"Eisboch" wrote in message
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"Short Wave Sportfishing" wrote in message
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Look - everybody was looking for a quick buck. The brokers, the home
buyers, the securities industry - it was a classic bubble. Everybody
was buying into the never ending increase in real estate prices.
Nobody in Congress saw it coming and the securities industry was on a
huge roll with complicated securities and derivatives. I saw a
prospectus in 2003 for a SIV which was 132 pages long - that was the
detailed base agreement. The CDO squared attached was 281 pages long,
the CDO cubed was 857 pages long, etc. It was sliced and diced and
leveraged to such an extent that you couldn't understand the base
economics. Yet, they kept selling the products and morons kept buying
the products.

That's what did everybody in - greed on the loan broker's, greed on
the home owner's and greed on the securities people. Nobody saw it
coming because nobody understood it.

Somebody had to take the hit. Bear Sterns took the hit - that's
business. They, and their employees, got bit in the ass. That's
life. Financial planners tell people over and over and over - never
ever believe anything you are told - look at the fundamentals, do your
research, figure not on the best that can happen, but the worst that
can happen. Balance that risk against your ability to take the hit if
everything goes teats up. If you can stand to take the hit, then
balance that against the upside potential in terms of percentage of
gain against percentage of loss. Then make your bet.

If there was one single aspect of this whole mess, it was this.
Everybody thought they were the casino, not the mark.

Whoops. :)


Well put. ........ ( I think.)

Eisboch


And the same thing happened under the former administration. Unbridled
greed in the tech securities market. Buy an IPO and sell it in 3 months for
10x profit. Where was the Fed and the SEC in controlling the Ponzi market?
Seems as if no one in government paid attention to history.