if the project loses $100 they take a $14 hit, the other share holders are on the hook for the remaining $86. Same split if it is a $100 profit instead.
Meanwhile they're the one structuring the deal not just for themselves but also for the other people who own the remaining 86% and they charge fees for their work. So as long as they make more than the $14 they just lost in fees, they're still in the black. If you want to know who is upset over the losses, it's the people who take the $86 hit and not Macquarie.
You could argue that it is too good of a deal for the company, but it is not nefarious since they are doing more work than the passive investors and so they should be getting some amount of money for their work.
Also of note, if they're overpaying for the assets the primary beneficiary is whoever is selling the asset (ex. State of Tennessee).
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On November 25 2014 02:21 TheMusiC wrote:
The point of my statement wasn't that these people get paid to produce above-market returns -- it was that they get paid a lot of money to do their financial due diligence and not buy things that are bad and going to blow up. Small and/or underperforming hedge funds fail and close up shop all the time, by the way, you probably just don't hear about it.
big funds, with great salaries, and many very high achieving individuals blow up too. LTCM was the best hedge fund that existed before it became the worst hedge fund that existed. It was so big that the Federal Reserve had to organize the bailout of its investors and counterparties.
These weren't casual investors -- they were sophisticated investors. They all had access to Reuters or Bloomberg terminals, and as the potential clients to these banks, were provided with the pitchbooks and details of these assets. The "duping" that gets spoken of wasn't that the list of assets in the CDO's wasn't disclosed (they were), it was that the details of the underwriting of those assets was muddy (this part is very shady, and a real thing -- if you read the pitchbook for, say, abacus, for example, one of the first thoughts that pops in your head would probably be something along the lines of "what the hell is this"). Also some people get upset that the banks said "so and so is on the other side of the trade" when they weren't, but this doesn't strike me as too egregious since if you're buying something, someone's obviously going to be selling -- whether it's Paulson, Goldman's flow desk, or Goldman's prop desk. I do think though that knowing who's on the other side of your trade is a critically important piece of information, but banks and brokers aren't supposed to disclose that anyway for anonymity and conflict of interest reasons. If you're buying, someone's selling -- think a little bit about why they want to sell (it's also important to note that in these transactions everyone on every side of the trade thinks they're getting a good deal -- it's the analyst's job to decipher who's right).
Sophisticated investors can be duped just as easily as unsophisticated ones, sometimes easier because of the agency problem I razed. Someone who has a two year rotation on a pension funds internal investment team is already mentally removed from his nominal charges, but someone who is on that rotation and is presented with a AAA asset by the best bank in the world isnt evne thinking
'd fire them right there.
Sure, and then your line manager would show up and ask how come units x y and z are going to show double digit growth and you showed were in single digits, and when you point out you were being conservative you join your fired team on the outside. The system of short term performance incentivizes people not to be conservative.
One more thing -- if you're using SEC settlements as evidence that the banks committed all kinds of fraud and duped everyone, you're misguided. Fab's case was easy to prove because he had loads of embarrassing e-comms attached to him, but the nine and ten digit settlements you see aren't really the banks saying "ok, we lied and duped people" or the SEC very clearly exposing them as crooks. Going to trial and dragging these things out is time consuming, expensive, and bad for banks that want to repair their reputation -- the SEC wants them to be punished, but that kind of crime isn't easy to prove (insider trading is another one). So instead, they settle. Everyone knows that banks did bad stuff leading up to the financial crisis. How shady, and whether or not the investor should have been able to spot it, is another story -- this stuff isn't binary. They just want the SEC to leave them alone so they can get back to doing business.
You are right, the SEC prefers picking on the small fish that cant afford white shoe law firms. But the fact that banks are forking over huge settlements in the face of a regulator they've captured is evidence that what they really dont want is a huge flow of documents released in discovery. The idea that Fab was the only one dumb enough to write emails of the nature seems highly unlikely. What the banks were terrified off was that internal chats and emails would reveal the kind of culture that internal chats of currency and interest traders revealed the banks are, and while in 2014 it just leads to bad taste because of crisis fatigue in 2009-2010 it would have been fatal. SP is settling because they rated a bunch of shit as AAA that they had a duty of care not to rate as AAA and they would be really and truly fucked if the government wanted to simply end the franchise.
But again, you are right, the regulators at present are not in lengthy trials. They are uncertain, which means if the SEC loses a nominal slam dunk they may actually face real sanctions instead of a slap on the wrist they received for being asleep at the wheel prior to 2007, and they expose too many nasty documents no one wants to see -- if the documents currently coming out of discovery in the AIG case were released in 2010 Geither is out of office then and not 3 years later, and regulators dont believe in killing white collar professional service firms after Arthur Anderson.
