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To: didjuneau who wrote (317041)	11/18/2021 9:16:24 PM
From: GUNSNGOLD	2 Recommendations Recommended By didjuneau Honey_Bee Read Replies (1) \| Respond to of 454376

IMO I watched as firms ignored Reg SHO all day long. The ends justified the means. The only way to create truly tax free income was to short firms into non-existence. If the firm doesn't exist anymore you don't have to cover your short and therefore no taxable "event" has occurred. Hammer I agree that SHO worked when you were working things, but in 2008 thanks to the elimination of Glass Steagall nothing works like it should. As we discussed earlier today....It doesn't "add" up. G-n-G

To: didjuneau who wrote (317041)	11/18/2021 9:20:55 PM
From: Thehammer	2 Recommendations Recommended By Honey_Bee MulhollandDrive Read Replies (3) \| Respond to of 454376

Securitization had been going on for decades. Mortgages were long considered one of the safest assets. They were as long as the banking system adhered to certain credit standards: 1) Down payment of 10 - 20% 2) Ability to pay ( the loan payment didn't exceed a certain (30%) of income ) 3) Credit Score (I think a minimum credit score of like 560 was required). When we violated those standards it went to hell. A lot of the subprime was put into REMICS and other collateralized mortgages. When those assets are pooled and tranched, they are slice into various cash flows and there are always some really goofy instruments included. (like securities paying 700% interest). Many of these were sold to retirement plans and basically institutions that were unsophisticated. The settlement system was freezing up but much of that had to do with firms failing. The s/t loan market evaporated. I believe the system failure exposed Bernie but taken alone that was small potatoes. Another problem was the betting that occurred with CDS (Credit Default Swaps). The guy from the Big Short (Burry?) made big bucks because he bet that the pools would fail and he bet that because he looked at the individual mortgages in the CMO's (they are all listed in the prospectus) . He saw that people were given a $500,000 loan based on a peanuts salary and given a teaser rate. A Lot of big institutions were on the wrong side. I forget the big insurance company run previously by Hank Greenberg (I think.) Now the market went up a lot over 4 or 5 years. That hid the defaults because the house could be foreclosed and sold at profit. Then you had flippers and over development. I'd also point out that real estate agents pushed people into homes they couldn't afford. Oil was spiking and that added to housing costs (carpeting pvc etc, energy to produce). The root problem was giving out bad loans. That was pushed by HUD. FNMA and FREDDIE were complicit. Eliminate the bad mortgages and we have no crash (also no bubble or less of one). The Bush administration actually tried to reign it all in and I recall Barney Frank railing against them on the house floor. First time I recalled hearing the word : shibboleth. Certainly there were many contributing issues but eliminate bad loans and no crash..