From $500,000 To $170 Million In A Few Months: The Next "Subprime Trade" Emerges
Ever since a few far-sighted, contrarian traders made a killing by betting on the collapse of subprime in 2005 and 2006 - and by implication on the implosion of the capital markets - a trade famously resurrected in the latest Wall Street movie The Big Short (whose Michael Burry recently warned that "The Little Guy Will Pay" For The Next Crisis, again) everyone has been dreaming to uncover the next "subprime" - a trade that has a 20-to-1 upside to downside ratio, which can be put on in massive size, and which would lead to a quick and lucrative retirement.
So far the next "subprime trade" remains elusive, with global capital markets continuing to grind ever higher thanks to constant central bank manipulation, as first called out on this website many years ago, and as admitted recently even by such "serious" legacy institutions banks as Bank of America which in an attempt to explain market instability
Central bank’s risk manipulation well explains local tails
A good way to explain why we have seen local tail risks arise so frequently since central banks began to heavily manipulate asset prices is with the following analogy, illustrated in Exhibit 1. Essentially central banks, by unfairly inflating asset prices have compressed risk like a spring to unfairly tight levels. Unfortunately, the market is aware the price of risk is not correct, but they can’t fight it, and everyone is forced to crowd into the same trade. By manipulating markets they have also reduced investors’ inherent conviction by rendering fundamentals less relevant.
This then creates a highly unstable (fragile) situation that breaks violently when a sufficient catalyst causes risk to rise – overly crowded positioning meets a market with little conviction.
The above explanation leads to a critical line of thought: perhaps the next "subprime" trade is not shorting a mispriced asset at all?
After all, all assets are mispriced as a result of central bank intervention.
As BofA admits "the market is aware the price of risk is not correct, but they can’t fight it, and everyone is forced to crowd into the same trade", which is logical: after all why should one fight the Fed when any time there is even a 5% drop in the S&P500, the Fed can and will either jawbone and threaten to cut rates or launch QE4 or NIRP, or just do it? In doing so, of course, the Fed merely "kicks the can" and with every failed attempt at reprice risk and bring back some trace of price discovery, guarantees that the next market crash will be the most epic ever, one which will wipe out not only the Fed's credibility but the bedrock of the modern financial and economic system, a monetarist system based on neo-Keynesian rules. Frankly, the devastation can not come fast enough.
But first, why not make some money?
And if one is limited from generating 20-1 returns in a market of suppressed volatility due to a global central bank puts, perhaps the next "subprime" trade has to do with the process of actually putting the trade on.
A process which involves ETFs.
To be sure, we - and many others - had issued many warnings about the very nature of ETFs in recent years, especially during 2015. Here is a brief chronology of the countless warnings we have issued on this topic in the past year alone:
- March 2015: What Would Happen If ETF Holders Sold All At Once? Howard Marks Explains
- May 2015: ETF Issuers Quietly Prepare For "Market Meltdown" With Billions In Emergency Liquidity
- June 2015: How Fund Managers Use ETF Phantom Liquidity To Avert A Meltdown
- July 2015: The Complete Guide To ETF Phantom Liquidity
All of these warnings became realized on August 24, the day of the infamous ETFlash Crash which even the SEC remarked on in the last week of December with an 88-page note on "Equity Market Volatility on August 24, 2015." What the SEC essentially said is that it is generally concerned with plumbing and exchange regulation, with an emphasis on ETFs.
To be sure the story of broken markets as a result of the epic proliferation of Exchange Traded Funds continued after August, with stories such as:
- August 2015: Was Monday's ETF Collapse Just A Warmup?
- September 2015: Mom And Pop "Will Probably Get Trampled": Alliance Bernstein Warns On Bond ETF Armageddon
- October 2015: How The Entire Short Volatility ETF Complex Could Be Wiped Out Overnight
- November 2015: How Illiquid Are Bond ETFs, Really? (Spoiler Alert: Very!)
