OK, No on else has picked up on this. That says to me I have got this one wrong. I asked Karl Denninger over at Tickerforum for his opinion. He said,
Yeah, I saw that, but given how badly you get cornholed if you default on one of these, I’m not sure they really aren’t good paper.
HOW they’re good paper though should outrage everyone.
So I think I have to say sorry on this one. Outrage got the better of judgement. Something still stinks about this. But not quite as blantantly as I argued. I left it up for a while, as penance, but I have to take it down now. It would be unwise to leave a badly wrong story on line.
Here is the link to the raw story .
What I wrote began well enough.
A company Student Loan Corp. ‘has agreed’ to sell its loans and assets to Citi, Discover financial and Sally Mae. Citi is to ‘buy’ $8.7 billion worth of ‘assets. Discover will buy a piddling 0.6 billion in private student loans. While Sally Mae, another one of the US government sponsored financial institutions (GSE’s) like Fannie and Freddie, is ‘buying’ $28 billion in securitized federal student loans.”The private loans will be AAA rated and performing, valuable loans. The Assets Citi ‘buys’ will similarly be good.
So far so true. But then I went off the rails.
What outraged me was that Sally Mae, was buying up $28 billion more debts that one of the big banks wanted to unload. I felt if they were a money spinner then Citi would keep them or another bank would want them. The only reason Sally Mae would wind up with them is if they were defaulting. BUT I don’t and can’t know for sure. As Karl observed.
It is important to me that what I write be clear and above all honest. So all I can do apologise to you all. I don’t get things wrong very often. But I did this time.
This seems to be no more than financial prestidigitation; Now you owe it… now you don't!
Unfortunately the art of conjuring requires that the audience are willingly duped. If the "artiste" loses the sympathy of the audience, however, things start to fall apart pdq!
Sound familiar?
I'm new to all this Free market, derivitives, carry trade, FOREX holdings etc and only know what i know by googling stuff purely to see what all the fuss is about.
Well $£&% me!
It's outrageous, I want to scream and shout outside government buildings and banks but i know I'm gonna look crazy.
There are so many scams all going on at the same time it's hard to know where to aim your pitchfork.
My big question is this…
How can we bring this to the forefront of peoples thoughts rather than it be a passing firing synapse then back to their own little world which is inherinetly being controlled by the same skanky corrupt people?
If we all went to the same government building at the same time on the same day and politely knocked the front door is my idea but i do not have a clue how to organise such an event.
I know some may ruin the day by turning a car over etc but revolutions are normally a bit messy. If we had volunteer marshalls like at the olympic games I'm sure we could do a pretty good job though.
I think that's the only way we can change the system. Be a good day out too
24K,
It would be a good day out. But you can only organize the already awake. The others, the vast docile crowd still haven't woken up to what is going on. They like to believe those who know best are in charge and are diong their best.
Our chance comes as those people feel hardship begin to sink its cold claws into their luke warm lives. When it does and they start to feel afraid or hurt, then is the chance we muct seize. That is when we, you, have to be prepared to gently suggest new thoughts to them.
It may also be when we need to march up to those government buiildings. That time may be coming.
I just realised my idea wasn't an answer to my question. I like your answer,
When the time comes.
My next question then is how do the awake organise themselves so that when the sleepwalkers blink we can act?
Who's gonna get the high vis jackets for the volunteer marshals and the bottled water for the march?
Seriously though some focus would be nice.
I love the book, the bit about the guy walking into the bank would make a great rap song, "me put me nine to me ed 'n wail, me lifestyle never gonna fail. Bring da bass back"
I'm barely touching the surface but i feel like I'm in the body snatchers film when i talk to people about this stuff, god knows what you feel like.
I printed the book clip out for the misses, when can we buy a copy? Do you have a zirp payment plan?
24K,
Book should be available just before the Gov's spending review in mid Oct.
Sadly its a straight up front payment plan of £8.99.
Maybe we should get some beers in and watch "Fight Club"? 🙂
Thanks for the honesty Golem: most of us are struggling to understand the world's economic affairs and could be misled. With knowledge comes debate, and further feedback from your readers will help.
@24K
Don't worry about organisation. Trade union officials know all about this stuff and will be only too eager to win a new audience. I say this without cynicism, though I have in the past cursed unions for their abuse of power.
A shift towards socialism is desirable, but not the kind that is dominated by unelected, petty officials whose definition of success is sitting in the First Class train carriage.
Can you hear me gnashing my teeth?
Hi Golem
bit busy, sunny so off to mow, just came across this in the INDIE .
Second bit . Numbers ?
PS I'm long exited from the markets, but looks like you all sorted out the 'carry trade' , I couldn't have worked out all the mechanisms off-hand. frog2
Holy cognitive dissonance, Batman!
The 2nd part of that Independent article makes me want to punch someone.
This guy's supposed to be the British Press Awards 'Business and Finance Journalist of the Year 2009'
Bite me.
Hi folks,
Just back from a short holiday with Golem's thoughts looming large in my mind. Have been reading his bit about the blog and the book,and how many people are reading it now. Well, now is the time for people to watch David Malone's (Golem) film 'High Anxieties – the mathematics of chaos' which you can find on You Tube. If you don't understand it the first time, watch it again and again, and like Ozymandias, despair. You may well feel it is time to do something about it yourself, because it should make you very angry, and when one is angry enough one will find a way to protest.