Dear John Thain

CNBC's Specious Reporting on the Housing Plan

To all those making a point about principal reductions, let me direct you to this...

From the Whitehouse website (www.whitehouse.gov/blo.../):

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* Will refinancing reduce the amount that I owe on my loan?

No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

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Can a lender reduce the principal amount? If they own the loan, sure. Does this legislation do anything to affect that right? Or compel them to do so? No.

As for knowing about Rick Santelli and CNBC, let me be unequivocal and unambiguous about this: The reporting on CNBC is completely surface. Having sat on a bulge bracket institution's trading floor for years I pity anyone who defines knowing Rick Santelli as either necessary or sufficient for being informed. The only thing CNBC is good for is hearing rumors about corporate actions such as mergers, layoffs, management changes, etc.

If you rely on CNBC for trading, being informed about the market, or understanding the real issues in finance, then I can't help you. One needs to read primary documents, do their own research, and get a breadth of opinions before they can be considered informed. As a matter of fact, if you consider watching CNBC informed, then please call me when you want to do a trade--I'll take the other side gladly.

Some commenters refer to Fannie and Freddie as having started this problem. They have missed the boat missed the boat. I refer you to my previous writing on the matter -- (dearjohnthain.wordpres.../).

As for open outcry, please stop carrying water for this antiquated system. Yes, I know there are electronic methods for trading that exist next to the pits. However, claiming open outcry has value versus electronic trading is a farce. It might be true only because of limitations put on electronic trading by those who have a stake in open outcry systems. Most equity option exchanges are electronic -- algorithms price the illiquid securities and those markets function just fine.

Calling a Bottom: It's Time To Party

All,

Everyone should calm down and realize that I haven't called a bottom. Go to my original post, the title was: "Bold Statement: Time to Start Partying" ... Meant to be a bit sarcastic. SeekingAlpha re-wrote the headline, as they usually do. I'm just saying that we've turned a corner, most of the uncertainty and irrationality in the markets has been taken out. So, if it gets *much* worse, then I'm wrong. If another firm blows up, sending the market into a tizzy, I'm wrong. Otherwise, if volatility comes down, investor confidence returns, etc. then I'm not totally wrong. Low bar, eh? Wish I would have seen this sooner to set the record straight.

-DJT