Is it possible that "the next subprime trade" was so obvious that it was staring everyone in the face for the past year?
A trade which involved betting on the collapse not of the central-bank supported market, but the death of the instrument which allows this unprecedented global central bank "put" to prop up markets, and which like the infamous coiled spring in the Bank of America "revelation" is just waiting for a catalyst to snap: in other words, betting against ETFs?
Actually the answer is yes, and for some, the "next subprime trade" is already happening.
Meet David Miller and his Catalyst Macro Strategist Fund (ticker: MCXCX). The introduction, provided by WaPo reads like something straight out of a Michael Lewis book:
The Michigan-native is betting against one of the most popular investment vehicles for mom-and-pop investors: exchange-traded funds. The bets have paid off, turning Miller’s little known Catalyst Mutual Funds into one of Wall Street’s most successful players in 2015.
It sure sounds like a story about one of the lucky few who correctly predicted in 2006 what would happen to not just subprime, but the overall market just a few years later... and would retired filthy rich.
The comparisons between Miller's story and the "Michael Burry's" of the subprime era don't end there, because the young asset manager has not only figured out what to bet against, but how to make a lot of money in the process: ever since it started making complicated bets against some leveraged ETFs, Miller’s Catalyst Macro Strategies Funds has since grown from $500,000 in assets at the start of the year to about $170 million. It achieved a more than 50 percent return this year, placing it far ahead of its competitors.
In a year in which virtually not one hedge fund generated notable returns, and most were an embarrassment, it is surprising that not all financial media outlets are talking about Catalyst's performance, which as shown below, is quite impressive. Behold the 2015 performance of the Catalyst Macro Strategy Fund, which according to Morningstar held a total of $169.5 million in assets most recently.
Miller's initial target in the broken sector: leveraged ETFs: "Our goal is to identify poorly designed financial vehicles,” said Miller, Catalyst’s senior portfolio manager. “The strategy has certainly worked out well for us."
While still a tiny part of the market, the growth of leveraged ETFs has been explosive. Nearly nonexistent in 2005, the market has grown to more than $20 billion this year, according to data from Lipper. The market has doubled since 2011.
The regulators have, as usual, been asleep at the wheel, making such debacles as August 24 a recurring reality, and allowing people like Miller to make outrageous profits by betting against the broken market:
[A]s the industry has grown, so have concerns around whether investors understand the risks. The Securities and Exchange Commission proposed rules in December to rein in these type of funds. And the Financial Industry Regulatory Authority, also known as FINRA, has cracked down on brokers who have sold complicated ETFs they didn’t understand.
“The SEC and FINRA have been coming down on them, and they still have not gone away,” Miller said. “Money keeps coming into them despite their poor performance.”
But if leveraged ETFs are the "BBB" CDO tranches in the subprime analogy, then regular, and just as broken ETFs, will be the A, AAs and higher which will be the next to flame out: "Even traditional ETFs aren’t immune from market volatility. Over the summer, the price of some ETFs dropped off a cliff, then bounced back within minutes. Investors who automatically sold as their value plunged, faced heavy losses."
Catalyst may have been the first, but many more are coming, looking to profit from problematic ETFs. New York hedge fund Hilltop Park has employed complicated trades to bet against some ETFs, according to The Wall Street Journal.
Perhaps the final analogy to the subprime crisis is the infamous straw that broke the camel's back: back then, just like now, the fulcrum security was safe... until enough bets had been made against it (infamously by such as Goldman itself, which via Abacus and others, was selling exposure to CDOs only to short them at the same time), at which point the bubble bursts.
And while 10 years ago it was the subprime bubble, this time it will be the ETFs that go first as more and more bets against them proliferate, and when they do, it will be all up to the central banks to preserve the last artificial asset prices in "markets" which over the past eight years forgot how to discount reality, and merely reflect the intentions of a few clueless economist hacks.
To help accelerate this process, we present Catalyst Macro Strategy's latest prospectus, with hopes more modern "Michael Burrys" emerge and take on what the fulcrum security of today's broken markets.
