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Changing the Rules

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March 29, 2008 – Comments (5)

I've seen a couple posts on this already, the SEC changing rules. 

The US goes Japanese...

I particularly like Mish's post on it.

Mish also did another post on the Asset Backed Commerical Paper.   I sent him some of the links on that one.  The thing that really got to me on this is the Credit Union I deal with has decided to cover losses for credit union members who bought this stuff through Vancity's investment partner.  I truly do not understand what this ABCP is, and this is what I found.  I had thought it was US garbage but somehow because it was being sold though Canadian investment banks I then though it was Canadian.  

Reading through the comments on Mish's post something that I had not thought about in terms of where some of this stuff is being held would be Canadian junior explorers.  When this stuff first came out I remember numerous companies putting out press releases that they did not have any ABCP and I completely missed the significance of that.  Now I am wondering how the American SEC rules will play out here.  I got my husband to pick up a gold junior explorer over spring break and now I need to go and find out what they have their money in. 

 Here's an oil company that has been hit by it...  One of my reasons I've given for not being in the market is because you just don't know where the losses are going to show up.

Time to look for time bombs... 

5 Comments – Post Your Own

#1) On March 29, 2008 at 6:24 PM, dwot (65.40) wrote:

Lehman hit by fraud.  Somehow I just don't feel sorry for them...

 

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#2) On March 29, 2008 at 7:28 PM, ATWDLimited (< 20) wrote:

Hey, Come view the The official Dollar Report, its loaded with analysis of the dollars actual value, that you cant get anywhere else, since I calculated it all my self and made the graph for inflation, GDP, M3 and Debt and compared them as backings per dollar.

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#3) On March 29, 2008 at 7:54 PM, Tastylunch (29.37) wrote:

time bombs? the whole market feels more like a minefield to me. The ground looks normal but you never know when you'll step on something explosive.

That ABCP mess wasone I wasn't aware, considering what's ahppened of late with auction rate securities it makes a lot of sense.

First the FED more or less goes corrupt and now the SEC? I'm beginning to wonder if the US will ever recover from this...

great post dwot.

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#4) On March 29, 2008 at 8:40 PM, abitare (88.82) wrote:

dwot,

you are great. What a find, the Leh and GS scam, to bad it is only $353 million, not a lot of money these days.

"Lehman Brothers was defrauded of some $353.1 million after it was caught in a scam in Japan, a source familiar with the situation told Reuters on Saturday, and trading house Marubeni said some of its staff were involved. Goldman Sachs (GS.N: Quote, Profile, Research) was also caught in the scam"

I came up with a decent bear pitch on LEH 

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#5) On March 30, 2008 at 9:06 AM, dwot (65.40) wrote:

Tasty, the ABCP froze in August and has been frozen ever since.  It makes up about 1/4 of the securitied paper in Canada.  It isn't anything like what it sounds like.

But now this plays out just like the depression, where people who owe never pay the people they owe.  The "people" can be businesses.  So, in business you could have all these businesses that have raised equity by share dilution and put the money into this paper that was then frozen on them.  Shareholders get a double whammy, they got diluted for worthless paper and now it is a much harder market to raise equity again.

Abit, yup frauding the fraudsters... 

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