S&L in a different package- same result.

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Gary Allan

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Yes, send Freddy and Fanny down a dead-end one way street and SURPRISE!!!! As Crisis Grew, a Few Options Shrank to One
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Now a consensus was emerging that they had little choice. If Freddie’s and Fannie’s problems worsened, a crisis of confidence could spread through the worldwide financial system, deepening the difficulties in the housing market and further weakening the economy — in the midst of a hard-fought presidential campaign.
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Gary, if you want the truth, all of this is old news - it just became public the last few days. The market has been punishing Fraudy/Phony shares since October 07. Bill Gross at PIMCO started buying FF debt months ago in anticipation of this bailout. Did you jump on the bandwagon by buying PIMCO total returns or puts on FF/shares, or is all your foresight and wisdom that you continue to remind us of relegated to a mere expression of "outrage." Put all that soothsaying to good use, my friend.
 

Gary Allan

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Yes ..I too can get in on the booty in managing my avoided losses!! I love it when you can see the bright side to things. Welcome to managed losses and the seeking of an increasing share of a declining market. ..and what of the vast majority? Well, it's just their fault ..that even if they can see the cliff ...they aren't at the throttle and don't own enough to buy the parachutes. It just sucks to be them Like I said earlier "That's life"
 
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Since we are talking about what we love, you know what I love? Guys born in post WWII America, quite possibly the most prosperous and stable time and place in the history of the humankind. A 50 year abberration that has never been seen and will probability never be repeated. And this self-pitying and entitled group declares armaggedon and the end of civilization whenver the aberration doesn't continue and when they have to take risk and actions to get ahead. When the world stops handing them their free lunch, they are "outraged." I mean, how could anyone expect them to take risks, live with less, and pay taxes? Never mind that the other 30 thousand years of human history is characterized by darwinistic survival of the fittest, slavery, oppression of the masses, war, diseases, etc etc. Somehow, G*d and society handed them a raw deal.
 

Gary Allan

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And this self-pitying and entitled group declares armaggedon and the end of civilization whenver the aberration doesn't continue and when they have to take risk and actions to get ahead.
Well, I don't quite state it that way. I'd say that any sensible and responsible citizen .... managed their life in alleged favorable manners ...did their civic duty ..paid their bills ..fought the wars ..obeyed the laws ..educated their children ...just got taken to the cleaners since they weren't predatory enough to capitalize on the assured outcomes of masked and convoluted contrivances specifically designed to extract "worth" from them. Now this is not to say that anyone participating in such activities is "evil" ..but it would be a very disingenuous stretch to say that there isn't obvious corruption in the process itself. It's as plain as the nose on our face ..but typically only shows itself "in earnest" after the booty has been collected ..and when the bill comes due. That is, while there is surely a defensible reason to shield yourself from the effects, there's no philosophically defensible position to NOT see the basic corrupt flaw in the process ..just in the underhanded and insidious nature in which its conducted. There can be no pride in ethical social behavior taken in this shake down. ..but..you're surely correct..mine is a somewhat pointless point of view. I hope that you manage to keep above the rising water line ...and even manage a comfy house boat. I mean that sincerely. ..btw- you're one of the few who acknowledges our "unique" post WWII boom as a circumstantial windfall of coincidence. Most attribute it to some inherent or intrinsic "quality" ..which, conspicuously, seems completely absent now. It was never there to begin with. Peace
 
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 Originally Posted By: Gary Allan
Well, I don't quite state it that way. I'd say that any sensible and responsible citizen .... managed their life in alleged favorable manners ...did their civic duty ..paid their bills ..fought the wars ..obeyed the laws ..educated their children ...just got taken to the cleaners since they weren't predatory enough to capitalize on the assured outcomes of masked and convoluted contrivances specifically designed to extract "worth" from them. Now this is not to say that anyone participating in such activities is "evil" ..but it would be a very disingenuous stretch to say that there isn't obvious corruption in the process itself. It's as plain as the nose on our face ..but typically only shows itself "in earnest" after the booty has been collected ..and when the bill comes due. That is, while there is surely a defensible reason to shield yourself from the effects, there's no philosophically defensible position to NOT see the basic corrupt flaw in the process ..just in the underhanded and insidious nature in which its conducted. There can be no pride in ethical social behavior taken in this shake down.
First of all, who is shielding themselves from the corruption and and flaws in the process? You think that because I don't sit here and lob gernades at anybody that I can blame for my "situation", that I'm blind to the human condition? I take corruption as a basic constraint that I have to live with in the same way that I have to live with gravity. I can come here and b$tch about gravity too, but what good is that going to do me? Doing your civic duty and all is fine and dandy but this isn't Leave it to Beaver. If you aren't going to protect yourself from the snakes out there, who is suppose to do that for you? The government?
 

