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#361 Hiding Bear

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Posted 23 November 2003 - 09:43 PM

More bad news for FRE, in addition to the bad news yesterday that they are seriously delaying reporting financial results:

Freddie Mac Finds New Problems

The restatement shows that Freddie Mac understated its earnings through 2002 by almost $5 billion, a figure close to the company's prior estimates. But the restatement also reveals unexpected new accounting troubles, detailing a number of problems that the company previously had only hinted at.

The new problems -- largely the result of mistakes and misinterpretations, officials said -- dwarfed in size the accounting maneuvers that the company previously spotlighted. Some of the newly disclosed accounting adjustments involved inaccurate valuations of the company's huge derivative hedging portfolio. Others resulted from inadequate documentation of hedges.


Will be waiting to hear Mark's translation of misinterpretating trillions of $ worth of hedges, swaps, and other derivitives means.

I guess their next earnings report will come with a disclaimer that the margin of error is plus or minus $10 billion. :ph34r: :angry: :o

#362 dozer

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Posted 23 November 2003 - 09:45 PM

bearman, what's the doolar doing ?

would be interested to hear opinions on tomorrow and next week from you and machinehead.

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Posted 23 November 2003 - 09:48 PM


In addition to my home in Newport Beach, I maintain a 160 acre ranch in N. Cal, stocked with everything and completely self sufficient ...houses, barns, power (public utility and propane backup) , pubic water and potable wells with 5000 gal  holding tanks, my own year round creek, 16000 watt propane generator,  four 50 gal drums with Diesel and unleaded fuel and ... the small valley I'm a part of has lots of cattle, sheep, chickens, etc....   plenty of wildlife too.

I'm self sufficient with a shotgun, ammo and flint. Costs less too. :lol:

Thats good, congrats. I applaud your preparedness. "Flint " ? muzzle loader ? No waterproof matches ? :grin

Here at the ranch we well prepared too. Heavy Ordinances and Night vision are standard isssue.

#364 Jimi

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Posted 23 November 2003 - 09:52 PM

Hadjin, will you adopt me? :huh:

Hadjin, will you marry me?
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#365 flockofsheeples

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Posted 23 November 2003 - 09:54 PM

This was my favorite part of the article....


If Enron was like a bank heist, this mutual fund thing is the equivalent of the parking meter and not putting any money in."


I should put that as my new signature  :lol:

Funds may not go belly up, but they will just disappear. Look how quickly internut funds merged, reorganized or just closed up in the past few years - without accusations of fraud and self dealing.

Any fund pleading guilty to criminal fraud will lose all or most of its institutional support. How could any company tell its employess it still wants to deal with a fund family that admits fraud?

A recent NY Times story showed how one accused mutual fund (PBHG I think) actually lost money for all shareholders from 1998 to 2003. This could be further grounds for a lawsuit for breaching fiduciairy duty. I don't see how Strong and some of these other ones will survive.

Being a bear, maybe I'm too pessimistic, but the first thought I had when Enron released its first bad news was that it was going down - and I feel the same way now about these fund managers.

here in the land of cheese and beer strong is the only option for the states 529 plan. orificials are currently debating on if they plan to offer other options. there was also an article in the bidness section last weekend talking about strong (the chair) who was being chastised over nothing. The guy said something about his trades which amounted to $600K worked out to $2 per person. I wanted to email the a$$hole about his faulty logic and ask him how dick strongs late trades affected the share prices of the funds.
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#366 flockofsheeples

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Posted 23 November 2003 - 09:58 PM

dozer-nice link earlier. Some good stuff on there....not quite sure how dream theater fits into the slayer/king diamond type, though.
I don't know why they call it hamburger helper...it seems to do just fine on its own-Uncle Eddie, "Family Vacation"

#367 Madame Wrecked Him

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Posted 23 November 2003 - 10:00 PM

The restatement shows that Freddie Mac understated its earnings through 2002 by almost $5 billion, a figure close to the company's prior estimates. But the restatement also reveals unexpected new accounting troubles, detailing a number of problems that the company previously had only hinted at.

Am I the only one who is not surprised that this is coming to light?

