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Friday, October 26, 2012

Buffy the Bozo Buffett Blows his Baloney Wad in Rails? He must have Another Sweetheart Done Deal in the Bag.



11.04.2009


There was a famous scam that continues to be reinvented and it goes like this: Somebody calls you up and gives you a guaranteed bet on some stocks. This will work! When the stock goes up, as he promised, he calls back and gives you a second pick and makes the same guarantee. When that pick goes up he calls you back and offers you the Big One. Only a fool would pass up this new tasty morsel so the sucker buys in and the stocks drops.  What has happened is that the scammer had made phone calls to several thousand people using a dozen different stock picks and only called back the marks on the list when their particular assigned stock hit. Same process was used for the second round to provide ‘proof’ that this guy was a stock wizard. The third pick, with very few remaining marks in tow was actually some phony off shore shell where they cashed promptly in the sucker’s money and fled the Caymans. This is a boiler room art form. I wonder if Berkshire Hathaway is playing this game with our government.

A more appealing version of this scam is to observe that some people can apparently just pick the best stocks from a market array and that there must be something innate or magical about this person given their ‘record.’ Might I recall for discussion one Joseph Granville[1] for all of you to wonder about who ‘controlled’ his own markets with his recommendations and then he picked the wrong direction and the whole scam went suddenly crashing down. His Granville Market Letter produced average loses of 20% per year for a quarter century. [2] Nevertheless his calls produced remarkable results on April 22, 1980 (+4.05%) and on January 6, 1981. That was all the ‘proof’ that he needed. Jean Dixon was like that and gained fame with a single prediction about JFK. We must survey a broad picture of all the picks from the celebrated pickers and perform some analytical work or we invite disaster under the conception of the "the Jeane Dixon effect,” which refers to a tendency to acknowledge a few correct predictions while ignoring a larger number of incorrect predictions.”[3] “She predicted that World War III would start in 1958 over some offshore Chinese Islands and that labor leader Walter Reuther would run for president in 1964 and that the Russians would land the first man on the moon.”[4]

Buffy the Bozo does not go so far as to run a freak show “…featuring a trained chimpanzee … could play Granville's theme song "The Bagholder's Blues," on piano” in his works. But the investment world has never had  a sage that lasted very long as we find from  Elaine “Go-Go “Garzarelli’s predictions of the 1987  stock market crash[5], (along with me). She has done poorly since.[6] I have done better. She called “it” weeks before the crash and I sold out on Wednesday of the week before the Black Monday[7] crash. Her crystal ball must have gone murky as her predictions since then have been spotty. See footnote.[8] She did pick Lehman and Bear Stearns for 2007 and 2008 stock picks, but nobody is perfect. My record is spotty too with picks like Texas Instruments at $86 and Oracle at the wrong time and then Sun. My Arriba pick did soar from $25 at IPO to some $145 with a couple of splits along the way producing a $14,000 return on a measly 25 shares that I paid 525$ for including commissions and a flip or Red Hat was fun—owing the stock for 11 min and making $1100 dollars on the opening of the IPO. But, what heck—that was just luck. There is a limit to luck and sooner later we must find that the ‘luck’ is manufactured if it looks too promising and that is the subject of today’s blog: nobody is that good or that lucky in the long term.

Not to get us too far off the track with personalities we need to make something clear: nobody can predict the markets and most take a big hit along the way like Garzarelli and Granville and many others have done.  The fund manager for my old fund Wellington Fund lost money for 11 years in a row since its inception in 1960 and he is considered one of the best. I can give a wide margin for allowing for guesses for most stock pickers until somebody wants me to dive under a steaming freight train for a nickel or two. The current euphoria about rails by Buffett apparently ignores the salient facts that the unions in league with the Democrats poisoned the rail business in the last 150 years and the whole mess crashed and morphed in the soggy stinky messes now known as Amtrak and Conrail. They were regulated to death by politicians and unions. Union feather bedding and work rules and the mandate that the rail companies keep running empty passenger cars wrecked the business.[9] The worthless Amtrak system has never made a profit since 1970. Nada—zip and their cars stink, are windy and drafty and cold and the food is crap. Here is some political history on train wrecks:

From the New York Times of July 6, 1970. we read:

“THE nation's largest railroad succumbed last week to a lethal combination of politics [Time  blames Nixon here--ed], tight money, mismanagement and fumbled Government rescue efforts. A federal court ordered the tottering Penn Central Transportation Co. into a bankruptcy reorganization.”[10]

Does this sound familiar?