- Login or register to post comments
- Printer-friendly version
- Send to friend
- advertisements -




Wall street brokers aren't rich enough yet, they really need that 3%.
Can't you see it coming?
Rep. Kanjorski's off-the-cuff, slip-of-the-tongue admission that the Great Recession was preceded by an almost instantaneous $150 billion withdrawal from the NYSE money markets is most instructional.
See it at https://www.youtube.com/watch?v=1zbqMJk6-Ek.
The poignant part comes in about midway. Don't listen to it just once. Listen 2-3, ever 4, times. This is the only time the truth has ever been revealed.
July like the 2007 bust was started with a sliver, so too will be the next one.
There is no NYSE, no specialists, no trading posts, nothing but an old set used as a prop on CNBC. Everything is Euronext/ Electronically traded 24/7 from Mahwah NJ. The 07 bust was aimed at Dick Fuld because he didn't go in on the 1998 bailin of Long Term Capital. I'm with Fuld, they got screwed with Tbonds? How stupid are they. Corzine went frontrunning Draghi and got screwed, how did that happen? He got bailed out, customers got 100% back, no jail time. Ruined company though, same as Fuld. Secret bailout with Corzine, he's Obie's buddy......and Hillary's too...so now this cannot be a racist post........
Buy TVIX if you want to make the big money.
Blahzay, thank you for posting that link to konjorski's 1/2 trillion pulled in an hour and and a half..lost that link and now have it saved.
it of course begs the question : why C Cox sec head at the time did NOTHING.
Who pulled those funds? mom and pop obviously not.
one would think the .gov doj and sec and all the congress oversite comm would have looked into WHO? pulled it.
they did not because they knew who did it, as all those transactions are recorded by banks and invst houses by law.
The elite did not want the public to know ..crime and corruption are the dollar.
I don't see Ned around much anymore, : (
by Ned Zeppelin
on Fri, 01/15/2010 - 17:47
#195390
That reminds me: Please add the phony baloney, completely contrived money market draw down of September 18, 2008 to the list of events that at the very least need to be fully and completely investigated as to who, how much, when and where. Do you really believe that much money was suddenly sucked out of the system in that span of time? I do not, and must be shown how it occurred. A not unreasonable request, in light of the dramatic steps the government took (an announced $250,000 account guarantee, right?) to "stop" the run, and the apparently fantastic danger such a run poses. The whole thing sounded contrived then, and sounds contrived now. Do you know anybody who ran to their money market fund that day and took out ALL of their money that day? I mean, WHO did that? And, is it really that easy to get that much money out that quickly in general? I mean, not everybody with money in a money market account watches it like a hawk on the Internet. I smell bullshit. Smelled it then, smell it now. Issa? Add it to the list. Throw this carcass on the table, grab the chest saw and let's slice this foul-smelling thing open and look inside.
Just for the heck of it - let's, for fun, assume that the run consisted of quite a few account holders simultaneously coming to the conclusion that they had better get their money out pronto, and you also need to assume, that this same group of account holders were assuaged and comforted enough by the "announced" $250K account guarantee to - all at once - stop. This is what we are told occurred. So, to me, that means the withdrawing parties were a group of people who had $250K or less in their accounts. Let's make the very generous assessment that these panicked folks had an average of $200,000 in their accounts. To get to $550 billion, that would mean 2,750,000 people took their money out in "an hour or two." Do you really believe that happened that day? Where did that money go? And also ask yourself, if there were that much panic in the streets, where's the corresponding bank runs, and grocery store runs, and ammunition runs? Multiply that panic over the much larger number of people who simply did not have that kind of money in a money market account, but a much smaller amount, and the numbers go exponential, and reveal this event to be something different from what it was claimed to be.
It was contrived, to create a sense of urgency. It was over before it started, and it was used to bludgeon foolish congressmen and the general public. Use your heads, people.
