"Ed Huntress" wrote:

And it's not bad. But the Economist stuff this week is better. If you want
I'll see if I can e-mail you the article(s). It's 10 pages of print.


Could you send it to me also? Use my address please.

Wes
--
"Additionally as a security officer, I carry a gun to protect
government officials but my life isn't worth protecting at home
in their eyes." Dick Anthony Heller

On Sun, 23 Mar 2008 15:14:07 -0700 (PDT), Too_Many_Tools
wrote:

Did lenders have the option of not lending money to those who could
not pay their loan obiligations?

Or did they commint fraud with their depositor's funds?

TMT
=============
Major problem in perception here.

With the demise of the *LOCAL* bank or S&L and their replacement
with the national megabanks (possibly through a "stealth
roll-up"), the people originating the mortgage, the agent for the
buyer, the agent for the seller, the appraiser, etc. are *NOT*
the same entity, and are likely part of a nationwide chain such
that many to most of the people involved are not knowledgable of
local trends and conditions.

Everything was computer based off the FICA score. The old
computer adage "garbage in -- garbage out" was totally ignored,
and quantity was stressed over quality and service. Note that
the bank, has little or no skin in the game at this point, AND
DID NOT MAKE THE LOAN, except for possibly fronting the mortgage
originator, and this is a limited exposure, with considerable
collateral, i.e. the house.

The new "mortgage" was bundled or aggregator with thousands of
other mortgages by yet another "family", into a novel financial
instrument called a CDO or MBO [collateralized debt obligation or
mortgage backed obligation]. In general, these bundled mortgages
are now actually owned by a trustee corporation domiciled in
Aruba or another tax haven, and are beyond the reach of US
law/regulation, although the actual aggregation was done by a
major US financial firm. [Ain't globalization wonderful!] The
bank still has minimal skin in the game at this point, the main
exposure being a little front money for the MBO aggregator.

The synthetic structured CDO was then "rated" by one of the major
rating agencies such as Ambec, Moody's etc, as AAA investment
grade (apparently after a long lunch with several pitchers of
martinis). [Note that these agencies, if you will scrape enough
dog poop together and spray it with gold paint, (and pay the
fees) will certify the new gold ingot.] In many cases, the AAA
investment rating was "insured" for 5 (or more years) years by
the purchase of a CDS [credit default swap] that
"insured/guaranteed" the [re]payment of interest and principal.
The major problem is the CDSs are totally unregulated and
unregistered, and the majority of guarantors are alien
corporations in foreign jurisdictions, with no
veriafiable/attachable assets. [Still little to no bank skin in
the game, although bank profits (but not depositor returns) are
mounting because of the service fees.]

At this point things get strange. Everyone knew that their CDOs
were as phony as a 3 dollar bill, but assumed that the other guys
were "good as gold" (after all they had that CDS "guarantee").
The AAA investment grade CDOs/MBOs were then sold by the billions
to hedge funds, pension funds, etc. In order to boost the
return, the basic capital was leveraged by borrowing to the hilt,
for example Carlyle Credit Corporation borrowed/leveraged from
the banks and invested 32X their capital into AAA rated
"securities." At this point the banks had huge amounts of their
depositors [but possibly not their own] skin *OPERATIONALLY* in
the game, but not on paper. In order to allow this kind of
leverage (and keep the grift going), it was necessary on the part
of the commercial banks to evade the 10% loan reserve / vault
cash requirements, which they did using the Enron method of SPEs[
special purpose entities], SIVs [special investment vehicles],
conduits, and several other scams. Unfortunatly, there is no US
regulation on "leverage" in other than commercial banks.

On a day in September 2007, some twit walked into a bank and
wanted to cash a twenty dollar check on his account, but the bank
didn't have that much cash on hand, and the dominos started to
topple. As soon as the PSPEs/SIVs etc. fell, they went back on
the bank's books, and it became apparent how badly the depositors
were exposed.

Note that in many cases, the depositors provided the money that
was "amplified," which they then borrowed back to buy that new
Hummer with a home equity loan... [O'Henry would have loved it]

Were any laws and regulations broken in this convoluted and
arcane chain?

Apparently not, as each link in the chain was carefully sized on
a "need to know" basis, to limit individual/organizational
accountability, and maintain "plausible deniability."

However note that for exactly this reason, both federal and state
conspiracy statutes prohibit these types of operations under both
criminal and civil law as well as the federal RICO act. That
said, it is very unlikely that any of the major players will ever
go to trial, do time or pay any fines [they got copies of the
paperwork showing who got a "piece of the action" ], but a
"Martha Stewart" and "Sam the Sweeper," or two will go under the
wheels of the bus.

Are we rich yet?


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On 2008-03-24, Wes wrote:
"Ed Huntress" wrote:

And it's not bad. But the Economist stuff this week is better. If you want
I'll see if I can e-mail you the article(s). It's 10 pages of print.


Could you send it to me also? Use my address please.


send it to me too... thanks

ichudov AT algebra DOT com

i

On 2008-03-24, Hawke wrote:

That's exactly why there is a long standing recommendation to limit
mortgage payment to a small fraction of one's income.

So it doesn't make much sense to say these people knew what the
risks were. No one else did, either.

But they were obviously imprudent. As were the lenders.

Looks like there was plenty of investors who bought mortgage loans
containing those crap loans, who did not even bother to think about
their quality.

i

Why would you worry about quality if you thought they would only continue to
go up? Apparently, the idea that they could actually decline never occurred
to any of them.


The recommendation to not borrow too much, has little to do with home
values and everything to do with dealing with emergencies, loss of
income, etc.

The home prices can go up and you can still lose your home to a
foreclosure.

i

On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth:

And it's not bad. But the Economist stuff this week is better. If you want
I'll see if I can e-mail you the article(s). It's 10 pages of print.

I regret having turned down the free prescription for The Economist a
decade ago. If the article is online, point me to it. Otherwise,
email is great. You have my real addy. (Say 'HI' to SWMBO for me.)

OK, I just e-mailed it from _The Economist_ (and copied myself, to see what
you're getting). They give you an ASCII file of the text and a link to the
article with graphics. With The Economist, you always want the graphics.

The trouble is, the 10-page "briefing" consists of 10 separate articles. The
one I sent you is two pages long. I can send you the other nine, I think.
Let me know if you like the first one and I'll give it a try.

