The Intelligent Investor: What's Eating Your Munis?
By: Jason Zweig, The Wall Street Journal (Jun 2013)
Jason Zweig's "The Intelligent Investor: What's Eating Your Munis?" in this weekend's Wall Street Journal revisits excessive markups in the municipal bond market. His article cites SLCG's recently completed analysis of 20 million trades in long term municipal bonds between 2005 and 2013. Geng Deng and Craig McCann are the principal authors of the study. Their findings are reported in "Using Emma to Assess Municipal Bond Markups".
Structured Note Rules May Fail to Resolve Confusion Over Pricing
By: Kevin Dugan, Bloomberg News (Feb 2013)
Kevin Dugan's "Structured Note Rules May Fail to Resolve Confusion Over Pricing" discusses the remaining obstacles to the efficacy of fair value estimations of structured products following the April 2012 sweep letter from the SEC. Dr. Tim Dulaney is quoted as saying that "if you change your volatility assumptions...you could get a vastly different valuation." To read more about this story, feel free to visit our blog on Structured Product Issuers Under Pressure to Disclose Estimated Value.
How Apple Bit Bond Holders, Too
By: Jason Zweig, The Wall Street Journal (Jan 2013)
Jason Zweig's "How
Apple Bit Bond Holders, Too" in this weekend's Wall Street Journal describes the impact on investors in Apple-linked structured products of the decline in Apple's stock price from $700 in September 2012 to under $450 in January 2013. His article relies heavily on SLCG's structured products research including "
The Rise and Fall of Apple-linked Structured Products". All eight of SLCG's working papers on structured products can be found on our website. SLCG's database of 15,000 free research reports equity-linked structured products includes 775 reports on Apple-linked products.
Bond Funds: The Downside
By: Kirsten Grind, The Wall Street Journal (Dec 2012)
Kirsten Grind's "Bond Funds: The Downside" reports on the recent high returns earned by some short term bonds funds. These higher yielding funds tend to hold bonds with longer maturities and more credit risk than the bonds which dominate lower yielding bond funds' portfolios. The article quotes Craig McCann pointing out that the bond funds that have the highest yields in 2012 will suffer the largest losses if credit spreads widen again as they did in 2008. The higher risk taken by some bond funds to boost yields in comparison to their peers is the subject of our "What Does a Mutual Funds' Term Tell Investors?" and our "What Does a Mutual Funds' Average Credit Quality Tell Investors?"
The Great Yield Gamble
By: Ben Levisohn, Joe Light, The Wall Street Journal (Dec 2012)
Ben Levisohn and Joe Light's "The Great Yield Gamble" reports on the riskier investments that offer higher yields, such as high yield bond funds and structured products. Some of these investments are more complicated and riskier than necessary. The article quotes Craig McCann on the merits of reverse-convertible
structured notes. Learn more about structured products from SLCG's free database of structured product analysis.
Appeals Court Reinstates Morgan Keegan Ruling
By: Suzanne Barlyn, Reuters (Oct 2012)
The U.S. Court of Appeals for the 5th Circuit ruled that a district court's decision to throw out the arbitration
award was made in error, according to an opinion released on Tuesday.
U.S. District Court Lynn Hughes in Houston ruled in September, 2011, that the arbitration ruling should be thrown out because, in part, it was obtained through the alleged 'fraudulent' testimony of Craig McCann, an expert witness and former U.S. Securities and Exchange Commission economist.
The federal appeals panel, however, noted that there was a 'total absence of any evidence' to support that finding. The evidence 'supports nothing more than a conclusion that a member of Dr. McCann's staff made a calculation error that he did not discover until after he testified,' the court wrote.
New Product Offers Stock-Like Returns With Less Risk
By: Kirsten Grind, The Wall Street Journal (Jul 2012)
The Wall Street Journal's "New Product Offers Stock-Like Returns With Less Risk" by Kirsten Grind reports on a new type of investment from Eaton Vance called eUnits that combine a unit investment structure with a buffered plus payoff at maturity. The article quotes SLCG's structured products research and Craig McCann on the merits of eUnits. Learn more about structured products from SLCG's free database of structured product analysis.
Wall Street Fights Back Against Expert Witness in Lawsuits
By: Suzanne Barlyn, Reuters (Feb 2012)
Suzanne Barlyn's "Wall Street Fights Back Against Expert Witness in Lawsuits" reports on largely unsuccessful efforts by the financial services industry to lessen the impact of SLCG's Craig McCann on securities litigation.
B of A Subpoenaed by Massachusetts Over CLOs
By: Allison Bisbey, American Banker (Feb 2012)
Allison Bisbey's "B of A Subpoenaed by Massachusetts Over CLOs" reports on Massachusetts subpoena of Bank of America over two CLOs issued by BofA in 2007 - LCM VII and Bryn Mawr II. SLCG first publicized the problems with these two CLOs ten days earlier in "CLOs, Warehousing, and Banc of America's Undisclosed Losses". Secretary Galvin apparently read and liked SLCG's January 31, 2012 press release about these two CLOs.
Recent Award
- Hayes v Banc of America Securities - $1.4 million CLO Award
A Wipeout That Didn't Have to Happen
By: Gretchen Morgenson, The New York Times (Feb 2012)
Gretchen Morgenson's "A Wipeout That Didn't Have to Happen" reports on research done at SLCG into collateralized loan obligations (CLOs) underwritten by Banc of America, Citigroup and other firms in 2007 which resulted in a $1.4 million FINRA award in the case of Hayes v Banc of America Securities. In "Collateralized Loan Obligations, Warehousing, and Banc of America's Undisclosed Losses", Tim Husson, Craig McCann, and Olivia Wang document two examples of CLO offerings in which Banc of America appears to have transferred at least $35 million of losses to investors in July 2007 and which ultimately led to approximately $150 million in losses. Banc of America Securities sold one of the problematic CLOs they identified, LCM VII, to Mr. Hayes.
