Wall Street’s ship of fools

I spent most of my career managing needed change, in some cases, “fixing” businesses. The greatest difficulty was finding people who acted ahead of a problem instead of people who could tell you what everyone else did wrong after thefact.There is no question the system broke down.When I read the critics,I always wonder how many of them would have turned down a mortgage based on known bad appraisals and known false income claims.I found that people who told me how the system could work better,what they could do or have done better, what I could do to make this happen were ones I could depend on.Those who told me what everyone else did wrong to the detriment of the company and the apparent detriment of their own opportunity, could never answer a query “Why didn’t you resign?”Where were these commentors when this started in 2004 or 5?Did they all refuse to take part? My experience leads me to say, “I doubt it.”

it’s a shame soneone is told to give loans to some who are risky at best then ,have the fed to back it ,have even more to hide the losses, and the one who are not risky in the END have to pay for it ,only in america

This is a managed destruction of America’s financial underpinnings, albeit a poorly managed one.

The EU and the coming North America Union are products of the 1940s
GATT formulations, and very few analysts are aware of it.

My missive to Ron Paul’s staff, regarding my view that this financial crisis is not by happenstance nor mismanagement—but BY DESIGN!:

The Honorable Ron Paul is ignorant of an ongoing conspiracy to topple, financially, the West, in order to equalize the world’s economies; for building one-world government under GLOBAL ECONOMIC SOCIALISM. // The conspiracy began in the 1940s with the GATT formulations. // Ask why Greenspan had violated his chairmanship duties by advising prospective home-buyers to take out an ARM. // Ask why Greenspan had sent out fed regulators to warn banks that they’d be charged with RACISM if they didn’t loosen home-loans for minority, HIGH RISK home-buyers. // Ask why Greenspan recently, TRAITOROUSLY, had advised OPEC oil producers to de-link from the U.S. dollar. // Greenspan - the FEDERAL RESERVE - has embarked on a purposeful set of monetary policies designed to destroy the West’s financial underpinnings. // Read about the WHO, the HOW, and the WHY of it in my below article (first one): Planned Destruction of America: http://planneddestructionofamerica.blogspot.com/ // Corporate America: What Went Wrong?: http://corporateamericawhatwentwrong.blogspot.com/

This helps to confirm efforts to PURPOSELY trash America’s financial underpinnings: http://www.321gold.com/editorials/engdahl/engdahl031808.html

I notice that Oppenheimer analyst Whitney is trashing banks again and Katie Benner of CNNMoney recently called her a “prophet.” It is very easy to kick dogs when they are down. If she can call the upturn in financial stocks right, then she may earn some credit in my book.

In the meantime, let’s observe a moment of silence for the fallen Wall Street prophets of days gone by - Joe Granville, Elaine Garzarelli, Abby Cohen, etc.

Keep forecasting Whitney, and as I always say to Wall Street analysts and economists like yourself, “If you must forecast, forecast often.”

I strongly agree with these words. Moreover, We have to try to understand that most of the times the human comprehension won’t match to the market behaviour, at all. They’re two different minds trying to come together without speaking the same language.

Forget the $3000 government checks, and the financial companies (Bear Stern, etc.)bail out, that’s all short term.

Why not provide every US citizen with 1MM check, and every US family (Citizens) with $3MM check, that way none of us will have to work and things are in teh US will be Happy.

Since we don’t do anything anymore (landscaping, restaurants, java, toys, TVs, etc.)

I thought we already went through a civil war, against salve labor, is that why we move jobs to 4th wolrd nations ?

very good sounding board ,a few have again hurt everyone in this country .
my comment is this: today at our local
boa branch i noticed that their advertized cd rate had dropped to under 2% but the lending rates were fixed 6% arm 5.74%. Thank you very much i guess ? i should grab my ankeles now as it looks as we are about to pay for the banking industrys mistakes and greed.
The first to fall will be the credit card sharks then i’ll bet the dirt will fly out from under the rug when the real truth gets out as to how much the others are hideing
in bad news.