Will do. In the interim, what do you think about Warren Buffett's
Chairman's Letter to Berkshire? Interesting, oui? I really like the
Stumpf quote as well: “It is interesting that the industry has
invented new ways to lose money when the old ways seemed to work just
fine.” from http://www.berkshirehathaway.com/2007ar/2007ar.pdf

OK, I'm reading the letter now. Do you feel that Greenspan was wrong
all this time? Now that I see (portions of?) what happened, I'm
surprised that we never heard cautions from him. Or was that just the
pick-'n-choose media's output? Does not compute.

Yes, that one being so juicy, please email the other 9 post haste.
Danke.

--
Try not to become a man of success but rather to become a man of value.
-- Albert Einstein

On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth:


OK, I just e-mailed it from _The Economist_ (and copied myself, to see what
you're getting). They give you an ASCII file of the text and a link to the
article with graphics. With The Economist, you always want the graphics.

Reading on, I note the Wall Street, like our gov't hierarchy, has
unbelievable jobs and titles. "Alan Johnson, a consultant who designs
pay packages for Wall Street," And what do you do, sir? Oh, I design
pay packages. thud

--
Try not to become a man of success but rather to become a man of value.
-- Albert Einstein

"Ignoramus14119" wrote in message
...
On 2008-03-24, Wes wrote:
"Ed Huntress" wrote:

And it's not bad. But the Economist stuff this week is better. If you
want
I'll see if I can e-mail you the article(s). It's 10 pages of print.


Could you send it to me also? Use my address please.


send it to me too... thanks

ichudov AT algebra DOT com

i


OK, there are 10 parts to the report, and I have to send the links and ASCII
copy for each one separately. I just sent the "leader," which is sort of an
editorial summary.

But there's a chance I'll either run up against a limit by The Economist, or
your spam filter may knock out most of the rest. So let me know if you don't
get 10 messages between today and tomorrow, and I'll try something else.

--
Ed Huntress

"Wes" wrote in message
...
"Ed Huntress" wrote:

And it's not bad. But the Economist stuff this week is better. If you want
I'll see if I can e-mail you the article(s). It's 10 pages of print.


Could you send it to me also? Use my address please.

I sent you one of the 10. See my message to Iggy.

--
Ed Huntress

On Sun, 23 Mar 2008 21:12:54 -0600, with neither quill nor qualm, F.
George McDuffee quickly quoth:

On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote:

There is a lesson to be learned here....

TMT


March 20, 2008
The Affluent, Too, Couldn't Resist Adjustable Rates
By JANE BIRNBAUM
snip
===========
They told him, "cheer up, things could be worse."

He cheered up and sure enough....

==========
"Pay day" loans exacerbate housing crisis
Sun Mar 23, 2008 8:15pm EDT

A pay day loan is typically for a few hundred dollars, with a
term of two weeks, and an interest rate as high as 800 percent.
The average borrower ends up paying back $793 for a $325 loan,
according to the Center.

OhmyBuddha! Whatever happened to usury laws?

--
Try not to become a man of success but rather to become a man of value.
-- Albert Einstein

Ed, thanks, I printed them, they look very well researched.

i

On 2008-03-24, Larry Jaques novalidaddress@di wrote:
On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth:


OK, I just e-mailed it from _The Economist_ (and copied myself, to see what
you're getting). They give you an ASCII file of the text and a link to the
article with graphics. With The Economist, you always want the graphics.

Reading on, I note the Wall Street, like our gov't hierarchy, has
unbelievable jobs and titles. "Alan Johnson, a consultant who designs
pay packages for Wall Street," And what do you do, sir? Oh, I design
pay packages. thud

On 2008-03-24, Ed Huntress wrote:

"Ignoramus14119" wrote in message
...
On 2008-03-24, Wes wrote:
"Ed Huntress" wrote:

And it's not bad. But the Economist stuff this week is better. If you
want
I'll see if I can e-mail you the article(s). It's 10 pages of print.


Could you send it to me also? Use my address please.


send it to me too... thanks

ichudov AT algebra DOT com

i


OK, there are 10 parts to the report, and I have to send the links and ASCII
copy for each one separately. I just sent the "leader," which is sort of an
editorial summary.

But there's a chance I'll either run up against a limit by The Economist, or
your spam filter may knock out most of the rest. So let me know if you don't
get 10 messages between today and tomorrow, and I'll try something else.


I got 2 so far... thanks a lot...

i

On 2008-03-24, F George McDuffee wrote:
It's like grade eight bolts. You buy based on the
certification/specifications. You expect counterfit grade 2
marked as grade 8 to come from a no-name Asian supplier, not
Unbrako.

Unbrako's bolts are socket head and they are not subject to grade 8,
though I see your point.

By the way, I have a boatload of Unbrako socket head cap
screws. Approximately 800 lbs of them.

i

On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote:

There is a lesson to be learned here....

TMT


March 20, 2008
The Affluent, Too, Couldn't Resist Adjustable Rates
By JANE BIRNBAUM
snip
===========
They told him, "cheer up, things could be worse."

He cheered up and sure enough....

==========
"Pay day" loans exacerbate housing crisis
Sun Mar 23, 2008 8:15pm EDT

By Nick Carey

CLEVELAND (Reuters) - As hundreds of thousands of American home
owners fall behind on their mortgage payments, more people are
turning to short-term loans with sky-high interest rates just to
get by.
snip
"We're hearing from around the country that many folks are buried
deep in pay day loan debts as well as struggling with their
mortgage payments," said Uriah King, a policy associate at the
Center for Responsible Lending (CRL).

A pay day loan is typically for a few hundred dollars, with a
term of two weeks, and an interest rate as high as 800 percent.
The average borrower ends up paying back $793 for a $325 loan,
according to the Center.

The Center also estimates pay day lenders issued more than $28
billion in loans in 2005, the latest available figures.
snip
The loans on offer have an Annual Percentage Rate (APR) of up to
391 percent -- excluding fees and penalties. All you need for a
loan like this is proof of regular income, even government
benefits will do.
snip
========
for complete article click on
http://www.reuters.com/article/busin...rpc=23&sp=true

Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote:

ATT TMT

Remember the extreme politesse and euphemisms the Japanese use
when making public statements. This is *NOT* a mild message or
observation, but a "get your head out..." directive..