Gary Allan

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If you aren't going to protect yourself from the snakes out there, who is suppose to do that for you? The government?
I agree. It's a little tougher to do when it's included in the package. There's a big difference between dividing the pie on merit ..and dividing the pie on who can grab it before its stolen. ...but again, I have no beef with you or anyone else buffering ..and indeed prospering, under the current conditions within our current, as it has evolved, economic environment. While I hope that you future is bright and full of bounty ...I cannot be ignorant of the predictable outcomes in terms of the basic environment for the nation as a whole. Again, be free, be happy, and carry on with your path toward whatever level of self actualization that you can achieve. It's would be negligent for you not to do it. Just be fully and sensibly aware of the consequences, and realize that there is no up without a down...no left without a right ..nor a plus without a minus. While you're (hopefully) enjoying your mastery and conquest of "the hump" ..you're going to see the congruent, complimentary, reality also emerge. I hope that you won't look at those side effects as mutations or oddities or defects when they increase in severity. Again, peace be with you
 
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It is a government sponsored entity designed to manipulate the market into what the government wants. People are shocked that this happened why? This entire credit boondoggle has been set up because of faulty government policy. It is that simple.
 
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Have you ever noticed that the biggest boondoggles are bus/gov co-ops???......Sorta like neither can/will get the blame because they can point the finger at the other one. So the real table humping starts. Bang on the door and they are already out the door. Who's watching who? I have no real problem with the government (people?) coming up with the laws and enforcing the laws....but [censored] don't let all the criminals near the money at the same time. Of course it provides fodder for wrong headed "new" laws and the spiral continues....if I'm allowed to apply some twisted Allan logic.
 

Gary Allan

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apply some twisted Allan logic.
When I pull the clip to check the ammo ..that's all that's there, pal! Sorry ..it's all I have to give. Here ..take a look for yourself
 
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 Originally Posted By: Tempest
It is a government sponsored entity designed to manipulate the market into what the government wants. People are shocked that this happened why? This entire credit boondoggle has been set up because of faulty government policy. It is that simple.
No, the fault lies at the foot of mortgage originators, loan officers, mortgage originating banks, brokerage institutions who sold MBSs, sovereign wealth funds, foreign reserve banks, and housing inspectors. THOSE are the people that inflated housing values, engaged in out right fraud, and robbed us. Mortgage brokers, housing inspectors/valuators, and the financial firms who trade MBOs are the ones who manipulated the market the most and stole the most from home owners. It's not "that simple".
 
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Gary Allan

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I'm sure that we could all place blame on any number of people/institutions within the whole thing. The bottom line for me is that this wasn't an "invisible" evolution and our shepherds, who could have clearly put the brakes on it ...chose to look the other way since it served so many ..including themselves. It wasn't rocket science ..especially if an undisciplined buffoon like myself can see the simple illogic of unsustainable enterprises operated in a propped up manner. Those who "saw no evil" allowed those who benefited from the "future crash" to position themselves out of harms way (or max getting while the getting was good) ..while the whole corrupt mechanism was assured to go down in flames. When you hear me whine... I tend to look at those who ended up on the good end of the shake down. That is, who it served best. That's where I place the ultimate blame for it. You can usually trace the deviation from sensible to them. The rest are just their puppets or victims of their own pathetic internal corruption. As for the individual investor. Best of luck to you. \:\! Very few will make it through this and future gauntlets without some form of net loss.
 
