Posted on 07/29/2008 8:25:57 AM PDT by CRBDeuce
Excellent point...yep and I like that 'return to the good ole days' side that should ameliorate the boom/bust. I really miss walking up to the teller at the bank where I also had a mortgage and getting a smile of recognition, instead of the current furtive look to see if I have a gun!
Bingo NVDave. And the real point is that the saavy money guys won’t bite. Real-estate will correct at least another 10%. So for this plan to be truly effective, you need investor confidence and that is GONE, bye-bye. Stop it with the banking games boys. Your time to act as true stewards of this economy is gone. You know get to have the Democrats on the Hill telling you how to lie to the American people until it collapses. Best we can hope for is heavy subsidies into energy, ALL kinds to fuel future innovation. This does also help the banks, just not in the timeframe to save the corporate buddies. The free market investor is letting them hang, they had lots of meals of Kobi steak and red wine in there indoor tennis courts as they rigged the free market. Now Paulson and Frank can shill for the politicians whom openly are now creating the greatest fleecing event of all history. Will you continue to shill Mr. Paulson and Mr. Frank? How about you Chris Dodd and other Demonrats? Think we’ve never heard of a nifty invention called the database so we will find you? Better invest in some Atlas rockets or plastic surgeons.
1) CEO, Mr. Fuld from Lehman Brothers? Lying in public on SeekingAlpha.com in an open letter to Warren Buffet stating they had a meeting. Mr. Buffet responded telling him it never happened.
2) Mr. Thaines of Merrill Lynch, lying repeatedly to the investment community on need to raise money from being the first to set the floor on CDO’s. ‘Marked to market’ is now .22 cents on the dollar. You must now know what that means NVDave?
Our entire government is now fascist. Just like Nazi Germany whom created a great scapegoat of the Jews to fleece for there 40 years of economic stupidity. This time, it’s the American public, We the People deserved it for not understanding economic theory and how our assets declined. What a bunch of traitors and they think all of us are stupid?
You and I will finish our debate about the fallout of notional value to the real economy. The CDO floor has just been set by Merril Lynch. .22 cents on the dollar buddy. Unfortunately, by the time we reach consensus you will be eating government rations of wheat pasta and yellow cheese.
Such a shame, so much heavy lifting will be done to fix this mess, but I assume there will be some silver linings down the road for some wise enough to keep some hard assets protected.
How’s that long coming on oil from August 2008 to August 2009 Toddster? There are those whom truly know and then there are those who are instructed to know little. But enough of simple vindications. What are your solutions Toddster? In all seriously interested in your approach, you are bright.
Secretary Henry Paulson used to be a gentlemen. Now he is sheep being told what to do. That is what happens when you accept a little of the taste and take it out millions of little guys. He certainly has lots and lots of company these days, deciding when and if he shall speak.
We will? When did it start?
About three months ago. Under the screen name, Quant 5. I am known by name by some in the Investment community where I was not making many friends lately. Actually, the time for debate on structured investment vehicles and there destructive power on the ‘real economy’ is passed and is now meaningless. Solutions are the only discussion worthy of debate.
Your confused posts were part of a debate? LOL!
I didn't know multiple screen names were allowed here.
I know Todd, your such an intellectual genius. Still pushing SIV’s? You seemed to be in love with the whole risk free model to the economy. I’ll post begin posting them in your replies to posts warning people of how ignorant people can truly become. Your sheep Todd, but go ahead and fire back and defend yourself like a man. I asked for solutions and you fire off useless diatrabe. Go and speak to Mr. Fuld or Mr. Thaines or some of your other idols. They make great shepards for you.
You shouldn’t post drunk.
Sheep Todd sheep. Give me a good intellectual comeback as an insult.
When I saw what Merrill got for those CDO’s, all I could think was “Oh boy, here comes the next wave of write-downs....”
Round ‘n round we go... swirling down the drain.
But I think you might be a bit optimistic in the “22 cents on the dollar” part. Did you see this steaming turd in the press release?
http://biz.yahoo.com/bw/080728/20080728006329.html
“Merrill Lynch will provide financing to the purchaser for approximately 75% of the purchase price. The recourse on this loan will be limited to the assets of the purchaser. The purchaser will not own any assets other than those sold pursuant to this transaction. The transaction is expected to close within 60 days.”
WTF?
OK, so they took a HUGE haircut off the notational value in the sale process — $6.7B for a $30.8 notational value CDO, that’s where you got 22 cents (21.9 actually, but let’s just go with your 22 cent value to be, I dunno, generous).
But they’re financing 75% of that reduced price?
So let’s do the math together: 22 cents, * 25% = what they’re actually getting out of the sale, ie, 5.5 cents.
WTF?!
Oh, and notice in the PR that the only recourse here is for MER to take the CDO’s back? Niiiiice. After they’ve marked them down to a fire-sale price, they might have to take them back. Way to go, what a suave bit of business this deal is.
If I were a MER shareholder, I’d be howling for blood. Nothing else would suffice. I’d want to see heads on spikes, I’d want to see people tossed into tree chippers. I’d want something from the Dark Ages of penalties. None of this “slap on the wrist and fine them” crap that seems to be the DOJ/SEC way of doing things down.