============
US can learn from Japan’s crisis

By Michiyo Nakamoto in Tokyo

Published: March 23 2008 22:05 | Last updated: March 23 2008
22:05

The US should inject public funds into its financial system,
which is undergoing a worse crisis than that experienced by Japan
during its non-performing loan crisis, according to Japan’s
financial services minister.

“It is essential [for the US] to understand that given Japan’s
lesson, public fund injection [into the financial sector] is
unavoidable,” Yoshimi Watanabe told the Financial Times.
snip
Although “it is very difficult for Japan to convey such a message
to a foreign government...Japan could, for example, convey –
through the G7 [meeting of finance ministers] or central bank
governors’ meeting – Japan’s lesson and that we are prepared to
take co-ordinated action if necessary”. to help resolve the
situation, Mr Watanabe said.
snip
The remarks are the first public expression of concern by a
Japanese cabinet minister that the impact of the current
financial market turmoil could be much more serious than Japan’s
experience during its “lost decade” of abnormally slow economic
growth in the 1990s.

== Mr Watanabe warned unless swift and appropriate action was
taken by world leaders, the financial market turmoil could lead
to a severe dollar crisis.== {cold shot to the heart here}
snip
===========
for complete article click on
http://www.ft.com/cms/s/0/18972048-f...077b07658.html


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Sun, 23 Mar 2008 13:03:41 -0500, Ignoramus14119
wrote:

snip
Looks like there was plenty of investors who bought mortgage loans
containing those crap loans, who did not even bother to think about
their quality.
snip
============
That was what the rating companies got the big bucks for.

AAA was susposed to indicate minimal risk investment grade
securities. The CDS was susposed to insure the [re]payment of
interest and principal.

It's like grade eight bolts. You buy based on the
certification/specifications. You expect counterfit grade 2
marked as grade 8 to come from a no-name Asian supplier, not
Unbrako.




Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Mar 23, 4:30*pm, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message

...
On Mar 23, 1:46 pm, "Ed Huntress" wrote:





"Larry Jaques" wrote in message

.. .

On Sat, 22 Mar 2008 23:58:10 -0400, with neither quill nor qualm, Wes
quickly quoth:

I'm not tracking you. The banks with the bad loans should not be taking
the
keys, they should be working on ways to float the loans until better
times.
The borrowers should be paying as much as they can and we ride this
monster
trying to stay clear of the ditch.

I agree entirely. Putting that many people out on the street is
assinine, especially when there is so little market left for homes.
Bank repos are a major part of the problem.

It is like a renter that doesn't have the full payment for rent so he
doesn't pay anything instead of ponying up what he has. This whole thing
seems to have a trailer trash mentality on honoring obligations.

If I were the lender, I'd be keeping as much cash flow coming in as
possible. I'm curious as to legalities why they could/would not do
so. Wes? Ed? Anyone?

I have no idea what legalities would be involved. But the lenders don't
have
the option of taking lesser cash flow, because they're unable to make
their
margin calls or their loan payments now. They're stretched out too thin on
margins themselves. They need the money *now* to avoid bankrupcy.

--
Ed Huntress- Hide quoted text -

- Show quoted text -
Did lenders have the option of not lending money to those who could
not pay their loan obiligations?
Or did they commint fraud with their depositor's funds?

Which lenders? Private mortgage brokers don't have depositors. Most
commercial banks sold the mortgages to people who knew what they were
buying. After that, it gets kind of murky about who knew what, but most of
those instruments were understood to be collateralized with mortgages, and
that many of them were subprime. The people who bought *them* didn't have
depositors, either, in the sense that you probably mean the term.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

If no depositors will be harmed, then why are we the American taxpayer
bailing them out?

TMT

On Mar 23, 4:32*pm, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message

...
On Mar 23, 2:27 pm, "Ed Huntress" wrote:





"F. George McDuffee" wrote in
messagenews:ldhdu3di1epujg445blag40sbiljdae3dq@4ax .com...

On Sun, 23 Mar 2008 15:15:05 -0400, "Ed Huntress"
wrote:
snip
Starting with criminal charges for many in the finance industry.

TMT

I figured you were of that opinion. That's why we're lucky you aren't
making
the decisions. d8-)
snip
=========
Don't rush things. First the investigation, then the grand jury,
then the indictment, the trial, and only then we hang them.

I wasn't talking about TMT's remarks about criminal charges. I was talking
about his opinion that "the Dems can't clamp down hard enough," in terms
of
financial regulation. There is enough, and there is too much. You know
I've
been an advocate of more regulation for over a couple of decades now. But
I
think it's too easy to do too much, and to kill the goose.

--
Ed Huntress
Ed...the goose is dying under the Republicans now.
Either regulation with TEETH is put into place or you and I will soon
be living under a bridge somewhere in the future when the financial
system collapes.
That is if the bridge doesn't fall down due to no maintainance under
this Republican Adminstration...
TMT

Just so the teeth you're prescribing don't wind up bleeding the system out..
It wouldn't be hard, and you and I would pay big time for that, too.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

We are already paying big time.

That taxpayer guarantee that Bush promised did not come free.

Time to pass some damn tough laws ...and time to throw who we can in
jail for fraud.

TMT

On Mar 23, 5:57*pm, "Hawke" wrote:
"Wes" wrote in message

...





"Hawke" wrote:

It's clear that you don't understand why it's wrong to let all these
people
go into foreclosure. The only way you'll get it is if a bunch of them
foreclose in your neighborhood. After you see what that does to the value
of
your home, if you have one, then maybe you'll see why it's not such a
dandy
idea to let millions of home go into foreclosure at the same time all
over
the country. What it'll do to home values across the country won't be
pretty. Maybe, and I say maybe you'll get it when a house on your street
is
foreclosed on. But probably not.

I'm never planning on moving. *20+ years and staying. *Actually if my
property value went down, my property taxes would eventually have to drop.

People that get overjoyed about increases in the value of their primary
domicile are nuts. *It costs them money.

Wes

Do you plan on getting sick, losing your job, getting a divorce, or any
number of other things that will change your life? I didn't think so. You
probably think everything is just going to go along the way it always has.
It won't. I wouldn't plan on being in the same place fifteen years from now
if I were you. Something will probably happen to change your plans. But that
doesn't have anything to do with the damage too many foreclosures in one
year will do to the economy. It'll be better for everyone if this real
estate downturn can be softened instead of letting it come crashing down at
full speed.

