Bankruptcy
Texas Lawyer Blog 
Bankruptcy law: adversary proceedings, fraudulent transfers, preferences, creditor representation.
Post Frequency: 1.2/day Last Entry: November 19, 2009 at 18:58:22 Recent Entries: 378
By J. Michael McBride
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Swindle on Wall Street? Naw?
Posted on November 19, 2009Here is a hugely informative article on a monster swindle involving the Federal Reserve and certain anointed “too big to fail” banks. The allegations are that these folks got together and decided to buy massive amounts of puts on Bear Stears? stock ? yes, right before the Fed and Treasury let it fail...
Omen of Things to Come?
Posted on November 19, 2009If the economy falls off a cliff starting tomorrow, then there will only be more of this kind of finger pointing and name calling between Washington and Wall Street. ?Treasury Secretary Timothy Geithner defended the Obama administration?s economic record and dismissed a call for his resignation from the senior House Republican on the Joint Economic [...
Gold Prices
Posted on November 18, 2009The good folks at Elliot Wave note that ?[Gold]?s rise has now engendered back-to-back days of 97 percent bulls, the first time this has occurred in the 22 years of Daily Sentiment Index data that we have from MBH Commodity Advisors (trade-futures.com)...
OK, now this is Serious
Posted on November 18, 2009There is a shortage of Eggo frozen waffles. Now I know that you can make and freeze your own pancakes and waffles, but do your kids really want those?? No. They want what they see on TV ads ? and now?they are out, due to a flood at the Eggo plant!! Here is a link to [...
Was AIG Bailout Botched Or???
Posted on November 17, 2009A newly released report is highly critical of the Federal Reserve Bank of NY and its negotiations with insurance giant AIG. At the time of these analyzed negotiations, the Fed had already “invested” 85 billion into AIG and some say that it was too late to back out at that time...
Jobless Rate Soars
Posted on November 06, 2009A report out today states that the rate of unemployment, as that figure is kept by the government, which most say is optimistic, soared to 10.2%, the highest in 26 years. Of course the concern is twofold: first with those who are out of work now and perhaps more upsetting is that the US economy [...
Escada Bidders Line Up
Posted on November 05, 2009High fashion designer Escada (now trading at .53 Euro?s per share) is in an insolvency proceeding in Germany. The company?s release states that: ?The court decreed on August 13, 2009 at 12:00 a.m. the preliminary administration of the insolvent’s assets and appointed Christian Gerloff, LL...
GM may Keep Opel After All
Posted on November 04, 2009In a smart move, GM may be about to reverse course and determine that the company needs the engineers at its German car company, Opel, after all. Opel products have most recently been sold as Saturns, but as that car company is surely closing (after its sale fell through), GM would have to find another [...
GM?s About Face on Opel Angers Russians, Germans
Posted on November 04, 2009Talk about a global company: GM?s proposed sale of Opel to the Canadian group was really to Russians, with lots of cash support from the German government. Also, that German cash was not offered to GM when it was trying to save Opel. Now GM?s decision to retain Opel (one speculates for its excellent line [...
Chrysler?s (and Fiat?s) Plans for the Future
Posted on November 04, 2009Since emerging from bankruptcy with a new owner, Chrysler has been circumspect with regard to its finances. Reportedly, since the exit from bankruptcy, the company is in a positive cash position despite its sales. This pleasant result is due to some extremely unpleasant cuts in its operating costs...
2.3 Billion Stimulus to CIT Failed
Posted on November 02, 2009The US taxpayers will not recover on the 2.3 billion in stimulus money which went to CIT ? now a chapter 11 debtor. One has to wonder why CIT did not file chapter 11 sooner, if that was where it was headed anyway and saved the country 2.3 billion in money which went to ?float [...
CIT Files Ch 11, Gets Same Judge as GM
Posted on November 02, 2009CIT has filed its pre-packaged chapter 11 in New York. ?CIT Group Inc’s bankruptcy case was assigned on Monday to U.S. Bankruptcy Judge Robert Gerber, the same judge who oversaw the recent reorganization of the automaker General Motors Co. Gerber, a bankruptcy judge since 2000, is no stranger to large complex cases, having also handled [...
CIT gets A(nother) Billion
Posted on October 30, 2009?Commercial lender CIT Group Inc. said Friday that billionaire investor and bondholder, Carl Icahn, agreed to support the company’s restructuring plan amid reports CIT may soon file for bankruptcy protection. Icahn also agreed to provide CIT with a $1 billion line of credit...
Shawnee Couple Indicted for Bankruptcy Fraud
Posted on October 29, 2009Yesterday, in federal bankruptcy court, a couple, Mr. and Mrs. Moser, were accused of several counts of bankruptcy fraud based on incorrect schedules filed in their Chapter 7 bankruptcy in 2005. The couple evidently did not list a valuable option to purchase real property and other valuables...
Chrysler?s Future with Fiat
Posted on October 27, 2009Here is the first in what will no doubt be a long series of articles which purport to predict what life at Chrysler will be like as Fiat?s control becomes more manifest. Do not doubt that the mini Fiat 500 will be brought over and sold here and that will be a fun addition to [...
Recent Georgetown News
Posted on October 26, 2009One enterprising student has posted an add with the intent of hiring a personal assistant. He needs help with laundry, making his bed, and driving him to work. He is a sophomore at Georgetown and in McDonough School of Business. Here is a link to the blog created for his ad: http://blog...
Oakwood Cemetery Tour
Posted on October 26, 2009I attended a wonderful event this weekend. The North FW Historical Society had a tour of Oakwood Cemetery, which is located on the north side of downtown. It is located on a hill overlooking the Trinity River. It is a lovely place with a wonderful view of the skyline of downtown over the curving river...
Ordered to Cut in Half Top Execs? Salaries and Bonuses
Posted on October 23, 2009Will it really happen in November? The Treasury Department?s plan orders “seven big companies that haven’t repaid their government bailout money to cut their top executives’ average total compensation — salary and bonuses — in half, starting in November...
Some Good News, for Once
Posted on October 23, 2009?Dallas stars Linda Gray and Larry Hagman have confirmed they’ve been approached to reprise their Sue Ellen and J.R. Ewing characters for a remake of the classic 1980s soap. TV executives at Warner Bros. are reportedly considering bringing back Dallas and focusing the new show on the TV couple’s son, John Ross, and his cousin, [...
Transactions Behind Closed Doors Got City in DEBT
Posted on October 20, 2009Its going on across the country - but one city in particular, Jefferson County, Alabama, “a politician indicted over $3 billion in sewer debt that may lead to the largest municipal bankruptcy in history.” “Jefferson County?s debacle is a parable for billions of dollars lost by state and local governments from Florida to California in transactions [...
Atlantis Discovered?
Posted on October 20, 2009?The secrets of a lost city that may have inspired one of the world’s most enduring myths ? the fable of Atlantis ? have been brought to light from beneath the waters off southern Greece. Explored by an Anglo-Greek team of archaeologists and marine geologists and known as Pavlopetri, the sunken settlement dates back some [...
?They were blindsided?
Posted on October 20, 2009A recent study is now showing a trend that complicates lenders? efforts to identify borrowers? that are at-risk. Small businesses that do not indicate problems and pay their debts in a timely manner with maybe one delinquency are now seeking bankruptcy protection...
Professor Warren: A Recent Interview
Posted on October 19, 2009One of my favorite smart people has just done a new interview. Her name is Elizabeth Warren and she is a bankruptcy attorney and a Harvard Professor who is in charge of the TARP oversight committee. At one point she admits to being ?speechless? over the unnecessary, undeserved bonuses which bank executives are now taking...
Porsche 100 Year Anniversary Marred
Posted on October 15, 2009A new book which provides fresh details of Porsche?s Nazi connections is being put out at the time Porsche is celebrating its 100th year anniversary. ?German historian Ulrich Viehover, who specializes in the auto industry, easily proved that the company was much too large to call itself a “small plant...
Dollar Down and Gold Up
Posted on October 13, 2009So, here is a quiz: with the dollar so far down and gold so far up and all the pundits saying that both of these trends will continue into oblivion ? what is one to do? If you have been following along with the contrarian economists that I read, you would know the answer: sell [...
Sneak Attack on the Dollar??
Posted on October 12, 2009?It?s the biggest mystery in global finance right now: Who conducted a sneak attack on the U.S. dollar this week? It began with a thinly sourced but highly explosive report Monday in a British newspaper: Arab oil sheiks are conspiring with the Russians and Chinese to quit using the dollar to set the value of [...
Opel?s Sale
Posted on October 01, 2009Speaking of the Opel sale?One of the most interesting and informative economists which I read is Ed Wallace. He is a specialist in things automotive and economic. One of his recent articles concerns GM?s sale of Opel. He points out that the buyer is a partnership which includes a Russian bank with ties to an [...
Saturn to Shutter
Posted on October 01, 2009The deal to buy Saturn from GM has raced away. The buyer (Penske Automotive Group) was apparently driven from the deal out of fear that there would not be adequate automotive stock on the showroom after its purchase was complete. That is, the proposed buyer was concerned that it could not get a good source [...
An Insider?s View of TARP: Scary
Posted on September 25, 2009Here is an interview with Neil Barofsky ?who [is] a special inspector general monitors a dozen separate bailout-related programs that now account for nearly $3 trillion in financial commitments.? He states in this interview that the TARP money has not compelled any new lending, that many if not most banks can indeed track where the [...
Let?s See?
Posted on September 23, 2009Want a story with Muammar Gaddafi, Donald Trump, Libyans posing as Dutch diplomats (wonder why they got caught?), Diane Sawyer and a giant tent? Me too. Here it is: first, Muammar (can I call him that?) wants to come to speak to the United Nations, he wants to stay in his tent ? who wants [...
Must See video
Posted on September 22, 2009In yet another ?you will only see it here? posting, here is a link (thank you Jeff) which was forwarded to me which is unbelievable and I recommend that you watch it: http://link.brightcove.com/services/player/bcpid1137883380?bctid=21337502001 Then you too can thank Jeff, who sent it to me! Michael
Banks to Bail Out FDIC?
Posted on September 22, 2009In yet another interesting twist, there is now a proposal floating about that would have the big banks bail out the FDIC. ?Senior regulators say they are seriously considering a plan to have the nation?s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors...
GM Board Approves Sale of Opal to Magna
Posted on September 11, 2009Canadian auto part manufacturer, Magna, appears to be the winning bidder in the long running sale of the German auto maker, Opal, which is now owned by GM. This should be interesting as it progresses as Saturn?s showrooms are filled with Opal products...
Noises for a More Powerful Central Bank
Posted on September 08, 2009Russia and China have both previously made noises about a new currency; however, now the United Nations has joined this chorus along with a proposal for a more powerful central bank. ?In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the [...
Unemployment News,?Not Good.
Posted on September 04, 2009The unemployment rate rose to 9.7% with about 216,000 more jobs lost during August. However, the actual rate is even worse when one accounts for those who have given up looking for a position and those who are working part time, but want full time employment...
Celebrities caught up in the 24 Percent Rise of Bankrutpcy Filings
Posted on September 03, 2009Bankruptcy filings continue to grow to 119,874 in August from the previous year. “Consumers continue to turn to bankruptcy as a shield from the sustained financial pressures of today?s economy,” said Samuel Gerdano, the executive director of the American Bankruptcy Institute...
Kennedy Family Tree
Posted on August 26, 2009With the passing of Senator Ted Kennedy, there is a renewed interest in that family. Here is a link to a family tree which was useful in tracing the family and informing the reader of the family members? present activities. Here is the link: http://www...
Court Rules Federal Reserve Must Disclose Borrowers
Posted on August 25, 2009There is a trend to hold the Federal Reserve more accountable for its many actions taken in recent months in an effort to stem the economic downturn. Under a freedom of information action, news agency, Bloomberg, sought this information and stated as its basis the fact that the US taxpayer had become an involuntary investor [...
BBVT, a Spanish Bank, Buys Guaranty
Posted on August 25, 2009Evidently, beating out two large private equity groups, Blackstone and Gerald ford?s Flexpoint, ?Banco Bilbao Vizcaya Argentaria SA won the bidding to take over ailing Texas lender Guaranty Financial Group Inc., people familiar with the matter said, in what will be the Spanish bank?s sixth U...
Taylor Bean, Mtg. Company, Files Bankruptcy Amid Questions
Posted on August 25, 2009The large mortgage company Taylor Bean filed chapter 11 in the US Bankruptcy Court in Florida. It has stated that essentially all options are open as far as how to proceed, including a sale of its assets. The company is in talks with the FDIC. ?Closely held Taylor Bean does business across the U...
The Question that Topped the Google Trends List Today
Posted on August 24, 2009On the show “Who Wants to be a Millionaire”, Kevin Basin was asked what Lyndon B. Johnson?s favorite drink was. “According to the show, LBJ had four buttons installed in the Oval Office so he could order his favorite beverages on demand...
Interesting Moves by Russia and China
Posted on August 21, 2009Two interesting and unrelated moves by Russia and China are being reported today by the BBC. China, the largest holder of US debt, has reduced its holdings of US securities by 3% in July (25 billion). However, note that China?s overall holdings of US debt are 7% higher than they were in January of this [...
McCartney Concert
Posted on August 20, 2009I had the privilege to attend the Paul McCartney concert at the new “Cowboys” stadium last night. I had no expectations as I knew from having heard other ?aging rockers? what can happen to the singing voice over the years. But I am here to report that it was a wonderful experience; McCartney?s voice was [...
Tarrant County New Car Sales Off
Posted on August 18, 2009July was another down month for new car sales even in North Texas which has had a strong resilience to the current economic recession. ?Denton County dealers had the best performance, with sales down only 17.3 percent. Sales were down 35.5 percent in Tarrant County, 33 percent in Collin County and 40...
The next time you are behind a Bentley?
Posted on August 18, 2009?in the drive through line to get your Chick-fil-A and the Bentley is too big to fit around the turn and gets stuck, don?t honk; don?t get out and for goodness sakes don?t get into a fight with the driver and his two sons! ?[A]bout 11 a.m. Saturday, a couple received their order from the [...
At the Checkered Flag: VW Wins Over Porsche
Posted on August 17, 2009The battle between Porsche and VW has been a heated one, between distant but closely tied cousins no less. Perhaps only those of us who remember the Ewing clan of the TV show Dallas can truly appreciate this one! Previously blogged, Porsche tried to take over VW, failed and now VW is taking over Porsche...
Colonial Shuts, Sells, ReOpens
Posted on August 17, 2009BB&T is now the owner of Colonial?s assets and some of its debts, but certainly not all. BB&T is based in Winston-Salem, N.C.; Colonial was an Alabama institution. ?The agency [FDIC] approved the sale of Colonial’s $20 billion in deposits and about $22 billion of its assets to BB&T Corp...
