Elaine Meinel Supkis
The Federal Reserve claims they didn't make money magically out of thin air, they gave loans to banks who gave the reserves something valuable: a pile of mortgages that no one wants to hold! And so we don't have to touch our pathetic FOREX reserves, we just take this pile of IOUs and make it into dollar bills! See? Understand? Next, we must remember we can't afford health care for 50 million Americans because they don't have pieces of paper to trade for dollars. They must die or go bankrupt, who cares? At least, no one in our government or Wall Street gives two figs.
Federal Reserve policy makers don't expect to know for days whether their Aug. 17 discount-rate reduction will succeed at calming markets, Fed watchers say.Yields on three-month Treasury bills yesterday fell the most since the 1987 stock-market crash as money market funds dumped asset-backed commercial paper in favor of the shortest- maturity government debt. Fed officials, who said they would accept everything from home-equity finance to municipal bonds as collateral for loans, expect some disruptions because banks are more cautious about what collateral they themselves accept.
``What the Fed wants to do is buy time to sort these things out,'' said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.
Fed Chairman Ben S. Bernanke is trying to avoid an emergency cut to the benchmark lending rate between banks, focusing instead on trying to maintain liquidity in markets. Futures traders are betting he'll fail and that the credit crunch will force him to ease monetary policy for the first time since 2003.
I want to thank the readers who alerted me to this news. I had it already on the computer screen but had to do out and hay the fields because the storms that were supposted to hit today stayed to the south by just a few miles, all day long So I cut two fields while watching the foreboding dark clouds rapidly passing all day long just down the valley. But time to examine the economic clouds! When the European banks and the Federal Reserve (the Treasury has no money making abilities) dumped an incredible half a trillion dollars down the maw of all the hedge hell hound's mouths, I wondered where it came from. Did they raid the pitiful cupboards of the FOREX reserves? Did they simply make up a number and then tell the banks, this existed? I am very curious about their magic spells and their wand waving techniques. Did they speak Latin? Or did they talk backwards? What did they do?
Well, they are now throwing around various hints because too many people are asking questions. Faith in fiat currency is collapsing. In the early 1970's, our government desperately tried to pretend fiat currency was as good as gold but when gold rose to $800 an ounce, this was dropped like a lead weight painted yellow and they simply raised interest rates up and up and up...to nearly 20%! That killed the metals markets.
It was just only this last year that the fiat femme fatales tried it again. All the bankers in Europe and the US united to tell us that gold was worthless. Despite it rising from $260 to $650 in the last couple of years, they said this was silly, why stocks and the value of houses beat gold hands down! But as the value of both of those begin to falter and fall, the central banks have been selling of tons and tons of gold and this has kept the price down but this is a form of mass suicide, not to be copied. True, when a depression hits, the value of gold will drop just like all other assets but unlike fiat currency, it won't VANISH. For this is what all holders of paper fear. Stocks don't just go up or down, they VANISH. The only way gold can vanish is if the government confiscates it or someone robs you, both being quite obvious hazards!
But even if you keep your paper in a safe and watch over it with a gun, it can be reduced to zero value with no one coming within 1,000 miles! This is the inherent hazard of holding any sort of paper wealth. All paper wealth is just a proxy for something else.
This brings us to the news today: the Federal Reserve couldn't just hand out money to the banks for free! So they 'temporarily' took pieces of paper with addresses and signiatures on them that are IOUs made out to mortgage companies who loaned money to a bunch of dead beats! OK: so what are these scraps of paper really worth? Eh? $100 billion or more like $0? In the real world the answer is 'ZE-fucking-RO! Zen zen, nothing, nada, zilch.' If these worthless pieces of paper were worth $100 billion they would have been sold out in the open and not in this ridiculous fashion where we can't see them and we won't know if they are worth anything at all and is this the 'rescue' that our rulers are pulling off at our collective expense?
From Bloomberg:
``You're going to see liquidity return to normal,'' Treasury Secretary Henry Paulson said today in a CNBC interview in Washington. ``What Americans need to understand is these things take time.''
