Mizuho $7 Billion Loss Turned on Toxic Aardvark Made in America

“On Oct. 18, 2006, Rekeda and his team were offered an $11 million signing-on fee to defect to the Japanese bank … By the time the deal was consummated, the market was turning. On Dec. 11, 2006, the same day Mizuho announced it was setting up an office in the U.S. to create asset-backed debt securities, Fitch Ratings said the outlook for U.S. subprime mortgage bonds was ‘negative.’ It expected delinquencies on those loans to rise by 50 percent.

By December 2007, Mizuho had halted its U.S. CDO business. It fired Rekeda and at least four others on the team, putting an end to the bank’s one-year experiment.”

Sounds like the kid from Kiev timed it just about perfectly.

“In the prospectus, Mizuho pledged to back 87 percent of the [Aardvark] deal” — sheesh, one wonders if they had any idea what they were doing. Aardvark is mentioned here back in March 2007.