This is probably the most sensible an informative bit of commentary on the current market conditions (DOW -387):
I love how 90% of farkers don't understand exactly what the crisis is right now.
It's not the fact that the housing bubble "burst". People aren't jumping out of skyscrapers because their house value went down by 5%.
The vast majority of the problem is that the credit market for certain types of bonds has tightened up, to the point that it's almost not even trading at this point. To those that are newbies, the bond market is roughly 10x the size of the stock market in terms of dollar value. It is huge. Bonds get traded back and forth every day, and billions upon billions of dollars worth.
What happened is that mortgage-backed securities are farked up. During the housing boom, lenders would give mortgages to people, then they would package them up and then sell a whole shiatload of mortgages to things like pension funds, hedge funds, mutual funds, etc. The lenders like this because they reduce their risk, and the funds like it because it's a reliable source of income, at least mortgage-backed securities are. Well, it turns out that the lenders were selling the funds investment grade mortgages, when in fact they were more like junk bonds; the people who got these mortgages not only faked their income, but in reality could only afford these mortgages under the best of conditions. Now that short-term interest rates have spiked up, many people have defaulted on these loans. More importantly however, the price of the mortgage-backed securities drop because their price is in part related to how reliable they are as an investment.
Now, many hedge funds invest in MBSs on margin, which really screws them up, because all of a sudden they owe a huge amount of money on worthless securities. This is why 2 Bearn Sterns hedge funds got screwed over and a 3rd one is in question. It's like owning stock in a gold mining company with a certain reported amount of gold, and then finding out that there really is no gold. The price will plummet, and if you bought that stock on margin, you will get a margin call.
The same thing happened with the French hedge fund that this article is talking about. What is worse, however, is that if the markets aren't trading, you can't tell how much the stock is worth, so the French stopped trading the funds until it can get better clarity as to how much their fund is worth.
The submitter's headline is misleading because the govt isn't injecting $12 billion, it's $12 billion more than they usually inject. They are always buying and selling bonds to create liquidity. This is what they mean by the US or Euro governments injecting funds into the bond market. They are going around buying bonds to create an artifical market because regular traders aren't buying them anymore. They are buying these bonds to create liquidity, so that traders will have confidence they can buy and sell bonds again, and once the market recovers they will turn around and start selling them back to replenish their reserves.
This is the real danger here. This MBS contagion has spread throughout the world because every one around the world has invested in US MBSs. We have no idea how bad this contagion has spread, but if this MBS problem takes down funds around the world, and the credit market really tanks and there is a flight to quality, making things like MBS fall even further, it could literally evaporated trillions dollars of peoples investments around the world.
From poster tstoneman.
Over the past 4 years, I've been both a Comcast and Cablevision subscriber. When I moved recently, I was "forced" into subscribing to Comcast due to whatever stupid regulations are in place limiting competition.
Let me list all the ways in which Comcast blows:
- Their customer service reps. are completely clueless. It took me five call to three different people to figure out a stupid promotion that they were running that required you to be a customer already. But clearly, on the ad, the terms and conditions state that it's available to new and existing customers.
- Their sales reps. are retards or just fuckups. So to ensure that I got the exact package I wanted, just before I hung up with the rep., I specifically went over each line item to ensure that I was getting what I wanted. Yet when the installation tech showed up - a day early, but an hour late - he didn't bring the right box! I looked at the box to see if there were component cables and as I suspected, there weren't. So I state "Hmmm...this doesn't look like an HD box" to which he responds "Yeah, I figured you wanted an HD box (gestures to TV)...those fuckups in sales...". I check the order and indeed, not only was I not signed up for the package that I wanted, I was not signed up for HD either.
- Their customer service sucks. So my wife goes to the local field office to tell them that they messed up their order. Instead of offering for a tech to come out for free to claim the box and install an HD box, they hand her a new box and ask her to return the old one by Saturday. That's quality service for ya' right there.
- The service sucks ass. This deserves several sub-points:
- The digital voice comes with a shitty modem that has led to noticeably slower Internet performance (i.e. loading pages, sending files, etc). You have no choice but to use this shitty modem.
- The digital cable is very unstable...many of the digital channels consistently lose integrity (blockiness, screen blacks out).
- The HD selection sucks.
- The fastest cable internet option costs $53 per month and it's only 8mbps downstream (and something like 1.5mbps up). Contrast this with Cablevisions Optimum Online with Boost which offers 30mbps down/5mbps up for $44.95+$14.95. Ho-lee shit. There is no comparison. To make matters worse, Boost comes with:
- A static IP (OH SCHNAPS!!)
- TOS allows outbound HTTP traffic over port 80!
- TOS allows outbound SMTP traffic over port 25!
- Comcast is expensive. The Digital Preferred, which you need to get ESPN HD, costs $74/mo. Plus, on top of the cable cost, you have to pay an extra $5 for HD channels and rental fee for the HD box. Cablevision? HD is included in all of the packages. Plus, you can get most of the HD channels with the Silver Package @ $68/mo.
So in conclusion, Comcast sucks. Cablevision has service to the zip code, but not to the street address...so what can I do but suffer