Comments on: Bankrupting For Profit http://www.runtogold.com/2009/05/bankrupting-for-profit/ Monetary science applied to current events focusing on the role of gold and silver.. Thu, 18 Mar 2010 16:50:25 +0000 http://wordpress.org/?v=abc hourly 1 By: Dreaded D Words | RunToGold.com http://www.runtogold.com/2009/05/bankrupting-for-profit/comment-page-1/#comment-1417 Dreaded D Words | RunToGold.com Thu, 14 May 2009 09:52:12 +0000 http://www.runtogold.com/?p=3328#comment-1417 [...] Bankrupting For Profit [...] [...] Bankrupting For Profit [...]

]]> By: Trace Mayer, J.D. http://www.runtogold.com/2009/05/bankrupting-for-profit/comment-page-1/#comment-1416 Trace Mayer, J.D. Wed, 06 May 2009 18:18:47 +0000 http://www.runtogold.com/?p=3328#comment-1416 1.) It is Company M not B. When I was drafting the article it was Company B but then I named one of the Banks B and must have let that typo through which I have since corrected. 2.) The $600k is a more penetrating question showing the depth of your analysis of the article. The $600k has nothing to do with paying down the loan but simply its valuation on the financial statements. In this hypothetical, the $600k number is used to represent the value the Bank would 'make up' under the *new* FASB rules when valuing assets (you may want to read the article on Fair Value Lying), or in other words, marking-to-fantasy. In effect, before the FASB changes the bank should have taken a much larger loss. 1.) It is Company M not B. When I was drafting the article it was Company B but then I named one of the Banks B and must have let that typo through which I have since corrected.

2.) The $600k is a more penetrating question showing the depth of your analysis of the article. The $600k has nothing to do with paying down the loan but simply its valuation on the financial statements. In this hypothetical, the $600k number is used to represent the value the Bank would ‘make up’ under the *new* FASB rules when valuing assets (you may want to read the article on Fair Value Lying), or in other words, marking-to-fantasy. In effect, before the FASB changes the bank should have taken a much larger loss.

]]> By: Julie http://www.runtogold.com/2009/05/bankrupting-for-profit/comment-page-1/#comment-1418 Julie Tue, 05 May 2009 11:58:56 +0000 http://www.runtogold.com/?p=3328#comment-1418 I am new to this CDS stuff but want to understand what is happening....I actually am trying to diagram this out in a picture and I am not getting this....In your example I am confused about two things.... 1.Did you mean Company "M" not "B" in this statement?.... "Company B, while still able to service its debt, does violate some provision of its debt covenant." 2.Could you explain how you figured $600k in this statement....Are you implying a payment down of Company M's loan to that figure?.... "Third, the SIV pays Banks G and J $850,000 of cash for the Company M loan which, while trading for $25,000 in the market is being carried on their balance sheet for $600,000 and consequently results in a $250,000 gain on the income statement for the quarter after having written down a couple quarters ago." Thanks.... I am new to this CDS stuff but want to understand what is happening….I actually am trying to diagram this out in a picture and I am not getting this….In your example I am confused about two things….

1.Did you mean Company “M” not “B” in this statement?….
“Company B, while still able to service its debt, does violate some provision of its debt covenant.”

2.Could you explain how you figured $600k in this statement….Are you implying a payment down of Company M’s loan to that figure?….
“Third, the SIV pays Banks G and J $850,000 of cash for the Company M loan which, while trading for $25,000 in the market is being carried on their balance sheet for $600,000 and consequently results in a $250,000 gain on the income statement for the quarter after having written down a couple quarters ago.”

Thanks….

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