Chart of the Day: History of Bailouts
Posted on August 13, 2009Here is a link to a very interesting chart listing all of the US bailouts and their cost in current dollars. http://www.propublica.org/special/government-bailouts Michael
Mortgage Companies/Servicers Get Blasted
Posted on August 13, 2009Bankruptcy Judges and Trustees are weighing in on mortgage companies? and servicers? tactics and strategies and the results are not pretty. ?This May, Judge Elizabeth Magner in Louisiana said her review of multiple cases involving Ocwen Loan Servicing had shown the servicer regularly acted in ?bad faith...
Elliot Wave Calls a High, Expects Bear to Renew
Posted on August 11, 2009The most accurate financial reporting that I read comes from the folks at Elliot Wave International. In the most current ?Theorist? which comes out monthly for subscribers, they are calling for the bear market to renew ? perhaps not right away, but shortly...
Overdraft Profits Exceed 38 Billion
Posted on August 11, 2009It is reported that for some banks, the windfall reaped from overdraft fees, which frequently exceed the amount being covered by the bank, are their only source of capital. ?U.S. banks will collect a record $38.5 billion in overdraft fees this year, with nearly all the revenue paid by just 10% of customers, according to [...
Another Loan to Own ? Delphi
Posted on July 29, 2009One method for obtaining ownership of a company in bankruptcy is to make a Debtor in Possession loan and then, as part or all of the purchase price, agree to forgive repayment of that loan in exchange for buying the company or its assets. This makes sense because the DIP loan would have to be [...
Good News on Home Sales
Posted on July 27, 2009As the economy continues to falter overall, there are some bright spots. As reported earlier, Ford earnings increased and the company saw its first profit in some time. Now comes a report on gains for home sales. The question of course is whether this is part of a general and continuing trend upward or whether [...
Some Good News
Posted on July 24, 2009Ford has returned to profitability, at least as reflected in its second quarter reports. According to the Wall Street Journal [ http://online.wsj.com/article/SB124834005025175293.html#mod=djemalertNEWS ], Ford reported a 2.3 billion profit for the second quarter, as compared to a loss of 8...
McBride Talks on Collecting Debts and Judgments Seminar
Posted on July 23, 2009J. Michael McBride recently lectured at the University of Houston’s Collecting Debts and Judgments seminar. He spoke to audiences in both Dallas and Houston. Mr. McBride spoke on the timely subject of Foreclosures and Deficiencies. The Firm also published a lengthy paper in conjunction with the speech...
Asset Sales in Bankruptcy
Posted on July 20, 2009As you may know I enjoy this topic as it is one area where there are plenty of rules/laws in place but the actual events which occur in a bankruptcy sale often push the limits of the rules and they are always unpredictable. (I even wrote a book on the topic of asset sales should [...
Unemployment Among Blacks in NY
Posted on July 13, 2009Unemployment is rising throughout the US; however, among the black population in New York, it is rising at a much higher rate (four times as fast) than for the NY population as a whole. ?By the end of March, there were about 80,000 more unemployed blacks than whites, according to the report, even though there [...
Mortgage Crisis Continues
Posted on July 13, 2009A short article in The Economist entitled: ?Can?t Pay Won?t Pay? states that ?HOUSE prices in America have fallen so far that as many as one in five households have mortgage debt greater than the value of their homes.? Moreover, some of the defaults on mortgage loans is what the author calls ?strategic? meaning that [...
GM Must follow Texas Law
Posted on July 08, 2009Texas Attorney general won a victory against GM when the Bankrutpcy Court ruled that Texas law covering dealers still had to be followed even in the context of GM's reorganization. "Abbott's office said this week a U.S. bankruptcy court ruled that General Motors must comply with Texas state law and cannot use the government's 60 [...
Former Star Center Fielder Files Chapter 11
Posted on July 08, 2009?Lenny Dykstra, the former star center fielder for the New York Mets and Philadelphia Phillies, has filed for Chapter 11 bankruptcy protection, court records show. Dykstra, 46, has no more than $50,000 in assets and between $10 million and $50 million in liabilities, according to a petition filed Tuesday with the U...
June Unemployment Figures?More Bad News
Posted on July 02, 2009The markets are reacting to the bad news concerning unemployment in the US which was reported today. At the time of this post, the Dow was down 186 points. ?Employers cut a larger-than-expected 467,000 jobs in June and the unemployment rate climbed to a 26-year high of 9...
FDIC Proposes New Strict Rules for Owners of Banks
Posted on July 02, 2009In order to buy a failed banking institution, an equity fund will have to meet new criteria under newly proposed rules. Several people involved with the proposal have argued that these rules need to be scaled back in order to avoid ?scaring off money? which would otherwise be available to save a failed institution...
Changes to the Russian Bankruptcy Laws
Posted on July 02, 2009I got this notice from a bankruptcy practitioner with the international firm of Salans (offices in France, United-Kingdom, Germany, Spain, USA, Poland, Russian Federation, Hungary, Ukraine, Czech Republic, Slovak Republic, Romania, Kazakhstan, Azerbaijan, Turkey, China) regarding the most recent changes to the bankruptcy laws in Russia...
U.S. Car Sales?
Posted on July 01, 2009Overall, sales continue to decline, which is not a shock. Sales figures for Ford (off 11%), Honda (off 30%) and Nissan (off 23%) were all somewhat better than expected, although still clearly in the red. Sales for GM (off 34%), Toyota (off 32%) and Chrysler (off 42%) were all significantly worse than expected...
Editorial on Federal reserve
Posted on June 30, 2009The idea that the Federal Reserve should be granted even more power than it already has is raising the eyebrows of at least one observer: Eliot Spitzer. He writes: ?The United States should not lightly put our fate back in the hands of the very entity whose oversight of the economy and financial sector brought [...
More on the Billion Dollar Smugglers
Posted on June 19, 2009?Whether the men are really Japanese, as their passports declare, is unclear but Italian and US secret services working together soon concluded that the bills and accompanying bank documents were most probably counterfeit, the latest handiwork of the Italian Mafia...
Fed Debt Skyrockets to 2 Trillion
Posted on June 19, 2009The Federal Reserve has been the primary actor along, with the Treasury Department, in the bailing out of Corporate America, primarily its financial institutions. As a result, its debt has gone (by one report) from 900 billion in October of ?08 to over 2 trillion presently...
Eddie Bauer Bankruptcy Sale Proposed
Posted on June 18, 2009Too much debt forced Eddie Bauer into bankruptcy and now an entity which owns several other retail chains is offering to buy its assets, maintain its corporate headquarters in Bellevue and continue current management. ?CCMP [the stalking horse] hopes to complete the sale within 45 days because a quick transfer of ownership would allow Eddie [...
Men Caught Carrying 134 Billion, with a ?B?
Posted on June 18, 2009It is now trite to use the phrase ?never before in history? as it is applicable to so many activities, especially economic ones. But smugglers caught with suitcases holding 134 billion in US bonds?that has never happened before! ?Two Japanese men are detained in Italy after allegedly attempting to take $134 billion worth of U...
TARP Money Repaid
Posted on June 17, 2009Some big banks are trying to extricate themselves from government interference with their corporate governance?read salary caps?by repaying TARP money. It is interesting that the Treasury Department had to approve the repayments (this being unlike normal loans, which is an understatement) and one wonders about the effect that this repayment has on the very public [...
China?s Continuing ?Hints?
Posted on June 17, 2009China has made a series of statements about its (her?) concern regarding the US monetary policies. Basically, I surmise that China is concerned with the amount of national debt that is being racked up and the country?s ability to sell bonds at a rate adequate to finance the new spending...
Citi to Convert 58 Billion into Stock
Posted on June 11, 2009Preferred shares are being converted into equity and the government will then be an owner of 34% of the company. ?Citi?s conversion is expected to flood the market with 18 billion new Citi common shares, diluting existing investors by 80 percent.? Since so many governmental/corporate actions fall into this category, it is no longer even [...
Russia and China to Start Moving out of Dollars
Posted on June 10, 2009As has been previously noted, there is a move afoot for some countries to move out of US dollars. With the increasing need for sales of US bonds, to pay for all the newly created TARP debt, this is an important change, if it actually occurs. One question arises: since all countries and the IMF [...
Nation of Laws?
Posted on June 10, 2009The US Supreme Court allowed the Chrysler sale to proceed, thus granting the current administration?s plan for the company?s assets to be sold to Fiat. (I still cannot wait to see how your local Chrysler service bay handles warranty work on a Fiat product, once they arrive...
Good Article on GM Filing
Posted on June 05, 2009Here is a good article with several embedded links relating to the GM bankruptcy filing. ?General Motors, the leading U.S. automaker founded in Flint, Mich., in 1908, is making history again on Monday — the battered auto giant has filed for bankruptcy protection in a plan that will see the U...
More Noise About a ?new? Currency
Posted on June 02, 2009??There?s been a lot of talk out of Russia about a new global currency, and that?s contributing toward this latest bout of dollar weakness,? said Henrik Gullberg, a currency strategist in London at Deutsche Bank AG, the world?s largest currency trader...
Van Cliburn Finalists
Posted on June 02, 2009The Judges made their decisions ? and the finalists did include my two favorites the Bulgarian man, Bozhanov, and the Italian woman, Vacatello. Since you can see their performances online at www.cliburn.tv I suggest that you watch/listen to Bozhanov?s semi final recital and Vacatello?s preliminary recital...
Hyperinflation or Continued Deflation?or one followed by the other?
Posted on May 29, 2009One of the economists which I read regularly is Marc Faber. He is not too well known, but always has an interesting ?take? on the US economy, as well as the world?s economy. I saw an article about his views and I thought that I would reveal to you his thoughts on the US economy: [...
When Government Controls ?Private? Businesses
Posted on May 28, 2009The federal government?s control over GM and Chrysler brings with it many issues, as we are in uncharted territory. One such issue has to do with the intersection of partisan politics business decisions. Whether this story is true or not, it is an example of the types of issues which will always cloud the government?s [...
Van Cliburn Semi-Finalists Announced
Posted on May 27, 2009Well, although I do not know how to play the piano and am totally uneducated, my two suggestions made earlier this week as to who to listen to on the ?Cliburn TV? web site (http://www.cliburn.tv/#) both made the cut and will continue forward in the competition...
Diamond Production Free-Falls 91%
Posted on May 26, 2009?De Beers, the world?s largest diamond producer, reduced first-quarter output by 91 percent, according to Anglo American Plc, as the world economic slump cut demand for luxury goods. Production slid to 1.08 million carats from 11.8 million carats a year earlier, London-based Anglo, which owns 45 percent of De Beers, said in a statement today...
Next Wave of Foreclosures
Posted on May 26, 2009According to a new study, which has been presented as a chart, prepared by Credit Suisse, the foreclosure tidal wave is not yet spent. In fact, the next wave of foreclosures will last until 2012, according to this study. ?These are the ultimate in “exploding mortgages...
Porsche Gambles on VW May Come Home to Roost
Posted on May 26, 2009Using borrowed money and a series of options and related devices, Porsche engineered a take over of VW and made itself rich (on paper) in the process. However, that all may be changing. ?Recall that Porsche engineered a massive short squeeze of Volkswagen common stock (VLKAF...
Van Cliburn Piano Competition
Posted on May 26, 2009Every four years Fort Worth hosts the Van Cliburn piano competition. We are now in the preliminary rounds. I have been able to attend some of these and the whole experience is wonderful. Now you can listen and watch via your computer. The sound quality is excellent ? so put on your good headphones and [...
Tracking Dying Malls
Posted on May 22, 2009Another manifestation of the economic melt down is the decline and ultimate death of some underperforming malls. As noted in the article below, malls have been a central meeting place, like a town square for many cities. That may be changing at least as to some malls which will not be able to survive...
The Beat Goes On
Posted on May 21, 2009The pattern is a) a government bail out of once private company followed by b) the need for more money by the target company followed by c) additional cash (read tax money) infused into target with the stipulation that the government will now have the ability (either immediately or at some future point) to own [...
Opal Sale at Gm Clouds Saturn?s Future
Posted on May 21, 2009As previously noted, when GM closed Oldsmobile, it lost a division replete with good cars running great engines. Olds had bad marketing. Saturn was the polar opposite, great marketing even with far inferior cars. Rather than taking the Olds products and rebranding them as Saturns, GM kept selling the inferior Saturn products until it was [...
Getting the Heck out of Dodge Ad Campaign
Posted on May 20, 2009Local Dodge dealer strikes back and the customer is the winner. Only a few months after agreeing to open/purchase a Dodge dealer, owner principal, Will Churchill, finds that his dealership is on the public list of Chrysler stores which are to close. Thus, he promptly offered all of cars for sale to wholesalers and then [...
Talk About Bad Timing
Posted on May 19, 2009The administration?s new rules tightening regulations on greenhouse gases emitted by cars and increasing gas mileage could not come at a worse time for car makers. These rules while perhaps laudable in a perfect economic environment will increase the cost of the cars to be sold and will increase the cost of making those vehicles [...
GM Filing Nears?
Posted on May 18, 2009?After 100 years in business and 10 months of frenzied but failed restructuring, General Motors Corp is weeks from the bankruptcy filing experts say will be required to complete the Obama administration’s bid to reshape a fallen icon of American industry...
Merrill Muzzles Blog
Posted on May 14, 2009Merrill?s former chief economist, David Rosenberg, had some very negative comments about the much touted ?turn around? calling it the stuff of fairy tales. Some of his comments were published on a blog, causing his former employer to work hard to remove those posts! Here is a quote from an article about that effort: ?Rosenberg’s reports [...
General Growth Obtains Approval for DIP Loan/Cash Collateral Use
Posted on May 14, 2009?General Growth Properties Inc., which filed the biggest real-estate bankruptcy in U.S. history, won court approval [over the objections of some of its other lenders] of a $400 million loan from a group led by Farallon Capital Management LLC and the right to use cash on hand to fund its operations...
Chrysler Files List of Dealer Closings
Posted on May 14, 2009Here is a link to ?map? the Chrysler dealer closings, at least as they have been proposed by Chrysler in its bankruptcy case: http://money.cnn.com/news/specials/storysupplement/chryslerdealerclosings/TX.html Michael
Tough Decisions?
Posted on May 12, 2009As I contemplate the government?s corporate preferences — GMAC yes; Chrysler Financial no (see one article on the forced switch: http://www.crainsdetroit.com/article/20090510/SUB01/305109961/1069 ) ? I am reminded of the recent Saturday Night live skit where ?President Obama? gives a speech on the government?s decisions about which companies will be allowed to continue and which will be [...
Renewed Bear Markets
Posted on May 11, 2009As previously noted, the authors who I read generally agree that we have been experiencing a bear market rally in the markets and that it will soon, or perhaps already has, resume its steep declines. Here is another advocate of that position. ?Merrill’s economist David Rosenberg left the firm Friday, May 8 (planned for several [...
Elliot Spitzer (Remember Him?) Opines On NY Fed
Posted on May 07, 2009?The kerfuffle about current New York Federal Reserve Bank Chairman Stephen Friedman’s purchase of some Goldman stock while the Fed was involved in reviewing major decisions about Goldman’s future?well-covered by the Wall Street Journal here and here?raises a fundamental question about Wall Street’s corruption...
