A SENIOR National Australia Bank executive expressed grave concerns about the credit market in an obscenity-laden email sent in February 2008, two months before the bank officially recognised a portfolio of sub-prime loans were damaged goods.
Manny Arabatzis, the head of securitisation at nabCapital, told a friend at the bank the organisation's position depended on ''blind luck''.
NAB eventually took write-downs of more than $1 billion on its exposure to collateralised debt obligations, sending its share price plummeting and sparking a shareholder class action.
Mr Arabatzis set out his concerns about the CDOs in an internal email containing his proposed presentation to a risk management committee meeting.
''Markets are f---ed,'' Mr Arabatzis said in the email, sent to nabCapital's global head of credit, Carmine Veltro. ''Investors are f---ed. Liquidity is gone. Ratings agencies are f---ed and trying to rate to market value rather than through the cycle, cash flow analysis. In short, we may or may not be f----ed!! Key dependency: Blind Luck.''