But put aside my churlish tendencies. Let’s back up to Thain’s previous statements. He was assuring us only earlier this month that they were comfortable with their CDO positions. That they didn’t foresee needing to raise more capital.
In January, Thain said they had the capital they needed to move forward in 2008. Since then, they’ve raised, what $18B+?
Then again in April, he mouthed off that they were done selling more dilutive equity.
Absolute bullcrap. This is actionable malfeasance by Thain, and stockholders should now be hiring lawyers to take him out of there and return all his comp package. He’s been an utter liar and fraud from the end of last year until now.
As for people not understanding economic theory:
Well, we’re not going to need any of that, because we have a fella coming onto the stage that will infuse us with both hope and change. And that should suffice, shouldn’t it?
(gag)
” Depression-era “lend no money” at the other extreme”
That gets my vote.
No one should everget a home loan without putting at least 20% down and adjustable rate loan should be illegal.
Adjustable loans should be reserved for people with a demonstrated track record of *regular* salary raises.
History of employed, then unemployed: no ARM for you.
Can’t show proof of income: no ARM for you.
Got one big raise once, but never before or since: no ARM for you.
Yeah... Ummmm... Vote for CHANGE! Seriously, the guys like Thain or Fuld (I can go on) will never do time. Why? Because implicating them implicates the party in power, there buddies the Democrats. The Democrats will find a new scapegoat in the American public in a few years when things near collapse and they need more fleecings, direct private property confiscations will occur. But first, many, many new laws will be created so that all are lawbreakers.
Never allow lawyers in the White House. That used to also be law, did you know that? We have seen this before in history my friend, it ends one of three ways:
1) Voter revolution - Of course sometimes the voters are too brainwashed to see the wolf in sheeps clothing - Hugo Chavez and yes Obama come to mind. But it is probably our nation will get it right to fix things internally. Shame nations around the world are now pointing some big guns at us and proliferating nuclear materials. The job of cleanup and recover is not going to be nice, no not nice at all.
2) Physical revolution - The theft we are seeing and the probably cause and effect makes the Bastille affairs seem pretty tame, in my humble opinion.
3) The nation is conquered. I assume we would hit the BUTTON before that happens but you never know, the transfer of power to foreign nations has already largely occured because of our own arrogance, retarded thought processes about how all nations are our buds and we must help them all become capatalists instantly at the expense of our own people(of course this is short-sighted greed based also) and of course malinvestment, also greed. Karl Marx was a true visionary indeed, we are selling the rope to hang ourselves and the Marxist and Dems are one and the same. I have a project I am working on, mail me sometime on solutions.
Why should anyone ever get an adjustable rate loan?
When I was making $3.50/hr after we got married we saved $7,000 in 8 years to be able to put 20% down on our home that we bought in 1966 for $34k.
There wasn’t any such thing as adjustable rate mortgages and banks wouldn’t even talk to you without a 20% down payment.
It was the same way when my parents built their home in 1936.
The old rules worked very good and flakes had to stay renters.
Why would I push an SIV? Who would I "push" it to? Would "pushing" it be profitable? How exactly?
You seemed to be in love with the whole risk free model to the economy.
What is a "risk free model to the economy"? Where did you imagine I said I loved whatever a "risk free model to the economy" happens to be?
I’ll post begin posting them in your replies to posts warning people of how ignorant people can truly become.
You'll begin posting what?
Your sheep Todd, but go ahead and fire back and defend yourself like a man.
I'll continue to correct your errors and point out your silliness.
I asked for solutions
The solution is education. If you learn about this stuff before you post stupid comments, you won't sound stupid.
I see your frustration level perhaps equals my own...tho’ our targets may differ somewhat!
Bingo....back to the covered bond solution weaning America from Fannie Mae and Freddie Mac. I still see that as the preferred (private) solution to the continued existance of these 2 (gubbermint) behemoths. Especially given the restrictions....like 90-95% of Appraised value, kept ON Balance Sheet, etc.
Seconded...and Never let the Federal Gov't borrow [--Thomas Jefferson] yep...the new constitution could start w/clean slate!
I agree with all your sentiments. Completely.
I’m just saying that the current generation of bankers, er... frauds posing as bankers on Wall Street ain’t going to go for covered bonds with those parameters. We might WANT them to, but they’re not going to.
What is needed is regulation to force an end to the off-balance sheet assets, the mark-to-model nonsense, the leverage used to buy mark-to-model assets, etc.
We need to re-regulate the banking system. Not with Depression-era regulations, but with modern, updated regulations that eliminate the invention of utter nonsense that tries to hide risk (eg, SIV’s, CDO’s CDO-squareds, etc).
This entire Charlie-Foxtrot comes down to ONE thing: bankers trying to retain alpha at the same time they’re thinking they’ve sold off, compartmentalized or hedged risk. The fact is, alpha is the result of taking risk. Period, thanks for playing. If they want no risk, then they have to take the reduction in alpha that comes with moving down the risk:reward curve.
Once the government has forced the finance sector to quit playing games, then we could introduce covered bonds.
Because, let’s think about this for a moment: covered bonds are effectively mortgage-backed securities wrapped by the credit, solvency and reputation of the issuing bank.
What bank is worth a pinch of pig poop right now? In other words, where is the “covered” in “covered bonds” when the banks aren’t to be trusted?
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