The Federal Reserve chairman is a joke

[Miramonti]

Originally posted by: LegendKiller

Originally posted by: jjsole

Originally posted by: LegendKiller

Originally posted by: jjsole

Originally posted by: 3cho
i blame the homebuyers/speculators because they should know that there is no way they can afford properties of a certain price. they should know that best. again, i think the local mortgage originators should also bear a lot of blame because as you say, they knew more about the risks more than anyone else. all i am saying is that by the time these mortgages got to the investment banks, they have already been through multiple hands.

Blame them for what? Please don't say 'for wall streets problems'. Homeowners aren't the ones that have gotten bailed out to this point, wall street and banks have been the recipients of the [undeserved] good will in the form of cheap loans.

And I wouldn't blame honest local mortgage originators either, they simply offered what there was a market for on both ends - subprime loans to borrowers, and then they sold them to a market that wanted to buy them. Most local mortgage lenders (if I'm not mistaken) don't actually lend their own money, but use a credit line. Wall street created the vacuum that simply enabled them to keep revolving their credit line into new loans. That's hardly criminal, muchless even bad judgment, considering this is capitalism.

As with all financial explosions like this, to discern what went on and who's responsible for it, first look for the fraud, then deception, then conflicts of interest and poor judgement, then simple mistakes, and finally for stupidity. I believe when all the dust settles, wall street is all over everything here, while homeowners rest pretty firmly in the last two areas only.

Why do you think the Fed is pumping liquidity into the market?

It can't be because the banks will then turn around and offer other people loans, bailing them out too!?!

NO, IT CAN'T BE THAT!!!!!

Btw, I updated my thread. And yes they are loaning money so that money can continue to be lent to homebuyers and others etc., but I'm sure you're not assuming that those who have foreclosed recently or that will soon will be the recipients of this new found liquidity, muchless be able to get another loan for the next 5-7 years or so... 😉

They have written off those that are lost already and concentrating on the ones who can be saved.

If there is a deal or program to help restructure current subprimes to enable people to keep their homes, I'm all for it. Again, not because they deserve it, but because so many need it.

One idea, perhaps they could be changed to 40 year loans to those who want it, costing the homebuyer more but lowering their monthly payments. Even better of course is if the rates or terms on the loans could be restructured. The banks are getting the loans cheap from the fed, and it would be nice to see part of that get passed down to the current homeowners in need. I'm not in favor of handouts nor keeping home prices artificially inflated at taxpayers expense, but would love to see something done.

 

[bamx2]

That seems to be the political bait. The quick fixes get the votes .

"Yes in hopes of written new loans to sell to freddy and fanny making the tax payers take the losses."

 

[Nerva]

Originally posted by: smack Down

Originally posted by: 3cho

Originally posted by: smack Down

i blame the homebuyers/speculators because they should know that there is no way they can afford properties of a certain price.
they should know that best.

So they didn't need to affoard them just the carrying cost until pay day came. If pay day didn't come well they don't take any lose because the greedy idiots on wall street gave them a free put.

again, i think the local mortgage originators should also bear a lot of blame because as you say, they knew more about the risks more than anyone else. all i am saying is that by the time these mortgages got to the investment banks, they have already been through multiple hands.

Investment banks where paying mortgage originators to originator and that is what they did. In fact the worse the loan was for the borrower the more they got paid.

can you point to a source?

http://en.wikipedia.org/wiki/Yield_spread_premium

ok... i am gonna assume you don't understand a word on that page. but please, unless you find me an article that says the investment banks funded residential mortgage underwritings on the local level, i am gonna call complete bs.

and oh, i get to work this morning, get on the bbg, and guess what the top news is? JPM bumping the offer. that is obscene and ridiculous that they are acquiescing to bear shareholders. why does bear still not understand the difference between $2 vs. nothing?

 

[Miramonti]

Originally posted by: 3cho

and oh, i get to work this morning, get on the bbg, and guess what the top news is? JPM bumping the offer. that is obscene and ridiculous that they are acquiescing to bear shareholders. why does bear still not understand the difference between $2 vs. nothing?

