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Did Jeffrey Epstein Personally Set Off the Financial Crash of 2008?
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As you may recall, the timeline of the 2008 financial collapse got serious in March 2008, when the Wall Street firm of Bear Stearns started to go under due to mortgage-based securities. The New York Fed tried to bail Bear Stearns out, but it still became insolvent anyway. Then in September 2008, Lehman Brothers started to drown as well. Thinking that the lesson of Bear Stearns was to not throw good money after bad, the authorities let Lehman go under, which then set off the global panic.

Interestingly, Jeffrey Epstein may have personally initiated the dominos falling that eventuated in the collapse of Bear Stearns by asking, on April 18, 2007, for his $57 million back from a hyper-leveraged Bear Stearns hedge fund investing in mortgage-based financial gimcrackery.

Oddly, this might be one of the few actions I’ve heard about Epstein that isn’t obviously shady. He probably got the $57 million in the first place in a crooked manner, but he had the right to try to retrieve what was left of his money.

From the New York Times financial section in 2007:

More Bad News for Jeff Epstein?
BY DEALBOOK JULY 11, 2007

It was just about a year ago that Jeffrey Epstein, the reclusive financier, was being charged with soliciting prostitutes in Palm Beach, Fla. He may now have another image problem on his hands.

BusinessWeek reports that Mr. Epstein’s Virgin Islands-based money-management firm, Financial Trust Company, is listed in a filing with the Securities and Exchange Commission as a stakeholder in Bear Stearns‘s High-Grade Structured Credit Strategies Enhanced Leverage Fund, which became much easier to refer to in recent weeks as “Bear Stearns’ collapsing hedge fund.”

It is a tantalizing nugget of information about someone who rarely discloses anything about his business or his billionaire clients. Despite his penchant for privacy, Mr. Epstein runs in prominent circles: he once flew former President Bill Clinton on his 727.

Regulatory filings show that Mr. Epstein’s firm had voting power over 10 percent of the equity in the Bear Stearns fund, which, aided by loans from some of Wall Street’s biggest banks, bet heavily on the securities linked to the market for subprime mortgages, or those to homeowners with weak credit histories.

As the subprime mortgage market has been rocked by a rise in defaults, many of those bets have gone bad. As of the end of April, the Bear fund was down 23 percent for the year.

Mr. Epstein did not respond to BusinessWeek’s calls, and his lawyer had no comment.

We now know that Epstein had invested $57 million in this Bear Stearns fund run by Ralph Cioffi and Matthew Tannin, two of very few Wall Street executives ever put on criminal trial over The Crash. (They beat the rap.)

From “The Secret History of the Bear Stearns Crash” in Fortune in 2009 by William Cohen:

After 40 months of positive returns, the sudden and sharp decline in the two hedge funds was new territory for Cioffi and Tannin. They struggled mightily to figure out what to do. On April 18, one of Cioffi’s investors, who had $57 million invested, informed him that he was considering redeeming his money.

The unnamed investor wanting his money back was very likely Jeffrey Epstein.

Cioffi told the investor that the portfolio managers had $8 million of their own money invested, one-third of their liquid net worth. He neglected to tell the investor that he had taken $2 million of his own money out and invested it in his other hedge fund. …

Epstein appears to have been one day ahead of Cioffi and Tannin in figuring out the end was nigh:

[Tannin] went on to wonder whether the funds should be closed or significantly restructured. The argument for closing the funds was based on the market and on a complex internal April 19, CDO report, which was a new analysis that Tannin had recently perused. “If we believe the [new CDO report] is ANYWHERE CLOSE to accurate, I think we should close the funds now. The reason for this is that if [the CDO report] is correct, then the entire subprime market is toast,” wrote Tannin. “If AAA bonds are systematically downgraded, then there is simply no way for us to make money – ever.”

