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Posts Tagged ‘Financial Framework’

FilmMattic: Movie Review: Too Big to FailTHE AIG RESCUE, ITS IMPACT ON MARKETS, AND THE GOVERNMENT’S EXIT STRATEGY

CONGRESSIONAL OVERSIGHT PANEL
JUNE OVERSIGHT REPORT, JUNE 10, 2010

FIGURE 3: GOVERNMENT ASSISTANCE TO AIG AS OF MAY 27, 2010 2
[Dollars in millions] Amount Authorized — Amount Outstanding as of 5/27/10
Federal Reserve [Inc.]
Revolving Credit Facility … $34,000 — $26,133
Maiden Lane II: Loan extended by Federal Reserve [Inc.] … 22,500 — 14,532
Net portfolio holdings of Maiden Lane II LLC … 0 — 15,910
Accrued interest payable to Federal Reserve [Inc.] … 0 — 342
Maiden Lane III: Loan extended by Federal Reserve [Inc.] … 30,000 — 16,206
Net portfolio holdings of Maiden Lane III LLC 3 … 0 — 23,380
Accrued interest payable to Federal Reserve [Inc.] … 0 — 427
Preferred interest in AIA Aurora LLC … 16,000 — 16,266
Accrued dividends on preferred interests in AIA Aurora LLC 0 — 125
Preferred interest in ALICO SPV … 9,000 — 9,150
Accrued dividends on preferred interests in ALICO Holdings LLC 0 — 70
Total Federal Reserve [Inc.] … 111,500 — 83,251

TARP (more…)

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The “too big to fail” theory asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and that they therefore must be supported by government when they face potential failure. — Wikipedia

THE AIG RESCUE, ITS IMPACT ON MARKETS, AND THE GOVERNMENT’S EXIT STRATEGY

CONGRESSIONAL OVERSIGHT PANEL
JUNE OVERSIGHT REPORT*

JUNE 10, 2010.—Ordered to be printed

EXECUTIVE SUMMARY*
At its peak, American International Group (AIG) was one of the largest and most successful companies in the world, boasting a AAA credit rating, over $1 trillion in assets, and 76 million customers in more than 130 countries. Yet the sophistication of AIG’s operations was not matched by an equally sophisticated risk-management structure. This poor management structure, combined with a lack of regulatory oversight, led AIG to accumulate staggering amounts [liabilities], (more…)

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Image result for debt crisisTHE VALLEY OF THE SHADOW OF DEBT
By Carolyn Baker, 2006

Never before have political leaders urged such large-scale indebtedness on American consumers to rally the economy. — Kevin Phillips, in American Theocracy: The Peril and Politics Of Radical Religion, Oil, and Borrowed Money In The Twenty-First Century

In a recent conversation with a friend, a married mother of three, she anxiously confided that although she has never been scared about money in her entire adult life, she now, in her mid-forties, finds herself feeling terrified. “Sometimes I wonder,” she said tentatively, “if it’s our own fault or if it’s the world we now live in. I’ve never worked harder in my life, but I’ve never found myself and my family falling so far behind financially.”

[Many] are no doubt hearing similar anguish issuing from the mouths of friends and family, and in all likelihood, thinking similar thoughts, but they know that the frightening quagmire of debt in which (more…)

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Image result for CABRI budgetBudget Practices and Procedures in Africa 2008
Collaborative Africa Budget Reform Initiative and African Development Bank

Executive Summary [Excerpt]

The Collaborative Africa Budget Reform Initiative (CABRI) is a pan-African network of senior budget officials in ministries of finance and/or planning, created as a platform for its members to share experiences on budget reform programmes and to contribute towards the efficacy of public finance management in Africa.

a) Timeline of the budget process in African countries
Budget timelines depict the duration and sequence of the different stages of the budget process, which are likely to reflect country-specific factors, such as administrative heritage and capacity, the balance of power between the different branches of government, as well as the macro-economic context. The budget process can be divided into four distinct stages: (1) executive (more…)

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Image result for magic moneyThe Simple, Metaphorical Explanation
Patrick Byrne, Mark Mitchell, 2008

When [we] travel to another country, the first thing we do when we land is change some US dollars into the local currency. Perhaps you change enough to get a cab to the hotel, go out and buy a meal, etc. For the duration of your stay you keep changing your dollars into the local currency to get around. Then when you are ready to leave, you take whatever you have left and you convert it back into dollars, or spend it, or give it away, and board the plane back to the United States.

Yet imagine that there are some travelers [who] are allowed to take a small machine that prints out the local currency. If they are in Paris, it prints out Euros. If they are in London, it spits out British Pounds. When in Mexico City, it prints pesos. And so on and so forth. On every trip, however, this special “currency machine” keeps track of how many (more…)

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Image result for fake companySEC warns: Beware of ‘blank check companies’
By Matt Levine, Bloomberg News, Apr 20 2015

A lot of investment scams are pretty simple. You tell someone you’ll invest money for them, they give you money, you steal it, you run away to [Washington DC]. Or, more likely, you fritter the money away day-trading [unregistered] stock because, realistically, criminals [like to gamble]. But the stock market also has a long and charming tradition of needlessly complicated scams, where the basic process — you give me money, I steal it — is dressed up in multiple layers of storytelling designed to prey both on people’s hopes and also on vulnerabilities in regulation.

Here is a fraud case about “undisclosed ‘blank check’ companies,” a popular scheme […]. The background is that if you want to be a public company and sell your shares to regular investors, there are hoops you have to jump through. You have to file a registration statement with the Securities and Exchange Commission, with audited financial statements and a bunch of detail about your business. The SEC will review it and demand revisions to make sure that the registration statement is complete and gives investors sufficient disclosure. It’s an expensive and time-consuming process […]. (more…)

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Blank Check IPOs (SPACS)
From Silicon Investor (2014) [Edited]

Wall Street has never been bashful about recycling old products and concepts. One of the recent concepts to be recycled is the blank check IPO. Blank check companies are also known as Special Purpose Acquisition Companies (SPACS) [or shell companies].

A blank check company is a development stage company that has been formed for no specific purpose other than to complete a merger or acquisition with an operating entity, the identity of which is unknown when the company is formed. Because such transactions generally, but not always, trigger a change of control, with the shareholders of the acquired company now owning more than 50% of the combined entities, the majority of these transactions are accounted for as reverse mergers. (more…)

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