Does anyone else find Cuepee's complete lack of reading comprehension remarkable? At this point, there appears to no relationship between Cuepee's understanding of what I wrote and what I actually wrote.

I like how you're assuming my views now. No, I don't believe that at all. I'm very well read on this topic, which is how I know that what you say is pure unadulterated bullshit at odds with the clear facts.

There's a good explains this a lot better than the lying trash that you write, claiming to be an insider. Here are the facts (from that article):

So. according to the fraudclown candybar, the ultimate Wall Street insider kindly teaching up poor plebs, it was broad knowledge on Wall Street years before the financial crisis that these were going to crash. They also knew which were likely to do poorly (better than some uninformed schmuck like the people in this thread who aren't Wall Street insiders like candy).

Against this claim by candybar, we have these facts:
The best of Wall Street were calling Burry, trying to sell him the insurance that moved more than 2000% against them when the worst kinds of subprimes - the ones they were gladly selling insurance one - 100% predictably crashed. They also ended up holding the bag on this trash in the hundreds of billions. In other words, the vast majority of Wall Street had no clue what was coming, and were in fact so clueless they were selling guaranteed -2000% positions.

The verdict is that candybar is absolutely full of **** and straight up lying.The ridiculous walk back of his claims in his last post already confirmed that.

You still appear to have no understanding of what I wrote. My friends were experts in some of these specific product areas but it probably wasn't broad knowledge. I don't have a lot of insight into people on Wall Street in general thought in 2006. The point here is that I knew what was going on in the trenches.

Michael Burry was able to buy some credit default swap on shitty mortgage bonds in 2005 = Candybar's friends couldn't have possibly thought some structured products would blow up in a way that would reduce origination volume in 2006.

Nice logic you have going there.

You also seem to have no idea how these things work. During normal times, Wall Street is always willing to sell you anything. It doesn't matter what it is. And it's also a certainty that none of these firms lost money on the trades in 2005 - what those dealers took on in 2005 have absolutely no bearing on what the book looked like when **** hit the fan. These were liquid instruments and they were happy to sell because they effectively take a cut on every trade. Also, I don't think you understand the relationship between CDS and structured products - they are not traded by the same people. They are happy to sell CDS in any liquid market, since they can sell synthetics on the other hand at a higher price. It's quite likely that Wall Street made money here - they wouldn't sell CDS to Burry otherwise.

Edit:

From your own ****ing article:

Also the article goes on to describe how "Wall Street" caught on to what he was doing in late 2005 and were trying buy insurance and how Wall Street Journal reported on loan performance issues in November 2005. Yup, clearly my friends couldn't possibly have been worried about anything in 2006.

You are joke as you keep repeating the same pattern. YOu are the one with the comprehension problem always assuming people's positions and incorrectly then fighting strawman you stuff.

We have two disputes neither of which should be a dispute if you were anything resembling a normal reasonable person.

I believe, and have represented it as my opinion only, that the GDP considerations are not properly priced in and the markets have taken a more 'optimistic' view' than i would in many areas. i have explained why. That is not a controversial view and even if you want to call it an outlier view, so what. Outliers will always exist and rightfully so.

But since it disagrees with your position there is simply no way you will agree to disagree which I have said all thru is reasonable. Nope it must be wrong and you must be right. You just are so smart there is no room for error in your view.


And when it comes to 2007/8 and the potential of any market manipulation in the system you dismiss it out right. Anyone who thinks there was ANY TRACE, is in your view is in crazy conspiracy land.

And how did you inform your view. You admit it has nothing to do with any readings you have done. You admit you learned nothing from any analysis pre or post.

Instead you had discussion with your smart Wall Street friends and formed your opinion on that and you do not need to read any analysis to challenge that as your view is formed and in your mind, nothing can counter that.

Anyone else who did not see the crash coming was simply the naive outlier, and you and your smart friends were the norm.

I would bet that if we look into any of your 'trade' analysis you would always be the guy who never got caught and always knew exactly the right trade after the fact.

