everything i wrote is either facts or my interpretation of facts, i.e. truth
re icbc, yes, the wrap a/cs are marketed, very lightly
and yes, bank of china system subsidiary banks do deal in paper gold, script silver, and fibre platinum
the potential is there and being tee-ed up
in the mean time, just in in-tray
From: R
Sent: Fri, July 8, 2011 1:30:43 AM
Subject: The Subprime Loan Revisited
The Subprime Loan Revisited
Ramsey Su July 2011
The now infamous subprime loan has the following characteristics:
1. The Subprime Borrower - borrowers who have no ability to repay the amount of debt.
2. The Subprime Lender - lenders who are willing to lend because of some random AAA BBB CCC rating.
3. The Rating Agencies - the spineless pencil pushers who can be bought or pressured into assigning random alphabets to financial products.
4. Big Bad Banks - Banks that will sell refrigerators to igloos as long as there is a fee. They will even sell bad loans to themselves.
4. Stated Income - borrowers are allowed to state their income, with no verifications needed.
5. Accommodating Fed - the Federal Reserve is needed to provide easy credit and to keep rates low.
6. No Collateral Needed - appraisals are manipulated while lenders are willing to provide loans that are above the value of the inflated collateral.
7. Refinancing - subprime loans must be refinanced continuously just to make interest payments via increases in the principal balance.
By the way, I am not talking about mortgages, I am referring to the world of subprime sovereign debt, from the Greek bonds to the US treasuries.
Why would the Greeks or the Irish bother with repayment, especially with these painful austerity plans?
Trichet ECB) this morning said default must be avoided. That is almost as silly as saying death must be avoided. When you lend someone an amount of money that they have no ability to repay, then lend them more money to pay interest, and keep repeating this process indefinitely, what outcome should a logical person expect?
Why would US worry about debt ceiling? Taxpayers, through no fault of their own, are somehow obliged to pay on these subprime loans that they never intended on taking out.
Instead of HAMP, why can't we have CAMP (country affordable modification program)? Instead of making loan payments that is too high, all borrowers should decide how much they like to repay, in interest as well as principal.
Joking aside, the upcoming subprime sovereign debt crisis is even more obvious than the subprime mortgage crisis. Anyone who cares to do the simple math can see how the debt can only add up to disaster. Greenspan claimed that no one could have predicted the subprime credit melt down. Bernanke said he did not see it coming. Now Bernanke is dreaming about 2nd half recovery, again. The world would rather be lied to as long as the lies are what they want to hear. This human behavior is simply baffling, just a baffling as why the Greeks in Athens are not stock piling some food and water, and that there are still money left in Greek banks.
As for me, I think I am going to Costco to buy a few pallets of canned food. |
