I have got to get into this game. This is a can’t-lose proposition. It’s like black jack, except that sometimes I’ll be a player, sometimes I’ll be the dealer and sometimes I’ll be both at the same time. If I can just get a grip on say…five or maybe ten million dollars, I can sit on a high chair next to those fellas who put the “ick” in slick and the “vic” in evicted. You know, the fellas who just about sucked the life out of the global economy.
By now, you know their names.
If you lost a home to foreclosure, you should know their names. If you can’t get a car loan or you’re stuck at home or you’re going to your third choice for college because you can’t get a student loan, you should know their names. If you still have a savings account and you’re getting pennies in interest when you used to get dollars, you should know their names.
For now, I’ll name just two: Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse. These big-time gamblers made billions betting on subprime mortgages before the credit crisis, and slurped up billions in what were, in effect, government subsidies when greed collapsed the subprime mortgage market. Now these fellas have started a new game—the one I have got to get into—and the chips are…I’m not making this up…. subprime mortgages, some of the very same so-called toxic assets that were so poisonous that only the Federal Reserve Bank could swallow them and survive.
Bundles of these subprime mortgages are kicking out 7% to 9% percent returns. Stay with me. Don’t be afraid of the numbers. Think of it this way, for every dollar Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse put down on subprime mortgages they get about 10 times the rate grandma gets for every dollar in her certificate of deposit.
And you know what else--- why I have got to get into this game? Every dollar that grandma put in her account was a dollar…..four quarters, ten dimes.. a hundred pennies. But Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse
recently paid $6 billion for subprime mortgage bonds with a face value of $13 billion, according to Bloomberg News. They got this better that 50% off deal from the Federal Reserve Bank of New York.
Let’s slow down a minute and review. Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse get a rate of return that’s 10 times grandma’s and dollar-for-dollar they risk half as much money as grandma to get that return. Right now, people reading this who are not afraid of numbers are saying I’m unfair to Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse. They’re saying I should recognize that the big-time gamblers are assuming a lot of risk, because, after all a lot of those subprime mortgages never will be paid off and there won’t be any return. Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse could lose money.
Fair enough.
But the thing is, Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse are not holding on to all that risk. They’re re-selling those toxic bundles and taking an immediate profit off the top. They win going in by buying the subprime mortgages at a discount. They win while they hold the mortgages (7% to 9% return). They win when they sell at any price higher than they paid. They can’t hardly lose, and that’s why the people calling the shots at Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse are in the 1 percent casting a shadow on the 99 percent.
Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse are willing to deal me in, but first I have to show them a bankroll big enough to choke ten mega-church deacons. Gimme-Some-More Goldman Sachs and Can’t-Stop-Countin’ Credit Suisse know I don’t want to occupy Wall Street. They know I just want to pick up some chips.
I’ve got 10 large…. Somebody front me the rest….
