Re: OT GOOG

Black-n-Gold <pwd@xxxxxxx> wrote in message
news:11lv6hmhrs6d611@xxxxxxxxxxxxxxxxxxxxx

> Well, since I've been labled a hear no evil bull I don't see the sense in
> going on, but lets try. My point is short-selling is a looser's game
unless
> you have detailed knowledge on the company and know of some pending
catalyst
> for the downfall. That being said every stock will see a downturn and I'm
> sure you'll plaster a "see i told you so" when as soon as Goog/AIG/JPM/FNM
> loose a few bucks. You obviously have no clue how the financials work
which
> is even more evident by your derivative comment. FNM will see $60 long
> before it every sees 20 and a prediction of zero so absurd it doesn't
> deserve comment. That being said I fully back the reorg and its long over
> due. I still own quite a bit of FNM and FMA paper but have always been
> partial to the FCB system. I've never owned an Auto and never will. As
far
> as performance good for you on being up in a down year, and if we are
> measuring I throw mine on the table at anytime. Its a matter of public
> record anyway.

I could care less whether those stocks go up or down. I don't have a
position in any of them anyways. Unlike most people, I don't need the
markets to go up to make money. I can make money whether the DOW goes up
1000 or drops 1000. Then again, I can lose money either way too.

As for derivatives........

THE TRIPLE D BOMB:
DERIVATIVE DOMINO DESTRUCTION

by Michael Edward

http://worldvisionportal.org/wvpforum/viewtopic.php?t=177

U.S. banks have already duped you by using derivatives to help Enron,
WorldCom, Global Crossing, and Parmalat pirates "cook their books."

So, what do they have in store for you now?

THE DANGEROUS MYTH ABOUT DERIVATIVES

The biggest myth spewed out of the mouths of banks and financial paper
brokerages, regarding derivatives, is that they reduce risk. But the reality
is that they simply do not reduce any risk! In layman's terms, derivatives
transfer risk, such as from a bank to another bank or entity.

The alchemy of derivatives rests on complicated mathematical models that
predict how markets and derivative gambling risks will behave under certain
conditions. These computer models use past market performance to predict the
future, but they can't account for the unaccountable. Right now, computers
worldwide are creating financial plutonium; and as with all nuclear mishaps,
there are no small accidents. Get ready for the Chernobyl of the Financial
World.

THE DOMINO EFFECT

Due in part to the current Parmalat derivatives scam, a chain of events is
unfolding that will - sooner more likely than later - set off these
derivative time-bombs one-by-one. America's biggest banks are carrying
hidden gambling risks that no one has warned you about, and they are all
tied up in U.S. bank derivative portfolios.

The problem few people understand is this: With most derivative bets, you
have to supply a certain amount of collateral (cash) to the other party in
order to cover your bet. This amount depends on the bank's credit rating. If
the bank gets into financial difficulties, its credit rating will drop. The
result is that the bank will have to supply more cash collateral to its
derivative contract. This would easily cause a cash liquidity crisis, which,
in turn, would lead to a further credit rating downgrade, which would set
off a downward spiral. If only one major U.S. bank falls, they'll all begin
to topple like dominoes.

Now, get ready for the really bad [sic] news...

This nightmare scenario has already begun.

JP MORGAN'S HOUSE IS ENGULFED WITH FLAMES

Right now, U.S. banks are like a group of mountain climbers all tied
together with a 'safety' rope. JP Morgan Chase is at the top of that rope.
If it falls, the others will topple down the mountain with it, one after the
other. The end result will make the 1929 U.S. economic collapse look small
in comparison.

Ever since Chase Manhattan bid $33 billion for JP Morgan in September 2000,
the bank has been on an out of control downward financial spiral. The bank
claimed it would provide huge new growth, but that hasn't come about. But
instead of striking new profits, the bank has produced an endless well of
red ink. It has lost billions of dollar$ through bad loans and derivatives
connected with Enron, K-Mart, Global Crossing, Tyco, Argentina, and
Parmalat. In 3 short years, JP Morgan Chase laid off over 10,000 workers and
closed hundreds of branches.

