| US woman who faked the birth of sextuplets to get donations gets 4 ...
Within days of the story appearing on the front of The Examiner newspaper in Independence, the couple admitted to reporters and police that the entire thing was a lie. They said they needed the cash. They were sentenced in August 2006 to four years of probation after each pleaded guilty to one count of felony stealing by deceit. They were required to pay restitution of $3,661 and perform 40 hours of community service. .
More than 20 Years in the Making
Banks worldwide may need to raise as much as $143 billion of additional reserves to satisfy regulators if bond insurer rating cuts trigger downgrades for the securities they guarantee, Barclays Capital analysts said. Banks will need at least $22 billion if bonds covered by insurers led by MBIA Inc. and Ambac... are cut one level from AAA, and six times more for downgrades by two steps to A, Paul Fenner-Leitao wrote... The estimates are based on banks' holdings of the outstanding $820 billion of structured securities covered by bond insurers, the report said. 'This is a huge amount, but the assumptions we use are also very aggressive,' Fenner-Leitao said... The estimate was designed to show how bank capital could be affected if bond insurers are downgraded significantly, he said." January 25 - Bloomberg (Jeremy R.
Sacramentan guilty of bank fraud, money laundering
A 25-year-old Sacramento man pleaded guilty Tuesday to bank fraud and money laundering in federal court in Sacramento. Sennett H. Swift defrauded two homeowners and their lenders by offering refinance loans with interest rate caps and promises of refunds for early payment penalties when he knew those terms were not real. Swift wanted to get the substantial broker commissions, said Matthew Stegman, the assistant U.S. Attorney prosecuting Swift. It turns out at least one of the homeowners wasn't eligible for the loan program. Swift also submitted a forged loan application. Sentencing is scheduled before Judge Lawrence Karlton on March 25. The case was investigated by the Federal Bureau of Investigations and the Internal Revenue Service.
Pyramids Crumbling
If total investment grade and junk bond defaults approach historical norms of 1ΒΌ% in 2008 (Moody's and S&P forecast something close) then $500 billion of these default contracts will be triggered resulting in losses of $250 billion or more to the "protection selling" party once recoveries are inserted into the equation. To put that number in perspective, many street estimates ascribe similar losses to subprime mortgages, a derivative category substantially distinct from CDS insurance. Of course, "buyers of protection" will be on the other "winning" side, but the point is that as capital gains and capital losses slosh from one side of the shadow system's boat to the other, casualties and shipwrecks are the inevitable consequence. Goldman Sachs wins? Fine, but the losers in many cases will not be back for a return match.
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