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ABCP write-offs



March 30, 2008 – Comments (4) | RELATED TICKERS: TRQ

Awe, toxic Bob had to write-off $24.5 million of ABCP.

So, this is the second business I've seen that has written some the Asset Back Commercial Paper off this weekend.

Wall street spread the risk alright...  You get diluted shares and worthless paper.  They made an average of about $300k per year.  There was $32 billion of this worthless paper sold, well, estimates go from about 40c to 85c on the dollar.  It will be interesting to see how many take a hit.

ou'd think someone would take the time to check out the quality of the paper, especially with buying amounts like $24.5 million..  $32 billion of this stuff gets into Canada and no one in the selling food chain picks up that this stuff is bad. 

Robert Friedland is someone I don't much care for.  He killed a whole river system in Colerado in his rush to  build a mine and not building it properly.  He left the tax payers there to clean up his mess, although he did eventually pay a $20 million fine.  It didn't come close to covering the costs.  Last I read he's worth about $400 million now.  

4 Comments – Post Your Own

#1) On March 30, 2008 at 10:20 PM, mandrake66 (74.09) wrote:

$32 billion of this stuff gets into Canada and no one in the selling food chain picks up that this stuff is bad.

I doubt that very much. I'd bet many of them knew it was bad. It was a kind of pyramid scheme, usually with some fraud or misrepresentation at the end to get the stuff into the hands of end-buyers ("it's like a money market investment, only higher yield"). 

I remember reading an anonymous quote from someone inside Wall Street a while back, before the you know what hit the fan, that all this mortgage securitization into lots of tranches with a deceptive AAA rating was quite explicitly a way of exporting the risk of all this toxic stuff into European banks (wish I knew where I saw it, possibly Up and Down Wall Street in Barrons). But apparently not everyone got the memo and Wall Street banks, both investment and commercial, remained themselves exposed in too many ways. Even the stuff they successfully exported, they often ended up writing derivative insurance contracts on, and all those are blowing up now too...and they're conveniently off balance-sheet, so know one knows how big the exposure really is. They were too clever by half. But the people at the top of the pyramid all prospered mightily.

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#2) On March 30, 2008 at 11:58 PM, phegm (< 20) wrote:

 -58 degrees??  Yeah, I'll take 104 degrees over that....I'd much rather be kicked in the balls than have them turn blue and fall off.

 With regards to the pipes - how are you showering?  It must be getting pretty funky over there in dwot land.... If you don't want them to freeze you have to leave a couple faucets running during periods of non-use (like overnight).  Once they're frozen ur pretty much screwed until it warms up.

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#3) On March 31, 2008 at 12:08 AM, dwot (29.24) wrote:

-58C, that's -72F.   Believe it or not, they don't have pipes to deliver water here.  Water is delivered via a water truck and put into a big tank.  I get water out of the tank, boil it up and have a instead of a shower.  I have another container I keep filled over my sink.

I thought the US banks remained exposed simply because they didn't sell it fast enough.  But, pretty disgusting.  I think it will result in fairly serious international relationships. 

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#4) On March 31, 2008 at 12:47 AM, dwot (29.24) wrote:

Nikkie down nearly $400...

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