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Posted by John R. Carroll on May 25, 2008, 1:15 pm
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F. George McDuffee wrote:
> new thread started -- was Re: Obamas plans for the US
>
> On Sat, 24 May 2008 11:23:03 -0700, "John R. Carroll"
>
>> F. George McDuffee wrote:
>>> Metal content? Priced steel, aluminum or copper lately?
>>>
>>> On Sat, 24 May 2008 08:37:02 -0700, "John R. Carroll"
>>>
>>>>> Its always dangerous to extrapolate from a single data point, but
>>>>> this could be the first drops of water seeping through the cracks
>>>>> as the dam bursts, although Vallejo is not a major municipality.
>>>>
>>>> Like Orange was?
>>> ==========
>>> Interesting that you remember Orange County.
>>
>> I'm funny that way. LOL
>> I remembered Coughlin as well.
>> It comes from a life time of making mistakes and trying to learn
>> from them in an effort to avoid repetition.
>> There really isn't anything new under the sun.
>>
> <snip some good comments>
> ====================
> Warren Buffet, one of the few remaining honest people in finance
> has this to say:
> -------------
> Buffett blames banks for credit crisis
> Sun May 25, 6:21 AM ET
>
> MADRID (Reuters) - Blame for the sub-prime crisis lies at the
> feet of banks who took too many risks in mortgage lending, U.S.
> billionaire investor Warren Buffett told newspaper El Pais in an
> interview published on Sunday.
> "The banks exposed themselves too much, they took on too much
> risk .... It's their fault. There's no need to blame anyone
> else," he said.
> <snip>
> for complete interview click on
>
http://news.yahoo.com/s/nm/20080525/bs_nm/spain_buffett_dc;_ylt=ApdLr.J8zIu8eG_EJosx6mlv24cA
> ------------
>
> I will observe that this does not necessarily imply any sort of
> cabal or conspiracy, but rather an excessive division of labor,
> and top management that demanded "results," and were not
> concerned how these were obtained, as long as jail time and
> "disgorgement" were not a significant possibility (e.g. money
> laundering, fronting drug deals, etc.).
>
> In retrospect, it now appears there were three groups involved in
> every bank.
>
> Group one consisted of very bright, hard working and dedicated
> individuals who were tasked with developing and implementing
> processes/procedures to keep liabilities on the bank's books as
> low a possible, while retaining potential income, such as SPE
> [special purpose entities], SIVs [Special Investment Vehicles].
> Conduits, and a series of novel financial instruments such as
> synthetic structured RMBCDOs [residential mortgage backed
> collateralized debt obligations]. In this they were
> extraordinarily successful.
>
> Group two consisted of very bright, hard working and dedicated
> individuals who were tasked with maximizing both the utilization
> of and rate of return on the bank's capital/equity, defined as
> assets less liability (which group one was tasked with
> minimizing). In this they too were extraordinarily successful.
>
> Both groups were "enabled, aided and abetted" by financial rating
> companies, who apparently were under the impression that an
> intern with a "AAA" stamp, and a computer generated VAR [value at
> risk] analysis, constituted "due diligence." In any event, the
> rating companies and outside auditors could not understand the
> risks involved in these novel financial instruments and
> structures, because no one did, not even the people that created
> them.
Warren Buffet isn't in finance George.
He, and BH, are investors/managers.
Anyone in the metalworking industry can tell you what it feels like to watch
a company, or group of companies, evolve once they join the Berkshire
Hathaway stable.
It ain't pretty.
He'd also like to prevent the spectacle of 35 year old middle managers
hanging from the worlds lamp posts.
That is admirable but beyond it's his ability.
--
John R. Carroll
www.machiningsolution.com
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>
> On Sat, 24 May 2008 11:23:03 -0700, "John R. Carroll"
>