Apparently you're the only one who's really grasped this situation from that beginning and that understands what true value is...

In fact, with the stock at $12.50 right now, you can avoid the kiss@ssing needed to eventually get your 6-figure bonus, and get rich yourself by buying a truckload of $10 puts and selling a truckload of $15 calls. Its free money given the value of the stock is <$2, and with the stock here you can even put the 'spread' on for about even, without costing you anything. 😉

Seriously tho, what's done is done - it was close but never became the bankruptcy stock that JPM gratiously tendered a $2 offer for. With the fed window now open to them, that significanly curtails bankruptcy risk, even if JPM bails, and thus significantly increased Bear's value over the $2 per share. If anyone thinks JPM can buy their building if shareholders reject their buyout offer, they are sadly mistaken imo. They may have the legal grounds when its all said and done, but would pay an extremely negative political price in the court of public opinion imo if they evicted Bear from their own building.


(actually, thinking about it, if it gets too messy for JPM, they may cut their losses and bail, which could make for a pretty interesting situation)

 

[Miramonti]

Question for thought:

What is Bear Stearns stock worth if JPM feels its too much a pia, and cuts their losses (or negotiates a settlement with Bear), and bails on their offer to buy the company?

More: Now that the fed is loaning them billions, they don't have the same liquidity issues that put them on the edge of bankruptcy, and their stock is worth more.

Less: There problems are much deeper than liquidity...if JPM bails, they are on the edge of bankruptcy again.

 

[LegendKiller]

Originally posted by: jjsole
Question for thought:

What is Bear Stearns stock worth if JPM feels its too much a pia, and cuts their losses (or negotiates a settlement with Bear), and bails on their offer to buy the company?

More: Now that the fed is loaning them billions, they don't have the same liquidity issues that put them on the edge of bankruptcy, and their stock is worth more.

Less: There problems are much deeper than liquidity...if JPM bails, they are on the edge of bankruptcy again.

with the Fed window open to broker dealers they could probably survive and thive in the future.

 

[Miramonti]

Originally posted by: LegendKiller

Originally posted by: jjsole
Question for thought:

What is Bear Stearns stock worth if JPM feels its too much a pia, and cuts their losses (or negotiates a settlement with Bear), and bails on their offer to buy the company?

More: Now that the fed is loaning them billions, they don't have the same liquidity issues that put them on the edge of bankruptcy, and their stock is worth more.

Less: There problems are much deeper than liquidity...if JPM bails, they are on the edge of bankruptcy again.

with the Fed window open to broker dealers they could probably survive and thive in the future.

The january 30 calls are looking fairly cheap at .$35, lol. If Bear really is solvent w/o JPM, I don't think JPM is going to be able to pull it off. A $10 bid for a solvent bear would be *way* too cheap.

 

[theeedude]

Originally posted by: LegendKiller

Originally posted by: jjsole

Originally posted by: 3cho
i blame the homebuyers/speculators because they should know that there is no way they can afford properties of a certain price. they should know that best. again, i think the local mortgage originators should also bear a lot of blame because as you say, they knew more about the risks more than anyone else. all i am saying is that by the time these mortgages got to the investment banks, they have already been through multiple hands.

Blame them for what? Please don't say 'for wall streets problems'. Homeowners aren't the ones that have gotten bailed out to this point, wall street and banks have been the recipients of the [undeserved] good will in the form of cheap loans.

And I wouldn't blame honest local mortgage originators either, they simply offered what there was a market for on both ends - subprime loans to borrowers, and then they sold them to a market that wanted to buy them. Most local mortgage lenders (if I'm not mistaken) don't actually lend their own money, but use a credit line. Wall street created the vacuum that simply enabled them to keep revolving their credit line into new loans. That's hardly criminal, muchless even bad judgment, considering this is capitalism.

As with all financial explosions like this, to discern what went on and who's responsible for it, first look for the fraud, then deception, then conflicts of interest and poor judgement, then simple mistakes, and finally for stupidity. I believe when all the dust settles, wall street is all over everything here, while homeowners rest pretty firmly in the last two areas only.