JP Morgan Chase has become the largest gambler in economic history. Its
derivatives portfolio is equal to 1.5 times the size of the entire global
economy. According to the Office of the Comptroller and Currency (OCC), JP
Morgan Chase has more U.S. dollar$ at risk in derivatives than it has in
capital. As of September 2003, It carried a shocking $7.97 in risk per
dollar of capital. Just a 13% loss on its derivatives books would be enough
to wipe it out... and that risk keeps rising each day. Some analysts are
estimating that the Parmalat scheme may have eroded 5-8% already.


Fannie Mae Faces $25 Billion
Derivative Losses
By Stephen Schurr in New York
Financial Times
3-9-4

Fannie Mae paid a net $25.1bn on derivatives transactions in under four
years - nearly all of which may represent losses that cannot be recouped, in
turn depressing future earnings.

The potential scale of the liabilities, which have yet to be recognised in
the company's earnings or in the minimum capital adequacy required by its
regulator, raise fresh doubts about the financial health of the mortgage
finance giant.

Regulation of Fannie Mae and its sibling Freddie Mac is rapidly moving up
the agenda in Washington, amid concerns that the two goverment-sponsored
entities have grown so big that they pose a systemic risk to the US
financial system. The two entities own or guarantee mortgages totalling
$4,000 billion.

http://www.realdemocracy.com/debacle.htm

During the Depression, Franklin Delano Roosevelt had a dream -- to create a
government agency that would help buy homes for American families that could
otherwise not afford one.

And in 1938, the dream came true: Congress gave birth to the Federal
National Home Mortgage Association, later nicknamed Fannie Mae. Still later,
Congress transformed it into a stock company with special government
privileges.

Today, however, that dream is turning into a nightmare:

-- The company has grown into a government-subsidized monster that so
thoroughly dominates the mortgage market, its contraction or failure could
cause a collapse of the entire housing industry ...

-- Its executives have just been caught with their hands deep in the cookie
jar -- an accounting scandal that's potentially so serious, it could make
the Enron and WorldCom scandals look like a game of marbles ...

-- Its shares have just taken a big beating, wiping out more than $11
billion of shareholder value last week alone, and ...

-- Its balance *** is so shaky, any change in the marketplace, or even any
sudden legislative or regulatory moves to fix its problems, could
precipitate serious financial difficulties.

This is not new. I warned about it over thirty years ago when I published my
first book, The Money Panic.

I warned about it again in the 1980s and the 1990s in my Safe Money Report.
And on September 18, 2000, I warned my readers still another time, when I
wrote: "Fannie Mae is already drowning in a sea of debt. It has $34 of debt
for every $1 of shareholder equity. That's big leverage and of the wrong
kind. Plus, the company has only one one-hundredths of a penny in cash on
hand for every $1 of current bills."

"How could a company get so laden down with debt and operate with such scant
cash reserves? Because of Fannie Mae's unusually close relationship with
Uncle Sam ...

"Think Fannie Mae can't go under? Think again. [Someday] Fannie Mae ...
could lose one of its most important assets of all: The implicit backing by
the U.S. government.

"Indeed, Representative Richard Baker is leading the charge in Congress to
repeal the line of credit from the Treasury Department that Fannie Mae
receives. That means Fannie Mae's bonds would no longer have government
funds to back them up.

"Fed Chairman Alan Greenspan himself has raised a related issue. He's
apparently unhappy that government-sponsored enterprises like Fannie Mae are
being subsidized by the government, in the form reduced borrowing rates from
the Fed."

That warning was published exactly four years and nine days ago. But since
that day, even while this situation has continued to deteriorate, there have
been few voices of protest ... and even fewer concrete steps taken to avert
the disaster we face today.

Reason: Fannie Mae's executives, while allegedly enriching themselves at the
expense of investors and taxpayers, mobilized one of the most powerful --
and most fearless -- lobbies on Capitol Hill. Congress, the SEC and the
Justice Department were pushed back.

Even Baker and Greenspan were repeatedly forced into reluctant retreat.

And throughout it all, the company just kept growing in size and power,
virtually nonstop, emerging as the greatest single monopoly on the face of
the earth.




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