Relevant:
2008-10-23 — current.com
There's no telling how much vaporization of "wealth" we are now seeing is due to the way rampant practices like naked short selling undermined the fabric of the market. The regulators turned a blind eye (or actively participated?), and most likely as a result, they are finding the market that much more difficult (impossible?) to stabilize. Watch the video.
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SigmundFraud at 19:00 2008-10-24 said:
I would have thought short selling, naked or otherwise, could not explain the current collapse. These companies became the living dead long ago when, like the housing sector, they leveraged themselves up to unprecedented levels when credit was essentially free, destroying their own capital. Of course imaginary money, born of fractional reserve lending, credit derivatives or the assetless "investment" in nations such as the U.S. (i.e. Chinese loaning profits to the US to buy Chinese widgets, then Chinese loaning these profits back to the US to buy Chinese widgets, then...), must either "vaporize" (because it never existed) or be drawn down from the future through decades of repayments (private or via taxation). Financial institutions had the triple vulnerability of imaginary money on their balance sheets, imaginary money underpinning their own leveraged investments, and finally the imaginary money of others underpinning their share price in the form of margin loans. Sure, short selling probably spared a few fools buying over-valued assets by prematurely killing proud companies, but if you looked at any of the "victims'" balance sheets, they weren't killed by rumours and shorts. 1 to 50 leverage at the end of a boom, now that's another matter. PermalinkVaAppraiser at 20:43 2008-10-24 said:
More fraud and corruption. Now we know that borrowers committed fraud, appraisers committed fraud, lenders committed fraud, real estate agents committed fraud, title companies committed fraud, lenders committed fraud, underwriters committed fraud, investment brokers committed fraud....and we wonder why we are in the mess we are in???? And we want MORE rules???? Why oh why can we not just enforce what we have? It totally boggles my mind. This is not rocket science. This is calling a spade a spade. It is not a matter of how you look at it...a lie is a lie...much of this was ALL based on lies, from the bottom up. Of course it will not last and throwing $700 Billion or $700 Trillion or $700 Gazillion will not save any of it. Permalinkadd a comment | go to forum thread
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