“Many Congressmen and Senators [read Democats here too ed.] questioned whether the Government ought to come to the aid of any private company—large or small—with a record of sloppy management.”[11] [Emphasis is mine in all quotes.]

Now, we spring the trap: More money is apparently need to infuse this corpse so Buffy has decided to split his Class B shares 50:1 to get more “ordinary investors” to buy in. Does this sound like a Three Card Monte game[12] yet?

“Buffett's decision to conduct a 50-for-1 split of Class B shares of his Berkshire Hathaway Inc lowers the price of entry for ordinary investors who long found it prohibitively costly to buy the stock”--More people now likely to invest with Buffett
Tue Nov 3, 2009 3:15pm EST 

Well, there is a sucker punch for you. Can you follow the peanut as it bounces along between the magical walnuts?

He might, but he ignores the economic fundamentals here.  But, he could do this with union help and the Democrats of course, groveling stooges to unionism. The several states where he now owns right of ways are bound to see this as a tax target and the regulators and such will pile on new restrictions and fees and such as what happens when the bandwagon comes to town with a trailer full of fresh straw and all the hookers and cops and politicians grab a sausage sandwich, some beer and jump in the pile for a great ride. He can probably get around these hurdles with some political assistance and make a pile. My view of this wreckage is that Buffett is betting [or is assured] that he can make money in spite of the unionism and regulatory costs and the offensive sputum of the EcoNazis who will rail and bawl over his heavy rail system and cite light rail options instead. He must have a deal cooking here.

Buffet is also in a scam to buy tax credits from the phony and bankrupt Fannie Mae, a disgraceful plundering of the US taxpayer. Partnered with his usual crony Goldman Sachs [involved in some complicated preferred stock deal[13]], he is apparently indirectly seeking a tax subsidy with TARP money.

“The credits are virtually worthless to Fannie Mae and require the company to take losses each quarter as their value declines. Companies such as Berkshire Hathaway and Goldman Sachs could use them to offset federal tax expenses.” [14]--Buffett Joins Goldman in Bid for Fannie Mae Tax Credits NOVEMBER 4, 2009

The Bozo has other ‘deals’ with the government or some of their TARPies[15]:

[1] A deal with MidAmerican Energy and Constellation Energy (CEG). This is a nukie pooh Power Company and is allied in some way with the French.[16]

[2] He paid “$5 billion for Goldman Sachs (GS) preferred shares that pay a 10% dividend.” Isn’t that sweet! Another TARPIE Sweetie! [Emphasis is mine in all quotes.]

We currently get 0-0.25% from government bonds. How sweet? Or, how sour??

[3] His company “agreed to buy $3 billion of preferred General Electric (GE) stock. This stock pays a generous dividend of 10%. On top of that, Berkshire gets the option to buy $3 billion of GE common stock at $22.25 per share, well under the current trading price of around $25 a share.”

[4] “Wells Fargo (WFC) said early Friday that it would pay 0.1991 of a share of common stock in exchange for each common share of Wachovia Bank (WB) in a deal worth $15B. Berkshire Hathaway is the largest shareholder of WFC. That's a whopping potential for over $30B in deals with up to $16B in cash.” A quickie 100% deal falling something short of Hillary Clinton’s 1000X cattle futures deal.[17] Isn’t Wachovia a TARPie?

This is not the program of an ‘enlightened’ investor this is what a political crony does. There is the stench of insider trading swirling around here.