Why do you think the Fed is pumping liquidity into the market?

It can't be because the banks will then turn around and offer other people loans, bailing them out too!?!

NO, IT CAN'T BE THAT!!!!!

Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

 

[Nerva]

Originally posted by: jjsole

Originally posted by: LegendKiller

Originally posted by: jjsole
Question for thought:

What is Bear Stearns stock worth if JPM feels its too much a pia, and cuts their losses (or negotiates a settlement with Bear), and bails on their offer to buy the company?

More: Now that the fed is loaning them billions, they don't have the same liquidity issues that put them on the edge of bankruptcy, and their stock is worth more.

Less: There problems are much deeper than liquidity...if JPM bails, they are on the edge of bankruptcy again.

with the Fed window open to broker dealers they could probably survive and thive in the future.

The january 30 calls are looking fairly cheap at .$35, lol. If Bear really is solvent w/o JPM, I don't think JPM is going to be able to pull it off. A $10 bid for a solvent bear would be *way* too cheap.

are you that stupid? the only reason bear stocks ran up to 6 mostly probably because the hedgefunds are buying into the stock so they can vote yes (they made a killing on the CDS shorts starting the Friday before the announcement). At this point, it is probably purely from a "clinching" the deal point of view.

and i know exactly how to trade to make money in this situation, but i can't because there are rules governing people who work in the securities industry. words cannot describe my frustration with you people, except LK.

 

[LegendKiller]

Originally posted by: senseamp
Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

Do you not understand the idea that this goes beyond irresponsible lenders or borrowers? Have I not pointed that out time and again, only to have people like you ignore it since you can't counter the point?

Get over the "stealing" with inflation, nobody has yet to provide substantial evidence that anybody is worse off in the long run from 50 years ago because the "inflation tax".

 

[Miramonti]

Originally posted by: 3cho

Originally posted by: jjsole

Originally posted by: LegendKiller

Originally posted by: jjsole
Question for thought:

What is Bear Stearns stock worth if JPM feels its too much a pia, and cuts their losses (or negotiates a settlement with Bear), and bails on their offer to buy the company?

More: Now that the fed is loaning them billions, they don't have the same liquidity issues that put them on the edge of bankruptcy, and their stock is worth more.

Less: There problems are much deeper than liquidity...if JPM bails, they are on the edge of bankruptcy again.

with the Fed window open to broker dealers they could probably survive and thive in the future.

The january 30 calls are looking fairly cheap at .$35, lol. If Bear really is solvent w/o JPM, I don't think JPM is going to be able to pull it off. A $10 bid for a solvent bear would be *way* too cheap.

are you that stupid? the only reason bear stocks ran up to 6 mostly probably because the hedgefunds are buying into the stock so they can vote yes (they made a killing on the CDS shorts starting the Friday before the announcement). At this point, it is probably purely from a "clinching" the deal point of view.

and i know exactly how to trade to make money in this situation, but i can't because there are rules governing people who work in the securities industry. words cannot describe my frustration with you people, except LK.

QFP

 

[Miramonti]

Originally posted by: 3cho
and i know exactly how to trade to make money in this situation, but i can't because there are rules governing people who work in the securities industry.

That sucks. Paypal me the cost of the position you want to put on, I'll put it on for you, and give you 100% returns minus my income tax rate - no capital gains taxes etc. No unhedged premium shorting tho.

 

[theeedude]

Originally posted by: LegendKiller

Originally posted by: senseamp
Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

Do you not understand the idea that this goes beyond irresponsible lenders or borrowers? Have I not pointed that out time and again, only to have people like you ignore it since you can't counter the point?

Maybe it does go beyond them now, but bailing them out only encourages a repeat of this exact behavior. We should not bail out irresponsible lenders and borrowers even if it hurts the overall economy in the short term.

Get over the "stealing" with inflation, nobody has yet to provide substantial evidence that anybody is worse off in the long run from 50 years ago because the "inflation tax".