Wikipedia now synthesizes the bits and pieces that have appeared here and there over the years:

In August 2006, Epstein, a month after the federal investigation of him began,[56] invested $57 million in the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage hedge fund.[55][59] This fund was highly leveraged in mortgage-backed collateralized debt obligations (CDOs).[59] On April 18, 2007, an investor in the fund, who had $57 million invested, discussed redeeming his investment.[60] At this time, the fund had a leverage ratio of 17:1, which meant for every dollar invested there were seventeen dollars of borrowed funds; therefore, the redemption of this investment would have been equivalent to removing $1 billion from the thinly traded CDO market.[61] The selling of CDO assets to meet the redemptions that month began a repricing process and general freeze in the CDO market. The repricing of the CDO assets caused the collapse of the fund three months later in July, and the eventual collapse of Bear Stearns in March 2008. It is likely Epstein lost most of this investment, but it is not known how much was his.[60][59]

By the time that the Bear Stearns fund began to fail in May 2007, Epstein had begun to negotiate a plea deal with the U.S. Attorney’s Office concerning imminent charges for sex with minors.[55][56] In August 2007, a month after the fund collapsed, the U.S. attorney in Miami, Alexander Acosta, entered into direct discussions about the plea agreement.[56] Acosta brokered a lenient deal, according to him, because he had been ordered by higher government officials, who told him that Epstein was an individual of importance to the government.[40] As part of the negotiations, according to the Miami Herald, Epstein provided “unspecified information” to the Florida federal prosecutors for a more lenient sentence and was supposedly an unnamed key witness for the New York federal prosecutors in their unsuccessful June 2008 criminal case against the two managers of the failed Bear Stearns hedge fund. Alan Dershowitz, one of Epstein’s Florida attorneys on the case, told FOX Business “We would have been touting that if he had [cooperated]. The idea that Epstein helped in any prosecution is news to me.”[55][6][62]

 
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  1. Anonymous[427] • Disclaimer says:

    What no one is talking about is what is going to become of his 727. There aren’t really a lot of customers for them, because they require a three man crew and are not especially fuel efficient. Someone should be working to get it intact into a museum with enclosed storage, probably.

    • Replies: @Mr. Anon
  2. Bear Stearns’ robbing Peter to pay Paul operation was destined to collapse at some point. Epstein’s Liquid Funding Ltd. likely kept the fraud going longer than it should have run by colluding with Bear Stearns to hide toxic assets that should have been disclosed on the bank’s balance sheet.

    When the Federal Reserve and Congress bailed out the toxic assets during the 2008 Financial Crisis some of that money surely went to Epstein.

    Did Bob Barr’s father, William Barr, hire Jeffrey Epstein for his first job teaching teens at the elite Manhattan Dalton School? Before becoming headmaster at The Dalton School, William Barr was a member of the OSS, the predecessor of the CIA. Was William Barr using his role as headmaster of an elite Manhattan prep school to recruit for the CIA? College dropout Epstein would go from teaching calculus to Manhattan high schoolers to a top trader at Bear Stearns.

    • Replies: @BenKenobi
    , @Clifford Brown
  3. Bruce says:

    Provided prosecutors with information, provided prosecutors with hookers, tomayto, tomahto.

  4. Epstein was an informant for Mueller’s FBI in 2008. Talk about a busy boy.

  5. Hopscotch says:

    Fantastic find. Yet more evidence that “systemic risk” is comically understated by both Normal shaped distributions, as well as Taleb’s fat-tailed distributions. When you have a few thousand people of a single ethnicity channeling a few trillion dollars through less than six financial institutions, you are better off estimating their collective personality blindspot, than mathematically modeling the overall system or the individual financial instruments. More so, when those dollars are channeled into subprime lending for blacks and Hispanics in a handful of metros.

    Probably not unrelated to the fact that hedge funds have shifted away from hiring physics and math PhD’s, to hiring many Indian, Asian and white computer scientist whose “racist” algorithms are geared towards spotting clusters in behavior, as opposed to developing an equation for a Grand Theory of Behavior.

  6. OT-

    The New York Times has demoted Jonathan Weisman, formerly a deputy Washington editor, for his inconsiderate tweets and somewhat belligerent emails.

    Is that enough?

