madasiwannabe

Negative Return on Investment on Paulson’s Moral Hazard

The GSE takeover was an orchestrated power play. The downward spiral started when Paulson announced his plan for a backstop. Once in place, PIMCO did their best to shake investor confidence so they could buy government backed securities at Junk bond rates. One of their point men was non other than Greenspan. He's been on PIMCO's payroll for a while now as a consultant. He's also on the other big winner of Sept 8th's payroll, Pershing Square. They racked up a whopping 8 Billion.

The takeover also took, by my estimates, 36 Billion in shareholder/investor value out of the GSE's in a single day. We now know where 10 Billion of it went. Now the taxpayers will have to put it back before we can even start paying the rest of the tab. If we can use the S&L bailout as a benchmark, this will cost the taxpayers many Trillions before it's over.

Causes and Opportunity Cost on the Ongoing Crisis

It's about time someone pointed out there were always limits on what the Financials can get away with and for some reason the limits were changed on Greenspan's watch. I've been hoping someone would put together Greenspan's relationship with PIMCO and Pershing Square... The two companies that racked up $10 billion when Hank took over Fannie and Freddie. All that bashing by the former Fed Chair really paid off big.

A few months ago I predicted that Hank would take over the GSE's and once in his control, he would use them to clean up the books of his friends before he left office. Last week Paulson mentioned using the GSE's as a clearing house for purchasing toxic mortgages. Is this really a plan to save the economy?

Feddie Pay: The Reality of the Bailout World

It was on Greenspans watch that all the bad decisions were made. You mentioned increased ratios, but no one is talking about the Fed lowering capital requirements for the banks and OFEHO lowering capital requirements and increasing portfolio limits for the GSE's. All of this just to make sure there was enough liquidity in the market to keep the housing boom rolling.

Greenspan should go to jail, not just for his role in setting up our current crisis while at the Fed, but his role in toppling the market while on the payroll of the two guys that made the most from it, Bill Gross and Bill Ackman.

Moody's, Fitch, S&P, SEC Are All Useless

The credit rating agencies are all masters of the obvious. Downgrading a company after it falls says it all. Where were they 6 months ago when the market figured it out.

SEC is very good at sitting on their hands. Naked shorts are not killing stocks, bad policy and greedy companys are. As you alluded to, LEH was a victim of long selling, not short. Also include Paulson's confidence building backstop scheme. All it really did was make everyone question the real health of the market. You know it's time to worry when everyone tells you not to.

Let Lehman Fail

The risk of Bill Gross losing Billions was removed in July when Paulson talked Congress into backstopping the institutions. Since then, Bill stood to make Billions if the GSE's continued their slide. Monday's takeover actually made Bill 1.7 Billion dollars.

For some reason no one points out the fact that the most vocal opponent of Fannie and Freddie, Al Greenspan, is also on PIMCO's payroll. He also works for Bill Ackman's Pershing Square, who also made $8 Billion when the fed zeroed out the shareholders. He is speaking with the best interest of his pocket and not the Nation and has never disclosed his personal interest in the GSE's. Where has the SEC been

If Hank would have left the GSE's alone in July, we would not be here right now. The GSE shareholders would still be taking it on the chin and the spin doctors would not be relentlessly attacking the IB's. Now we have two black holes that have $35 Billion dollars less capital this week then last, and Hank has a place to help his friends dump their bad portfolios at the taxpayers expense.

We the taxpayers can't afford any more help from Hank. January can't come soon enough.

Could Lehman's Failure Cause a Systemic Meltdown?

To blame Lehmans mess on the short sellers is like blaming your account balance on your bank. Fuld had plenty of opportunities to clean up the mess, but didn't take them. The Koreans came out and said Fuld wanted twice the book value for a 50% stake. When you factor out the losses, a $10 p/s offer from the Koreans was actually very realistic.

SpinCo is nothing more than spin. How does Dick plan to capitalize this new company? Stock offerings? Who would buy into a business that everyone knows is losing a billion a month? Not me. Use the money they get for selling a stake in Neuberger Berman? Lets say they get 5 Billion for a 50% stake, that wouldn't cover 6 months of losses, and they would be giving up 50% of what they have as profits now.

The dogs are now on MER, WB, and WM because they have exactly the same issues with bad paper. Once again not a short sale problem, it's a risk and greed issue created by management.

Lehman’s Dirty Laundry Stuck in the SpinCo.

