Category Archives: Fraud

RMBS Losses in Limbo: As Bad As They Seem, The Reality May Be Much Worse

By Ann Rutledge | Published: January 25, 2012

Since the financial crisis in 2007, residential mortgage-backed securities have been hit with high levels of borrower defaults, realized losses and credit rating downgrades.  Realized losses declared on private residential mortgage-backed securities (RMBS), already much higher than original rating agency and investor estimates, are projected to rise substantially in the coming months, according to a ... Read more

Also posted in Ann Rutledge, Bailout, Banks, Credit Crisis, Iuliia Palamar, Press Releases, Risk Measurement, Structured Finance/Securitization | 6 Comments

Moneyball and the Credit Rating Agencies

By Ann Rutledge | Published: October 11, 2011

Moneyball by Michael Lewis is a story of the Oakland Athletics, an under-capitalized baseball team managed by Billy Beane. Unable to afford expensive talent, Beane turns to sabermetrics, baseball statistics that measure in-game performance, to select a lineup of cheaper players with lopsided abilities. Beane’s own disappointing career as a player was said to validate ... Read more

Also posted in Ann Rutledge, CRAs, Credit Crisis | Tagged , , , , | 1 Comment

The independence of collateral managers

By Ann Rutledge | Published: June 22, 2011

“The real question throughout the subprime crisis was whether the collateral manager’s role was legit, or whether these firms lent their names and the appearance of objectivity to facilitate the sale of securities that were defective,” said Ann Rutledge, principal of structured-finance consulting firm R&R Consulting. See Serena Ng’s article in today’s WSJ, ‘Collateral Managers’: ... Read more

Also posted in Ann Rutledge, Credit Crisis, Credit Spectrum, Financial System, Market Microstructure | Leave a comment

Ann Rutledge on ‘Wizards of Odds’

By Stacy Mosher | Published: June 20, 2008

“The SEC’s ‘subprime mortgage’ problem is that the crisis has exposed a very serious information problem in the capital markets, and a perverse truth is revealed: financial firms make less money from information than from exploiting loopholes in our fragmented, deeply flawed capital market information systems. The SEC is the guardian of these fragmented, flawed ... Read more

Also posted in Ann Rutledge, CRAs, Credit Crisis, Financial System, Noir, Reform | Tagged | Leave a comment

Rope-A-Dope Securitization Economics: Part 2

By Ann Rutledge | Published: April 5, 2008

In Rope-A-Dope 101, we said there are five ways to mask the credit quality of a structured bond, that it is done by manipulating an “invisible” boundary where the consequences of being on one side or the other are not symmetrical, and that the boundary is only invisible to the investor. In Rope-A-Dope 201-205, we ... Read more

Also posted in Ann Rutledge, Basel, Credit Crisis, Noir | Tagged , , , , , , | Leave a comment

Rope-a-Dope Securitization Economics: Part I

By Ann Rutledge | Published: March 15, 2008

The high road of securitization is forward-looking. It promotes economic growth and rewards superior asset quality. Securitization is alive and doing well in grass-roots economies. But maybe you have not come to our blog to read about the high road of securitization. Maybe you have come looking for a map to lead you off the ... Read more

Also posted in Ann Rutledge, CRAs, Federal Reserve, Noir | Tagged , , , , , | Leave a comment

"You won’t know who to trust." (from Sneakers)

By Ann Rutledge | Published: January 18, 2008

In early 2004, we were asked to join a professional support team to help a new equipment lessor get financing through the structured market. The premise of the deal, the team, and our role in it, were not new. The endgame, to get a monoline insurance company to wrap the senior tranches so as to ... Read more

Also posted in Accounting, Ann Rutledge, Consequences, Risk Measurement, Risk/Value | Tagged , , , , , | Leave a comment

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