    • Replies: @AnotherDad
  7. Mr. Anon says:

    I haven’t seen any mention in the media of the fact that Jeffrey Epstien seems to have won a huge Oklahoma lottery jackpot in 2008. An entity which he controlled, the Zorro Trust (which seems to be the owner, or in some way affilliated with his Zorro Ranch in New Mexico) claimed the jackpot with a winning ticket that was purchased at some gas station or convenience store in some podunk Oklahoma town. The prize, in the form of a lump-sum of about 29 million dollars (the value of the jackpot was 85 million in total) was paid out on July 2nd, 2008, the day after Epstein began his 13 month Jail-cation in florida.

    WTF?

    Is that what “billionaire” financiers typically do? Well, I have a diversified portfolio of stocks, bonds, real-estate, commodities, and – oh yes – I bought a lottery ticket in Oklahoma and I’m hoping that’ll work out for me (it sounds better if you imagine Norm MacDonald saying it).

    The Multi-state Lottery Association (MUSL) has had it’s own scandals involving a rogue employee fixing lotteries:

    https://en.wikipedia.org/wiki/Hot_Lotto_fraud_scandal

    So what’s up with all that? Did Jeffrey Epstein know Eddie Tipton? Or somebody else at MUSL? Was that lottery fixed by Epstein? Or by someone for Epstein? What gives?

    Or was Jeffrey Epstein just incredibly lucky.

  8. Kronos says:

    Is there any indication that Epstein hired a PR firm? I mean, the guy was involved in LOTS of shady stuff. Even including his political ties, it’s amazing he lasted this long.

  9. he once flew former President Bill Clinton on his 727.

    “Once”?

    • Replies: @Kronos
  10. BenKenobi says:
    @Clifford Brown

    “Perhaps it would be simpler to dissolve the elite and form a new one.”
    – Bentolt Kebrecht

    • Replies: @Dieter Kief
  11. Might I humbly suggest that the problem here is in plain sight. Having something called

    High-Grade Structured Credit Strategies Enhanced Leverage Fund

    Or to be pedantic, having such a beast that has any connection to, has “leverage” from, entities involved in providing credit to any piece of the real economy. If a bunch of these financial “geniuses” want to setup a fund to go blow their money proving their genius … peachy! But leverage from anything real. No. Lose your own money not anyone else’s.

    And the idea of financial parasites trying to make “enhanced” profits off of mortgages i.is inherently financial parasitism.

    How to safely, stably finance mortgages–i.e. having to tie up money for long terms–is not some rocket science unsolvable problem. Even a financial non-genius like me can solve it. Oh, ok, how about we have several giant publicly traded corporations with multi hundreds of billions capitalization–not leverage, just capitalization–that do nothing but mortgage finance. Their returns would look like a long time average of mortgage interest rates, minus their costs. They would have their own internal compensation incentives to employees and managers based on long term performance (i.e. writing non-defaulting net-profitably mortgages) that would work against fraud and bubblicious stupidity. Their portfolio–rates/terms/defaults–would be in public filings. The market’s valuation of these companies would reflect both how well they are being run and the overall prospects for mortgage interest rates. You want to invest in mortgages, buy their stock.

    These businesses would be about exciting as say … power companies. But that’s ok. The purpose of finance is not to provide looting opportunities for financial parasites … but to actually finance productive activity!

  12. @Clifford Brown

    Lemme see Roxane Gay? and Jonathan Weisman?

    Nope, neither one belongs in my nation. They are both citizens of Rainbow not America.

  13. Richard S says:

    Jimminy-jillickers! It’s almost as if there’s something going on behind the scenes, like one of those “canards” I’ve heard tell of…

    Sure let’s ask Epstein during his trial!🤣

  14. Now, we just need to tie him to 9/11, Chernobyl, the Nixon administration and the Kennedy assassinations, and then we can close the book on 20th century American history and simply write: Jeffrey Epstein did it.

