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Brokers threatened by run on shadow bank system - Regulators eye $10 trillion market...
MarketWatch ^ | June 19, 2008 6:29 p.m. EDT | Alistair Barr, MarketWatch

Posted on 06/20/2008 10:01:11 AM PDT by Ernest_at_the_Beach

SAN FRANCISCO (MarketWatch) -- A network of lenders, brokers and opaque financing vehicles outside traditional banking that ballooned during the bull market now is under siege as regulators threaten a crackdown on the so-called shadow banking system.

Big brokerage firms like Goldman Sachs, Lehman Brothers , Morgan Stanley, and Merrill Lynch,

which some say are the biggest players in this non-bank financial network, may have the most to lose from stricter regulation.

The shadow banking system grew rapidly during the past decade, accumulating more than $10 trillion in assets by early 2007. That made it roughly the same size as the traditional banking system, according to the Federal Reserve.

While this system became a huge and vital source of money to fuel the U.S. economy, the subprime mortgage crisis and ensuing credit crunch exposed a major flaw. Unlike regulated banks, which can borrow directly from the government and have federally insured customer deposits, the shadow system didn't have reliable access to short-term borrowing during times of stress.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Extended News; Government; Technical
KEYWORDS: banking; economy; financialmarkets; goldmansachs; lehmanbrothers; merrilllynch; morganstanley

1 posted on 06/20/2008 10:01:11 AM PDT by Ernest_at_the_Beach
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To: Ernest_at_the_Beach

Regulating these firms is impossible because they ARE the government. Any new regulation will coincide with a bailout.


2 posted on 06/20/2008 10:10:23 AM PDT by Soliton (Investigate, educate, then opinionate.)
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To: Ernest_at_the_Beach

I agree that there should be some regulation otherwise the suffering is widespread and economy becomes a yo-yo.

The idea is that same rules that Federal Reserve lives by should be applied on shadow bankers as their size has gown equivalent to central banks.

The whole world is facing inflation and bad stuff is on the horizon.

This could have been avoided and nation would not have been trending hard left if someone could have nipped the evil in the bud.


3 posted on 06/20/2008 10:12:22 AM PDT by The_Republican (Conservatives are in trouble because they hate Scarlett Johanson.)
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To: All
Related story....FR Thread:

Paulson's unhappy with slow pace of reform - wants Congress to move quickly on giving Fed new powers

4 posted on 06/20/2008 10:16:35 AM PDT by Ernest_at_the_Beach (No Burkas for my Grandaughters!)
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To: Soliton

Bailouts are needed because there was no regulation.

They simply did not have any liquidity to adjust to short term needs.

People don’t know who is offering them Mortgages.

These guys are.

Yet when they do not follow traditional banking guidelines, they go out of business and millions who thought that they were taking out loans like people TRADIONALLY do are now going to be wiped out.

This protects everyone.

If they are going to act like Banks, they should follow the same guidelines or find some other business.


5 posted on 06/20/2008 10:17:28 AM PDT by The_Republican (Conservatives are in trouble because they hate Scarlett Johanson.)
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To: Ernest_at_the_Beach

The mother lured the daughters into the trp where they were murdered. I hope she hangs.


6 posted on 06/20/2008 10:23:03 AM PDT by Blood of Tyrants (G-d is not a Republican. But Satan is definitely a Democrat.)
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To: Ernest_at_the_Beach

Cramer BRAGGED how he committed a CRIME by doing naked shorts - the SEC, etc refuses to enforce existing laws so why do we need new ones?


7 posted on 06/20/2008 10:26:29 AM PDT by spanalot
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To: Ernest_at_the_Beach

The US has been preaching transparency and rule-of-law to the governments of a lot of third-world hellholes. We could use some here, particularly when the taxpayers are taking part of the risk.


8 posted on 06/20/2008 10:58:40 AM PDT by omega4412
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To: Blood of Tyrants

????????


9 posted on 06/20/2008 11:04:24 AM PDT by Ernest_at_the_Beach (No Burkas for my Grandaughters!)
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To: Ernest_at_the_Beach

Now I know why my grandmother said NEVER trust a banker.