Hawke- Hide quoted text -

- Show quoted text -

I agree that the recovery needs to be done carefully.

And those responsible for lending money irresponsibily should be
investigates and if found guilty of fraud should be prosecuted.

TMT

On Mar 23, 7:03*pm, "azotic" wrote:
"Hawke" wrote in message

...







"Ignoramus14119" wrote in message
m...
Looks like there was plenty of investors who bought mortgage loans
containing those crap loans, who did not even bother to think about
their quality.

i

Why would you worry about quality if you thought they would only continue
to
go up? Apparently, the idea that they could actually decline never
occurred
to any of them.

Hawke

Faith based economic perpetual motion, true believers bought into the hype
hook line and sinker.

The next economic implosion may very well be the credit card industry as
desperate people walk away from unsecured debt thru chapter 7 bankruptcy.

Best Regards
Tom.- Hide quoted text -

- Show quoted text -

It is not a "may"...it is a reality.

And the bomb is ticking...on all that unsecured credit.

TMT

"Larry Jaques" wrote in message
...
On Sun, 23 Mar 2008 21:12:54 -0600, with neither quill nor qualm, F.
George McDuffee quickly quoth:

On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote:

There is a lesson to be learned here....

TMT


March 20, 2008
The Affluent, Too, Couldn't Resist Adjustable Rates
By JANE BIRNBAUM
snip
===========
They told him, "cheer up, things could be worse."

He cheered up and sure enough....

==========
"Pay day" loans exacerbate housing crisis
Sun Mar 23, 2008 8:15pm EDT

A pay day loan is typically for a few hundred dollars, with a
term of two weeks, and an interest rate as high as 800 percent.
The average borrower ends up paying back $793 for a $325 loan,
according to the Center.

OhmyBuddha! Whatever happened to usury laws?


The financial sector didn't like them. Elect a George Bush and it gets what
it wants. Pretty simple, really. They send their lobbyists to see republican
congressmen, they pay them, they do what they want. Why else would they want
republicans elected?

Hawke

On Mar 23, 8:16*pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote:
On Sun, 23 Mar 2008 15:14:07 -0700 (PDT), Too_Many_Tools

wrote:
Did lenders have the option of not lending money to those who could
not pay their loan obiligations?

Or did they commint fraud with their depositor's funds?

TMT

=============
Major problem in perception here.

With the demise of the *LOCAL* bank or S&L and their replacement
with the national megabanks (possibly through a "stealth
roll-up"), the people originating the mortgage, the agent for the
buyer, the agent for the seller, the appraiser, etc. are *NOT*
the same entity, and are likely part of a nationwide chain such
that many to most of the people involved are not knowledgable of
local trends and conditions. *

Everything was computer based off the FICA score. *The old
computer adage "garbage in -- garbage out" was totally ignored,
and quantity was stressed over quality and service. *Note that
the bank, has little or no skin in the game at this point, AND
DID NOT MAKE THE LOAN, except for possibly fronting the mortgage
originator, and this is a limited exposure, with considerable
collateral, i.e. the house.

The new "mortgage" was bundled or aggregator with thousands of
other mortgages by yet another "family", into a novel financial
instrument called a CDO or MBO [collateralized debt obligation or
mortgage backed obligation]. *In general, these bundled mortgages
are now actually owned by a trustee corporation domiciled in
Aruba or another tax haven, and are beyond the reach of US
law/regulation, although the actual aggregation was done by a
major US financial firm. [Ain't globalization wonderful!] *The
bank still has minimal skin in the game at this point, the main
exposure being a little front money for the MBO aggregator.

The synthetic structured CDO was then "rated" by one of the major
rating agencies such as Ambec, Moody's etc, as AAA investment
grade (apparently after a long lunch with several pitchers of
martinis). * [Note that these agencies, if you will scrape enough
dog poop together and spray it with gold paint, (and pay the
fees) will certify the new gold ingot.] *In many cases, the AAA
investment rating was "insured" for 5 (or more years) years by
the purchase of a CDS [credit default swap] that
"insured/guaranteed" the [re]payment of interest and principal.
The major problem is the CDSs are totally unregulated and
unregistered, and the majority of guarantors are alien
corporations in foreign jurisdictions, with no
veriafiable/attachable assets. *[Still little to no bank skin in
the game, although bank profits (but not depositor returns) are
mounting because of the service fees.]

At this point things get strange. *Everyone knew that their CDOs
were as phony as a 3 dollar bill, but assumed that the other guys
were "good as gold" *(after all they had that CDS "guarantee").
The AAA investment grade CDOs/MBOs were then sold by the billions
to hedge funds, pension funds, etc. *In order to boost the
return, the basic capital was leveraged by borrowing to the hilt,
for example Carlyle Credit Corporation borrowed/leveraged from
the banks and invested 32X their capital into AAA rated
"securities." *At this point the banks had huge amounts of their
depositors [but possibly not their own] skin *OPERATIONALLY* in
the game, but not on paper. *In order to allow this kind of
leverage (and keep the grift going), it was necessary on the part
of the commercial banks to evade the 10% loan reserve / vault
cash requirements, which they did using the Enron method of SPEs[
special purpose entities], SIVs [special investment vehicles],
conduits, and several other scams. *Unfortunatly, there is no US
regulation on "leverage" in other than commercial banks. *

On a day in September 2007, some twit walked into a bank and
wanted to cash a twenty dollar check on his account, but the bank
didn't have that much cash on hand, and the dominos started to
topple. *As soon as the PSPEs/SIVs etc. fell, they went back on
the bank's books, and it became apparent how badly the depositors
were exposed.

Note that in many cases, the depositors provided the money that
was "amplified," which they then borrowed back to buy that new
Hummer with a home equity loan... [O'Henry would have loved it]

Were any laws and regulations broken in this convoluted and
arcane chain? *

Apparently not, as each link in the chain was carefully sized on
a "need to know" basis, to limit individual/organizational
accountability, and maintain "plausible deniability."

However note that for exactly this reason, both federal and state
conspiracy statutes prohibit these types of operations under both
criminal and civil law as well as the federal RICO act. *That
said, it is very unlikely that any of the major players will ever
go to trial, *do time or pay any fines [they got copies of the
paperwork showing who got a "piece of the action" ], but a
"Martha Stewart" and "Sam the Sweeper," or two will go under the
wheels of the bus.

Are we rich yet?

Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

A question....

