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James Gornick
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Currently holding levels of PMD, and CCT; an economist who created theorems being bantered about for the Austerity v. Coase oppression investing, and new nest egg investing lifestyle rules. The theorems are measuring affects on markets and human unit plights over these next decades. I have been... More
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  • What Makes The SEC Rules Protective Over Supporting The Banking Sector In ("ABS") Practices?
    The lawsuits being raised by the QIBs have forgot the original SEC and current Dodd Frank Wall Street Reform and Consumer Protection Act (the ‘‘Act’’) related to asset-backed securities (‘‘ABS’’).  

    These proposed rules (Laws) to implement Section 943 of the Act, which requires the Commission to prescribe regulations on the use of representations and warranties in the market for asset backed securities--are the vary nature of acts providing the final protective curtain over the ("ABS") issues. Many of these issues most likely to see the judges pushing for settlements outside the court if the QIBs wish to come away with any recoveries.

    These investors (QIBs) filling suits will become handcuff by the vary nature of past and new present laws protecting the banks in allowing the time for these many issues to resolve. The fact of the bank are still holding the upper hand has said volumes to why this sector is starting to show recovery "Cup with Handles" on the charts on many of these issues.

    Signals revealing the banks having full control as seen by the marks left by the Countrywide's Sub-prime mess and the Bank of Americas (NYSE:BAC) bad paper an ability to settle for much smaller amounts if Rule 144A Section 5 have any role to play. 

    The why comes in the answer of going back to the laws and SEC rules that were in place during these sub-prime CDOs and ABSs. Many QIBs investments are held to a much higher standard to adapt to high risk offerings.

    The definition of a worthy investors comes Rule 144A is a safe harbor exemption from the registration requirements of Section 5 of the Securities Act for certain offers and sales of qualifying securities by certain persons other than the issuer of the securities.

    The exemption applies to resale's of securities to qualified institutional buyers, who are commonly referred to as “QIBs.” QIBs must be institutions, and cannot be individuals—no matter how wealthy or sophisticated.

    What types of transactions are conducted under Rule 144A?

    The following types of transactions often are conducted under Rule 144A:

    •offerings of debt or preferred securities by public companies;
    •offerings by foreign issuers that do not want to become subject to U.S. reporting requirements; and
    •offerings of common securities by non-reporting issuers (i.e., “backdoor IPOs”).

    What are the holding periods applicable to the sale of Rule 144A and other restricted securities?
    In December 2007, the SEC amended Rule 144, effective February 2008, to, among other things, shorten the holding periods for restricted securities (subject to certain public information requirements). For non-affiliate holders of restricted securities, Rule 144 provides a safe harbor for the resale of such securities without limitation after six months in the case of issuers that are reporting companies that comply with the current information requirements of Rule 144(c), and after one year in the case of non-reporting issuers. (Prior to the December 2007 amendments, the holding period was one year.) In each case, after a one year holding period, resales of these securities by nonaffiliates will no longer be subject to any other conditions under Rule 144.
    For a reporting issuer, compliance with the adequate current public information condition requires the issuer to have filed all required reports under Section 13 or Section 15(d) of the Exchange Act. For a non-reporting issuer, compliance with the adequate current public information condition requires the public availability of basic information about the issuer, including certain financial statements.
    For affiliate holders of restricted securities, Rule 144 provides a safe harbor permitting resales of restricted securities, subject to the same six-month and one-year holding periods for non-affiliates and to other resale conditions of amended Rule 144. These other resale conditions include, to the extent applicable: (a) adequate current public information about the issuer, (b) volume limitations, (c) manner of sale requirements for equity securities, and (d) notice filings on Form 144.
    Due to the shortened holding periods, it has become easier for Rule 144A securities to be acquired by non-QIBs once the restricted period has expired. Accordingly, the December 2007 amendments will decrease the incremental value that registration rights previously provided. See “Why do Rule 144A purchasers typically insist that the issuer register the securities issued in the Rule 144A transaction?” below. Source: Preliminary Note No. 2 of Rule 144.
    An issuer that intends to engage in multiple offerings may have a “Rule 144A program.” Rule 144A programs are programs established for offering securities (usually debt securities) on an ongoing or continuous basis to potential offerees. They are similar to “medium-term note programs,” but they are unregistered, and the securities are offered only to QIBs. These programs often are used by financial institution and insurance company issuers to offer securities, through one or more broker-dealers, to institutional investors in continuous offerings. Among the advantages of using Rule 144A programs are (1) no public disclosure of innovative structures or sensitive information; (2) limited FINRA filing requirements; and (3) reduced potential for liability under the Securities Act.
    What are the conditions that a reseller of restricted securities must satisfy to rely on Rule 144A?
    There are four conditions to reliance on Rule 144A: The reoffer or resale is made only to QIBs (see “What is a ‘QIB’?” below) or to an offeree or purchaser that the reseller (and any person acting on its behalf) reasonably believes is a QIB (see “How does a reseller establish a reasonable belief that a person is a QIB?” below); The reseller (or any person acting on its behalf) must take reasonable steps to ensure that the buyer is aware that the reseller may rely on Rule 144A in connection with the resale (see “Reseller’s Reasonable Steps So Buyer is Aware of Rule 144A Reliance” below); The securities reoffered or resold (a) when issued were not of the same class as securities listed on a U.S. national securities exchange or quoted on a U.S. automated inter-dealer quotation system (see “What is the definition of a U.S. national securities exchange or automated inter-dealer quotation system for purposes of Rule 144A?” below); and (b) are not securities of an open-end investment company, unit investment trust, or face-amount certificate company that is, or is required to be, registered under the Investment Company Act of 1940; and In the case of securities of an issuer that is neither an Exchange Act reporting company, or a foreign issuer exempt from reporting pursuant to Rule 12g3-2(b) of the Exchange Act, or a foreign government, the holder and a prospective buyer designated by the holder must have the right to obtain from the issuer and must receive, upon request, certain “reasonably current” information about the issuer. See “Informational Requirements” below. Source: Rule 144A(d).

