My pal Roy always talks about the lions looking for the water buffalo (also known as a wildebeest) walking with a limp at the edge of the herd. The same strategy applies among the short sellers in the stock market. Merrill was sold because they figured out that they were "next" among the investment banks (after the market had bled Lehman to death) that might have trouble surviving in the spotlight. Now the focus will shift to other free-standing lenders. Maybe Wachovia.
In my photo here, those birds sitting on Bossy's back could be the shorts. Along for the ride, but taking off to the next target once the lions show up.
Lots of blame to go around on this. Greed. At every level. From John Doe who took a mortgage on a property that he could not afford. To the mortgage broker who took the commission to write up the paperwork. To the Countrywide's who packaged the paper and passed it on to the investment bankers. To the bankers who sliced and diced the paper into high paying mortgage-backed bonds. To the insurers who gave the reconstructed securities their AAA rating. To the brokers who then sold the AAA paper to John Q. Retiree. And don't let John Q. Retiree totally off the hook: he wanted a rate of return higher than what he could get on a CD.
Lots of very smart people let this all go on. Greed creates short memories. Its a "new economy". Real estate isn't the same as Dot-com. The new mortgage-backed paper is insured and therefore can't go down. The people who put it all together have only the safety and security of the ultimate buyers in mind.
All lies. Everybody was selling the stuff to feather their own nests.
The politicians are playing their typical game of Four Dogs Playing Poker on this one. Blame the other guy. Its the season. For another 50 days.
Today's filing date passed with little fanfare. The same guys who file on the last day every year showed up today. If I had one wish for the tax side of my business, it would be that this last-day crowd changed their ways to a-month-from-the-last-day crowd.
My pal Bill did a full day of tailgating with his family in IC on Saturday for the Iowa State game. They got up there and parked in a yard just off of Melrose (for 60 bucks!) by 7:30AM. In the rain! I had called his cell to ask if he took a portable sump pump, but he didn't return my call. He said today the the $60 was a deal as it should have been $80 because of their tent. He didn't hear the call for "Big Ass Turkey Legs", but he said that he saw a bunch of turkey bones in the trash locations.
Another venture to IC tomorrow to see 4.
Have a great day.
BCOT
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