Post by jannikki on Jun 5, 2007 23:14:15 GMT -4
STOCKGATE TODAY
An online newspaper reporting the issues of Securities Fraud
It's a Hedge Hedge Hedge Hedge World - June 5, 2007
Dave Patch
Who needs a movie with the likes of Buddy Hackett, Milton Berle, Ethel Merman, or Spencer Tracey running around like comedic, greed infested lunatics in a dash for some hidden treasure to show us how awful greed can be when we have all the hedge fund managers we can stomach doing it for real right before our eyes?
Enter Stage Left, the Subprime debacle and one mean spirited hedge fund.
As if the subprime meltdown has not already shown how the ambitions of personal wealth overcame logic and responsibility, we are now faced with an organized group of wealthy hedge fund managers who are opposed to the prime banks involved in the meltdown renegotiating mortgages to needy homeowners. Homeowners who, without such renegotiations would otherwise default on their mortgage and lose their homes sending the families to the streets.
Recall, the subprime industry is under investigation for lending practices where bait and switch mortgages were issued to high-risk borrowers placing the homeowners into much more expensive loans than they could otherwise afford. It was a setup for a default and a set up ripe for those betting on the defaults. Also under review is the heavy-handed selling tactics used to sell mortgages that were not in the best interest to the borrower but were certainly profitable to the bank.
Enter stage right, the villain.
The NY Post today followed up on a previous story in Bloomberg identifying that the $11 Billion Hedge Fund Paulson & Co. has taken lead role in a battle with Bear Stearns over efforts by Bear Stearns to renegotiate loans for homeowners struggling with subprime mortgages. Paulson claims that to renegotiate the loans on homeowners who would otherwise default is an act of market manipulation in the bonds markets of the derivative subprime securities.
Understand that Paulson is a hedge fund where profits become compensation and in this case. Paulson reportedly bet about $1 Billion on the decline of the subprime securities through complex credit default swaps. Paulson's profits to date are not small in this bet as it is rumored that the fund has nearly doubled their initial investment to date. The fund is upset however because renegotiated mortgages will reduce defaults and thus raise bond prices. An increase in the bond prices goes against Paulson negative bet and cuts directly into profits.
Paulson is no dummy and thus political correctness is a necessity when you are talking about evicting the poor from their homes. Paulson therefore claims that loan modifications in general are not what he is going after; it is just where second chances at a default manipulate the markets. Say again? Paulson has not expounded on how you differentiate between one poor man's default and another's second chance but for political correctness the fund is not against renegotiated mortgages.
For the record, U.S. mortgages in foreclosure rose in April 62% from a year ago.
Where did the now homeless go? What impact did the influx of foreclosures have on the real estate market where these foreclosures were executed? If the subprime mortgages are to high risk people, you can bet that the foreclosures were not in the neighborhoods of John Paulson or his clients.
Thus we have a classic war about to be waged between the banks that are looking to protect the real estate market as a whole by making small concessions and the fat cat hedge funds that show humanity starts and finishes at their private offshore bank account. The front line used to fight this war or course will be the poor people who were duped into being a participant in an American dream that was never intended for them. Generals, in this case the wealthy banks and fund managers, do not fight wars they send others out to be sacrificed.
It may behoove Paulson to talk over his complaints with rival hedge fund Citadel Investment Group. Citadel apparently reached out and purchased ResMae Mortgage this week for pennies on the dollar providing further evidence that the hedge fund buy side interest in bonds backed by subprime mortgages is returning.
It very well could be that Paulson is wrong and that the long-interest hedge funds like Citadel and Lone Star Funds may be the cause for the subprime bond market turning around and not the banks simply acting in good faith to protect the lower income families whose life's would be destroyed in a default otherwise.
Now don't get me wrong, I am not saying the banks like Bear Stearns do not have ulterior motives for their actions. It is not all about humanity. Money is certainly the motivation behind Bear Stearns actions as well but when faced with an either or, Bear Stearns becomes the better of two evils in this war. Paulson simply comes out playing the role of greedy pig.
I will say that when I read the covered stories on this subject I could only wonder how many different ways hedge funds have attempted to take over our markets and deprive the financial and social safety of our nation as a whole. All for the sake of tainted profits at levels only needed for ego-stroking purposes. I can only wonder whether these fund managers have the guts discuss the victims of their efforts when they compare their riches with and against their fellow peers.
How many billionaire hedge fund managers do we need in this great country when we still have people living on the streets in poverty and children living in hunger? How many families were actually put into poverty by these fund managers as businesses and families were destroyed by the actions of the funds? Nobody will ever talk about such issues because in a campaign war chest driven government the poverty stricken have little representation or voice.
Now I am not saying these fund managers don't deserve the opportunity to make as much money as they possible can but when our government bends over backwards to aid them in their efforts, against the rights of the remaining general population, you really have to question the social value of these individuals. We became the nation we are because of the humanity that lies within us. Somewhere along the line these fund managers lost the humanity and replaced it with greed.
For the sake of those who will bring up the charitable donations these fund managers provide, I do not consider giving back a penny on the dollar of what was taken without humanity is a noble gesture. Such gestures are simply more ego stroking for publicity.
It's a Hedge Hedge Hedge Hedge world we live in where hedge fund managers bet on people defaulting on home mortgages and whine and complain when these people are given a second chance at life. And with the money they make, they buy off the best Washington DC can provide to protect the opportunity to do it again and again to more people and more public companies.
Unfortunately this is not a comedic movie, it is real life.