More on Chrysler
Posted on May 06, 2009The attorney for some of the bond holders in Chrysler, Tom Lauria, (once a co-worker of mine) has pointedly stated that the White House has threatened his clients in order to get them to ?go along? with the deal which the Treasury Dept. and in particular, the car czar panel (no one car czar was [...
Best Morning Business Summary
Posted on May 06, 2009Here is a link to an article from www.Slate.com ?s Big Money section which is an excellent overview of today?s financial news. Sample on Chrysler: ?Chrysler’s dive into bankruptcy protection means the U.S. taxpayer won’t be seeing the $7 billion in bailout money provided to the automaker ever again...
Administration Blasted for Pressure Exerted
Posted on May 06, 2009The administration has been making decisions about what used to be called private businesses which are, in some quarters, coming under fire as being too invasive. On one hand though, if the tactics seem to be working (and the market?s present rise is one justification for this viewpoint), then the objecting parties may well keep [...
Interesting Pleading of the Day
Posted on May 05, 2009Here is a link to a pleading which was filed in the Chrysler reorganization case now pending in NYC. It is filed by an Tom Lauria, who also worked at the Shank Irwin law firm in Dallas. To provide a flavor of the pleading, which is an objection to the Debtor?s sale motion: ?Among other things, [...
Cram Down Amendments Defeated in Senate
Posted on May 04, 2009A new law, which would amend the Bankruptcy Code to allow the reduction, with court approval only, of a home mortgage to the amount of the home?s value, was defeated in the US Senate yesterday. The result of the law would have been to allow many homeowners to remain in their homes while making payments [...
Pontiac Joins Oldsmobile ?
Posted on April 30, 2009First, fair disclosure: this author owns an Oldsmobile ? and a Pontiac! Second, in the ?what were they thinking category? GM decides to close Pontiac when ?[t]he division was still GM?s third-largest seller, with 278,000 sales last year, and it enjoyed the youngest average age of any GM brand...
Chrysler to File Today or Tomorrow
Posted on April 30, 2009News reports now say that a negotiated resolution to Chrysler?s financial ills have stalled, causing the large automaker to file for chapter 11 as soon as today or tomorrow. ?The Chapter 11 filing, which sources said would be done in U.S. Bankruptcy Court in Manhattan, will send shock waves through the entire auto industry — [...
Local News?FWISD Closes
Posted on April 30, 2009In response to one case of confirmed swine flu and the fear of more cases which are suspected but have yet to be confirmed, the Fort Worth Independent School District closed yesterday. The closing is through at least May 8th. That decision means 80,000 students from 144 campuses are confined to their houses; which means: [...
Define Your Terms
Posted on April 29, 2009Here is a link to a site which defines financial terms, like the one for ?Credit Default Swaps?: http://www.investopedia.com/terms/c/creditdefaultswap.asp Plus there are links from that site to related articles which also discuss and define the term selected...
GM Restructures Ownership
Posted on April 28, 2009In what is likely to be the first major restructure of a once private US company conducted by the Treasury Department, GM has announced its proposed ownership structure under the new plan. In a huge ?loan to own? move, the US government would swap its debt for equity, the unions would get a large share [...
Government Debt, Record Levels
Posted on April 28, 2009?361 billion, for this quarter. That is how much that the Treasury Department now says it needs to borrow. It is a record amount. ?The administration is projecting the federal deficit for the entire budget year ending Sept. 30, will total a record $1...
?Empty Creditors?
Posted on April 27, 2009This is a term to describe a certain type of creditor which is better off when its debtor files chapter 11 than if it agreed to an out of court workout proposal. While there have always been circumstances when a filing is actually advantageous to the lender, the new forms of financial instruments, i...
Amazing Interactive Map
Posted on April 27, 2009Here is a link to a map/article which shows the job gains/losses on a monthly basis across the country from January 2007 until present. http://www.slate.com/id/2216238/ It is an amazing visual representation of the job losses which have occurred in this country since February of 2008 (4...
Chrysler First to go?
Posted on April 24, 2009Evidently, the US government has made an agreement with the UAW which will then make a Chrysler bankruptcy more likely to succeed. So now the Treasury Department is ?preparing? a chapter 11 for Chrysler. And the Fiat merger will happen within the context of that filing...
Bank Lending Continues to Fall
Posted on April 23, 2009As was noted here in the December 18 post, just because a bank takes TARP money does not mean that said institution will continue to loan money. The Wall Street journal confirms that this is the case in a recent article which notes: ?Leanding at the nation’s biggest banks has fallen more sharply than previously [...
Foreclosures Continue to Climb (46%), Car Sales Fall Locally (41%)
Posted on April 16, 2009Despite the various governmental programs and packages, home foreclosures continue to climb steeply. ?Foreclosure filings ? default notices, auction sale notices and bank repossessions ? were reported on 341,180 properties in March, 46% more than a year ago and 17% above February’s total, RealtyTrac reports today...
After Firing its CEO, Treasury Dept Pushes GM to File Bankruptcy
Posted on April 13, 2009While it may be the best idea for saving GM, some still wonder about the role of the federal government in compelling a ?private? company to file for chapter 11. ?WASHINGTON (Reuters) - The U.S. Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by June 1, even though the [...
More on New World Currency
Posted on April 09, 2009The G20 Summit has quietly issued new currency. ?A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order. ? In effect, the G20 leaders have activated the IMF’s power to create money and begin global “quantitative easing”...
Deflation Risks Admitted
Posted on April 06, 2009?Federal Reserve Vice Chairman Donald Kohn offered a sobering assessment of the economic landscape and warned in starker terms than he has before about the risk of deflation — a widespread drop in consumer prices that can sap the economy’s strength...
Stocks Should Continue to Rally
Posted on April 03, 2009As I have said in prior posts, the folks at The Elliott Wave seem to do a great job of predicting the cycles of the stock markets, along with the prices of commodities as well. Here is a short quote from their latest ?Financial Forecast?: ?A Primary-degree bear market rally is underway and should last [...
Jobless Claims Soar
Posted on April 03, 2009?The nation’s unemployment rate jumped to 8.5 percent in March, the highest since late 1983, as a wide swath of employers eliminated 663,000 jobs. It’s fresh evidence of the toll the recession has inflicted on America’s workers, and economists say there’s no relief in sight...
Bail Out Costs Almost Equal GDP!
Posted on April 01, 2009?The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s. New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp...
Russia and Ron Paul?
Posted on March 31, 2009These two make for strange bedfellows indeed, but both are now calling for a return to a gold standard, to a greater or lesser degree. Both China and Russia have called for a new paper currency and now Russia is acknowledging that adding a tie between the paper and gold would help stabilize the new [...
A Tale of Two Companies
Posted on March 31, 2009Car companies take government money and have unprecedented intervention in their corporate affairs. Financial companies just take government money. ?But the White House on Monday downplayed the difference between Obama’s treatment of the automakers and the less stringent conditions it has placed on the financial industry in return for financial infusions worth billions of dollars...
Circuit City and liquidators to sell off merchandise in remaining 567 US stores
Posted on January 16, 2009Negotiations for the acquisition sale of Circuit City went past midnight Thursday, but were not successful. The electronic store stated Friday that is will go out of business and begin the liquidation process starting as early as Saturday with only a 70...
Top Attorneys - Fort Worth Texas Magazine
Posted on January 13, 2009Congratulations to J. Michael McBride for being named as one of the best lawyers in the 2008 Top Attorney, in the Bankruptcy category, of the Fort Worth Texas Magazine - Top Attorney's list. Mr. McBride was nominated by his pers in this prestigious list which was published in the December issue of Fort Worth, Texas Magazine...
Foreclosures linked to 2005 Bankruptcy Reform law
Posted on January 13, 2009For those readers not familiar with the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCA"), prior to October of 2005, unsecured debt (credit cards, for example) could be discharged under a Chapter 7 bankruptcy (liquidation) therefore allowing the debtor to use that money to make their mortgage payments...
Jobs Jobs Jobs
Posted on January 09, 2009The news is really bad on the employment front. “Nearly 2.6 million jobs were lost in 2008, with 1.9 million destroyed in just the past four months, according to a survey of workplaces. It's the biggest job loss in any calendar year since 1945, when 2...
Cars: Good News Bad News
Posted on January 05, 2009Chrysler sales are higher this month than last – that’s the good news. The bad news is that Chrysler car sales fell in December by 59%. “Chrysler sold a total of 89,813 vehicles compared with 191,423 in the same month last year. Despite the drop, the month's sales were up about 5 percent from November levels...
Commercial Real Estate Defaults May Stress Big Banks
Posted on January 05, 2009As all of the markets contract, some analysts are concerned about the impact of a looming number of commercial real estate defaults. “Banks and other financial companies have not had the problems with commercial properties in this recession that they have had with residential properties...
Comments on the Federal Reserve
Posted on January 05, 2009Despite the unprecedented action taken by the federal reserve in the last year, there has been little debate over this exertion of federal power. Here is one article entitled “Fed has Abandoned Monetary Policy” which comments on that issue, to some limited degree...
One of my Favorite Gifts
Posted on December 30, 2008This Christmas, I was delighted to get some very special gifts. Among them, the new book written by my sister-in-law, Nancy Lutkehaus. Nancy is a professor at USC and her book is a very interesting take on Margaret Mead. It analyzes the public perception of Ms...
It Pays to be an Exec?Even of a Failed Company
Posted on December 30, 2008In a photo essay simply entitled “What They got Away With”, Newsweek covers 12 CEO’s of failed or bailed out institutions and chronicles what they received as their respective company’s were going down. Here is a link to this photo article: http://www...
Ok, the Cowboys?
Posted on December 29, 2008Here is a first: I am so moved by Sunday’s Cowboy game that I discuss it on the firm blog! Poor Jerry Jones. He does not know what he is doing wrong. To him, it must seem as if he is doing everything right and yet, still losing…and losing badly...
More in Middle Class Using Payday Lenders
Posted on December 29, 2008For consumers living paycheck to paycheck who have unexpected expenses arise, a payday lender might be an easy solution. These payday lenders, who did not exist in 1990, now account for 25,000 outlets today. Consumer groups advocate against these payday lenders due to the astronomical interest rates charged--up to 439% annually...
The Radio
Posted on December 23, 2008Here is a pretty cool site for those music fanatics. You just have to be sure you have the name of the song right, including punctuation. Just type in any song that was ever played, and see what happens. Then, following the end of the song, it will keep playing songs of the same era forever...
How One Major Law Firm Closes
Posted on December 23, 2008The economic crisis has drastically affected Wall Street law firms as well and those in the broader financial markets. One law firm, Thacher Proffitt & Wood, which has existed for 150 years will be winding down, having made a deal for 100 of its lawyers and many staff members...
Home Values Fall
Posted on December 23, 2008In another “not since the Great Depression” moment, recent reports state that the value of homes in the US have fallen 13 percent. “The median resale price fell 13 percent from a year before, to $181,300, “probably the largest price decline since the Great Depression,” National Association of Realtors Chief Economist Lawrence Yun said in Washington...
Banks? use of TARP Money
Posted on December 19, 2008Recall that when the bailout was announced at least one explanation of it related to “unfreezing the credit market” and getting money to banks so they could again feel comfortable lending money. Well, the money got to the banks but there was no provision to compel lending, so the banks have generally held on to the money to improve their balance sheets or they have used it to buy other banks...
Professor Warren, Appointed to Chair of Congressional Oversight Panel for Economic Stabilization
Posted on December 18, 2008On November 14, 2008, Ms. Elizabeth Warren was appointed by United States Senate Majority Leader Harry Reid to serve on the five-member Congressional Oversight Panel (COPES) created to oversee the implementation of the Emergency Economic Stabilization Act...
More on the Federal Reserve
Posted on December 17, 2008As noted yesterday, the Federal reserve has a limited number of tools and yesterday’s allowance of the rate to drop to zero a. was an acknowledgement of something that was already happening and b. made clear that this tool (the ability to adjust interest rates) has not worked to halt the economic slide nor does it have any more use at this point (one cannot go lower than zero)...
Fed Running out of Options
Posted on December 16, 2008As the federal reserve takes the primary rate closer to zero, it will not acknowledge that it may soon run out of options. Instead, the Fed continues to expand its powers by “expanding liquidity (as if that had not been tried over the last year!)...
All I Can Say is That Car Companies Must Really Really Need the Money!
Posted on December 09, 2008Two points about the car company bailout as it is presently proceeding. First, if the car companies are willing to accept a car czar from Washington who has real authority over the companies operations, then they must really need the bail out money. Second, there is once again a double standard in practice: one for the car companies and one for Wall Street...
Printing Trouble
Posted on December 08, 2008Two stories today about troubles in the newspaper business. First, the venerable New York Times has had to mortgage its new building, which was completed last year. (Finished just at the top of the market it would appear.) “The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits…...
PILGRIM?S PRIDE FILES CHAPTER 11 BANKRUPTCY CASE
Posted on December 08, 2008The nation’s largest chicken producer, Pilgrim’s Pride, filed for Chapter 11 bankruptcy protection in the Northern District of Texas, Fort Worth Division, on December 1, 2008. The company is represented by the law firm of Weil, Gotshal & Manges of Dallas, and has been assigned to Judge D...
Further Report on Biased Inflation Numbers
Posted on December 08, 2008We have noted this issue before – the government has jimmied with the inflation reporting numbers and it has given a false sense of security when actually there was a great amount of inflation. Here is an article which describes that phenomenon in detail...
Bailout Results
Posted on December 08, 2008The bailout which at first was to be used to buy up toxic paper but then morphed into stock purchases has resulted in a net loss for taxpayers (if the options were exercised today) in a net loss of 9 billion dollars, according to a report prepared by the Associated Press...
Bad News Friday: Job Losses Up and Retail Spending Down
Posted on December 05, 2008The number of jobs lost last month are the highest since December of 1974. ‘U.S. employers axed payrolls by 533,000 jobs in November, the most in 34 years and far more than expected, government data on Friday showed, as the year-old recession hammered every corner of the U...
So Where are the Chastened Wall Street Executives?
Posted on December 03, 2008“Since there's one standard for automakers and another for bankers, the quickest way for GM to pick up some loose change would be to buy a few banks and thus get the company's mitts on some of the Treasury's $700 billion. If insurance companies are doing it, why not GM? A story on the Bloomberg wire on November 17 told us that four of the world's biggest insurers, including Transamerica and Hartford Financial Services Group, may buy some ailing S&Ls in trouble with the Office of Thrift Supervision for making shifty loans...
How Bad Was it?
Posted on December 02, 2008The Dow dropped 680 points yesterday. How bad was that? “The Dow lost 679.95 points to close at about 8,149. There have only been three days in market history with bigger point losses for the Dow -- the Monday after the Sept. 11 attacks, and Sept...
