"Has a lot of money gone to money heaven because it was all based on smoke and mirrors?" --CNBC

[Blackhatjack]

We are starting to hear professional financial pundits talk about the fraud of this market.

Should be a red flag for those listening.

And folks this is what Democrats are going to inherit if we put our Nominee in the Oval Office in January of 2009.

We need to be listening very carefully to what the candidates positions are in regard to corporate and wealthy interests, and whether they are taking their money in the run up to the election.

The selection of the next President is going to affect each and every one of us in this regard.

[BeyondGeography]

1. That was funny...CNBC is the place to be today

They've been dealing in some brutally frank terms this morning.

[jojo54]

2. The only problem is, none of the candidates (R or D) want to talk about it.

And I'll say it again as in my post of the other day: I want a yes or no answer from these candidates, not some hogwash that they think/hope will pass for an answer.

[spindoctor]

6. It is so complex that really nobody understands it anymore

It's also not something that can be fixed. The very last opinion I want hear on this subject is that from a politician.

[TechBear_Seattle]

3. "Fraud" is a very nebulous term when speaking of financial markets

The real problem is that sub-prime lenders, lured by easy profits, have taken on too much risk (by lending money to people who could not afford to borrow), grown too fast and never planned for falling housing prices. Hedge funds invested heavily in the profitable sub-prime market, so the collapse of one has resulted in the collapse of the other.

This isn't really fraud, just greed, poor management and lack of foresight.

[Blackhatjack]

5. The 'fraud' I referred to was the manipulation of the market ...

... to protect favored players and leave other players helpless to be exploited by the favored players.

[WCGreen]

4. If they were such great pundits...

How come the glib cheerleaders of CNBC didn't have a clue about the meltdown until it jumped up and bit them on the tuckas...

They are so full of clever sayings and meaningless platitudes that I believe they could be exchanged, en mass, for a bunch of Sportscasters and not miss a beat...

Just two weeks ago, Maria Bartiloma was gasping for that sacred 14,000 mark....

She couldn't contain her glee...

And then Krudlow and his laffer curve mentality tops off a day with gobs and gobs of nothing...

And now, these highly paid shills for the wealthy class have been caught, once again, by surprise...

[Blackhatjack]

10. When the DOW hit 14000 I said somebody is selling to cash out their positions before the drop...

Whenever the market runs up for no apparent reason you know that there is a very good reason for it. In a lot of cases people holding on to options and and wanting to cash out part of their portfolio take that opportunity to get out while everyone else is overtaken by optimism and exuberation.

Maybe somebody will go back and look at the insider trades at or about the time the market hit the 14,000 mark.

[WCGreen]

14. Too much emphasis on the day to day fluctuations of the market...

Just like all other meltdowns, everyone thought it would go on forever...

[beberocks]

12. Yep, CNBC talking heads are just GOP cheerleaders

If I watch CNBC it's with the mute on, just to watch the indexes/prices. They do have some knowledgeable guests on occasionally, but the CNBC talking heads often dismiss anything negative--"doom and gloomers," as Maria Bartolemo called one guest (however, he was dead right about this mortgage mess and what it would mean for the markets).

[WCGreen]

15. She is the worst of the bunch...

[Eurobabe]

7. I've always thought the stock market is glorified gambling

that benefits the very few who have the inside track. The rest of "us" who have retirement funds, etc. are just the little peons along for the "ride." After we got phucked out of a 5-digit sum in 2000, we've been extremely wary about where we put our money.

This crazy market up to 14K is/was a disaster waiting to happen. It comes as no surprise to someone who used to work in the brokerage industry during the 1987 crash. What goes up, must come down.

[TahitiNut]

17. Greater Fool Theory Rulez!

When public policy is 'tweaked' to flood the equities market with inflationary pressures (too much money chasing too few values), the result can only be that the rich get richer and the poor get poorer.

Since when does equity have a greater entitlement to endless return above and beyond loans? It's INSANE that our tax policy offers equity preferable treatment to loans/bonds ... and afford BOTH preferential treatment to Earned Income. It's fundamentally corrupt.