If you actually have Wall Street friends, which i doubt, they would tell you that ANYONE who always acts like everything was obvious to them after the fact and anyone else who did not see it was just dumb, is never to be taken seriously. That person, if he exists should be rolling in his billions of dollars.


Take your great insights to the blog sphere and just post some of them in ADVANCE, and when you prove right with most of the rest of the world being wrong (as most of Wall Street was in the lead up to 2007/8) everyone will know you are a gold mine and King Maker and any fund you set up will be oversubscribed.

Until you do that do not expect any to take your e-bravado and e-bragging and e-hindsight wisdom, seriously as you are clearly a joke.

candybar,
At this point you're outing yourself as a liar. Your walkbacks screwed you. You, a random dude on Internet, are claiming to have friends who were the very few people who were "experts in this field" and knew that this was going down in 2006 (they were "certain") in 2006. You're like that fraud in OOT who claimed to work in the modeling industry - a combination of lots of "inside info" and insulting those not on the inside and claiming that those on the inside - which includes you of course - are the ones that get and they are beyond reproach. It's the classic shtick of an internet fraud.
That's not the logic. Burry started buying in 2005 and kept buying for a long time as the market got larger and larger with Wall Street a good chunk of the sellers. They got more and more willing to sell them as time went on, not less. Wall Street was collectively so clueless that they were happy to sell him these swaps with absolutely no differentiation from them in the quality of the underlying securities that deviated from ratings. That says that they had no clue, as it is the fact that they ended up holding giant bags of crap.

You either know this is the logic and are deliberately lying about above my position, OR you don't and have you no clue what you're talking about or how to read. Which is it?
I know exactly how this all works. It's been the subject of numerous books, papers and movies.
Another line that absolutely destroys your credibility and proves you have no idea what you're talking about. Most of Wall Street lost tens to hundreds of billions on toxic CDS assets that they owned. So they did indeed lose money, and your assertion that they wouldn't sell unless they made money is insane. They accumulated these over time and then held a giant bag of toxic debt they didn't see coming. Your clown argument seems to be "well they made fees on them when they sold them so them selling toxic trash that they held the bag on means nothing". Weird argument bro.

Almost everyone was oblivious. A few people caught on. In the end, the people that ended up holding the bag on the wrong side of the trade tells you everything you need to know about who saw this coming.

You, an Internet random, claim to have known the very very few people who were "certain"t his would blow in 2006 - although you contradicted yourself when challenged and walked back that claim. I'm calling bullshit.

And as far as it goes in this thread, why would you even mention this? It clearly was NOT widely known in Wall Street or else they wouldn't have ended up with all this toxic trash on the books. Did they want to go bankrupt? So why did you mention your friends then, in a general discussion of what Wall Street knew, if not to do the classic fraud thing of trying to appear the ultimate insider? If only your expert friends knew it's irrelevant to the discussing.

Tooth being skeptical of other people's claims, I guess is not surprising, given the glass house. Btw, you still seem to have no idea what you're talking about - that's just not how that industry works - but since you seem so sure, how about this? If I can demonstrate to a neutral mod (I don't know, Larry Legend?) that I have contacts in this field that would qualify as experts, you (and all your sockpuppets, etc) get permabanned. If I cannot demonstrate this to their satisfaction, then I get permabanned. How does that sound Tooth? Since you're so sure, this should be easy right? Quite frankly I'm not even sure if I have enough evidence to convince a third party - this was all so long ago - so you should probably take this bet, you may win even if you're wrong.

I find candybar is writing out most of the things I am thinking but do not have time to write. so yes, I agree with pretty much everything hes saying and disagree with cuepee that "big banks" are artificially manipulating the broader stock market.

