August 24, 2007

This about sums it up

Thanks TR for the link


Anonymous said...

Ponzi scheme

Anonymous said...


Anonymous said...

For all the GOP dopes who think the national housing crash is not real:

Check Out This FACT hot off the press: Home Depot in Distress

WSJ, August 24, 2007

Pinched by the current credit crisis, the banks are toughening their stance against the private-equity firms. With a backlog of some $300 billion of U.S. private-equity deals still to be funded, the banks are now facing significant write-downs on their balance sheets and are weighing how to extract themselves from as many buyout transactions as possible.

It is no accident that the Home Depot Supply deal is the first test of this dynamic. The housing market underpinning its core business -- distributing building materials for new construction -- is in distress. That already has made the $10.3 billion price tag seem high, and the terms of the original debt especially unattractive for the banks.

Did you read that dopes?
"distributing building materials for new construction -- is in DISTRESS"!!!!

Wake-up dopes!

That means a state of PANIC!!!

Not a criminal republican spin nor a bush-co bin-laden fairytale, but a true scientific fact.

Someday the FBI will be in a courtroom displaying the IP addresses from all the bush-hitler regime supporting criminals - before they get sent to prison for fraud, cover-ups, lies, theft, misrepresentation, illegal profiterring and raceteering.

In the end, there is only the truth...

Anonymous said...

Ahh crap

Anonymous said...

Video: how millions of americans will lose their homes.

Anonymous said...

I think that everybody should take a look at these snapshots on how the Chinese deal with tough situations:

These generally show how they deal with negotiations - and I'm betting this is how the next round with the Americans are going to go.

Anonymous said...

Keith, you should do a thread on the manipulation of the silver price. Ted Butler has a good new article addressing this issue. Gold is up...Oil is UP...Dollar is DOWN...yet silver has been tanking every day. This is NOT a FREE MARKET. Maybe your readers could write as advised by Ted Butler to the CFTC and SEC...the more people that write the better. This manipulation has to end. There are about 250 mill oz of Silver sold short. This is 150 days worth of no other market is the short position so huge and manipulatory.

Anonymous said...

From Barry Ritholtz of The Big Picture Blog:

CDO Insiders: "We Knew We Were Buying Time Bombs"
Friday, August 24, 2007 | 06:00 AM
in Credit | Derivatives | Hedge Funds | Real Estate

Here's an email I received late yesterday from a friend, "R," who was in the CDO business from way back when to right through the past few years.

"R" writes:

"I've been paying attention to your macro economic call lately and you're right on. Three anecdotal stories for you that you can use on Kudlow. (PLEASE don't mention my name).

1. XXXXXX and I were talking in 2003 about how shaky these low FICO, high LTV, 2/28 ARM's that were being created were. People in the know knew then those loan products were going to be a problem in the future. Way back in 2003, it didn't make sense.

2. In early '05, XXXXXX tried to hook me up with a HF he knew that wanted to play the CDO issuer game. I talked to the guy and told him that at the risk of talking them out of hiring me, I wouldn't do it. I thought that game was topped-out even back then. A bit early, but perhaps the right call.

3. I was talking to CDO managers in mid-'05 that were saying how rich sub-prime MBS was and how wrong everyone was for buying that stuff at the spreads they were. To a man, they all agreed they were paying too much for the risk, they all believed that HPA [ED: home price appreciation] was going negative soon. But, sadly, they had to buy the stuff because they needed to accumulate collateral for their CDO issuance. Fuck, we all knew we were overpaying, even back in 2005. We knew it was essentially a bet that home price appreciation was going to continue at levels that couldn't be sustained. No way that could keep going on.

Everyone was saying the same thing: Home pricing cannot continue appreciating at the same rate, and the second this thing turns, we are FUCKED.

Is it really any surprise to anyone that the mortgage business got too far ahead of itself? To me, the only surprise has been it took so long for all of this to happen."

So what was the prime motivating factor?:

"The answer is quite simple: DEAL FEES. I gotta keep buying collateral, in order to keep issuing these transactions as a CDO manager. Its my job: I gotta keep accumulating collateral, and I gotta issue the liability against that collateral.

In 2005, we all said "I hate the real estate market, I hate the credit spread, but my job is to keep doing this: Buying Collateral and issuing CDOs. Everyone was the buying this shit to do any deal. The greed went thru the whole chain, from the home owner buying a property they couldn't afford right up to the CDO manager buying subprime paper."

Why did these managers keep buying this bad junk?:

"Well, nothing is "bad junk" -- it's just priced wrong. No one believed the under-performance of these MBS loan pools would ever be so severe. Everyone knew in the back of their minds that the possibility existed, as did the possibility that residential real estate prices would move LOWER someday.

But no one wanted to be the first to acknowledge it fearing that they'd miss the opportunity to participate in big fees, big alpha, etc. . . ."

Thanks, R. Great insight from inside the belly of the beast.

Anonymous said...

Don't know about this one...but a coworker and I we're walking thru Wal-Mart over lunch yesterday and we passed by the car radios. There was an advertisement playing on the speakers. I don't know if the speakers were connected to the radio.

The speakers were advertising Option One Mortgage loans. I wondered, knowing how slimeball Wal-Mart is, if they purposely put this on this advertisement to play all day long. It wouldn't surprise me if they did. It would make people feel good about being able to refinance their house, thus, spend more money in their store.

Do you think ole sweet Wal-Mart would do such a thing?

Anonymous said...

This picture is truly worth ten thousand words of boring exposition in the financial press, most of whom are spinning some version of "It's all OK" anyway.

In reality it's SO not OK, and this show why in terms anyone can understand.

Anonymous said...

Housing sales up 2.8% in July. Boy that was a close one, guess everything is OK now. Keith, you can take the blog down now, the panic is over, the MSM said so.

Anonymous said...

Nice pic!

Anonymous said...

Best and most concise depiction of the whole stinking mess I have seen yet!!!

Anonymous said...

Man, that drawing visualizes exactly how I felt when I received the first copy of the closing papers for my first house. Couldn't believe how many companies crowded in for their piece of the pie. I felt like not going forward with the purchase because of all of the leeches that had attached themselves to the deal.

Tom said...

They knew the CDOs were time bombs, so why did they buy? Because they needed to make their numbers and hit their targes to get their bonuses.

After all, it wasn't "their" money they were investing. It was a 401k's, or a pension fund.

if it were their money, do you think they would have bought it?

Anonymous said...

Keith, you should do a thread on the manipulation of the silver price.


Keith hasn't reached that level of sophistication just yet. Give him a few years, he's a babe in the woods when it comes to the big markets.

Anonymous said...

Silver stocks are on sale for now

Anonymous said...

my recently ex-realtor brother sent me a fwd yesterday and this was the first cartoon, it was great. the best part was at the bottom of the fwd (it was sent to him from a countrywide friend):
Confidentiality Notice: The information contained in and transmitted with this communication is strictly confidential, is intended only for the use of the intended recipient, and is the property of Countrywide Financial Corporation. etc

these cartoons are the property of countrywide!! awesome

Anonymous said...

Who's the third world country, now?

Anonymous said...

Let it go, Secret Society at work again, just like they did with Iraq contracts: Bernake is changing the discount window rules to transfer taxmoney from the sheeple to bailout their cronies at Wall Street

Folks, no need to include risk on rates anymore because the Fed is erasing that important component of free markets.

Yet another ponzi scheme to destroy the middle class. It sure pays to be a criminal in the US!