The most amazing part is here in fla the nitwit devlopers are poised to start building at a moments notice with lower prices that will finish us off in the housing market by driveing the already falling prices into the dirt. The supply of repos and new inventory along with listed resales is staggering.i’ve never seen any thing like this here in 58 years. the banking regulations need revision and to be inforced.

This article contains very little real information. The writer who wrote this gives us nothing and is simply “Stirring the Pot.” Reporting like this is very dangerous.

I was in London last summer - an experienced trader told me that he was pulling his own money out of the market because it was all about to crash big time. Also, credit was going to be at risk and would be a big problem.
So I am not sure I completely buy the “don’t understand them” line. It sounds cool though!

Even regulators did not bother understanding the rotten hot dogs packaged and sold? Wall Street would not care the ingredients as long as they are bought and sold for a premium, but compliance personnel and regulators?? It is such a shame !!
Madhu Aryal
Madhu Aryal
Madhu Aryal

This article is helpful, but we never seem to get beyond the words. There is no sense of accountability anywhere, in the present nor for the future! We have good intentions, but beyond pouring money into the problem, mostly Federal, or over regulating the situation, there don’t seem to be any realistic solutions. There is no sense of checks and balances which would either help the economy or preclude this from happening again. I have lost faith in the market’s desire to remedy their problems or to do what is necessary to stabilize the situation, except to drop it on the Federal government. These execs should not allowed to walk away. But share holders have also failed in their responsibilities to the process. It’s really pathetic!

My company is floundering due to the rough times. Who do I contact in Washington to get a few hundred thousand to tide me over.

I worked in the mortgage industry and like any business there always a few bad apples, but when you combine that with a few from the securities companies who wanted more high yielding loans to the few asleep at the switch at fannie and freddie and the customer who wanted that dream home at almost any costs, well……..now the fat cats pack their bags while the rest of us are holding the bag. The answer is not in finding someone to blame because we are all to blame.

The Fed is largely responsible for encouraging the housing bubble, by offering cheap credit. This is much bigger than just ’subprime’ lending. The entire system of debt and credit that has allowed the US an artificially strong economy is at a tipping point.
The Fed has done what every central bank does, it has used inflationary policy to try to fix its own mess, and blames the private sector for doing exactly what the Fed incentivized it to do. Bernake is fast running out of rate cuts, but remember that there is a delay in the effect of cuts on the dollar and economy. Look for a much weaker dollar in the following months.

This is why you should buy dividend-paying stocks. You can juggle earnings numbers but you can’t fake dividends. Too bad they went out of fashion when everyone decided to buy “earnings”. That just encouraged executives to cook the books to increase stock value and cash in their options.

Okay, here is my question. I keep hearing about potential bailout for homeowners. How would this work? Does the bailout go to the people who have been living large (giant houses furnished to the nth degree, luxury cars, super home improvements - - have you ever seen a $100k kitchen remodel? Gorgeous!! - - delux vacations, on and on and on. So, now having refi’ed themselves into penury (I know many who refi’ed six to ten times and pulled out all that great old equity each time) but had a great time doing it - - now does the government plan to bail them out and leave those of us who lived by our old-fashioned values and were careful and conservative out in the cold on this? The only acceptable solution is to give the same exact amount to everyone. If you’ve been careful and don’t “need” it, then your ship has finally come in. I don’t plan to be nice and quiet while those who enjoyed the fruits of their recklessness now get babied and coddled by spineless politicians. The bottom line is - - they better keep it fair. Or, they will have an actual revolution on their hands!

Interesting that all that has happened to the economy, due in part to sub-prime and excessive credit use, no one is looking at the government to go after some of the big execs, who made untold millions in “compensation”, while their companies were floundering.
I guess “money always talks and…
why people have so little faith in the government.

