Citigroup Sounds the Death Bell for the Auction-Rate Bond Market
The fate of auction-rate securities shows no signs of being resuscitated, according to an April 15 article by Martin Blaun on Bloomberg.com. After an unprecedented number of auction failures, investors abandoned the $330 billion market for variable-rate municipal securities in February. Having already taken on nearly $250 billion in credit losses and write-downs, investment banks and securities firms like Goldman Sachs, UBS and Merrill Lynch were no longer willing to support the auction market and abruptly stopped infusing their own capital to buy the securities. Read more
Executive Summary
Many investors have sustained losses because of investments in subprime and other mortgage-related investments.
Many investors relied on Wall Street and the Rating Agencies assignment of “investment grade” relative to these investments prior to investing. Developing theories of Wall Street's liability requires an understanding of Wall Street's role in transferring individual high risk mortgages into pools of investments which were sold as “investment grade.” Read our full executive summary.
A Look Back at What Caused the Mortgage Crisis.
For more than a year, the business press has reported extensively on the problems attributable to the subprime mortgage market. These problems have had a swift and dramatic impact on many investments. At last count, losses were approaching $200 billion. Investors in all sectors are advised to educate themselves on the far-reaching consequences of the subprime securities market freeze, and subsequent crash. A brief history follows. Read more…
CDOs, Subprime Securities Sold In 2006-07: A Ticking Time Bomb?
As the credit crisis news continues to worsen daily, investors and consumers alike are left wondering how and why it all began in the first place. All signs point to the fact that collateralized debt obligations (CDOs) and other subprime securities that were sold to investors in 2006 and 2007 may be at the core of the problems. From the outset, these securities appeared to be ticking time bomb just waiting to explode. Read more…
Credit Crunch Turn Firms and Clients into Adversaries.
The recent credit crunch has turned Wall Street into the “law of the jungle.” Street firms and clients who once banded together to finance large transactions are now souring and some are turning into legal adversaries. Read more…
General Information
The financial press is full of stories about the “collapse” of the subprime mortgage market, what caused this “collapse” and who should bear the blame. Members of our group are often quoted in those stories (see those stories). Subprime mortgage loans are, as the name indicates, loans made to less credit-worthy borrowers which have a greater risk of default than “conventional” mortgages and hence carry a higher interest rate. Wall Street Underwriters and the business teams they assembled played a critical role in the boom of subprime mortgage loans that were made in the last several years. Read more…
AAA and AA Mortgage Backed Bonds Are In Trouble
Bloomberg reported March 11, 2008 that evidence exists that the ratings agencies are overvaluing AAA and AA rated bonds tied to mortgage debt. Up to $487 billion in AAA mortgage bonds, now spread across the U.S. banking system, pension plans, insurance companies and in many bond mutual funds should be and presumably are going to be downgraded. Those downgraded will result in significant devaluation of these assets with devastating results. Read more
Bond Funds Overview
Read about the bond funds affected.
Rating Agencies
Read about the role of the rating agencies.
Our Credentials
Read about the collective credentials of our firms' attorneys.
Our Affiliation
Read about our unique affiliation.
|