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Just in time for that crazy uncle at thanksgiving dinner.
WASHINGTON (AP) — A two-year investigation by the Republican-controlled House Intelligence Committee has found that the CIA and the military acted properly in responding to the 2012 attack on a U.S. diplomatic compound in Benghazi, Libya, and asserted no wrongdoing by Obama administration appointees.
Debunking a series of persistent allegations hinting at dark conspiracies, the investigation of the politically charged incident determined that there was no intelligence failure, no delay in sending a CIA rescue team, no missed opportunity for a military rescue, and no evidence the CIA was covertly shipping arms from Libya to Syria.
In the immediate aftermath of the attack, intelligence about who carried it out and why was contradictory, the report found. That led Susan Rice, then U.S. ambassador to the United Nations, to inaccurately assert that the attack had evolved from a protest, when in fact there had been no protest. But it was intelligence analysts, not political appointees, who made the wrong call, the committee found. The report did not conclude that Rice or any other government official acted in bad faith or intentionally misled the American people.
Source
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On November 24 2014 17:53 Simberto wrote:Sorry to interject here, but could someone explain that thing to me? Maybe the problem is me not knowing enough about financial terms, but i don't really understand that article. Bank buys stuff at a credit, stuff loses money, bank has to pay interests for the borrowed money, and somehow the bank still makes money out of it through accounting tricks and is able to pay everyone dividents? And the investors love those assets because they are constantly profitable for some reason that i can not really understand despite losing money. My common sense tells me that you can not make money from losses, and thus someone is getting screwed here and/or the whole thing has to blow up at some point, but i don't really see who that someone is because according to the article everyone involved is happy with the situation. Which is really weird. People who got screwed here are: 1) Investors, because while they were happy to buy shares in Macquire Trusts prior to 2007 when credit was loose, after 2007 most of those trusts assets went into bankruptcy. I suppose there was some rare subset of investor who was only interested in receiving in dividends for 2 years, then they were happy 2) The state, since a road is a natural monopoly over an area it cant afford to let the road just fail. So they have to go in and re-purchase it out of bankruptcy. Since some of these road loans were co-invested into by the then conservative US government as part of its privatize everything always mantra the federal tax payer also paid. And unlike the current period when the US treasury gets free money from the federal reserve back then they actually were paying 3) The banks that loaned the money for the original purchase.
The way it worked was: Banks and a corrupt consulting firm find a road, bank pays a ton of money for the road by borrowing on credit that looks like sub-prime borrowing, first almost no interest paid then a mountain of interest paid. Bank takes the new asset and then gives it to an 'independent' legal entity whose sole job is running that road. Bank then sells rights to other people in investing into that legal entity with the promise of steady dividends. Investors like dividends and reason that this is like owning a bond since the road is a natural monopoly so it will always recover money. In the meantime for every service now bank charges the "independent legal entity" fees, at first its no big deal because the massive debt costs of this new legal entity are so minuscule that there is a temporary river of cash. 3-4 years down the line there is no cash but the bank is no longer the legal owner -- if its particularly sneaky maybe it even bought insurance on the debt the legal entity now owes and when it collapsed the bank also collected on that.
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On November 25 2014 03:41 GreenHorizons wrote:Just in time for that crazy uncle at thanksgiving dinner. Show nested quote +WASHINGTON (AP) — A two-year investigation by the Republican-controlled House Intelligence Committee has found that the CIA and the military acted properly in responding to the 2012 attack on a U.S. diplomatic compound in Benghazi, Libya, and asserted no wrongdoing by Obama administration appointees.
Debunking a series of persistent allegations hinting at dark conspiracies, the investigation of the politically charged incident determined that there was no intelligence failure, no delay in sending a CIA rescue team, no missed opportunity for a military rescue, and no evidence the CIA was covertly shipping arms from Libya to Syria.
In the immediate aftermath of the attack, intelligence about who carried it out and why was contradictory, the report found. That led Susan Rice, then U.S. ambassador to the United Nations, to inaccurately assert that the attack had evolved from a protest, when in fact there had been no protest. But it was intelligence analysts, not political appointees, who made the wrong call, the committee found. The report did not conclude that Rice or any other government official acted in bad faith or intentionally misled the American people. Source Is Lindsey Graham your uncle? http://www.foxnews.com/politics/2014/11/23/graham-critical-new-gop-house-report-on-benghazi-calls-findings-garbage/
South Carolina Sen. Lindsey Graham on Sunday criticized a recently released House Republican report that concludes no intelligence lapses in connection with the fatal Benghazi attacks, saying congressional investigators did a “lousy job.”
