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Government Secretly Warned Banker Friends Of Housing Crash

reinoe said:
The same capable person's not understanding the market enough to cause the problem but understanding the market enough to bail themselves and their friends out. 'kay...
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Could you be more precise in that?
 
reinoe said:
Insider trading is prohibitied by Congress but not enforced. So there is that.
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Doesn't it depend upon who it is that's doing the insider trading?

If Martha Stewart does it, it's a crime worthy of a prison sentence. If somebody inside the Beltway does it, well it's not an indictable offense.

Rank has its privilege, and laws are meant to be broken by those in certain strata of society. I thought everybody knew that. ;)
 
Vern said:
jaeger ole buddy. long time no shred. I see you still pretend not to understand simple concepts. Now I'm going to type this real slow so you can follow it. the title of the thread is "Government Secretly Warned Banker Friends Of Housing Crash ". the article makes it quite clear that it was discussing "insider information" of the TARP disbursements.

"One study suggests politically connected executives traded on non-public*information about the government’s subsequent bailout after the crisis hit."

read that slowly "bailout after the crisis hit". that is clearly late 2008. You could "misparaphrase" this next study if you want

"The other*suggests that despite their claims to the contrary, many*bank executives understood the risks they were taking in the lead-up to the crash, and sold their personal holdings in their firms before the crisis hit.*"

Its vague because it doesn't specify a date or which 'crash' its referring to but the first study says "bailout after the crisis hit" so the "editorial" is either referring to late 2008 or its being disingenuous.

Now even you know that housing prices collapsed early to mid 2006 and the MBS markets collapsed late 2006 and that TARP was late 2008. so jaeger, instead of fulfilling some emotional need to flail at me, why not explain why you think I'm wrong. Or (and this is a big Or) you could just admit you're once again flailing at the facts because its "mean ole vern".
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because the signs of crash.. and the talks of bailouts and other interventions in case of a crash.. were well before 2008 Vern.
 
jaeger19 said:
because the signs of crash.. and the talks of bailouts and other interventions in case of a crash.. were well before 2008 Vern.
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Jaeger, its takes a serious lack of something for you to "misparaphrase" something as clear as "traded on non-public*information about the government’s subsequent bailout after the crisis hit". You will need to draw upon all your conservative skills to "misparaphrase" the following:

"The study zeroed in on those who made trades after the announcement of the government's $700 billion Troubled Asset Relief Program (TARP), which bought up so-called “toxic” assets"

as a favor to you, let me strip out the extra words

"trades after the announcement of the government's $700 billion Troubled Asset Relief Program (TARP), "

let me paraphrase it for you in case you're still not getting it

"trades after TARP"

do you get it now? if you don't, you clearly have VDS, Vern Derangement Syndrome.
 
Vern said:
Jaeger, its takes a serious lack of something for you to "misparaphrase" something as clear as "traded on non-public*information about the government’s subsequent bailout after the crisis hit". You will need to draw upon all your conservative skills to "misparaphrase" the following:

"The study zeroed in on those who made trades after the announcement of the government's $700 billion Troubled Asset Relief Program (TARP), which bought up so-called “toxic” assets"

as a favor to you, let me strip out the extra words

"trades after the announcement of the government's $700 billion Troubled Asset Relief Program (TARP), "

let me paraphrase it for you in case you're still not getting it

"trades after TARP"

do you get it now? if you don't, you clearly have VDS, Vern Derangement Syndrome.
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Yes Vern.. you are deranged.

Let me simplify it for you.

The focused on trades after the announcement... because the trades show that though there was ONLY an announcement that there would be a relief program (TARP)... the trades demonstrated knowledge of WHO would benefit from that program BEFORE THE PROGRAM WAS EVEN IMPLEMENTED:

In other words: while the government was supposedly deciding in private who would get TARP funding, politically-connected individuals traded as if they already knew the outcomes of those decisions -- before the decisions were made public. That information translated into cash: The politically connected saw between 4-5 percent return in just three days
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That's because the politically connected all knew who was going to benefit prior. Likely, well before the announcement.
 
jaeger19 said:
Yes Vern.. you are deranged.

Let me simplify it for you.

The focused on trades after the announcement... because the trades show that though there was ONLY an announcement that there would be a relief program (TARP)... the trades demonstrated knowledge of WHO would benefit from that program BEFORE THE PROGRAM WAS EVEN IMPLEMENTED:

That's because the politically connected all knew who was going to benefit prior. Likely, well before the announcement.
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yep, you did it jaeger, you were able to post something to reconcile your "were well before 2008 Vern." with "trades after TARP". I knew you could do it. Post words that is, not accept that nothing you could post could change the fact that the article is talking about "trades after TARP" and clearly not "well before 2008". And as is usually the case, when a conservative tries to reconcile his narrative to the facts, incoherent babble soon follows.

