{"id":4948,"date":"2008-10-14T11:03:55","date_gmt":"2008-10-14T18:03:55","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=4948"},"modified":"2008-10-15T08:15:40","modified_gmt":"2008-10-15T15:15:40","slug":"why-the-bailouts-dont-work-and-why-wall-street-loves-them","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4948\/why-the-bailouts-dont-work-and-why-wall-street-loves-them\/","title":{"rendered":"Why the Bailouts Don’t Work and Why Wall Street Loves Them"},"content":{"rendered":"

The stock market came back with a vengeance yesterday.\u00a0 On Friday’s episode of BloodhoundBlog Radio<\/a> we noted that the market was vastly oversold from a fundamental perspective and suggested a rebound after the weekend.\u00a0 This was prescient enough that the Mortgage Cicerone<\/a> made note of it, which is high regard indeed.\u00a0 So why am I not celebrating?\u00a0 Because yesterday’s reaction was as irrational as the sell-off.\u00a0 One thousand points?!\u00a0 Sure the correction was in there, but so was the exuberance of a seemingly ceaseless font of federal gifts.\u00a0 The markets like the latest ideas out of Washington and why shouldn’t they?\u00a0 Wall Street has done a good job creating an aura of representation – most people now believe that was is good for Wall Street is good for America.\u00a0 How else do you explain the frantic efforts our fearless leaders make each time the market drops?\u00a0 The rally cry lately seems to be: “If we make the Dow go up, we must be on to something.”\u00a0 This is nothing new.\u00a0 For years now the markets have taken a preeminent position in economics beyond their reach or relevance.\u00a0 One need look no further than earnings reports.\u00a0 You might report record earnings for your company, yet your stock is pummeled because the reported earnings did not equal what the market had already priced in to the stock.\u00a0 “You didn’t do as well as we thought<\/em> you would do based on our self-serving judgment of what is best for you.” (Which is shareholder profits, of course.)<\/p>\n

If you believe what you hear from the talking heads (and by virtue of the fact you are reading BHB, I doubt you do) the source problem for the economy is the toxic mortgage derivatives and their tentacle like reach.\u00a0 Everyone bought these things, even when they didn’t know they were buying them.\u00a0 Now (as the story goes) our problem is this: no one knows what this stuff is worth.\u00a0 Everyone is marking down their portfolios, no one wants to risk lending money and the initial bailout (bailout 1.0) didn’t phase anyone; all because we don’t know the real Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The stock market came back with a vengeance yesterday.\u00a0 On Friday’s episode of BloodhoundBlog Radio we noted that the market was vastly oversold from a fundamental perspective and suggested a rebound after the weekend.\u00a0 This was prescient enough that the Mortgage Cicerone made note of it, which is high regard indeed.\u00a0 So why am I […]<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,26],"tags":[],"class_list":{"0":"post-4948","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-investment","7":"category-lending","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1667,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1667\/the-800-pound-gorilla-in-the-corner-the-meltdown-of-the-wall-street-mortgage-market\/","url_meta":{"origin":4948,"position":0},"title":"The 800 pound gorilla in the corner – the meltdown of the Wall Street mortgage market","author":"Morgan Brown","date":"July 16, 2007","format":false,"excerpt":"As we go about our daily lives in the mortgage and real estate world; dutifully performing our job functions and taking the high road of customer enlightenment via blogs such as Bloodhound; we are faced with a very large gorilla looming in the corner of our workplace. That gorilla is\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1566,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1566\/how-do-you-get-to-carnegie-hall-practice-how-do-you-get-to-the-wall-street-journal-online-genius\/","url_meta":{"origin":4948,"position":1},"title":"How do you get to Carnegie Hall? Practice! How do you get to the Wall Street Journal Online? Genius . . .","author":"Greg Swann","date":"June 22, 2007","format":false,"excerpt":"Michael Cook's post on Private Equity investing was picked up as a related-info link by The Wall Street Journal Online. We've been linked from a lot of interesting places, but I think this is the new high-water mark... Technorati Tags: blogging, investment, real estate, real estate marketing","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1947,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1947\/wall-street-fed-cut-sittin-in-a-tree\/","url_meta":{"origin":4948,"position":2},"title":"Wall Street & Fed Cut Sittin’ in a Tree…","author":"Lani Anglin","date":"September 18, 2007","format":false,"excerpt":"I know Jeff's working on a whopper of an article to follow up on his last gem; what do YOU think of the rate cuts? \u00a0 \u00a0","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1889,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1889\/arms-look-scary-before-they-look-good-or-how-wall-street-dupes-the-little-guy\/","url_meta":{"origin":4948,"position":3},"title":"ARMs Look Scary Before They Look Good or (How Wall Street Dupes the Little Guy)","author":"Brian Brady","date":"September 4, 2007","format":false,"excerpt":"I don't look real smart today, do I ? Mortgage rates in general took a fairly substantial dive during the previous week with longer term rates dropping double digits in most cases and some rates returning to mid-2006 levels. However, the Mortgage Bankers Association reported a spectacular increase in the\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1147,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1147\/bad-loans-buried-in-the-back-of-the-breadbox\/","url_meta":{"origin":4948,"position":4},"title":"BAD LOANS: Buried In The Back Of The BreadBox","author":"Brian Brady","date":"March 14, 2007","format":false,"excerpt":"Let me tell you a story about how the subprime mortgage market collapsed and millions of baby boomers had to accept less money in retirement. If you liked the Da Vinci Code, you're gonna love this one. It's not wrapped up in sex, or murder, or corruption, just good-old fashioned\u2026","rel":"","context":"In "Enduring Interest"","block_context":{"text":"Enduring Interest","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/enduring-interest\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14788,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14788\/wall-street-journal-a-home-is-a-lousy-investment\/","url_meta":{"origin":4948,"position":5},"title":"Wall Street Journal: “A home is a lousy investment.”","author":"Greg Swann","date":"July 12, 2011","format":false,"excerpt":"Ahem: \"Today's young people would be foolish to imitate their parents and view ownership as the cornerstone of personal finance.\" From the Wall Street Journal:At the risk of heaping more misery on the struggling residential property market, an analysis of home-price and ownership data for the last 30 years in\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=4948"}],"version-history":[{"count":12,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4948\/revisions"}],"predecessor-version":[{"id":4978,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/4948\/revisions\/4978"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=4948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=4948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=4948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}