Somewhere buried deep in this rail road junket is some artificial sweetness that has yet to surface. To think that he can make money in an industry polluted by unionism and a myriad of state laws and his offensive energy systems that burn oil and coal for their electricity and fuel is an insult to the Green Weenies[18][19][20][21][22][23][24][25][26][27][28]. They will kep silent only if they are bribed.

Buffy is not an ‘investor’ --he is a political opportunist [like the Harpy—e.g.-- “…one of the winged spirits best known for constantly stealing all food from Phineas [the “government”, ed]”] who swims in the sleazy political latrines of corruption. I suspect these are just fixed insider deals and have little to do with ‘investing.’

I think this railroad gig is a fait accompli and the taxpayers will provide him with huge profits. Buffet’s chimp, played by Goldman Sachs, is playing new versions of The Bagholder's Blues” for the suckers and taxpayers and I think the taxpayers are going to wind up holding an empty bag.

rycK [a 5th generation Californian in exile]

Comments to: ryckki@gmail.com


[2] The Granville Market Letter "is at the bottom of the Hulbert Financial Digest's rankings for performance over the past 25 years - having produced average losses of more than 20 percent per year on an annualized basis."  http://en.wikipedia.org/wiki/Joseph_Granville

[8] These investors ended up being sorry. In 1988, Garzarelli's fund was the worst-performing fund among growth stock funds. From 1988 to 1990, Garzarelli's fund underperformed the S&P 500 average by about 43 percent! So even the few investors who were in her fund before the crash in 1987 (when Garzarelli's fund outperformed the S&P 500 by about 26 percent) still lost. What she saved her investors by avoiding the crash she lost back (and then some) in the years that followed.

The Dumb Things People Do When Worried About The Safety of Their Money. By Eric Tyson.

“To my amazement, media outlets are still asking Garzarelli for her predictions and here's what she told Business Week in late 2007 for her 2008 predictions: "Garzarelli is advising investors to buy some of the most beaten-down stocks, including those of giant financial institutions such as Lehman Brothers, Bear Stearns, and Merrill Lynch. What would cause her to turn bearish? Not much. ‘Our indicators are extremely bullish.'" She also said the Dow would close 2008 at 16,000! Could she have been more wrong?!” http://www.erictyson.com/articles/20090103
[11] The hardest blows were struck by Wright Patman, chairman of the House Banking Committee. He was a Democrat and a Baptist. http://www.time.com/time/magazine/article/0,9171,878372,00.html
[13] The American Bankers Association (ABA) has lobbied congress to cancel the warrants owned by taxpayers, calling them an "onerous exit fee."[57] Yet, if the Capital Purchase Program warrants of Goldman Sachs are representative, then the Capital Purchase Program warrants were worth between $5-to-$24 billion dollars as of May 1, 2009. Thus canceling the CPP warrants amounts to a $5-to-$24 billion dollar subsidy to the banking industry at taxpayers expense.[58] While the ABA wants the CPP warrants to be written off by taxpayers, Goldman Sachs does not hold that view. A representative of Goldman Sachs was quoted as saying "We think that taxpayers should expect a decent return on their investment and look forward to being able to provide just that when we are permitted to return the TARP money." [59] http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
[15] A financial image of a harpy but uglier. http://en.wikipedia.org/wiki/Harpie
[17] http://seekingalpha.com/article/98597-why-is-everybody-selling-as-buffett-is-loading-up
This reference covers all quotes in [1] to [4] in the text.
[28] Reason and Faith Assault the Phony EcoNazis and Their Lackeys.
Wednesday, December 12, 2007 1:52 PM
http://rycksrationalizations.blogtownhall.com/2007/12/12/reason_and_faith_assault_the_phony_econazis_and_their_lackeys.thtml

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Affordable Housing Follies and the Intentional Corruption of Supply and Demand Economics




