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>package up a bunch of subprime mortgages >sell them as

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>package up a bunch of subprime mortgages
>sell them as AAA investments
>bet against them
How do you learn to hustle like these guys?
>>
>>968045
They be pros. They be the pros of pros. Lots of banks did it tho.
>>
>tfw i work for them

feels good man
>>
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>>968045
Don't forget: Moody's and S&P had to RATE the securities as "AAA". Their reputations are forever besmirched and it comes up A LOT when ratings discussions are held.
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>>968207
Keep believing it and maybe it'll come true
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>>968211
True. Rating agencies were just as guilty as investment banks for fucking everyone over.
>>
>Be CEO of a company
>Sell stock of the company
>Fed sets 0% interest rate
>Use debt to buy back all the company stock
>Stock price soars
>Earnings report looks amazing
>Get huge pay bonus
>Step down before rates rise
>>
>>968518
That explains a lot.

Trading activity is at an unusual high, yet the markets have never been more stagnant.

The rising indexes are only reflecting a supply side imbalance caused by this kind of shady buy-backing.

Raise the fucking rates already.
>>
>>968045

>muh bet against them

You're a moron. Go back to your occupy drum circle
>>
>>968562

>Raise the fucking rates already

You don't know how monetary policy works, please stop talking
>>
>>969441

You know, you're exactly right. You've really brought a lot to this discussion, I never thought of it like that before. Now I see that we must stay at 0% forever.

Wow. Mind blown. I'm learning so much today.
>>
>>968045
They packaged them to reduce risk. It's like an index fund, but of mortgages. And betting against them once they realized what was going on is a good idea to save themselves from going bankrupt.

What they did was perfectly rational. what was not rational, was the government suing banks to force them to lend money to poor idiots who couldn't pay the money back, and then fannie mae and freddie mac backing these crazy mortages as commanded by the government, which made the marketable, at least, in theory, until the whole charade collapsed.
>>
>>968045
>tfw people still take their stock analysis without a mountain of salt
>>
>>969448
Also, remember that the fucking MBA and holders of CFA certificates had to take psychometric tests to get the jobs that fucked the entire United States financial world and the working stiffs who depended upon it.

Allegedly smart people killed the economy 2007 to 2009. Way to go.
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>>969441
A bit blunt but +1
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>>969441
this desu

>>969443
recite enough memes, maybe some poor rube will believe you know what youre talking about
>>
>>969441
>>969502
>>969531
(same fag)
>>
>>969563
lol nope. try again
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>>968562
A basic rule. If you raise rates then debt payments increase on things like mortgages. higher debt is lower disposable income for consumption. which leads to lower economic activity. which will force down rates in turn.
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>>969573
You're absolutely right (and I mean it this time), but I'm not talking about Day Traders or Macy's Year-over-Year sales numbers.

I'm talking about Central Banks and Mega Corps being forced to make a profit on their loans, which forces them to make investments. They have a fuckload more buying power than any single State's worth of men with a mortgage, and their dicks slapping around the dinner table does a lot for market liquidity.

Am I completely wrong, partially correct or totally retarded?

Let us discuss things so that we both might learn things about things beyond picking pictures of palm tress.
>>
>>969631
ok... fuck big topic how to approach it and where to begin lol. Central banks will always be separate from any corp, mega or not. its due to the ability to actually print money versus not (basically) and different rev sources (sales vs taxes). which side u wanna discuss. corporate or gov
>>
>>969441
You're an idiot if you think its healthy to keep interest rates <2% for this long. Though of course raising them isn't the solution anymore since that will just bring about another contraction.
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>>969652
its not entirely unhealthy as long as rates are positive. if inflation is at 20% then 2% rates are bad, but aslong as everything is proportional then....
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>>969651
Yell, Rant, Gripe. Whatever. Just give me something to think about that I don't already have in my head.

Simply saying "lol you're wrong" isn't progressing anything.

Nobody knows all, but together we know more.
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>>969664
ok so some proportions for you. to put things in prospective. sincu you say buying power of a big corp is more tan people. apple has the biggest cash pile of any corp. about 200 billion. california has a population of about 40 million. thats 5k per person. against the usa population 625$. if you raise rates 1% on an avg mort of say 350k thats about 1/2 of apple's cash just on mortgage debt. not including car loans, student loans or business loans
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>>969677
and thats per yr where apple spent awhile growing their cash balance. apple net income per yr only 50bil
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>>969677
woops faulty math on the 1/2 of apple cash. inc in mort pmts is 3.5k a yr vs apple cash of 625 per
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>>969677
>>969680

Once again, you're correct. However, you're not addressing my point.

