And The Hits Keep Coming

The Financial World is coming around to the situation California and New York. The negative feedback loop that are these states funding mechanisms are going into the vortex - and they ain't coming out any time soon. When they do, in a couple of election cycles and periods of extreme angst and denial, it will all be a mopping up job. Neither state is biologically capable of making the tough decisions, and implementing them, that would be of real service in this time of transition. Their bureaucrats and politicians are still fighting the last war. Nobody has picked up their head and looked around - or they would have noticed that both sides have been defeated. Its the vultures who will win this one.

-------------------------------------------------

Why can't I get a gig like CEO of Merril or Freddie Mac?

And why is it Merrill has learned nothing from Enron? Moving obligations off balance sheet for non-OPERATIONAL purpose does not cure the F%^^&$*~~ING problem, Mr. Thain. From the New York Times:

It (Merrill) had ridden them from 100 cents on the dollar to 22 cents, but
now it would unload them for little more than a nickel, with the possibility of getting the rest of the 22 cents later. It would give up any claim to profits from a rebound.

The Market LOVED it, at least for a day. Jim Cramer got on his soap box and declared this was the bottom of the CDO market and gave the all clear to own the banks. But after some hard examination under the light of day, it seems that selling $30 BILLION worth of CDO's and getting only 5 cents on the dollar for them, with the PROMISE of 17 cents more IF everything works out OK was not what the market had in mind. Imagine that.

I am here to tell you that everything will NOT work out OK. This portfolio Merrill just off loaded will not survive the Great U.S. Oil Import Crisis of 2009 - 2012. Nor will the portfolios of the other major banks.

And you know what that means.

Good Luck!

Mentatt (at) yahoo (dot) com