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| User Info | Stupidity Defined: Blind Buying in forum [Ticker] | |||
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Genesis Posts: 71430 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1217-S....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-07-15 09:00:41
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Halfbrite Posts: 555 Incept: 2008-10-13 
Arizona via California
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Amen, amen, and amen.
---------- "The Second Amendment is in place in case they ignore the others" "Go Galt,and Go Now!"
2009-07-15 09:07:37
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Dashingdwl Posts: 4564 Incept: 2007-06-26
los angeles
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The really stupid part of the whole syndication of CLO/RMBS/CMBS **** sammies is that, in the 2006 and 2007 heyday, the institutional buyers that were 'investing' in the AAA tranches were willing to do it for a yield of LIBOR plus 20 to 30 bps. That's right Libor plus 0.2%. No where to go but down. An example: My old firm's last CLO closed in 2007, syndicated by UBS, and featured a AAA piece paying L + 23bps. Sweet aint it? ---------- Think Green Tip.
2009-07-15 09:13:30
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Lordhumongous Posts: 1972 Incept: 2008-09-29
USA
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Why? Kickbacks under the table.
---------- Freedom. Is there anything it can't do?
2009-07-15 09:23:49
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Mayorquimby Posts: 5868 Incept: 2008-09-18
Ponzi Planet
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Amen is right. I tell ya - if I hadn't found TF, I might just be on the funny farm right about now.
---------- It's a PONZI ECONOMY and it already HAS collapsed. Now they need more ponzi!
2009-07-15 09:31:27
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Xtbjeff Posts: 39 Incept: 2008-03-19
St. George, Utah
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Let’s take a used car analogy. You go to a used car dealer, and see a spiffy looking sports car. Not being a mechanical expert, you take it to a mechanic for evaluation. Little do you know that the mechanic does all the “repair” work for that used car dealer. He says it is in great shape even though there is evidence it was in the Katrina flooding. So, you take the mechanic’s advice and buy the car. Shortly after it begins to crumble due to the hidden rust. You were sold package of crap by collusion between the used car dealer and the mechanic that worked for him. Why is this any different?
2009-07-15 09:48:06
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Genesis Posts: 71430 Incept: 2007-06-26
KD^2
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Because in this case you knew the car was in New Orleans when Katrina came ashore and the floor mats were caked with mud.
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me Last modified:
2009-07-15 09:48:56 by genesis
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Ggg71 Posts: 27 Incept: 2009-06-03 Swampscott, MA
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Quote:Regulators and law enforcement need to take a close look at all participants in these schemes over the last few years - not just the packagers, raters and sellers, such as the banks and ratings agencies, but also the buyers who may have willingly and knowingly suspended disbelief in the pursuit of profit - and are now trying to shield themselves from self-inflicted losses. Investors also need to take a hard look at who they have their money invested with, and if it is with any of these so called "Professionals" that poured money into these toxic assets, they should pull their cash, and invest with someone else. Honestly, I think people should pull all their money from the markets (easier said then done) until someone steps up at the federal level and removes the bezzle from the system. Last modified:
2009-07-15 09:54:20 by ggg71
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Xtbjeff Posts: 39 Incept: 2008-03-19
St. George, Utah
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Ah, but the car was shipped to Salt Lake City, and the used car dealer steam cleaned all the crap out of it to hide what was underneath. (This is precisely the reason why I avoided buying a used car since then.)
2009-07-15 09:55:35
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Lunatic_fringe Posts: 5706 Incept: 2007-06-26
Location: Terra Firma Online
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Quote:CALPERS has a rather amusing position being that they're in the middle of the biggest bubble area in the country for real estate. Attempting to claim that they didn't know that there was an active real-estate speculative bubble - right in their own back yard - defies logic. So does any claim that they didn't know that people making $8/hour cutting hair were getting $500,000 mortgages. Calper's investment managers must be the stupidest bunch of mother****ers to come down the pike. Don't forget the billion that Lennar took them for when they sold them the residential development in northern LA at the height of the bubble. Calpers has to be the IB's "go to" sucker to unload any bunch of **** they have stuck on their books. "Let's see, who can we stick with this bag of ****... Oh yeah! Calpers!" ---------- --------- __o ------- _`<,_ ------ (*)/ (*) ****************** Last modified:
2009-07-15 10:10:58 by lunatic_fringe
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Problemis Posts: 14 Incept: 2009-07-07
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I have to laugh at this one... My lower division economics professor was an investor for CalPers. He said at the time they were all on 1 year contracts. 25% of the investors with the lowest annual returns were not not offered new contracts the following year. Standard policy. Sort of like if Goldman fired 25% of the partners with the lowest bonuses. What kind of shark tank would that breed? So you have to out do 1 in 4 of the guys in the cubicle next to you or your fired... what incentive does that create? If all the 2nd basemen are now on steroids and batting .280 with 20 homers... you better get on steroids too if you expect to get a contract in this league... Hence, every CalPers investor on steroids. "Where do I sign up for those fine AAA MBS???"
2009-07-15 10:11:58
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Ruffcut Posts: 2201 Incept: 2007-07-07 Mushagain Online
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I wish they stomp their ass into the ground. Gut these rating agencies like the pigs, that they are. THen let the foreign investors pound what's left. Without any justice, we will go the way of mexico, where liability is dealt with a shrug of the shoulders. ---------- Support locally, and **** off globally!