10 posted on 06/20/2008 11:07:09 AM PDT by Vaduz (and just think how clean the cities would become again.)
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To: Ernest_at_the_Beach

Oops. Wrong thread.


11 posted on 06/20/2008 11:09:21 AM PDT by Blood of Tyrants (G-d is not a Republican. But Satan is definitely a Democrat.)
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To: Ernest_at_the_Beach
That sounds like a lot of money. How about this number...

Total Notional Value Of Derivatives Outstanding Surpasses One Quadrillion

12 posted on 06/20/2008 11:09:45 AM PDT by Sgt_Schultze
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To: omega4412

BTTT, I have always believed anything that is not based on something real is a shell game with the taxpayer as the fool.

Congress critters will never bite the hand that feeds it. Real reform would be to limit campaign contributions to individuals from their own state.


13 posted on 06/20/2008 11:19:02 AM PDT by A Strict Constructionist (We have become an oligarchy not a Republic.)
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To: Sgt_Schultze
That sounds like a lot of money. How about this number...

Scary! If you don't know how a derivative works.

14 posted on 06/20/2008 12:20:48 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Sgt_Schultze

That is scary!


15 posted on 06/20/2008 2:56:52 PM PDT by Ernest_at_the_Beach (No Burkas for my Grandaughters!)
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To: Ernest_at_the_Beach

LOL!


16 posted on 06/20/2008 2:58:01 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Sgt_Schultze; 1rudeboy; Mase; expat_panama; groanup; JasonC
Well we hit a QUADRILLION. We have more than $1000 trillion dollars in all derivatives outstanding. That is simply NUTS because notional value becomes real value when either counterparty to the OTC derivative goes bankrupt.

Proof Jim Sinclair doesn't know how derivatives work.

17 posted on 06/20/2008 3:03:42 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Toddsterpatriot

Even if we use the figure that experience tells us is the cost of derivative contract failure is 2 to 3% of the notational value, that’s what, $20 trillion+?

Even that number sounds too high.

I’m fully prepared, however, to believe that the sum total costs of failed counter-parties will reach or exceed $1 trillion. The under-capitalization of many of these derivative contract holders is absurd. Look no further than the so-called “monolines” - they have nowhere near the capitalization to handle the CDS instruments they’re in now, which is why they were downgraded this week.


18 posted on 06/20/2008 4:01:07 PM PDT by NVDave
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To: NVDave
Even if we use the figure that experience tells us is the cost of derivative contract failure is 2 to 3% of the notational value,

Derivative contract failure is 2% to 3%? Says who? Where?

What does "contract failure" even mean?

that’s what, $20 trillion+?

If nobody long ever offset anything with a short. If no one short ever offset anything with a long.

I’m fully prepared, however, to believe that the sum total costs of failed counter-parties will reach or exceed $1 trillion.

Sum total costs are zero. Every loss on a derivative is offset by a gain on the other side.

Look no further than the so-called “monolines” - they have nowhere near the capitalization to handle the CDS instruments they’re in now

Yes, it'll suck if you were counting on a monoline to pay you and they end up defaulting.

19 posted on 06/20/2008 4:57:03 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Soliton

President, Paulson, Bernanke will all hold there ground, despite threats to them that they will offshore and damage the economy further if the party for the shadow banking system stops. Sheila Bain is sickening. Get her off the Fed now Mr. President.

The pain will be massive as a depression unfolds over a couple year period and final resounding tipping point of collapse. The President knows this and is acting honorably for the American people, but half the dummies out there will blame him entirely for there pain when it happens.

Make money now while you can and prepare a back-up plan and I am not talking about hedging your portfolio bets, I am talking about a physical place to go. Mobs of hungry, enraged, entitled, deluded, spoiled population will feel it has a right to break into your nice home you slaved your life away for and do unpleasant things to your family. The guys at the shadow banking system who knew this or couldn’t understand the economics behind these schemes have 20 foot high fences and security. Do you?


20 posted on 06/20/2008 6:23:54 PM PDT by quant5
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To: The_Republican

Human nature and national behavioral patterns are highly cyclical and easily charted, especially the United States. Since you are educated I doubt you need discourse on it.


