In 2006 and 2007, while that idiot Cramer of "Mad Money" fame was touting Countrywide Mortgage as a "buy" on CNBC, I was watching Angelo Mozilo. Mozilo was the founder of Countrywide Mortgage and he was selling hundreds of millions of dollars worth of company stock. I was tracking his insider sales on E Trade.
So about the time Cramer had Mozilo on his TV show, I very nearly threw a brick through the Samsung. I remember Cramer saying Mozilo had founded the company and was entitled to take a "little money off the table." To say that Cramer kissed Mozilo's ass is an understatement. He completely avoided any mention of the size of those sales. Mozilo was completely liquidating his ownership in the company.
I truly hope nobody bought Countrywide. Cramer should have been flogged in the square for his role in that interview. To this day, I refuse to watch his show.
I had a mortgage originator insider tell me what kind of loans Countrywide was making at that time. No documentation, no income statements, absolute fraud. I shorted Countrywide. Unfortunately, I covered far too soon. Should have spent my life savings on put options. Countrywide went bankrupt. Mozilo got a cushy job at Bank of America. B of A was forced to swallow Countrywide's toxic assets. Now Bank of America is truly a zombie bank. Mozilo didn't ruin one company, he has helped ruin two. Thankfully, we tax payers get to backstop the zombie mess as well. Trust me, if Bank of America had to actually "realize" their losses- the stock would hover around two bucks instead of 12.
Angelo Mozilo may be one of the great architects of this depression. I've read about all of his shady deals, his signature loans to friends and Senator Dodd's questionable purchase of a little Irish cottage. All of this garbage is on line- and I am desperately trying to avoid an aneurysm by looking it up again.
Today, the SEC announced a 67.5 million dollar fine levied on Mozilo like it was a great victory. I am not convinced that paltry amount even accounts for a quarter of his net worth. Not only that, but he won't get criminally charged.
I absolutely detest this fucking two tier criminal justice system in America that allows criminals like Mozilo to buy their way out of jail. The rest of us peons get sent to prison for a hell of a lot less. This is one of the reasons why people detest government. Mozilo, one of the chief architects of our depression, should be spending the rest of his life in prison and forfeiting ALL of the money he snuck away with while touting his company. I won't be happy until this piece of garbage is bunking with Bernie Madoff. Aneurysms available at the link:
http://money.cnn.com/2010/10/15/news/companies/mozilo_SEC/index.htm
Friday, October 15, 2010
Thursday, October 14, 2010
Wishing We Were Japanese
http://www.youtube.com/watch?v=gEmJ-VWPDM4
Just before the two lost decades that is now Japan, I read once where commercial real estate was selling at one million per square inch. I am not sure whether that was in dollars or yen and I am too lazy to look it up. The point is illustrative.
That kind of insanity kicked off Japan's banking melt down and it's two lost decades.
Anything Japan can do, America can do better. Including credit disasters. We extended make believe money to everyone. That the "FED" has mirrored Japan's moves- in the post meltdown period is not news. There is simply no alternative for "one-way" Ben Bernanke.
So when they posted today's usual round of bad news, widening trade gap, PPI at 0.4, and unemployment up again...I was not surprised. I was not surprised to see stock futures up.
The stock market has been marginalized to the extent that it is simply no longer a credible predictor of our nation's economic health. All it has become is a place for bankers to trade stocks with cheap money. The real indicator of our nation's health is the counter indicator- gold.
In the old days- when the market functioned as a true barometer of our nation's fiscal health- gold and equities did not move in tandem. We are witnessing the strange effects of central bankers trying desperately to repair themselves. Sooner or later, equities and gold are going to de-couple and diverge. I think it will be breathtaking when it happens. Commodities are absolutely red-lined now and as they move even higher, the chance of divergence grows dramatically.
I am reminded of an old cliche' here, "Every problem looks like a nail- to a hammer." One way Ben Bernanke just can't see the solution. His very survival depends on his ignoring the solution.
That solution is what separates men from boys. Heroes from survivors. He will just keep hammering away- trying to inflate us out of the mess his own central bank caused.
Before this over, I think there is a very good chance that we are going to gaze fondly upon the Japanese.
Just before the two lost decades that is now Japan, I read once where commercial real estate was selling at one million per square inch. I am not sure whether that was in dollars or yen and I am too lazy to look it up. The point is illustrative.
That kind of insanity kicked off Japan's banking melt down and it's two lost decades.
Anything Japan can do, America can do better. Including credit disasters. We extended make believe money to everyone. That the "FED" has mirrored Japan's moves- in the post meltdown period is not news. There is simply no alternative for "one-way" Ben Bernanke.
So when they posted today's usual round of bad news, widening trade gap, PPI at 0.4, and unemployment up again...I was not surprised. I was not surprised to see stock futures up.
The stock market has been marginalized to the extent that it is simply no longer a credible predictor of our nation's economic health. All it has become is a place for bankers to trade stocks with cheap money. The real indicator of our nation's health is the counter indicator- gold.