I keep hearing how "nobody" knows who owns these mortgages.

Why?

But at the same time, they do know gets the monthly mortgage payment.

In my world if you know who is owed, you know who owns the note.

The saying "follow the money" still holds true....

TMT

On Mar 23, 6:26*pm, "Ed Huntress" wrote:
"Larry Jaques" wrote in message

...





On Sun, 23 Mar 2008 17:17:01 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth:

"Larry Jaques" wrote in message
. ..

I had to google "margin call". I think I learned about it I way back
in Civics class in high school and haven't needed it since.

That's good. People who worry about margin calls are people who live with
a
lot of life-shortening stress.

I figure I'm about as well off since I've never had excess cash to
invest poorly. *g

Drat, NYT threw away my identity. *I re-registered and will read that
article now. Wow, 6 pages? *It's a biggie!

And it's not bad. But the Economist stuff this week is better. If you want
I'll see if I can e-mail you the article(s). It's 10 pages of print.

I regret having turned down the free prescription for The Economist a
decade ago. *If the article is online, point me to it. Otherwise,
email is great. You have my real addy. *(Say 'HI' to SWMBO for me.)

OK, I just e-mailed it from _The Economist_ (and copied myself, to see what
you're getting). They give you an ASCII file of the text and a link to the
article with graphics. With The Economist, you always want the graphics.

The trouble is, the 10-page "briefing" consists of 10 separate articles. The
one I sent you is two pages long. I can send you the other nine, I think.
Let me know if you like the first one and I'll give it a try.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

Are these ten articles by the same geniuses who dreamt up this
nightmare?

TMT

On Mar 23, 9:12*pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote:
On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools

wrote:
There is a lesson to be learned here....

TMT

March 20, 2008
The Affluent, Too, Couldn't Resist Adjustable Rates
By JANE BIRNBAUM

snip
===========
They told him, "cheer up, things could be worse."

He cheered up and sure enough....

==========
"Pay day" loans exacerbate housing crisis
Sun Mar 23, 2008 8:15pm EDT

By Nick Carey

CLEVELAND (Reuters) - As hundreds of thousands of American home
owners fall behind on their mortgage payments, more people are
turning to short-term loans with sky-high interest rates just to
get by.
snip
"We're hearing from around the country that many folks are buried
deep in pay day loan debts as well as struggling with their
mortgage payments," said Uriah King, a policy associate at the
Center for Responsible Lending (CRL).

A pay day loan is typically for a few hundred dollars, with a
term of two weeks, and an interest rate as high as 800 percent.
The average borrower ends up paying back $793 for a $325 loan,
according to the Center.

The Center also estimates pay day lenders issued more than $28
billion in loans in 2005, the latest available figures.
snip
The loans on offer have an Annual Percentage Rate (APR) of up to
391 percent -- excluding fees and penalties. All you need for a
loan like this is proof of regular income, even government
benefits will do.
snip
========
for complete article click onhttp://www.reuters.com/article/businessNews/idUSN1045663120080324?fee...

Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

By the same people who up to their chins in credit card debt....just
waiting to default.

TMT

On Mar 23, 9:26 pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote:
On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools

wrote:

ATT TMT

Remember the extreme politesse and euphemisms the Japanese use
when making public statements. This is *NOT* a mild message or
observation, but a "get your head out..." directive..

============
US can learn from Japan's crisis

By Michiyo Nakamoto in Tokyo

Published: March 23 2008 22:05 | Last updated: March 23 2008
22:05

The US should inject public funds into its financial system,
which is undergoing a worse crisis than that experienced by Japan
during its non-performing loan crisis, according to Japan's
financial services minister.

"It is essential [for the US] to understand that given Japan's
lesson, public fund injection [into the financial sector] is
unavoidable," Yoshimi Watanabe told the Financial Times.
snip
Although "it is very difficult for Japan to convey such a message
to a foreign government...Japan could, for example, convey -
through the G7 [meeting of finance ministers] or central bank
governors' meeting - Japan's lesson and that we are prepared to
take co-ordinated action if necessary". to help resolve the
situation, Mr Watanabe said.
snip
The remarks are the first public expression of concern by a
Japanese cabinet minister that the impact of the current
financial market turmoil could be much more serious than Japan's
experience during its "lost decade" of abnormally slow economic
growth in the 1990s.

== Mr Watanabe warned unless swift and appropriate action was
taken by world leaders, the financial market turmoil could lead
to a severe dollar crisis.== {cold shot to the heart here}
snip
===========
for complete article click onhttp://www.ft.com/cms/s/0/18972048-f90b-11dc-bcf3-000077b07658.html

Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

Japan can do what every other creditor will do...it will demand
payment on the money they are owed by the United States.

Are we ready to pay up?

TMT

"Larry Jaques" wrote in message
...
On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth:

snip

In the interim, what do you think about Warren Buffett's
Chairman's Letter to Berkshire? Interesting, oui?

I hadn't read it, and I've still read only a couple of pages, but Buffett is
always refreshing to read. I hope he keeps it up for a long time.

I really like the
Stumpf quote as well: "It is interesting that the industry has
invented new ways to lose money when the old ways seemed to work just
fine." from http://www.berkshirehathaway.com/2007ar/2007ar.pdf

LOL! Yes, that was a good one.


OK, I'm reading the letter now. Do you feel that Greenspan was wrong
all this time? Now that I see (portions of?) what happened, I'm
surprised that we never heard cautions from him. Or was that just the
pick-'n-choose media's output? Does not compute.

I'm getting the impression that a lot of economists and finance experts
thought that Greenspan let a lot of things slip by him that he shouldn't
have. But I'm in no position to evaluate it. We know in hindsight that some
of his decisions worked out very badly, but how good they were at the time
he made them, I have no idea.

Hindsight is easy. Economic theories always look better if they're based on
things that happened in the past -- until the future catches up with them.
It's like what you've read about climate models.


Yes, that one being so juicy, please email the other 9 post haste.
Danke.

I sent off four so far, but I think I repeated one of them to you. Sorry.
I'll get the rest out shortly.

