Of course, there is no shortage of toxic financial assets. They are clogging the financial system and putting incredible pressure on global banks.

Typically, such things get bought up. But, with little visibility and the complexity of modern financial instruments, it's been tough to attract bottom-fishers into the market.

Yet, according to U.S. Treasury Secretary Timothy Geithner, it's important that private operators swoop in.

Continue reading Wilbur Ross craves toxic assets

Wilbur Ross craves toxic assets originally appeared on BloggingStocks on Wed, 18 Feb 2009 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Private investors have to be part of any financial rescue

Private investors have to be part of any financial rescue originally appeared on BloggingStocks on Mon, 09 Feb 2009 17:40:00 EST. Please see our terms for use of feeds.

Despite the recession and surging unemployment, there are actually some signs that the real estate market is perking up. True, this may be a statistical quirk - but it's encouraging.

But, there is one savvy investor who sees opportunity: Wilbur Ross. He's the financial backer of Home Mortgage Servicing Inc., which is now the #2 mortgage servicing company to third parties.

And, he's boosting things even more. That is, Ross has agreed to pay $1.5 billion for Citigroup's (NYSE: C) servicing rights on 185,000 home loans (these are mostly subprime and "Alt-A" loans). In all, these loans have a face value of about $37 billion.

Continue reading Wilbur Ross plunks down $1.5 billion on mortgages

Wilbur Ross plunks down $1.5 billion on mortgages originally appeared on BloggingStocks on Fri, 06 Feb 2009 11:24:00 EST. Please see our terms for use of feeds.

Will the Paulson plan make money? Don't forget where we're getting the cash! originally appeared on BloggingStocks on Thu, 25 Sep 2008 12:12:00 EST. Please see our terms for use of feeds.

Wilbur Ross, the world's most famous buyer of bankrupt companies, who is a sage in his own right, attacked the government''s bank bailout plan. Like Warren Buffett and George Soros, the media hangs on his comments. He has made a billion dollar fortune and is, therefore, considered smarter than most people, whether that is true of not.

Ross has a simple message. Savings banks will do nothing if mortgage-holders are not saved in the process. If the mortgage mess gets worse, banks will continue to have trouble over time, even if the Treasury does put $700 billion into the market.

Ross's comment was straight-forward. He told Reuters that "none of the recent actions to stabilize the financial system addressed the root of the problem -- helping Americans make their mortgage payments."

So, why is the government attacking the crisis from the wrong end of the system? The answer probably is that it is easier to save a small number of banks than it is to salvage hundreds of thousand of mortgages. Renegotiating all of those loans, resetting interest rates, and keeping some homes from foreclosure is simply too difficult a task. Many members of Congress do not view it that way. They want mortgage assistance programs added to the bailout bill.

Not matter what the level of challenge, the federal government has to give banks direct incentives to help the mortgage holder. Nothing can save the economy if hundreds of thousands of more home loans go into default. At that point, the real estate market could collapse and not recover for years.

The $700 billion rescue package would only be a drop in the bucket.

Douglas A. McIntyre is an editor at 247wallst.com.

A sage comment from Wilbur Ross originally appeared on BloggingStocks on Tue, 23 Sep 2008 09:45:00 EST. Please see our terms for use of feeds.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

CNBC: Billionaire Wilbur Ross offers solution for credit crunch originally appeared on BloggingStocks on Mon, 18 Aug 2008 11:11:00 EST. Please see our terms for use of feeds.

Assured Guaranty (NYSE: AGO) is recently down $8.77 to $9.95. Moody's said it placed AGO debt under review for possible downgrade. AGO has a triple-A-rated credit rating.

Wilbur Ross announced on Feb. 29 the agreement to invest $1 billion in AGO, a Bermuda-based holding company that provides credit enhancement products. AGO August option implied volatility of 195 is above its 26-week average of 69 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: Assured Guaranty volatility spikes on possible debt downgrade originally appeared on BloggingStocks on Tue, 22 Jul 2008 14:51:00 EST. Please see our terms for use of feeds.