In the old days- when the market functioned as a true barometer of our nation's fiscal health- gold and equities did not move in tandem. We are witnessing the strange effects of central bankers trying desperately to repair themselves. Sooner or later, equities and gold are going to de-couple and diverge. I think it will be breathtaking when it happens. Commodities are absolutely red-lined now and as they move even higher, the chance of divergence grows dramatically.
I am reminded of an old cliche' here, "Every problem looks like a nail- to a hammer." One way Ben Bernanke just can't see the solution. His very survival depends on his ignoring the solution.
That solution is what separates men from boys. Heroes from survivors. He will just keep hammering away- trying to inflate us out of the mess his own central bank caused.
Before this over, I think there is a very good chance that we are going to gaze fondly upon the Japanese.
Monday, October 11, 2010
Like Sands Through The Hour Glass...
At some sort of rally in Philadelphia, someone apparently hucked a book at President Obama while he was on stage. Obama was probably doing what he does best, talking.
Three things instantly came to mind. First, it did not appear that the book was a first edition "War and Peace." It was thin and had it actually hit him, it is doubtful that it would have knocked any sense into him. http://www.dailymail.co.uk/news/article-1319448/Obama-book-thrown-Philadelphia-rally.html
Secondly, it reminded me of how utterly useless the Secret Service is at preventing real attacks. They serve some deterrent effect for lunatic opportunists like Squeaky Fromme and mainly I think that all of that looking around they do is a reminder that a small army of men and women and dogs will descend upon any attacker forthwith and seal their fate. That in turn reminded of the myth of "pro active" law enforcement. The idea that law enforcement actually prevents crime. It was and still is- a grand delusion.
What saddens me most about all of this, is how angry this nation has become. They are mad. I see it everywhere. People out of work, frustrated, hurling insults and books it seems, at whatever person, place, or thing they deem as the source of their frustration.
I don't see it getting better. And I don't expect Obama to wake up anytime soon, rollover in bed, and say, "Michelle, I've been doing this all wrong. We need to end the fed, and install real campaign reform. Our country needs to stand up and admit we are a mess and administer the medicine that it will take to get well. It will be painful and it will cause a lot of suffering. We need to dismantle and reform government, we need to set the example."
Rather what I envision happening, is that Obama is sensing that he is a failure. He is lashing out on many fronts and entrenching himself in ego. Hurling insults, or books, at him is pathetic and cowardly. You see, Obama doesn't realize that he is part of the same old problem. A 50 year problem. Hurling insults and books at this cat, won't do a damn bit of good. He just doesn't know he is part of the problem. Ask him, and he might tell you he is the solution. He is just going to entrench himself even further. Become angry like the rest of us. Hell, he is already there.
Obama has the same problem, the same common denominator, as the rest of us. We have created a monster and it is terrorizing and pillaging the country. Man, I hope we can do something a little better than throw books at each other or we're in a lot of trouble.
Three things instantly came to mind. First, it did not appear that the book was a first edition "War and Peace." It was thin and had it actually hit him, it is doubtful that it would have knocked any sense into him. http://www.dailymail.co.uk/news/article-1319448/Obama-book-thrown-Philadelphia-rally.html
Secondly, it reminded me of how utterly useless the Secret Service is at preventing real attacks. They serve some deterrent effect for lunatic opportunists like Squeaky Fromme and mainly I think that all of that looking around they do is a reminder that a small army of men and women and dogs will descend upon any attacker forthwith and seal their fate. That in turn reminded of the myth of "pro active" law enforcement. The idea that law enforcement actually prevents crime. It was and still is- a grand delusion.
What saddens me most about all of this, is how angry this nation has become. They are mad. I see it everywhere. People out of work, frustrated, hurling insults and books it seems, at whatever person, place, or thing they deem as the source of their frustration.
I don't see it getting better. And I don't expect Obama to wake up anytime soon, rollover in bed, and say, "Michelle, I've been doing this all wrong. We need to end the fed, and install real campaign reform. Our country needs to stand up and admit we are a mess and administer the medicine that it will take to get well. It will be painful and it will cause a lot of suffering. We need to dismantle and reform government, we need to set the example."
Rather what I envision happening, is that Obama is sensing that he is a failure. He is lashing out on many fronts and entrenching himself in ego. Hurling insults, or books, at him is pathetic and cowardly. You see, Obama doesn't realize that he is part of the same old problem. A 50 year problem. Hurling insults and books at this cat, won't do a damn bit of good. He just doesn't know he is part of the problem. Ask him, and he might tell you he is the solution. He is just going to entrench himself even further. Become angry like the rest of us. Hell, he is already there.
Obama has the same problem, the same common denominator, as the rest of us. We have created a monster and it is terrorizing and pillaging the country. Man, I hope we can do something a little better than throw books at each other or we're in a lot of trouble.
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