While putting away $5 billion was obviously not correct, FRE did it for a good reason. I'm sure management was as aware of the potential for negative surprises as are all the stoolies & other bears listening to the ticking of the derivatives time bomb.

#368 wndysrf

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Posted 23 November 2003 - 10:01 PM

Some of the newly disclosed accounting adjustments involved inaccurate valuations of the company's huge derivative hedging portfolio. Others resulted from inadequate documentation of hedges.

Minds will be blown when the truth comes out about the size and scope of the hedging portfolios at FRE and FNM.

My prediction is this:

1) The notional amount of the HedgeBook will be found to be 10x larger than the entire portfolio of mortgages and mortgage backeds.

2) The potential for error (plus or minus $10 billions), profit or loss, on the HedgeBook will far exceed the possible profit or loss on the mortgage porfolio impacted by rising or falling interest rates.

3) 2/3 of the "executives" at FRE and FNM are currently working full time to try to understand the how this Paper Pyramid was constructed, how it can be unwound, how it can be simplified, or how it can be neutralized.

In short, these people have created a HedgeBook from Hell, one that is way too complex, and has spiraled out of control, and even the top execs don't have a clue as to what is in it, how it would react to "market events", or how to fix it if its broken.

The HedgeBook is a monster.

Its out of control.

It can't be "neutralized".

It can't be "turned off".

The HedgeBook will run its course, probably into a Black Hole, from whence it came:

The "Black Holes Model."

Good luck Dr. Myron and Dr. Scholes.
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#369 Hiding Bear

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Posted 23 November 2003 - 10:02 PM

This was my favorite part of the article....


If Enron was like a bank heist, this mutual fund thing is the equivalent of the parking meter and not putting any money in."


I should put that as my new signature  :lol:

Funds may not go belly up, but they will just disappear. Look how quickly internut funds merged, reorganized or just closed up in the past few years - without accusations of fraud and self dealing.

Any fund pleading guilty to criminal fraud will lose all or most of its institutional support. How could any company tell its employess it still wants to deal with a fund family that admits fraud?

A recent NY Times story showed how one accused mutual fund (PBHG I think) actually lost money for all shareholders from 1998 to 2003. This could be further grounds for a lawsuit for breaching fiduciairy duty. I don't see how Strong and some of these other ones will survive.

Being a bear, maybe I'm too pessimistic, but the first thought I had when Enron released its first bad news was that it was going down - and I feel the same way now about these fund managers.

here in the land of cheese and beer strong is the only option for the states 529 plan. orificials are currently debating on if they plan to offer other options. there was also an article in the bidness section last weekend talking about strong (the chair) who was being chastised over nothing. The guy said something about his trades which amounted to $600K worked out to $2 per person. I wanted to email the a$$hole about his faulty logic and ask him how dick strongs late trades affected the share prices of the funds.

529 plans are a meal ticket for the fund industry, locking uninformed J6pack types into funds with high fees and poor performance. No surpise Strong turned up here.

Yep, the $600m only represents what he personally took - what about everyone else taking part of the pie? Does the guy with the $2 quote mind if every executive at his/her neighborhood bank each took $2 out of every account he had every year? ;)

#370 dozer

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Posted 23 November 2003 - 10:04 PM

"The emerging gold bulls have not been swayed by the bears. But the primal instincts of many gold insects have been triggered during this feeding. Especially among the technical anal cysts, many of which have capitulated on the long term using short-term trends.

Seems odd, given the fundamentals and the strength of the longer-term primary trend. Is this the false dawn capitulation that I had expected? Maybe, but it still seems a bit weak. Most likely this is a technical respite, and a good entry point.

The Bear will resume feeing on larger fare soon: the financial markets for currencies, stocks and bonds.

This Kondratieff Fall feeding may be frenzied with liquidity suffering dramatically. As such the Bear may well charge a resurgent gold bull, resulting in even stronger capitulation.

But this new gold bull will be strong and bears will typically veer away from a strong animal. Making only a false charge. If it comes to pass this will be a time to stand strong. Those who do will be the legends of this Kondratieff Fall."


from Rod Cook's site. I really like this guy. Most all of what he's predicted has come to pass; and I like his calm style.

