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One potential explanation for 'TARP On Ice' is during the latter half of the derivatives madness; there weren't many real toxic assets as part of the tranches being sold by the 'investment banks'. Anotherwards they new the sub prime was going to default and just made up the sub prime part of the derivative without any actual mortgage being held. So Paulson knows, since he was there at the time, the government buying the 'toxic assets'; would be exposing the banks and brokers to the fraud they had perpetrated, through their derivative sales.

Michael Lewis, the author of Liar's Poker, has an interesting article about how short sellers couldnt understand why the investment banks were offering them to short their derivative sales until the short sellers realized the banks needed short sales in order to perpetrate the fraudulent long transactions they were selling. Link is:

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boo m#page1

by An American in London on Tue Nov 18th, 2008 at 09:03:04 AM EST

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