I guess you are clamoring for the 70s, since we are all better off in the long term from inflation. There are a lot of people on fixed incomes being hurt by inflation, you just choose to ignore it because you want a government bailout of your industry. In the long term we'll all be dead.

 

[LegendKiller]

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp
Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

Do you not understand the idea that this goes beyond irresponsible lenders or borrowers? Have I not pointed that out time and again, only to have people like you ignore it since you can't counter the point?

Maybe it does go beyond them now, but bailing them out only encourages a repeat of this exact behavior. We should not bail out irresponsible lenders and borrowers even if it hurts the overall economy in the short term.

Get over the "stealing" with inflation, nobody has yet to provide substantial evidence that anybody is worse off in the long run from 50 years ago because the "inflation tax".

I guess you are clamoring for the 70s, since we are all better off in the long term from inflation. There are a lot of people on fixed incomes being hurt by inflation, you just choose to ignore it because you want a government bailout of your industry. In the long term we'll all be dead.

I agree that it does encourage a repeat of the behavior, which is why I advocate letting the market delever, work itself out of the current problem and then follow up with constraints to prevent the situation from happening.

Hyperbole and bullshit don't make for an argument, provide data or stop using it.

 

[Miramonti]

Originally posted by: LegendKiller
I agree that it does encourage a repeat of the behavior, which is why I advocate letting the market delever, work itself out of the current problem and then follow up with constraints to prevent the situation from happening.

"More regulation!! :frown:", lol. I agree.

Behind the Deal, the Hand of the Fed

Mr. Paulson was desperate to demonstrate to Main Street that he wouldn?t rescue Wall Street on the government?s dime, even though that?s exactly what he did, by providing a $30 billion backstop to the deal. (And he may have been right to do so.)

But the night that Bear signed the original bid, the Fed opened what?s known as the discount window to companies like Goldman Sachs and Lehman Brothers ? oh, yes, and to Bear, too. Except that the Fed didn?t tell Bear that it planned to open the window when it was signing its deal with JPMorgan.

Had Bear known it might have access to the discount window ? a crucial source of liquidity ? it might have been able to hold out for a couple more days or at least had enough leverage to seek a higher bid. But the Fed clearly preferred the original bid.

Inside Bear, jaws dropped at what many considered a broad deception by the Fed. Alan D. Schwartz, Bear?s chief executive, was furious, as was the board and its team of advisers. Several JPMorgan executives even offered their apologies about the way the deal ?went down.?

Now its more than a hunch...the fed screwed Bear. It wouldn't have gone down like this if it was Goldman on the brink. :disgust:

 

[Nerva]

Originally posted by: jjsole

Originally posted by: LegendKiller
I agree that it does encourage a repeat of the behavior, which is why I advocate letting the market delever, work itself out of the current problem and then follow up with constraints to prevent the situation from happening.

"More regulation!! :frown:", lol. I agree.

Behind the Deal, the Hand of the Fed

Mr. Paulson was desperate to demonstrate to Main Street that he wouldn?t rescue Wall Street on the government?s dime, even though that?s exactly what he did, by providing a $30 billion backstop to the deal. (And he may have been right to do so.)

But the night that Bear signed the original bid, the Fed opened what?s known as the discount window to companies like Goldman Sachs and Lehman Brothers ? oh, yes, and to Bear, too. Except that the Fed didn?t tell Bear that it planned to open the window when it was signing its deal with JPMorgan.

Had Bear known it might have access to the discount window ? a crucial source of liquidity ? it might have been able to hold out for a couple more days or at least had enough leverage to seek a higher bid. But the Fed clearly preferred the original bid.

Inside Bear, jaws dropped at what many considered a broad deception by the Fed. Alan D. Schwartz, Bear?s chief executive, was furious, as was the board and its team of advisers. Several JPMorgan executives even offered their apologies about the way the deal ?went down.?

Now its more than a hunch...the fed screwed Bear. It wouldn't have gone down like this if it was Goldman on the brink. :disgust:

uh... its not exactly tax payer money...

