Insiderman

Interpreters of Data Should Exercise Care to Get Facts Right

Mauldin's analysis in this case was about as on point as Keynes' analysis of savings and investment, entrepreneurs deciding how many people to hire and what to pay (ex ante actually deciding how to produce a product) and many other mistakes and causality reversals in the "General Theory."

But yet, they still use Keynes.

Why Banks Write Down but Don't Sell Subprime Loans

Wow. That was easy. The only problem is that with a CDO you don't necessarily know what assets are in it. Recall that the CDO may be built using MBS, ABS and just about anything else the originator throws in to enhance credit quality.

Therefore, you don't know what the credits are that are in the CDO. Since CDSs are built to offset risk of CDOs, you don't really know how the CDSs should be priced.

Now, think about the logic of your spreadsheet. The discount rate for each cash flow stream should be adjusted for risk.

Makes it a little more challenging, and that ain't the half of it.

Two Fight Back - Cramer's Mad Money (9/11/08)

WaMu says they have capital. Cramer says they don't. Which one do you believe?

I believe the possibility of WaMu doing a "Bad Bank" much like Lehman is doing by separating their Commercial business and CMBS.

Cramer is an idiot with an occasional good idea and a tight stop loss for all his bad ones.