21 posted on 06/20/2008 6:25:52 PM PDT by quant5
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To: Vaduz

She must have lived through the Great Depression because my grandmother said the same thing. She never figured out that Democrats shouting ‘change’ ‘progress’ and ‘new deals’ were the ones passing laws to allow the bankers to take it to the nth. Those whom do not learn from history are indeed doomed to repeat it.


22 posted on 06/20/2008 6:28:19 PM PDT by quant5
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To: Toddsterpatriot

Bear Sterns got the short-end of the fees. So, ok it’s not a $40 trillion dollar problem its a $800 billion dollar problem. You must be from NYC Toddster. $800 billion could have provided a complete energy independence solution allowing America to retain it’s status as a solid Republican empire. Instead, arrogant, self-loathing bozos partied it up on steak and fine wine and having 9 yachts to ski behind. Your right though, people should really get a handle on math before publishing articles for mass media.


23 posted on 06/20/2008 6:34:16 PM PDT by quant5
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To: quant5
So, ok it’s not a $40 trillion dollar problem its a $800 billion dollar problem.

What is an $800 billion problem? Show your work.

You must be from NYC Toddster.

Chicago.

$800 billion could have provided a complete energy independence solution allowing America to retain it’s status as a solid Republican empire.

Who do you want to take $800 billion away from? Why?

Instead, arrogant, self-loathing bozos partied it up on steak and fine wine and having 9 yachts to ski behind.

Who are you talking about? Some people took $800 billion of their own money and spent it on stuff they wanted to buy? The horror!

Or are you claiming someone stole $800 billion? Who stole it? Who did they steal it from?

24 posted on 06/20/2008 6:43:41 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Toddsterpatriot

Depends on the value of the marked-to-whatever off the books asset blessed by the bond market. That number is not really. None of really know how much it really is without individually going through ten quadrillion pieces of paper. By the time that happens, America will be bankrupt.

Did the big money, educated guys leave there money in mortgage securities or back them out last May/June 2007 and into emerging markets and energy futures or didn’t they?

Why wouldn’t they keep there money long in mortgage securities if there was a net loss/net gain equation of 0? News flash, they pulled out because there is a winner and loser in fractional percentages because real-estate values were obviously overinflated and correction was inevitable. Hey Toddster, place your bets long on oil for us between August of 2008 and August 2009 for us will ya? There’s a net gain/net loss on equation on that one too.


25 posted on 06/20/2008 6:45:04 PM PDT by quant5
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To: quant5
Did the big money, educated guys leave there money in mortgage securities or back them out last May/June 2007

How much did Bear, JPMorgan, Lehman, BofA etc etc lose? LOL!

Why wouldn’t they keep there money long in mortgage securities if there was a net loss/net gain equation of 0?

Hate to break it to you, but buying a mortgage security isn't the same thing as writing a derivative or a swap.

Hey Toddster, place your bets long on oil for us between August of 2008 and August 2009 for us will ya?

Hey, come back when you have more real info, will ya?

26 posted on 06/20/2008 6:55:47 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Toddsterpatriot

Nobody stole anything, did I say someone stole something? A failed economic theory by idiots was employed a long time ago by utopian, delusional Dems whom pass laws or repeal safeguards. Bankers are capatalists. I am a business owner and a capatalist. Both kinds of people at the top take it to the nth. However, we know the line in the sand between greed between competitors vs. taking it out on the little guy. And I don’t know the exact numbers, nobody does but $40 trillion is estimated by people on Wall St. and the Fed itself.

A broker pushing the paper is a useful lackey that will always defend failed economic theory and corrupt banking leadership because they get a tiny taste of the action. But the culpability doesn’t lie with you Toddster if you are a trader or broker of this.

The i-Banks know how much of there own paper there holding and why the deadline of September to come clean or no more discount window to do a deal. Instead, the I-Banks have quietly threatened the Fed Chairman with offshoring there entire operations if the Fed doesn’t keep the party and the fleecing of the taxpayer going. They sure are have become big stakes gamblers these days. But if you don’t know what I am talking about I am certainly wasting my breath.


