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Thread: MER = Enron, it only gets worse from here

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    Featured Member lunchbox's Avatar
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    Default MER = Enron, it only gets worse from here

    http://online.wsj.com/article/SB1193..._us_whats_news

    In one deal, a hedge fund bought $1 billion in commercial paper issued by a Merrill-related entity containing mortgages, a person close to the situation said. In exchange, the hedge fund had the right to sell back the commercial paper to Merrill itself after one year for a guaranteed minimum return, this person said.
    I'm speechless. The Enron guys are in jail because they did this. How stupid can you be?

    FYI - The bull market is over when the SP500 convincingly breaks 40 on the weekly RSI chart. Merry Grinchmas.

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    Banned Melonie's Avatar
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    Default Re: MER = Enron, it only gets worse from here

    ^^^ essentially, the 'primary dealer' financial houses are able to manipulate the stock and bond markets to at least the same degree that ENRON was able to manipulate the western grid electricity market. There are two key differences though. #1 they have done so under the 'blind eye' of the SEC and with the tacit approval of the US Fed, and will continue to do so as long as their objective results in a levitation the US stock market and depressing the price of gold. #2 if they get overextended on their manipulations they have a de-facto guarantee from the US Fed and US Treasury that a limitless pool of US taxpayer dollars will be deployed to continue the levitation of US stock markets to stave off their losses (or at least allow for an orderly retreat). There's even a #3 in that mainstream financial media continues to report a 'rose colored glasses' view of the major financial houses, whereas mainstream financial media went into attack mode re ENRON. And actually there is a big #4 as well ... ENRON's off balance sheet obscuring of bad debts was considered to be illegal and was vigorously prosecuted, whereas big financial houses obscuring of bad debts is not only considered to be legal, but the US Fed just helped the financial houses to organize a Structured Investment Vehicle SuperFund for the express purpose of perpetuating the off balance sheet status of the big financial houses' toxic mortgage / subprime CDO's !!!

    Unfortunately, with today's nearly 50% ownership of US stocks and bonds in the hands of foreign investors and anonymous hedge funds, there is IMHO a very real possibility that investor money could be suddenly drained from the US stock and bond markets in a manner so abrupt that the Fed couldn't print new electronic dollars fast enough to stave off the resulting market decline.

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    Default Re: MER = Enron, it only gets worse from here

    Mel - While I agree with that. One of the thing the Enron execs went to jail for was parking assets in the manner described above. This is not the same thing as an off balance sheet SIV.

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    Default Re: MER = Enron, it only gets worse from here

    Quote Originally Posted by Melonie View Post
    ^^^ essentially, the 'primary dealer' financial houses are able to manipulate the stock and bond markets to at least the same degree that ENRON was able to manipulate the western grid electricity market. There are two key differences though. #1 they have done so under the 'blind eye' of the SEC and with the tacit approval of the US Fed, and will continue to do so as long as their objective results in a levitation the US stock market and depressing the price of gold. #2 if they get overextended on their manipulations they have a de-facto guarantee from the US Fed and US Treasury that a limitless pool of US taxpayer dollars will be deployed to continue the levitation of US stock markets to stave off their losses (or at least allow for an orderly retreat). There's even a #3 in that mainstream financial media continues to report a 'rose colored glasses' view of the major financial houses, whereas mainstream financial media went into attack mode re ENRON. And actually there is a big #4 as well ... ENRON's off balance sheet obscuring of bad debts was considered to be illegal and was vigorously prosecuted, whereas big financial houses obscuring of bad debts is not only considered to be legal, but the US Fed just helped the financial houses to organize a Structured Investment Vehicle SuperFund for the express purpose of perpetuating the off balance sheet status of the big financial houses' toxic mortgage / subprime CDO's !!!

    Unfortunately, with today's nearly 50% ownership of US stocks and bonds in the hands of foreign investors and anonymous hedge funds, there is IMHO a very real possibility that investor money could be suddenly drained from the US stock and bond markets in a manner so abrupt that the Fed couldn't print new electronic dollars fast enough to stave off the resulting market decline.
    So, does this mean I should try to get into foreign investments? I get my first bonus check at the beginning of the year and was hoping to start investing with some of it.
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    Banned Melonie's Avatar
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    Default Re: MER = Enron, it only gets worse from here

    if the US dollar is destined to decline further, then investments which are priced in almost any currency besides the dollar won't experience as much of a loss in 'purchasing power'. The trick of course is to find a foreign investment that won't also decline in value because of some US dollar based effect. The classic bad example would be investing in the stock of a european exporter, whose costs of productions must be paid in euros but whose sales and profits must be earned in US dollars.

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    Featured Member francescadubois's Avatar
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    Default Re: MER = Enron, it only gets worse from here

    Thanks, Melonie!
    "I came in like a lamb, but I intend to leave like a lion."

    -Sade
    Quote Originally Posted by Mastridonicus View Post
    The only thing a person hates more than being a sex object, is NOT being a sex object.
    Quote Originally Posted by TigersMilk View Post
    If you should your way through life you'll be should-ing all over yourself later.
    Quote Originally Posted by TheSexKitten View Post
    Finger pointing is awesome!! No really, it gets things done.

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