--
Ed Huntress

On Mar 23, 9:57*pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote:
On Sun, 23 Mar 2008 13:03:41 -0500, Ignoramus14119

wrote:

snipLooks like there was plenty of investors who bought mortgage loans
containing those crap loans, who did not even bother to think about
their quality.

snip
============
That was what the rating companies got the big bucks for. *

AAA was susposed to indicate minimal risk investment grade
securities. *The CDS was susposed to insure the [re]payment of
interest and principal. *

It's like grade eight bolts. *You buy based on the
certification/specifications. *You expect counterfit grade 2
marked as grade 8 to come from a no-name Asian supplier, not
Unbrako.

Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

And that is why the management at the rating companies are not
sleeping at night.

There has been fraud committed.

Time to build more jails for bankers and their friends.

TMT

On Mar 23, 6:09*pm, "Hawke" wrote:
"Ed Huntress" wrote:

Sure, on a car. Not on a house. You could have asked any broker or
banker,
a
year ago, what the chances were you'd get in trouble that way. They'd
laugh
you out of the place.

First, they would tell you what I said above. They they'd tell you
that
once
you'd made two or three years of payments, you'd qualify for a
fixed-rate
mortgage before the balloon came due on (what they might call) your
"bridge"
loan. Then you could look at all the statistics and see that they're
dead
right. Only they weren't, for the first time ever.

Okay, try this. You buy a new house, the overall market does not go
down
but when you go to refinance the banks appraiser notices a crack house
next
door and doesn't think your house's market value is high enough to
secure
the loan. By your logic, the bank should forgive principle since the
house
is not worth far less than when it was originally purchased.

First off, I haven't said what banks should do, or what the government
should do. It's beyond my knowledge and I'm studying the subject right
now
.
I do (or did) know how mortgages work, though, and the basic situation
is
not that hard to figure out.

Secondly, every day you walk out of your door you're taking a chance
that
something really bad won't happen. That's true about your investments,
your
chances of getting hit by a truck, and so on. House buyers can't buy
without
some risk of some kind, and some go under and lose their houses all the
time.

But that doesn't cause the credit markets to dry up, nor does it cause
average house prices to drop throughout the country (curiously, not in
my
town; prices took a one-month hiatus but now they're going up, but
that's
another story). Even if a few people get it all wrong and come up
losers,
the market usually isn't much affected by that. This time, we have a
perfect
storm: just as those people are getting in a bind, new mortgages are
drying
up, and prices have dropped enough that they're upside down on their
mortgages.

Nobody anticipated that. Not the experts, not the banks, and not the
government. It's a crisis because there's no way out -- except that some
of
these crap mortgages were written in such a way that a home owner can
just
walk out of an upside-down situation and turn the keys over to the bank,
with no further repurcussions. That amazes me, but that's what the
papers
say. The brokers are calling it "key mail." You open the bank's mail,
and
there are house keys in the envelopes. d8-)

The bank loans money, the borrower agrees to pay based on the terms of
the
contract. Doesn't matter what the market is doing, you borrowed, you
owe.

Sure. Unless you can't, which is something that people and businesses
sometimes face. It's what happens afterwards that's causing all the
trouble.
In a normal market, even during a downturn, most of those people would
have
been able to get out by selling their houses. Now there aren't enough
buyers
because the buyers can't get mortgages; prices are dropping, and the
buyers
who *can* get a mortgage are waiting it out. I would, too.

This wouldn't have happened in the first place if the mortgage lenders
hadn't fallen all over each other to give mortgages with practically no
money down. That's bad banking. It's NOT necessarily bad borrowing.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

But...but...but...why do the banks get bailed out but not the
borrowers?

TMT

If I'm reading Bush's proposals correctly, they're both going to get
bailed
out.

--
Ed Huntress

It's kind of what do you mean by bailed out. Bear Stearns stock was selling
at 160 a share not long ago. Book value the week before the take over was 80
dollars a share. Price per share that J.P. Morgan is paying for the stock;
two dollars a share. If you are a stock holder in Bear Stearns I think you
would not see this as a "bail out" of any kind. One major stockholder just
lost a billion in the deal. He's suing and doesn't want the deal to go
through. It was a major gift to J.P. Morgan, but a bail out to Bear Stearns,
I don't think so.

Hawke- Hide quoted text -

- Show quoted text -

If it is not a bail out then why is the American taxpayer being made
responsible for the loss by Bush?

If you really think this is the last bailout to occur you have little
grasp of what is coming.

TMT

On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote:

TMT
===========

The "enablers" of the CDO grift start to get sued.

===========
Sentinel Management's Trustee Sues Auditor
By MARIE BEAUDETTE
March 22, 2008; Page A14

Sentinel Management Group Inc.'s court-appointed trustee has sued
the collapsed money-management firm's auditor, accusing it of
ignoring "blatant" violations of federal law allegedly committed
by Sentinel's former executives.
snip
n a lawsuit filed with the U.S. Bankruptcy Court in Chicago, the
trustee said accounting firm McGladrey & Pullen LLP and G. Victor
Johnson, a partner at the firm, "substantially contributed to and
caused hundreds of millions of dollars of losses" that caused
Sentinel's August 2007 collapse. The lawsuit seeks $550 million.
snip
Sentinel collapsed in August amid the global credit crunch fueled
by the crisis in the subprime-mortgage industry. It is facing
lawsuits from its clients and the Securities and Exchange
Commission. The firm managed about $1.4 billion for clients,
including commodities brokers, hedge funds, financial
institutions, pension funds and individuals.

{I don't know how much "leverage" they were using. 30X seems to
have been common, this would be 42 billion in "bets." }

Mr. Grede has acted aggressively to recover money Sentinel's
customers lost when the firm failed last summer. He has sued
three of its former executives, claiming that they lied to
customers about the nature of investments made on their behalf
and that they used customer securities as collateral for a loan
from Bank of New York. ==He also sued the bank itself, claiming
it played a "pivotal role" in Sentinel's collapse.==
=============
for complete article [registration required] click on
http://online.wsj.com/article/SB1206...ome_law_middle


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Mar 23, 10:16*pm, "Hawke" wrote:
"Larry Jaques" wrote in message

...





On Sun, 23 Mar 2008 21:12:54 -0600, with neither quill nor qualm, F.
George McDuffee quickly quoth:

On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote:

There is a lesson to be learned here....

TMT

March 20, 2008
The Affluent, Too, Couldn't Resist Adjustable Rates
By JANE BIRNBAUM
snip
===========
They told him, "cheer up, things could be worse."

He cheered up and sure enough....

