Post by unlawflcombatnt on Aug 8, 2007 3:58:42 GMT -6
Below are excerpts from an article by Trading Markets Research describing the deceptive and fraudulent practices of the Financial industry and the government that have created the conditions for the coming Economic Armageddon. The title of the article is:
Can Fraudulent Loans Destroy this Bull Market?
8/7/07
By Trading Markets Research
"The complete lack of foresight by the regulators and the overwhelming greediness by the players put the markets in the position they are in. I am now starting to believe that the credit bubble may go down in history as the worst bubble we have ever seen...credit on steroids created by Easy Al....It was about 2 years ago when I stated on TV that what we were seeing was a real estate and credit bubble....In my past reports, I have outlined a few things that led to the problems we are all seeing today. Some of the following is repetitive...but necessary.
What you first need to know is that we could not have a credit bubble without Uncle Al and the Fed....The only reason the housing market got way out of hand on the upside is because Easy Al lowered rates to effectively 0%. Speculation comes from easy money. The housing market got way out of hand because Easy Al said that it is ok to lend $250,000 to a person with no means by handing out interest only, no money down mortgages....This enabled more houses to be built and more houses to be bought. The problem was always going to be that when all was said and done , it was fraudulent demand. Someone who cannot buy a house, should not have been able to buy a house. Why were only just a few people calling for a problem? Simple...markets were still going up. Problems take time to work through the system.
Another part of the equation was the buyout bubble. That is now over. How were the slimy private equity dudes able to buy hundreds of billions of dollars worth of companies when they did not have hundreds of billions of dollars to buy these companies? How were they even able to make the announcement of a buyout when the funding for the buyout was still not at hand? Yup...they were able because of the artificially low rates which enabled them to float a ton of debt. Once again...the Fed. But as usual, when greedy people know they are at the end of a cycle, they push the pedal down and buy as many companies as possible before the well runs dry. Unfortunately, the greedy became greedier at the most inopportune time. These imbeciles...yes, I called them imbeciles, are now sitting with over $300 billion of unfunded buyouts...and I have news for these Albert Einsteins, they ain't going to get the money...because no one wants to take on the risk and get a low rate of return while the slimebags take hundreds of millions of dollars in fees. The game is up. Why were only just a few people calling for a problem? Simple...markets were still going up. Problems take time to work through the system.
Take the trillions in mortgages...package them...sell them...margin them up anywhere between 50-90% and you have a recipe for disaster...and that is what you are seeing now. The well runneth dry...and to be clear, when you see a Bear Stearns in trouble, you have to know there is a lot more trouble to come...and let me be doubly clear...no one knows how much of this gunk is out there. Funds that were 75% margined only have to lose 25% to be out of buckos...this is not hard to understand. I have sat in amazement that some are mad that Bear Stearns actually told the truth on Friday. One latecomer pundit, who I believe needs a rubber room, was yelling and screaming at them. Why were only just a few people calling for a problem? Simple...Greed! Greed comes in all forms and usually harnesses everyone down the food chain.
So now what? I cannot even fathom where this takes us...but I do have a few thoughts:
#1:
Let anyone who should go bankrupt...go bankrupt. I believe in free market capitalism...both on the good side and on the bad side. I do not believe in holding up houses of cards and I do believe that people who took ridiculous risks, should pay the penalty...big or small. You want to take on 90% margin, I say have a nice life.
#2:
For the past 2-3 weeks, several Fedheads have been out claiming that the problem is "contained." Contained? Contained by what? As I have said in the past, these Fedheads are either dumb or lying. In either case, it scares the wits out of me. If the Fed is reading this, I would not even wait for your Fed meeting on Tuesday. I would lower rates on Monday. Lowering rates would not save the day and will not correct the problem. That will take time. In fact, I believe this problem is not fixable in the short run. .But movement by the Fed would send a real message to the markets that you are not a bunch of stumbling, mumbling, bumbling ,fumbling, comatose, blithering idiots and that you get it. You finally get it that there are real consequences of markets that are run amok because the inmates were running the asylum. You get it that both you as well as the other overseers and regulators stood by watching an orgy of credit and debt and leverage infiltrate a system by the greediest of greedy people. You finally get it that you should be in front of the problems and not enabling the problems that are out there and that just because the stock market is going up, everything may not be ok....because as I have told you, for some idiotic unknown reason, it is only a problem when stock markets say so. Why were only just a few people calling for a problem? Simple...markets were still going up. Problems take time to work through the system.
#3
Make every hedge fund mark to the market everything immediately. When I started in the investment business, I sold penny stocks. What we are seeing now pales in comparison to the manipulation in the penny stock market. The penny stock business was a very small market. The fraudulent loan business and the fraudulent pricing of these loans is massive. I do not think it would be a good thing to wake up every day to another fund marking their products correctly...and going out of business. Take the medicine now so we can get a semblance of order. I ask again...WHERE WERE THE REGULATORS? How were these fraudulent markets able to live for so long? Oh yeah! Simple...markets were still going up. Problems take time to work through the system.
#4
Shut Hank Paulson up. Hank Paulson and the company he used to run, were part of this problem. Hank Paulson, in my mind, is and has been part of the problem, not the solution. You just cannot come out every other day and say everything is fine...when it is not fine. You cannot come out every other day and state housing is stabilizing and bottoming...when it is not. Credibility is key when you are the Treasury Secretary and frankly, I would rather listen to Michael Vick tell me how to treat dogs then listen to Hank Paulson tell me the state of the markets. How is a so-called genius not able to see any of this coming? Why were only just a few people calling for a problem? Simple...markets were still going up. Problems take time to work through the system...."