Yes. The "$250,000 guarantee" was the tipoff that this story stinks. I suppose that is why the story has disappeared down the memory hole, because it simply doesn't stand up to logical scrutiny, and was repaced with an even more dumbed-down narrative that is completely impossible to verify.
Kanjorksi was obviously stupid enough to buy it though-- a sad commentary on our elected officials, and their inability to think critically.
How well will their models hold up when UVXY SDS FAZ etc are compounding huge gains from an extended crash?
Will they catch enough of the destruction of the bullish ETFs to make it work?
If their positions are heading south they massively short the opposite ETF. For example and off the top of my head, if they were significantly shorting UVXY
and it spiked, they could then take a conterbalancing position in XIV in the hope of mean reversion. Potentially though, they could be wiped out of their XIV position
(if the referencing index rose 33.33% in one day, XIV would be worth zero), and also get killed with their UVXY position.
You're now going to have more firms shorting various 3x ETFs & ETNs but then, I would guess, they'll be other firms looking to blow up their short positions.
In August of this year there was a day, I forget when, when there were Short Sale Restrictions at IB on JNUG, JDST, DUST & NUGT simultaneously. I suspect it
was someone using the same strategy as these guys who were positioned on the wrong side and then started massively shorting the other side to balance
out their losing positon. I remember watching it at the time (I didn't have a position in any of them), thinking "this is freaking weird."
ABSOLUTELY NOT!!!!!! The opposite ETF does not represent the Mirror Image! You are sadly mistaken, as the other side has a smaller % of a smaller %, ad infinitum, and NEVER gets to ZERO.
The ONLY day of greater gain is the First Day of the REVERSAL, when it cuts like the Double Edged Sword that it is. After the 2nd day, you will make more by being long the gaining etf than by being short the loser.
The Time Value of Money, AKA Compounding, is a very important concept. In ETF's however, the miracle is accomplished by reverse/negative swaps.
UXVY and TVIX are NOT negative ETF's, and only mildly leveraged in comparison. BUY THESE and become RICH when VIX hits 200.
Forget SHORTING these ETFs, get that concept out of your head, and everything will become clear to you, I promise.....you need to go LONG JNUG, DUST, TVIX, UXVY grasshopper.
Oh, and there's this: (remember, you are not short by owning UXVY TVIX): http://www.zerohedge.com/news/2015-10-20/how-entire-short-volatility-etf...
Jenks, have a nice day! I'm looking out for you, really.
I suspect that they short both sides using synthetic shorts (because shares not available or borrow is insane)
Options are not perfect as when these get bumping the spread widens quite a bit. Buy at price X, but to sell is X-40%.
So.. first governments start using ETF's to manipulate the stockmarket...
and then the house of cards implodes...
like driving somebody's car and keep the engine at 7000 rps while ignoring that red light that says you have an oil problem...
Movie was excellent btw
True, that. I watched it online last night -- probably qualifies as one of my 3 most favorite movies.
And back to waiting for the next shoe to drop: with all the endemic distortions created by NOT dealing with what happened in 2007/2008 (and 2000/2001 for that matter), this next implosion is going to change society. Not just a few million jobs lost -- total phantom wealth obliteration. We should be thinking about betting against the dollar. As a paper fiat currency, its ties to true value are so far diminished, that the currency is near worthless. As much as I'd like to believe everyone is going to run to silver and gold, I think there are just too few people stockpiling physical metals. The new currency will be ammunition. Save and prepare accordingly.
Consider the fact that the idiots and even fraudsters who caused the crash and created the garbage CDO's are virtually all still there. Perhaos the market slap in the face reformed them but who wants to bet on that?
I don't see a problem with shorting MBS if it's properly hedged, and margin is properly managed.
I'm short MBS, and have been for months, but I've also set aside my profits from my corporate debt shorts to finance the trade.
I figure, as the bond market melts in corporate debt, the same players that were given free money from .gov, and have levered their paper are going to get hit even harder as rates rise.
