Monday, June 25, 2007

Wall Street Alchemists / Fleckenstein

Fleckenstein has also some excellent comments on some "dead fish" analysts. Click on the headline to read the entire post.

Fleckenstein hat noch ziemlich treffende Worte in Sachen nutzloser Analysten. Bitte auf die Überschrift klicken.

The housing bubble and the housing ATM were built on fantasy. They were driven by Wall Street's ability to take any and all mortgages, package them up and turn them essentially into high-grade securities.

It was like the medieval notion of spinning straw into gold: Wall Street alchemists wanted volume, and they got it -- assembling trillions of dollars' worth of mortgage paper that probably should never have been created, certainly not under the terms as structured.

One day when we look back on this period, I believe we'll shake our heads and say it was all so obvious. Then we'll ask: What was the stock market "thinking" when it viewed itself as an entity that reality couldn't touch?

>Time to hire the ..... Zeit neue Geldquellen zu erschließen... :-)

Thanks to Randy Glasbergen !!

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Anonymous Anonymous said...

The housing bubble and the housing ATM were built on fantasy.

I would say it was built more on economic opportunism. Oder in andere Worte: Gier nach Geld. Whether it was investment banking fees or a high return. To the extent that fraud was not involved (which remains to be seen), either by the companies that packaged the mortgages into CDOs or the rating agencies that assessed them, I don't necessarily blame these companies for taking the opportunity to make money this way. It's up to investors to do their 'due diligence' -- in all circumstances.

2:12 AM  
Blogger jmf said...

Hi Anon,

i agree.

"Due Dillegence" was almost non existend.

But i have the feeling that this is coming back in full swing :-)

i can´t wait for the next Bear Sterns earning report.

i´ll bet that they will report a "core" number excluding the damage from the bail out :-)

2:30 AM  

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