As should be no surprise, SpiceJet is losing money as it deals with high oil prices and heavy competition. Plus, in order to continue growing, the company has a voracious need for capital to take on new planes.

For Ross, this deal is definitely small. But, at the same time, it does reveal some of his thinking.

Continue reading Wilbur Ross invests in India's SpiceJet

Wilbur Ross invests in India's SpiceJet originally appeared on BloggingStocks on Wed, 16 Jul 2008 15:46:00 EST. Please see our terms for use of feeds.

Think the credit crisis is a bad thing? Well, Wilbur Ross doesn't. He's a maestro restructuring expert - having decades of experience on highly complex deals. In fact, he was prescient with key roll-ups in sectors like steel (where he made billions).

His next stop? He likes US banks. In fact, according to a piece in Bloomberg, Ross is putting together a $4 billion fund to capitalize on the opportunity. Apparently, he's talking to a variety of investors in Abu Dhabi. Hey, sovereign wealth funds have already shown their alacrity for US financial institutions, with investments in mega firms like Merrill Lynch (NYSE: MER) and Citigroup (NYSE: C).

Ross' strategy makes a lot of sense; that is, he wants to buy 100 to 200 banks. Thus, by building some heft, he should realize economies of scale - and ultimately build more value for his investors. Simply put, it's a formula he has refined.

Actually, Ross has already been aggressive in the financial services sector. For example, he recently spent $1.1 billion on Option One Mortgage, which was purchased from H&R Block (NYSE: HRB).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Wilbur Ross: Banking on banks? originally appeared on BloggingStocks on Thu, 17 Apr 2008 14:32:00 EST. Please see our terms for use of feeds.

JP Morgan (NYSE:JPM) may be raising cash it does not need to prepare its balance sheet for more losses. The bank reported a $2.37 billion profit. That was down by half from a year ago, but was still an impressive number. The firm did set aside $4.4 billion for loan losses and took about $2.6 billion of write-downs tied to mortgages.

According to Reuters JPM "results calmed investors, who had hoped the bank would deal with the credit crisis better than some others."

So, why raise the capital? The answer may be in news that Wilbur Ross, billionaire specialist in Chapter 11 investing, is putting together cash from sovereign funds to invest in weak US financial stocks. According to Bloomberg "Ross will talk with Gulf investors in Abu Dhabi next week about 100 to 200 so-called thrift banks."

Now that JP Morgan has acquired Bear Stearns (NYSE:BSC), it is almost a sure bet that JPM CEO James Dimon will go looking for other bargains. He learned the practice under former boss Sandy Weill and his company is the product of a large merger with Bank One.

JP Morgan's likely desire to buy smaller financial firms may be a sign that stocks in banks and brokerages are bottoming. Dimon wants a piece of that. Why should Ross have all the fun?

Douglas A. McIntyre is an editor at 247wallst.com.

JP Morgan (JPM) may raise cash for M&A originally appeared on BloggingStocks on Thu, 17 Apr 2008 03:51:00 EST. Please see our terms for use of feeds.

Continue reading Four CEOs give economic commentary on Squawk Box

Four CEOs give economic commentary on Squawk Box originally appeared on BloggingStocks on Wed, 19 Mar 2008 16:24:00 EST. Please see our terms for use of feeds.

Wilbur Ross backs up Assured Guaranty originally appeared on BloggingStocks on Fri, 29 Feb 2008 15:47:00 EST. Please see our terms for use of feeds.

Bloomberg News reports on rumors that Wilbur Ross, a private equity investor who's made billions investing in industries like steel when they were down on their luck, will take over Ambac Financial Group (NYSE: ABK). Ambac's market capitalization has fallen $8 billion in the past year, and Fitch Ratings last week stripped it of the AAA credit rating it depends on to guarantee $556 billion of debt.