11/9/09

Abstract: The left continues to chase failed social policies in education and ‘affordable housing’ despite eternal failures. They continue to push the silly nostrum of ‘equality’ when this is impossible and has been shown to be a joke throughtout history. They really don’t believe in this notion, but employ it a method of maintaining power. The current phony plan is to lease back homes from owners in foreclosure or potential foreclosure and that will sustain the property values and keep the looters from selling the plumbing and rugs. This process has a 70% failure rate as it is. All this is being financed by printing money and that is the fastest way to trash our currency and our society. Several other governments, who, presumably, are educated and open eyed are also elevating their debt to GDP ratios to astronomical heights and inviting financial default. The debased dollar is currently fueling the stock markets and gold prices and will eventually produce a bigger bubble than the 2008 mess. Many people cannot handle debt or finances and our tax monies derived from borrowing and printing money pay for these follies. We face a second bubble soon if we continue on like this. But, this may be a grand opportunity for the Democrats who can celebrate the collapse of capitalism with party and song.

We can always make rough approximations and slice some pie in various ways to illustrate some new analytical view on any subject. Today, we can carve up the housing pie to show that there are really only two kinds of people in the world: those who can cope with capitalism and those who cannot. The government, despite its sticky array of erudite folk from Ivy League who draw high salaries and cushy benefits on the government dole cannot manage to understand basic economic principles, or they don’t wish to.  Their political path forward depends on failure and poverty—not success.

Consider, for the joke of the day, the current status of government structured home foreclosure prevention. To say that this operation is run much differently from some freak side show at Coney Island opens the sayer to criticisms about the knowledge of even basic economics or finance. Most of this nostrum is infected with the salient quest for ‘equality’ for the ‘masses’ that we inherited from a swarm of losers from the past two centuries.  In 1920, the thrust of ‘equality’ was to redistribute the wealth through violent means if necessary and Winston Churchill responded to this quest in this way:

On equality:

"....But my hatred of Bolshevism and Bolsheviks is not founded on their silly system of economics, or their absurd doctrine of an impossible equality. It arises from the bloody and devastating terrorism which they practise in every land into which they have broken, and my which alone their criminal regime can be maintained...."— Text of Winston Churchill's July 8th, 1920, British House of Commons, Amritsar Massacre Speech By Winston Churchill  given July 8th, 1920[1][2] [Emphasis is mine in all quotes.]

For the simple, the notion of equality rings loud and sweet as many see free money falling from the skies and decorating their hovels mandated by the historical theorem that this is some kind of payback for stolen wealth by the bourgeois. The supporters for reparations sing this song; this is ‘social justice’ in the parlance of the rabid left. But, not based on sound economics or even believable social theories we always find the persistent residual tenet of this theme that still survives the anvil of reason and persists like some metastatic disease throughout the world. There is no such thing as equality in any social or cognitive vector selected at random or extracted from lengthy thinking. This phony attribute that synthetically defines of all mankind persists for two reasons: [1] that politicians can gain power and prestige and wealth by promising the impossible to the low classes and [2] that the low classes want to spend money and enjoy this process as much as those who can work the levers of capitalism and make it work. These two factors always result in opposition and failure. The system that does work is for the entrepreneurs to create wealth and employ the rest of us in some kind of cooperative adventure where everybody gains wealth although not equally. This is not acceptable to the left.

There are two major diametrically opposing mechanisms operating here:

Capitalism is self-adjusting and rewards the successful with profits while destroying implausible or inopportune business adventures with stark business failures and unavoidable bankruptcies, but the Political Classes never self-adjust unless there is famine, war or inflation and tend to merely accumulate more and more unsuccessful people in their ranks. One trendy facet of this is to ignore drug addiction and crimes in inner cities but to ensure that they will vote properly at the proper times. This is a phenomenal political success for the liberal Democrats. Thus, one system constantly improves and the other remains stagnant and an increasing burden upon the other in the form of parasitism. This notion that ‘education’ can eventually ‘level the playing fields’ is absurd and a topic for another blog. Education is not the word that must be used here—the proper word is propaganda. [3]

