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

To: coug who wrote (192513)	3/22/2009 4:54:23 PM
From: bentway	Read Replies (1) \| Respond to of 306849

"The problem was, none of this was based on reality. "The banks knew they were selling crap," ..and there MUST be some emails and memos documenting this. Which is all a prosecutor would need to get a fraud conviction from any jury in the land right now. Let's get cracking, prosecutors! Let's PUT THESE TURDS IN JAIL!

To: coug who wrote (192513)	3/22/2009 11:30:31 PM
From: John Koligman	Read Replies (2) \| Respond to of 306849

I think I FINALLY understand (I hope) how trillions of these instruments were created. This paragraph in the Rolling Stone article nails it for me. That this was allowed and not regulated is simply insane. I think if our government had some cojones they would have extradited Cassano and his cronies and put them in jail.. I have a feeling perhaps this is how John Paulson made those billions betting against the housing market... Regards, John "Secondly, Cassano was selling so-called "naked" CDS deals. In a "naked" CDS, neither party actually holds the underlying loan. In other words, Bank B not only sells CDS protection to Bank A for its mortgage on the Pope — it turns around and sells protection to Bank C for the very same mortgage. This could go on ad nauseam: You could have Banks D through Z also betting on Bank A's mortgage. Unlike traditional insurance, Cassano was offering investors an opportunity to bet that someone else's house would burn down, or take out a term life policy on the guy with AIDS down the street. It was no different from gambling, the Wall Street version of a bunch of frat brothers betting on Jay Feely to make a field goal. Cassano was taking book for every bank that bet short on the housing market, but he didn't have the cash to pay off if the kick went wide."