Posted: Tue Jul 15, 2008 12:35 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Quote:
In a stark reminder of just how dicey bottom-picking can be, Bloomberg reminded us that private-equity firm TPG led a consortium of investors in providing the bank with $7 billion in much-needed cash in April, when the stock traded at $13. Those daring saviors have seen most of their investment wiped out.
TPG did, however, slip a protective clause into the deal: If the stock drops below $8.75 -- which it clearly has -- TPG is owed the difference, effectively putting the bank on the hook for its own equity losses. While protecting TPG's investment, this feature also makes it considerably more costly, if not impossible, for the bank to raise more capital, which would further dilute shares.
oh hello if this is true Washington Mutual may just have taken a rather sizeable loss....
Posted: Tue Jul 15, 2008 1:22 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Quote:
July 15 (Bloomberg) -- The U.S. Securities and Exchange Commission will take emergency action today to limit the ability of traders to bet on a decline in the shares of Freddie Mac, Fannie Mae and brokerages, the agency's chairman said.
Christopher Cox told the Senate Banking Committee that the SEC will issue an order today imposing a ``preborrower requirement'' on short sales in the mortgage-financing companies and Wall Street firms. The requirement would prohibit the practice known as naked short selling, in which traders avoid the financial burden of borrowing shares when betting they'll fall.
``In addition to this emergency order, we will undertake a rulemaking to address the same issues across the entire market,'' Cox said in his remarks to the committee.
Joined: Dec 02, 2005 Posts: 6417 Location: Oil-addicted Southern Californucopia
Posted: Tue Jul 15, 2008 1:24 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Too bad. This thread will wither and die here. _________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
Joined: Mar 12, 2007 Posts: 1004 Location: As close as I can get to the beginning of the pipe.
Posted: Tue Jul 15, 2008 2:05 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
One reason this thread has succeeded is that it has been up until now respected and protected as a commons instead of as personal territory as several of the forums have become.
The naked short selling prohibition for FNM/FRE and perhaps for other financial stocks really concerns me. The government is increasingly saying that speculation is no longer allowed for selected stocks or even sectors that they choose or own, specifically for financial stocks or energy. These statements mark a new direction for governmental intervention into the stock market. It is no longer going to be a quiet whispered manipulation like the PPT. It will be focused, blatant manipulation.
Here's another example.
Quote:
""This scheme can be used over both short and long periods of time. Its is an old game, going back before even the great market 'pools' of the 1920's that set up the environment for the Crash of 1929 and the Great Depression.
The SEC remains blissfully asleep at the switch during the general looting of the country by the financial interests. The state of the silver market in the US under the guidance of the CFTC is a disgrace.
As traders we can live with it, but as citizens and parents we are appalled. It creates a general atmosphere of lawlessness and cynicism and amorality. It spawns larger and more sophisticated con games like Enron and collateralized debt, as the big financial houses become more greedy and emboldened. It is a source of corruption and decay in the politicial system. It corrupts regulators, politicians, and even the media.
It is one of the reasons why Glass-Steagall was enacted back in the 1930s, to prevent this predation by the large national banks using federally insured depositors funds and privileged access to cheap Federal Reserve funds as the instruments of their common cheats and frauds."
Posted: Tue Jul 15, 2008 2:12 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
It is good to consider that along with direct intervention in short trading, the astounding promises of multi-trillion subsidies and bailouts for F&F, and an oil price drop failed to keep the DJIA above 11,000.
Posted: Tue Jul 15, 2008 2:23 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
UncoveringTruths wrote:
Quote:
July 15 (Bloomberg) -- The U.S. Securities and Exchange Commission will take emergency action today to limit the ability of traders to bet on a decline in the shares of Freddie Mac, Fannie Mae and brokerages, the agency's chairman said.
Christopher Cox told the Senate Banking Committee that the SEC will issue an order today imposing a ``preborrower requirement'' on short sales in the mortgage-financing companies and Wall Street firms. The requirement would prohibit the practice known as naked short selling, in which traders avoid the financial burden of borrowing shares when betting they'll fall.
``In addition to this emergency order, we will undertake a rulemaking to address the same issues across the entire market,'' Cox said in his remarks to the committee.
This seems to bar naked short selling only. Naked short selling is similar to banking: brokers loans shares they don't have. As such, it is a blatant violation of property rights and should be outlawed as fraud. It does seem however that they are creating a mechanism to disallow it selectively, and not across the board. That is a powerful manipulation mechanism and it should not be done this way. Naked short selling is so bad in certain sectors that there can be more counterfeit shares outstanding than there are legitimate shares.
Posted: Tue Jul 15, 2008 2:26 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
mattduke wrote:
UncoveringTruths wrote:
Quote:
July 15 (Bloomberg) -- The U.S. Securities and Exchange Commission will take emergency action today to limit the ability of traders to bet on a decline in the shares of Freddie Mac, Fannie Mae and brokerages, the agency's chairman said.
Christopher Cox told the Senate Banking Committee that the SEC will issue an order today imposing a ``preborrower requirement'' on short sales in the mortgage-financing companies and Wall Street firms. The requirement would prohibit the practice known as naked short selling, in which traders avoid the financial burden of borrowing shares when betting they'll fall.
``In addition to this emergency order, we will undertake a rulemaking to address the same issues across the entire market,'' Cox said in his remarks to the committee.
This seems to bar naked short selling only. Naked short selling is similar to banking: brokers loans shares they don't have. As such, it is a blatant violation of property rights and should be outlawed as fraud. It does seem however that they are creating a mechanism to disallow it selectively, and not across the board. That is a powerful manipulation mechanism and it should not be done this way. Naked short selling is so bad in certain sectors that there can be more counterfeit shares outstanding than there are legitimate shares. Short selling in and of itself of course is perfectly legitimate.