Jaeger, show your posts to a trusted friend or relative. You need help.
 
Anyone with half a clue knew the housing crunch was coming. In fact, a lot of us talked about it here on this very forum back before it happened. Are we guilty of insider trading now too?
 
Vern said:
yep, you did it jaeger, you were able to post something to reconcile your "were well before 2008 Vern." with "trades after TARP". I knew you could do it. Post words that is, not accept that nothing you could post could change the fact that the article is talking about "trades after TARP" and clearly not "well before 2008". And as is usually the case, when a conservative tries to reconcile his narrative to the facts, incoherent babble soon follows.

Jaeger, show your posts to a trusted friend or relative. You need help.
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Translation..."yet again Jaeger you proved your point so now I will throw up some useless post to cover my mistake".

Vern.. you need help. Let the people that know about this stuff discuss. Your partisan hackery belongs in the Conspiracy forum.
 
jaeger19 said:
Translation..."yet again Jaeger you proved your point so now I will throw up some useless post to cover my mistake".

Vern.. you need help. Let the people that know about this stuff discuss. Your partisan hackery belongs in the Conspiracy forum.
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jaegar, when was TARP announced because you said "The focused on trades after the announcement". See if you can answer that question that is directly related to your post.
 
Vern said:
jaegar, when was TARP announced because you said "The focused on trades after the announcement". See if you can answer that question that is directly related to your post.
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I did.

I am not going down the Vern rabbit hole into Vern fantasy land.
 
jaeger19 said:
I did.

I am not going down the Vern rabbit hole into Vern fantasy land.
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oh jaeger, of course you're not going down this rabbit hole because you realized you were wrong. You kept going down it when you didn't know you were wrong. And jaeger, you went down so many rabbit holes I have to laugh at your hypocritical and cliché excuse. Read this slowly, TARP was passed on Oct 3 2008. why why why do you have such an emotional need to flail at me and why why why do you lack the integrity to admit ""were well before 2008 Vern." was wrong? oh yea, I forgot, VDS.
 
joG said:
Oh, there certainly are tipp-offs from time to time and there was a lot of insider trading in the 1970s and 80s. But in the States and London the regulation and punishment concerning insider trading has discouraged considerably and most people would be as probable to follow tradition in this respect as having a duel at dawn.

The thing to remember is that these people are not running banks and political organizations for nothing. Most of them are exceedingly bright in understanding how the cards are shaping up and successful at making difficult decisions based on soft information. So the results might be explained by quite legal behavior. They should be followed up on, but not used as populistically to achieve political goals.
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Didn't US Treasury Secretary Hank Pauson's brother John make a billion dollar profit during the Lehman Bros.'s bankruptcy?

How Goldman Sachs Made Tens Of Billions Of Dollars From The Economic Collapse Of America In Four Easy Steps

"Investment banking giant Goldman Sachs has become perhaps the most prominent symbol for everything that is wrong with the U.S. financial system, but most Americans cannot even begin to explain what they do or how they have made tens of billions of dollars from the economic collapse of America. The truth is that what Goldman Sachs did was fairly simple, and there may not have even been anything “illegal” about it (although they are now being investigated by the SEC among others).

The following is how Goldman Sachs made tens of billions of dollars from the economic collapse of America in four easy steps….

Step 1: Sell mortgage-related securities that are absolute junk to trusting clients at vastly overinflated prices.

Step 2: Bet against those same mortgage-related securities and make massive bets against the U.S. housing market so that your firm will make massive profits when the U.S. economy collapses.

Step 3: Have ex-Goldman executives in key positions of power in the U.S. government so that bailout money can be funneled to entities such as AIG that Goldman has made these bets with so that they can get paid after they win their bets.

Step 4: Collect the profits – Goldman Sachs is having their “most successful year” and will end up reporting approximately $50 billion in revenue for 2009.

So is it right for the biggest fish on Wall Street to make tens of billions of dollars by betting that the U.S. housing market will collapse?

You see, when you are talking about a financial giant the size of Goldman Sachs, the line between “betting that something will happen” and “making something happen” gets blurred very quickly."
 
Cephus said:
Anyone with half a clue knew the housing crunch was coming. In fact, a lot of us talked about it here on this very forum back before it happened. Are we guilty of insider trading now too?
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You watched the video/read the article right?

It's a question of timing and trade volumes which clearly signifies insider information being disseminated and being acted upon relating to TARP _after_ it was announced but _before_ the beneficiaries/and distribution of the money were publicly disclosed. It's not about predicting the housing crunch and betting accordingly, it's about knowing who would benefit from TARP and front running the program when that was not at all public information, nor something that could be feasibly predicted with enough confidence to triple typical volumes.
 
jaeger19 said:
I did.

