Thursday, March 20, 2008

Gilmore and Bear Sterns

The AP recently carried a story tying US Senate Candidate and Former Governor Jim Gilmore to a failed Bear Sterns subsidiary. You’ll remember that Bearn Sterns was the multi-billion dollar investment bank that recently collapsed due to risky sub prime mortgage investments. According to the AP, Gilmore was the Chairman of a subsidiary called Everquest Financial. In doing some basic research, it became clear to me that Everquest was nothing more than a scam to move these risky investments off of Bear Sterns balance sheet and thus reduce their exposure. But, when their true intentions became clear, investors was forced to call off the Everquest IPO.

My first question is why on earth would Jim Gilmore, who as an attorney would have no financial market experience that I am aware of, be chairing something of this nature? I suppose even former Governors need to earn a paycheck. Clearly his leadership was a bit lacking. I read the statement by Gilmore campaign manager Dick Leggitt, defending Gilmore’s role in the subsidiary. Dick seems to know even less about the financial markets than his boss. The entire deal stinks and no amount of cologne will prevent people from smelling it on Gilmore. Is this who we want as our Republican candidate for the US Senate?

I have heard a lot of people say that Mark Warner will deliver Virginia to the Democrat Presidential nominee. As much as Warner would like to do this, I doubt he will be able to. With Gilmore’s negatives as high as they are, I feel certain that the Independent vote will flock to Warner and likely to the Democrat nominee for President. If Jim Gilmore is our nominee, he, not Mark Warner, will be able to claim the distinction of handing Virginia to Clinton or Obama and maybe even the Presidency itself. So after mismanaging our State finances and fracturing the Republican Party over the car tax, Gilmore is set to turn this red state blue. The Democrats may end up loving Gilmore after all.

http://www.wdbj7.com/Global/story.asp?s=8037562

13 comments:

Spank That Donkey said...

Former Senator Bell:
You seem to hold a grudge against the Gov. who gave me a tax break, and tied up that $950 Million dollars annually you were lusting to spend.

I guess Gov. Gilmore forced you to vote for tax increases, and this is why you have all this derision for an actual Tax Cutting Republican.

If only your internal Conservative Compass had led you to restrain govt, and it's spending, instead of cozying up to Gov. Warner's wanton desires to expand govt. and tax the daylights out of your fellow citizens.

Can't you turn those sour grapes into something more useful than venom?

hoobie said...

Is there anything that Mr Bell has written that is untrue?

Mr Gilmore's involvement with Everquest underscores either his lack of financial acumen, or his lack of a moral compass.

Which is it?

Brandon Bell said...

STD,

My concern is for our party who your candidate has caused great harm. Instead of Gilmore being able to spank any donkey much less M. Warner he will get the s___ kicked out of him.

Sherman L said...

Thank for your valuable insight Mr. Bell. I've always wondered why you haven't stepped up and run for higher office.

Oh that's right, you're two time loser who sits around complaining about everyone else. What do you do for a living by the way? You seem to have a lot of free time.

Lynchburg RINO Slayer said...

Ex-Senator Bell,
You might consider starting a blog in another area of expertise. Maybe you could comment on Wall Street. Oh no..that's right your business expertise is in mailing packages. Lots of financial acumen required for that job!
Well package this! As a politician you were a failure (twice). As a political commentator you are worse than a failure, you are a shill for liberal Democrat Mark Warner (just as your were when you were in the State Senate).
Nobody cares what you think. Listening to you offer advice on politics is about like listening to Obama talk about bringing America together. Waste of time.

(signed) Sick of Two Faced Republicans

BTW, is this the same sort of in-depth research that caused you to believe that abusive driver fees were a peachy idea?

hoobie said...

A waste of time like reading the above post.

Can either of you geniuses tell me what is wrong with Mr Bell's comments about Mr Gilmore and Everquest?

Mr Gilmore's involvement with Everquest underscores either his lack of financial acumen, or his lack of a moral compass.

Which is it?

Brandon Bell said...

Lynchburg RS,

What a funny post. I really like the part out how you say no one cares what I think but evidently you do enough to comment on the blog. That's a riot.