“Silly economics” is currently being showcased with the tinsel, hokum and curious circus acts all shouting “affordable housing.” This is a proxymoron[4] from the old socialist days where current ‘scholars’ and their appreciative political hacks sort through the histrionic rubble of Marxism and its aftermath for hidden truths by the liberal swarms and then stodgily recap the old stale precepts recast in new habits. This process works because most humans cannot compete equally  in capitalist societies [e.g. The Bell Curve[5][6][7] shows this clearly] thus there are always a large group of disadvantaged, poor and restless persons for whom this offering is their best hope of getting at least something in this world. Thus the divide between those who can produce goods and services and those who can only burden such process is maintained like the Great Wall of China. It is always of interest to note that programs by the left are not successful thus prompting us to think that many are predestined to fail to maintain the political power of Democrats and their allies.

There have been numerous ‘programs’ to help out the ‘poor’ and most of these circulate like vultures around the concept of ‘land reform’ or some other form of ‘redistribution of wealth.’[8] Much of the ‘theoretical’ basis of such a concept was provided by Keynes thus lending license to governments to print money and ‘share’ in the wealth of others. The United Kingdom is running an expensive [and maybe terminal] experiment what will probably topple their society via the debt mechanism, a process that would have destroyed any corporation who emulated this folly, but since the government of Gordon Brown and Alistair Darling is socialist the process may happily run the U.K. into the financial latrines:

“So terrible was Gordon Brown's economic stewardship during his decade as Chancellor from 1997, and so huge has been his "fiscal stimulus" since, that the UK now has the biggest structural deficit of any major country.”[9]-- This financial mess isn't even the end of the beginning for UK wealth By Liam Halligan Telegraph Published: 8:49PM GMT 07 Nov 2009

Our own government’s futile attempts to make suitable homeowners out of uncreditworthy citizens and non citizens by offering to ‘restructure’ their loans failed miserably:

““HSA is showing high redefault rates on the early offerings,” FHFA director James Lockhart noted in a Congressional report this week. “Performance on the February through April offerings shows a redefault [or recidivism] rate of almost 70%, which calls into question the program’s assumptions that borrowers have the capacity to make payments going forward.””[10]-- Fannie Program Sees 70% Recidivism By Diana Golobay May 22, 2009.

A desperate attempt to preserve some value in government-owned real estate now unfolds where mortgage defaulters can essentially rent their properties so they won’t be trashed and the plumbing cut up and sold before foreclosures. If the rents are too low then we have more social engineering adventures to pay for:

“Mortgage giant Fannie Mae said Thursday that it would throw a lifeline to some people losing their homes to foreclosure by allowing them to lease those properties back for up to a year at market rental rates”[11]— Fannie Mae to allow borrowers in foreclosure to lease back homes

All of these  socialist government actions surge forward in song and theatre  and then bounce off the Wall of Reality and summarily revert back to the penalties for violating basic supply and demand theory and practice and the ability to purchase and maintain property or capital or both. Capitalists can manage capital and when they fail their unit plan disintegrates into pieces and the pieces are sold off and recombined elsewhere with a new and hopefully successful plan. Thus Capitalism is a self-sharpening economic tool while government, using the reverse technique of eternal necrosis is just a dead chicken tied around the necks of the business community.

Here, some collective of socialists schemed to get ‘affordable housing’ for the poor using federal law CRA [Community Reinvestment Act][12][13] and political  harassment machines like Greenlining[14] and the criminals at ACORN[15] and thus perpetuate this failure.

Freddie Mac [that just lost 5 billion more dollars[16]] and the intellectually and financially bankrupt Fannie Mae are both convenient socialist financial dumpsters[17] provided to toss away phony mortgage deals that will obviously end in failure and the taxpayer will pay for the mess. This is a classic redistribution of wealth foray where the ‘poor’ are subsidized by the rest of society as if high progressive income taxes were not enough.