27 posted on 06/20/2008 7:09:50 PM PDT by quant5
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To: Toddsterpatriot
Proof Jim Sinclair doesn't know how derivatives work.

Jim Sinclair is an idiot. Again.

From the Commitments of Traders report a/o 6/17/08:

3-MONTH EURODOLLARS - CHICAGO MERCANTILE EXCHANGE

CONTRACTS OF $1,000,000 - OPEN INTEREST: 14,233,322

Is this where he's getting the 1.4 trillion?

28 posted on 06/20/2008 7:18:20 PM PDT by groanup (Most of my cliche's aren't original.)
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To: Toddsterpatriot

‘How much did Bear, JPMorgan, Lehman, BofA etc etc lose? LOL!’

Ask the shareholders of Bear Stearns. X amount of equity at $60 share several months ago vs. $10 a share after the JP Morgan deal. How much will JP Morgan make? The building itself was worth what, a billion? net/loss net/gain equation right?

‘Hate to break it to you, but buying a mortgage security isn’t the same thing as writing a derivative or a swap.’

Yeah no shit. The article is about derivatives and deravatives are DERIVED from a security based on an asset value stamped by the bond market.

I have you real information and that information is no one knows the exact numbers of derivatives themselves. Real estate values dropping are facts. Need a chart buddy?

I give you an numbers based on example and your poor excuse for a brain attempts to ask me to quantify the number. Not knowing real numbers of an obvious trillion something dollar massive problem but not knowing the exact amount of the scope of the problem in itself creates extreme volatility and why smart guys hedged in other areas such as energy or emerging markets. You keep defending bad behavior putting the entire public at risk by the i-Banks so put your money up while you drive around in your S Class. Oh let, me guess you just broker swaps or used to?


29 posted on 06/20/2008 7:30:00 PM PDT by quant5
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To: quant5
Nobody stole anything, did I say someone stole something?

What was this?

Instead, arrogant, self-loathing bozos partied it up on steak and fine wine and having 9 yachts to ski behind.

Whining about people spending their own money in a way you don't approve, tovarish?

And I don’t know the exact numbers, nobody does but $40 trillion is estimated by people on Wall St. and the Fed itself.

$40 trillion is the estimate of what exactly? Source?

Instead, the I-Banks have quietly threatened the Fed Chairman with offshoring there entire operations if the Fed doesn’t keep the party and the fleecing of the taxpayer going.

Where is the taxpayer being fleeced?

But if you don’t know what I am talking about I am certainly wasting my breath.

You are wasting your breath, because your posts are an example of economic confusion (I'm probably being too kind).

30 posted on 06/20/2008 8:11:56 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: quant5
The building itself was worth what, a billion? net/loss net/gain equation right?

Keep confusing derivatives with equity. It's funny.

The article is about derivatives and deravatives are DERIVED from a security based on an asset value stamped by the bond market.

My comments were in response to the link in post 12, Total Notional Value Of Derivatives Outstanding Surpasses One Quadrillion

Still confused?

I have you real information and that information is no one knows the exact numbers of derivatives themselves.

Do you believe Jim Sinclair when he says, "notional value becomes real value when either counterparty to the OTC derivative goes bankrupt"?

You keep defending bad behavior

Where did I do that? Link?

Oh let, me guess you just broker swaps or used to?

No.

31 posted on 06/20/2008 8:17:56 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: groanup
Is this where he's getting the 1.4 trillion?

1.144 quadrillion.

32 posted on 06/20/2008 8:21:37 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Ernest_at_the_Beach

bttt


33 posted on 06/20/2008 8:46:23 PM PDT by dennisw (We have an idiocracy not a democracy)
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To: Toddsterpatriot

No, the averaged loss of value in the contract that goes bust is 2 to 3%, taken over the longer term and entire sector of derivatives. Some instruments, however, blow up in spectacular ways that expose the inability of a counterparty to pay even a significant minority of the value of the instrument, which is part of what has caused so much turmoil in the debt markets in the last year.

That’s what I was referring to when people come out and make predictions about the sum total of all derivatives blowing up and the full “notational value” coming due. That simply won’t happen. The losses from the blow-ups, taken across the whole derivative market, will likely amount to 2% of the notational value of the instruments in the sub-market (eg, CDS or other bond swaps in this case; there’s no involvement of options on stocks or commodity futures, which are part of that grand quadrillion total ‘notational value’ scare number).

