Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: ChanceIs who wrote (158723)	10/21/2008 10:15:32 AM
From: bentway	Respond to of 306849

" Mr. Baker goes further. He points out that it wasn't the unregulated part of the financial markets that got us here. It was the regulated part. In his own industry, he notes, the lack of a government guarantee means folks do a lot more due diligence before they part with their money. " The trigger was mortgages, but we're way past that now. As far as it being the "regulated" part, that wasn't true under Bush. His "regulators" were instructed to set the spigot to firehose.

To: ChanceIs who wrote (158723)	10/21/2008 10:30:40 AM
From: CalculatedRisk	Read Replies (6) \| Respond to of 306849

He has it backwards. The following is nonsense: "Mr. Baker goes further. He points out that it wasn't the unregulated part of the financial markets that got us here. It was the regulated part. In his own industry, he notes, the lack of a government guarantee means folks do a lot more due diligence before they part with their money." ROFLOL. That is just plain stupid. All the really bad MBS and CDOs started with mortgages from New Century and Countrywide, etc. that were sold to Bear Stearns and Merrill, etc. - and were then packaged into MBS and CDOs and sold to investors. This process was unregulated (although many people were calling for oversight). The Bush administration and Greenspan fought against oversight for ideological reasons - they thought that buyers would "do a lot more due diligence before they part with their money". They were wrong. Fannie and Freddie, for all their issues, were victims of the lack of oversight in the unregulated market. This "blame the GSEs" talking point is so stupid you'd think everyone would just laugh.

To: ChanceIs who wrote (158723)	10/21/2008 11:24:32 AM
From: SGJ	Respond to of 306849

Today all this sounds wise -- and obvious. But back when he was sounding the alarms in Congress, it was a different story. When he made public the outrageous compensation of Fan and Fred's executives, they threatened to sue him. When he questioned Franklin Raines, the now-disgraced former head of Fannie Mae, a fellow congressman accused him of a "lynching." When he suggested Fan and Fred's paper was not solid, he was dismissed as a crank. And on one of his early reform proposals, he couldn't find a single cosponsor. No, he was called a racist. As was anyone that spoke against this stuff back then.

To: ChanceIs who wrote (158723)	10/21/2008 12:53:49 PM
From: butschi2	Read Replies (1) \| Respond to of 306849

> Mr. Baker goes further. He points out that it wasn't the > unregulated part of the financial markets that got us here. > It was the regulated part. In his own industry, he notes, > the lack of a government guarantee means folks do a lot > more due diligence before they part with their money. It just didnt explode yet, the derivatives mess brought down AIG, MBI, ABK and rescued BSC because of the to big to fail value of the derivatives book ($7 trillion). Lehman default hasnt fully played out yet - CDS on Lehman settlement today - Derivatives counterparties of Lehman (losses unclear) / payment/settlement dates perhaps far in the future (swaps). coupled with wild prices swings and many counterparties could roil the market for a few more month until more derivatives settle and the money exchange is clear. Lehman wont post more collateral for their derivatives and asset prices are swinging around wildly. This could get ugly if Lehman has big open positions in a listed exchange contract underwater like Oil/currency or interest swaps. - hedge fonds with assets frozen perhaps destroyed because of wild price swings in assets and no action possible - London assets havent some time not been seggregated from Lehman assets - Lehman debt losses mostly accounted for - Lehman fallout for rescue systems (á la FDIC) unclear until payouts after insolvency are determined (some estimates are for Germany to be around Eur 6 billion) - Lehman SSF and options should be mostly accounted for by margin calls I would like to have some insight in open margin calls for hedge fonds/Lehman derivatives/positions.