So Thornburg Mortgage had yet another margin call, this time in the amount of 219 millions. Not even news anymore, at least to the main steam financial gurus. Well, it is news to this trader as Thornburg didn't do subprime, they did jumbo paper and most of it was prime or close to it. Yet another tell as to what is going on in the credit arena.
Thornburg CEO Larry Goldstone's quote sums things up succinctly, “Whoever thinks [mortgage securitization] is being fixed or getting better out there, it’s not.”
Gee, ya think ?
I see Roger Mudd, errr excuse me, I meant his son Dan, the CEO at Fannie Mae is doing the time honored ritual of Seppuku and is falling on his sword and taking his medicine. Oops, who am I kidding. That would take honor, courage, and moral character, he instead is having his underlings fall on their sword for him.
We ridicule and mock the Asians when they screw up, realise it, resign, go out for a night on the town and commit this act. You need look no further than who is running corporate America and it is easy, frankly, blatantly obvious as to why we are in the pickle we find ourselves in.
I also see the SEC wants to let U.S. companies switch to international accounting rules. Another nail in the coffin of our capital markets. As it should be, at least then the player steps up to the table knowing the game is rigged, the dice are loaded and the cards are marked. At least then the charade would be over and we could then all call a spade a spade.
You disagree okay. Then read the article about Lehman wanting to create a new entity in which to dump the toxic paper they hold. I have some advice for Dick Fuld over at Lehman. Don't bother, save yourself the assorted set up fee associated with a move like this and just dump them on the Feds lap. Who cares? You got nothing to lose and if it doesn't work out you walk with a deca-million dollar severance package and can round out the join Jimmy Cayne, Stan O'Neal, and Chuck Prince golfing foursome.
Lots of laughs and giggles on the best golf courses the country has to offer. As you hack your way in the annals of business humiliation as you become case studies in the new mandatory MBA course , How To Implode a Venerable Iconic Financial Name and Get Outlandishly Wealthy in the Process. As my grandmother (god rest her soul) would say, "you should be ashamed of yourself young man".
You may think I am kidding but I would be wholeheartedly in support of such a program of study. Sour, bitter, too harsh you say. Well facts are facts and I myself look at past trading errors and try to learn from them. The phrase from Santayana of "those who don't learn from history are doomed to repeat it" comes to mind. An old coach of mine used to say "when you've learned what not to do, then you have learned what to do." I guess we can safely surmise that they didn't learn from Enron. Lets hope we learn from this. That's obvious you say! To which I would reply, based on current goings on, obviously not !
Good speculating to you all and never ever forget that "an investor is a speculator who made a mistake and will not admit it".
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