As Detroit goes, so goes the US Economy
Posted on December 02, 2008Here are some of the latest numbers on car sales. Two thoughts, one, it is bleak all over (including Honda and Toyota) and two, it is really bleak. “Honda Motor's U.S. sales dropped 32% to 76,233 as its two strongest vehicles, the Accord and the Civic, recorded drops of 38% and 30%, respectively...
Fed Programs to Continue
Posted on December 02, 2008“The Federal Reserve has extended the life of key programs aimed at busting through credit clogs and restoring stability to financial markets. The Fed said Tuesday that the programs, originally slated to last through Jan. 30, will be extended through April 30...
GM?s Corporate Culture and History Reviewed
Posted on November 25, 2008In a good, lengthy article, author Alex Taylor of Fortune Magazine reviews the GM corporate culture and the efforts at “fixing” the company which have been made over the last two decades or so. “After three decades of covering the auto industry, I've learned that Ford (F, Fortune 500) executives tend to be scrappers skilled at bare-knuckle office politics, while the top brass at Chrysler traffic in bravado and charisma...
Markets Responding to Recent Actions
Posted on November 25, 2008Call it a honeymoon, call it a result of Obama’s known, solid choices of the members of his economic team, call it a statistical bounce resulting from an oversold condition. Whatever it is called, the markets are way up and headed further up, for a big pop...
It?s Good to be Big, too Big to Fail
Posted on November 24, 2008Hot on the heels of last week’s devastating slide in its stock value, now comes the news that Citigroup will be rescued by the federal government. The rescue plan which was hammered out over the weekend is similar to the one which almost happened with Wachovia when Citi was going to buy Wachovia...
Unemployment Benefits Extended
Posted on November 21, 2008The number of unemployed jumped at its highest rate in 16 years. The jobless rate is at a 14 year high. Thus, the Congress has extended unemployment benefits – perhaps figuring in part that it might help consumer spending in December, which would benefit the economy at large...
Bailout Not Working; Case in Point: Citigroup
Posted on November 21, 2008Despite all of the money and all of the deals between the big banks and the Federal Reserve and the Treasury Department which have taken place in the last year or so, the market continues to fall and the prices of bank stock as a specific case in point also have continued to fall...
Markets Continue to Fall, Deflation Spreads(?)
Posted on November 20, 2008Yesterday, the Dow fell 430 points to close below 8,000 for the first time since March of 2003. It has been down this morning so far some 200 points to swing back up for a loss of only 80 points or so at present. If the past is any indication, the last few minutes of trading can change the whole day’s performance since there have been huge swings in the hour (minutes) before the closing bell...
Consumer Prices Fall Precipitously
Posted on November 19, 2008Primarily due to the fast drop in the prices of oil and gas, the latest statistics show that there has been the largest drop in consumer prices in 61 years. “Consumer prices plunged by the largest amount in the past 61 years in October as gasoline pump prices dropped by a record amount...
Why Did Wells Pay So Much For Wachovia?
Posted on November 11, 2008“But why? Why was Wells Fargo so eager to ante up a deal that was leaps and bounds sweeter than Citi was willing to pay? After all, Wells Fargo has a stellar reputation of keeping underwriting standards in check, so why would it want anything to do with a shoddy bank drowning in subprime mortgages? Taxes...
More Economic News?.Still Crazy After all These Bailouts
Posted on November 11, 2008My apologies to Neil Simon for that title. It is hard to keep up with all the economic news and even harder to put it into some perspective. This is especially true since as to many of these events, no one knows the full story and the story changes as the bailout de jour morphs...
One of the economists which I look
Posted on November 06, 2008One of the economists which I look to for information and advice is Dr. Marc Faber. Here is a quote from his latest market Commentary dated November 1, 2008: “What I want to make perfectly clear is that Mr. Bemanke’s inept monetary policy actually increased volatility and led to greater losses compared to what would have occurred had rates not been prematurely cut in September 2007...
Foreclosure Crisis Becomes Health Problem
Posted on November 06, 2008The growing number of foreclosures has begun effecting more than our economy, it now may be leading to a growing health crisis. In Bakersfield, California the large number of foreclosures have been corresponding to the spread of the West Nile virus. Mosquitoes have been breeding in the plethora of abandoned swimming pools and have so far led to 140 diagnosed cases of the virus in Bakersfield alone in 2007...
Legal Work on Refco May Cost Mayer Brown
Posted on November 06, 2008Mayer Brown partner Joseph Collins has become the target of federal prosecutors and charged with playing an “‘active and crucial part in perpetrating the Refco fraud.’” Collins, the chief outside legal counsel for Refco, maintains that he had no knowledge of the enormous fraud taking place within the company...
Finally, Credit Default Swaps Explained
Posted on November 04, 2008I was listening to our local NPR radio station and heard one part of an interview/story which explains Credit Default Swaps. It was excellent and very helpful in really understanding these financial products. Here is the link to listen to the NPR broadcast about Credit Default Swaps: http://www...
Financial Crisis Continues to Affect Automotive Industry
Posted on November 03, 2008This October, the automotive industry experienced its worst month of sales in over twenty five years. Leading the charge into the abyss are General Motors, with a sales plunge of 45%, and Ford, with a sales plunge of 30%. Not far behind, Toyota and Honda are also on track for an October sales plunge of 23% and 35%, respectively...
Circuit City Announces Store Closures
Posted on November 03, 2008Circuit City announced Monday that it will close 155 of its stores, or roughly 20%. The company will also seek to limit future store openings and renegotiate a portion of its leases. The current flailing economy and a period of flagging business has led the store to take such measures in an effort to conserve resources and assets...
True Numbers on Inflation and Jobs
Posted on October 31, 2008As previously noted, the government provided figures on inflation show that it is not an issue and running at a low rate. However, those who compile these statistics changed what items are included in the “core” inflation figures, thus making the picture look much more positive than is reality...
Tracking the Government?s Response to the Economic Crisis
Posted on October 30, 2008Historians will someday write about these economic times and will ascribe to the current administration and the federal reserve either praise or approbation or perhaps both. At this point in the crisis, it is hard to get a good perspective on the matter...
Bailout Goes World Wide
Posted on October 29, 2008In another of those “say what?” moments, here is a report that the Federal Reserve has agreed to make loans (open the window??) to … Brazil, Mexico, South Korea and Singapore. This would be “in exchange” for other countries’ currencies...
Rates Cut Again
Posted on October 29, 2008The rate cut of .5% to bring the bring the benchmark to 1% shows again that the Fed realizes we are in a large mess. It also is interesting to note that the Fed can only cut rates so far, until there is no more interest rate to cut! “The Federal Reserve cut its benchmark interest rate by half a percentage point to 1 percent, matching a half-century low, in an effort to avert the worst U...
Tracking the Government?s Response to the Economic Crisis
Posted on October 29, 2008Historians will someday write about these economic times and will ascribe to the current administration and the federal reserve either praise or approbation or perhaps both. At this point in the crisis, it is hard to get a good perspective on the matter...
Markets Soar, all is well?
Posted on October 29, 2008Yesterday, the US markets, the Dow in particular soared, up 11% Here is an informative article on yesterday’s advance. It contains a great chart that shows the percentage up’s and down’s in the Dow since Oct. 13 of this year. “At about 2 p...
Industries Lobbying for Bailout Aid
Posted on October 27, 2008Think about the irony of that headline. Companies are paying lobbiests to assure that they get bailout money. Recently a number of economic sectors have begun lobbying for a slice of the largest government bailout in history. Industries hit hard by the financial crisis (such as insurers, automakers, and American subsidiaries of foreign banks) have all begun lobbying the Treasury Department for financial support...
Michael McBride has given many
Posted on October 27, 2008Michael McBride has given many talks about the different aspects of bankruptcy over the years. Just recently, Mr. McBride spoke at a conference sponsored by the University of Houston Law Center. It was held both in Dallas and in Houston and discussed the foreclosure process and collecting deficiencies...
World Markets Down
Posted on October 27, 2008Japan’s index (the Nikkei) has hit a 26 year low. “"Worries about the impact of the surging yen on Japanese export earnings have hit the Nikkei hard," said Julian Jessop, chief international economist at Capital Economics. "This in turn has led to sharp falls in European markets even when, as on Friday, the U...
Market Turmoil Continues
Posted on October 24, 2008So far, so bad – but the day may see huge swings up as well as down. Too much excitement either way! “Markets were so jittery early Friday that the New York Stock Exchange felt it was necessary to post a statement on its blog confirming that trading would open as normal at 9:30 a...
Loans From Fed Hit an all Time High
Posted on October 24, 2008The Federal reserve has been “opening the window” more and more over the past 6 months. Now banks and brokerage firms are taking full advantage of these low interest loans. (Whether they are lending any money as a result of the loans is another story...
Another Investor Loses Billions
Posted on October 23, 2008“Renowned [Texas] investor Harold Simmons is no wimp when it comes to a fight. He played a central role in the development of leveraged buyouts and corporate takeovers and once tried to gain control of Lockheed Martin (LMT, Fortune 500). He's funded Republican candidates and conservative attack-ad campaigns, including the current one linking Barack Obama to one-time domestic terrorist Bill Ayers...
New Lawsuit Puts Fannie Mae Regulator in Awkward Position
Posted on October 23, 2008Despite the enormous drop in their stock value, Fannie Mae shareholders might just yet receive a silver lining to their cloud. Currently a class action lawsuit alleging securities fraud is underway in the U.S. District Court in Washington. A similar lawsuit was filed against Freddie Mac that in 2006 yielded the eighth largest settlement in a corporate securities fraud case in United States history with a payout of $1...
Who got the Better Deal, Citi or Wells?
Posted on October 22, 2008Recall the fight between Citi and Wells over Wachovia? Citi had a deal which involved an asset purchase as well as offloading much of Wachovia’s bad debts onto the government. Wells came along and offered to buy all of Wachovia (debts and assets…) in a stock purchase which exponentionally trumped the Citi deal...
Chinese Workers Demand Wages for Work on Island
Posted on October 21, 2008Question: What do an idyllic Caribbean island, an unfinished Ritz Carlton, the largest bankruptcy ever filed and Chinese workers for an Israeli builder have in common? On Thursday, October 16, 2008 a nasty brawl broke out on an otherwise peaceful Atlantic island...
How to Destabilize a Country
Posted on October 21, 2008In these times when investors are extremely uneasy and with good reason, it is particularly easy to tip a country into financial chaos. Here is an article which addresses just this subject. Quote with emphasis supplied: A month ago, in the first round of this crisis, panicky rumors brought down banks...
Despite Pricing, Credit Markets Still Frozen
Posted on October 21, 2008Corporate bond debt is sold around the world. These bonds are priced based on the perceived risk of default. At this moment, there are some “once in a lifetime” deals as far as pricing is concerned; however, there are still no buyers for these well priced bonds...
Kerkorian Dumps Ford Shares
Posted on October 21, 2008As Ford stock hovers around $2 per share, one major investor has had to sell his interests after suffering a major loss on his investment. “Billionaire Kirk Kerkorian may sell his Ford Motor Co. stake after the $1 billion holding lost two- thirds of its value and put his firm's casino investments at risk...
This Merger is Just Hard to Believe
Posted on October 20, 2008It is hard for me to believe that GM would purchase Chrysler. I mean in America one grows up being fundamentally a Chevy guy or a Ford guy – with some blending off into Mopar territory when it shows up with a really good product (which happens every so often, like with the 300 sedan)...
Financial Crises Hits the Retail Sector
Posted on October 20, 2008The meltdown of the financial market continues to impact other sectors as the credit crisis perpetually worsens. One of the most recent companies to succumb to the credit crunch is Mervyn’s, a 59 year old department store with over 149 locations across California and the Southwest that filed for Chapter 11 bankruptcy in July...
Bears are Funny; Bulls are Serious
Posted on October 17, 2008Among the articles I read, some cover the socio economic side of the markets. Evidently, there is even some socio economic research to show that jokes about the market only occur in a bear, since gains are serious business and no laughing matter. Here are 2 funnies along those lines: "Well, the market went down over 700 points today...
$72 Billion Pulled Out of Funds in a Month
Posted on October 17, 2008With the market in the position that it is in now, many people have succumbed to make decisions with great haste. Of course fear drops into the picture of every share holder’s mind and over the course of the last couple of months it has lead to the impetuous pluck of over 72 billion dollars in September alone...
As Strong as a Swiss Bank??
Posted on October 17, 2008There continues to be much news. I saw this analysis of the Swiss government’s actions in regard to UBS which is getting the government to take 60 billion in bad accounts in exchange for a 9% stake in the company and Credit Swiss which is raising 8...
Bank Screener
Posted on October 16, 2008I have had several folks ask about this tool which I linked to some time earlier. Rather than make you search for it, here is the link again: http://www.thestreet.com/screener/index.html?src=ratingsindex&tab=3 MichaelPosted by the Law Offices of J...
Really Scary Numbers
Posted on October 15, 2008Now, as long as everyone used the recent pop up in the markets to sell their stocks, except for the ETF inverse positions, then watching today’s market was not too upsetting. But if another 700 point drop in the Dow does not concern you, then here are some numbers which will! This is an article which explains how the derivatives market is valued at nearly 600 trillion dollars and the credit default swap market at 54 trillion dollars...
RECENT NORTHERN DISTRICT OF TEXAS BANKRUPTCY CASE DECISIONS
Posted on October 13, 2008In re Michael S. Polly, Case No. 08-41506-DML-7. The issue in this case was whether a debtor in a Chapter 13 case has the absolute right to dismiss that case, even where a creditor’s motion to convert to Chapter 7 is pending. Despite the history in the 5th Circuit of denying that such a dismissal is made mandatory by the provisions of 11 U...
Dow Up 937 Points?
Posted on October 13, 2008Here is your pop up, time to sell. If you are feeling adventurous, wait and see what tomorrow brings, it could be another good day. But overall, a good day, like today, in a bad week/month, like this week/month, is a great time to sell. I would not suggest selling any inverse funds, unless you just wish to take some partial profits...
British Take Over Banks, US Considers Purchases of Preferred Shares
Posted on October 13, 2008We know A.) that this economic melt-down is a world wide problem and B.) over the weekend, there were meetings amongst the G7 to have a coordinated “attack “ on the problems. However, different countries are taking different steps to address the problem...
CREDIT DERIVATIVES AND THE WORLDWIDE FINANCIAL CRISIS
Posted on October 10, 2008Last night, I attended a seminar presented by the Turnaround Management Association of Dallas/Fort Worth concerning credit derivatives and their role in the current financial crisis facing the U.S. economy, and by extension the economies of the rest of the world...
On Being Out of Control
Posted on October 10, 2008I do not have to review too many subjects in my life to realize that I am not in control of much (maybe what I say, write and do). Here is a link to a sermon which I heard last Sunday on the subject of control, or one’s lack thereof. I thought that it was “just what I needed to hear” given the economic news, so here is the link to the video and audio version: http://www...
Stocks Drop 600 in Early Trading, to Recover
Posted on October 10, 2008I said a few days ago that I thought that the markets were due for a big pop up and I still think that this will happen. Clearly, I was a few days and, oh, a 1000 points, off on that prediction. But I still think that there will be such a pop and that when that happens, it is time to sell any stocks which you may still own...