*snip*
Banking Committee Chairman Christopher Dodd told reporters after the meeting that Bernanke agreed to use ``all of the tools at his disposal.'' Later, in response to a question, he said he didn't ask Bernanke to lower the federal funds rate. The Fed chairman didn't pledge any changes to that rate either, he added.
More than one underground news service has questioned all of this. Wasn't it only one lousy month ago that the stock market shot up to a record? Weren't the clowns there boasting about how housing didn't matter, it was small, it was nearly over? And how they were planning bigger and bigger and bigger deals? We heard of $5 billion, $10 billion, $20 billion and higher, buy-out deals? Indeed, I remember the last of the major media 'bears' throwing in the towel and saying they were wrong, we were in an unprecedented market that will only go up and up and up! There is an old saying, when the last bear gives up, the bear market finally enters through the other door.
And this proved to be true this time around. Readers of this news service know that I was not only skeptical throughout the spring and early summer, when July came around, I was downright pissed off at all the useless deals driving the stock market's rise. I correctly pointed out that China and Japan were entering a new phase in their eternal struggle for dominance, a 6,000 year old battle. So here we are, the government had to intervene after exactly 7 days of a bear market to 'save' it! Seven days! Not seven weeks! Much less, seven months!
What next? The Federal Reserve sets rates based on the previous 7 hours of stock market activities? Huh? This is gross abuse of the power of the purse. Congress, one of the grossest abusers of the purse, want instant protection for their donors who own them. 50 million Americans can be without healthcare, a number that has increased from 25 million just 20 years ago, these people are DYING and Congress can't and won't help them but god help us if a bunch of rich, reckless bankers screw the pooch! Suddenly, all stops are pulled out!
Worse: Congress has put us in a terrible fix, overspending recklessly now for a continuous 35 years minus ONE YEAR. One year, they balanced the budget! The following year, tax cuts all around and off we went, overspending ten times more than ever before, adding another $4 trillion to the public debt! On top of this, most Americans want the soldiers home from the stupid wars and Congress not only refused, they increased spending on war even as we are going bankrupt!!!!! Amazing, isn't it?
U.S. homes facing foreclosure almost doubled in July as property owners with adjustable-rate mortgages saw their payments rise and were unable to refinance because of the subprime crisis, RealtyTrac Inc. said.Lenders sent 179,599 notices of default, scheduled auctions or bank repossessions last month, a 93 percent increase from a year earlier, Irvine, California-based RealtyTrac said today in a statement. California, Florida, Michigan, Ohio and Georgia accounted for more than half of the country's total filings.
*snip*
California foreclosure filings totaled 39,013 in July, about triple the previous year. The state led the nation in foreclosure for the seventh consecutive month, RealtyTrac, a seller of foreclosure data, said.
Argh. I have owned several houses and still do own a property with a house I built myself with my own hands. At every point in this cycle, I made certain I never owed more than $50,000. I even bought a mansion once and still owed only $42,000, for example. The 20% down was supposed to be the minimum a bank asked for. The more money you plunk down, the more 'points' you gain. If you put down more than 50%, you get prime rates! The army of people who want to 'refinance' after owning a house for 2 years are nuts! You don't refinance except after say, 15 years! Doing it after 2 years is expensive, hear me? You have to PAY POINTS and percentages and discovery fees and appraisals and what ever garbage the banks need to finish the refinancing deal. The bills from refinancing a house are huge! Why on earth did all these pathetic fools go off and get loans that were only for 2 effing years in the first place????
Ever hear of renting? I was a landlady for years and years! We love good tenants and if they are very good, they can save money for buying a house. I have taught more than one tenant, how to get a house and not go deep in debt. Many a tenant! I would even help them find a good fixer-upper and guide them through the difficulties of renovation! Sweat matters! Instead, we have the whole economic system of the entire planet earth being twisted around so these idiots who signed up for super-cheap- teaser loans won't go bankrupt! Like, hell's bells! If we are going to throw around money, why not give it to people who have a good track record of staying out of trouble? Why throw good money after bad? And you can bet, the Federal Reserve is sitting on a whole nestful of rotten eggs like these mortgages which these foolish, pathetic people asked for.
