Bank Watch, page-105

Credit Suisse has made David Miller the chief of credit products and co-chief of Credit Suisse’s global markets credit division. Read this article to see what this man oversaw between 2004 and 2006. A few extracts below. The mind boggles how our societies allow these people to continue in these positions of responsibility. Eshmun

Credit Suisse Tries to Overhaul Its Image, but Problems Remain

http://www.nytimes.com/2016/06/24/b...rhaul-its-image-but-problems-remain.html?_r=0

"Mr. Miller, you may recall, was the bank’s architect, starting in 2004, of a new syndicated loan product – called a dividend recapitalization loan – that allowed big-time real estate developers in the Western half of the United States to borrow based on the inflated valuation of their projects, pocket hundreds of millions of dollars in the form of dividends and lay the risk at the doorstep of new investors whom Mr. Miller and his team had lined up.

From 2004 to 2006, Mr. Miller and Credit Suisse arranged for $5 billion of these kinds of loans, which were then sold to investors. The deals produced hundreds of millions of dollars in fees for the bank, a high percentage of which, of course, went into the pockets of Mr. Miller and his team. From 2004 to 2008, Mr. Miller received compensation of $23.1 million, including $7.2 million in 2006.

In the end, all of the loans blew up, and investors lost billions. Soured deals include $375 million in loans to the Yellowstone Club, an hour outside of Bozeman, Mont.; $250 million to the Tamarack Resort in Idaho; $540 million to Lake Las Vegas, a 3,592-acre golf community in Nevada; $275 million to Promontory, a 10-square-mile second-home resort outside Park City, Utah; $400 million to the Turtle Bay Resort in Hawaii; and $675 million to the Ginn resorts in Port St. Lucie, Fla.; Naples, Fla.; Boone, N.C.; and the Bahamas.
Continue reading the main story

After each of the developments ended up in Bankruptcy Court, a federal bankruptcy judge admonished the Credit Suisse bankers by calling the loans “doomed to failure” from the outset.