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MichaelZZ

MichaelZZ
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  • The Truth About Goldman and AIG Becomes Clearer [View article]
    GOLDMAN-SACHS

    1. GS was probably most responsible for the run-up of the price of crude to $147 via promotion and manipulation.
    2. GS was probably greatly responsible for the mortgage woes (see my thoughts following this short litany).
    3. GS appears to have paid off Warren Buffet to obtain his ability to promote (see my thoughts).
    4. We, the People, paid GS $13 billion through AIG. Why wasn’t this investigated?
    5. GS appears to view itself as the De Beers of the securities markets.
    6. Mr. Henry Paulson (Treasury Secretary, Bush Administration and ex-CEO of GS), panicked around the middle of September 2008, and “educated” Congressional leaders that we were in the middle of a financial crises.
    Interestingly, after reaching a high of $250.70 on October 31, 2007, GS’s common stock fell to under $86 on September 18, 2008.


    Regarding 2, above:
    Billions and billions (Carl Sagan) of years ago…, well, maybe 30-40 years ago,
    financial institutions would loan funds for the purchase of homes and would
    collect the funds over a period of years. The concept of selling those loans
    (mortgages) was developed to enable these institutions to recycle the funds for the
    purpose creating more loans with the proceeds from selling the mortgages to other
    institutions and investors.
    Via competition, these institutions began lowering the requirements for purchasers
    of residential properties, e.g., whereas the standard down payment was 20%, that
    requirement was reduced through competition to 15%, to 10%, and, in some cases,
    no down payment was required.
    Enter the Goldman-Sachs and its collective “creativity”.
    Is it possible (simplistic, but an interesting roadmap):
    a. GS went to Countrywide to promote the concept of stimulating the creation of
    additional mortgages that GS will package and sell as securities?
    b. GS attempts to sell the packaged securities and met with a head-wind insofar as the securities were not rated.
    c. GS went to the rating agencies, S&P, Moodys, etc. to obtain a rating, but were told they couldn’t receive a good rating unless the securities were “insured”.
    d. GS finds an insurer (a subsidiary of AIG) to obtain “insurance” for the packaged mortgages. GS sells the idea to the insurer that GS is willing to pay a fee as a cost of doing business. Further, it may have been that GS sold the insurer to believe that defaults would be almost non-existent and that the fees were “found money” for the insurer. The insurer bought into this sales pitch based upon greed. Thus, these securities (bonds) were given investment grade ratings by S&P, Moodys, etc., and the result was a flood of sales of these bonds (CDO’s – Collateralized Debt Obligations).
    e. GS, knowing that these highly rated CDO’s were risky, and after they sold these CDO’s, went out and purchased CDS’s (Credit-Default Swaps). They no longer had any insurable interest, but still expended funds to purchase these CDS’s. Why? Perhaps they knew that it was only a matter of time before the CDO’s would collapse? Those who purchased the CDO’s were the one’s who should have been advised to purchase the CDS’s. There should be a serious investigation into GS as to why it purchased these CDS’s.
    f. After the collapse, the insurer did not have the funds to pay off, thus We, the People, via our President came to its aid by injecting more than a hundred billion dollars into AIG to enable the payments to GS and others.

    Regarding 3, above:
    In the middle of 2008, Berkshire Hathaway (Warren Buffet) purchased $5 billion
    of preferred stock from GS. The dividend rate is 10%!! As a “kicker”, GS granted BRK long-term warrants to purchase 143,000,000 shares of GS @ $135.00 per share. Why would GS have made such an apparently desperate deal with Mr. Buffet?
    Shortly thereafter, Mr. Buffet was constantly on CNBC, promoting TARP.

    Is this good circumstantial evidence?
    What would a rational reader conclude?
    Where are our investigative reporters?
    What should a citizen/taxpayer conclude?

    mz
    07/05/09
    Dec 13 12:02 PM | 16 Likes Like |Link to Comment
  • America's 3-Ring Economic Circus [View article]
    The desire for wealth doesn't have to be, but, sadly, it is the root of too much evil.

    Beginning in 1981 (Voodoo economics, as coined by the elder Bush), the Nation's energy has been shifted to the upper 1% (actually much, much less).

    Capitalism being as great as it is held out for a long time but is in the process of keeling over.
    The "engine" of capitalism is a strong and healthy middle-class.