Traders don’t have to understand anything about their “companies.” By traders I mean the market makers, not the arrogant guy that sits at home buying and selling stocks. He’s not a trader, he’s a buyer and seller of stock plain and simple. The traders, market makers, are the few guys that have the ability to set the price for bid/ask. They function off the law of supply and demand instantly. If suddenly there are more buyers, raise the price to see if someone is willing to buy or sell at that price. They don’t care what the news is or if there is any news. It’s supply and demand at its finest! Of course it’s also volatile because people keep jumping and out of the market. (That would be the stay at home traders which will get taken again for a ride pretty soon.) This is not THE bottom, it’s just a technical slowdown on the way down. Which I find hypocritical that the media always says “don’t try timing the market” but yet are spewing the words “is this the bottom” lately. Market timing = Trying to find a bottom.

The Fed has made a drastic mistake letting these clowns off the hook. They’ve laid out $260bn of cash in exchange for what is essentially now toilet paper (mortgage backed securities). The Fed has total assets of about $915 billion. So almost 30% of the Fed is now backed by worthless instruments? If you think the dollar was low before, watch it slide now. If China ever tries to sell back the $1.5 trillion in T-bills they’re holding they will quickly find out that the US wrote them a “hot check”. Remember Argentina in 2001? Better brush up.

Uncle SAM needs you! Or to be more precise he needs your billions of taxpayer dollars to bail out investment banking millionaires and billionaires of wall street ….with very little (if any) going to homeless families evicted from their houses thanks to a wall street money making scheme that failed. How ironic. Is this an example of democratic capitalism that the USA wants to export around the world ?
Is this the same Hank Paulson who a few months ago was telling the Chinese that their currency was too cheap ? is this same Hank Paulson who while at Goldmans made millions from selling products based on sub prime loans? and the same Hank Paulson who failed to even see the problem ?
American taxpayers you are mad…you should complain ..and complain …and complain its an election year make your voices heard…
Together with the $ trillion + wasted in Iraq you can be sure the Chinese have a smile on their faces , they are in the ascendent, and the USA ?? How really really sad it is.

i have a bba in accouting and qualified for the cpa exam (minor in econ) - there used to be a mortgage company in dallas that offered a $350,000.00 mortgage with $500.00 due at closing - the old rule was you could afford a mortgage twice your annual salary or 25% of you monthly income - i knew at that point we where headed for BIG trouble - and than early last year i started learning about all the QUOTE securities that i had never heard of which i quickly learned that experinced business writers did not understand so it does not surprize me that the people that buy and them sell them dont know either - doesnt AIG have about 70 billion of this junk on their books or should i say off them (can you spell ENRON) - there was a term years ago in accounting called WAG (wild ass guess) - inverstment banks have given it new meaning )))))

“There is, of course, a reason that the market doesn’t understand Wall Street firms,” he writes at Bloomberg. “The people who run Wall Street firms, and who convey news of their inner workings to the outside world, don’t understand them either.”

Couldn’t have said it better myself! Short, sweet, and to the point.

So, basically, no one understands anything. The analysts, CEO’s underwriters, traders, janitors don’t understand what their respecitve companies are doing. The external analysts have even less of an understanding…and are basically guessing. This all explains why there is a lack of confidence, its simple, there is a lack of transparity.

What people do not understand these Wall Street bankers do not want anyone to know the many ponzi schemes they are running right now. One is the fact that nobody is buying U.S. Treasuary Bills the second is that crooks have stolen at least 3 trillion dollars in a flip a house to each other scheme and lastly that a couple of years ago the feds thinking the junk bond issue was behind us allowed people to pay up to 10 percent of principal people paid into bonds as interest. This has been going on long enough that some of these funds now only have 50 percent of their original pricinple left and are going belly up.

Oh by the way have a great day.

Very much disturbed to read such news & comments, now in this era of spiralling growth.

In my 25+ years of trading stocks, this is THE BEST summary that I had seen!