Page numbers are from “The Big Short” hard cover version 1st edition.
The home and or second home is “underwater” and the owner walks away.
Bank puts a paper in the window of the house or CA state office building saying the home has been reprocessed by the bank.
See LA Times, 9-11-10, page AA1, “$2.2 Billion from a consortium to buy 24 state office buildings.
Bank gets Government grant money to help small business in the area.
Bank uses the money for contractors to make improvements to the homes and CA state office buildings.
Improvements increase the value just enough to get a higher false loan rating, AGAIN. P. 50 & 73.
Bankers packages the newly rated buildings and try to sell these derivatives to hedge funds.
Hedge fund, investor or consortium says thank you very much and buys the small bank(s) and their newly rated derivatives which are insured of course.
See LA Times 9-9-10, Investors snapping up small banks, By Scott Reckard.
Large Wall Street banks buy groups of these Hedge funds and or derivatives and packages them into bonds.
These derivative bonds are bought, sold, and made legal by bond technicians page 72 and approved by ISDA and other Global Financial Regulators.
These derivative bonds are valued based on what you can sell them for. Their is no set price even if they contain U.S. Treasury bonds mixed in the derivative. page 62.
Remember the I in ISDA stands for International and the other 3 letters sand for whatever. What ever the bond technicians dream up, example, CDO. Page 72.
The fear of the corporate news media, page 62, makes us ignorant Americans, thus we must think that our government / politicians must honor these ISDA and Global financial regulators rules just because the derivatives may have Treasure bonds included in a CDO? page 72.
Treasure bonds that where Included without the Presidents knowledge and NOW us Americans must honored these Global financial rules even if it cost us our invested retirement money and having our jobs shipped over seas? I say fight back, “America Rules for Americans.”
We are feared into thinking International Associations are good for America. As the Republicans like to describe it, “Less Government Involvement.” Which means “Trust Wall Street” Which means trust Global Financial Regulators and Goldman Sachs’ collateralized debt obligation, CDO, page 72.
Fight back tell “Them” what you think? Or do you think that our American talk back has no value when compared to Goldman Sach?
Carl G. Mueller, Nam 68