Why does bond insurance matter? Bond insurers lend their AAA rating to $2.4 trillion of municipal and structured finance debt. Downgrades would throw into doubt rankings on the debt the companies guarantee, including thousands of schools and hospitals as well as collateralized debt obligations (CDOs) owned by banks. CDOs account for $133 billion in write-downs and credit losses since the beginning of 2007 at more than 20 of the world's largest banks and securities firms.

If Ross buys into Ambac, it could be a far more effective solution than the one being discussed a few days ago involving a $15 billion bailout from weakened banks that was being pushed by the New York Insurance Department. I've been hoping that hedge funds or private equity would step into the breech. And if Ross is serious, this could be great news for the market.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Ambac.

Will Wilbur Ross rescue bond insurance? originally appeared on BloggingStocks on Fri, 25 Jan 2008 11:28:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Liberty Media Corporation (NASDAQ: LCAPA) filed a lawsuit in Delaware against IAC/InterActiveCorp's (NASDAQ: IACI) Barry Diller in an attempt to block Mr. Diller from completing the spinoffs of several units on terms that could dilute Liberty's voting power; the suit follows a suit filed by IAC against Liberty seeking to complete the divestiture on its own terms, the Wall Street Journal said.

• The Evening Standard learned that billionaire Wilbur Ross is in takeover talks with AMBAC Financial Group Inc (NYSE: ABK) and that a deal could come within the next two weeks.

• According to analysts, TheDeal.com's Dealscape blog reported that the troubles at WellCare Health Plans Inc (NYSE: WCG) could lead to a sale of the company after the departure of the company's three executives.
• Citing a source close to Advanced Micro Devices Inc (NYSE: AMD), CRN.com reported that rumors of a merger between the company and International Business Machines Corporation (NYSE: IBM) "is nothing but speculation." A rumor in Mergermarket, which caused AMD's share price to spike almost 11% on Wednesday, said IBM's microelectronics division could merge with AMD "possibly in the near term."

Newspaper wrap-up: IBM-AMD merger rumor is 'speculation gone amok' originally appeared on BloggingStocks on Fri, 25 Jan 2008 08:00:00 EST. Please see our terms for use of feeds.

Wilbur Ross, don't screw it up, we are all counting on you.

Yesterday it wasn't just the Fed cut that made the bank stocks rally. That mattered because it will help one portion of the banks' biggest woes: the lack of margin on their loans. Obviously, it also matters as a way to avoid a severe recession, which is why the retailers rallied.

But I believe what was even bigger than the rate cut for some of these banks was the possibility that we would not have another round of big losses, this time from a lack of insurance, because the grave dancing Wilbur Ross indicated he is choosing a bond insurer -- or bond insurers? -- to save with a big investment or takeover.

These companies just can't raise the capital on their own. Despite their endless protestations, even the limited disclosure they have given us doesn't give you much comfort that they can get their paws on the money themselves.

Continue reading Cramer on BloggingStocks: And a vulture might save them

Cramer on BloggingStocks: And a vulture might save them originally appeared on BloggingStocks on Wed, 23 Jan 2008 09:35:00 EST. Please see our terms for use of feeds.

Some of the smart money that tracks the car industry thinks total sales in the US could go as low as 14.5 million to 15 million vehicles next year, down from 16 million this year.

Investors like Wilbur Ross and former Chrysler president Thomas Stallkamp see car sales in America hitting their worst year in the last 15. According to Reuters, "Stallkamp, a partner at private equity firm Ripplewood Holdings, which owns several auto parts makers, said the market could slump to 14.5 million, the lowest level since 1993."

High fuel prices and a falling housing market are likely to cause a large drop in demand for vehicles.

It would be hard to underestimate the impact of such a drop on Detroit and the largest Japanese firms. It had been anticipated that GM (NYSE: GM) and Ford (NYSE: F) might get their North American operations back into the black next year, helped by favorable UAW contracts.

If pessimistic forecasts hold true, though, 2008 could be awful for Detroit.

Douglas A. McIntyre is an editor at 247wallst.com.

A million unit drop in car sales? originally appeared on BloggingStocks on Mon, 19 Nov 2007 09:45:00 EST. Please see our terms for use of feeds.