Friday, May 01, 2009

LOL - Really?

A collection of "you CANNOT be serious" stories from Thursday:

1) MGM shares soar on lending agreement:
Under terms of the new deal, MGM Mirage will be responsible for completion costs if net proceeds form the sale of condominium units are less than $243 million and for any expenses in excess of the budgeted $8.5 billion. For its part, Dubai World has agreed to fully fund its original commitments, including some $135 million in payments that MGM Mirage recently paid out on its behalf. Until the project is done, MGM Mirage's obligations will be secured by the assets of Circus Circus Las Vegas and adjacent land through a completion guarantee.

LOL. Really?!?!?! The banks accepted the Circus Circus as collateral? Come on...

2) MBIA Sues Merrill Over CDO Losses:
The insurer wrote $5.7 billion in guarantees on these securities, which were packages of mortgages known as collateralized debt obligations (CDOs), it said in a statement. MBIA faces several hundred million dollars of losses on these contracts because Merrill misrepresented the credit quality of the CDOs, the insurer said. "MBIA believes that Merrill Lynch's effort to market the CDS contracts to MBIA was part of a deliberate strategy to offload billions of dollars in deteriorating U.S. subprime residential mortgages," the company said in a statement.

LOL. Really? Isn't that called "business" ??? How about when all the companies you sold guarantees to believed you could actually make good on them, eh MBIA? It's their job to do their own work on your worthiness as a counterparty, and it's your job to do your work on the quality of the assets.

3) Senate Defeats Mortgage "Cram-Down" Bill:

“These bankers who brought us into this crisis are literally shunning and stiff-arming the people who are facing foreclosure,” said Senator Richard Durbin of Illinois, sponsor of the legislation and the chamber’s second-ranking Democrat.

LOL. Really Mr. Durbin? The bankers brought us into this crisis - not the BORROWERS who took out loans they defaulted on? Blaming the bankers is like blaming me if I give someone on the street 5 bucks and he goes out and buys booze with it. If you're looking for a single group to blame, blame the ratings agencies.

4) AIG Said to Weigh Closing Unprofitable Mortgage Guaranty Unit

The insurer selling assets to repay a U.S. loan, may shut its mortgage guarantor after failing to turn around the unprofitable unit, said two people familiar with the matter. AIG may wind down any parts of the mortgage insurer that can’t be sold...AIG, which promised to sell businesses to repay a loan included in a government rescue package valued at $182.5 billion, has announced about $4.4 billion of asset sales since the September bailout.

LOL. Really? $4.4 Billion so far, with the number of potentially salable assets dwindling? So I guess we're not getting that money back then, right?


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