Mac1958
Diamond Member
No, that's not what I'm saying. Not even close. So I'll say it again:Because he doesn't have any fiduciary responsibility. None. His is a pure supply and demand dynamic. He's only a broker between a buyer and seller.How exactly are they fulfilling their fiduciary obligation to the client by doing that?You're focusing on the Fannie & Freddie aspect of this, and there's simply much more to it that has nothing to do with that crap.
The lenders didn't have to worry about losing money, because they were immediately packaging the dog shit sub-prime mortgages into dog shit CMO's and double dog shit CDO's, getting COMPLETELY FRAUDULENT AAA ratings from the ratings agencies who were making a ton literally selling ratings, and POOF, the dog shit was OFF THE BOOKS, sold to some unsuspecting investors who foolishly thought that AAA ratings actually MEANT something. Ha! Dumb shits! Suckers!
Meanwhile, AIG is making a SHITLOAD selling a few hundred billion dollars of CDS's with ZERO (0) actual "money" to back up those bets, to institutions that thought (suckers!) they were hedging their bets on those CDO's and other shit, only to find out that AIG NEVER HAD THE MONEY TO PAY THEM OFF. THEY NEVER HAD THE FUCKING MONEY, YET THEY TOOK THE FEES. WHAT A DEAL! Holy crap, talk about a boffo business model! But that's okay - they called the gubmit, told them they forgot to keep money in reserve (oops!), and got bailed out! How cool is THAT!
Oh yeah, it gets better -- THEN the banks were creating and selling these horrific dog shit CMO's and CDO's and selling them with their phony dog shit AAA ratings, while AT THE SAME TIME they were BUYING CDS's to fucking SHORT THE VERY SHIT THEY WERE SELLING. Brilliant! Win/Win! My personal FAVE was the Goldman Sachs/John Paulson crime partnership that made Paulson $1 billion, GS even more, and fucked over all KINDS of people with shit CDO's that they had PURPOSELY MADE shit CDO's. Whoopee!
So what does ANY of this have to do with Fannie and Freddie? And by the way....
Because there was no one saying "stop, we need to look at this". That's what a regulator does. In a normal world.
- Why were the ratings agencies getting away with slapping AAA - TREASURY LEVEL - ratings for SHIT securities?
- Why was AIG able to sell hundreds of billions of dollars in swaps with NO RESERVE REQUIREMENTS?
- Why were the creators of these shit securities able to bring them to market in the FIRST PLACE?
- Why were no limits placed on the amount of CDS's that could be bought to transfer risk?
- Why were there ZERO controls on the types of debt that were being shoved into these shit securities?
- Why were banks allowed to be in bed with companies that were selling hyper-toxic "synthetic CDO's" with zero fucking oversight?
- Why were the banks getting away with manipulating the value of CDS's, as they were buying them themselves?
- Why were the banks getting away with SHORTING the very crap securities they were creating and selling?
Are you really going to blame the Democrats ALONE for all that? Holy crap, come on.
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Why were the banks getting away with SHORTING the very crap securities they were creating and selling?
When a bank creates a synthetic CDO for a client, the bank is on the other side of the trade.
So of course they are short the security.
If you buy a call, are you mad because the market maker who sold it to you is short the call he sold you?
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If I go into the IBM pit on the CBOE and I buy 100 July 175 calls for 1.89
the market maker selling me those calls is now short 100 July 175 calls.
Why can he sell me this crap and go short this crap at the same time?
Goldman Sachs and JP Morgan DO have fiduciary responsibilities to act in their clients' best interests. Just like I do. Only about a trillion zillion times bigger, and an integral part of the economy.
Acting in their clients' best interests? They did not. They literally bet against what they were selling their clients using securities that were not regulated. They created dog shit securities, bought AAA ratings for them, fraudulently sold them based on bogus ratings, then bet against them. They created a market for themselves based on a fraud.
Do you see anything wrong there? And that was just ONE of the scams that was going on.
No regulation of the securities. No regulation of the AAA ratings they were given. No regulation of their behavior once they had them. THAT'S the problem. THAT'S what happened.
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So what you're saying is that they behaved responsibly with securities that weren't regulated, but they behaved irresponsibly with securities that were regulated. That right their tells you all you need to know to determine what was responsible for this fiasco.
They created dog shit securities, bought AAA ratings for them, fraudulently sold them based on bogus ratings, then bet against them.
They created and profited from a market for themselves based on a fraud. On both ends. From beginning to end.
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