For more on this issue please visit the Host site at www.investigatethesec.com (Posted with permission)
Copyright 2007
An online newspaper reporting the issues of Securities Fraud
It's a Hedge Hedge Hedge Hedge World - June 5, 2007
Dave Patch
Who needs a movie with the likes of Buddy Hackett, Milton Berle, Ethel Merman, or Spencer Tracey running around like comedic, greed infested lunatics in a dash for some hidden treasure to show us how awful greed can be when we have all the hedge fund managers we can stomach doing it for real right before our eyes?
Enter Stage Left, the Subprime debacle and one mean spirited hedge fund.
As if the subprime meltdown has not already shown how the ambitions of personal wealth overcame logic and responsibility, we are now faced with an organized group of wealthy hedge fund managers who are opposed to the prime banks involved in the meltdown renegotiating mortgages to needy homeowners. Homeowners who, without such renegotiations would otherwise default on their mortgage and lose their homes sending the families to the streets.
Recall, the subprime industry is under investigation for lending practices where bait and switch mortgages were issued to high-risk borrowers placing the homeowners into much more expensive loans than they could otherwise afford. It was a setup for a default and a set up ripe for those betting on the defaults. Also under review is the heavy-handed selling tactics used to sell mortgages that were not in the best interest to the borrower but were certainly profitable to the bank.
Enter stage right, the villain.
The NY Post today followed up on a previous story in Bloomberg identifying that the $11 Billion Hedge Fund Paulson & Co. has taken lead role in a battle with Bear Stearns over efforts by Bear Stearns to renegotiate loans for homeowners struggling with subprime mortgages. Paulson claims that to renegotiate the loans on homeowners who would otherwise default is an act of market manipulation in the bonds markets of the derivative subprime securities.
Understand that Paulson is a hedge fund where profits become compensation and in this case. Paulson reportedly bet about $1 Billion on the decline of the subprime securities through complex credit default swaps. Paulson's profits to date are not small in this bet as it is rumored that the fund has nearly doubled their initial investment to date. The fund is upset however because renegotiated mortgages will reduce defaults and thus raise bond prices. An increase in the bond prices goes against Paulson negative bet and cuts directly into profits.
Paulson is no dummy and thus political correctness is a necessity when you are talking about evicting the poor from their homes. Paulson therefore claims that loan modifications in general are not what he is going after; it is just where second chances at a default manipulate the markets. Say again? Paulson has not expounded on how you differentiate between one poor man's default and another's second chance but for political correctness the fund is not against renegotiated mortgages.
For the record, U.S. mortgages in foreclosure rose in April 62% from a year ago.
Where did the now homeless go? What impact did the influx of foreclosures have on the real estate market where these foreclosures were executed? If the subprime mortgages are to high risk people, you can bet that the foreclosures were not in the neighborhoods of John Paulson or his clients.
Thus we have a classic war about to be waged between the banks that are looking to protect the real estate market as a whole by making small concessions and the fat cat hedge funds that show humanity starts and finishes at their private offshore bank account. The front line used to fight this war or course will be the poor people who were duped into being a participant in an American dream that was never intended for them. Generals, in this case the wealthy banks and fund managers, do not fight wars they send others out to be sacrificed.
It may behoove Paulson to talk over his complaints with rival hedge fund Citadel Investment Group. Citadel apparently reached out and purchased ResMae Mortgage this week for pennies on the dollar providing further evidence that the hedge fund buy side interest in bonds backed by subprime mortgages is returning.
It very well could be that Paulson is wrong and that the long-interest hedge funds like Citadel and Lone Star Funds may be the cause for the subprime bond market turning around and not the banks simply acting in good faith to protect the lower income families whose life's would be destroyed in a default otherwise.
Now don't get me wrong, I am not saying the banks like Bear Stearns do not have ulterior motives for their actions. It is not all about humanity. Money is certainly the motivation behind Bear Stearns actions as well but when faced with an either or, Bear Stearns becomes the better of two evils in this war. Paulson simply comes out playing the role of greedy pig.
I will say that when I read the covered stories on this subject I could only wonder how many different ways hedge funds have attempted to take over our markets and deprive the financial and social safety of our nation as a whole. All for the sake of tainted profits at levels only needed for ego-stroking purposes. I can only wonder whether these fund managers have the guts discuss the victims of their efforts when they compare their riches with and against their fellow peers.
How many billionaire hedge fund managers do we need in this great country when we still have people living on the streets in poverty and children living in hunger? How many families were actually put into poverty by these fund managers as businesses and families were destroyed by the actions of the funds? Nobody will ever talk about such issues because in a campaign war chest driven government the poverty stricken have little representation or voice.
Now I am not saying these fund managers don't deserve the opportunity to make as much money as they possible can but when our government bends over backwards to aid them in their efforts, against the rights of the remaining general population, you really have to question the social value of these individuals. We became the nation we are because of the humanity that lies within us. Somewhere along the line these fund managers lost the humanity and replaced it with greed.
For the sake of those who will bring up the charitable donations these fund managers provide, I do not consider giving back a penny on the dollar of what was taken without humanity is a noble gesture. Such gestures are simply more ego stroking for publicity.
It's a Hedge Hedge Hedge Hedge world we live in where hedge fund managers bet on people defaulting on home mortgages and whine and complain when these people are given a second chance at life. And with the money they make, they buy off the best Washington DC can provide to protect the opportunity to do it again and again to more people and more public companies.
Unfortunately this is not a comedic movie, it is real life.
For more on this issue please visit the Host site at www.investigatethesec.com (Posted with permission)
Copyright 2007