BREAKING: Deutsche Bank Accused of Mortgage Fraud

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Shahien Nasiripour at the Huff Post reports that Deutsche Bank has been accused of mortgage fraud by the Justice Department. They are suing the bank for $1 billion. 

Here's another interesting piece of information about Deutsche Bank. They are in the business of investing in student loan debt.

Today, the WSJ noted:

 An $859.17 million student loan-backed bond from Educational Funding of the South priced on Tuesday, according to a person familiar with the matter. The $372.3 million triple-A rated 2.8-year tranche priced at 55 basis points over three month London Interbank Offered rate, while the $450 million 9.6-year portion priced at 65 basis points over three-month Libor.

Price guidance is also out on AH Mortgage Servicer Advance Revolving Trust's $850 million bond.

Price guidance on the $325 million triple-A rated one-year tranche suggests it could yield between 3% and 3.25%. The $325 million triple-A-rated two-year portion could yield about 3.5%, according to a term sheet.

Joint leads on the deal are Deutsche Bank, Royal Bank of Scotland and Bank of America Merrill Lynch. The security is expected to price later this week. 

Source: Credit Markets, WSJ (May 3, 2011) 

So is it all right for Deutsche Bank to be involved in investing in student loan-backed bonds, while at the same time being sued by the U.S. government for mortgage fraud?

Related Links


"Education Funding of the South, Inc. Announces Acceptance of Tenders in Tender Offers," PRNews Wire, May 3, 2011


"Steve Eisman Blasts For-Profits, Arguing 'Subprime Goes To College,''' AEM, May 28, 2010

"Those who seek knowledge suffer from the sin of despair and frustration,"  AEM, February 28, 2010

"Nelnet Keeps Taking Taxpayer Money Despite Accusations On Student Loans," Lawrence Delevingne, Business Insider, October 25, 2009

Living Abroad

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When I am abroad, I am more aware of how American I am than when I am here. Now that I am back again, I realize how much of an internationalist I have become. I am grateful, and feel blessed, that I have lived on two other continents, and have, with some success, learned a few languages. I do not feign to be fluent in any language, especially my mother tongue. Nevertheless, I have managed to make utterances in a number of different languages, and I believe I was understood on those occasions when I clumsily expressed myself. At one point I was reading German so well that I was able to translate nineteenth-century humor magazines. Boy, those were the days. I have tried to keep up on reading German newspapers because it provides such a different perspective on foreign affairs, and writing this post has reminded me that I need to continue with that daily exercise.

I have also been tutoring a young Mexican man in English, and that has been pure joy. I realize I understand far more Spanish than I previously thought, and it has been delightful to dip back into that language. (I also have a friend and professional acquaintance who likes to chat with me via Facebook in Spanish. I miss doing that). In fact, because of the student and my Spanish-speaking friend, I am now determined more than ever to become fluent in it. That is one of many reasons why I am thinking about going abroad again for work.  I also want to believe that the politics of everyday life is still possible, and I don't really see that here. That is not to say that it won't change, but it is dormant, and I find that suffocating. Incidentally, I didn't say that people here are dormant. That would be condescending and also absolutely false. It borders on being nihilistic too, and reminds me of nineteenth-century German images of a snoozing  spießbürgerlich man in his cap and nightgown. This metaphor, that Americans are not awake politically, has come back in fashion, and I find it both nauseating and intriguing to hear people pronounce similar things that were suggested in Germany during the nineteenth century. To be clear, there are great differences between the two, but it immediately comes to mind when I hear people proclaim that their fellow Americans are "asleep" or "have their eyes closed."

Deutscher Michel 

But what is like to live and work abroad? Would it be possible for you to give it a go? Likewise, would it be possible for me to try it again?

Many of you have expressed an interest in knowing what it was like for me to live and work abroad (see the comments to this piece). I think this is a great topic, and I have been delighted to read that many of you are not only considering work abroad, but that you have begun the process of applying for jobs overseas. In some cases you are already gone. Since I have a number of friends who are currently living abroad, or have already done so, I have asked if they would be willing to share their stories, too. 

I think we should begin a series on AEM about living abroad. So with that said, first thing is first, and that means a return to 2009 when I was living in D.C., more precisely Springfield, VA, and considering a job in Korea . . .

Sifting Through The Historical Bins At Butler University

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When all the historical dust settles, we can no longer see what lies beneath all that old, old sediment. But if you're a lover of history, like I am, you know that there are plenty of things worth investigating under all that dust. It is time to sneeze a little bit, and venture into the historical dustbins at Butler University.

I've recently gotten some heat for sharing an assertion from what I call "a little bird" about Thomas M Cooley School of Law (see here and here). It turns out, this school is not very popular. In response to these posts, I received a threatening letter from a dean at the school. The dean's letter came up in a conversation I had today with a good friend and professional acquaintance. It reminded him of a situation that occurred a few years ago at Butler University. Since my friend knows how much I like to resurrect things, he kindly provided me with a libel suit that was slapped against a student there.

Back in 2008, a student named Jess Zimmerman launched a blog entitled, "TrueBUBlog." Zimmerman used a nom de plume, 'Soodo Nym.' Cute! I'm serious. I like it. In his first post, Soodo Nym stated, "this is not a forum for attack. It is a forum for truth." Eventually the administration caught wind of the blog. But there is a back story to why they discovered the blog. It turns out Zimmerman's stepmother, Andrea Gullickson, was at risk of being dismissed from her faculty position at the school. Zimmerman began to share internal emails on his blog about the situation, and argued that Peter Alexander, dean of Butler's College of Fine Arts, and Jamie Comstock, Butler's provost, did not deal with Gullickson's exit in a fair manner. At the time the IHE reporter wrote the article about this case, Gullickson had retained her position.

The school's attorney sent Zimmerman a letter, demanding that the blog be taken down. Zimmerman complied. Apparently, that wasn't good enough. In January of 2009, 'Soodo Nym' was slapped with a libel and defamation suit. The junior asserted that he was unaware that a suit had been filed against him, and did not learn of the case until later that summer. In addition, Zimmerman's father was a biology professor at Butler, and things become even more complicated with his relationship to the university. (For the all the details of the case, I encourage you to read the IHE report mentioned above).

As for the young man, Zimmerman's attorney Dan Altman argued that the case was a SLAPP (a strategic lawsuit against public participation). In so doing, Zimmerman would have to pay fees for his legal defense, which would ultimately silence him. Altman noted, "This isn't about winning. [. . .] I mean, what damages are they going to get out of a college junior?"

Zimmerman began a new blog, "I am John Doe," to publicly discuss the lawsuit that the Butler administration threatened him with for 5 months. In my view, Mr. Zimmerman had a lot of courage to stand up for what he thought was right. It's a shame that he was being aggressively sought by a university.

Relationships And Your Student Loan Debt

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Has your student loan debt affected your relationships (personal and professional)? Has it affected your own self-worth?

"Golly gee, Jane, you owe $100,000? Well, what do you say about $200,000? Do you still love me? Cuz, well . . . I sure owe a lot more than you."

Related Links

"Former Law Student Confesses: 'I Think About Jumping From The 27th Floor Of My Office Building Every Day,'" December 18, 2010

"Debt And Suicide: Interview on Shared Sacrifice," December 16, 2010

"Mass Suicide?," December 12, 2010

"Suicide," November 25, 2010 

"For the Indentured Educated Class, Suicidal Thoughts Are Not merely an Individual Problem," October 22, 2010

"Suicide Among Debtors - Who's Thought About It?," August 17, 2010

Student Loan Debt Refugees

Iraq? Saudia Arabia? Vietnam? South Korea? Chile?