[C_U_L8R]

8. Yeah I heard that too and couldn't help but think...

some of this has to be going to Neil Bush.
We've been here before.

Yeah CNBC is like watching a prizefight today.

[Hubert Flottz]

9. We aren't headed for a recession this time we're headed for a

Hoover type depression.

The untaxed Vulture/Bushiebots/Have Mores, are ready to pounce and abscond again, just like in 1929.

[Blackhatjack]

11. Trump says for deal junkies 'this is a very exciting time...."

[OnceUponTimeOnTheNet]

13. Now they've trotted out The Donald. Too funny.

[Ikonoklast]

16. The hedge funds will get bailed out by the feds

The 'Old Boy' network of revolving door employees between Wall Street insiders and the Federal Reserve virtually guarantees it. The liquidity supplied by the Fed will go no further than their coffers; the mortgage markets won't get a sniff of it.

The little people trying to re-fi will be caught holding the bag in the ensuing credit crunch, and get hammered. Then those with cash, freely supplied by the government, can swoop in to buy real estate at fire sale prices.

[Blackhatjack]

18. My take is the $19bil injection is to speed up the exploitation of the mortgage market...

This is going to make it possible for the takeover of assets at rock bottom prices.

[OnceUponTimeOnTheNet]

19. The Fed should just let this mess happen. That Liquidity given is just prolonging the inevitable.

This kicking of the can will continue till the next administration.

[onethatcares]

24. at which point fingers will be pointed at a Democratic administration

for not taking care of the problem in 90 days. Or worse yet, having to raise some kind of taxes to keep the whole ball of wax rolling.

[Blackhatjack]

20. Trump just predicted a recession or worse if the Fed does not cut rate 1%...

Trump was very pessimistic, saying we are in for a tough time.

[Blackhatjack]

21. What would make sense is the Govt provides a 'bailout' to mortgage industry , but.....

in order to get the funds the mortgage companies would have to open up their books for an audit and the business practices would have to be reformed to meet sound lending.

THis would make the mortgage companies better and stronger, but it would expose a lot of the wrongdoing and those doing it which remains hidden.

[Warpy]

22. Wealth based on debt is always an illusion

Just like the paper stock market profits of stock bought on margin in the late 1920s made everybody feel prosperous and go on spending sprees, as the paper profits on housing purchased by debt made people feel prosperous now.

When the paper profits go bye bye, people are left with the debt and nothing to back it up. The money didn't go anywhere, but the illusion of it did.

The New Deal was put in place to prevent the boom and bust cycle from occurring, but the wealthy couldn't wait to get rid of it. This has all happened before and it will all happen again, no matter what reforms are enacted.

[DemReadingDU]

23. A $200,000 mortgage is not an investment

Many people were gullible to believe in the big mortgage is an investment. It is a debt. A big debt for a lot of people.

[Warpy]

25. It's astonishing to me how many people didn't understand that

and saw that $200,000 debt as somehow being paid off if the house appreciated to %500,000 over ten years. Even more puzzling were the people who refinanced at the higher value in order to go on consumer spending sprees or pay down credit card debt from previous consumer spending sprees.

I always felt debt as a terrible burden.

[DemReadingDU]

27. Debt is miserable, like an albatross around the neck

Thankfully, our house and cars are paid off. Not much in credit card debt either. I worry about my 30-something kids though.

[Eurobabe]

26. I always kind of chuckle when my mom sez:

Oh that goddamn DOW is down this week, I lost $10K "on paper." But to her that $10K is very real. Her investments and her house value are the only thing she has to carry her to the end of her life.

Pretty f'in' scary, working temp jobs to supplement SS bennies, just to put food on the table at age 66. :scared:

[Warpy]

29. Ask your mom what her yearly income is from that stock

and whether or not it goes down with the market.

The paper value is only one part of the deal.

My dad was very wise in his investments, keeping it defensive enough that his income wouldn't go down even if the stock market really tanked, something it did a couple of times while he was alive.

[G_Leo_Criley]

28. "vulture capitalists"

CNBC just had a feature on about the "vulture capitalists" (their phrase) who've been cruising the real estate of South Florida waiting for this...

glc

[trumad]

30. I think they're smart.