Another Perspective on Fed?s Purchase of Banks
Posted on October 09, 2008All of these new and increasingly interventionist acts by the federal government will have multiple unintended consequences. Here is an article which discusses some of the risks and rewards of the newest proposal to come from Washington, whereby the federal government buys equity in not only unhealthy banks, but healthy ones...
Fed to Buy Interests in Banks, Healthy and Unhealthy
Posted on October 09, 2008In yet another “not since the great depression” moments, the Federal Government, the Treasury Dept. In this instance, announced that it will use some of the money provided for in the bailout (200 billion out of the 700 billion, I gather) to buy interests in banks...
Iceland Faces the Big Meltdown
Posted on October 09, 2008The country of Iceland now faces an enormous financial mess. The currency had fallen in value by half and their banks are generally closed, so no one can take their money out. The country has sought a loan from Russia, for 4.5 billion in an effort to set things right...
More on Citi vs. Wells vs. Wachovia vs?..
Posted on October 08, 2008These multiple cases are in desperate need of a mediated settlement! As a trained mediator, I would say that most all suits fit into this category, but especially this mess where the patient may die on the table (Wachovia) while Nero fiddles (Citi and Wells fight)...
Some Perspective on the Markets
Posted on October 08, 2008It is always helpful to get some longer term perspective on the markets’ daily machinations. Most of the time, these long term views make us feel better about whatever it is that just happened. Not so today. “U.S. stocks fell, sending the Standard & Poor's 500 Index below 1,000 for the first time since 2003, on speculation banks and real-estate companies are running short of money as the credit crisis worsens…...
More Shorts:
Posted on October 07, 2008Market Not as Bad as it Could Have Been, Really: On one hand, the markets ended the day sharply lower. On the other hand, by the end of the day, they had all made up enormous ground from earlier points in the day when the markets were really really down...
Oh and the Dow Falls, Again
Posted on October 06, 2008“Wall Street tumbled again Monday, joining a sell-off around the world as fears grew that the financial crisis will cascade through economies globally despite bailout efforts by the U.S. and other governments. The Dow Jones industrials skidded nearly 500 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain...
Too Much News!
Posted on October 06, 2008First, the fight between Citi and Wells over Wachovia. The two deals are starkly different. The Citi deal looks to have been “pretty sweet” for Citi (always depending on what Wachovia’s true liabilities turn out to be) and the Wells deal is “way better” for Wachovia shareholders...
Bank Run Causes Wachovia Deal, FDIC Acts Quickly
Posted on October 03, 2008Quote: Inside Wachovia, executives started noticing customers withdrawing money on Friday morning, following the failure of Washington Mutual on Thursday. “The so-called silent run on the bank – it's real,” Carlos Evans, Wachovia's wholesale banking executive, said in an interview...
Wells Not Citi Buys Wachovia!
Posted on October 03, 2008In a prompt about face, the assets of Wachovia will be acquired by Wells Fargo and not CitiGroup. The new plan evidently calls for a purchase of Wachovia for 15.1 billion in an all stock deal with no FDIC involvement. This contrasts starkly with the proposed Citi deal, which would have been an asset purchase, with only some of the Wachovia debts being transferred to Citi and would have required federal assistance...
Jobs, Jobs, Jobs
Posted on October 03, 2008In the great depression, FDR created jobs, so that people could work and earn a living for their families. No one says that we are in recession, let alone a depression; however, here are the numbers on job losses and they speak for themselves. “There was a net loss of 159,000 jobs in September, the ninth straight month the U...
Mother of Money Market Funds Breaks the Buck and Closes Fund
Posted on October 02, 2008The Reserve has stated that it will liquidate its Primary Fund, one of the original money market funds. The Reserve announced on September 16 of this year that its Net Asset Value of its Primary Fund had fallen below the standard for money market funds of $1...
Wachovia Freezes College Fund
Posted on October 02, 2008Quote: “Wachovia Bank on Monday notified the institutions involved in the $9.3 billion Common Fund for Short Term Investments that, as trustee, it would be terminating the fund and distributing the assets. Commonfund of Wilton, Conn., manages investments for thousands of nonprofit institutions, including Baldwin-Wallace College, Oberlin College and the University of Akron...
Bank Safety Screener
Posted on October 01, 2008Here is a link to a searchable database of banks which tells that institution’s safety rating: http://www.thestreet.com/screener/index.html?src=ratingsindex&tab=3 MichaelPosted by the Law Offices of J. Michael McBride.
FDR?s Inaugural Address, 1933
Posted on October 01, 2008“... This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance...
Harvard Economist Pushes Bankruptcy not Bailout
Posted on September 30, 2008“The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines)...
Another Opinion on the Bailout? the Austrian School, not Marxism, is the Answer
Posted on September 30, 2008Quote: At first glance, anyone who understands economics can see that there is something wrong with this [bailout] picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere...
25 Billion For US AutoMakers, Even Foreign Ones
Posted on September 29, 2008Amid all of the other news of the day, the bailout that did not pass, at least today, and the markets that were expecting passage of the bill which fell sharply (DJIA falls by 777 points), there is also news of a loan guarantee package for US automakers...
More on Citi Deal for Wachovia
Posted on September 29, 2008“The FDIC in a press release stressed that Wachovia did not fail. Citi will take the hit for up to $42 billion of losses on a $312 billion pool of Wachovia loans, while the FDIC will take responsibilities for additional losses. It granted the FDIC $12 billion in preferred stock and warrants for assuming the risk...
Fed Continues to respond to Crisis?by Making More Money Available
Posted on September 29, 2008The Federal Reserve has announced that it will again make more and more money available for “cash starved banks” both here and abroad (?!). This continues and expands again the same policy that the Fed has been pursuing for months. One could gather that so far this policy has not worked as it seems necessary to keep pumping more money toward financial institutions, even though they continue to fail...
Citi Buys Wachovia
Posted on September 29, 2008In yet another weekend deal, it has been announced that Citigroup is buying the banking part of Wachovia, in exchange for taking a percentage of its bad loans, with the FDIC covering its other losses. “Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC...
Another Opinion on the Crisis
Posted on September 26, 2008It is hard to get much of an overview on a crisis while it is happening. That is why I read and link here to multiple articles with differing view points. Here is another opinion from E. J. Dionne, Jr.. “The simple truth is that Washington is petrified about this crisis and will pass something...
How Well the FDIC Works Re: Failed Banks
Posted on September 26, 2008“It is a tale of two systems. One system, the one used to process failed and faltering banks, works really well. It's been in place and evolving for 75 years, since the Federal Deposit Insurance Corp. was founded (over the opposition of bankers, it must be added)...
WaMu NoMo
Posted on September 26, 2008This is the largest bank failure thus far. “The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion. Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country's history...
Warren Buffett Warned of Time Bomb?
Posted on September 25, 2008And now the derivative time bomb is going off. Quote: “When historians write about the current crisis, much of the blame will go to the slump in the housing and mortgage markets, which triggered the losses, layoffs and liquidations sweeping the financial industry...
If you are car shopping?
Posted on September 25, 2008This is a list of the top 10 cash rebates on current new cars. I am making no recommendations at this stage as I suspect that if you have cash, you will be able to get bigger bargains on land, houses and cars and everything else in 12 months from now...
Auto Group with 13 ?Stores? Closes
Posted on September 24, 2008Although it is difficult to ascertain exactly what caused this prompt action, it appears that the lack of floorplanning loans caused this mega dealer group to shut its doors. “High fuel prices, cancelled floorplanning from GMAC Financial Services, a reliance on trucks and SUVs, a soft national economy and struggles in local markets had troubled the company, which on Sept...
Not Only Does the Bill Cost 700 Billion to 1 Trillion Dollars?it Gives Unreviewable Power to the Executive Branch
Posted on September 24, 2008Buried in at least one of the proposed legislation to fix our economy is a provision which states that all acts by the Treasury Secretary are somehow not reviewable by any Court of law. This is troubling as it sounds like the passage of some other recent bills which had to be done ASAP in a time when people were full of fear and there allegedly was not time to actually read the provisions of the bill—which not shockingly gave extensive additional powers to the federal government...
Relevant Quote From Robert Prechter
Posted on September 23, 2008This quote is from an article Robert Prechter wrote on Sept. 19: The overall process of credit manipulation has robbed bears of their rightful income for nine years. The latest announcement was timed perfectly to bail out investment banks and brokers who bet on the upside or against the downside in derivatives...
Social Mood, Movies and Politics
Posted on September 23, 2008As has been previously stated, much of what I read (e.g., Elliot Wave Theory) holds that social mood drives the financial markets and also, perhaps less directly, large governmental actions, like wars. War fever, for example, tends to rise when markets bottom, so that is something to watch for (fervent nationalism in combination with a testosterone fueled feeling of “we need to kick some …” in order to make ourselves feel better)...
No One is Talking About how to Pay for These Bailouts!
Posted on September 23, 2008“Even though the government has now formally agreed to guarantee the debt of Fannie and Freddie, the White House says it doesn't see the necessity—shock me!—to include the cost of doing so in the budget.… Consider the spree of actions that have the potential—directly and indirectly—to cost taxpayers money: the government accepting $30 billion of Bear Stearns' drecky collateral for a $29 billion loan to JPMorgan, giving investment banks access to the discount window, assuming responsibility for Fannie Mae and Freddie Mac, guaranteeing money market funds (up to $50 billion), making a big loan to AIG (up to $85 billion), and now proposing the mother of all bailouts—up to $700 billion...
Kids and Cellphones ? and Cancer
Posted on September 23, 2008“Children and teenagers are five times more likely to get brain cancer if they use mobile phones, startling new research indicates. The study, experts say, raises fears that today's young people may suffer an "epidemic" of the disease in later life...
Why Should we be Shocked?
Posted on September 22, 2008Given the exit money paid to the executives who ran Fannie Mae and Freddie Mac into the ground, literally threatening the US economy to the extent that the federal government “had” to buy these private companies, this story should come as no surprise...
Biggest Bail Out Ever, So Far?
Posted on September 19, 2008In order to avoid what has been said to be a “complete meltdown” of our financial system, the federal government has announced its largest new financial program ever whereby it will “take bad mortgages off the books” of large banks...
Phil Gramm?s Fingerprints
Posted on September 18, 2008“McCain's former economic adviser is ex-Texas Sen. Phil Gramm. On Dec. 15, 2000, hours before Congress was to leave for Christmas recess, Gramm had a 262-page amendment slipped into the appropriations bill. It forbade federal agencies to regulate the financial derivatives that greased the skids for passing along risky mortgage-backed securities to investors...
Fed Announces 180 Billion More Cash
Posted on September 18, 2008“The US Federal Reserve announced a 180-billion-dollar cash line to fight the racing fires of global financial crisis Thursday, as leading central banks said they would join in. The Federal Reserve said it was expanding its temporary arrangements for banks to obtain dollars by 180 billion ‘to provide dollar funding for both term and overnight liquidity operations by other central banks...
Got Migraines?
Posted on September 18, 2008Here is a book written by a famous MD which gives a step by step method of getting rid of headaches. It is a great book and offers relief for most headache sufferers, in my opinion. Here is a link to the book on Amazon: http://www.amazon.com/Heal-Your-Headache-Program-Taking/dp/0761125663/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1220993314&sr=1-1 ...
Credit card delinquency rate, debt levels up
Posted on September 18, 2008The TransUnion Trend Data for the 2008 second quarter shows the credit card delinquency rates and average debt per borrower are up from this time last year. The figures are compiled from 27 million consumer reports sampled each month. Here is how the numbers break-down: Average credit card delinquency: This is defined as the percentage of people at least 90 days delinquent on credit card payments...
Russian Markets Re-Open; Panic Ensues; Then Close
Posted on September 17, 2008In a repeat of yesterday’s events, the Russian stock market re-opened only to close thereafter. ":Russian markets stopped trading for a second day after emergency funding measures by the government failed to halt the biggest stock rout since the country's debt default and currency devaluation a decade ago...
Crisis Spreads; Russian Market Falls, then Closes
Posted on September 17, 2008“Russian shares suffered their steepest one-day fall in more than a decade on Tuesday, losing up to 20 per cent, as a sharp slide in oil prices and difficult money market conditions triggered a rush to sell. The heads of the Russian central bank, the finance ministry and the financial market regulator met on Tuesday night for an emergency discussion on ways to halt the crisis...
Another Day, Another Private Corporation Taken Over by the US Government
Posted on September 17, 2008Again as with Fannie Mae and Freddie Mac, today’s takeover of a private corporation by the federal government (with your tax dollars) is not being challenged or even seen as out of the ordinary. Has there ever been more intervention in private corporate affairs by the US government in the history of this country? Amazingly, there are no outrage from those who espouse the “free market” as the answer to all ills...
Overnight Interest Rates Double as Banks Hoard Cash
Posted on September 16, 2008Why would banks hoard cash? One can speculate as to their reasons, but the fact is that this is exactly what is happening. One result of that action is that overnight interest rates doubled and now stand at their highest point since 9-11. (Another is the Federal reserve having to pump more and more and more money into the system as was noted in yesterday’s article on “priming the pump...
Fed Continues to Prime the Pump at a Furious rate
Posted on September 15, 2008Not surprisingly, given its past actions and the strength of the recent reversals in the market, but the Federal Reserve has added another 70 billion in reserves to the banking industry. Banks appear to be hoarding cash while demand increases. “The Federal Reserve added $70 billion in reserves to the banking system, the most since the September 2001 terrorist attacks, to reverse a surge in borrowing costs sparked by the collapse of Lehman Brothers Holdings Inc...
Something You May Not Have Known About Guantanamo
Posted on September 12, 2008I know this is a bit off the subject of bankruptcy, but very intersting and informative. At the Inns of Court meeting this week, the guest speaker, a bankruptcy lawyer, spoke about his representation of several detainees at Guantanamo Bay. This clip is pretty much the same subject matter and tone as his speech...
Speech by Fannie Mae?s President
Posted on September 11, 2008Way back in February, Daniel Mudd spoke to the Homebuilders Association and assured them that his company was doing all it could to weather the storm, including cutting the corporate dividend (and it also quit paying his $100,000 annual tab for his country club)...
Lehman Stock Sinks
Posted on September 09, 2008On news that Lehman Brothers’ discussions with a Korean Bank (for a cash infusion/takeover) had faltered, the shares of that venerable Wall Street firm have sunk to new lows. “The nation's fourth-largest investment bank had hoped to secure a deal with the Korean [government controlled] fund before announcing third-quarter earnings on Sept...
Bernake on the Health of Freddie and Fannie
Posted on September 09, 2008One more interesting thing about the government’s takeover of Freddie and Fannie is that it flys in the face of the “happy talk “ which has been coming out of Washinton. Here is a quote from an article from July 16 of this year: “Federal Reserve Chairman Ben Bernanke told Congress Wednesday that troubled mortgage giants Fannie Mae and Freddie Mac are in "no danger of failing...
