Goldman Sachs driving YRC into bankruptcy

Discussion in 'Current Events' started by unionman, Dec 18, 2009.

  1. unionman

    unionman New Member

    Dec. 17 (Bloomberg) -- International Brotherhood of Teamsters President James Hoffa said Goldman Sachs Group Inc. is creating derivatives trades that would profit from the bankruptcy of YRC Worldwide Inc., the trucking company trying to avert failure with a debt exchange.
    The most profitable securities firm in Wall Street history “is actively soliciting bond trades for clients and underwriting credit-default swaps to benefit from a failed exchange and resulting bankruptcy,” Hoffa, the union leader, wrote in a letter dated yesterday to Goldman Sachs Chief Executive Officer Lloyd Blankfein.
    YRC, the biggest U.S. trucker by sales, is extending the exchange offer deadline to Dec. 23, after investors holding 75 percent of its debt initially agreed to the exchange, below the 95 percent required by bank lenders. As of 5 p.m. in New York yesterday, participation fell to 57 percent, the Overland Park, Kansas-based company said in a statement. The company said it believes some bondholders have withdrawn because they want to tender their notes only on the expiration date.
    The company has faced opposition to its plan to exchange $536.8 million of notes for equity from bondholders who also own derivatives that pay out in a default, according to people familiar with the matter. The Teamsters’ pressure comes as Goldman Sachs is under fire from other labor groups over its role in the subprime mortgage crisis.
    YRC, which has posted more than $1.7 billion in losses in the past five quarters, must complete the exchange offer as part of agreements with its bank lenders, the Teamsters and multi- employer pension funds, according to a Nov. 24 regulatory filing.
    Revised Terms
    YRC has changed the terms of the exchange so that it now requires 70 percent of holders of its 8.5 percent notes due in April 2010 and a combined 85 percent of its 3.375 percent convertible notes and 5 percent convertibles, both due in 2023, to tender. Lenders holding two-thirds of commitments under its credit agreement need to approve the revised offer, YRC said today in a statement. The company said it reached a tentative agreement with a steering committee of lenders to approve the revised offer.
    YRC joins companies including Yellow Pages publisher Idearc Inc. and newsprint maker AbitibiBowater Inc. that met opposition to restructuring outside of bankruptcy court from creditors that hedged their holdings with credit-default swaps. Such creditors will typically get paid whether a borrower defaults or not, and sometimes can make more in a bankruptcy.
    Workers United
    The Teamsters aren’t the only union taking on Goldman Sachs. Workers United, which represents 150,000 people in the U.S. and Canada, sent letters on Dec. 14 to 10 state attorneys general that urged them to investigate the role played by Goldman Sachs in the subprime mortgage market. The union noted that Massachusetts won a $60 million settlement from the firm in May when it undertook such a probe.
    Andy Stern, president of the 2.1 million-member Service Employees International Union, has led a letter writing campaign to Goldman Sachs board members demanding information on the firm’s part in the mortgage crisis and whether the companies they’ve invested in are cutting jobs.
    Hoffa wrote that “the relatively small benefit Goldman would derive for itself in fees or for clients from such a position is unconscionable given the fact that the 50,000 livelihoods could be ruined by a bankruptcy filing,” according to the letter obtained by Bloomberg News.
    No Position
    Michael DuVally, a spokesman for New York-based Goldman Sachs, confirmed the bank received the letter.
    “Goldman does not have a position in the company, nor are we making markets in the company’s bonds or credit-default swaps,” DuVally said in a telephone interview yesterday afternoon.
    Goldman Sachs sent e-mails to debt investors at around 11 a.m. yesterday, after the deadline for the exchange was extended, offering pricing levels on YRC bonds and credit- default swaps, according to people familiar with the matter.
    DuVally declined to comment further on YRC or the e-mails.
    Iain Gold, a director in the Teamsters’ strategic research department, also confirmed the contents of the letter.
    “We want banks to stop creating these derivatives,” Gold said. “There’s too much at stake for the employees of the company. We need to do everything we can to make the exchange successful.”
    Hoffa, 68, has led the Teamsters since 1998. The Teamsters union represents 1.4 million members, according to its Web site.
    Bondholder Protection
    Credit-default swaps are financial instruments based on bonds and loans that are used to hedge against losses or to speculate on a company’s ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.
    In response to labor statements over Goldman Sachs’s role with mortgages issued to borrowers with the weakest credit, DuVally said in an e-mail that “we strongly take issue with the assertions the union makes. For example, Goldman Sachs was never one of the larger issuers of subprime securities.”
    During 2006, when the housing bubble started to burst, Goldman Sachs was the 13th-largest issuer and sixth-largest underwriter of securities backed by subprime or second mortgages, according to newsletter Inside MBS & ABS.
    It was the seventh-largest issuer and sixth-largest underwriter of bonds backed by Alt-A loans, which are a step higher in credit quality. Issuers acquired and packaged the loans into securities, while underwriters sold the bonds that were created, including those created by others, to debt investors.
  2. JimJimmyJames

