11–20 of 72 posts
It's great that this guy has a gift but let's call what he does for what it is: exploitation. Countless pension funds and state budgets are in shambles because of people like him.
The fact that it was so hard to short subprime mortgage bonds probably kept the bubble going even longer.
It's great that this guy has a gift but let's call what he does for what it is: exploitation. Countless pension funds and state budgets are in shambles because of people like him.
"Mark to market" is dangerous because it equates your option of selling an asset at the market price with the actual exercise of that option. It would be better to model the asset using the actual stopping times the firm uses to decide when to sell (on the portfolio as a whole).
It's great that this guy has a gift but let's call what he does for what it is: exploitation. Countless pension funds and state budgets are in shambles because of people like him.
I can only hope you're kidding. Those pension funds and state budgets are in shambles because they were underfunded and relied on the market to tell them the value of their holdings rather than the kind of fundamental analysis performed by Burry, because the market gave their investments ridiculous rates of return. "Mark to market" is dangerous because it equates your option of selling an asset at the market price wi…
It's great that this guy has a gift but let's call what he does for what it is: exploitation. Countless pension funds and state budgets are in shambles because of people like him.
Those pension funds and states should not have invested in dangerous securities. Let's face it: the money seemed easy and these guys took very dangerous investments, with money that was not safe to play with.
Earlier quoted context omitted.
I can only hope you're kidding. Those pension funds and state budgets are in shambles because they were underfunded and relied on the market to tell them the value of their holdings rather than the kind of fundamental analysis performed by Burry, because the market gave their investments ridiculous rates of return. "Mark to market" is dangerous because it equates your option of selling an asset at the market price wi…
Why would I be joking. How is expecting the common decency from a fellow human being to tell you that you're standing on a live train track funny? The money managers/investors screwed over an entire economy because they were greedy and were willing to exploit esoteric financial laws/practices and consumer ignorance to sacrifice money that wasn't their own. There is no joke here.
Earlier quoted context omitted.
Those pension funds and states should not have invested in dangerous securities. Let's face it: the money seemed easy and these guys took very dangerous investments, with money that was not safe to play with.
Actually, they relied on rating agencies that said these were not very dangerous securities. They should have done their own homework, but there are regulations on valuing a pension fund's holdings. The government fell down by not ensuring the soundness of those regulations in practice.
It's great that this guy has a gift but let's call what he does for what it is: exploitation. Countless pension funds and state budgets are in shambles because of people like him.
Earlier quoted context omitted.
Those pension funds and states should not have invested in dangerous securities. Let's face it: the money seemed easy and these guys took very dangerous investments, with money that was not safe to play with.
That doesn't justify what he did. The right thing to do would have been to let people know of what was happening. Just because the financial system rewards greed/selfishness does not mean people shouldn't act ethically when the consequences of their actions could mean the loss of hard earned money by honest hard working people with families, medical expenses, college loans, etc. Then again the guy has Asperger's synd…
For example, during a hearing on September 10, 2003, before the House Committee on Financial Services considering a Bush administration proposal to further regulate Fannie and Freddie, Rep. Frank stated: "I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two Government Sponsored Enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury."
(http://www.judicialwatch.org/news/2009/dec/judicial-watch-an...)
Earlier quoted context omitted.
Those pension funds and states should not have invested in dangerous securities. Let's face it: the money seemed easy and these guys took very dangerous investments, with money that was not safe to play with.
That doesn't justify what he did. The right thing to do would have been to let people know of what was happening. Just because the financial system rewards greed/selfishness does not mean people shouldn't act ethically when the consequences of their actions could mean the loss of hard earned money by honest hard working people with families, medical expenses, college loans, etc. Then again the guy has Asperger's synd…
Lewis made the point that many journalists had in fact written stories about the real estate excess but those stories were simply ignored.
In addition, if you read The Greatest Trade, you will see that while Burry was pretty early, he was by no means the first to call the trade.
One company I own shares in, chose to publicly detail a very similar CDS trade in their 2006 letter to shareholders. This was before CDS prices skyrocketed and left any investor with ample opportunity to protect themselves from the fall out. At the time, it only cost $1 to $1.5M to buy $100M of protection on banks such as Lehman Brothers or Bear Stearns defaulting.
Most people just choose to ignore the possibility of a bubble bursting. They think the music will keep playing. I remember when I was buying shares in the above mentioned company back in the summer of 2007, when we started seeing subprime's true problems via the troubles at New Century Financial and others. Most commentators and analysts stupidly believed that the problems would not spread beyond subprime mortgage borrowers. But if you had looked at the data, you would have seen that as a result of the leverage employed, by multiple parties, things were much more intertwined.
It's great that this guy has a gift but let's call what he does for what it is: exploitation. Countless pension funds and state budgets are in shambles because of people like him.
The people you should be mad at are the ones that actually created the problem in the first place. These problems wouldn't have existed without the Federal Reserve's low interest rates and politicians like Barney Frank who enabled the GSEs. You should be outraged at the arrogance of those people who think that they can make decisions for the entire country that should be made by millions of informed individuals.