Quick thoughts

Headed out the door, but I think we are in important days.

If anything could cause a truly epic market meltdown and truly threaten the international financial system, this mortgage mess instigated by greedy crooks could do it.

Here we have some transactions on 90% margin getting priced arbitrarily by the folks on the sell side. Pure chicanery. Pure arrogance. Pure greed. Well what if real estate tops? What if rates back up? Oh, that was never happen...real estate is the perfect investment, right?

This are 1929 type abuses that supposed to be 'lessons learned'. But the bankers created new derivatives and insider (illiquid) markets in which they traded amongst themselves. As long as money was easy, as long as the fish kept buying/refinancing the party was never going to end.

But now we are in a situation were all these vaunted institutions are holding piles of worthless papers. The music has stopped. The fish have stopped biting...and the banks are holding the bag...not that I feel in the slightest way sorry for them. They had to know this was coming, they're not that stupid, right? Isn't business school supposed to make them smart and stuff?

And they lie...oh, they lie. 'France's biggest listed bank, BNP Paribas (BNPP.PA), froze 1.6 billion euros worth of funds on Thursday, citing the U.S. subprime mortgage sector and "the evaporation of liquidity in certain market segments of the U.S. securitization market."'...that's what killed the market yesterday. Guess what they said LAST WEEK? THEY SAID THAT THERE WAS NO PROBLEM, along was most other yutzes on Wall Street...the mortgage crunch was contained...THAT WAS WHY WE RALLIED.

Well guess what? It ain't contained. Why else do you think the ECB and the FED quickly pumped money into the banking system yesterday? It's good old fashioned PANIC that we thought could NEVER HAPPEN AGAIN...IT'S DIFFERENT, THIS TIME, RIGHT....RIGHT?????