Above was part of Oct-13 essay:

http://www.obscenepr...PW20031013.aspx

I've just been re-reading some older material to get refreshed on some thoughts and concepts. It's interesting to go back and look at prior predictions...

ps; POG solid at 396....possibly a slow uptrend...

#371 Hiding Bear

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Posted 23 November 2003 - 10:11 PM

The HedgeBook will run its course, probably into a Black Hole, from whence it came:

The "Black Holes Model."

Good luck Dr. Myron and Dr. Scholes.

Thought these were guys/gals with the super computer trading room, with the 10 large LCD monitors for each trader.

Doesn't sound like anyone bothered to figure out where they were going. Some bears have said they just constantly create new deriviatives and never look back. That about sums it up.

Black hole indeed. No one will be able to unscamble this mess if it fails. No wonder AG wants the bubble to continue until after he's gone.

Thanks Mark.

#372 beardrech

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Posted 23 November 2003 - 10:11 PM

I have faithfully paid attention to all the charts and learned opinions this weekend; but I still don't get where the 'up' is supposed to come from.  Yes, I can see that the TA pattern on a certain chart might be saying it "should" go up...but HOW?  To change the trend, something else has to CHANGE, right?

To me, that last sums the whole thing up, and explains the past 3 months of near-flat.  Whole lotta distribution going on...and I don't see that changing this week.

Dozer,

TA-types are spared the waste of energy of 'having to think' and its attendant bedfellow: 'attempting to explain'.

'The chart tells all' is the doctrine.

How many times do we read/see/hear "The mkts, or a stock, went up/ down/ nowhere today due to [fill in de blank]"?

How many times do we sneer at this kind of statement?

How oftern do we find ourselves making similar proclamations?

How to tell 'accumulation' from 'distribution'?

Success!
gruff

dozer
let me take the liberty as a grade A homogenized ignoramus of TA to spell out our needs which just might help the mavin themselves in explaining why they hypothesize directions the way they do--

for example, you can telll me:
Dummy,do you see the dark bodied candle with the very short upper shadow? Ok now go four candles to the left,notice the growing upper shadows(wicks) that represents four days of (say indecisiveness) so with all that doubt many traders will be procyclic and short the shit out of said market and this will happen 1 hour into the trading day-but many times those that are counter cyclic will reap the rewards if they enter at .......fill blanks... and so forth--

I know the good doctor is very specific in his calls which i read every day but it requires a higher degree of intellligence to grasp and more experience we need something more primitive in telling us when stock inertia is being overcome ina SIGNIFICANT WAY---

uNTIL THEN i ignorantly remain in gold--so much so that i'm currently as i've said before having my urine bottled and sending it noth to a Canadian laboratory for Assaying

beardrech :grin:

#373 dozer

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Posted 23 November 2003 - 10:15 PM

dozer-nice link earlier. Some good stuff on there....not quite sure how dream theater fits into the slayer/king diamond type, though.


tanks flock. he's the best.

i don't follow the band names, but i'll tell ya this...you'll hear EVERY type of metal on root's show....from ozzie to death-metal, and everything in between.

some nights he has live guests....metal guys who were playing locally and just finished their gig....come into the studio at 3am....it gets kinda wild...and humorous... :lol: :lol:


another interesting snippet from Oct 28th Cook essay...

"The GSEs’ hedging has distorted the global interest rate derivatives market to the point where it is unlikely that their role as primary pump to the money supply will continue as it has over the past few years. And treasuries are bid less and less aggressively as time passes. So the heavy lifting will be up to the Fed and their printing press. They are rapidly becoming the last line of defense as the options continue to narrow (pun intended). Any such action will be at the expense of the dollar. This appears to be reminiscent of the 30s in America, but this time around the better comparison is to the Weimar Republic.

A tipping point nears: Where we shift from deflation to hyperinflation. A subtle point that is ill defined. After the transition, even the most brilliant of economists will not agree on what has transpired. But the symptoms will be undeniable: The technical behavior of the market will change: Subtly at first, then with astonishing volatility. Technical analysis will fail the traders. Market timers will be confounded. This includes many in the gold camp.

http://www.obscenepr...PW20031028.aspx

#374 beardrech

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Posted 23 November 2003 - 10:22 PM

This was my favorite part of the article....