No, they aren't the ones that Dodd or Bernanke are worried about. The people who are being saved are people like the officers of Countrywide who sold half a billion in stock last year as they conned stock buyers into making a bad deal. These crips and rips are the ones being saved. And they deserve prison, not salvation.
Billionaire investor Warren Buffett may buy parts of beleaguered mortgage lender Countrywide Financial Corp, some investors are speculating, according to The Wall Street Journal.
Buffet is going to buy a pig in the poke? He should get a poke in the nose. Well, anyone who wants to rescue the creeps running that bank, good luck. You will need it.
The Federal Reserve Bank of New York cut the fee that bond dealers pay to borrow its Treasuries to a record low in a bid to ease a shortage in the market for loans backed by the securities.The New York Fed cut its so-called minimum fee rate to 0.5 percent from 1 percent after a surge in demand for government debt caused rates on loans backed by the securities to plunge. The Fed said in a statement the move is ``temporary.''
``We are doing it to provide additional liquidity to the Treasury financing market,'' said Andrew Williams, a spokesman for the New York Fed. He said the rate was the lowest in the history of the program, which has existed in its current form since 1999. The New York Fed last lowered the fee rate on June 26, 2003, the day after policy makers cut their target overnight rate to a four-decade low of 1 percent.
Just last month, just one damn month ago, all the bankers boasted they had INFINITE liquidity. They had so much damn liquidity, they were drowning. They were so desperate to do deals, they couldn't wait! Then on July 17, 2007, the liquidity vanished. So far few people dare say how or why this happened on that day but I would suggest the biggest bank on earth ceased the automatic transition of US dollars and European euros from a certain trade surplus back into the 'carry trade' stream. Anyway, look at how the bankers are being coddled! Imagine if they needed health care! Why, we would see public funding of health care instantaneously. Maybe we should get them all sick and forbid them any access to health insurance?
Accredited Home Lenders Holding Co., facing the possibility of margin calls, said Tuesday it agreed to sell $1 billion in loans to an unnamed investor at an advance rate.Under a 90-day purchase agreement, the San Diego-based mortgage company (LEND:6.74, +0.30, +4.7%) said it didn't anticipate the transaction to produce or use any significant liquidity. Accredited Home said $500 million of the assets were sold Friday.
Another one off the cliff! Time to look backwards. In this case, only 3 weeks backwards. Did Accredited Home Lenders warn investors about Hurricane Hedge Fund?
August 2 2007: Accredited Home Lenders Holding Co., a subprime mortgage lender that agreed in June to be acquired, said its survival is in doubt and that bankruptcy is possible, sending its shares down as much as 52.5 percent.
Yes, up until then, they were very liquid. Now they are dry as a dog's bone.
"There are a heck of a lot more subprime lenders available at fire-sale prices than two months ago," Kovaleff said. "Only Accredited knows what its inherent value is, and that will be a factor in its negotiating stance. If I were Accredited, I would have feelers out to other potential acquirers."
How brave of them! They knew they were worth what? Well, a lot, they thought. But then, this is the core of the collapsing real estate market: nothing is worth anything unless someone wants to pay something! A million dollar house can be a white elephant if no one can buy it! I have bought white elephants...cheap. When one is the only bidder, it doesn't get much!
Nearly exactly a year ago when everyone was still convinced the housing bubble which popped at the end of 2005 would revive, Accredited Home's stock was selling for $37.15, a new high. It dropped this month to just $3.77 but thanks to this deal from some 'unknown' dealer who is actually one of Santa Bernanke's little elves, will be 'buying' these pieces of papers representing money given to deadbeats to buy houses in California. So the stocks went up 100% this last two days to a wonderful $6.85 @share! Whoopee.