    Greed caused the "leadership" to suck too much energy from the middle class to that top 1%.

    The beginning of the solution (First step: The reversing of the erroneous and malfeasant Bush tax legislations on those with taxable incomes in excess of some number between $200-300 thousand and legislating a permanent tax cut for those with taxable incomes under $60,000 - arbitrary, but reasonable) will be made only after greed has been overcome.

    "Shots" to stimulate the economy in the form of rebates are nonsensical facades, at best, but are consistent with that which keeps our leadership from taking the correct actions; greed.

    Michael Z
    mikiesmoky@aol.com
    Mar 14 12:30 PM | 5 Likes Like |Link to Comment
  • The End Of Wall Street As We Know It? [View article]
    We don't need or require an "end" to Wall Street.
    We need an unwinding of the morphed Wall Street caused by greed.
    Greed is NOT good.
    Incentives ARE good.
    Greed = incentives on steroids

    Circa 1969, the average daily volume on the NYSE was fewer than 5 million shares.
    Today, that volume is traded in less than the first 5 seconds.
    Circa 1970, options were introduced on approximately 30 stocks. Now there are thousands of options.

    One of the major effects has been to shift energies from teaching, engineering, medical, et cetera to Wall Street.
    Could that be why we must import engineers, scientists, doctors, etc.?
    Not too stellar.

    We have slowly morphed into a quagmire and it can only drag us under.

    Everything is tied into the "market", most notably all defined benefit plans and insurance.

    Quagmire is an understatement.

    mz
    Aug 10 02:15 PM | 4 Likes Like |Link to Comment
  • Buffett Disses Gold [View article]
    Whereas I am not thrilled with Mr. B, he is 100% correct.

    Gold is a commodity.
    Gold is the most hoarded commodity.
    The incremental cost to produce an ounce of gold is between 350 and 650.

    Ride the wave, but be very quick to jump off your board unless you don't mind being smashed upon the rocks!

    best,

    mz
    Feb 10 08:15 AM | 4 Likes Like |Link to Comment
  • Who Is Buying Gold, And Why Is Gold Volatility So Low? [View article]
    Bubbles are not just in champagne................

    Who knows when we will sense the "pop", but it will be severe.........
    Jun 20 12:18 PM | 4 Likes Like |Link to Comment
  • Democrats push forward with call for higher minimum wage [View news story]
    There should be NO minimum wage.

    There should be an expansion of the EITC for citizens and green-card holders who are over 17 (to keep students in high school).

    Minimum wage laws falls in Einstein's definition of "insanity".

    mz
    Mar 5 10:08 AM | 3 Likes Like |Link to Comment
  • Eric Sprott: I Think We Are In For A Shortage Of Physical Gold [View article]
    Me thinks the author has an axe to grind.

    Shortage of gold???

    Is he a comic??

    What would happen to the price of gold if and when the hoarded gold were released into the marketplace?


    $600?
    $500?
    ?????

    mz
    Dec 25 11:22 AM | 3 Likes Like |Link to Comment
  • Cost Cutting A Slippery Slope For Bank Of America [View article]
    The author has either a prejudicial or math problem regarding:

    "For the past three years, the annual dividend amount has been $0.04. The amount paid in total as dividends last year was around $2 billion."

    $0.04 for 10.8 billion shares should be $432million or about 1/5th of the $2 billion reported by this author.

    Mr. Author, what is the answer?

    mz
    mikiesmoky@aol.com
    Sep 6 12:59 PM | 3 Likes Like |Link to Comment
  • Economy in Danger of Full Stall [View article]
    Economic erosion...., pure and simple.

    mz
    Jun 26 05:43 PM | 3 Likes Like |Link to Comment
  • 5 Charts of This Week's Investment News [View article]
    IF THE HYPERLINK DOESN'T WORK:

    www.federalreserve.gov...

    Please note that I have re-characterized “so-called Bush tax cuts” as “tax errors”.

    Alan Greenspan, on January 25, 2001, testified before the Committee on the Budget, U.S. Senate, regarding the “outlook for the federal budget and implications for fiscal policy”.
    His testimony reflected that his biggest concern was the disposition of federal receipts once the national debt was paid off due to the “burgeoning federal surpluses”, which had been projected. His full testimony can be read @ www.federalreserve.gov...