Anyway I don't know who you are but the packaging business you reference I closed in 1996. I do know a little about the investing business because it is my business. I council clients on the very crap that Gov. Gilmore tried to head up. I carry a brokers license Series 7, 63, 65 and Series 24 Managing Principal Licenses. My business is regulated by FINRA and the SEC. These licenses give me the authority to evaluate a wide range of investments. I also have a Chartered Retirement Planning Counselor designation. Do your research before showing your hind quarters.

BTW, I purposely put my real name out there on this blog because I am not afraid of standing behind the things I say or do. How about yourself. Who are you and what qualifies you to be a RINO Slayer?

Spank That Donkey said...

"According to the AP,"

It that the extent of your research? Gov. Gilmore's Campaign released more facts in one letter than the AP has in months.

That would be the other side of the story, but apparently those facts are not what your post or intent in propagating that hit piece is all about.

Carl Kilo said...

It looks like some bad reporting by Bob Lewis went down and the Gilmore campaign is calling him out.

March 19, 2008

Mr. Bob Lewis
The Associated Press, Capitol Bureau
State Capitol
Richmond, VA 23219

Dear Bob:

We would appreciate it if you would immediately correct the following factual errors and incorrect implications in your story about former Gov. Jim Gilmore and Everquest Financial which moved on the Associated Press wires last night and has been reprinted by several Virginia media outlets.

1. Everquest Financial is not, and has never been, “subsidiary” of Bear Sterns. It is an independent company.

2. Everquest has not and does not “market” high risk securities. It does not market securities; it buys and holds them in its portfolio.

3. The primary holdings of Everquest Financial are assets based on sound corporate loans.

4. Everquest is an asset management corporation. It is not a “hedge fund” and it does not operate a hedge fund.

5. As a result of sound management, Everquest is thriving and has earned $100 million in revenue for its shareholders.

6. When Jim Gilmore was Governor of Virginia, in the wake of 9/11 and a during a national recession, Jim Gilmore balanced the Virginia budget, gave working families $1.5 billion in tax cuts and left a record $1 billion in the state's Rainy Day Fund.

7. The deficit in the state budget, as defined by Mark Warner, was the difference between state revenues, which had decreased in the recession; and what Mark Warner wanted to spend in future years.

8. This shortfall in his spending plans is what Mark Warner used to justify raising taxes on working Virginians by $1.4 billion in 2003 – a year and a half after Jim Gilmore left office.

Thank you for your prompt attention to this matter.

Sincerely,

Dick Leggitt
Campaign Manager
Jim Gilmore for Senate

hoobie said...

1. True. Everquest Financial is an independent company, but its assets were valued by Bear Stearns in a way that fails the "arms-length" test. Real ethical problems here.

2. True. While Everquest is not a retail outfit, they attempted to dump CDO risk onto investors through an attempted IPO, which was cancelled as the real value of the underlying assets (increasing workthless sub-prime mortgages) became known. Had the IPO moved forward, Bear Stearns would have effectively sold its sub-prime portfolio to hapless investors. This was the whole point of the exercise. Again, an ethical breakdown.

3. False. If this were true, the IPO would have gone forward. Although, though the luck of the Irish, as the economy tanks and mortgage rates drop many of these loans may have a higher likelihood of remaining classified as performing loans. Or the declining dollar may force higher interest rates to attract foreign investment. Either way, this isn't Class A paper. Extremely risky.

4. True. Everquest Financial had close ties to Bear Stearns affliliated hedge funds at its inception. Too close, as these hedge funds dumped these self valued (over valued) high risk loans on to Everquest for disposal.


The back story tells the truth, not this simplistic spin of a complex issue by the Gilmore campaign, which it obviously banking on its supporters being as unsophisticated as he is. He's probably right.

Spank That Donkey said...

and so what about 5-8 Hoobie? Doesn't fit the smear profile that is trying to be accomplished?

Zak Moore said...

Hoobie--Well said. Sadly, I suspect many of these folks have the "don't confuse me with the facts" mentality. They probably stopped reading after point 1.

Shaun Kenney said...

Excellent post, Brandon.

...and the "buyers remorse" among Gilmore supporters continues.