Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.
Morgan Stanley is selling $87.1 million of securities that it expects to receive top AAA ratings and $42.9 million of notes graded Baa2, the second-lowest investment grade by Moody’s Investors Service, according to marketing documents obtained by Bloomberg News. The bonds were created from Greywolf CLO I Ltd., a CDO arranged in January 2007 by Goldman Sachs Group Inc. and managed by Greywolf Capital Management LP, an investment firm based in Purchase, New York.
Why didn’t I think of this? Oh, wait? I did. JUST THIS MORNING:
Why can’t they just do with the bad assets what they did with everything else the past couple decades? Just splice ‘em up a bunch, sell and re-sell them so many times that no one knows what the hell is what, bundle them up, have the ratings agencies slap a AAA rating on them, and sell them to small towns in Georgia and Norwegian pension funds. Voila! Problem solved! Then have AIG insure them, and Goldman can make another ten billion in default swaps and hand out some bigger bonuses. Also, rename them- they are not bad assets, they are “Under-Priced Yields Offering Untold Riches For Offshore Overseas Longterm Speculators (UPYOURsFOOLS).” Screw you Kenny Lay! Let’s get rich, bitches! What could go wrong?
/joecassano
I’m speechless. I really am.
jl
I am packaging up and selling tranches of the probability distribution of my future income. The upper 1% of that baby is for sale right now. The spreadsheet that works it out is proprietary, but lemme tell you, it is a goldmine.
This is for informational purposes only and not a formal offer of sale. But if anyone is willing to pay in small bills, we can work something out and I will send a piece of paper to those lucky duckies who are early getting in on that ship that is coming in, any day now.
rumpole
Unfreaking believeable.
“Under-Priced Yields Offering Untold Riches For Offshore Overseas Longterm Speculators (UPYOURsFOOLS)”
Pure gold.
Englischlehrer
Just another commodity with an acronym…
Tangential Waste Organizer Performing, Unlike Management´s Pre-Charitized Horrid Ulterior Motives & Privilege.
The TwoPumpChump.
Beeb
Nice little CDO you’ve got there. Be a shame if anything happened to it. Wanna buy an insurance policy? Call 1-800-AIG-CDS4U. And have a nice day.
Bun
This morning I read that and laughed and laughed. Now, not so much.
freelancer
Behold, the unKristol, and he is named Cole.
Jay in Oregon
I was totally gobsmacked by this story to begin with.
The fact that you predicted this shit is blowing my mind, man.
Why aren’t you working on Wall Street? You obviously have the chops, and I hear the pay is good…
used to be disgusted
I was going to suggest that you send in your resume and request a $5mil salary. But damn, Jay beat me to it.
Comrade Kevin
Securitized Home Investment Technology
Steve Balboni
Whiskey. Tango. Foxtrot.
GENINE
I second (or third) Jay’s suggestion.
Work on Wall Street, make a ton of money. Become head of one of the companies, fire all the douches and set Wall Street ablaze (metaphorically speaking).
El Tiburon
You are magic!
Can you predict how bad the Cowboys are going to stomp the Tittsburgh Steelers in next year’s Super Bowl?
Huh? Smarty pants/
Buckethead
Why would they do anything else? Their (the financial ‘industry’ as a whole that is) punishment for pulling this BS the first time around was to receive hundreds of billions of dollars in free taxpayer money. It’s a great return on investment.
Ken
Jay in Oregon wrote: Why aren’t you working on Wall Street? You obviously have the chops,[…]
This might be taken as slanderous.
Redhand
Beyond parody. Can’t we just put all these fuckers up against a wall and shoot ’em?
disappointedGOPer
This thread is filled with win.
Jon H
Greywolf CLO I Ltd., a CDO
So a CDO is a limited partnership.
Doesn’t that seem a little bit like an abuse of the laws for setting up a business?
Comrade Dread
If at first you don’t succeed, repackage that shit, slap a new name on it, bribe the ratings companies for a AAA, and sell it to dumbasses.
When that market for (UPYOURsFOOLS) bonds fails and destroys the global economy just as it’s recovering, maybe we can make them all into Bank Obligation Housing Investment Collateral Assets.
tigrismus
Genius! Next step: become too big to fail.
Wile E. Quixote
Why would anyone with an IQ in the double digits be purchasing *anything* from Morgan Stanley or *anything* with *any* rating from Moody’s is beyond me. Isn’t it obvious to everyone that both firms are staffed by and run by a bunch of lying sacks of shit?
DaBomb
Watch out Ms. Cleo! Looks like Cole is going give you a run for your money!
I read your post from earlier and thought it was absolutely funny!
Who knew I had a connection to the psychic friends network?
Okay, look into your crystal ball and tell me what you see?
RememberNovember
You can spit-polish a turd! if you are in bed with the Fed and Goldman Sacks ( and pillages)
Nathanael Nerode
FT reported on Monday, July 6 that Barclay’s and Goldman Sachs are trying to pull the same scam.
This is a very stupid idea. It is pretty much a recipe for FAIL.