Tuesday Items

• "Credit arbitrage ABCP vehicles were almost immune to all but two events: Unprecedented declines in credit quality of asset-backed securities, or a loss of access to funding in the ABCP market. Either event was predictably likely to be associated with broad disruptions in financial markets. That is, in creating and operating such vehicles, the sponsors mainly took on systematic bad-tail risk."

• "A closing dinner for Havenrock II was held in Dusseldorf in July 2007, according to Bloomberg News. Just three days later, IKB announced that it was failing and had to be rescued by the German government. Calyon was out $2.5 billion. IKB paid $625 million to Calyon. But FGIC refused to pay the remaining $1.875 billion. Calyon sued FGIC, FGIC sued IKB. FGIC wound up paying Calyon just $200 million in a settlement, according to reports. When Calyon asked IKB to pay for the shortfall, IKB said that Calyon “failed to conduct any, or any adequate, appraisal of the risks,” according to a report from Bloomberg. Calyon wasn’t cheated or duped, IKB said. Rather, the bank entered into the agreement to “fulfill its ambitions to develop and diversify significantly its activities in securitization and structured credit,” IKB said in court filings quoted by Bloomberg."

• This is a great office for a Russian billionaire, complete with blonde:
  

• Teddy Roosevelt at Harvard:

• If a dead body was sent into space, would it decompose?
• Two year old album just heard this song.

• Article on this large building in Atlanta-