From a previous blog: The French Revolution[18] was such a plan as the title of this blog suggests. Here, the lawyers and intellectuals and peasants brewed up a grim solution to the ever-popular notion of redistribution of wealth. Louis XVI and his peers were rounded up like cattle and their heads severed to baskets in a shower of blood as the crowds chanted about new notions of liberté, égalité and fraternité.[19] Louis had fought many wars, food was scarce and also much of this revolution was precipitated by a financial crisis, high debt, and inflation in food prices--all similar to the one we are experiencing now except inflation. The spending and debt levels are so high that hyperinflation is a surety. [20]

We should be watching our trading partners and how they handle debt and deflation:

“The IMF expects Japan's gross public debt to reach 218pc of gross domestic product (GDP) this year, 227pc next year, and 246pc by 2014.”[21]-- It is Japan we should be worrying about, not America Japan is drifting helplessly towards a dramatic fiscal crisis. By Ambrose Evans-Pritchard

We are at 12/14 or about 85% Debt to GDP ratio now and quickly copying the failed Japanese Model.

We should be watching our government was well:

““If the fiscal path is deemed unsustainable, it may be preferable to create limited inflation early on -- to nip the debt problem in the bud - rather than to allow a mounting debt burden. We think the risk cannot quite be dismissed out of hand,” said the bank”[22]-- Morgan Stanley fears global central banks will 'monetise' public debts By Ambrose Evans-Pritchard.  Morgan Stanley has warned clients that central banks in high-debt countries may try to stoke inflation as a deliberate policy to rescue governments and tackle the legacy of the crisis

We are wasting our growth potential—the only thing that can bring us back from the abyss and the leftists know this and persist in the destruction of our economy for political reasons. They are now trying to amalgamate a silly but economically lethal fusion[23] between classic Marxism[24] and Fascism[25] whereby they can dictate business and tax policies to industry and banks and finance this with printed money.

This debt will bury us and the left will be pleased:

“Harvard economics professor Ken Rogoff[26] said that the level of debt major governments have taken on to tackle the financial crisis is of considerable concern must not go unnoticed.
In a series of recent comments, Prof Rogoff cautions that countries like the US have been running up such significant national debts as a proportion of their total economies that there is the potential for default at some point in the future.

"There's no question that the most significant vulnerability as we emerge from recession is the soaring government debt," Prof Rogoff told Bloomberg. "It's very likely that it will trigger the next crisis as governments have been stretched so wide."[27]-- 'Debt levels risk another crisis' High levels of government debt around the world remain the most likely trigger of the next economic downturn, the former chief economist of the International Monetary Fund has warned. By James Quinn 24 Sep 2009

This is not going to work. But, then, why should the left want economic success? The most valiant and successful examples of the left getting what they wanted were the French Revolution, The Russian and Cuban  and Chinese Revolutions and some brushfire stuff in Africa. Did they suffer from a collapsed economy in any case? No--not the political leadership.

The destruction of your wealth and private property is their first priority. Watch it happen in California.[28]

rycK [a 5th generation Californian in exile]

Comments to: ryckki@gmail.com



[2] Copulating with Coprolites: The Unveiled Mechanism of Governance by Progressive Liberalism in California
http://rycksrationalizations.blogtownhall.com/2009/06/23/copulating_with_coprolites_the_unveiled_mechanism_of_governance_by_progressive_liberalism_in_california.thtml

[3] Propaganda Lesson: Economics and Recessions from The NYT: A Long [Sad] Story and Stern Tutorial on Tax Cuts. Friday, February 08, 2008 10:16 AM
http://rycksrationalizations.townhall.com/g/2bea69e5-bb30-4923-9ed4-192199970c1a


[5] The Bell Curve: Intelligence and Class Structure in American Life (ISBN: 0029146739)
by Herrnstein, Richard J. and  Murray, Charles  Free Press of Glencoe , Inc, Old Tappan, New Jersey, U.S.A., 1994.