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Freddy and Fanny had their issues over the years, but they in no way caused the housing crisis and subsequent mortgage/financial meltdown IMO. They are casualties. This is the best simpleton write up I've found on the subject: This is a crisis with many parts. Here are a few off the top of my head. 1 the tech stock crash of 2001/02 caused investors to look at real estate for a stable investment. 2 low interest rates made real estate look attractive 3 a virtual banking system was created that raised money by selling mortage backed securities 4 Mortgage companies had a mountain of money because savers could not earn decent interest rates on CDs or saving accounts and they began to buy mortgage backed securities. The rating companies like Standard and Poors gave the securities AAA ratings 5 Japanese investors could borrow funds in Japan for 0% interest and buy US mortgage backed security and pocket a nice profit. 6 The mortgage lenders were sitting on a growing mountain of liquidity so they relaxed lending standards 7 Hedge funds used leverage (borrowed money) to buy mortgage backed securities 8 Investors began to buy second and third homes on the assumption that they would sell them in two years for a profit. 9 The home building and land development industry cranked up in high gear to mass produce even more homes. 10 Many of the buyers with poor credit used adjustable rates to qualify for a loan. 11 Mortgage companies had so much money to lend they tempted loan brokers with lush commissions. The brokers scammed the lending standard to reap the huge commissions. then the end came When the federal reserve raised rates, that caused mortgage rates to rise. First the speculators stopped buying , then the public stopped viewing real estate as a good investment. When the people with poor credit and adjustable rate mortgages find they can't make the payment and they can't sell the house, they just let it go to foreclosure. This is where we are now, as foreclosures accelerate they housing market will deteriorate even further. This market will not bottom out until 2009 and that will be a time when home buyers will find they can afford to buy. Just like the tech bubble of 2002 this trend will end and when the public is in total despair about housing investments, it will be the time to buy,
 
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The key driver tying all those points together is the securitization process which allows banks and lenders to unload their loans onto the credit markets and hedge funds. If you are a lender and you know you can unload your lemon to the next sucker, what happens to your incentives to monitor credit risk and take precautions? What happens to loan volume? Then what happens when any consumer can get any loan he wnats to buy whatever the [censored] he wants? People don't just become genetically addicted to debt overnight. There was a fundamental change in our credit markets around the 80s and 90s and that's about the time we became a debt driven culture. And Gary, it's always convenient and so simple to blame one or few entities, but the reality is that the securitization process is so complex and so isoteric that most people creating these financial frankensteins are math and physics Ph.D.s. Not only that, these markets are massive - we are talking about a market that is about 20 times the size of the U.S. stock market. What chance does a bunch of government saps and bureaucrat extraordinaires have when trying to regulate this monster? Math Ph.D.s offered six figure salaries by investment banks do not become government regulators. This was truly a case where the inmates were ruling over the wardens and the wardens were too dumb to know the difference.
 

Gary Allan

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Well, I'd say that aftermath sentences of death would be a good incentive to "self police". (yes, I know, it would just create a new class of fall guy). ..but ultimately, Vee-Dub, who ended up fat here? Nobody leaves everyone with the bill and everyone without the loot. Not everyone can be out of chairs when the music stops So who are my beneficiaries that I'm one of millions of benefactors to?? Who owes me the most in gratitude for the bill that I'm already paying in debt that I didn't run up?? ..or would you say that this too was dispersed too broadly to nail down the principle winners. That is, with a new home economy lots of people profit. The Home Depot, American Standard, Pella, Anderson ...etc..etc. and further down the line Ford (any good contractor worth his salt has a few F250's floating around) Georgia-Pacific ..all the way down to Norfolk-Southern took part in the "prolonged euphoria" of a vapor economy supplied by too much cheap money. So, we've just lived the last so many years on credit ..and now our collective bill is coming due. ..and what's yet to come? The bail out of the Big 3 ...the SS major upramp ...the pension guarantees of of the failed pension insurance corporation ...the failing infrastructure ... THANK GOD WE'RE NOT IN THE AIR!!!!!!!!
 
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 Originally Posted By: Gary Allan
..but ultimately, Vee-Dub, who ended up fat here? Nobody leaves everyone with the bill and everyone without the loot. Not everyone can be out of chairs when the music stops
Are you looking for a simple answer or is this a rhetorical question?
 
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