“I think the report is full of crap,” Graham, a Republican, said on CNN’s “State of the Union.”
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On November 25 2014 02:27 Kickstart wrote:Show nested quote +On November 25 2014 02:18 xDaunt wrote:On November 25 2014 01:25 Kickstart wrote:On November 25 2014 01:12 RCMDVA wrote: SecDef Chuck Hagel resigns? More like asked/told to step down. Get ready for war in 2015 folks it's coming. Not likely -- and not with this president. Obama folds like a cheap suit when it comes to international conflict. It's hard for me to get a read on this move. Part of me thinks that they asked him to step down because of his stance on Iran/Syria (which is why I blurted out look out for the war, Hagel seemed to exercise restraint when dealing with Iran/Israel when others definitely wanted a larger scale conflict). For example when Israel wanted us to bomb Iran Hagel told them to fuck off it isn't happening. But then I wonder if it isn't because of Hagel not touting the President's message on ISIS that they got rid of him because Hagal was constantly saying ISIS is a huge threat while the administration is trying to downplay it. Still, Hagal was pretty anti all-out boots on ground conflict so this move worries me a bit. Will have to let things play out I guess. Hagel's the fall guy for Obama's perceived foreign policy incompetence, which was a drag on democrats in the elections. And yeah, it may be that Hagel is more hawkish on dealing with ISIS than Obama is, which just created additional tension. Regardless, I wouldn't expect a radical change in course from Obama. What we've seen over the past six years is what we're going to get.
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On November 25 2014 03:43 Sub40APM wrote:Show nested quote +On November 24 2014 17:53 Simberto wrote:Sorry to interject here, but could someone explain that thing to me? Maybe the problem is me not knowing enough about financial terms, but i don't really understand that article. Bank buys stuff at a credit, stuff loses money, bank has to pay interests for the borrowed money, and somehow the bank still makes money out of it through accounting tricks and is able to pay everyone dividents? And the investors love those assets because they are constantly profitable for some reason that i can not really understand despite losing money. My common sense tells me that you can not make money from losses, and thus someone is getting screwed here and/or the whole thing has to blow up at some point, but i don't really see who that someone is because according to the article everyone involved is happy with the situation. Which is really weird. People who got screwed here are: 1) Investors, because while they were happy to buy shares in Macquire Trusts prior to 2007 when credit was loose, after 2007 most of those trusts assets went into bankruptcy. I suppose there was some rare subset of investor who was only interested in receiving in dividends for 2 years, then they were happy 2) The state, since a road is a natural monopoly over an area it cant afford to let the road just fail. So they have to go in and re-purchase it out of bankruptcy. Since some of these road loans were co-invested into by the then conservative US government as part of its privatize everything always mantra the federal tax payer also paid. And unlike the current period when the US treasury gets free money from the federal reserve back then they actually were paying 3) The banks that loaned the money for the original purchase. The way it worked was: Banks and a corrupt consulting firm find a road, bank pays a ton of money for the road by borrowing on credit that looks like sub-prime borrowing, first almost no interest paid then a mountain of interest paid. Bank takes the new asset and then gives it to an 'independent' legal entity whose sole job is running that road. Bank then sells rights to other people in investing into that legal entity with the promise of steady dividends. Investors like dividends and reason that this is like owning a bond since the road is a natural monopoly so it will always recover money. In the meantime for every service now bank charges the "independent legal entity" fees, at first its no big deal because the massive debt costs of this new legal entity are so minuscule that there is a temporary river of cash. 3-4 years down the line there is no cash but the bank is no longer the legal owner -- if its particularly sneaky maybe it even bought insurance on the debt the legal entity now owes and when it collapsed the bank also collected on that. Your 2) should be wrong. The state should have received more than it deserved for the asset / was protected from declining toll revenues / able to buy back the asset at a lower price.
Also, it sounds like some of the deals worked out fine, so I'm not sure how people can claim scam here. Some investments just don't turn a profit. Shocking, I know.
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Welp, here comes the Ferguson grand jury verdict.
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On November 25 2014 04:00 Sub40APM wrote:Show nested quote +On November 25 2014 03:41 GreenHorizons wrote:Just in time for that crazy uncle at thanksgiving dinner. WASHINGTON (AP) — A two-year investigation by the Republican-controlled House Intelligence Committee has found that the CIA and the military acted properly in responding to the 2012 attack on a U.S. diplomatic compound in Benghazi, Libya, and asserted no wrongdoing by Obama administration appointees.
