Closer
to bankruptcy: Major insurer opposing Kevyn Orr's Detroit plan - (www.freep.com) An
insurance company that backs more than $170 million in Detroit bonds said it
opposes emergency manager Kevyn Orr’s attempt to restructure the city’s
finances, a rejection appearing to place the city one step closer to the
largest municipal bankruptcy in U.S history. Ambac Assurance said in a written
statement Monday night that it does not agree with Orr’s plan to treat general
obligation bondholders the same as unsecured creditors. The company didn’t say
what it plans to do next. But it did announce the hiring of Harrison J. Goldin
of Goldin Associates. Goldin is a former New York City comptroller who played a
key role in New York’s financial restructuring in 1970s.
Detroit sues
after insurer blocks city's access to casino revenues - (www.freep.com) Emergency
manager Kevyn Orr said today that Detroit filed suit against one of the
insurers of its debts that sought to stop payment of up to $11 million a month
in casino revenues the city desperately needs to maintain public services while
Orr restructures government operations. The lawsuit is complicated, but boils
down to this: In 2009, Detroit — in a move to avoid defaulting on payments for
debts it issued to shore up pension underfunding — pledged casino revenues as
collateral. Under the deal, the city agreed to set up an account that Orr
spokesman Bill Nowling called a “lockbox” that would be administered by U.S.
Bank. That company would release casino revenues to Detroit once the city had
paid its obligations under the deal. Syncora Guarantee insured the hedge
agreements, often called swaps, as well as some of the the $1.4 billion in what
are called certificates of participation that the city issued to make up for
underfunding in Detroit’s two public employee pension funds.
WSJ:
Government Student Loan Program a 'Scam' - (www.moneynews.com) A
new report from the Congressional Budget Office (CBO) shows that the federal
government's student-loan program is a "scam," a Wall Street Journal
editorial states. "If you think the federal student-loan program looks
like a bad deal for taxpayers, imagine how it would look with honest
accounting," Journal editors write. "And now you don't need to
imagine thanks to a new [CBO] report that's receiving far too little attention.
Turns out that the official 'savings' for taxpayers of $184 billion over the
next decade really add up to $95 billion in losses." The "scam"
is that Congress has enabled a huge subsidy for universities while claiming
that student loans create huge tax savings, the editorial says. It can make
that claim because a 1990 law "requires a deliberate under-counting of the
cost of defaults," the editorial says. "To its credit, the
Congressional Budget Office has noted on various occasions that while the law
forces it to use this Beltway math, CBO knows it's not accurate under
fair-value accounting."
Massachusetts regulator subpoenas Wall
St firms over sales to seniors - (www.reuters.com) Massachusetts'
chief securities regulator has hit top Wall Street firms with a blanket of
subpoenas, saying he fears elderly people are being targeted for high-risk,
alternative investment products. Massachusetts Secretary of the Commonwealth
William F. Galvin said on Wednesday subpoenas have gone out to a group of firms
including Morgan Stanley,
UBS AG, Fidelity Investments, Bank of America Corp's Merrill Lynch,
Wells Fargo & Co, TD Ameritrade and Charles Schwab
Corp. Galvin said a recent investigation into real estate investment trusts
heightened his concern that elderly investors were being targeted with products
too complex for them to understand the underlying risks. "While these
products are not unsuitable in and of themselves, they are accidents waiting to
happen when they are sold to inexperienced investors by untrained agents who
push the products to score the large commissions associated with alternative
investments," Galvin said in a press release.
Las
Vegas: a wretched hive of realtor scum and villainy - (www.ochousingnews.com) To buy a large number of homes, renovate them,
and either flip them or hold them, I needed to form business relationships in
Las Vegas. Jacki, My Lieutenant out there, has known my wife for over 20 years,
and despite the occasional mishap, she has been reliable and trustworthy. We’ve
had contractors come and go, but we’ve used one title company for four years,
and most of the professionals we’ve needed to rely on have been adequate to the
task. Unfortunately, I haven’t had the same success with the realtors out
there. If it was just one bad apple, I could ignore the problem as bad luck.
But when three different realtors go to outrageous lengths to cheat and steal,
it makes me jaded on the whole profession. Perhaps I am predisposed to judge
realtors harshly. Everyone knows I think their association is horrendous, but
when working with agents, its the character of the individual that matters. I
have worked with Shevy for over four years now. I’ve consistently found him to
be honest, moral, and deeply conscientious about ethics. I’ve met many other
agents whom I admire and respect. The three you’re about to read about are not
among them.
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