Sources? I highly doubt this. Outside of AIG (not Wall Street) and similar companies, I don't think any major US financial firms had heavy net exposure to CDS. I could be wrong here - I'm not super familiar with the market (well probably more than you though by a fair amount) but Wall Street firms (investment banks) don't take on naked risk like this, they sell CDS primarily to make markets and sell synthetics. If you're quoting losses at that level, you're almost certainly mixing in unrelated products or not netting out offsetting gains. If I had to guess, they were probably net buyers of CDS, since they necessarily had a lot of credit exposure due to having to hold on to collateral and bonds during the securitization process. For banks like Citi, Deutsche and JP Morgan, it's also important to separate out the investment banking arms (Wall Street"), most of which aims to be neutral and the commercial side, which has a lot of capital it needs to invest.

from my understanding most of the losses from CDS came as a result of holding what was effectively inventory of CDS and MBS products right at the end. so you can both be right.

the trading desks most likely went long some of the stuff on their own books to facilitate trading, and got stuck with it. happens all the time that they go long or short temporarily when making markets, things dont often go no bid or collapse like CDS did at the end

Possible, but I don't think there's any evidence of this. By the time this really blew up, they had been trying to reduce net exposure for quite some time. There's just no real reason for them to have significant CDS exposure. Also CDS nets out - the total net exposure of all parties involved is zero. So we know AIG was stuck with a whole bunch and pretty sure some european banks too. So the rest of the world had to be net long - they must have made, not lost money on CDS. For instance:

https://covid-19.mitpress.mit.edu/pu...ction=107da4e3

And i have no issue, zero with anyone who has a differing view.

If you tip into the 'it is conspiracy stuff to believe markets can be or have been artificially manipulated by Wall Street' as Candybar came out swinging and said instead of just having a different view of things, that is when lines are crossed.

It is a way people trying to make their opinion have more weight than should improperly appeal to facts or authorities they do not have.

And again that is not speaking to any thing regarding who is right or wrong in their belief, just the argumentative tactic being employed.

Here's another:

https://www.cfainstitute.org/en/rese...digest-summary

So the more I look, the more I'm pretty sure that Tooth made that whole thing up:

https://nymag.com/news/business/58094/

That covers Goldman, Lehman, Bear and Merrill, 4/5 non-commercial bulge brackets at the time. While this isn't conclusive, seems like most investment banks, just as I suspected, took losses on the real bonds, but offset that with gains from CDS. I couldn't find anything that shows that "Wall Street" lost any significant amount on CDS on structured products specifically.

Again, this is kind of the point of structured products. Why do you think they structure these deals and create credit tranches in the first place? So that under normal circumstances, they can trade fungibly as bonds. Each deal is unique, but there's enough of them collectively and most people that aren't specialists have enough trust in the deal and the rating such that collectively this creates enough liquidity. This is how anything works in finance - bonds are sold to all kinds of unsophisticated investors who just need market yield and often considered fungible within the same product category and rating. If you had to be an expert on the collateral, there would be no point in creating these bonds with ratings.

This is like saying that Amazon comingling products is evidence of Amazon being clueless. It really doesn't matter to them as long as people accept the practice. Likewise, as long as the market is willing to trade without looking at the collateral for the most part, there's no reason for Goldman to care, I'm sure AIG or whoever was perfectly fine taking the other side of that trade.

A single trader at Morgan Stanley alone lost $9 billion selling CDS naked. The article on Howard Hubler provides an excellent example of the kind of blind stupidity on Wall Street about these products at the time. Do us a favor and read it and be less of an uninformed idiot when it comes to this conversation.

They had no ****ing clue what they were dealing with at any level of the organization, from the traders through to their bosses through to risk management who job it is to see the risk in these naked sales. And the incredible thing is, it was simple to see the exact trajectory of these products by simply reading the prospectuses. That's what Burry did to buy these CDS and know which ones to buy; you didn't even need a finance degree, just a little common sense.

I have two problems with your shtick here. The first is the absurd notion that "Wall Street are far smarter than you and have priced everything in". Everything you write revolves around that thesis, and it's comically wrong and intellectually lazy on a level that shames even Cuepee. Wall Street (with close to zero exceptions) failed to even reach a smart high schooler level of sophistication and diligence on CDS for example, and ended up holding the bag on them. Similarly with corona - Wall Street with almost no exceptions (Ackman being one) completely failed to see any of it coming, despite it being 90+% certain to happen and result in a market crash. Similarly with Enron, Valeant etc. Ackman proved how much money was on the table if you made that bet correctly. It's important to understand this blindness/stupidity/incompetence on Wall Street; idiots (such as yourself) who failed to realize Wall Street's blind spots missed 10-20 baggers betting on corona, because the market acted like it was nothing even when it was 90+% certain to happen.

