Financial News 7/12/2012 – CDO Ratings Scandal, Sandusky Scandal, Leon Black buys The Scream


Financial News 7/12/2012 – CDO Ratings Scandal, Sandusky Scandal, Leon Black buys The Scream

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    So to make things worse, rumor has it, that the Securities and Exchange Commission, is running out of time to file civil law suits against some of the main players involved in the financial crisis. Under US federal law, the SEC has five years max, to file lawsuits concerning alleged fraud and other misbehavior. To our relief however, the SEC is very busy preempting, wrong doers from filing dismissal of the cases against them, based on these legal time constraints. First up is the charge against those who helped create and market a 1.6 billion dollar mortgage-bond deal known as the Delphinus CDO 2007-1. The Delphinus, which consisted of subprime mortgages and other bad loans, was rated by Standard & Poor’s Rating Agency to be a triple A product. You know where I am going with this right? Despite this amazing rating this so called collateral debt obligation miraculously imploded within months, and now the SEC is filing charges against Mizuho Financial Group, who was the underwriter and seller of this deal. Mizuho failed to mention to its investors, that there is a big fat hedgefund on the other end, betting that the Delphinus CDO, would go bust. And bust it did go. I can’t wait till the SEC finally goes after the Rating Agencies.

    The independent investigation into how Pennsylvania State University handled the child sex abuse allegations against Jerry Sandusky, has found that university administrators, including former President Graham Spanier football coach Joe Paterno, “repeatedly concealed critical facts”, from fear of bad publicity. The report maintains, that Pennsylvania State University knowingly failed to protect its students from a child molesting predator. In June Jerry Sandusky was convicted of abusing 10 boys over a time spans of 15 years. He now faces a maximum sentence of 442 years in prison, but still maintains his innocence.

    The biggest art mystery has been solved and we can now all go back to sleeping soundly at night, knowing that it was Leon Black, the New York financier, who bought Edvard Munch’s Scream painting, for a whopping $120 million dollars, in an auction at Sotheby’s this year! Now it begs the question if Mr. Black will share his purchase with the public or not. And if he does chose to put it on display, will it end up at the MET or at MOMA? It will be a tough decision, since Mr. Black sits on the board of both. Whatever his reasons for wanting “The Scream” pastel may be, it sure is a most exquisite addition to Mr. Black’s already existing 750 million dollar art collection. We extend our congratulations to Mr Black. And hopefully we get to see “The Scream” again soon.

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