    JimJimmyJames Big Time Feeder Driver

    Anyone really surprised that investment bankers don't give a rat's ass about people?
  3. wkmac

    wkmac Well-Known Member

  4. unionman

    unionman New Member

    You guys just keep trying to find dirt on Obama and you as usual come up with nothing. Are you kidding me, do you actually think there is something to that story? If you find any facts, let me know and i'll be sure to say your right about that.
  5. JimJimmyJames

    JimJimmyJames Big Time Feeder Driver

    Ah Wkmac, another poor soul who has yet to realize that both major political parties are, for the most part, allied in robbing us of our property and freedom.
  6. Lue C Fur

    Lue C Fur Evil member

    Its tuff to find dirt on Obama....LMAO!!!!!!!!!!!:rofl: Open your eyes Ralph!!:surprise:
  7. wkmac

    wkmac Well-Known Member

    Yeah, that's pretty obvious but then I think we both knew that before hand. I did like the comment about "you guys" digging up dirt on Obama and the irony of that comment based on the sources of several of the links. I'm with Lucifer laughing on that one too!

    Well, if you and Lucifer are game for a little more fun,

    The Democrats Faux Fight Against the Banks

    Larry Summers and the Jobless Recovery

    Obama As The Manchurian Candidate

    It's truly amazing how low these "vast rightwing conspiracy" pundits will go!


    Hey Unionman, check out these "teabaggers and birthers" and their anti-Obamaism at Black Agenda Report. Even Robert Scheer over at the pro-Obama, Pro Democrat Truthdig admits Wall Street is in Charge. Considering the top campaign contributors to Obama run to the White House, it's fair to believe a good return on investment is in order!

    Well with unionman, we've now completed the BC's Trilateral Commission. Photos of Unionman, Island and Tie at their first meeting when someone dare pointed out that there is no difference between the 2 political parties!

  8. wkmac

    wkmac Well-Known Member

    Hey Unionman,

    Check out Bill Moyers Journal this weekend (see link below) or today for that matter on your local PBS station. Bill in the first half of his program interviews Matt Taibbi and Robert Kuttner on the influence of Wall Street and the likes of Goldman Sachs on the Obama adminstration as well as the democrat party. Taibbi sounds a bit more bleak but Kuttner still remains hopeful and both men supported Obama and traditionally democrat politics as a whole.

    The interview does make for a good "I told you so" for folks like me but there is an even greater concern beyond that. The Wall Street machine that dominates by force and power what I call Statist Capitialism is a equally big threat to the whole idea of true free market economics (what is called free market capitialism) as it is to downhome populist sensabilities. I might disagree with using central gov't and power to address these problems (mainly because it was this very mechanism that created the problem to begin with) but the fact does remain that this reality will and does effect us all and longterm not in a good way IMO.

    I did find it interesting that Kuttner points to FDR as standing up to corp. interests when the fact is, FDR let the corp. interests write his New Deal plans like the National Industrial Recovery Act (see NIRA and Who is Gerard Swope?) and of course it was their own business interests who won out and lay the seedbed for what ails us today.
  9. diesel96

    diesel96 New Member

    Here's the story that defines our political parties, and those who behind the scenes try to back/justify one side or the other. Clearly conservatives have created a fantasy when it comes to how they define their take on religion, morals, limited gov't, and when it comes to the foundations of America. They look backward to a mythical time when people's behavior was defined equally by Leave it to Beaver, one in which markets were free, women were submissive, and all the colorful elves knew their place. It's not hard to imagine them floating down rivers flanked by giant stone statues of a Reagan on one side and a scowling Joe McCarthy on the other, past temples to Ayn Rand. Conservative utopia only existed in some mythic period outside of normal time, but they are determined to endlessly circle that stagnant goal.
    Progressives tend to have more of a science fiction outlook. Sure, we may want our Star Trek uniforms made from envioromentally safe organically grown fibers, but who doesn't long for the time when we can throw away prejudices and break the "stay the course" roles that dictate our lives? An end to war. An end to hunger. A world where the condition of your parents doesn't restrict the possibility of your life. There's a reason that the word "progress" is bound up in progressive (and no, it's not meant to be ironic). Progressives are about making changes, moving forward, creating a world that's unlike the one we see around us with fewer flaws than we see today.
    When you look at it that way, it's no wonder that progressives always seem to have the harder path. After all, inertia is against us. Conservatives are content to put their feet down and preserve the status quo. They have both the weight of the world and the fear of change on their side. Progressives have to persuade the unpersuaded to break into new territory, to pack away the past and face a world unlike what's come before. Worse, we are often put in the position, on everything form social issues to the environment, of being the ones that have to say, "what you are doing now is wrong." I don't have to tell you, that's a position that leads to some bruised egos and bloody noses.
    So today we have, modern armchair pundits have rewritten the history of the United States, and the similiarities. And just because progressives look forward, it doesn't mean we're always successful. Sometimes we're the ones who get fixated on certain goals, even when those goals are no longer realistic. The results of bumping against the stubborn and corrupt mass of the world as it is can be frustrating. It's not hard for progressives to find failure. We can find them even in our successes.
    But a low batting average is the price of science fiction. And even though you may think this sci fi is a remake, there are suttle differences.... JMHO
  10. Baba gounj

    Baba gounj pensioner

    too many long winded posts today, is everyone snow bound with nothing better to do ?