Even if we were to take 2% of that total notional value of all instruments, we arrive at $20 trillion, which is (I believe) far, far too high.

Such scenarios would require that all derivatives contracts become due and payable all at once, and that the holder of the contract can, will or wants to demand full payoff all at once.

In the debt market, this isn’t the case. For example, each CDS class is different; some contracts have wiggle clauses, deferred payment clauses, etc. The holder of a contract can demand “accelerated payment” from someone who issued a CDS (eg, the monolines), but if this forces the monolines over the edge, then what was the benefit to the guy who wanted to be paid again?

I can completely believe, however, that when this Charlie-Foxtrot in the US credit markets is done, tho, that there will have been losses and write-downs adding up to $1T or more. The more I look into the debt derivative markets, the more I see that these instruments were created, sold, re-sold, etc, with little regard as to whether or not all the parties involved in the contract would be able to meet their obligations if the underlying instruments made an unforeseen move, the “black swan” issue of markets moving in co-ordinated downtrends. This is the result of stupid mathematics inside these instruments, and the Monte Carlo analysis used to “prove” how unlikely the failure scenarios are.

The best example of this is the “monolines” (who should be called duo-lines, really), who wrote credit default swap instruments on CDO’s. The monolines have nowhere enough capital to pay off the number of CDS buyers who will very likely have a legit claim to collect on the CDS contracts written on residential mortgage CDO’s and other instruments.

This has been evident to a lot of bond market analysts for quite a while, and people like Bill Ackerman have been talking about this in public for quite a while - like five years.

This is why S&P and Moody’s finally started taking down the ratings on MBIA, etc, this week: because the ratings agencies’ credibility is now on the line. To continue to insist that there was nothing wrong at MBIA (et al) would require a child-like innocence that allows children to believe in the Easter Bunny. There’s simply no way to wave a wand over MBIA’s balance sheet and say “This company can meet all their obligations easily” and give them a AAA rating.

Even a modest downgrade of MBIA (et al) ripples through the market like a boulder tossed into a pool. Various large banks who are holding a lot of paper (including muni paper) insured by MBIA (et al) will have to take write-downs because MBIA is no longer carrying a AAA credit line, which means that the insurace “wrapper” around the bonds they’ve insured is sometimes lower in financial rating than the bond the wrapper was insuring.

A downgrade like this:

http://investor.mbia.com/phoenix.zhtml?c=88095&p=irol-newsArticle&ID=1168119&highlight=

Is like throwing a hand grenade into a wading pool.

Without a AAA rating, MBIA’s business model is compromised; the reason why any government sovereign (eg, city, state, county, etc) would buy muni bond insurance is because MBIA (or other monoline) has a AAA rating, which would allow the issuing political entity to offer the bonds at a lower interest rate.

But with a downgrade of five levels, to A2 on watch negative... pfah. There’s plenty of counties and states with a credit rating higher than what MBIA now has as a result of the ratings cut, and there is no reason for a Aa1, Aa2, Aa3 or A1-rated county to give MBIA (et al) a chunk of money to “wrap” their muni bond.

So there goes MBIA’s bread-n-butter business and income, which will lead to further problems in a short while, because what was the problem again? Oh, yes, MBIA is short of capital - which is what results from profits, which is what comes from their bread-n-butter business, wrapping muni bonds.

It is easy to see why Moody’s put on the “creditwatch negative” — they knew that slashing the rating would result in a hit to MBIA’s business model and cause more problems down the road.


34 posted on 06/20/2008 10:47:52 PM PDT by NVDave
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To: The_Republican

Why give them money?

Can’t the government do to them the same thing they did to Chrysler in the early 1980’s?

IE - give them a low-interest government loan and then have them pay it back over time.


35 posted on 06/20/2008 11:56:12 PM PDT by gogogodzilla (Live free or die!)
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To: Toddsterpatriot
What does "contract failure" even mean?

ACA Capital Holdings Inc., the bond insurer that lost its investment-grade credit rating in December, won a fifth forbearance from its trading partners on $60 billion of credit-default swap contracts.

