axelrod608

Wall Street Breakfast: Must-Know News

The Fed's ZIRP - zero interest rate policy - is the driver behind most of our economic problems. Florida's pension plan bought a ton of Lehman preferred with a 10+% yield, rated AAA and ended up eating it. Investors like pension plans that must make gains and individuals who want gains have to move out on the risk continuum to make gains that exceed tax and inflation costs. The Fed policy mandates that anyone who wants to make positive gains has to buy. riskier investments.

There simply aren't any guaranteed investment vehicles that will pay more than taxes and inflation.

Having said that, whoever buys any investment they don't fully understand is at least as liable as the seller. CALPERS should have done their due diligence and known better.

And having said that, the rating agencies need radical transformation. They serve the interests that pay them - the sellers. Never a good policy.

Wall Street Breakfast: Must-Know News

>> " the foxes about to be given a free pass to the hen house" >>

The foxes have been running the hen house for decades. Where the old foxes were crafty and only took enough to not get a great deal of attention, the 21st century foxes no longer care, even if the "goose that lays the golden eggs" gets eaten.

Bailouts are unAmarican, unPatriotic, unConstitutional and ineffective.

If we'd let Chrysler die a natural death a few decades ago, we wouldn't have had the infamous K-car, several million gas guzzling "hemi" ads, and their incompetent leaders back at the trough for seconds. What part of "BAILOUTS DON'T WORK" doesn't Congress understand ? Unfortunately, all of it.

Wall Street Breakfast: Must-Know News

OOOPS !!! Senior moment above....

The CDS's are not 1,000 Trillion - that's the total of all derivatives. The CDS problem is that they were invented to be an alternative to insurance with no requirements for sequestering funds to cover them. The companies that sold the CDS's cannot cover the losses, so the "insurance" buyers of derivatives were counting on to cover losses doesn't exist. The losses are uninsured. So the holders of all those derivatives just have to eat the losses.

Real, regulated insurance requires funds to be safely held to cover losses. CDS's aren't worth the paper they're written on.

THAT's the problem.

Wall Street Breakfast: Must-Know News

19 months of endless campaign drivel and people have to make it spill over here....

Divided we fall. Just keep pointing those fingers and calling loyal Americans who disagree with you names. It will surely hasten our demise.

Back on subject, the breakfast had one indigestible tidbit - the one by the talking head in charge of CDS's saying CDS's are being unfairly blamed for the mess. CDS's ARE the mess.

First, they are stupid, highly leveraged "securities" with no security, no requiremets for security. Backed by nothing, worth no more than a rube will pay for them. They sell at market somewhere between 16 cents and 65 cents on the dollar and there's 1,000 TRILLION dollars of them globally.

Second, they are held off the books, totally negating any transparency the holder may have in its other assets.

No amount of money will make their holders solvent. The "bailout" is akin to bailing out the Titanic with a teaspoon.

Dishonest "leadership" is too afraid to level with the American people. They'd rather keep us busy pointing fingers at and calling each other names. Sadly, many Americans buy in to this charade.

Newsflash - it matters not who "wins" the election. The minor differences are dwarfed by the immensity of the underlying problem.