Joined: Apr 13, 2005 Posts: 3018 Location: St.Louis, Mo
Posted: Tue Jul 15, 2008 4:44 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
They Called in My Car Loan!
July 14, 2008
BL
Mr. Quayle;
This is unbelievable, Mr. Quayle! My wife and I had our car loan called in by U.S. Bancorp! We were NOT even notified ahead of time! They just took our 2003 Ford Focus wagon! We found it missing from our driveway the other morning!! We were NOT in default, and current with all payments!!!
U.S. Bancorp said that as lien holders, they reserve the right to take any financed car at ANY TIME and for ANY REASON!! We only had a year to go before the car was completely paid off!
They told us the car was being auctioned off any any monies received above and beyond the payoff would be paid to us. (Sure....) Other then this, we were no longer under any financial obligations to U.S. Bancorp, even if the car was sold for less than the payoff. (I even got that in writing!!!)
I can't believe this!!! This is insane!!!!
Now WHY would a bank do this UNLESS they were in SERIOUS financial trouble and needed to raise QUICK CAPITAL!!!!
Everyone is telling me to sue U.S. Bancorp. But why??? I say; let them have that old car! I'm out from under a debt. I'm free to pay cash for another vehicle.
But the manner in which this was literally stolen out from under us is just another indication that the bank crisis in this nation is GROWING!
Plant those gardens! Can those veggies! Stock up on food! The bottom is falling out from the banking industry....RAPIDLY!
Posted: Tue Jul 15, 2008 5:35 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
And of course you have a source for this repo'd car? I'm skeptical of the story. Maybe if they were late on payments or something but its downright foolish to repo a instrument which is having on time payments and accumulating interest. You'll get more over time on the payments then by auctioning it off. Banks are notorious for thinking long term and maximizing profits.
So, I contend either the claim is downright bullshit or the individual was not current on payments. _________________ "Battle not with monsters, lest ye become a monster, and if you gaze into the
Abyss, the Abyss gazes also into you."
Ammo at a gunfight is like bubblegum in grade school: If you havent brought enough for everyone, you're in trouble
Joined: Apr 12, 2007 Posts: 1172 Location: Central NC
Posted: Tue Jul 15, 2008 5:41 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Yeah, definitely some missed payments or a case of mistaken ID by the bank/repo man. _________________ "The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place we are entering a period of consequences…"
Sir Winston Churchill
Joined: Oct 23, 2004 Posts: 5897 Location: New Jersey
Posted: Tue Jul 15, 2008 6:17 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
I am against naked short selling but my understanding from having worked on Wall Street is that for major company and large blocks of stocks, it is difficult to get away with. Granted there seems to be a problem of naked short selling of various small company's stock.
However some articles today on the SEC clearly state that this is only a preliminary measure that may be greatly expanded.
My opinion for three years here is that Fannie & Freddie stock is destined to become worthless, or nearly so, and they do not want people who realize that to benefit - so the remaining shareholders may still get something for their stock.
I had a position in the SKF, which I mentioned I switched to the SDS too soon. I'm guessing that existing shorts, and short funds, won't have to be closed out unless the marlet collapses. I am not so certain about oil futures, which I think will be totally closed down by 2010. _________________ It's already over, now it's just a matter of adjusting.
Joined: Oct 23, 2004 Posts: 5897 Location: New Jersey
Posted: Tue Jul 15, 2008 6:31 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Congress appears to be moving slowly towards bailing out F & F. I don't think they want to bail out the shareholders.
If F & F were already declared insolvent, then I would expect Congress to act quickly.
Meanwhile the Fed will be stuck with the job of trying to stop a financial crisis. These will be interesting days ahead.
Quote:
Congress dissects Treasury's GSE plan, no vote set
By Kevin Drawbaugh
Reuters
Tuesday, July 15, 2008; 5:49 PM
WASHINGTON (Reuters) - Congressional leaders on Tuesday agreed swift action is needed to bolster housing finance giants Fannie Mae and Freddie Mac, but they raised basic questions about the Treasury Department's plan, leaving the timing of final action in doubt.
As share prices in the nation's largest mortgage companies tumbled for a third day, Massachusetts Democratic Rep. Barney Frank said Democrats plan to alter the Treasury's plan "to enhance taxpayer protection."
He said Democrats want to ensure that any Fannie or Freddie equity stake the government might buy under the plan -- unveiled on Sunday by Treasury Secretary Henry Paulson -- must be "a very senior position for the federal government," possibly involving preferred stock.
Washington Post _________________ It's already over, now it's just a matter of adjusting.
Posted: Tue Jul 15, 2008 7:21 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
DantesPeak wrote:
I had a position in the SKF, which I mentioned I switched to the SDS too soon. I'm guessing that existing shorts, and short funds, won't have to be closed out unless the marlet collapses. I am not so certain about oil futures, which I think will be totally closed down by 2010.
Balls of steel here... still in SKF @90. But I agree will you Dante. I'm going to sell my USO within the next six months. It will be taxed or confiscated. J6P will rejoice. More evil removed from the marketplace right? I just hope that the tax/thief is not retroactive to the sale... it might get that bad! _________________ -Dac
Winners never quit and quiters never win, but those that never win and never quit are idiots.
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I'm guessing that existing shorts, and short funds, won't have to be closed out unless the marlet collapses. I am not so certain about oil futures, which I think will be totally closed down by 2010.