If Enron was like a bank heist, this mutual fund thing is the equivalent of the parking meter and not putting any money in."


I should put that as my new signature  :lol:

Funds may not go belly up, but they will just disappear. Look how quickly internut funds merged, reorganized or just closed up in the past few years - without accusations of fraud and self dealing.

Any fund pleading guilty to criminal fraud will lose all or most of its institutional support. How could any company tell its employess it still wants to deal with a fund family that admits fraud?

A recent NY Times story showed how one accused mutual fund (PBHG I think) actually lost money for all shareholders from 1998 to 2003. This could be further grounds for a lawsuit for breaching fiduciairy duty. I don't see how Strong and some of these other ones will survive.

Being a bear, maybe I'm too pessimistic, but the first thought I had when Enron released its first bad news was that it was going down - and I feel the same way now about these fund managers.

here in the land of cheese and beer strong is the only option for the states 529 plan. orificials are currently debating on if they plan to offer other options. there was also an article in the bidness section last weekend talking about strong (the chair) who was being chastised over nothing. The guy said something about his trades which amounted to $600K worked out to $2 per person. I wanted to email the a$$hole about his faulty logic and ask him how dick strongs late trades affected the share prices of the funds.

529 plans are a meal ticket for the fund industry, locking uninformed J6pack types into funds with high fees and poor performance. No surpise Strong turned up here.

Yep, the $600m only represents what he personally took - what about everyone else taking part of the pie? Does the guy with the $2 quote mind if every executive at his/her neighborhood bank each took $2 out of every account he had every year? ;)

May i propose a change in the financial nomenclature???
Someone said that there is no higher crime than the current one of Murder--namely the physical destruction of 1 or more human beings--

What about the finacial murderers who've killed the dreams and futures of millions of human beings;on a scale so vast that the word Financial Genocide springs to mind---

I'm not joking--without the proper terminology of what has happened there will be no justice--

And i sssuggest to you that if you start using it on an experimental bassis slowly but surely a feeling of nausea will invade your ssoul and never leave---

I admit there is a risk but is gaining the truth worth it--I leave it for you to decide

beardrech :ph34r: :ph34r: :ph34r: :ph34r:

#375 Sphinxter

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Posted 23 November 2003 - 10:24 PM

In addition to my home in Newport Beach, I maintain a 160 acre ranch in N. Cal, stocked with everything and completely self sufficient ...houses, barns, power (public utility and propane backup) , pubic water and potable wells with 5000 gal  holding tanks, my own year round creek, 16000 watt propane generator,  four 50 gal drums with Diesel and unleaded fuel and ... the small valley I'm a part of has lots of cattle, sheep, chickens, etc....   plenty of wildlife too.

This MATRIX and the latest revelation that the  FBI now openly investigating protestors and those that demonstrate in antiwar events really pisses off this long time conservative stoolie.  I tell you, I'm getting quite nervous about our present leaders and their intrusion on our Civil Rights and their attack on the Bill of Rights.


Just had a nice long dinner with the misses and we fretted about this very subject. I can't remember the FBI ever getting it's panties in a twist about the Planned Parenthood bombings, killings, fake-biological-attacks, etc to the point where they even arrested anybody let alone kept a file and shared it with other law 'enforcement' agencies.

This is the same FBI that was just excoritated for having run a mob outfit in Boston for 2 decades with the Bulger Bros. and went so far as to stand aside when murders were committed and even let 4 wrong people get fingered and sent up on capital murder charges with 2 receiving the death penalty. Never bothered them a bit.

Nice bunch and now they are openly keeping tabs on anti-goverment protestors ( a CONSTITUTIONALLY guaranteed right, by the way).

Good folks and definitely not at all the same as mobsters with government backing. Quite different. I just can't figure out how.

As to the rest, Hadjin - YOU DA MAN!!!

I am aiming towards the same levels of self sufficiency but am about 25% of the way to the place you describe. I plan to be all the way there within 12 months, but these things, as you knwo, take planning and time.

I am 100% convinced that in 50 years there won't be 50 states. In the meantime, there will be some fun.

Those who are prepared, will be OK.

As for the rest .....





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