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 : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (138875)	12/11/2008 11:21:26 AM
From: koan	Respond to of 312695

They were stripping out the worst paper to put in the CDO's, grade C and D paper, and then Moody's and other rating agencies, would stamp it as AAA paper. Then they raised the leverage form 12 to one to 40 to one; and then the banks would use CDS's to insure what they had loaned out and then they were free to loan more. Then they got rid of the glass Steagall act in 1999. Phil Gramm slipped it in an appropriation bill, but clinton should have stopped it. Then to make things worse, they started trading the CDS's until they had 62 trillion of CDS's. They now have about 50 trillion. It started 14 years ago with a 25 year old MIT whiz kid who bundled 9 billion of low grade commercial paper and sold it to Japan as a CDO. He put in the worst 10% of the paper. That sure sounds like fraud to me??