BANKRUPTCY PROVISION FOUND TO VIOLATE LAWYERS? RIGHT TO FREE SPEECH
Posted on September 08, 2008In the case of Milavetz, Gallop & Milavetz, et al. v. The United States of America, the Eighth Circuit Court of Appeals has ruled that a provision of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act violates the free speech rights of lawyers, stating the provision “prevents attorneys from fulfilling their duty to clients to give them appropriate and beneficial advice...
The US Government Takes Over Private Corporations and the Public ? Yawns
Posted on September 08, 2008“Uncle Sam has just become the 800 pound gorilla in the U.S. mortgage market. The Bush administration's announced Sunday it was seizing troubled mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) in a bid to help reverse a prolonged housing and credit crisis...
Fed Lending Stat?s for Last Week
Posted on September 05, 2008Since the Federal Reserve has been responding to the credit crisis by adding more and more money to the money supply, the total amount of funds loaned to banks by the central banks has increased greatly. Here is a recent article which reports that banks have averaged just under 19 billion in daily loans for the last week...
Business News Roundup
Posted on September 04, 2008Here is a link to an article which summarizes the latest business news. First up, indicted bankers – it is interesting to see prosecutors now deriding CDO’s, when not too long ago, the public was being told that they were the next big thing in banking (which they were, just the next big bad thing in banking)...
Insider Sales of McDonald?s Gets Attention
Posted on September 04, 2008As you no doubt know, insiders who sell, or buy, stock must disclose that information. Subsequently, said purchase or sale is made public. Here is an article discussing the insiders’ sales of McDonald’s Corporation’s stock. “Conventional wisdom says McDonald’s should continue to have great success as the economy slows and consumers trade down restaurants just as they’ve been trading down to Wal-Mart for their shopping needs...
Caro?s Comments on Obama Give Historical Background
Posted on August 29, 2008One of my favorite authors, Robert Caro, has dedicated his professional life in large part to a series of books on President Lyndon Johnson. They are an unblinking portrait of a flawed, yet powerful and in many ways (known and unknown) good man. Here are some quotes from an article he authored in yesterday’s New York Times: “As I watch Barack Obama’s speech to the Democratic convention tonight, I will be remembering another speech: the one that made Martin Luther King cry...
Bankruptcies Soar for Senior Citizens
Posted on August 29, 2008This statement is from an analysis report based on bankruptcy filings between 1991 and 2007. According to this analysis, the number of senior citizens being forced into bankruptcy is 'soaring'. In 1991, filers over the age of 55 accounted for 8% of bankruptcy filings...
Interesting Science Site of the Day!
Posted on August 27, 2008Here is a link to one very cool site: http://www.sciencedaily.com/ MichaelPosted by the Law Offices of J. Michael McBride.
New Documentary on New Orleans
Posted on August 25, 2008Here is an article about a movie which I have not seen, but would like to see. It is about a woman who made a home movie of her neighborhood and hurricane Katrina, before and during and after it happened. She lives in the Ninth Ward and her story sounds like one of a community coming together to fight a major common problem when no one was there to assist them...
Evidence of the ?Credit Crunch?
Posted on August 21, 2008In my mail this morning is the latest report from one of my favorite economists, Marc Faber, who writes monthly reports which may be found at his site: www.gloomboomdoom.com. In it he refers to a chart which I want to discuss further. If one is to understand the breadth and depth of the current credit crisis, one must read widely...
Predictions of a Big Bank Failure
Posted on August 19, 2008Here is an article on the recent comments from Professor Kenneth Rogoff who is a former chief economist for the IMF. He predicts that there will be not only smaller banks failing in the US but also a large bank or investment bank. I do not disagree, however, another way to look at this gentleman’s comments would be to think about the fact that they are being made as indicative of a changing social mood rather than seeing them simply for what they are, an opinion of a large bank failure per se...
Foreclosures Continue to Increase
Posted on August 14, 2008This is not exactly “new news” but the housing market continues to crater. “Banks repossessed almost three times as many U.S. homes in July as a year earlier and the number of properties at risk of foreclosure jumped 55 percent as falling prices made it harder to sell or refinance...
It?s Barely News, but?
Posted on August 12, 2008The Federal Reserve has followed through with its plan for an auction of money with an 84 day term. This action by the Fed was once considered impossible but finding new and better ways to print and pump money into the economy, no matter the negative effect on the value of the dollar is now commonplace...
Gallery Collection Takes a Sabbatical at law firm
Posted on August 12, 2008We are delighted to announce that the law firm of J. Michael McBride has celebrated it's 10th anniversary with a reception. On July 31, the offices held an open house. The offices were transformed for the event by the placement of new artwork throughout...
Further Update on Bond Insurers
Posted on August 06, 2008We have previously noted the precipitous decline in the value of MBIA and Ambac, the companies which insure certain types of securities. Once again, the market had already given its opinion of the value of the companies by pushing their stocks into the basement before the ratings companies officially downgraded their credit...
Fed Opens Window Wider
Posted on August 06, 2008The Federal reserve has made it even easier for banks to borrow money from the Fed. Specifically, the previous loans had to be paid back in 28 days and now that is being extended to 84 days under the current auction. There have been so many opportunities to say these words that we need not say them again, but … “never since the Great Depression” have we seen this type of intervention by the federal government...
Gallery Collection Takes a Sabbatical at law firm
Posted on August 06, 2008On July 31, 2008, the law firm of J. Michael McBride, P.C., celebrated its 10th anniversary: The Art of Law by teaming up with local art gallery, Artspace 111. "A collection of works by nationally celebrated artists" are on display at the firm and these works "will grace the walls of the firm throughout the fall" while Artspace 111 takes its summer sabbatical...
OBAMA PROMISES CHANGES TO BANKRUPTCY LAWS
Posted on August 06, 2008During a speech in Powder Springs, Georgia, on Tuesday, Barack Obama promised changes to the nation’s bankruptcy laws in an effort to help military families, senior citizens, and victims of natural disasters. Obama accused Senator McCain of backing the interests of the banking industry and credit card companies “at the expense of hardworking Americans...
Comment on the "Dark Knight"
Posted on August 05, 2008Nice article on social mood and The Dark Knight. The line, “The general population’s dark mood which makes a movie like Batman so popular also drives markets down,” really hits the nail on the head. Best, Ben Hall Socionomics Coordinator Socionomics Institute www...
Shifting Sands Uncover Nazi Bunkers
Posted on August 04, 2008In an great archaeological find, several Nazi bunkers have been uncovered. Their status since the war, covered in sand, has preserved the artifacts inside, making it a rare discovery for scientists. The bunkers were part of Hitler’s Atlantic Wall and are located off the Danish coast...
Too Good a Story to Pass Up
Posted on July 31, 2008Amid all the “feel good” human interest stories about the athletes at the upcoming Olympics, I somehow doubt that this story will be so prominent. It deals with gender testing of the athletes. This is just too funny, especially for those of us who remember the character of unknown gender, “Pat,” from Saturday Night Live...
Merrill Writes Down 7.5 Billion and Sells New Stock to Singapore
Posted on July 29, 2008Brokerage firm Merrill has announced that it has a third quarter write-down of 5.7 billion and at the same time, as part of this effort to raise capital and face these write-downs, it is selling 8.5 billion in new stock. The primary buyer of the new shares is the government fund of Singapore...
Used Car Prices Drop
Posted on July 29, 2008Here is a link to a Business Week article with a fairly lengthy explanation of the drop in the used car market, which particularly discusses the used truck market. One “take away” from this article is that the correction we are now seeing may be too strong and it may thus be a good time to buy a used truck...
CONGRESS APPROVES MASSIVE HOUSING BILL
Posted on July 29, 2008Congress approved a long-awaiting housing market rescue bill on Saturday, July 26th, 2008, and President Bush is expected to sign the bill promptly. The bill offers emergency financing to Fannie Mae and Freddie Mac, and creates a $300 billion fund to help distressed homeowners...
Fearing Trouble, Banks Tighten Lending
Posted on July 28, 2008As has been previously noted here, the Federal Reserve can make money more available to lenders, which it has done, but it cannot force a bank to make a loan. So, in the current economy, lenders are raising their lending standards on all loans, especially loans to businesses...
Success of The Dark Knight, the new Batman Movie, Indicative of Social Mood
Posted on July 28, 2008I am not the first one to make the connection between social mood and the markets. As we compare the success of the recently released and morally confused Batman movie to the current state of the markets, it is possible to see that the slide in the US economy is far from over...
U.S. FORECLOSURES DOUBLE AS HOUSING PRICES DECLINE
Posted on July 28, 2008During the second quarter of 2008, U.S. foreclosure filings more than doubled from a year earlier, as falling home prices left borrowers owing more on mortgages than their properties were worth. According to RealtyTrac Inc., one in every 171 households was foreclosed on, received a default notice, or notice of a pending auction...
Judge References Texas Football in Court Order
Posted on July 21, 2008In the case of Waggoner v. Wal-Mart, the estate of William Waggoner is suing Wal-Mart after Waggoner suffered fatal injuries while exiting a Wal-Mart in Marble Falls, Texas, through a faulty door. A dispute arose over the location of a deposition for a Wal-Mart representative...
U.S.-Style Bankruptcy System Proposed for U.K. Business
Posted on July 18, 2008David Cameron, leader of Britain's opposition Conservative Party, pledged that he wants to introduce bankruptcy laws modeled after the U.S. system to give struggling businesses time to recover during the economic downturn. “We will consult on taking the best aspects of the American Chapter 11 system and give good companies breathing space to allow them to rescue or restructure the business in the face of the credit crunch,'' Cameron said...
Chickens Coming Home to Roost?
Posted on July 17, 2008The Federal Reserve's actions (exponentially increase the money supply) have reduced the value of the dollar. One of the unintended (but known) consequences of a devalued dollar is that foreigners, mainly foreign governments, will seek to reduce their exposure to the falling dollar by moving away from the US currency...
A Quick Review of MBIA and Ambac
Posted on July 14, 2008These two bond insurers have had a rough time and now are in the aftermath of being downgraded by the large credit agencies. Specifically, Moody's downgraded MBIA in mid June from AAA to A2. Other agencies had also taken similar action. However, what is interesting is that investors had already "voiced" their opinion by the time of the downgrade such that the company's share prices had fallen significantly prior to the downgrade...
Florida Department of Revenue v. Piccadilly Cafeterias Inc.
Posted on July 14, 2008In the past, Bankruptcy courts have allowed real estate sales certain state stamp or transfer taxes exemptions even if the sale took place prior to confirmation of a reorganization plan. This is based on a broad interpretation of 11 U.S.C. §1146(a) of the Bankruptcy Code, and is usually done to expedite bankruptcy cases...
Freddie Mac and Fannie Mae Melt
Posted on July 11, 2008Insolvency concerns have driven the share prices for the once venerable firms of Freddie Mac and Fannie Mae almost into the ground. Today, share prices for these two have fallen substantially. Freddie Mac's 52 week high is $67.20 and it closed yesterday at $8...
Vick Files for Chapter 11 Bankruptcy
Posted on July 11, 2008Michael Vick, the former Atlanta Falcons quarterback, is serving a 23-month prison sentence after pleading guilty to federal dogfighting charges last year. “He was subsequently suspended indefinitely without pay and lost all his major sponsors, including Nike...
Obama Proposes Bankruptcy Changes
Posted on July 09, 2008Barack Obama proposes changing bankruptcy laws to help military families, seniors, and people recovering from natural disasters. According to the Associated Press, “Obama said he also would help service members and military families struggling financially after multiple moves, lengthy deployments and, in some cases, predatory lenders...
Interactive "Game" Allows You to Pick Your Own Vice President
Posted on July 09, 2008Here is a link to a fun site created by www.slate.com where you can choose your own VP, depending on how you answer various questions. It takes only minutes and really is kind of fun! http://www.slate.com/id/2194590/ MichaelPosted by the Law Offices of J...
Former Senator From Texas/McCain Advisor at UBS
Posted on July 08, 2008Sen. Phil Gramm has been at the Swiss banking giant, UBS since 2002. During that time, the bank has (like many banks/brokers) encountered some major losses. This fact may take on more importance as the US Presidential election draws near as Sen. Gramm has been touted as a possible Secretary of the Treasury in a McCain administration...
Federal Reserve to Expand Measures to Protect Wall Street
Posted on July 08, 2008Fed Chairman Bernanke has announced plans to further ease the brokerage firms' money crises by extending the time in which they may borrow money from the Federal Reserve. Earlier this year, the "Fed window" was "opened" to brokerage firms and now those lending rights are being further expanded...
One More Article on June Auto Sales
Posted on July 02, 2008This article on the bleak report turned in for US auto sales for June is interesting because it provides a make by make break down on the sales numbers. Interestingly, Mini posted a 40.5% increase while not surprisingly, Hummer posted a 54.2% decrease...
Junk Bonds Healthy???
Posted on June 27, 2008Fridson Investment Advisors was founded by Martin Fridson who says, “that new issues of junk bonds are healthier and more default-resistant than in recent years. This shift in what has been a challenged market is happening because weaker borrowers are being shut out, in Mr...
Foreign Governments Continue to Buy/Bail-out US Mega Banks
Posted on June 26, 2008The latest in the trend for foreign governments to use their "sovereign funds" to buy stakes in US Banks is Kuwait which just invested 3 billion more in Citi Bank during January. Likewise, it invested 2 billion in Merrill Lynch. Here is a link to one article on this subject: http://biz...
FBI Arrests Hundreds in Mortgage Fraud Case
Posted on June 20, 2008The FBI said that "it has arrested more than 400 real estate brokers since March in a crackdown on incidents of mortgage fraud that have contributed to the country's housing crises." Apprehensions were made all over the country including Chicago, Atlanta, Miami and suburban Maryland...
Bankruptcy Rates Rise Among Older Americans
Posted on June 19, 2008According to a new study, “the rate of bankruptcy filings among those 65 and older has more than doubled since 1991.” The study found that “Americans age 55 or older have experienced the largest increase in bankruptcy filings, going from 8...
Fifth Third Bancorp Needs to Raise Capital After Dividend and Profit Forecast Cut
Posted on June 18, 2008Bloomberg reports that Fifth Third Bancorp, Ohio’s second largest bank, “stock fell 19 percent, after slashing its dividend and forecasting much lower profit.” This is reportedly the largest decrease in at least 23 years. “Fifth Third joins the list of banks and securities firms that have raised more than $300 billion to shore up their balance sheets after losses tied to mortgage and debt markets,” reported Bloomberg...
Successful Hedge Fund Operator Says Losses Will Reach 1.3 Trillion
Posted on June 18, 2008John Paulson recently told a group of hedge fund managers meeting in Monaco that he expects that the losses and write downs which will follow the world wide credit crunch will reach 1.3 trillion dollars. He stated that he thinks that we are about one third of the way through this financial crisis...