Here is Accredited talking to its investors:
SAN DIEGO--(BUSINESS WIRE)--Aug. 10, 2007--Accredited Home Lenders Holding Co. (NASDAQ:LEND) ("Accredited" or "Company") today announced that it believes all conditions to the closing of the pending tender offer for Accredited's common stock will be satisfied by the expiration of the current tender offer period, and that Accredited strongly disagrees with the statement made by affiliates of Lone Star Fund V (U.S.), L.P. ("Lone Star") that, as of today, Accredited would fail to satisfy the conditions to the closing of the tender offer. The statement was made in an August 10, 2007 filing by Lone Star with the Securities and Exchange Commission in which Lone Star also said that it does not expect to accept Accredited shares tendered as of the end of the current offer period ending at 12:00 midnight, Eastern time, on August 14, 2007.Accredited noted that it had entered into an agreement that would resolve the class action lawsuit which had sought to enjoin the closing of the tender offer, Wan vs. Accredited Home Lenders Holding Co., et al., and that, as previously announced, all state regulatory approvals required to close the tender offer had been obtained. Accredited explained that, earlier in the day, both it and Lone Star had entered into a Memorandum of Understanding (the "Memorandum") with the plaintiff in the Wan case. The Memorandum outlines a proposed settlement that is subject to court approval, but the Memorandum is structured in such a manner that the tender offer can be completed prior to the court's decision with respect to the proposed settlement.
Looks like the only buyer got cold feet. And the deal fails. This being America, everyone sues everyone else. I expect the investors of Accredited to to likewise eventually. It isn't fun, losing money.
SAN DIEGO--(BUSINESS WIRE)--Aug. 13, 2007--Accredited Home Lenders Holding Co. (NASDAQ:LEND) ("Accredited" or "Company") announced today that it has filed a lawsuit against Lone Star Fund V (U.S.), L.P. and two of its affiliates ("Lone Star") seeking specific performance of Lone Star's obligations to close Lone Star's tender offer for the outstanding common stock of Accredited and to complete the merger with Accredited.
Bankruptcies are like hoof and mouth disease: all the cows die and then the vultures and flies show up and have a merry feast. This last month has seen many a wedding postponed as grooms and brides don't show up at the altar. Or worse, they do show up but some lawyer comes and when the cleric says, 'And now is the time to speak or forever hold your peace,' they yell, 'Stop the wedding!' So the Federal Reserve is going to give everyone doweries and wedding cakes. Let them eat cake! Yes. And don't give any medicine to those stupid children who are sick.
I will note here that Bush has cut health care to the needy even more. So make it 60 million Americans with no health care while our government ties itself into knots to save all these stupid corporations who want to tie the knot and make billions of dollars from the fees and percentages of the profits of the sales! What a ridiculous economy we have created! How foolish! And cruel.
SAN DIEGO--(BUSINESS WIRE)--Aug. 14, 2007--Accredited Home Lenders Holding Co. (NASDAQ:LEND) ("Accredited" or "Company") announced today that the Delaware Chancery Court (the "Court") has agreed to an expedited trial in Accredited's pending lawsuit against Lone Star Fund V (U.S.), L.P. and two of its affiliates ("Lone Star"), which lawsuit seeks specific performance of Lone Star's obligations to close Lone Star's tender offer for the outstanding common stock of Accredited and to complete the merger. The Court set the trial for late September or early October of this year.
Accredited can't wait. Time is running out already. Way back in June, Accredited was boasting about what a great mortgage company they were and how they lent only to high-class dead beats! I will note that when I go down lists of homes foreclosed this last month, the smattering of $1-5 million houses are growing. I see some spectacular failures in the future. There are all too many $10-40 million homes just waiting to be abandoned during a down market.
Sentinel Management Group Inc., a bankrupt cash-manager, can disburse most of the $312 million it received from an asset sale, a judge ruled the same day the Securities and Exchange Commission sued the company for fraud.U.S. Bankruptcy Judge John Squires said yesterday Sentinel can immediately distribute to its clients money from last week's sale to hedge fund firm Citadel Investment Group LLC. Sentinel was barred Aug. 17 by a different federal judge from disbursing the proceeds after clients sued, accusing it of selling assets at a discount. The company filed bankruptcy the same day.
