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LuckyOne

Morgan Stanley Plans To Turn Downgraded Loan Cdo

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http://www.bloomberg.com/apps/news?pid=206...id=aeTzfvEedKpQ

I have to admit to being a little pi55ed off at this.

We are in the midst of a massive economic crisis, much of which was facilitated (being generous) or caused (probably being a little extreme) by financial "engineering" sophistry.

It seems that our friends at MS want to try to solve the problem by doing more of what caused the problem.

I would be very dismayed if enough investors still fell for the "ratings agency game" at this stage of our descent.

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http://www.bloomberg.com/apps/news?pid=206...id=aeTzfvEedKpQ

I have to admit to being a little pi55ed off at this.

We are in the midst of a massive economic crisis, much of which was facilitated (being generous) or caused (probably being a little extreme) by financial "engineering" sophistry.

It seems that our friends at MS want to try to solve the problem by doing more of what caused the problem.

I would be very dismayed if enough taxpayers still fell for the "ratings agency game" at this stage of our descent.

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yep, sell the crap to anyone, pay for a new rating for stuff that wouldnt get a value, and save yourself.

triple bonuses all round.

all thats missing is the off balance sheet numbers.

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Oh for gods sake! Will they ever give up?

SECURITIZATION IS BULLS*IT...! It always was.

The whole point was to make it so complex no one could understand it, so they could slip in the risk, and investors would be forced to rely on the fraudulent ratings.

Anyone who buys into this con again, deserves to lose everything.

That's why its so Fu**ing annoying our governments ended up buying this Sh*t.

If we hadn't bailed out all these bas*ards, they'd be securitizing old cardboard into a makeshift house under a railway arch somewhere.

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SECURITIZATION IS BULLS*IT...! It always was.

No, risk pricing circa 2007 was bulls*it.

"Yes, Percy. I don't want to be pedantic or anything, but the colour of gold is gold. That's why it's called gold. What you have discovered, if it has a name, is some 'green'."

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Sounds and excellent opportunity where can I buy some.

If you are a taxpayer, I think that you just did ........

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Oh for gods sake! Will they ever give up?

SECURITIZATION IS BULLS*IT...! It always was.

The whole point was to make it so complex no one could understand it, so they could slip in the risk, and investors would be forced to rely on the fraudulent ratings.

Anyone who buys into this con again, deserves to lose everything.

That's why its so Fu**ing annoying our governments ended up buying this Sh*t.

If we hadn't bailed out all these bas*ards, they'd be securitizing old cardboard into a makeshift house under a railway arch somewhere.

This is exactly what happened from 2004 to 2007 ........

It boggles my mind that people might fall for it again in 2009 .......

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Question:

If these CDO's have already been downgraded, why would anyone in their right mind buy them? It's like knowing they're going to default before it happens.

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Question:

If these CDO's have already been downgraded, why would anyone in their right mind buy them? It's like knowing they're going to default before it happens.

You have asked the perfect question.

In the olden days (2002 to 2006), people thought that you could tranche cr@p into good cr@p (AAA) and less good cr@p (BBB).

From 2007 to early 2009, everyone finally understood that cr@p is cr@p no matter how you tranche it.

MS suddenly seem to think that you can actually polish a sh!t and make good cr@p and less good cr@p out of it again.

It would be catastrophic for the 5 to 10 year deleveraging / recovery phase that we need to go through if enough people actually fell for the "sh!t polishing" process again and we had to delay our economic recovery until we could prove, once again, that you cannot polish a turd.

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You have asked the perfect question.

In the olden days (2002 to 2006), people thought that you could tranche cr@p into good cr@p (AAA) and less good cr@p (BBB).

From 2007 to early 2009, everyone finally understood that cr@p is cr@p no matter how you tranche it.

MS suddenly seem to think that you can actually polish a sh!t and make good cr@p and less good cr@p out of it again.

It would be catastrophic for the 5 to 10 year deleveraging / recovery phase that we need to go through if enough people actually fell for the "sh!t polishing" process again and we had to delay our economic recovery until we could prove, once again, that you cannot polish a turd.

Yeah I understand that but isn't the liquidity in this market pretty much now non existent? I don't understand who is going to buy this. Like you say, crap is crap, but there is a difference between admitting somethings crap (ie the downgraded CDO's) and saying somethings not crap but really it is crap.

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You have asked the perfect question.

In the olden days (2002 to 2006), people thought that you could tranche cr@p into good cr@p (AAA) and less good cr@p (BBB).

From 2007 to early 2009, everyone finally understood that cr@p is cr@p no matter how you tranche it.

MS suddenly seem to think that you can actually polish a sh!t and make good cr@p and less good cr@p out of it again.

It would be catastrophic for the 5 to 10 year deleveraging / recovery phase that we need to go through if enough people actually fell for the "sh!t polishing" process again and we had to delay our economic recovery until we could prove, once again, that you cannot polish a turd.

So let me get this straight.

They wanna re-securitize old crappy securities that have sh*t stained the entire planets economy, then sell it on as AAA standard investments to new investors who have presumably been on another planet while the biggest financial meltdown in the history of mankind has been playing out here on Earth.

The only securitization they should be doing is trying to sellotape their cardboard house together.

distopic1.jpg

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Yeah I understand that but isn't the liquidity in this market pretty much now non existent? I don't understand who is going to buy this. Like you say, crap is crap, but there is a difference between admitting somethings crap (ie the downgraded CDO's) and saying somethings not crap but really it is crap.

The problem is that enough fools might actually buy this nonsense that more and more people try to restructure already weak securities that the old problems are perpetuated.

My hope is that this cynical approach taken by MS fails miserably and that we go back to an era where complex securities are deconstructed in a way that allows people to price risk appropriately.

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