SpinCo is just that, spin. who will buy stock into an IPO that is known to be sinking by over $1 Billion a month? Sounds nice when Fuld spins it, but it's completely unrealistic to think LEH will be able to raise further capital with stock offerings any time soon.

My guess is they are trying to hang on till the housing bill kicks in. When it does, they will be able to use it to refi their trash and dump it on the taxpayers via the GSE's. Another fine fleecing product brought to you by Hank and Co.

Checkmate for Lehman?

You can only cry sale so many times before the market stops listening. When the Korean's announced they were walking away again, the stock was doomed.

Today they will announce more of the same. Not sure how the market will digest what's said, but I think the big boys will let it run up a bit and then put the full press short back on...

Bond Expert: Lehman, the Corporates, and MBS

Another " I told you so". The takeover of the GSE's got everyone liquored up, but today was hangover day. Next comes out of control interest rates and a long line of banks that want the Fed's help.

I've spent the day yelling at the TV because the same knuckleheads that called for the takeover were on today questioning the move. Just a bunch of fair weather talk show hosts that try to pretend they are analysts.

For a Lehman Signal, Watch Commercial Paper

Everyone knows LEH is probably the most CDO over exposed investment bank on Wallstreet. They need capital and the CEO has been playing poker with the Korean's to make a profit when he should have been looking for a way to cover. Unless they show a profit or have a signed deal very soon, they are going to be the next ones to get a Friday visit from the Feds.

Stunning Reversals: Is This a Market or a Casino?

This is an " I told you so" day. The market realized the bailout was BS and nothing really changed (except GSE investors got scalped and the taxpayers got the bill). The banks still have $7 Trillion worth of toxic CDO's that are not covered by the GSE bailout, LEH & WM are still in denial, Uncle Sam has maxed out the credit cards and no one is buying treasuries, the rising dollar is killing exports (which was the only economy strength) and dismal financial quarterlies are still coming out this week.

Welcome back to reality.

Richard X. Bove on Lehman: An Assault on Reason

Bove and intelligent don't go together. He doesn't use any analytical tools, just hunches. He declared the financial crisis over in March and recommended strong buys for once in a lifetime financial stock prices. He had a hunch that BSC was a buy the week before they crashed. He also came out the day after and predicted they wouldn't make it without a partner. Wonder if he has one of those 8 balls. Go look at his stock picks, he's down 80% this year. If we did exactly the opposite, we would all be rich right now.

He admitted he made the LEH $20 estimate based on current stock price plus a 50% premium. Very intelligent.

Witnessing the Biggest Transfer of Wealth in History

There is definitely something going on and it doesn't take long to see the scam if you look at who stands to make the most. Can't believe Paulson and friends are behind it though. If they are, it's the dumbest plan I've ever seen.

The backstop did nothing more than imbolden purchasers of securities. Trashing the GSE's would lead to downgrades, which in turn would drive yeilds through the roof. The effect is reduced liquidity, increased rates, and loss of buying power. This is going to quickly spread outward from the GSE's to every financial institution in the country. In effect Paulson's plan is transferring wealth away from his buddies in the financials.

At this point, any help from the government would just be bled right back out. A government takeover now would cause goverenment securities to be downgraded too which will accelerate the pending economic collapse. If the government doesn't act, downgrades will continue to Junk and we will be back to 1980 interest rates, no matter how low the Fed drops the rates to. I think I would call it check mate.

This is a Ponzi perpetrated by the financial backers of our credit addicted economy. We are all hopelessly adicted junkies and it's now time for the Credit dealers to raise their prices. Go find the backers and you'll find the masterminds. I'm sure a talk with Bill Gross and Mr. Greenspan at PIMCO would be very helpful.

In the Eye of the Storm: Fannie Mae, Freddie Mac and Lehman Brothers

Dick Bove is completely wrong. Why would anyone want to buy LEH now? If they wait till it hits bottom, they could get a Government backed deal like JPM did. The apparent desperate activity behind the scenes at LEH (which is getting more frantic as Q3 wraps up) is the main reason their stock is sliding. Fulm needs to check his ego and do what needs to be done before the whole company collapses.

Fed Likely to Save Lehman

Careful, the same backstop rumor killed the GSE's. I can't believe LEH is in as good shape as everyone thinks when the CEO is out on the streets with a pencil cup trying to raise money. Also not sure why Dick Bove would go out on a limb on an immaginary hostile takeover possibility. With Q3 looming, the company is upside down and no one wanting to buy into a massive debt I say the writing is on the wall.