asset securitization

Charles Jannuzi jannuzi at edu00.f-edu.fukui-u.ac.jp
Wed Feb 20 22:41:46 PST 2002



>dlawbailey" <dlawbailey at netzero.net>
Subject: RE: asset >securitization
>Comrade Januzzi,


>I think the problem with your >objection is that Japan is >supposed to be
>cash-rich and America cash->poor.

Hey, Rad Bailey, look at market cap of US companies and you see who is rich. Or look at who invests in private, closely held firms like Carlyle Group (for a start, the Bushes and the Bin Ladens).


>That should mean that there >would be a
>bigger market for Japanese >debt in Japan than in >America.

That's the beauty of the whole scheme. Lehman Bros. and Cerebus and Ripplewood and Carlyle Group get to buy up the good stuff at less than ten cents on the dollar (how is that for a force multiplier effect? trying to use terminology that Chairman Carlucci understands)? Then they sell the other stuff back grab bag style to the very banks and insurance companies it was stripped from in a liquid market--instead of junk bonds you could call it junk stocks. Where is Michael 'Bilkem' Milken?

I suppose they can set up some funds in North America and sell to the always naive US investor, too. Call it the Japn Contrarian Fund or something.

They make out like the bandits they are . They get owers' equity in the good stuff, and they sell the shit to the suckers (if any will bite after Enron, Global Crossing and Tyco).


> If securitization
>is the evil plot you describe >then it should immediately >backfire.

Watch the trolling there Rad Bailey. I never said evil plot. It's obviously just business as usual with the Bushes in office (and given Clinton and Gore connection to Lehman Bros. I won't defend the Democrats either).


>Securitized bank loans should >be gobbled up by the cash->rich Japanese.

Well, not individuals, since they know that savings means savings, not lending your money to GE or Tyco waiting for the price of the stock to go up again.

Still, I could imagine a bankrupt company gobbling up this stuff with a new loan (that's called leveraging). But wait, apparently US companies do it all the time.
>Moreover, the Japanese >should be in an advantageous >position in bidding
on
>the debt since they (by your >lights) are paying with highly->valuable
yenversus meager >dollars.

Yeah, but high market caps and getting first dibs on stuff at ten cents to the dollar will help those poor starving venture capitalists at Lehman Bros. with their measly dollars, don't worry (that's what the factotums at S&P and Moody's are there for--to undervalue the loans when the big boys buy, and since they aren't so busy praising Enron they have lots of work to do here) .

Are you a business major at an American university? I mean, you seem like it.

Charles Jannuzi



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