Archive for March, 2008
The excesses of the current ‘subprime’ era are not the only excesses with ties to structured finance transactions. Many banks were sued by Enron Corporation. Enron filed suit in September 2003 against 11 banks, accusing them of conspiring with former Enron officials to manipulate the energy company’s finances. Enron says the banks helped set up a series of structured finance transactions with Enron that buried the company in debt, forcing it into bankruptcy. Every bank settled and paid Enron.
Federal officials announced the indictment of 19 people today in what they call the largest “foreclosure rescue” scam in the nation, one that allegedly took in more than $12 million and affected more than 100 homes. Officials with the FBI, IRS and the U.S. attorney’s office say the defendants ran an “equity stripping” scam targeting people on the brink of foreclosure.
Hilliary Clinton’s ruse to protect her friends while playing up to homeowners is so shallow it’s not even funny. Consider Whitewater and other “Clinton” dramas they wish you would forget about. Clinton proposed greater protections for lenders from possible lawsuits by investors, a variation of so-called tort reform. For years, GOP leaders have called for restrictions on what they consider unwarranted lawsuits against businesses. Democrats have often resisted them on grounds they limit injured parties’ legitimate rights to redress.
The CIT Group, a century-old company that lends money to small businesses and midsize corporations, was forced to draw on $7.3 billion of emergency bank credit lines. Its shares and bonds plummeted. CIT makes student loans, an area from which others have retreated. HSBC Bank USA; M&T Bank Corp.; and TCF Financial Corp., won’t be making loans for the next school year. CIT has other interests as well. Analysts said the tightening credit squeeze could drive the entire company into the arms of a suitor.