Bear Strearns' Subprime IPO
Everquest Financial is Going Public with Risky Mortgage Bets Purchased from Underwriters' Hedge Funds
Business Week - May 11, 2007
by Matthew Goldstein

Janet Tavakoli, a Chicago financial consultant who specializes in advising clients on asset-backed investments, isn't impressed with the Everquest offering. "There is a huge moral hazard with Bear providing the assumptions for valuing the CDO equity," says Tavakoli. "Bear Stearns Asset Management is very good at surveillance, so if it is trying to get CDO equity off of its balance sheet, incur the costs of securitization, and sell the risk without arm's length valuation, why would a customer want to buy it on that basis?" Bear Stearns declined to comment for this story.

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Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct professor of derivatives at the University of Chicago's Graduate School of Business. She is the author of: Credit Derivatives & Synthetic Structures (John Wiley & Sons, 1998, 2001), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2008).

Janet Tavakoli's book on the global financial meltdown is Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street (Wiley 2009)


Clients of Tavakoli Structured Finance have the benefit of proprietary consultation, which is not available in any other paid or public forum. Clients also commission proprietary research and analysis.

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