==========
"Pay day" loans exacerbate housing crisis
Sun Mar 23, 2008 8:15pm EDT

A pay day loan is typically for a few hundred dollars, with a
term of two weeks, and an interest rate as high as 800 percent.
The average borrower ends up paying back $793 for a $325 loan,
according to the Center.

OhmyBuddha! *Whatever happened to usury laws?

The financial sector didn't like them. Elect a George Bush and it gets what
it wants. Pretty simple, really. They send their lobbyists to see republican
congressmen, they pay them, they do what they want. Why else would they want
republicans elected?

Hawke- Hide quoted text -

- Show quoted text -

Correct...and that is why I say this Administration is responsible.

It happened on their watch.

Time for them to pay the penalty.

TMT

"Ignoramus14119" wrote in message
...
Ed, thanks, I printed them, they look very well researched.

That's why they charge $120/year for a subscription -- and they get it. d8-)

I sent the rest. Let me know if you don't get 10.

--
Ed Huntress


i

On 2008-03-24, Larry Jaques novalidaddress@di wrote:
On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth:


OK, I just e-mailed it from _The Economist_ (and copied myself, to see
what
you're getting). They give you an ASCII file of the text and a link to
the
article with graphics. With The Economist, you always want the graphics.

Reading on, I note the Wall Street, like our gov't hierarchy, has
unbelievable jobs and titles. "Alan Johnson, a consultant who designs
pay packages for Wall Street," And what do you do, sir? Oh, I design
pay packages. thud

"Too_Many_Tools" wrote in message
...
On Mar 23, 4:30 pm, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message

...
On Mar 23, 1:46 pm, "Ed Huntress" wrote:





"Larry Jaques" wrote in message

.. .

On Sat, 22 Mar 2008 23:58:10 -0400, with neither quill nor qualm, Wes
quickly quoth:

I'm not tracking you. The banks with the bad loans should not be
taking
the
keys, they should be working on ways to float the loans until better
times.
The borrowers should be paying as much as they can and we ride this
monster
trying to stay clear of the ditch.

I agree entirely. Putting that many people out on the street is
assinine, especially when there is so little market left for homes.
Bank repos are a major part of the problem.

It is like a renter that doesn't have the full payment for rent so he
doesn't pay anything instead of ponying up what he has. This whole
thing
seems to have a trailer trash mentality on honoring obligations.

If I were the lender, I'd be keeping as much cash flow coming in as
possible. I'm curious as to legalities why they could/would not do
so. Wes? Ed? Anyone?

I have no idea what legalities would be involved. But the lenders don't
have
the option of taking lesser cash flow, because they're unable to make
their
margin calls or their loan payments now. They're stretched out too thin
on
margins themselves. They need the money *now* to avoid bankrupcy.

--
Ed Huntress- Hide quoted text -

- Show quoted text -
Did lenders have the option of not lending money to those who could
not pay their loan obiligations?
Or did they commint fraud with their depositor's funds?

Which lenders? Private mortgage brokers don't have depositors. Most
commercial banks sold the mortgages to people who knew what they were
buying. After that, it gets kind of murky about who knew what, but most of
those instruments were understood to be collateralized with mortgages, and
that many of them were subprime. The people who bought *them* didn't have
depositors, either, in the sense that you probably mean the term.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

If no depositors will be harmed, then why are we the American taxpayer
bailing them out?

TMT

So the economy doesn't tank. From all accounts, we got a very good deal. The
best part is that we knocked $1.2 billion of the chairman's stock value down
to a measly $11 million. Apparently that's half of what he paid for a NYC
apartment last week. (That's one apartment, not a building.) He and the
other top guys at Bear Stearns are apoplectic. It warms my heart.

As I read the details of the deal, it appears we aren't likely to lose our
$30 billion loan. As of late today, JPMorgan is offering to raise its offer
to $10/share.

--
Ed Huntress

"Larry Jaques" wrote in message
...
On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth:

snip


OK, I'm reading the letter now. Do you feel that Greenspan was wrong
all this time? Now that I see (portions of?) what happened, I'm
surprised that we never heard cautions from him. Or was that just the
pick-'n-choose media's output? Does not compute.

Well, five years ago he said "derivatives are financial weapons of mass
destruction, carrying dangers that, while now latent, are potentially
lethal." He's always been wary of this stuff. But he's also bought a bunch
of credit derivatives, so he's hard to read on that one.

--
Ed Huntress

"Only when the tide goes out do you discover who's been swimming naked." --
Warren Buffett

"Too_Many_Tools" wrote in message
...
On Mar 23, 10:16 pm, "Hawke" wrote:
"Larry Jaques" wrote in message

...





On Sun, 23 Mar 2008 21:12:54 -0600, with neither quill nor qualm, F.
George McDuffee quickly quoth:

On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote:

There is a lesson to be learned here....

TMT

March 20, 2008
The Affluent, Too, Couldn't Resist Adjustable Rates
By JANE BIRNBAUM
snip
===========
They told him, "cheer up, things could be worse."

He cheered up and sure enough....

==========
"Pay day" loans exacerbate housing crisis
Sun Mar 23, 2008 8:15pm EDT

A pay day loan is typically for a few hundred dollars, with a
term of two weeks, and an interest rate as high as 800 percent.
The average borrower ends up paying back $793 for a $325 loan,
according to the Center.

OhmyBuddha! Whatever happened to usury laws?

The financial sector didn't like them. Elect a George Bush and it gets
what
it wants. Pretty simple, really. They send their lobbyists to see
republican
congressmen, they pay them, they do what they want. Why else would they
want
republicans elected?

Hawke- Hide quoted text -

- Show quoted text -

Correct...and that is why I say this Administration is responsible.

It happened on their watch.

Time for them to pay the penalty.

TMT

Uh...you're a little late. It happened in 1980.

'You been asleep all this time? d8-)

--
Ed Huntress

"Too_Many_Tools" wrote in message
...
On Mar 23, 6:26 pm, "Ed Huntress" wrote:
"Larry Jaques" wrote in message

...





On Sun, 23 Mar 2008 17:17:01 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth:

"Larry Jaques" wrote in message
. ..

I had to google "margin call". I think I learned about it I way back
in Civics class in high school and haven't needed it since.

That's good. People who worry about margin calls are people who live
with
a
lot of life-shortening stress.

I figure I'm about as well off since I've never had excess cash to
invest poorly. g

Drat, NYT threw away my identity. I re-registered and will read that
article now. Wow, 6 pages? It's a biggie!

