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User Info	Koolaid iditots; entered at 2007-12-02 00:35:52
Fengwu Posts: 421 Registered: 2007-11-17	I ran into this site a few weeks ago and became addicted to KD's tickers. I think he and some others here though have jumped overboard on this one. Yes, things are really bad. IMO will get progressively far worse over time. One must be very careful in extrapolating the Citadel/ETrade deal across the entire financial system. Citadel was a large ETrade investor who wanted to save their own butt when the stock's price plunged. They also saw a great opportunity to make a fortune IF their timing was correct. Citadel purchased E*Trade's asset-backed securities. When reviewing just one of these, what value does a person place on a tranche containing say a February 2017 and July 2023 mortgage payment on a house located in North Dakota? Now ask this same type of question hundreds or thousands of times on other little pieces of loans in that same security. There in lies the problem. Many vulture hedgies are very willing to buy at reasonable discounts. It's practically impossible to give a fair value on securities containing chopped up loans spread across the country. At best, they blindly gamble and place very low bids. Some think there's a huge conspiracy not to properly mark this stuff to market. The reality is these securities are packaged in such a complicated way where even THEY couldn't do it. This stuff is worth something but very tough to tell what. It didn't matter back when there was irrational buying. Not the same environment today. 2007-12-02 00:35:52