Mail bombs sent to CNN / Dems

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Drew

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I'd stop short of saying he's an idiot necessarily. I think his compass points the right way and he processes events coherently in a way that allows him to put them into words better than most, but it doesn't come as much of a surprise if Taibbi would be the type to go into a discussion like Wall Street/SEC/MBS with his mind already made up, and only court whatever facts back up his conclusion, without a broader context.
Fair point - I'm definitely engaging in the same sort of hyperbole I'm accusing him of here (ironically, lol).

But, he has a clear agenda and strong biases, and sometimes those two combine to mask some of the things he doesn't realize he doesn't know. I think one of the more grevious examples was the hit piece he did on the swap markets where he, knowingly or unknowingly, drastically overestimated the size of the market at larger than the whole global economy by 1) looking at the two notional exposures of a given swap contract between two counterparties (for example, one party will agree to pay the other a fixed interest rate on a notional balance of $20mm and in return receive a floating rate payment from the other party) as seperate amounts (in the example below, he would calculate the total value as $40mm, not $20, even though there was only one $20mm contract), 2) ignore the fact that swaps often get netted out or used to hedge other liabilities (so if the first counterparty in the example above had $20mm in floating-rate debt outstanding, what the swap contract was actually doing wasn't speculating on the level of interest rates, but was converting a floating rate liability into a fixed rate one), and most egregiously, 3) ignoring the fact that in a swap, the notional balance never actually changes hands but is the hypothetical basis for determining the interest payments, so in the example above, if the first counterparty was paying a fixed rate of 2.5%, then in reality the actual payments they were making would be $500k a year, not $20 million... except, 4) payments are netted, so in actuality only one party makes a payment to the other based on the difference in rates (so, if last yeare the floating rate was 2.25% and this year it rose to 2.75%, then last year counterparty 2 would pay the other 0.25% x $20mm = $50k, and this year counterparty 1 would pay the other $50k. So, he's estimating the size of the swaps market, in this hypothetical example, as $40mm, whereas the actual cash payments moved would be a minescule fraction of that.... and even then, more often than not they were being used to hedge other cashflows. He either had no idea what he was talking about, or did but just didn't care because a hundreds-of-trillions-dollar swap market sounded really scary and like gamblers run amuck.

Here, there's a couple things he was missing - aside from the MBS thing, the biggest is probably banks weren't increasing their leverage from 12:1 to 20-40:1 to go out and buy speculative CMOs, they were increasing them to allow them to loan out far more money than they had previously, and in doing so leverage their net interest margin (difference between the interest they pay out on customer deposits, to interest they earn on their loan book) through the roof. I actually don't have hard numbers on the percent of firm assets that Merrill Lynch was using for proprietary trading, but I suspect it was quite small compared to their "conventional" retail banking, investment advisory, and investment banking assets, it's just with the amount of leverage they'd taken on even a small part of their business could cauuse crippling losses to the parent if it got hit hard enough.

...but, of course, if you write it like the banks doubled leverage to invest other people's money in collateralized mortgage obligations, it sounds WAY more like gambling than if you tell it more honestly and say that the banks just stretched their balance sheet to such a degree that even modest unexpected losses (relative to total assets) would become completely crippling compared to firm equity (the net of assets and liabilities).
 

zappatton2

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Trumpo incel shot up a bar in CA last night.
Has a motive been established? I hadn't seen anything written on it. Still a tragedy regardless, though if political in motive, eerily on-topic. Everybody's worried about caravans of vulnerable, desperate people, but these shootings are getting a tad endemic.
 

Drew

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Has a motive been established? I hadn't seen anything written on it. Still a tragedy regardless, though if political in motive, eerily on-topic. Everybody's worried about caravans of vulnerable, desperate people, but these shootings are getting a tad endemic.
Nothing yet, Ex-Marine, served in Afghanistan, possibly PTSD related, he'd been acting odd earlier in the year but cleared by a police mental health group after they interviewed him. Nothing about political or personal views, only identifying features during the shooting were that he was dressed entirely in dark/black clothing, and (not surprisingly, now that we know he was a former Marine) he was very proficient with handling and reloading his handgun.
 

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MFB

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I'm going to run for office on the platform of profiling former vets by how high they hold their rifles at rest, and I'm also putting a ban on HD Vision SpecOps Tactical sunglasses! How many more people could've been saved if this Marine couldn't see so well in the low-lighting atmosphere the bar was trying to create? I ASK YOU?!
 
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