Thanks for your comment. Ever try to have a serious conversation with a chronic alchoholic? Those are just some of the verifiable snips of Ollie’s life from newsclips and eyewitness reports, letters and documents on file.

The stories Ollie related while in his cups (semi-continually as he aged) are even more interesting and amazing; but are now nothing more than hearsay.

What a wild ride he had; but at a terrible cost to his family. My Mom and her sister pretty much kept us kids away from him, until we were old enough to handle the confrontation.

IE when a debtor goes under, the swap writer pays off the bond at par — 100%.

In the Syn-CDO situation the first defaulters are picked up by the most junior tranches within the syndication — held by the creator of the SPV. ( Special Purpose Vehicle )

However, after the first seven or eight listed names in the underwriting pool default the pound of flesh comes from the naive investors in the syndication.

You then have a repetition of the sub-prime syndication melt-downs.

In both situations the investors were assured that they were not taking significant credit or political risk. The tranches were sold with AAA ratings. Hence, no one looked under the hood.

These crap-shoots are now becoming apparent — and there is no way out. Each Syn-CDO is going to resemble a smaller version of AIG — ’cause they were writing the exact same type of coverage in the very same market against the very same names. How well has that worked out for AIG?

Since February the yield spreads on unionized, politically touchy major investment grade credits have moved up significantly. After the dictats by H we should expect to see spreads ramp up.

BTW China only bought T-Notes and T-Bonds with recycled export proceeds. Now that American consumer imports have fallen greatly.
Consequently China no longer has hot money needing a home and is out of the long term market.

In the face of this H & Co intend to flog the market with paper. The result must be that Ben buys the long end with paper money while the Treasury is only able to auction short term paper. This means that Uncle Sam is now on a credit card and figures to pay the interest with the web-press.

This dynamic is exactly what happened to Weimar Germany between 1919 and 1923.

Citi may be rallying because the insiders now realize that her Syn-CDOs are filling her coffers upon the demise of GM.

BTW, the staggering tax loss carry-forward in the GM corpus makes it a prospect for a merger with Microsoft. The Good-GM is being kicked out as a 363 which I believe means that the tax basis of GM stays behind. GM has approximately $70 of losses per share. Since so many bondholders have been removed from the claimant schedule by way of the 363 deal it may be possible for the liquidated assets to be rolled into some note after which GM-Classic could be merged with a major corporate taxpayer. I’m sure Mr. Buffett has his phone ringing already.

Citi however has jumped from below $1 on Friday to over $3 today. Go figure. What drove that? Speculation!!!

Cadmus

This is pure speculation. I wonder if companies are buying back their own stock? They could fear hostile take-overs with a lot of loose money sloshing around. Also, there are changes coming to cooperate governance that would give share holders more clout. And, likely, regulators.

Again, pardon my civic ignorance, but don’t “new regulatory powers” have to be approved by Congress? And if they were approved by Congress, isn’t it that body that gets to “piggyback” additional requirements? Since when does a President get to create legislation?

I know, what a naive doofus I am.

Hoover invented the secular international non-governmental organization to feed the Dutch in the Great War.”"”"”"

Hoover also started the “Americans’ Right to Own a Home” craze almost single-handedly shortly after WWI. Thanks a bunch, “Progressive” Republican. Is Hoover being channelled by Colin Powell?

“”"”Obama’s new fuel standards are imposed through the executive branch, piggy-backed on new regulatory powers he’s granted to the EPA regarding carbon dioxide emissions as a greenhouse gas.”"”"”

Good Lord, that’s right! Past CAFE standards were legislated by Congress, not by executive fiat! How lawless and crazy is that? I missed that completely, as, apparently, did most people. When the feds bailed out Chrysler back in 1980 or so, I don’t recall that the feds took over Chrysler. This Mob-like inistence that “we own you” because we lent you money is frightening, but not as scary as the fact that the mechanisms and institutions that are supposed to be in place to stop such corruption are doing nothing to prevent it.

This is NOT! the response of a rational “free market”.

Is this the work of the “Plunge Protection Team” (PPT) or is it a continuation of “Pump and Dump”?

What entity is buying into this market? Are they buying with freshly printed money? How long before someone notices that the emperor is nude?