    The final summary of this article concludes too hedge ones bet on the banks. Hedging them in leading the markets higher in the next several months. They have all the tools in place to continue business as usual. 

    I have taken a longer view point on many of the issues at hand. The continuation of the Unemployment benefits and the ability to allow for Programs in the Home modification area to adapt solutions to keeping many within their homes in the near-term and eventually will allow the servicers to steady in a recovery on keeping the housing collapse and commercial collapses from imploding the economy increasing the vary nature of the FED to be raising rates to equal the recovery efforts. 

    Remember what its all about; the final view when it comes to your life and investing. 


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: ***DISCLAIMER*** Stock and options trading involves substantial risk. The valuation of stock and options may fluctuate, and as a result, in some cases, clients could lose more than their original investment. In no event should the content of this correspondence be construed as an express or an implied promise, guarantee or implication by or from James Gornick and/or Seeking Alpha and or their affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information provided in this correspondence is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
    Dec 28 6:23 PM | Link | Comment!
  • Get To Know Why The Real Deal of Markets are Going Up!
    Hard to imagine! The truth is in the story why.  The markets love econometricians. This is when effective bail-out needs meets to the level sustaining Austerity  ratios.  Hence, ECB along with IMF and Ireland, and countries yet discovered in also needing assistance. 
    The DANGEROUS Atom Bomb lies with the potential fall-out if congress has truly shut the door on extending the unemployment benefits for millions of folks coming into December. If Congress, along with the President does not go back to work and approve the 2 1/2 million coming off the Unemployment Benefits and COBRA extended 65% discount to 35% pinked slipped employee pays.  

    Underline the corporations, rich enough to pay due to their 10-K filings and ability to buy back shares and raise dividends sends this signal loud and clear.  Corporations should have to continue to pay the COBRA Health benefits of these folks they displaced. And, if Congress is smart enough, they can apply the equation to have these same Corporations pay an extra 2 1/2 percent unemployment rate hike to unemployment tax. This hike would take the taxpayers off the hook and bring back the real winners in this massive QE2 recovery surge. 
    Time to beef up the extensions needed to keep massive unemployed floating till the wheels turn to dissolve/resolve the housing crises, along with the many hidden other debt loads. These debt loads being lessened as their leveraged exposures are calculated through Austerity Theorems.
    Central Banks involvement in floating this entire scheme since 2007 has rung the bell of Austerity Theorems of Coase Oppression for all.  Markets are very effective in running the futures to scale this probability of Dow reaching 12,500 and the S&P into the 3,200, and Nasdaq to 4,250. 
    Read this link provided giving the importance of stopping an Atomic Bomb to tank the market being on the table ready to blow.  

    Disclosure: No Positions
    Nov 21 8:58 PM | Link | Comment!
  • When Nations and Systems Forget the Real Game
    One can assume, the Power Elites affect nations or a single retirement fund to become squeezed. Squeezed and somewhat oppressed; in this current Austerity Environment.

    They say, market forces cleanse wasteful investments, innovative business models make existing ones obsolete, and the economy roars forward all the stronger for it--or do the Magicians of the Oligarchy running the show from behind the curtains blind us?