More people opting for bankruptcy help
Posted on June 13, 2008In 2005 Congress enacted a law to get consumers to look for alternatives to filing personal bankruptcy. The new law made it more expensive to file for bankruptcy protection, put tighter restrictions on qualifying for the protection with income limits and measuring the debtor's ability to pay their creditors, and mandatory credit counseling...
American Airlines denies bankruptcy rumor
Posted on June 11, 2008American Airlines spokesman, Andy Backover, denied the rumors that the major U.S. carrier was about to file for bankruptcy protection in a Dallas Morning News report. The rumors started in a DealReporter story that quoted "unnamed sources" saying "bidders for AMR's regional carrier American Eagle would be cautious based on a risk of AMR filing bankruptcy"...
LandSource real estate partnership files for bankruptcy
Posted on June 10, 2008LandSource Communities Development LLC, a California property developer backed by Calpers, filed for bankruptcy protection under Chapter 11 Sunday. Calpers (California Public Employees' Retirement System) is the largest public pension fund in the United States...
Insider joins Fed critics faulting credit crisis programs as risky
Posted on June 09, 2008Federal Reverse Bank of Richmond President, Jeffrey Lacker, spoke out in London Thursday criticizing the Fed's recent rescue of Bear Sterns. In an interview before his speech, Mr. Lacker said that "before this recent episode, there [were] well-understood and well-articulated boundaries around when we would lend" -- to manage short-term interest rate, to help bank deadline with temporary shortages of cash, or to facilities the closure of a bank taken over by regulators...
Remembering Sen. Phil Graham
Posted on June 05, 2008A recent article illustrates how legislation is crafted and how those little known provisions slipped into a bill that no one had time to read can impact us years later. Quote: Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen...
Lehman Brothers May Need to Raise Capital As Analysts See Loss
Posted on June 04, 2008According to analysts, Lehman Brothers may need to seek more capital to alleviate concerns as the company prepares to report its first-quarterly loss since going public in 1994. Analysts at Oppenheimer & Co. and Bank of America predict that Lehman Brothers, the fourth largest U...
Great Series of Articles in WSJ re: Bear Stearns Bailout
Posted on June 03, 2008Here is a quote from one of the 3 part series of articles from the Wall Street Journal about the Bear Stearns bail out: "Directors authorized an emergency bankruptcy filing, but Mr. Schwartz still held out hope that a rescue could be arranged. A bankruptcy filing for Bear Stearns -- with its nearly 400 different subsidiaries -- would be immensely complicated...
Federal Reserve Continues to Pump Money into Economy
Posted on May 29, 2008The Federal Reserve continues its program of injecting money into the economy. This is accomplished in several ways. The first way referred to in the quotes below gets money to banks with the idea that the banks will then loan it out to customers. Of course, that may or may not be the result...
Mortgage Fraud Cases Surge, Convictions Rise, FBI Reports
Posted on May 29, 2008The FBI has been working with the Securities and Exchange Commission in investigating over 1,300 mortgage fraud cases and 19 corporate investigations. Some interesting statistics were released yesterday in an FBI report concerning fraud cases linked to the subprime lending crisis...
UPDATE: City of Vallejo, California files for Bankruptcy
Posted on May 29, 2008Vallejo, California filed for bankruptcy protection under Chapter 9 (available only to municipalities and a form of reorganization, not liquidation) last Friday in the Eastern District of California. The city has been struggling with personnel costs and low taxes from the housing market...
UPDATE: Vallejo, looking to bankruptcy, consoles citizens
Posted on May 20, 2008In late February we discussed the city of Vallejo in California that was contemplating on filing Chapter 9 Bankruptcy. Tuesday night the City Council unanimously agreed to the bankruptcy filing after the two-month long mediation sessions with unions failed to balance the fiscal plan long-term...
Why more homeowners aren't getting help
Posted on May 16, 2008Many Americans are trying to work out new loans for their mortgages to avoid foreclosure--no surprise there. An article at CNNMoney.com gives an explanation that might explain why some Americans are finding it difficult to accomplish this task. The person who will decide whether or not the homeowner will get a new loan is a person called a "servicer"...
Fed Loans Banks and Brokers 31 Billion...per Week!
Posted on May 16, 2008In order to avoid a widening of the banking/credit crisis, the Federal Reserve has opened the window wide. That is, unprecedented amounts of money have been loaned to banks as well as (in a recent move) to brokerage firms. So, while the official word is that all is well and things are about to turn around, the amount of money which banks and brokerage firms are borrowing in order to survive is skyrocketing...
Six Flags Mall in Arlington Heads Into Bankruptcy
Posted on May 13, 2008On May 5 the Six Flags Mall in Arlington filed for bankruptcy protection under Chapter 11 -- the same day the property was posted for foreclosure auction by three lenders. In the last six months lenders have had their foreclosure efforts averted five times...
UPDATE: Vallejo Avoids Bankruptcy
Posted on May 13, 2008Last Tuesday the City Council unanimously agreed to the bankruptcy filing after the two-month long mediation sessions with unions failed to balance the fiscal plan long-term. Monday the unions proposed a $10.6 million salary reduction in a press conference that could avert the bankruptcy filing...
Accounting Firm Not Held Liable
Posted on May 08, 2008The 7th Circuit Court of Appeals recently rendered a decision which held that an accounting firm would not be held liable for giving an auditing opinion involving a purchaser company shortly before it acquired a dot.com-based business. Before reviewing the decision itself it is quite interesting to read what the 7th Circuit stated about Trustee suits in general...
Big Banks Still Struggles for Cash
Posted on April 30, 2008Despite the unorthodox moves by the Federal Reserves to open the federal lending window higher and make it available for more cash starved financial companies, not just banks, news comes today that Citicorp offered stock which raised 4.5 billion. "The sale [of stock today] represents about 3 percent of Citigroup's shares outstanding as of March 31...
Housing Slump Showing No Signs of Letting Up
Posted on April 29, 2008According to the S&P index, “the home price of 20 cities fell by 12.7 percent in February versus last year, the largest decline since its inception in 2001.” David Blitzer, chairman of the index committee at S&P said, “There is no sign of a bottom in the number” “noting that all 20 metro areas have declined for six straight months...
U.S. regulator fears wave of bank failures
Posted on April 24, 2008“U.S. bank failures could be on the rise as a weakening economy puts pressure on badly underwritten loans.” John Dugan, who is the comptroller of the currency for about 1700 national banks, said “the growing problems for lenders follows a period of almost four years in which no institution regulated by its agency had failed...
Government?s Foreclosure Rescue Plan ? A Good Idea?
Posted on April 23, 2008Rep. Barney Frank and Sen. Chris Dodd “calls for up to $300 billion in loan guarantees from the Federal Housing Administration to refinance loans that homeowners can't afford as long as the original lender reduces the principal on the loan to 85% of the home's current market value...
Now to Recapitalize the Smaller Banks
Posted on April 21, 2008Now that foreign governments (through their funds usually called sovereign wealth funds) have come to the financial rescue of the big banks and brokerage firms, like Citigroup, Merrill Lynch and Morgan Stanley, it has become necessary to also recapitalize the smaller US banks as the credit crisis widens...
How to Survive the Downturn
Posted on April 16, 2008Although the economy remains relatively strong in Texas, businesses that rely on the national economy need to be paying close attention to the national scene. In fact, it’s a good time for businesses of all types to review their contractual agreements and tighten up their internal controls to help ensure their business remains healthy...
Frontier Files for Bankruptcy
Posted on April 14, 2008On Friday, Frontier Airlines became the fourth airline to file for bankruptcy in the past month. Unlike the previous three – Aloha, ATA, and Skybus - Frontier plans to continue normal operations while it reorganizes, with no cancellations. Factors other than the rising fuel costs and credit crisis affecting all airlines were apparently at work in Frontier’s filing...
In Memory of Robin Love Perkins McBride
Posted on April 11, 2008Our office will be closed today in Memory of Robin Love Perkins McBride who passed away earlier this week. "Robin was born June 29, 1959, in Lufkin and graduated from Southern Methodist University with majors in English and dance. She enjoyed a successful 15-year career with Neiman Marcus, primarily in its human resources department...
Taking Tax Advantage of a Worthless Stock
Posted on April 08, 2008With the declining dollar and values of corporate stock you might be encouraged to know that you can still offset some of your loss from a worthless stock. This means that the stock is totally worthless. You need to do some research to confirm this, however, because even if the stock is worth a few pennies it is not worthless as far as the IRS is concerned...
Ex-Sentinel execs: Settlement with trustee close
Posted on April 08, 2008Sentinel Management Group, Inc., managed around $1.4 billion in funds for financial institutions and individuals. On August 17, 2007 Sentinel crumbed and filed for Chapter 11 bankruptcy protection in Chicago, Illinois. The firm is facing lawsuits from not only their clients but also the U...
Judge who faced charges files for bankruptcy
Posted on April 08, 2008Although Judge Jeffrey Hoskins was acquitted of all 15 criminal charges (eight in December 2006 and the remaining seven in August 2007), he incurred numerous attorney fees. On March 26, 2008 Judge Hoskins and his wife filed for Chapter 13 bankruptcy protection in Ohio...
ATA Left Midway Passengers Stranded Without Even Polite Phone Call
Posted on April 08, 2008The 35-year old company filed for bankruptcy protection under chapter 11 Wednesday, April 2, 2008, due mainly to high fuel prices and their loss of an agreement with Federal Express, which helped offset the company's fuel bill. The company had announced in a statement last month that all domestic flights out of Chicago's Midway Airport would cease on April 14 and all the international flights on June 7...
Allegations of a Rigged Christie's Auction and Gallery files for Bankrutpcy
Posted on April 08, 2008Berry-Hill Galleries, a New York dealer in American art filed for bankruptcy under Chapter 11 on December 8th. The gallery's chief restructuring officer, Alan M. Jacobs said that the filing resulted from disputes with the gallery's lenders and with the auction house Christie's...
Ex-Sentinel execs: Settlement with trustee close
Posted on April 04, 2008Sentinel Management Group, Inc. managed around $1.4 billion in funds for financial institutions and individuals. On August 17, 2007 Sentinel crumbed and filed for Chapter 11 bankruptcy protection in Chicago, Illinois. The firm is facing lawsuits from not only their clients but also the U...
New Article From Socio Times
Posted on April 01, 2008There is an economic theory that the markets are all driven by social mood and not by events or economic news per se. Elliot Wave International is the largest proponent of this theory. It is a great resource and provides a unique perspective. ( Here is a link to that site: http://www...
Fair Debt Collection Practices Act Complaints on the Rise
Posted on April 01, 2008Although in-house debt collector complaints are down by 6.5% in 2007 from the previous year, the complaints about third-party debt collectors increased by 2.4%. The top five complaints lodged in 2007 with the Fair Trade Commission were: 1. collectors attempted to collect on debts that consumers either did not owe or was larger than what was actually owed [27,393 complaints]; 2...
Fed Considering Quiet Nationalization of Banks?
Posted on March 31, 2008At the same time as most of the proposed “solutions” to our current economic melt down include increasing the power of the Federal Reserve, an article appears today that states that the Fed may be considering a “Nordic style nationalization” of US institutions...
Insider View of Wall Street
Posted on March 28, 2008Here is a great story which provides an inside look at the Bear Stearns bail out by focusing on the Chairman of JPMorgan Chase, Jamie Dimon. Quote: The Monday after a long working weekend, Jamie Dimon looked a little tired. His collar was unbuttoned, his tie loosened, and he was slouching slightly in his office chair...
What Not to do as a Judge
Posted on March 27, 2008On August 29, 2007 Public Defender Service attorney Liyah Brown had a criminal hearing before D.C. Superior Court Judge John Bayly, Jr. During the hearing the two entered into an argument about whether or not the Defendant was in deed "a homeless man"...
How Depression Era Entities are Still Used Today to Save Companies and Banks
Posted on March 27, 2008Here is a great little article on the subject of how the quasi governmental entities set up by President Roosevelt in the 1930's are still being used today to save companies like Countrywide Financial. Now of course, the question remains: why do we want to save such a company when it is simply reaping the losses it sowed in bad loans? In any event, here are some quotes from this brief and yet interesting article: “Despite sustained efforts to tear down the New Deal—from the repeal of the Glass-Steagall Act in 1999 to President George W...
Capital One Bank being Sued Over Post-Bankruptcy False Credit Reporting
Posted on March 26, 2008James Krider was a responsible individual who paid his bills, but when life happened he was forced into filing bankruptcy. Willing to live with the bankruptcy notation on his credit report for 10 years, he was not aware that one credit card company was still reporting his discharged credit accounts as delinquent...
Wall Street Bail-Outs Will Cost Taxpayers
Posted on March 26, 2008There is an interesting article out today which attempts to make sense of the current Wall Street bail-out and its impact on taxpayers. Perhaps it is no surprise that shifting the losses in the Bear Stearns portfolio over to the Federal Reserve does not mean that those losses disappear...
Bear Bailout Being Renegotiated for Shareholders? Benefit
Posted on March 24, 2008The deal cut last weekend to save Bear Stearns from bankruptcy (JPMorgan Chase buys the company for $2 per share) is evidently being renegotiated in an effort to get more money to that company’s shareholders. When the deal was first announced, the details were fuzzy...
Ohio Senate Bill Softens Sting of Bankruptcy
Posted on March 18, 2008Ohio Senate Bill 281 passed in a rare Thursday session. The bill would allow a bankruptcy debtor to claim $20,200 worth of equity from their home. Ohio's current homestead exemption (which hasn't been updated in nearly 30 years) is $5,000--one of the lowest in the country...
Champ Car Bosses File for Bankruptcy
Posted on March 17, 2008Champ Car World Series filed for bankruptcy Wednesday after agreeing to an open-wheel unification plan with Indy Racing League ("IRL") worth $6 million. The assets of Championship Auto Racing Teams were purchased from Champ Car in 2004 after CART had filed bankruptcy...
Are we There Yet?
Posted on March 17, 2008Those of us who watch the economy can hardly take a breath before the next unprecedented action occurs. This weekend (an event in and of itself), JPMorgan Chase agreed to purchase Bear Stearns for a fraction of its “value” just one month ago...
Wonder What JPMorgan Chase?s Shareholders Think About This?
Posted on March 14, 2008First, Bank of America buys Countrywide, an unusual business move unless taken to avert a major meltdown of the US economy which would hurt all institutions or unless BoA was protected somehow from the obvious losses it was buying. Now there is the Bear Stearns bail out, which may well take the form of a direct buy out of that entity, this time by JPMorgan Chase...
Fed Accelerates its Unprecedented Actions to Save Economy
Posted on March 13, 2008Most know that a few days ago, the Federal Reserve offered to loan a total of 200 billion (of newly printed money) not only to banks but also to Wall Street brokerage houses taking a risk on almost any collateral however worthless it might be and extending the time for repayment...
More Bad News; More Fed Pumping Money into Economy
Posted on March 07, 2008Let's see, this morning, we have a 63,000 job loss reported, instead of an expected gain; we see an all time high in foreclosures and then hear that the Fed is increasing its cheap loans to banks (for collateral which is of what quality?). "The Federal Reserve announced Friday that it will boost the size of auctions planned for March 10 and March 24 to $50 billion each...