And so more investors are suing! With other judges, hoping to stop this deal. Accredited sold everything to a hell hound who came sniffing around the carcass.
Ottimo Funding LLC, whose name is Italian for ``excellent,'' has the highest possible credit rating and doesn't own subprime mortgage bonds. That made no difference to investors who refused to buy Ottimo's $3 billion of short-term debt this month as losses on home loans to risky borrowers infect the global credit markets.``It's pretty much a straight contagion,'' said George Marshman, chief investment officer of Stamford, Connecticut-based Aladdin Capital Management, which oversees about $20 billion, including Ottimo. ``We think the assets are good enough'' to attract investors, he said.
I talked about Aladdin in the past. I see they are still around. Amazing, isn't it? But of course, all these stupid organizations thought they could roll over multi-billions in red ink forever. This entire economic system is based entirely on keeping all this red ink flowing and much of the wealth is just red ink multiplied over and over as more and more people lend it to each other but like any good ponzi scheme, the minute someone demands to be paid or they run out of chumps with money to put in, it falls apart rapidly and all the paper wealth vanishes.
Chinese share prices continued an upward trend on Tuesday as the benchmark Shanghai Composite Index went up 1.02 percent, or 50.35 points, to 4,955.20.The major index reached 4,982.98 points in the afternoon session and then dropped. The Shenzhen Component Index climbed 1.62 percent or 270.17 points to close at 16,859.9 points.
As I predicted, the party that put in zero funds, the people who perhaps started this mess by squeezing the amount of money returning to the system just for a few days to test their power and ability to destroy, China is happy. They are even raising interest rates! They are HOT. And so all that money fed to all the screaming babies who are our financial wizards and ruling elites, the rich of America and Europe...it all went to China, didn't it? The US stock market an barely crawl out of the funk it is in.
Toyota Sets Global Sales Target Of 10.4mn Autos For '09NAGOYA (Nikkei)--Toyota Motor Corp. (7203) plans to sell around 10.4 million vehicles worldwide in 2009 on the back of increasing demand in North America as well as China and other emerging economies, The Nikkei learned Tuesday.
*************************************
Consumption Tax Hike Unlikely To Move Forward: LDP Tax ChiefTOKYO (Nikkei)--Chances of a consumption tax hike have receded along with the Liberal Democratic Party and New Komeito coalition's control in the upper house in the aftermath of the July election, LDP tax czar Yuji Tsushima said Tuesday in an interview with The Nikkei.
*************************************
BOJ Likely To Forgo Rate Hike Amid Subprime TurmoilTOKYO (Nikkei)--The Bank of Japan's policy board will likely decide to keep interest rates unchanged when it meets Wednesday and Thursday in order to ascertain how the economy will be affected by instability in the financial and capital markets due to the U.S. subprime loan crisis.
*******************************************
Lending Limit For Individuals To Take Effect This YearTOKYO (Nikkei)--The Financial Services Agency will implement at the end of this year caps on lending to individuals, effectively adopting a provision included in a moneylending law that goes into full effect in 2009, The Nikkei learned Tuesday.
****************************************
OK: Japan is estatic too. Toyota will eventually take over the US auto industry. The right wingers will not tax the poor even more...today. But they are nervous about inflation now. The Bank of Japan, as I expected, will not raise rates or help us out in any way, shape or form. But our treasonous rich elites WANT the Bank of Japan to keep the carry trade going. Everyone is making money off of it even if they just had a huge scare. They think the Bank of Japan can bankroll all of us all the time with infinite loans. This is impossible without China doing the same! We will see if China will continue. Right now, they are happily resuming business as normal which means huge trade surpluses with the US and Europe. Note also that unlike the US desperately trying to find some way of loaning even more money to dead beats, in Japan, they are RESTRICTING loans to people! Gads.
