Tim in SATX

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    • The SEC's 'Sacred Cow' List: Where Are WaMu and Wachovia? [view article]
      Mark and all, the real protective target of the SEC list is just Fannie, Freddie and Lehman. The whole primary dealer thing is just thrown in there to add some hint of legitimate rationalization. The SEC is perverting their mission to protect investors. They have turned a blind eye to the whole bubble promotion issue, and now that we have the next bubble bust- in real estate finance, they are looking for scapegoats.
      Shorts play an essential role in mopping up bursting bubbles as they are the only bid while taking profits in a crash. This, after their offerside supply at the top protected the last fools from theirown bidding extremes.
      The SEC is misreading the rumor mongoring shorty boogieman here. The source of the rumors on Bear Stearns for example was merely the sharing of counterparty risk concerns as a part of legitimate business transactions. If you needed to hedge your BSC credit or counterparty risk in a meltdown, why not short the stock?
      The SEC is inadvertantly playing Whack-a-Mole with dynamic credit exposure hedging. Financial equities are intangible options on a leveraged balance sheet. Did anyone notice that during the short squeeze on the GSEs their MBS spreads blew out? Do you think their equities were getting kicked around like credit hedge option footballs? Did anyone notice how MBS spreads improved when the GSEs reversed today?
      Is the SEC now trying to promote GSE equity in a desperate attempt at a last ditch private market recapitalization? Are they misreading the shorting of Lehman as a bear raid when it is credit and counterparty risk exposure hedging?
      And as far as Hanky Panky Paulson goes- I say stop it with the shotgun socialism!       Jul 21 10:54 PM
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