[6] Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes
Posted by rycK on Saturday, February 16, 2008 10:37:49 AM
http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

[9] This financial mess isn't even the end of the beginning for UK wealth By Liam Halligan Telegraph Published: 8:49PM GMT 07 Nov 2009 http://www.telegraph.co.uk/finance/comment/liamhalligan/6521350/This-financial-mess-isnt-even-the-end-of-the-beginning-for-UK-wealth.html

[10] Fannie Program Sees 70% Recidivism By Diana Golobay May 22, 2009. http://www.latimes.com/business/la-fi-fannie6-2009nov06,0,4259740.story?track=rss

[11] Fannie Mae to allow borrowers in foreclosure to lease back homes http://www.latimes.com/business/la-fi-fannie6-2009nov06,0,4259740.story?track=rss
[12] “Bear Stearns made the first public securitization of Community Reinvestment Act (CRA) loans started in 1997.[6] Editorialists in some American newspapers[7][8] and US Congressman Ron Paul[9] say the CRA loans were lent to otherwise un-credit-worthy consumers in the name of ending discrimination, although an analysis of actual lending patterns does not generally support this conclusion.[10][11][12]
On June 22, 2007, Bear Stearns pledged a collateralized loan of up to $3.2 billion to "bail out" one of its funds, the Bear Stearns High-Grade Structured Credit Fund, while negotiating with other banks to loan money against collateral to another fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund.[13] The funds were invested in thinly traded collateralized debt obligations (CDOs) found to be worth less than their mark-to-market value. Merrill Lynch seized $850 million worth of the underlying collateral but only was able to auction $100 million of them. The incident sparked concern of contagion as Bear Stearns might be forced to liquidate its CDOs, prompting a mark-down of similar assets in other portfolios.[14][15] Richard A. Marin, a senior executive at Bear Stearns Asset Management responsible for the two hedge funds, was replaced on June 29 by Jeffrey B. Lane, a former Vice Chairman of rival investment bank, Lehman Brothers.[16]
During the week of July 16, 2007, Bear Stearns disclosed that the two subprime hedge funds had lost nearly all of their value amid a rapid decline in the market for subprime mortgages.

[13] http://en.wikipedia.org/wiki/Community_Reinvestment_Act
Community Reinvestment Act (or CRA) Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.)


[17] “dollarloos”

[19] “Liberté, égalité, fraternité, French for "Liberty, equality, fraternity (brotherhood)",”http://en.wikipedia.org/wiki/Liberté,_égalité,_fraternité
[21] It is Japan we should be worrying about, not America Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world's second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending – and allowing it to push public debt beyond the point of no return. http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6480289/It-is-Japan-we-should-be-worrying-about-not-America.html

[22] Morgan Stanley fears global central banks will 'monetise' public debts By Ambrose Evans-Pritchard Morgan Stanley has warned clients that central banks in high-debt countries may try to stoke inflation as a deliberate policy to rescue governments and tackle the legacy of the crisis http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6400157/Morgan-Stanley-fears-global-central-banks-will-monetise-public-debts.html

[23] Our Economy is Collapsing. The Liberals will Now Institute Some Kind of Neo- Fascism or Socialism or Some New Blend to Maintain Power.
http://rycksrationalizations.blogtownhall.com/2009/08/06/our_economy_is_collapsing_the_liberals_will_now_institute_some_kind_of_neo-_fascism_or_socialism_or_some_new_blend_to_maintain_power.thtml

[26] A chess opponent of mine at Yale when he was an undergrad and I was a researcher at the Yale Med School , Dept of Pharmacology in 1972-1976. I never won a game.

[27] 'Debt levels risk another crisis' High levels of government debt around the world remain the most likely trigger of the next economic downturn, the former chief economist of the International Monetary Fund has warned. By James Quinn Published: 8:43PM BST 24 Sep 2009 http://www.telegraph.co.uk/finance/financetopics/g20-summit/6228450/Debt-levels-risk-another-crisis.html
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