Among the hedge funds hardest hit were credit funds and those using a type of statistical arbitrage, known as long-short equity neutral. Stocks in these portfolios are picked assuming certain shares will rise and others will fall. In this case, the complex models that drive them were upended by the extreme market volatility. Four building-blocks of such models are stock valuations, quality, price momentum and earnings momentum. These usually offset each other, but when they all started suffering, the models went awry. Some of the world's biggest hedge funds all began selling the same things at the same time. “You had the proverbial camel trying to get through the eye of the needle,” an analyst says.
This is a very good hedge fund story. Too bad it wasn't written a year ago when I was struggling to figure out how these post-Great Depression investment trusts operated. Indeed, no one and I do mean NO ONE in the mainstream media gave any honest answers about 'leverage' or the 'carry trade' or anything. Now that even small children are hip to what is going on, are they bothering to explain. Indeed, when I warned that hedge funds were not hedging at all but were amplifying hazards, they all told their readers that hedge funds were cutting risk by 'diluting' the bad stuff within the good stuff. I said this was insanity and more like plague ships carrying infections from port to port.
As usual, I was right. But still, this is a well written article worth reading at this late date. I will also note he doesn't call for anyone to be arrested. Arrest them all, I say.
The Economist:
The fall-out was not limited by geography. Quantitative hedge funds in Japan were among the worst affected, according to Manolis Liodakis, head of global quantitative research at Citigroup. The pain also spread to Europe.The extent of losses is not yet clear. Many funds will report to their investors in the coming weeks. Much depends on whether the pension funds, endowments and rich individuals investing in hedge funds hold their nerve. The “lock-up” periods for fund investors vary. Many allow redemptions only monthly or quarterly. August 15th was a big day for those who need to give 45 days notice before redeeming their stakes by the end of September.
The saga has damaged the image of computer-driven funds, generally so powerful that they can account for up to half of a stock exchange's daily trading volume. But there is no way the clocks will be turned back. “People aren't going to give up their computers and go back to insider information and tips,” says David Harding, a fund manager in London.
The churning of stocks is due to one very simple thing: taxes and fees have been cut drastically by the government and the use of computers. The volume of stocks trades have ballooned ever since the government made it super-easy and super-cheap to play the markets and most of these trades are machines talking to each other, basically, and the more they do this, the more the handlers running these computers can extract fees from transactions and on and on it goes: it is a money machine that makes money doing virtually nothing useful, just passing something back and forth like in a game of ping pong or tennis.
The Economist:
It is also unclear who will gain from the turmoil—and someone always takes the upside of losing trades. Market volatility meant that some funds that plunged last week had recouped most of their gains within a few days. Timing was all. Goldman Sachs' investment in its own fund may look like a clever move in retrospect. Top executives at the bank insisted the highly unusual gyrations were “way out of whack” with their models. Clearly the models were flawed. But Goldman's backers, such as Hank Greenberg, the former chairman of AIG, an insurer, were not acting out of charity.
Charity is usually the last thing these guys think. Indeed, they won't pay taxes which is why our economy is in trouble and red ink covers the land. And I know who won in this last round: the Chinese and Japanese! Namely, the system they set up is set in cement and we can't jackhammer our way out of the cement overshoes we are wearing as we sink beneath the red ink waves off the Fishmarket piers in Manhattan.
From the Daily Pfenning, another dying mortgage company:
And... Thornburg Mortgage Inc., the jumbo- mortgage specialist that stopped taking loan applications last week because of a cash crunch, sold $20.5 billion of securities at a discount to pay down debt it couldn't refinance.The Santa Fe, New Mexico-based company will record a $930 million loss in the third quarter on the sale of the mortgage- backed bonds, resulting in a probable net loss for the year, President Larry Goldstone said in an interview.