And it's not bad. But the Economist stuff this week is better. If you
want
I'll see if I can e-mail you the article(s). It's 10 pages of print.

I regret having turned down the free prescription for The Economist a
decade ago. If the article is online, point me to it. Otherwise,
email is great. You have my real addy. (Say 'HI' to SWMBO for me.)

OK, I just e-mailed it from _The Economist_ (and copied myself, to see
what
you're getting). They give you an ASCII file of the text and a link to the
article with graphics. With The Economist, you always want the graphics.

The trouble is, the 10-page "briefing" consists of 10 separate articles.
The
one I sent you is two pages long. I can send you the other nine, I think.
Let me know if you like the first one and I'll give it a try.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

Are these ten articles by the same geniuses who dreamt up this
nightmare?

TMT

Nope.

--
Ed Huntress

"F. George McDuffee" wrote in message
news
On Mon, 24 Mar 2008 01:54:48 -0400, "Ed Huntress"
wrote:

I sent the rest. Let me know if you don't get 10.

--
Ed Huntress
==========
can you put me on the distro?

Thanks

AAackk! Now I have to go back and do it all again. g

OK, George, for you, I'll do it. Anyone else is on their own. Is that your
real e-mail address? If so, I'll have the articles e-mailed early today.

--
Ed Huntress

On Sun, 23 Mar 2008 21:18:40 -0700 (PDT), Too_Many_Tools
wrote:

A question....

I keep hearing how "nobody" knows who owns these mortgages.

Why?

But at the same time, they do know gets the monthly mortgage payment.

In my world if you know who is owed, you know who owns the note.

The saying "follow the money" still holds true....

TMT
============
Finance is the art of passing money from hand to hand until it
finally disappears.
Robert W. Sarnoff http://www.infoplease.com/ipea/A0763145.html

[Which ain't easy when you are talking about 3 to 5 trillion
dollars, (and counting).]

To start see
http://en.wikipedia.org/wiki/Collate...ebt_obligation

There are layers on layers on layers of "ownership" of these
mortgages, which were first commingled/aggregated and then
stratified. Any particular sub-prim, alt-a, NINA/(liar) [no
income, no asset], etc. mortgage, along with thousands of others
are generally owned "in trust" by a foreign domiciled alien
corporation beyond the reach of US law, regulation, subpoena,
etc.

The ownership of the trust is split into several "tranches" or
slices with different rates of return and risk. In theory, the
risk of loss was to be born first by the highest return tranches,
then next highest, etc. with the lowest risk slice to never have
a default as these would all be absorbed by the lower priority
tranches, hence the AAA rating, but only for the highest tranche,
a point that was frequently overlooked or omitted when the CDOs
were sold.

Things get much more complicated at this point, as the shares in
the "tranches" can be owned by individuals, corporations, hedge
funds, private capital pools, pension funds, and nominally
"independent" SIVs [special investment vehicles], SPEs [special
purpose entities, conduits, etc. that were specifically designed
to allow a commercial bank to buy and hold an interest in a
"tranche," without having it appear on the banks books as a loan
to avoid/evade the US loan reserve / vault cash requirements. In
many cases the banks in turn had loaned money to the hedge funds,
private capital pools directly, or had loaned money to
individuals to "invest" in the hedge funds, private capital
pools, etc. that bought shares of the tranches at several levels
of risk in multiple CDOs.

In many cases, these transactions were specifically designed to
be impossible to trace to facilitate tax evasion and concealment
of assets by "high net worth" clients. (Although if I was a
banker, and one of my clients was named Gambino, Chaney, Bush or
Corleone, I would be sweating bullets...)

If things were not complicated enough to this point, many of
these "shares" were pledged as collateral, generally through a
"repurchase agreement" to raise money for additional "leverage."
When the "great unwinding" started back in September, the value
of these "securities" fell below the amount lent, so the banks
[commercial and merchant] and other bank-like institutions made a
margin call for addition collateral or cash, which was not
available. These pledged "securities" were then seized (and
sold, depressing the market) as the loans were in default,
starting the current "death spiral."

Thus it is difficult, possibly impossible, to determine the
actual owner.

FWIW -- this is not new except for scale. When IOS [Investors
Overseas Service] collapsed in 1970 the same thing occurred.
Rumors are that the CIA contract employee [spook] pension funds
were involved and Robert Vesco made off with a 2.5 billion boodle
bag of black money. For details of this pioneering effort in
creative finance click on
http://en.wikipedia.org/wiki/Investors_Overseas_Service and
http://www.rinfret.com/vesco.html

Note that IOS gave it big time in the shorts to the small
European [mainly German] investors, but they still came back for
more. First for the Argentinean dollar denominated bonds sold by
the American banks, and then for the CDOs hawked by the American
banks, proving again that humans are the only animals you can
skin more than once.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Sun, 23 Mar 2008 21:20:32 -0700 (PDT), Too_Many_Tools
wrote:
snip
By the same people who up to their chins in credit card debt....just
waiting to default.

TMT
===========
That's the next tsunami of CDOs to hit, although I don't know if
it will be the credit card debt backed or the auto loan backed
collateralized "securities."

Run for the high ground while you can and hope the wave dosen't
reach that high....


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Mon, 24 Mar 2008 01:54:48 -0400, "Ed Huntress"
wrote:

I sent the rest. Let me know if you don't get 10.

--
Ed Huntress
==========
can you put me on the distro?

Thanks

Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

On Sun, 23 Mar 2008 21:26:42 -0700 (PDT), Too_Many_Tools
wrote:


The financial sector didn't like them. Elect a George Bush and it gets what
it wants. Pretty simple, really. They send their lobbyists to see republican
congressmen, they pay them, they do what they want. Why else would they want
republicans elected?

Hawke- Hide quoted text -

- Show quoted text -

Correct...and that is why I say this Administration is responsible.

It happened on their watch.

Time for them to pay the penalty.

TMT

If the balloon had burst on the Demonrats watch..you would be shouting
from the rooftops "everything is ok"

Your partisanship is awe inspiring.

And yes..it damned well could have happened on the Demonrats watch.

Gunner

On Sun, 23 Mar 2008 21:24:37 -0700 (PDT), Too_Many_Tools
wrote:


There has been fraud committed.

Time to build more jails for bankers and their friends.

TMT

Even the Democrat ones?

Gunner