Monday, July 28, 2008

What form of singularity, Sir?

I was sure of this now. Looking at what Paulson said today and the housing bill text in more details, the sense I have is that it's just a matter of time before mortgage loans are going to "survive a bankruptcy".

You see, in a typical blackhole, they said when you fell into one, just before you get shredded into your tiny little atoms they said light waves got bent so hard you can see your own ass looking forward.

This is what would happen since they have decided that zimbabwe is probably not a good economic model to follow.

So they will entrap every "recent" borrower, enact that covered bond, use a combination of deep subordinate support and FDIC, but the scheme can only work when the backstop can garnish money from the borrower should the event of default happens.

I guess if you NEED to default, it's probably best to do so now. If things are really retroactive, then it's useless but you can say you have tried your best anyway.


ARAK said...

Irrelevant to the topic, but what do you think about shorting LULU? Given the credit crunch and the fact that these guys make high priced yoga clothes of dubious value, I see another CROX in the making. Option IV is very high as well, meaning people expect it to fall bad.

reddweb said...

Is that a good thing ? Will that scare borrowers away....i hope they dont dupe the borrowers into something, and then suck them clean. They did that in real-estate over the last few years. I guess this is new game in town. Please use laymen language for us financial-illiterate.

PCap said...


CROX makes ugly crappy shoes. LULU makes high quality, good looking clothes (have you seen how awesome they make a girl with a saggy butt look! It's like magic! I know men who have written to the company to keep up their good work). LULU will suffer in the slow down, but I think they will do much, much better than CROX.

MTGSPY said...

saggy butt + seaweed-based clothing = sushi.

About the "end game", yeah i am fairly sure of it. The most needed change in the game is to pursue the borrower for damages cuz that's about the ONLY thing we haven't tried and probably is the single most important item to stop cascading default from happening in the future.

D said...

I think it is too late for someone that hasn't already defaulted. The people that have been trying to make it work are going to get hit much worse than those who threw in the towel early.

I just hope the treasury doesn't involve the IRS in recovering any of the $.