    Thus, it appears that Mr. Greenspan lobbed a softball to Mr. Bush for the major tax “cut” of 2001. It was passed in an effort to mitigate the potential damages, as outlined by Mr. Greenspan, due to the projected “burgeoning federal surpluses”.

    How many of our Senators and Representatives suggested that much, if not most, of these “projected” excess collections could be used to fill the shortfalls in Social Security, Medicare, and Medicaid?

    This larceny must be stopped.

    Thank you for your efforts.


    mz
    May 1 10:23 AM | 3 Likes Like |Link to Comment
  • Top 5 Dow Dividend Stocks: How to Double Your Yield [View article]
    The author's strategy appears somewhat naive.
    If the stock is called away, you are left with cash to find a home, unless you expect the stock to drop, overnight, for you to repurchase. LOL
    Further, being long a security AND shorting its Puts is adding substantial risk.
    Jan 15 12:27 PM | 3 Likes Like |Link to Comment
  • Gold Is Poised for a Big Correction [View article]
    I don't mean to sadden anyone, but most hereon are guilty of the #1 greatest human frailty, i.e., "tending to believe what one wants to believe".
    Gold is in a far bigger bubble than that of the Dot.com, NASDAQ (close), etc.
    Can you think of anything more hoarded than gold?
    What will happen to the price, once the "retail" buyers have dried up and sellers are looking to raise cash?
    Oooooooooooops!
    Who gets out the door first, and at what price?
    What is the incremental cost of production?
    All the gold ever produced throughout history is still here, i.e., it doesn't go bye-bye.
    The promoters will continue to push until it ends...., and it will end.
    Do I know when and at what price?
    Absolutely not.
    Good luck..................

    Michael Z
    mikiesmoky@aol.com
    Sep 12 04:27 AM | 3 Likes Like |Link to Comment
  • Obama's Loss Is the Economy's Gain [View article]
    Our "leadership" has done and is doing the wrong things.
    This comment is not limited to the Obama Administration, i.e.., it includes the Bush "Era".
    We have a massive Catch 22.
    There is no question, but we are in and will continue to be in a deflationary scenario for many years.
    The "22" resides in the fact that if the economics were adjusted, the seriousness of overpaid government workers (municipal, state, and federal), including their retirement programs will not be adequately addressed. This is a critical factor.
    An immediate (i.e., immediate!!!) economic stimulation would occur if legislation were enacted that would provide an income tax credit for 100% of the SS tax on the first $40,000 of wages, which would amount to $213 per month (maximum).

    michael z
    mikiesmoky@aol.com
    Sep 7 11:52 PM | 3 Likes Like |Link to Comment
  • Buffett's PR Disaster [View article]
    I have been writing about Warren ever since learning of the Goldman deal in September of 2008, when he purchased five billion of GS preferred, being given a 10% dividend and something like 42 million long-term warrants to purchase GS common @ $135/share.
    During the panel's quizzing of Mr. Buffett, I perked up when Heather Murren begin to ask about this transaction, but, sadly, her questions turned superficial and were truncated.
    I recall that just after the purchase, he went on CNBC to promote TARP (NOTE: BRK also owns piles of Wells Fargo).
    The main question should have been: why did GS give him such a deal?
    Mr. Buffett may be gradfatherly and a good businessman, but he is insidious (sorry Buffett lovers..., but what is...is).

    mz
    mikiesmoky@aol.com
    Jun 4 09:10 AM | 3 Likes Like |Link to Comment
  • Today Looks Like the Day [View article]
    We, collectively, are missing the big (macro) picture.
    Greece is a red herring.
    Whereas Capitalism is the best economic system available, the element of greed, allowed to run unchecked, is a cancer to the concept of Capitalism.
    Capitalism is not a game.
    It is a concept designed to stimulate the production of the greatest amount of goods and services for the greatest amount of users.
    Contrary to Michael Douglas' character in Wall Street, greed is not good.
    Rational incentives are terrific.
    By the way, greed is not limited to banks and other corporations, i.e., it is woven throughout the fabric of humanity. To mitigate the damage greed can cause, we must understand this cancer and establish systems and controls to minimize that damage.


    mz
    May 21 05:36 PM | 3 Likes Like |Link to Comment
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