 

[theeedude]

Originally posted by: LegendKiller

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp
Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

Do you not understand the idea that this goes beyond irresponsible lenders or borrowers? Have I not pointed that out time and again, only to have people like you ignore it since you can't counter the point?

Maybe it does go beyond them now, but bailing them out only encourages a repeat of this exact behavior. We should not bail out irresponsible lenders and borrowers even if it hurts the overall economy in the short term.

Get over the "stealing" with inflation, nobody has yet to provide substantial evidence that anybody is worse off in the long run from 50 years ago because the "inflation tax".

I guess you are clamoring for the 70s, since we are all better off in the long term from inflation. There are a lot of people on fixed incomes being hurt by inflation, you just choose to ignore it because you want a government bailout of your industry. In the long term we'll all be dead.

I agree that it does encourage a repeat of the behavior, which is why I advocate letting the market delever, work itself out of the current problem and then follow up with constraints to prevent the situation from happening.

Hyperbole and bullshit don't make for an argument, provide data or stop using it.

The only hyperbole and bullshit is this nonsense about the Bears of this world being too big to fail because the world will end if they do.

 

[Nerva]

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp
Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

Do you not understand the idea that this goes beyond irresponsible lenders or borrowers? Have I not pointed that out time and again, only to have people like you ignore it since you can't counter the point?

Maybe it does go beyond them now, but bailing them out only encourages a repeat of this exact behavior. We should not bail out irresponsible lenders and borrowers even if it hurts the overall economy in the short term.

Get over the "stealing" with inflation, nobody has yet to provide substantial evidence that anybody is worse off in the long run from 50 years ago because the "inflation tax".

I guess you are clamoring for the 70s, since we are all better off in the long term from inflation. There are a lot of people on fixed incomes being hurt by inflation, you just choose to ignore it because you want a government bailout of your industry. In the long term we'll all be dead.

I agree that it does encourage a repeat of the behavior, which is why I advocate letting the market delever, work itself out of the current problem and then follow up with constraints to prevent the situation from happening.

Hyperbole and bullshit don't make for an argument, provide data or stop using it.

The only hyperbole and bullshit is this nonsense about the Bears of this world being too big to fail because the world will end if they do.

let me ask you this then. do you have 401k? do you know what's you are invested in? of the things you invest in, how much subprime exposure do you have? or rather, think about the chain reaction that would happen across the board? you get affected, trust me. you get affected even if you are all cash. case and point is hsbc's online savings rate, that hs lowered with the fed fund rate. the fed fund rate is lowered to provide liquidity and stimulate lending. everything is interconnected in the financial market, transcends all physical borders.

and if you are calling bs on that, i would refer you to the russian debt crisis... that was the last time the fed had to step in, and that was much of a smaller mess back then than now. and oh, just in case you think you are a shrewd investor, you are not. LTCM was manned by veterans with 30 years of public market experience, nobel prize laureates and math phds...when genuis like them failed, what are your, or my chances?

 

[theeedude]

Originally posted by: 3cho

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp
Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

Do you not understand the idea that this goes beyond irresponsible lenders or borrowers? Have I not pointed that out time and again, only to have people like you ignore it since you can't counter the point?

Maybe it does go beyond them now, but bailing them out only encourages a repeat of this exact behavior. We should not bail out irresponsible lenders and borrowers even if it hurts the overall economy in the short term.

Get over the "stealing" with inflation, nobody has yet to provide substantial evidence that anybody is worse off in the long run from 50 years ago because the "inflation tax".

I guess you are clamoring for the 70s, since we are all better off in the long term from inflation. There are a lot of people on fixed incomes being hurt by inflation, you just choose to ignore it because you want a government bailout of your industry. In the long term we'll all be dead.

I agree that it does encourage a repeat of the behavior, which is why I advocate letting the market delever, work itself out of the current problem and then follow up with constraints to prevent the situation from happening.

Hyperbole and bullshit don't make for an argument, provide data or stop using it.