I am not going down the Vern rabbit hole into Vern fantasy land.
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Hey jaegar, before you cut and run, is this where you think you poster where TARP was announced

jaeger19 said:
because the signs of crash.. and the talks of bailouts and other interventions in case of a crash.. were well before 2008 Vern.
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The reason I ask, is because I asked you when TARP was announced and you said you did. This is the only thing you posted with something resembling a date. And that's not you telling me when TARP was announced. Again, just to be clear, we were discussing "trades after TARP announced" and you seem to think that is "well before 2008" so again, when was TARP announced?
 
DaveFagan said:
Didn't US Treasury Secretary Hank Pauson's brother John make a billion dollar profit during the Lehman Bros.'s bankruptcy?

How Goldman Sachs Made Tens Of Billions Of Dollars From The Economic Collapse Of America In Four Easy Steps

"Investment banking giant Goldman Sachs has become perhaps the most prominent symbol for everything that is wrong with the U.S. financial system, but most Americans cannot even begin to explain what they do or how they have made tens of billions of dollars from the economic collapse of America. The truth is that what Goldman Sachs did was fairly simple, and there may not have even been anything “illegal” about it (although they are now being investigated by the SEC among others).

The following is how Goldman Sachs made tens of billions of dollars from the economic collapse of America in four easy steps….

Step 1: Sell mortgage-related securities that are absolute junk to trusting clients at vastly overinflated prices.

Step 2: Bet against those same mortgage-related securities and make massive bets against the U.S. housing market so that your firm will make massive profits when the U.S. economy collapses.

Step 3: Have ex-Goldman executives in key positions of power in the U.S. government so that bailout money can be funneled to entities such as AIG that Goldman has made these bets with so that they can get paid after they win their bets.

Step 4: Collect the profits – Goldman Sachs is having their “most successful year” and will end up reporting approximately $50 billion in revenue for 2009.

So is it right for the biggest fish on Wall Street to make tens of billions of dollars by betting that the U.S. housing market will collapse?

You see, when you are talking about a financial giant the size of Goldman Sachs, the line between “betting that something will happen” and “making something happen” gets blurred very quickly."
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Did you ever do the math for the bonds of which you speak? Nope. I don't think your perspective is from a sensible position, if you want to understand, what went on then or now, for that matter. People will make money in markets, whether the prices go up or down. That is not bad. On the contrary, it makes the economy much more efficient and quicker to adapt to shocks and political mistakes.
 
joG said:
Did you ever do the math for the bonds of which you speak? Nope. I don't think your perspective is from a sensible position, if you want to understand, what went on then or now, for that matter. People will make money in markets, whether the prices go up or down. That is not bad. On the contrary, it makes the economy much more efficient and quicker to adapt to shocks and political mistakes.
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If you have advance knowledge that someone is going to bankrupt or be bailed out, you can use that info to short or long that business. The mortgage industry comes to mind and all the toxic mortgages that were declared solvent or something.
 
DaveFagan said:
If you have advance knowledge that someone is going to bankrupt or be bailed out, you can use that info to short or long that business. The mortgage industry comes to mind and all the toxic mortgages that were declared solvent or something.
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As long as it is not technically insider knowledge, it is quite reputable to short a lousy business model, just like it was to get out of stocks after 1996/7, when Greenspan said the prices were irrationally high. Something similar happened in 2006/7, when the sage of Omaha pointed out that default insurance in the form of CDS had gone too far.
 
joG said:
As long as it is not technically insider knowledge, it is quite reputable to short a lousy business model, just like it was to get out of stocks after 1996/7, when Greenspan said the prices were irrationally high. Something similar happened in 2006/7, when the sage of Omaha pointed out that default insurance in the form of CDS had gone too far.
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With respect to TARP though, per the facts as they stand, odds are that insider trading was in fact going on as stated previously.
 
Surrealistik said:
With respect to TARP though, per the facts as they stand, odds are that insider trading was in fact going on as stated previously.
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As nobody including Treasury and the Fed really knew how things would work out, there was risk involved and part of the requirements for success for tarp was that banks take positions they wouldn’t have.
 
joG said:
As nobody including Treasury and the Fed really knew how things would work out, there was risk involved and part of the requirements for success for tarp was that banks take positions they wouldn’t have.
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There is almost no risk in taking positions you know are going to be lucrative with insider information on TARP allocations; there's a reason their trading volumes tripled despite TARP particulars at the time not being public information.
 
Surrealistik said:
There is almost no risk in taking positions you know are going to be lucrative with insider information on TARP allocations; there's a reason their trading volumes tripled despite TARP particulars at the time not being public information.
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If you say so. My experience in investment banking was different with Anglo-Saxons. Had you been speaking of France, Germany or China it would be more believable. But that is only my experience and not research.
 
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