Debunking a series of persistent allegations hinting at dark conspiracies, the investigation of the politically charged incident determined that there was no intelligence failure, no delay in sending a CIA rescue team, no missed opportunity for a military rescue, and no evidence the CIA was covertly shipping arms from Libya to Syria.
In the immediate aftermath of the attack, intelligence about who carried it out and why was contradictory, the report found. That led Susan Rice, then U.S. ambassador to the United Nations, to inaccurately assert that the attack had evolved from a protest, when in fact there had been no protest. But it was intelligence analysts, not political appointees, who made the wrong call, the committee found. The report did not conclude that Rice or any other government official acted in bad faith or intentionally misled the American people. Source Is Lindsey Graham your uncle? http://www.foxnews.com/politics/2014/11/23/graham-critical-new-gop-house-report-on-benghazi-calls-findings-garbage/Show nested quote +South Carolina Sen. Lindsey Graham on Sunday criticized a recently released House Republican report that concludes no intelligence lapses in connection with the fatal Benghazi attacks, saying congressional investigators did a “lousy job.”
“I think the report is full of crap,” Graham, a Republican, said on CNN’s “State of the Union.”
Considering Graham did the same for climate legislation he helped write it doesn't really surprise me. It's more for the others at the table who might think the crazy uncle has a clue what they are talking about. The 'uncle' themselves isn't going to be dissuaded by something as inconsequential as the truth.
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On November 25 2014 04:06 JonnyBNoHo wrote:Show nested quote +On November 25 2014 03:43 Sub40APM wrote:On November 24 2014 17:53 Simberto wrote:Sorry to interject here, but could someone explain that thing to me? Maybe the problem is me not knowing enough about financial terms, but i don't really understand that article. Bank buys stuff at a credit, stuff loses money, bank has to pay interests for the borrowed money, and somehow the bank still makes money out of it through accounting tricks and is able to pay everyone dividents? And the investors love those assets because they are constantly profitable for some reason that i can not really understand despite losing money. My common sense tells me that you can not make money from losses, and thus someone is getting screwed here and/or the whole thing has to blow up at some point, but i don't really see who that someone is because according to the article everyone involved is happy with the situation. Which is really weird. People who got screwed here are: 1) Investors, because while they were happy to buy shares in Macquire Trusts prior to 2007 when credit was loose, after 2007 most of those trusts assets went into bankruptcy. I suppose there was some rare subset of investor who was only interested in receiving in dividends for 2 years, then they were happy 2) The state, since a road is a natural monopoly over an area it cant afford to let the road just fail. So they have to go in and re-purchase it out of bankruptcy. Since some of these road loans were co-invested into by the then conservative US government as part of its privatize everything always mantra the federal tax payer also paid. And unlike the current period when the US treasury gets free money from the federal reserve back then they actually were paying 3) The banks that loaned the money for the original purchase. The way it worked was: Banks and a corrupt consulting firm find a road, bank pays a ton of money for the road by borrowing on credit that looks like sub-prime borrowing, first almost no interest paid then a mountain of interest paid. Bank takes the new asset and then gives it to an 'independent' legal entity whose sole job is running that road. Bank then sells rights to other people in investing into that legal entity with the promise of steady dividends. Investors like dividends and reason that this is like owning a bond since the road is a natural monopoly so it will always recover money. In the meantime for every service now bank charges the "independent legal entity" fees, at first its no big deal because the massive debt costs of this new legal entity are so minuscule that there is a temporary river of cash. 3-4 years down the line there is no cash but the bank is no longer the legal owner -- if its particularly sneaky maybe it even bought insurance on the debt the legal entity now owes and when it collapsed the bank also collected on that. Your 2) should be wrong. The state should have received more than it deserved for the asset / was protected from declining toll revenues / able to buy back the asset at a lower price. Also, it sounds like some of the deals worked out fine, so I'm not sure how people can claim scam here. Some investments just don't turn a profit. Shocking, I know. I am talking about the Federal Governments loans, not the state. Its quite possible for both the private buyer to overpay for the road and the state to lose out anyway, private buyer stops maintenance on the road, the road declines, the extra 'profit' the state won in the initial bid is re-plowed back into the road.
Yes, some scams workout fine for the scammee. People who invested in Madoff were better off than people who invested in AIG. Guess better let him out of jail guys, he did more net good for high net worth individuals than their broker.
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On November 25 2014 04:11 xDaunt wrote: Welp, here comes the Ferguson grand jury verdict.
How long after the decision do you think it will take for us to hear the explanation for why he died 30 ft away from the car where the officer was (based on leaks) attacked?
I mean we have heard about everything other than the moment that matters. Releasing the decision without releasing what (at least the officer said) happened after the conflict at the car would be intentionally sparking outrage.
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