The only hyperbole and bullshit is this nonsense about the Bears of this world being too big to fail because the world will end if they do.

let me ask you this then. do you have 401k? do you know what's you are invested in? of the things you invest in, how much subprime exposure do you have? or rather, think about the chain reaction that would happen across the board? you get affected, trust me. you get affected even if you are all cash. case and point is hsbc's online savings rate, that hs lowered with the fed fund rate. the fed fund rate is lowered to provide liquidity and stimulate lending. everything is interconnected in the financial market, transcends all physical borders.

and if you are calling bs on that, i would refer you to the russian debt crisis... that was the last time the fed had to step in, and that was much of a smaller mess back then than now. and oh, just in case you think you are a shrewd investor, you are not. LTCM was manned by veterans with 30 years of public market experience, nobel prize laureates and math phds...when genuis like them failed, what are your, or my chances?

I know I am taking risks with my 401k, and I don't expect a bailout.
LTCM should have been allowed to fail too. And just because PhDs with their theories fail, doesn't mean people with simple common sense don't have a chance. Warren Buffet seems to be doing just fine with common sense approach to investing. Don't even need calculus to invest like he does.

 

[Miramonti]

Originally posted by: senseamp

Originally posted by: 3cho

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp
Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

Do you not understand the idea that this goes beyond irresponsible lenders or borrowers? Have I not pointed that out time and again, only to have people like you ignore it since you can't counter the point?

Maybe it does go beyond them now, but bailing them out only encourages a repeat of this exact behavior. We should not bail out irresponsible lenders and borrowers even if it hurts the overall economy in the short term.

Get over the "stealing" with inflation, nobody has yet to provide substantial evidence that anybody is worse off in the long run from 50 years ago because the "inflation tax".

I guess you are clamoring for the 70s, since we are all better off in the long term from inflation. There are a lot of people on fixed incomes being hurt by inflation, you just choose to ignore it because you want a government bailout of your industry. In the long term we'll all be dead.

I agree that it does encourage a repeat of the behavior, which is why I advocate letting the market delever, work itself out of the current problem and then follow up with constraints to prevent the situation from happening.

Hyperbole and bullshit don't make for an argument, provide data or stop using it.

The only hyperbole and bullshit is this nonsense about the Bears of this world being too big to fail because the world will end if they do.

let me ask you this then. do you have 401k? do you know what's you are invested in? of the things you invest in, how much subprime exposure do you have? or rather, think about the chain reaction that would happen across the board? you get affected, trust me. you get affected even if you are all cash. case and point is hsbc's online savings rate, that hs lowered with the fed fund rate. the fed fund rate is lowered to provide liquidity and stimulate lending. everything is interconnected in the financial market, transcends all physical borders.

and if you are calling bs on that, i would refer you to the russian debt crisis... that was the last time the fed had to step in, and that was much of a smaller mess back then than now. and oh, just in case you think you are a shrewd investor, you are not. LTCM was manned by veterans with 30 years of public market experience, nobel prize laureates and math phds...when genuis like them failed, what are your, or my chances?

I know I am taking risks with my 401k, and I don't expect a bailout.
LTCM should have been allowed to fail too. And just because PhDs with their theories fail, doesn't mean people with simple common sense don't have a chance. Warren Buffet seems to be doing just fine with common sense approach to investing. Don't even need calculus to invest like he does.

Suggesting that because there is something called cause and effect in the markets, thus the result is the world can't handle a Bear failure, is a pretty deficiently contrived conclusion imo. How can one argue that cause and effect exists - so therefore the results must be something the world can't handle! 😕

Beyond that it doesn't take a Phd to know that Phd's don't fair any better on average in the markets than a monkey throwing darts for stock picks.

 

[Nerva]

Originally posted by: senseamp

Originally posted by: 3cho

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp

Originally posted by: LegendKiller

Originally posted by: senseamp
Yep, let's keep the reckless lending party going with the Fed's help. Why not steal from responsible people (through inflation and taxation) to bail out some irresponsible lenders and borrowers? What is the lesson that these big brokers are going to learn from this? Go ahead and take as much risk as you want, the Fed will be there to bail you out if things go south.