All those high-class people unable to pay for super-expensive homes! My, we will see plenty of this in the future. Many, many of the money makers who run things are hideously in debt. I still hate Donald Trump for bankrupting his investors and then becoming a stupid TV personality who likes to yell, 'Your'e fired!' or in the case of his multiple wives, 'Your'e divorced!' He should run for the GOP nomination. He has as many divorces as front runner (sic---according to the media vultures) as Guiliani.
From Thornburgh Mortgage's home page:
SANTA FE, N.M., Jul 19, 2007 (BUSINESS WIRE) -- Thornburg Mortgage, Inc. (NYSE: TMA)
-- Quarterly dividend maintained at $0.68 per common share-- Margins improved as returns on new mortgage assets improved and prepayment expectations slowed as interest rates increased
-- 2Q mortgage originations of $1.7 billion, up 21% year-over-year
-- Total assets of $57.5 billion; a 15% increase year-over-year
-- Continued exceptional credit performance with 0.21% 60-plus day delinquencies and REO, well below the 2.32% industry average
Soooo....only one month ago, everything was coming up roses? This news was from just 2 days after the 'problems' with liquidity began.
News on their site from just three days ago:
<< Back
Thornburg Mortgage Stabilizes Its Financing Platform and Plans to Return to Business as UsualRapid Sale of $20.5 Billion of Assets Underscores Company's Highly Liquid Portfolio
Substantial Reduction in Repurchase Borrowings Greatly Reduces Exposure to Margin Calls
Credit Quality Remains Among the Industry's Best2Q Common Dividend of $0.68 on Schedule for September 17 Distribution
SANTA FE, N.M.--(BUSINESS WIRE)--Aug. 20, 2007--Thornburg Mortgage, Inc. (NYSE:TMA), a leading single-family prime residential mortgage lender focused principally on the jumbo segment of the adjustable-rate mortgage (ARM) market, announced today the sale of a substantial portion of its AAA-rated mortgage securities portfolio and a significant reduction in its borrowings portfolio. The company took these actions to address challenges in meeting its liquidity and financing needs caused by rapidly declining mortgage securities prices and simultaneous declines in the value of its hedging instruments. These rapid declines negatively impacted the company's ability to continue to support its borrowings collateralized by its high quality mortgage securities portfolio.
Aren't fire sales fun? You can get big discounts from them! And so it goes: the crisis is far from over. As many thousands of Americans die every month because they have no health insurance, as thousands of Americans go bankrupt because they have no health insurance, no one in power gives a hoot or lifts a finger. But now the Big Guys are hurting. Boo fucking hoo. They need to be saved or they will destroy our entire economy so NONE of us will have health care.
And this is the tragedy of modern America.
Some pertinent comments here about the foolish and cruel economy:
http://www.thenation.com/doc/20070827/ehrenreich
Couldn't happen to a nicer bunch of vampires.
Posted by: Gary | August 21, 2007 at 11:33 PM
From The Nation article:
"In fact, easy credit became the American substitute for decent wages."
Seems to me household debt has done the job of keeping wage inflation low (not just in America) - at the expense of the employees and for the profit of lending institutions.
Posted by: ivoc | August 22, 2007 at 12:31 AM
So long as everyone thought they would get rich via flipping houses or tapping equity on houses, they didn't worry about wages. In a cash economy, this will be at the forefront again. I have said this in the past.
Posted by: Elaine Meinel Supkis | August 22, 2007 at 06:42 AM
Stop using their money. Buy Liberty Dollars, backed by gold, silver, and the Constitution.
Federal Reserve notes are unconstitutional per Article 1, Section 10
www.americanbank.ws
Posted by: Jeremy | October 24, 2007 at 10:56 PM
Till date I was in a confusion whether to invest in a paper wealth or in gold , but after going through this post my confusion has been cleared. Thanks for your valuable post.
Posted by: David | March 18, 2008 at 06:50 AM
Everyone thought that making money is easy by flipping the houses and tapping them, But it is better to invest in gold than in paper.
Posted by: John | March 24, 2008 at 12:22 AM
Good stuff check out mine
Posted by: Andrew Reynolds | September 19, 2008 at 10:26 PM