My point is simple:
Any central bank or mega-corp that takes a loan from the fed at 0.0%% isn't motivated to make a profit on that loan. As OP said they can do shady shit that makes a profit year-to-year and raises the stock prices due to hefty buy-backs but doesn't actually grow anything.

However, if interest on those loans was anything above 0.0% then the receiver of that loan is very much motivated to make a minimum of the interest rate in profits which encourages investing in both the stock markets and in other forms like mortgages and small business loans.

So, once again, you're right that Mortgage rates will rise but you're neglecting that Apple-esk corporations and large banks must make a minimum of the federal loan interest rates in profits.

This should, in turn, increase trading activity and liquidity in the stock markets.
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>>969690
buy backs do grow something. problem is its among the investors that its shared (whole other topic). and profit goals are not driven by interest on the debt. the amount of debt assumed is reliant on the profit expectation. low interest is causing companies to assume more debt and using that for buy back is the purest form of adding liquidity to the markets...... ugh tooo big a topic for typing with a busted key board.....
>>
>>969705
Buying stocks and holding them indefinitely does not add liquidity to the markets. By definition it is removing liquidity from the market by deceasing the number of shares in active circulation.

It creates trading activity, but not liquidity.
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>>969706
liquidity is being able to find a buyer. if a company is always willing to buy then you have liquidity. berkshire for instance will always be there to buy their own stock under a certain % of price/book
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>>969712
same with usa gov buying their own debt back
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>>969712
Liquidity is being able to find a buyer OR a seller.

It doesn't work only one way, that creates a supply-side or sell-side imbalance. Which is my whole fucking point, the point you've been dancing around and refusing to address because in your mind stocks are only bought, never sold or shorted.

>>969715
Once again, completely missing the point and refusing to discuss the issue at hand.
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>>969716
but it does create demand, remembr th3 inv3stors who profit3d, th3y got cash to buy. and if an inv3stor knows a company will buy back shar3s th3n th3 risk is low3r3d in buying th3 shar3s cuz th3 company has said w3 ar3 wiling to go privat3 at a c3rtain pric3. sry my ee k3y is brok3n. 3=e
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>>969448
>t. libertarian
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>>969720
My laptop's alt key is broken, so I sympathize.

Yes, it creates Demand. That's my point. Only creating demand, or only adding supply, is what econ101 calls a supply-side or sell-side imbalance.

It is NOT adding liquidity, it is removing liquidity by reducing the number of shares on the market.

If 0% interest on fed loans allows corps to do non-stop buy-backs, it'll steadily raise the price of the stock but the company it represents isn't growing, and when the tide turns and the buy-backers refuse to sell (because they'd be forced to sell at a loss) it severely hurts the company.

We're running around in circles here.

I asked you to explain why you feel so strongly that it's ignorant of me to want the federal loans rate to raise above 0% in the near future, and all you've done is change the subject.

I'm trying to learn something from someone who claims to know more about a subject than I do.

I want a direct answer, or a dead thread.

Your move. Make it count.
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Aren't you guys talking about how when interest rates go up, the cost of borrowing will go up and then company's wont be able to buy back as much of their own stock. Since that was a key driver of this rally, it will cause the rally to fade out.

The counter argument for this is .25 percent wont do very much at all.

The pro argument is the trend is going up so that will reduce borrowing for buybacks.
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>>969745
Yeah, pretty much. You're saying what I'm saying. Higher rates, less buy-backs. More active trading to beat the interest rate, more liquidity.

Bing, bang, boom shakalaka.
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>>969658
>its not entirely unhealthy as long as rates are positive. if inflation is at 20% then 2% rates are bad, but aslong as everything is proportional then....
Inflation of stock market prices is probably about 20%.
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>>968045
collateralized debt obligations, simple!
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>>968211
have you ever wonder why? maybe because goldamn sachs finances rating agencies like moodys. when goldman started to sell CDOs it made rate them to moodys, applying its rating criteria. CDOs were sold as AAA, but they were junk
Thread posts: 41
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