Based on the flattening of the UST "safe bond" trade curve, short end catching the long end in yield, and the fact that yields on 2's-5's have risen, I think there's going to be some issues.
It looks like traders are hunkering down, and don't have much confidence in global central banks, for the near~mid-term.
Yen - Does anyone have confidence in central banks these days?
Edit: sorry Yen, just read the last line in your post.
I think it's more about weaning the financial addiction, from the last 7-8 years of central bank heroin...
I'd say most of the Zero Hedge clientele, is well in front of the curve, and fully understands what is in front of us.
There's other ways to indirectly short markets, indexes, and individual stocks. ;-)
I see a good future for gold when those margin calls start rolling in, off that 300+% =1toz leverage.
Hmm I didn't think Jelly Donuts were addictive. I guess you have to learn a new thing every day. :-)
In case you think I am being funny, well yes, but:
http://www.huffingtonpost.com/david-einhorn/fed-interest-rates_b_1472509...
"Poorly designed financial vehicles"
It's that easy? Fuck, those are everywhere.
It's just a matter of which one Kevin Henry drops the ball on first.
I guess it really IS how many digital 'joobux' you can stuff in a wheelbarrow! Whocooda[schlong]NOSED?
I have to laugh because evertime I see someone like this I ask,"Where do you think your going?"
Same place as the rest of us. Back to dirt.
Now they may think that they're doing their future family some good by leaving a bizillion dollars behind. But seriously, My ole man left me nothing and everything I have I earned by myself and I am SO GRATEFULE to him for teaching me that lesson that words cannot describe.
Saw “The Big Short” yesterday with my wife and sister in law. Brother in law, a devout Democrat and Hillary supporter who frets more over his retirement fund savings than a case of leukemia didn’t even want to see the movie. Wife fell asleep. Sister in law didn’t understand it, and wasn’t much interested in my attempts to explain. I liked the movie, and kudos to the producers for trying. But this is the problem folks; only a handful of people even want to understand or face the truth.
The best take away from the movie - that was actually presented very well – is that even if you make the right call you can lose if your counterparty goes bankrupt. That’s the thing that’s going to be different this time in the next crisis.
Heads they win, tails you lose. Same as it ever was.
You need to think in terms of being an pawn shop owner. ;-)
BTW, Is/Are your "Sister in Law and Husband", in the private sector? If so, where is the majority of their employers income derived?
Saw it myself yesterday, too. Well done movie and loved the 'stops' where shit got explained. Hope it wins a few awards.
My wife and I got there early for decent seats and I was interested in who was coming to see the movie. It was mostly 45-65 yr olds, pretty well put together folks (theater was in Costa Mesa/Newport Beach area), educated, successful types. Before the curtain went up, the atmosphere was light and holiday-cheery, but when the flick was over: no smiles, everyone either looked confused, worried or some other level of consternated.
I cheer Brad Pitt for getting behind Lewis' book and hiring a terrific director. Fuckin dead on movie. I lived/worked there in another life. They got that shit right.
Will it change anything? Probably not. But maybe?
Yen- with you on the yellow shiny stuff. Great time to add/get in there.
Best to ZH'ers in the New Year.
Nothing will change, except this time a bail in will rip folks faces off.
Same deal when I saw it. 45 and over and well to do folks. Most were quiet and concerned. Consternation sums it up. Most people just wanna go along to get along so trying to understand what is unfolding isn't fun or desired by most. It will affect them.
The movie must be a real slap in the face to most people.
While I'm sure that they go into the theater with some vague idea that Wall St. crooks made out like bandits prior to 2008 and then got a government bailout on top of that, I doubt most viewers fully comprehended the breadth of the corruption involved. The movie turns over the rock and shows all of the disgusting bugs scurrying around. It absolutely flays Wall St., TBTF banks, the rating agencies, the SEC, real estate agents, and the financial press. You exit the show with a very uneasy feeling that the American "way of life" is basically lying and cheating to strip honorable people of their life savings. That is a hard message for most viewers to swallow whole in one sitting.