That view (that Wall Street are geniuses and we're all dummies who can't see any angle they don't) would be ok by itself, but the compounding trouble is that you're a straight up liar, who makes **** up to support his position. For example, you lied about the traders you know in 2006 knew it was "certain" that CDS would fail, to make it seem like people "in the know" - you and your insiders - had it all covered and maintain your lie of Wall Street competence/infallability. You contradicted that by walking it back strongly when challenged, proving the lie.

You're exactly like that OOT model guy - I was one of the few to spot his fraud as well when he said something about beautiful women that was pure bullshit (having dated very smart beautiful women and hung around their friends, it was obvious baloney). He combined "insider knowledge" with orthodox thinking and backhanded status-based insults to those who weren't in his world. Which is what you do here, you're almost exactly like him. Normal successful people don't that, sir. They're more straight up. Like ahnuld.

I appreciate you taking the time to discuss the orthodoxy of Wall Street thinking (you're basically a mouthpiece for freshman Wall Street thinking), but lose the straight up lying and overstating. It shows a lack of intellectual curiosity at the very least and makes it very hard to take the other things you claim to know seriously. You say you're a teacher and perhaps that's where it comes from: people who don't know their **** from experience cover it with certainty and authority, and status-demeaning those who disagree.

People here find some value in your posts - and there a couple of ideas you've put forward that have subtly shifted my thinking - so I'm not going to take the bet that even you think you'd lose (proving you knew these people). "Hey do you want to bet me but I might lose anyway even if what I say is true" is a weird bet offer. Relax bro. Stop the lying and exaggerating and the insecure status-bound defense of your unfounded belief that there's no edge to be found over Wall Street who are smarter and more aware (seriously, I get a chuckle out of that especially after February/March).

You're not getting to the heart of the matter, which is that these things were a certainty to end up worthless, and that there was little to no understanding of this fact. Wall Street blindly trusted the rating agency giving AAA to zero worth junk, when the only thing you had to do to spot the bad ones and make billions was to read the damn prospectuses (as Burry did). Very basic diligence and first principles thinking simply didn't exist in Wall Street. It proves that Wall Street has massive blind spots and are comically incompetent at escaping groupthink and assumptions and at spotting massive problems coming up a head, even when the likelihood of an outcome is trivially obvious to anyone even remotely plugged into the world (see: the first 20 pages of our corona thread). What are they missing now? And what do people miss if they follow your shtick (which you support by straight up lying) of "they got it figured out bro, lol you have no edge on Wall Street".

The reality is that orthodox thinking (such as yours) is just fine until something goes wrong. And the big money is in figuring out when you should think in an orthodox way and when not. You don't even see the "not", you're pure orthodox. Which works fine 90% of the time and gives you index-level returns, and misses the big edges.

the Atlanta Fed is now predicting 26.2% annualized growth in Q3, almost makes up for Q2

I know it seems to (26 is close to 32, right?), but (100-32)*1.26 = only 85% of what you started with

Still getting your info from sensationalist mainstream media? You are a dunce.

The CPI ticking up (after ticking lower Feb - May) isn't the same as your hyper inflation end of the world nonsense.

good point, so we need back to back +26% quarters for it to be very impressive

So I was told it's annualized in both cases, divide by 4.
(100 - 32/4)*(1+ 0.262/4) = 98.0%
ergo down ~2% from a year ago

Pent-up demand exhausted and lays offs starting for real.
No need to panic. TSLA will make us all rich.

+26.2% annualized is about +6% for the quarter. -32.9% annualized is down about -9.5% for quarter.

Together we're down about 4.1% over two quarters if the advanced estimates are accurate.

grizy did the math correctly here