Seen on the street in Kyiv.

Words of Advice:

"If Something Seems To Be Too Good To Be True, It's Best To Shoot It, Just In Case." -- Fiona Glenanne

“The Mob takes the Fifth. If you’re innocent, why are you taking the Fifth Amendment?” -- The TOFF *

"Foreign Relations Boil Down to Two Things: Talking With People or Killing Them." -- Unknown

“Speed is a poor substitute for accuracy.” -- Real, no-shit, fortune from a fortune cookie

"If you believe that you are talking to G-d, you can justify anything.” — my Dad

"Colt .45s; putting bad guys in the ground since 1873." -- Unknown

"Stay Strapped or Get Clapped." -- probably not Mr. Rogers

"The Dildo of Karma rarely comes lubed." -- Unknown

"Eck!" -- George the Cat

* "TOFF" = Treasonous Orange Fat Fuck, A/K/A Dolt-45,
A/K/A Commandante (or Cadet) Bone Spurs,
A/K/A El Caudillo de Mar-a-Lago, A/K/A the Asset., A/K/A P01135809

Wednesday, July 15, 2009

Mu-Wha-Ha-HA!

Oh, I cannot begin to tell you how this news from John Cole's blog has just made my frakking day:
The nation’s largest public pension fund has filed suit in California state court in connection with $1 billion in losses that it says were caused by “wildly inaccurate” credit ratings from the three leading ratings agencies.

The suit from the California Public Employees Retirement System, or Calpers, a public fund known for its shareholder activism, is the latest sign of renewed scrutiny over the role that credit ratings agencies played in providing positive reports about risky securities issued during the subprime boom that have lost nearly all of their value.

The lawsuit, filed late last week in California Superior Court in San Francisco, is focused on a form of debt called structured investment vehicles, highly complex packages of securities made up of a variety of assets, including subprime mortgages. Calpers bought $1.3 billion of them in 2006; they collapsed in 2007 and 2008.

Calpers maintains that in giving these packages of securities the agencies’ highest credit rating, the three top ratings agencies — Moody’s Investors Service, Standard & Poor’s and Fitch — “made negligent misrepresentation” to the pension fund, which provides retirement benefits to 1.6 million public employees in California.
And it just gets better and better:
Now, here comes the fun part: Calpers doesn’t give a rat’s ass about the money. Sure, the financial instruments at hand (Cheyne Finance, Stanfield Victoria Funding and Sigma Finance) have defaulted on their payment obligations. The losses to Calpers are ~!$1 billion.

But that’s not what’s going on here: These Left Coasters want their pound of flesh. They don’t care for the Ratings Agency folks, and consider them a blight on the investment landscape.

The goal of the litigation (as I see it) isn’t to make the rating agencies pay a financial penalty; rather, it is to publicly try them just as the regulatory rules are being rewritten. I also predict that CALPERS is going to attempt to not just win, but humiliate these agencies, call them out in the most embarrassing way possible, trash the senior executives, and make things very uncomfortable in general for these firms.

They don’t want them to merely suffer — they want to destroy their unique position as an Oligopoly, to remove them from having a special status under the SEC rules.
Oh, motherfuckin' yeah! I am going to have to lay in a large supply of popcorn in order to watch this one.

While tumbrels and a guillotine would be satisfying, no doubt, Death by Litigation can be very entertaining. Depositions, discovery, interrogatories and CALPERS is going to take their asses to trial.

It should be oodles of fun over the next several years.

4 comments:

Phil said...

Kinda brings new meaning to the term "leaking like a SIV," doesn't it?

Phil said...

Nice find!
I predict that if this gets any serious traction and doesn't squashed by the fuckers protecting these assholes then you will see a RASH of these kinds of suits.

Michael Hart said...

At last, another good reason to eat more popcorn. Will the government of the people ever learn it must guarantee the retirement pensions of all its citizens?

In more enlightened nations on more enlightened worlds, the income from all their natural resources is held as a social trust by the federal government, and all the income is used for social purposes, like disease prevention, the education of geniuses; and the expenses of especially promising individuals in their political statesmanship schools. And one half of the income from natural resources goes to the old-age pension fund.

Ruckus said...

I thought I knew what a trumbel was but I looked it up anyway:
"A tumbrel, or tumbril was a tipcart—usually used for carrying dung, sand, stones and so forth—which transported condemned prisoners to the guillotine during the French Revolution."
Carrying dung, how very appropriate.