Feds Prosecuting Man in Foreclosure Scam
Posted on March 06, 2008Isaac Yass, in the United States on an employment visa, is being extradited back to Topeka, Kansas to stand trial for six counts of mail fraud and six counts of aggravated identify theft. Yass, aka Itsik Yass, was arrested in Los Angeles last week with $10,000 cash and four packed bags in his apartment...
Bundled Mortgages and Dubious Fees Complicate Foreclosure Cases
Posted on March 06, 2008Do you know you owns your mortgage? Are you sure? With all the notes being bundled and sold not even some of the banks are sure which they own. Ohio courts have recently dismissed cases where ownership of the mortgage has not been proved by lenders seeking foreclosure...
Forget that day in court
Posted on March 05, 2008After being sexually assaulted by co-workers while working in Iraq a woman was denied access to the criminal justice system because the perpetrators worked for a defense contractor. After the assault, when she was [ Later, ] back in the states, she was told by a Texas state court judge during a civil suit that, "[s]adly, sexual harassment, up to and including sexual assault, is a reality in today's workplace"...
Senate Passes Evidence Rule 502: 2/27/08
Posted on March 04, 2008On February 27, 2008, the Senate approved by unanimous consent without amendment S. 2450, a bill adding new Evidence Rule 502 to the Federal Rules of Evidence. See Sen. Rept. No. 110-264. The legislation addresses waiver of the attorney-client privilege and work product protection and is identical to proposed Evidence Rule 502, which was approved by the Judicial Conference of the United States and transmitted to Congress for its consideration in September 2007...
If the Sky Falls, it will be via Deflation, not Inflation
Posted on March 03, 2008Here is a recent article which postulates that all of the unprecedented action by the Federal Reserve will not prevent a deflationary recession. Quotes: "Half the eurozone is grinding to a halt. Italy is slipping into recession. Property prices are flat or falling in Ireland, Spain, France, southern Italy and now Germany...
Rivalry Between Republic of Texas? First and Second Presidents
Posted on February 29, 2008A discovery of Harris County district court records gives a look into the practice of law in the past. An opinion written by Chief Justice John Hemphill, the “John Marshall of Texas” was discovered and “ultimately decided the case” of Houston v...
UPDATE: Vallejo Strikes Deal to Avoid Bankruptcy
Posted on February 29, 2008We last left off with the city council planning a meeting on Thursday to decide whether or not the city needed to file Chapter 9 bankruptcy. The financial turmoil that lowered the expected balance of the city's general fund account was caused by three different factors: 1...
USB Faces Shareholder Pressure
Posted on February 28, 2008"The flagship bank of Switzerland, UBS, is in deep trouble. Not only did it recently report its first ever annual loss, of 4.4 billion Swiss francs, or $4 billion, as well as 21 billion francs in write-offs and an estimated $88 billion in additional exposure to risky U...
California City on Brink of Bankruptcy
Posted on February 28, 2008The city of Vallejo, with a population of about 117,000, would be the first large city in California to declare bankruptcy as a result of revenue shortfalls used to pay its day-to-day operating costs. The city has been slammed by the weakening housing market and will run out of money from it's general fund for expenses by March 31st...
Subprime Mortgage Brings Down Lenders
Posted on February 28, 2008The FDIC is looking to hire 25 retired employees and staffing up for a possible wave of bank failures. “The FDIC identified 76 banks as potential problems during the last quarter of 2007, 11 more than in the third quarter. Problem institutions are put under closer scrutiny but the agency never discloses their identity, hoping to avoid mass withdrawals by depositors...
Justice Thomas Silent Through More Than Two Years of Supreme Court Arguments
Posted on February 27, 2008Often thought of as the 'silent justice', two years and 142 cases have passed since the last time Justice Thomas spoke during oral arguments (besides the comments to Justices Breyer and Kennedy who sit to his immediate right and left, respectively). The last time Justice Thomas posed a question during oral arguments was on February 22, 2006 in a death penalty case...
Fairness Opinion Upheld
Posted on February 26, 2008On February 20, the Seventh Circuit Court of Appeals issued an opinion in which it held that the issuance of a fairness opinion by Credit Suisse First Boston right before the tech bust of 2000 was not gross negligence. In this instance, a Liquidating Trust established for the benefit of unsecured creditors sued SCAB for gross negligence arguing that it should have known that the deal they were saying was fair was instead about to implode when the market turned...
This Looks Bad: Judge Arrested in ?Drag?
Posted on February 21, 2008“U.S. Bankruptcy Court Judge Robert Somma, 63, pleaded no contest in Manchester District Court to a misdemeanor first–offense driving while intoxicated charge.” according to Union Leader. Somma was arrested on February 6, after his Mercedes-Benz rear-ended a pick-up truck at a traffic light in Manchester...
Credit Woes
Posted on February 21, 2008The subprime mortgage troubles are now spreading to customers who rely on credit. The consumer debt has double in the past decade and reached an "all-time high of $2.55 trillion" in December 2007. Consumers were using their houses as piggybanks with home equity loans and now they are struggling...
There is a First Time for Everything
Posted on February 20, 2008Ritchie Capital Management LLC, who was founded in 1997 by Thane Ritchie and manages more than $1 billion in investor assets including the remnants of Multi-Strategy, has been forced into involuntary bankruptcy by three investment companies with regards to two funds...
Major Melt Down Ahead?
Posted on February 20, 2008A recent article explains how a major melt down in the US economy is possible and even likely. It quotes extensively from Professor Roubini, a Professor at NYU's Stern School of Business. Quote: "So how bad might this downturn get? To answer this question we should ask a true bear...
High Fees Scrutinized
Posted on February 19, 2008According to the US Bankruptcy Court Western District of Pennsylvania court’s annual report in Pittsburgh’s “more than $25 million in fees were paid last year to attorneys, accountants and other professionals”. The court’s report, In the LeNature’s bankruptcy case, the accountants and attorneys are some of the highest paid professionals where the total fees topped 6 million...
Big US banks Use Fed Credit Facility to Tune of 50 Billion
Posted on February 19, 2008The Federal Reserve, as part of its unprecedented measures to shore up the US banking system established a Term Auction Facility which allows banks to borrow money at good rates using less strong collateral, thus putting the Fed at risk of this weak collateral...
Pre-Petition Workout Agreement Enforced, Even As to Stay Waiver
Posted on February 18, 2008After defaulting on his principle and interest payments to Florida Community Bank, the owner of a set of “dry-stack” boat condominium units entered into a pre-petition forbearance agreement with the bank. The conditions of the forbearance agreement were as follows: (a) the Bank should be accorded relief from the automatic stay in the event the borrower ever filed for bankruptcy; (b) the final judgment would continue to accrue interest at the rate set forth therein; and (c) the borrower, among others, waived all claims, counterclaims, defenses and causes of action against the Bank...
Catholic Diocese Chooses Chapter 11 Bankruptcy
Posted on February 18, 2008With “more than 150 claims were filed against the church, alleging abuse by clergy or church workers“ the Catholic Diocese of Fairbanks plans to file for Chapter 11 bankruptcy. Bishop Donald J. Kettler believes it’s the “best way to bring all parties together and to provide for fair and equitable treatment of all who have been harmed...
Link to an Archive for Speeches
Posted on February 15, 2008For those of you who, like me, occasionally delve into political history, here is a great link to add to your favorites: http://www.americanrhetoric.com/ It is an online speech bank. It lists the top 100 speeches according to scholars of American History...
Fed Chairman Acknowledges Economy is Worse
Posted on February 14, 2008"Federal Reserve Chairman Ben Bernanke told Congress Thursday the economy is deteriorating and signaled a readiness to keep on lowering a key interest rate to shore things up. Bernanke also told the Senate Banking Committee that the one-two punch of housing and credit crises has greatly strained the economy...
Real Estate News, at the High End...
Posted on February 12, 2008"The housing-market crunch isn't just hitting small-time buyers on Main Street - Hollywood stars are also feeling the pain, Buyers in the $3 million to $6 million range are getting crushed as part of a property downturn across Los Angeles, and the list of losses includes some famous names...
NASCAR Issues Penalties
Posted on February 12, 2008Drivers Busch and Stewart are both on probation for 6 races, according to the newly released NASCAR edict. Evidently, there was "an incident" on the track and then one in private (Stewart allegedly punched Busch in the officials' trailer!). "NASCAR spokesman Ramsey Poston said the measures would have been more severe if Stewart and Busch had rubbed fenders while pit crew members were working on pit road, endangering their safety...
What are the Presidential Candidates' Proposals for Resolving the Subprime Mortgage Crisis?
Posted on February 06, 2008Here is a snapshot of the Presidential Candidates' views on the mortgage crisis. The views were compiled by Bankrate.com and summarized in the following ABI article: http://www.abiworld.org/e-news/02-05-08.html Clinton: Proposes cracking down on mortgage brokers, eliminating payment penalties, requiring mortgage lenders to include the cost of taxes and insurance in high-risk mortgages, and establishing a fund to help at-risk borrowers avoid foreclosure...
What a Nasty Letter for a $16.96 Debt!
Posted on February 05, 2008Nationwide Collections, Inc. of Fort Pierce, Fla., will be sued next week for a collection letter it sent out to a customer of Columbia House for a music account in October 2007. What makes this collection letter worthy of litigation? The letter was addressed to "Dear S--- " in an envelope addressed to "S--- Face" (spelled out in the letter and on the envelope)...
Robbing Peter to Pay Paul Can Land You in Bankruptcy Court
Posted on January 30, 2008A gallery ("Debtor") in New York, who was charged with holding art work, sold that art work (worth $4.6 million) without the permission of the owners in order to pay off its debts. When the owners ("Creditors") found out they placed the Debtor in involuntary bankruptcy under Chapter 7 on November 1, 2007...
Fed Cuts Rates Again
Posted on January 30, 2008Showing once again that it will pull out all the stops to avoid further economic slowdown, the Federal Reserve has again cut interest rates, this time by 1/2 a point. This size cut and the comments made both allow for further rate cuts in the future...
Nationwide Foreclosures Jumped 75% in 2007
Posted on January 30, 2008According to the 2007 U.S. Foreclosure Market Report released on January 28, 2008 by RealtyTrac the nationwide foreclosures in 2007 jumped 75% from 2006 with a total of 2,203,295 foreclosure filings. "More than 1% of all U.S. households were in some stage of foreclosure during 2007, up from 0...
French Bank Loses 7 Billion...because of one "rouge" trader!
Posted on January 24, 2008A low level employee of Societe Generale somehow engineered trades over several years that evaded all of the bank's internal controls and ultimately lost the bank 7 billion dollars, according to news reports today. The bank, which also just wrote off about 3 billion dollars due to the "global credit crunch" is now searching for additional capital...
Note that the Fed Rate Cut did not Prevent Stock Drop
Posted on January 22, 2008The market fell today 450 points and has since recovered to a drop of 250, but this activity is after the Federal Reserve cut rates in an emergency action not taken since just after the Sept. 11 attacks. "U.S. markets joined stock exchanges around the globe that fell precipitously in recent days amid concerns that a downturn might spread around the world...
What are Democrat Candidates Saying About the 2005 Bankruptcy Law?
Posted on January 18, 2008When asked during Tuesday's night debate in Las Vegas about the 2005 Bankruptcy law, the candidates had the following comments: Edwards: When asked if he regretted voting for the 2001 bankruptcy bill which later became law in 2005 that made it more difficult for the middle-class, particularly woman, to file for bankruptcy Mr...
Garth and Troy Show Off New Room at Local Hospital
Posted on January 17, 2008On a personal note, although thankfully my girls are presently healthy, both of them (and I) have spent many nights at our local children's hospital, Cook Children's Medical Center, and have spent time in a play room donated by Troy Aikman. Here is a story about it being updated with the help of both Troy and Garth Brooks...
More Foreign Funds Investing in US Financials
Posted on January 15, 2008More news on foreign funds, frequently foreign governments themselves, buying into US financial companies. "Merrill Lynch & Co. said Tuesday that it is getting a cash infusion of $6.6 billion from three foreign investment funds. The Korean Investment Corp...
Pop Quiz
Posted on January 15, 2008OK, so what do the Kuwait Investment Authority, the New Jersey Division of Investment, Prince Alwaleed bin Talal of Saudi Arabia and Sanford Weill all have in common? In short order, they may all be major contributors to bail out Citigroup. As you have read, Citigroup announced its 10 billion loss and its 18 billion write off...
Merrill Looking for More Foreign Money After 15 Billion Loss
Posted on January 11, 2008"Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments, almost double its original estimate, prompting the firm to raise additional capital from an outside investor. ... To shore up its deteriorating finances, Merrill is now in discussions with investors in the United States, Asia and the Middle East, including American private equity firms, to raise about $4 billion in the coming days, these people said...
In a Stunning Move, BoA Buys Countrywide
Posted on January 11, 2008Yesterday, the talk was that Countrywide would file for chapter 11; today Bank of America inks a deal to buy the troubled lender. Recall that BoA had invested 2 billion in Countrywide about 5 months ago and, perhaps to salvage that investment or to make the powers that be happy by not allowing Countrywide to go into bankruptcy perhaps triggering an even larger "crunch," it now announces that it is buying the company for 4 billion...
Are Big Malls Next?
Posted on January 10, 2008Here is an article in the online magazine, www.Slate.com , which addresses "ghost malls" and whether the real estate crash will spread from individual homes to malls. The author's conclusion is: not yet, but maybe soon. Quote: "Malls aren't turning into haunted houses just yet, but they may be on their way, thanks to the recent wholesale shuttering of national retail chains...
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On 08-12 at 16:20PM
Family of New York City swine flu victim to sue city for failure to secure school #nyc #swineflu
On 08-12 at 12:59PM
Real Network's DVD copying software deemed to break DMCA's anti-circumvention provisions
On 08-12 at 12:57PM
Prepaid funeral operators indicted for $100 Million fraud
On 08-12 at 12:53PM
NY Jets join Cincinnati, Dallas, Green Bay, Houston & Seattle #NFL teams offering branded state lottery games
On 08-12 at 12:43PM
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Can driving accident be cause for termination?
If your state is an at-will state, the company can fire you for any reason or fo...
Must I refinance my house aftering taking full ownership after a divorce via a quit claim?
When financing there are at least two documents...the mortgage and the note. The...
What rights does a father have when a woman waits 13 years to tell a man he is a father & he missed out on the growing up of that child?
Actually, he has as much right as she to request a paternity test, plus he can f...
I signed myself out of a hospital because I thought the care was negligent. I am a nurse and know a great deal about medical care. I was in the hospital a year ago for less then 12 hours and they sent me a bill for over
If you can prove tha the care was negligen you need to get a lawyer and try to n...
How to prevent an arrest from appearing in the local newspaper?
Dont know the law in Minnesota but in most jurisdictions an arrest is a matter o...
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