I have a solution to the bond insurer problem

Discussion in 'Economics' started by Eliot Hosewater, Feb 2, 2008.

  1. They should short each other's stocks and buy puts. Then they all declare bankruptcy at the same time. After they collect their profits then maybe they can remain solvent. Maybe even short the banks and brokerages too.
  2. you need to study some finance. This is called a secondary offering (selling your shares and diluting), and is the way these companies HAVE been raising cash (look no further than ETFC for an example).
  3. He means short other companies stock, not sell their own.

    Problem with that is you need capital to short stocks and they have no capital to spare.

  4. Im fairly certain "all go bankrupt at the same time" is pretty illegal and against all sorts of regulations. Also even if they were, holders of the companies shares or assets would have all everything seized and split between holders, including all the shares they sold short for a profit. If anything, they would be forced to liquidate their short positions before declaring bankruptcy.
  5. insider trading would be the easiest case to make but, I'm sure theres more there than that.
  6. I have a real solution to all of this too. My program is called the "Stay the fuck out of the way" program.

    It is real simple, stop trying to manipulate the economic cycle with policy and "free" money rebates. If the market was allowed to just cleanse itself on its own, we could have maybe on of the healthiest markets in decades going forward.

    The downside of this is the pain we would go through, lasting up to several years even. The rewards would worth it however.
  7. ammo


    go on wikipedia and look up history of federal reserve,my conclusion of that article is that they can print all the money they want. Give it to the banks. They can lend out ten times what the fed lends them and collect double the interest they are paying the fed. This whole subprime thing was a strawman alibi to shift blame to deadbeat borrowers,borrowers who for the previous 50 years were considered a bad risk and coudn't get a loan, and away from the huge 10 year banking scam to raise loan values. Your house is only worth what the bank will loan you,they doubled the value in middle america,tripled and quadrupled in major metro areas. House prices will come down. The consumer will have to take a hit. Unlike the banks ,the consumer will not have an unlimited amount of available credit. Corporations still having to produce, will hire factories full of willing temporary immigrants,make money, break the unions,lower the average american wage,hire americans at $8 an hour,further lower the spending power of the american consumer,lower the prices of goods, and on and and on..... Sell mortimer sell
  8. You do not get it. Insurances are smart, people who bought houses are smart. Who are the idiots: the stock (bag) holders (as a whole) of bond insurances and mortgage stocks. If you do not think so, check the charts.

    Smart stock traders do similar to was suggested: buy convertible bond (high yield), and short stock. They win no matter what! If stocks go to zero they own the liauidation. If the stock goes to the moon, they convert bond. They laugh on their way to the bank....
  9. ammo


    only if the bank is still open when they get there.