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The next action was to short the securities  

2012-04-10 08:17:53|  分类: 默认分类 |  标签: |举报 |字号 订阅

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Best Buy one of nations top retailers, in response to this issue had put in a program to buy back the old or defunct model, which will discount the newer model. The result of this has not supported the company as it lost over seven percent of its stock value.Marcel Wanders To be fair our current economic conditions is a contributing factor. Our financial crisis was not due to any one particular sector failure. This great recession which was powered by corporate, personal, and political greed and pandering in many areas was the primary cause. It isn't a republican or democratic thing; it is a power and greed thing. Let us start with Wall Street, which is finally being confronted. The opportunity to buy a home was increased by loosening regulations on the consumer. This in itself is not a bad thing. What took place was not just loosening regulations but wholesale deceit on those who were the most vulnerable, the middle class. Mortgage companies were not only reducing the capital requirements but issuing sub-prime mortgages on riskier customers. Wall Street was well aware of this fact, but instead of fixing this problem, they decided to take full advantage of it. Wall Street Hedge Fund Managers and Brokers decided to develop a new financial instrument called "Mortgage Backed Securities.Mac Makeup Eyeliner " These packages were sold all over the world at a premium. The second step was to hedge against these securities, you may ask why you would hedge on something that is supposed to be secure. These managers knew that what they were peddling was just junk, and also realized that there was an opportunity to make some real money when they fail. The next action was to short the securities, in other words to bet that they will fail. Of course this was done in a low key fashion so as not to raise suspicion or mistrust. Here is where it gets really good,Mac Hellokitty not only were they right and the market crashed on these securities, they were paid through the shorts they placed in the exchanges, but they also received the insurance payments when these mortgages went bad. A primary Insurer, AIG went bankrupt, covering these securities and the American taxpayer had to come in and save AIG from complete failure. Freddie Mac and Fannie May also ended up paying for this failure, which i may add were government guaranteed insurers of a major amount of these mortgages that were now "securities. "
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