Somewhere in the movie there is a quote to the effect that nobody really wants to hear the truth.
The truth is that a wide swath of the most "successful" people in America should have been thrown into the deepest dungeons available to sit in the dank and dark and feel rats gnawing the flesh from their bones, but, instead they received no punishment whatsoever. You hear Brad Pitt's character informing you that each 1% increase in unemployment causes 40,000 deaths in America. You learn when Michael Burry tried to bring his story to the powers that be in Washington, D.C., the reply was four IRS audits.
The theater was full (not difficult with only 40 seats). Nobody cheered or clapped at the end of the movie. Seeing the bloody financial ass-rape of your family members, friends, and communities depicted on the big screen, no matter how well acted and directed, does not inspire you to stand up and applaud, especially when it is made crystal clear that your government is there to help the rapists and extract payment from you for the services they rendered.
My wife wanted to go see it, in part because I talk about ZeroHedge over the morning coffee with her. She did not understand it at all, despite being prepped for it to some degree. She was used to the meme of "good guys" vs. "bad guys", and she was never able to identify any good guys to root for. She has a good heart, and maybe she was right. You cannot play the game and remain a good guy. Upon reflection, I think that was a major theme of the picture. It is money for nothing, and it is covered with blood.
Similar wiht my wife. She's heard it so long she is sick of my whining. Until recently. She's a realtor and sees how the NAR has promoted total BS stats for so long. Further, she recently experienced my EXCOMMUNICATION from WaterMark Church Dallas, TX.
The Pastor there - Todd Wanger - is a very smart guy and great salesman. Over a couple year private email discussion between the two of us, when it turned to TBTF WS and how they had infiltrated every industry and stolen from teh poorest amongst us and now Middle Class America, and how i felt he should atleast begin to have an open discussion wrt this with his congregation, he and his elders EXCOMMUNICATED me.
THAT opened my wife's eyes and ears. We are going tonite to see Big SHort. I hope it can do a better job of explaining the hows and whys and help her understand why these Mega Churches here in South - especially the SOuthern Baptist Variety like WaterMark Church - should be quickly castigated for their complicity.
There was a time when they got big loans to build these churches and simply got the loans rolled until forgiven to "spread the Money Changers' Words". But then inquiring minds such as mine began to make contributions and then demand to see funding sources. THAT is when these Mega Churches figured out , contemporaneous with the US IRS Tax Changes a few years ago, that as a "Non-Profit" they must produce those Financial Statements under color of law. That busted a bunch of them to anyone paying attenion.
Sooooooo......
they have now adopted our CONgress and USSC motto of "pay for Legislation and Court Rulings at the Highest and Most Corrupt Levels". They now take "Donations" from employees of TBTF WS Banks in the literal hundreds of thousands to Millions of Dollars in hopes of hiding thier most DISGUSTING form of spreadign Gawd's Word.......to the most susceptible and desperate of our nation.
Shame on the bastards. If their Gawd exists, I have demanded he make his presence known along with his dissatisfaction specifically, to these at the highest levels of what is supposed to be HIS HOUSE, to those so mislead.
Till then, I will anxiously wait for evidence and proof that their are consequences for misdeeds here on Earth cause from my ever present and critically-thinking perspective over my 50+ yeasr now, it seems these guys always win and there is absolutelly no drawbacks - certainly not here on Earth.
great write-up!
Similar exp. Last nightt. Full..I mean full parking lot. I expected big short theatre to be nearly empty as assumed most were there for star wars.
To my ssurprise the big short was full.....full of white 40 and 50 somethings.
Why not tell your brother-in-law that voting for Hillary Clinton because she's a woman is like eating a turd because it looks like a tootsie roll?
Questionable analogy. I don't think she looks like a woman
It's even worse than that. Even those with NO bets on the table will be screwed, and screwed bad. It will be those who can afford the loss the least that will suffer the most,
Uh oh.. these guys have been outed by ZH.. and that can only mean trouble.