Counterparties waived collateral requirements, termination rights and policy claims against ACA Financial Guaranty Corp. until July 15, the New York-based bond insurer said in a statement distributed on Business Wire. The fourth forbearance agreement had been extended to June 20.

* * *

On Jan. 17, Merrill Lynch & Co. wrote down $1.9 billion in securities it had tried to hedge through ACA. Canadian Imperial Bank of Commerce had to sell more than C$2.75 billion ($2.7 billion) in stock to investors to rebuild its balance sheet after taking writedowns tied to ACA guarantees.

ACA Capital Gets Fifth Forbearance Agreement on CDO Swaps

36 posted on 06/21/2008 8:31:20 AM PDT by DeaconBenjamin
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To: Toddsterpatriot
I meant quadrillion. Oops.
37 posted on 06/21/2008 8:34:35 AM PDT by groanup (Most of my cliche's aren't original.)
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To: Sgt_Schultze

Smoke and mirrors. FUD.


38 posted on 06/21/2008 8:37:43 AM PDT by Glenn (Free Venezuela!)
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To: gogogodzilla

I agree with that completely.

I was making the point about being in favor of reasonable regulation.


39 posted on 06/21/2008 9:51:57 AM PDT by The_Republican (Conservatives are in trouble because they hate Scarlett Johanson.)
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To: DeaconBenjamin
The derivative didn't fail, the counterparty failed. Thanks for the link.

Do you believe Jim Sinclair when he says, "notional value becomes real value when either counterparty to the OTC derivative goes bankrupt"?

40 posted on 06/21/2008 4:46:27 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Toddsterpatriot

‘Taken from Investopedia:

[A]…derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.

Futures contracts, forward contracts, options and swaps are the most common types of derivatives. Because derivatives are just contracts, just about anything can be used as an underlying asset. There are even derivatives based on weather data, such as the amount of rain or the number of sunny days in a particular region.

Due to the complex structure of derivatives, it becomes very difficult to evaluate the underlying assets of many derivatives. Problems in the industry could lead to massive derivative writedowns by banks. Derivatives could form an extension of the collateralized debt obligation [CDO] and mortagage backed security [MBS] problems that fueled most of the recent writedowns by financial institutions. If there are too many sellers and not enough buyers in the derivatives market, investments become stagnant and pose the possibility of devaluation if anxious sellers seek to cash out.’

You keep telling me to ignore the equity. This is your problem Todd in your thought process Todd. Also, how’s the monolines doing? Going to be hard to raise money at this point, now isn’t it? John Sinclair is oversimplistic in his reasoning, he doesn’t have much of a following with my thought process.


41 posted on 06/25/2008 9:07:38 AM PDT by quant5
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To: quant5
You keep telling me to ignore the equity.

Where did I say ignore anything? I want you to stop confusing equity with a derivative contract.

Also, how’s the monolines doing?

Ummm, not so well?

Going to be hard to raise money at this point, now isn’t it?

I guess, so what? I'm not a monoline.

John Sinclair is oversimplistic in his reasoning, he doesn’t have much of a following with my thought process.

Good for you. Now if only you could only correct your misconceptions, you wouldn't sound so silly.

42 posted on 06/25/2008 9:42:06 AM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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To: Toddsterpatriot

Good luck to you Todd. My silly misconceptions will keep my family and fortune well protected. I hope you supreme clarity does the same for yours. I mean you well but you don’t get the big picture, your focusing on nuances which I have already shredded but your holding on to. My attempt to educate was honorable, I do not believe your intentions with this continued dialogue are.


43 posted on 07/01/2008 1:01:38 PM PDT by quant5
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To: quant5
My silly misconceptions will keep my family and fortune well protected.

As long as you don't get involved in derivatives, your ignorance probably won't harm you.

I mean you well but you don’t get the big picture, your focusing on nuances which I have already shredded but your holding on to.

Yes, the difference between an equity and a derivative is a nuance. LOL!

My attempt to educate was honorable

You would have to get educated first. Good luck with that.

44 posted on 07/01/2008 5:43:36 PM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
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