Do you not understand the idea that this goes beyond irresponsible lenders or borrowers? Have I not pointed that out time and again, only to have people like you ignore it since you can't counter the point?

Maybe it does go beyond them now, but bailing them out only encourages a repeat of this exact behavior. We should not bail out irresponsible lenders and borrowers even if it hurts the overall economy in the short term.

Get over the "stealing" with inflation, nobody has yet to provide substantial evidence that anybody is worse off in the long run from 50 years ago because the "inflation tax".

I guess you are clamoring for the 70s, since we are all better off in the long term from inflation. There are a lot of people on fixed incomes being hurt by inflation, you just choose to ignore it because you want a government bailout of your industry. In the long term we'll all be dead.

I agree that it does encourage a repeat of the behavior, which is why I advocate letting the market delever, work itself out of the current problem and then follow up with constraints to prevent the situation from happening.

Hyperbole and bullshit don't make for an argument, provide data or stop using it.

The only hyperbole and bullshit is this nonsense about the Bears of this world being too big to fail because the world will end if they do.

let me ask you this then. do you have 401k? do you know what's you are invested in? of the things you invest in, how much subprime exposure do you have? or rather, think about the chain reaction that would happen across the board? you get affected, trust me. you get affected even if you are all cash. case and point is hsbc's online savings rate, that hs lowered with the fed fund rate. the fed fund rate is lowered to provide liquidity and stimulate lending. everything is interconnected in the financial market, transcends all physical borders.

and if you are calling bs on that, i would refer you to the russian debt crisis... that was the last time the fed had to step in, and that was much of a smaller mess back then than now. and oh, just in case you think you are a shrewd investor, you are not. LTCM was manned by veterans with 30 years of public market experience, nobel prize laureates and math phds...when genuis like them failed, what are your, or my chances?

I know I am taking risks with my 401k, and I don't expect a bailout.
LTCM should have been allowed to fail too. And just because PhDs with their theories fail, doesn't mean people with simple common sense don't have a chance. Warren Buffet seems to be doing just fine with common sense approach to investing. Don't even need calculus to invest like he does.

yeah...warren buffet does fine because he's well capitalized and has been investing for the past 50 years. do you know how much the market has gone up, even on a inflation adjusted level? i am betting the answer is no, you don't...

Beyond that it doesn't take a Phd to know that Phd's don't fair any better on average in the markets than a monkey throwing darts for stock picks.

uhhhhh i would like to see how you would do. i dont see people flocking to you with $6bn asking you to manage it for you, or a monkey for that matter. for you though, i won't make that distinction. and in case you are wondering, myron scholes manages $6bn... JM manages ~$1.3bn. even though JM hasnt done too well in the past year, i would imagine people would give him money before you. so there...

 

[Special K]

Originally posted by: 3cho


uhhhhh i would like to see how you would do. i dont see people flocking to you with $6bn asking you to manage it for you, or a monkey for that matter. for you though, i won't make that distinction. and in case you are wondering, myron scholes manages $6bn... JM manages ~$1.3bn. even though JM hasnt done too well in the past year, i would imagine people would give him money before you. so there...

So is it a lie that 80% of professional fund managers fail to outperform their benchmark index after expenses over the long term?

 

[bamx2]

mod pls delete duplicate

 

[bamx2]

I am not sure where to post this reply but there they go again with another quick fix ( at the taxpayers expense /risk ) -

http://biz.yahoo.com/rb/080327/markets_money.html

 

[Miramonti]

Originally posted by: 3cho
yeah...warren buffet does fine because he's well capitalized and has been investing for the past 50 years. do you know how much the market has gone up, even on a inflation adjusted level? i am betting the answer is no, you don't...

Rate of return and consistency of it isn't a function of capital, but wise decisions. However it is much harder to make the same rate of return with significantly more money as it is with small pools of capital. Buffet makes his money because understands value, and one of the wisest money managers/investors *ever.*