Readings: Auction Rate Securities, India Risk Briefing, Growth slowdown
- Bloomberg Special Report: As Houston Auctions Fail, JPMorgan Exploits Taxpayers
The collapse of the auction-rate bond market may cost borrowers from New York to California at least $1 billion in fees, enriching JPMorgan Chase & Co., Goldman Sachs Group Inc. and the rest of Wall Street that let the market fall apart.
Banks may be paid as much as $525,000 for every $100 million of securities, based on the average price for arranging municipal bond sales in 2007. The fees are on top of interest rates as high as 20 percent that borrowers are paying on the debt after auctions failed for lack of buyers.
Investment banks created the securities,” said Peter Morici, professor at the University of Maryland School of Business in College Park. “Now that the market has exploded they’re going to force losses on their clients.”
Screwing ‘em on the way up and on the way down!
- Economist Intelligence Unit: Risk Briefing for India
| RISK RATINGS | Current | Current | Previous | Previous |
| Rating | Score | Rating | Score | |
| Overall assessment | C | 50 | C | 51 |
| Security risk | C | 46 | C | 46 |
| Political stability risk | B | 30 | B | 30 |
| Government effectiveness risk | D | 68 | D | 64 |
| Legal & regulatory risk | C | 60 | C | 60 |
| Macroeconomic risk | B | 35 | B | 35 |
| Foreign trade & payments risk | C | 50 | C | 50 |
| Tax policy risk | C | 56 | C | 56 |
| Labour market risk | D | 61 | D | 61 |
| Financial risk | C | 42 | C | 42 |
| Infrastructure risk | C | 56 | D | 66 |
| Note: E=most risky; 100=most risky. The risk ratings model is run once a quarter. |
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- Business Standard: Slipping into a slowdown
During the first nine months ended December 2007, net sales of the corporate sector grew 15%, compared with 27.4% in the financial year 2006-07. The net profit also moved up at a slower pace of 27.93% vis-a-vis 41.56% in 2006-07.
Prepare for a slowdown?
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