Given their strategy is mostly reversion to mean, it won't take much for even a small cartel of RTM Vigilantes to take them out... Because you can't swing that much of a book on a single strategy and not either a) move markets without anyone screwing you over and/or b) paying the market piper
These guys are going down in 2016.... book it
Okay, I look forward to reading your financial statements in April. lol
Can you offer me some Non-GAAP guidance?
Maybe they should make highly leveraged bets against their own fund. Then when their approach blows up, they'll get even richer!
I think the ZIRP well is running dry ann. word play
It smells like something huge started to happen.
And it is far past time.
Would this successful strategy take advantage of the 'time decay' inherent in leveraged and short ETFs? If so, I wouldn't count on this fund doing as well if volitility were to increase dramatically.
Zero Hedge morons need to crawl under the table and think apocalyptic thoughts for the next 12 months.
If you're having trouble keeping the two dozen Zero Hedge conspiracies you've been tracking straight in your head - focus!
Stock up on all the popular Mountain House freeze-dried flavors.
Remember: the government is dogging your every step, so keep a low profile (again, preferably under your kitchen table).
And stop shaking like a Goddamn leaf!
Says the GMT:16 hundred knob goblin...
At least some Veterans are starting to realize how used they were.
Your Fig Leaf just fell off
I don’t think moron is the appropriate word.
Heavily biased by the wrong reasons where there are plenty of good reasons. And not willing to change approaches would have been a better way to describe many Hedgers. Let me show you an example:
By Larry from Pittsburgh: Repudiation is not the solution as it would destroy millions of innocent people through their investments, pension plans, 401-k’s etc. and it is unnecessary. Instead I would recommend a three prong attack:
1) The U.S. should issue debt free money to repay the national debt as it becomes due. If a bank created the money to buy the treasury bonds (which is very common) the money would be destroyed upon repayment but the money in circulation already would stay there.
2) Debt free money should be spent into circulation by states rebuilding their infrastructure.
3) 0% interest loans must be made available. I would start with the biggest private sector credit market in the country – mortgages. The U.S. is already guaranteeing around 97% of mortgages in the U.S. (http://georgewashington2.blogspot.com/2011/03/97-of-all-us-mortgages-are-backed-by.html) so why shouldn’t they own them?
The government could issue (debt free) the approximately $12 trillion required to buy all of the mortgages and then roll them over to 0% loans (mortgage holder must qualify).
http://realcurrencies.wordpress.com/2012/03/01/debt-repudiation-or-an-interest-strike/#comment-2124
There are way too many making good money from the ongoing disaster to ever want to change it. They simply shake their heads in recognition of the corruption while cashing their chips in at the window. WE are an indispensable part of the ongoing corruption as long as we engage in these "markets". Just as this article points out, many recognize what is going on, but rather than recoiling from it they still seek to profit from it.
WE ARE IT
You do realize that someone's interest payment is somebody else's income don't you?
There is no free lunch and no unicorns. In spite of what you're being told, capital has value
You also do know that, once there’s isn’t enough for one’s to live, there won’t be enough for one’s to rule.
Capital (paper) won't have any value as scarcities intensifies.
(1808-1887) Political theorist, activist, abolitionist Source: "No Treason #6" (1870) Rating: Categories: Banking, Corruption, Debt, Despotism, Economics, Illuminati, Power, Rothschild, Slavery, Tyranny
Front running dragon farts? They're on the other side of the rolling options trade. This will end badly.
That was a lot of words to say they're selling UVXY rips.
Certainly...and a lot of words to say a few newbs acutally bothered to read the prospectuses, realized that most of these are contango'd pieces of dog shit, and are utilizing our wonderful public options markets to short these f*ckers.
And unlike the OTC subprime CDO market of yesteryear, finding willing counterparties to the other side of the trade just takes a few clicks of the mouse.
-chomu