May 05, 2008
– Comments (5)
I asked someone in the lobbying game who it is that's pushing congress for all these mortgage workouts and bailouts. I got a two-word answer: hedge funds.
Raise your hand if you think you know why.
both hands my are up.
Answers? Besides, of course, that the hedge funds out there are genuinely worried about the financial well-being of American mortgage-holders. That's a given.
I will take a stab/guess. Hedge funds play on the short term and volatile market that they have created for themselves today. Indeed, this is a daunting task as we can see in the present conditions of the market (winnie the pooh workout for sure). Regardless, since they are working on the short term, hedge funds are benefiting from the derivatives and options. How much are those going to cost, if the bailout/workouts don't come thru and the banks falter more?
Derivatives? Bailouts? Options? Corruption! The hedge fund managers have more market control than some realize and it is/should be a concern for the average investor. People keep asking why the banks are still holding there values when they report such big losses and they wonder why SKF hasn't paid out yet. Answer me this. If these hedge fund managers keep doing the same thing over and over plus we add more of them into the market doing the exact same thing as the ones before them, do we get a manipulated/corrupt market? The value of most stocks they participate in become detached and that is why most average investors are having a hard time pricing their positions.
Man, like I said, this is just a guess. I wouldn't stand by this more than Clinton stands by Clinton, but it is my guess and I felt like playing along.
Just for fun. Are the renters mad at the hedge fund manages now or are they mad at the renters that bought homes they couldn't afford or are they still upset at the homeowners that are paying the mortgage they signed on for or are they mad at the banks that made the loans?
Angryrenter- that is funny. It should be confusedandangryrenters:) I am not pushing for a bailout, so don't get angry at me please.
What's wrong with a bailout? After all, the most exposed "home owners" have already lost their houses. Why should those with a good job and a good credit also lose their homes, just because foreclosures are reducing prices in neighborhoods to artificially low levels? In Cleveland prices of houses have dropped up to 90%! You can buy a house for less than $10'000 there. Cheaper than a car. Crazy.
Do we really need a second Depression? No!