Tag Archive for: ABCP

Court turns down ABCP appeal!

The Supreme Court of Canada has denied an appeal of the plan to rescue $32-billion of stranded asset-backed commercial paper, clearing the way for thousands of individuals and companies to start reclaiming investments that have been frozen for 13 months.

A group of Canadian companies holding about $600-million of notes had challenged the ABCP bailout on the grounds that it was legally flawed. The businesses, which include Domtar Inc., Ivanhoe Mines Ltd. and Jean Coutu Group (PJC) Inc., opposed the plan because it includes a sweeping legal immunity that shields financial players from potential lawsuits relating to their controversial role in the ABCP meltdown.

By refusing to consider the appeal, the Supreme Court has endorsed a precedent that some legal experts say will allow other troubled entities to seek similar shields that deny investors and other parties the right to … Read more

Another one bites the dust!

If you enjoy a good train wreck, then watching the financial markets of the past few days should have given you plenty to watch. For those of you who have not kept a roll call then here is a brief summary, Lehman Brothers the large brokerage house has filed for Bankruptcy protection, Merrill Lynch brokerage house was bought out by Bank of America, and it was just in time or they might have suffered the same fate as Lehman. Now it seems that the straw that will break the camel’s back is what is currently happening to AIG ( American International Group). CNBC announced last night that they need to raise 75 BILLION by the end of Sept 16th to stave off bankruptcy, and now it seems like that may not happen.

Now the question that you may be … Read more

Appeal court ruled that ABCP restructuring is legal!

Investors are left out in the cold while the banks and credit union’s receive protection form possible lawsuits regarding the securitization of Asset Backed Commercial Paper or ABCP. The good news is the the plan to restructure the ABCP market can now go ahead. For the complete news story from the source click here other wise this is what this means to you, the mortgage holder or potential mortgage holder. 

Once this is all behind us lenders should be able to securitize their ABCP and as a result offer us the options that we want for our financing needs. This is what I would like to see happen but only time will tell.

Cheers,

Pat

 … Read more

Why the Sub Prime market failed!

The Globe and Mail has done a great job telling the story of the collapse of the Sub Prime Mortgage market. You can read the whole story here or hang out here for my summary.

When the real estate market in the US was extremely hot a few short years ago. People were getting loans to buy homes with no documentation, less than stellar credit, financing more than the purchase price, qualifying for the loan based on a discounted teaser rate and investors were buying these loans up like they were going out of style. They were betting that the market would never cool off and home values would continue to rise, probably using the old adage ” they are not making any more real estate”. However what they failed to realize is that some of these people could not … Read more

How ordinary investors got sold on ABCP!

It’s been a year since the ABCP market seized up and a rescue committee set out to salvage $33-billion in notes. A Globe and Mail investigation has found that breakdowns occurred throughout the financial system. On Saturday, the story of how the retail brokerage industry lost its way. On Monday, the two-part package explores the role of regulators

JANET McFARLAND, BOYD ERMAN, KAREN HOWLETT AND TARA PERKINS

 

Friday, August 08, 2008

Throughout his life, Alan Jones’s father invested his money conservatively, favouring bonds and GICs and avoiding even mutual funds as too risky.

When he died in late 2006 at age 87, Alan Jones and his sister decided to continue with the conservative strategy to ensure their mother’s retirement income would be safe. In the spring of 2007, they moved more than $500,000 into three short-term investment trusts, assured by

… Read more

Home Trust to offer traditional mortgages!

Alternative lender believes competing with banks will lower risk, allow it to pick up more business

LORI MCLEOD

 

00:00 EDT Wednesday, August 06, 2008

Alternative lender Home Trust Co. is launching a line of traditional mortgage products that will compete directly with those offered by the banks.

The Toronto-based lender hasn’t been pushed out of lending to riskier borrowers, a problem encountered by some of its competitors as a result of the U.S. subprime crisis.

Instead, the company, which uses a deposit-based funding model, believes the move will help fuel the growth of its core alternative-loan business and its relationships with mortgage brokers.

“What we can offer is a one-stop shop, particularly for brokers where time is of the essence for their clients,” said Gerald Soloway, chief executive officer of Home Trust’s parent, holding company Home Capital Group Inc.

To

… Read more

HSBC posts steep profit drop!

The Associated Press

August 4, 2008 at 8:39 AM EDT

LONDON — — HSBC Holdings PLC [HBC-N], Europe’s largest bank by market value, reported Monday its steepest fall in profit since 2001 as costs for bad U.S. mortgage loans mounted.

Net profit for the first half of the year plunged 29 per cent to $7.7-billion (U.S.) from $10.9-billion in profit in the January to June period of last year.

“The first half of 2008 saw the most difficult financial markets for several decades, marked by significant declines in profitability throughout much of our industry,” said HSBC chairman Stephen Green. “HSBC was not immune from the turmoil.”

The biggest losses came from the North American market, which HSBC depends on for a quarter of its revenue. Operations there posted a first-half loss of $2.9-billion, compared with profit of $2.4-billion a

… Read more