Posts Tagged ‘investor’
This is a recap. Merrill Lynch & Co. Inc. said in a financial report that it has agreed to pay $550 million to settle separate class action lawsuits stemming from subprime loss disclosures. The Ohio State Teachers Retirement System, the lead plaintiff in one lawsuit brought on behalf of stock purchasers, agreed to a proposed settlement totaling $475 million in cash. The other suit was brought by employees, and was settled for $75 million.
Upon review the government Troubled Asset Recovery Program (TARP) falls short in many areas. Mr. Paulson bragged that President Bush never contested anything he (Paulson) said. Nothing proposed was overridden. What was not accomplished, however, says much about both men. There was no proposal to fund, help, or bail out retired or active duty military. There was no proposal to immediately assist the elderly, or said another way, those receiving social security benefits. No programs were created or funded to assist those retired from government service. No thought was given to those who supported, defended, and continue to support this country. Mission accomplished? I think not.
As we finish the last day of 2008 the reality of the matter is that 18 months have passed since red lights came on and warning sirens sounded in the summer of 2007. Letting the air out of the mortgage bubble, and subsequently starting the collapse of Wall Street, the summer of 2007 was only a prelude to bigger unthinkable things to come.
Competition is a never-ending race of everyone against everyone else. Everyone is a worker, but everyone is a consumer too. As we wrap up Mortgage Blues for another year 2008 has been chaos to some, but very predictable to others. When we told an investor group to dump Fannie and Freddie we were told our predictions could never happen.
If subprime issues and tainted paper sold around the world didn’t start a global economic war a recent move might do so. Investors in bank debt are threatening to boycott lenders that follow Deutsche Bank in breaking an unwritten rule and failing to exercise a call option on subordinated debt.
In a coordinated action, angry bond investors are writing to bank treasurers and investor relations heads telling them that any failure to exercise a call option will be considered a breach of trust that could cause all the issuer’s debt to be shunned.