2009-07-15 10:20:03
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Rhabdamanth Posts: 1833 Incept: 2008-10-31 
NJ, USA
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You can argue that Calpers should have done their own research, that's fine. But if someone puts themselves out as an expert and you rely upon their expertise only to find out that they were grossly negligent, at the minimum, then you have a cause of action. The only issue here will be contributory negligence or some version of that legal theory as applied to fiduciaries like CP. Did they abrogate their responsibility by relying on rating agencies - either in whole or in part? I don't know. The mere fact that the agencies were being paid by the issuers will not be persuasive. ---------- Is it still Russian roulette when all of the cylinders are loaded?  Being Paranoid just means you have all the facts... - Workinstiff
2009-07-15 10:21:37
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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Not that I'm going to argue with the premise of the ticker today - but I am happy that someone is taking the ratings agencies to task for not doing their job.
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2009-07-15 10:24:52
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Asimov Posts: 26708 Incept: 2007-08-26
east tennessee
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Problemis: I've never heard that. That's insane.
---------- It's justifiably immoral to try to deal in a moral fashion with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
2009-07-15 10:29:15
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Problemis Posts: 14 Incept: 2009-07-07
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Asimov, if you think CalPers investor incentives are insane, you should see the new office complex they built themselves. It completed construction around 2007. Opulent amenities everywhere. This is suppose to be a public pension fund and they build themselves a Silicon Valley-esque headquarters? This ain't Oracle folks. A client of mine had the contract to install the fire extinguishers in the building... into brass plate wall mounted cases that had to be polished after the tech finished installing the fire extinguisher.... The cases were close to $3k each wholesale... on every floor and I think it was no more than 150 feet apart...That is a lot of polished brass.
2009-07-15 11:18:17
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Critter Posts: 188 Incept: 2008-01-26 iowa
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Even i can understand this ticker. it's so simple- Mr. Haney followed the Clampetts to Califorinia and possibly teamed up with Whimpy.
2009-07-15 11:24:34
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Sushihorn Posts: 6084 Incept: 2007-10-22
Arlington, TX
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Problemis Not surprising. The whole industry has been like that - just not always as a matter of formal policy. We have been self-selecting for lemmings too stupid to feel fear for the last 15 years or so. ---------- http://jengafinance.blogspot.com/ Stop the looting. Start prosecuting. Do it soon. Or folks may start shooting.
2009-07-15 11:26:09
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Waverider Posts: 2785 Incept: 2007-12-23 Chicago
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>So why did you buy them CALPERS? Simple... because they knew govt. will take the loss. Govt. will bail them out. Head you win, Tail you don't lose. So why not. And this will continue forever.
2009-07-15 11:35:35
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Ptoemmes Posts: 79 Incept: 2009-04-13
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Gen - Perhaps one can hope that the exercise of going through the lawsuit regardless of outcome can expose in that "forum" many of the things you mention. Assuming this will be a somewhat "public event" there ought to be ample opportunity for followup ticker commentary. Lord knows the dense need things repeated and beaten into their heads and even then... Pete Last modified:
2009-07-15 12:26:16 by ptoemmes
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Kab Posts: 629 Incept: 2009-04-02 Colorado
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Quote:Let’s take a used car analogy. You go to a used car dealer, and see a spiffy looking sports car. Not being a mechanical expert, you take it to a mechanic for evaluation. Little do you know that the mechanic does all the “repair” work for that used car dealer. He says it is in great shape even though there is evidence it was in the Katrina flooding. Except there was a freakin' waterline on the doors and when you asked to see the interior or engine they told you that stuff was 'proprietary' and you bought it ANYWAY. Now you're crying because you were greedy and eager for returns during the massive car bubble where you were watching a Walmart greeter get financing on a Lamborghini because he said he could afford it, honest. It's not your fault, it's the mechanic for telling you it was a nice car, that bastard.
2009-07-15 12:29:35
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Kab Posts: 629 Incept: 2009-04-02 Colorado
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Quote:Ah, but the car was shipped to Salt Lake City, and the used car dealer steam cleaned all the crap out of it to hide what was underneath. (This is precisely the reason why I avoided buying a used car since then.) Except in this case the equivalent is it being sold in New Orleans. In 3 feet of standing water. Don't get me wrong the ratings agencies can go to hell and I won't cry one tear if they're sued out of existence. It's none the less laughable for these guys to point the finger at a ratings agency, pot meet kettle. The idiots at CALPERS need to be strung up right next to the idiots at the ratings agency, right next to the greedy ****s that were selling this ****. Last modified:
2009-07-15 12:34:32 by kab
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Xtbjeff Posts: 39 Incept: 2008-03-19
St. George, Utah
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That is easy for all of us to say in hindsight. But backup a couple of years when all of this was taking place. We have the "premier" investment houses (who we all now know are crooks) pushing these AAA investment vehicles. saying they are totally safe. They were backed by mortgages, and back then real estate was supposed to be one of the best investments one could make. And if any mortgages did go into default, they were supposedly insured, which gave that AAA rating. Hidden was the fact that behind that pretty "AAA" foil wrapper was a bunch of decaying trash.
2009-07-15 12:46:30
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Kab Posts: 629 Incept: 2009-04-02 Colorado
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Many people here were saying this at the time. Screaming it even.
2009-07-15 12:52:08
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Weaseldog Posts: 282 Incept: 2008-12-11 Texas Banned
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Quote:Except in this case the equivalent is it being sold in New Orleans. And you buy the title, unseen, and never take delivery, because you intend to sell it sight unseen to someone else at a markup... ---------- "You can know the name of a bird in all the languages of the world, but when you're finished, you'll know absolutely nothing whatever about the bird... So let's look at the bird and see what it's doing -- that's what counts." - Richard Feynman
2009-07-15 13:08:28
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