    Make no mistake of these well crafty Magicians trying to control the currency and banking systems of the world behind the backdrop of the world's curtain. Enough money to invest and control nation's choices and to bring nations to be introduced to the New World of Austerity Investing rules. However, while market entrepreneurs generally prosper during times of great dislocation, ultimately to the benefit of all participants in the economy, today political entrepreneurs have hijacked the economic system.  
    The politically connected elites have used this downturn to carry out a massive wealth transfer from the people, to the public, and private sectors; fleecing the middle class for their own enrichment. In their hypocrisy, the long ago small businesses that grew large because of free markets have helped chain these markets through lobbying for regulations and subsidies to shield themselves from competition and their own errors.
    In these times of greater uncertainty, messages are sent to play on the field with rules of engagement. This message was sent with Ben Bernanke on Friday November 19 to China and the Asian Rim. There is even a more important message being sent to Congress and the President of Barack Obama from these uttered concerns.
    It is a siren to the governments around the world to hold accountable, the corporations filing their 10-Ks, and other formal filings showing they have achievable documented earnings reaching the highest level on their books in the history of their businesses since the stock markets opened their doors.

    Understand the dominator of Abyss factor keeps the housing recovery from total collapse is based upon 2 1/2 million unemployed just in the United States keeping their benefits extended in Unemployment and COBRA for another 12-month period.

    The catch for Congress and the President Obama is to charge this off to the corporation structures revealing their buy back of shares and upping their dividends at the expenses that dislocated all these millions of folks in the first-place.
    The facts are clear; you take out the one direct source of pure stimulus of home-modification support for payments extended through the unemployment and COBRA, Extended Medicaid benefits. These benefits staying in the equation, getting these folks still supporting an economic consumption of basic necessities, and combining part-time dollars from possible one working individual, may be the only piece of the puzzle working right through this whole mess.
    The basic facts are simple in keeping as many Americans within their homes may play out to be crucial to a housing and economic recovery. Keeping them out from under the foreclosure mess of to many units flooding the markets and the up keep would cause the markets to depress even further than the 25% expected by Case-Schiller within professor Schiller most recent written responses giving solutions on-going for the housing and unemployment problems. 
    This Is a Real Game for Keeps

    If these extension for benefits to these 2 1/2 million folks on the table of the United States approving or disapproving could add up to be an Atom Bomb. Atomic bomb of inviting the Abyss theme as bantered about by so many brilliant minds. If these 2 1/2 million folks are not approved, as calculated within the Coase Oppression (Austerity Theorem), by well respected and renowned formulas. We all face cataclysmic failure of collapsing the China and Asian Rim and other nations by the mere fall-out of the bomb becoming lit and sent flying like an missile with all nations becoming the target of its wrath.
    An Atomic Bomb accidentally lit by ignorance of an Oligarchic miscalculation in timing of letting these unemployed folks, numbering well into around 2 1/2 million. These folks no longer stay within their homes under pre or post foreclosure or home modification status. These same folks with the additional folks from other nations supporting the delicate consuming economies of CPIs, GDPs and other essential growth metrics based upon the wellbeing of the Human unit bantered about by noted professor Joseph Stiglitz to be incorporated in measuring the wellbeing of economic survival of a nation. Nations ensuring a recovery can be substantiated.
    Greece, Ireland, and eventually other nations pressing the ECB an IMF need to stretch multi-trillion dollar debt restructures until the balance of the "New Third Wave Austerity Industries" bring many of the nations to become self supportive again, based upon an increase, and not a decrease, in Birth rates; as Demographic Economics is also more than at play.
    In plain English; these folks going to lose their, Unemployment and extended COBRA benefits starting in December of 2010 are the match that will be remembered around the world that a Tea Party, Republican, Democratic, and/or independent did not think long and hard about what history is going to write about them in the Year of December 2010. The collapses that occurred henceforward going into 2011 and steering full speed ahead into 2012s and collapsing China and all the other Emerging Growth Nations to hyper-deflation to try to allow for basic survival needs to be met by all under Coase Oppression (Austerity Theorem).
    Far-fetched, No, not this time. I wish it were! However, the math does not lie on the affects of 2 1/2 million Americans coming into the free-fall of losing their benefits. Benefits toppling the balance as stated hopefully as clearly as can be stated, causing the fall of many home modifications and contractual holding patterns of debt structural easing as seen demonstrated by QE1, QE2, and eventually, QE3.
    Collapses further denigration of the homes coming into the status of foreclosure deeming the effects of a downward pressure of the current markets supporting all the Municipal Bond Issues stemming from Cities, Counties, and States. No differences from the issues of Greece and other nations being no larger than California or Texas combined.
    I announced onetime as attached article answering the origins of creation and Stephen Hawking claims of some concerns for many. To get to know Teleios and the "I am" of your origins of what makes you the you or your "I am".
    May the peace of the coming days be with all reading this plea for sending a message straight to Washington and the World leaders...

    It can work...

    Disclosure: No Positions
    Nov 19 3:38 PM | Link | Comment!
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