The full article can be found at
Can Fraudulent Loans Destroy this Bull Market?
Can Fraudulent Loans Destroy this Bull Market?
8/7/07
By Trading Markets Research
"The complete lack of foresight by the regulators and the overwhelming greediness by the players put the markets in the position they are in. I am now starting to believe that the credit bubble may go down in history as the worst bubble we have ever seen...credit on steroids created by Easy Al....It was about 2 years ago when I stated on TV that what we were seeing was a real estate and credit bubble....In my past reports, I have outlined a few things that led to the problems we are all seeing today. Some of the following is repetitive...but necessary.
What you first need to know is that we could not have a credit bubble without Uncle Al and the Fed....The only reason the housing market got way out of hand on the upside is because Easy Al lowered rates to effectively 0%. Speculation comes from easy money. The housing market got way out of hand because Easy Al said that it is ok to lend $250,000 to a person with no means by handing out interest only, no money down mortgages....This enabled more houses to be built and more houses to be bought. The problem was always going to be that when all was said and done , it was fraudulent demand. Someone who cannot buy a house, should not have been able to buy a house. Why were only just a few people calling for a problem? Simple...markets were still going up. Problems take time to work through the system.
Another part of the equation was the buyout bubble. That is now over. How were the slimy private equity dudes able to buy hundreds of billions of dollars worth of companies when they did not have hundreds of billions of dollars to buy these companies? How were they even able to make the announcement of a buyout when the funding for the buyout was still not at hand? Yup...they were able because of the artificially low rates which enabled them to float a ton of debt. Once again...the Fed. But as usual, when greedy people know they are at the end of a cycle, they push the pedal down and buy as many companies as possible before the well runs dry. Unfortunately, the greedy became greedier at the most inopportune time. These imbeciles...yes, I called them imbeciles, are now sitting with over $300 billion of unfunded buyouts...and I have news for these Albert Einsteins, they ain't going to get the money...because no one wants to take on the risk and get a low rate of return while the slimebags take hundreds of millions of dollars in fees. The game is up. Why were only just a few people calling for a problem? Simple...markets were still going up. Problems take time to work through the system.
Take the trillions in mortgages...package them...sell them...margin them up anywhere between 50-90% and you have a recipe for disaster...and that is what you are seeing now. The well runneth dry...and to be clear, when you see a Bear Stearns in trouble, you have to know there is a lot more trouble to come...and let me be doubly clear...no one knows how much of this gunk is out there. Funds that were 75% margined only have to lose 25% to be out of buckos...this is not hard to understand. I have sat in amazement that some are mad that Bear Stearns actually told the truth on Friday. One latecomer pundit, who I believe needs a rubber room, was yelling and screaming at them. Why were only just a few people calling for a problem? Simple...Greed! Greed comes in all forms and usually harnesses everyone down the food chain.
So now what? I cannot even fathom where this takes us...but I do have a few thoughts:
#1:
Let anyone who should go bankrupt...go bankrupt. I believe in free market capitalism...both on the good side and on the bad side. I do not believe in holding up houses of cards and I do believe that people who took ridiculous risks, should pay the penalty...big or small. You want to take on 90% margin, I say have a nice life.
#2:
For the past 2-3 weeks, several Fedheads have been out claiming that the problem is "contained." Contained? Contained by what? As I have said in the past, these Fedheads are either dumb or lying. In either case, it scares the wits out of me. If the Fed is reading this, I would not even wait for your Fed meeting on Tuesday. I would lower rates on Monday. Lowering rates would not save the day and will not correct the problem. That will take time. In fact, I believe this problem is not fixable in the short run. .But movement by the Fed would send a real message to the markets that you are not a bunch of stumbling, mumbling, bumbling ,fumbling, comatose, blithering idiots and that you get it. You finally get it that there are real consequences of markets that are run amok because the inmates were running the asylum. You get it that both you as well as the other overseers and regulators stood by watching an orgy of credit and debt and leverage infiltrate a system by the greediest of greedy people. You finally get it that you should be in front of the problems and not enabling the problems that are out there and that just because the stock market is going up, everything may not be ok....because as I have told you, for some idiotic unknown reason, it is only a problem when stock markets say so. Why were only just a few people calling for a problem? Simple...markets were still going up. Problems take time to work through the system.
#3
Make every hedge fund mark to the market everything immediately. When I started in the investment business, I sold penny stocks. What we are seeing now pales in comparison to the manipulation in the penny stock market. The penny stock business was a very small market. The fraudulent loan business and the fraudulent pricing of these loans is massive. I do not think it would be a good thing to wake up every day to another fund marking their products correctly...and going out of business. Take the medicine now so we can get a semblance of order. I ask again...WHERE WERE THE REGULATORS? How were these fraudulent markets able to live for so long? Oh yeah! Simple...markets were still going up. Problems take time to work through the system.
#4
Shut Hank Paulson up. Hank Paulson and the company he used to run, were part of this problem. Hank Paulson, in my mind, is and has been part of the problem, not the solution. You just cannot come out every other day and say everything is fine...when it is not fine. You cannot come out every other day and state housing is stabilizing and bottoming...when it is not. Credibility is key when you are the Treasury Secretary and frankly, I would rather listen to Michael Vick tell me how to treat dogs then listen to Hank Paulson tell me the state of the markets. How is a so-called genius not able to see any of this coming? Why were only just a few people calling for a problem? Simple...markets were still going up. Problems take time to work through the system...."
The full article can be found at
Can Fraudulent Loans Destroy this Bull Market?