    • Replies: @Cagey Beast
  15. Kronos says:
    @Reg Cæsar

    More like 27 times. Both with and without the secret service.

    https://www.zerohedge.com/news/2019-08-10/jeffrey-epstein-dead-apparent-suicide

    “According to flight logs, former President Bill Clinton flew on the “Lolita Express” a total of 27 times.”

    • Replies: @Reg Cæsar
  16. The fact that a withdrawal of 57 million bucks could bring down the house of cards just confirms that that, yeah, it was a house of cards. Like A.D. above says, it’s not rocket science to lend long-term money at a couple of points above what you pay interest on, as safe investments for depositors.

    The problem is a lack of sound money, and the FED is THE promoter of unsound money. For those Socialists around here that will soon point out “Capitalism! Capitalism!”, please understand that the Federal Reserve’s distortion of the biggest market there is, the price of money, is what’s allowed those big highly-leveraged “banks” to exist in the form they did. Good money chases after bad, is the way they put it. Why would individuals and funds put money in staid, solidly-funded financial institutions per A.D. when they can come out better putting money into the government-encouraged ponzi-institutions, backed by the full faith and credit of the US Feral Gov’t.

    It’s a game of musical chairs, and everyone thinks they can get a seat (pull out their funds) before the music stops. Maybe Jeff Epstein had the same idea.

  17. “Get [The Big] Short[y]”?

    Is it possible that Jeffery Epstein had been in part primed to pull back on his bet placed on subprime mortgagtes by hearing that, say, a Jamaican housekeeper (or perhaps a relative of an underage prostitute) employed on his island retreat had recently come to
    own something like “…five townhouses in Queens”?

    https://www.takimag.com/article/the_bubble_hollywood_style_steve_sailer/2/

  18. My conspiracy theory (alert the FBI!): Epstein’s suicide was faked and the FBI sneaked him back onto his island by faking a raid.

  19. Dave Pinsen says: • Website

    And the idea of financial parasites trying to make “enhanced” profits off of mortgages i.is inherently financial parasitism.

    Really, it was more symbiosis that parasitism. More investors willing to buy mortgage-backed securities means more availability of mortgages to borrowers.

    Now, admittedly, this all went too far, largely due to all sorts of government intervention. But there’s nothing inherently wrong or dangerous about securitizing mortgages, provided some common sense standards are adhered to, such as income verification of borrowers, honest appraisals of the properties, and reasonable down payment requirements. The last one is probably the most important, both because it means the borrower has skin in the game, and because it gives a valuation cushion.

    Ideally, and often, securitization means people with spare capital get to returns on their money, and people who need to borrow get better rates than they would otherwise. Where this goes wrong is when standards are weakened too far. Absent any government intervention, it would probably be hard for most Americans to get mortgages with <20% down payments, or to get 30-year mortgages. But government programs that enable people to get mortgages with 3.5% or less down not only increase risk but inflate housing prices, making housing less affordable.

    As for using leverage on top of all that, that’s not ideal, but this sort of thing isn’t uncommon when yields are low. Really, they should have been higher to more accurately reflect risk, obviating the need for extra leverage.

    • Replies: @Polynikes
  20. Bruno says:

    The enhanced leverage fund had 1 billion investment and the enhanced one, 600 million of wich 57 were Epstein money then.

    In June, Bear Stearns gave to the fund 1,6 billion of fresh cash to cover all margin calls before they recognized in July that the first one lost 90% of its value and the other one 100%.

    So it doesn’t seem that Epstein April demand created any liquidity problem.

    It’s all the investment strategy that went down : the fund weee just buying the most secure chunk of bonds (CDO) – AAA – with borrowed money, making a profit out of the difference of interest rates. They bought products (CDS) to hedge the risk for the credit of borrowing interest.

    The problem is that there was a big amount of delinquencies among home owners. So the creditors (banks) that had taken CDO as collateral of their credit to borrowers were feeling the pain because both the credit and it’s collateral were going down. As those creditors were lenders to the fund, they had to require addition guarantees in form of cash. The crazy thing is that the fund manager started to sell the bond to repay the money creating a downward spiral.

    But ultimately, as the level of delinquency on debt from home « owners » was high, all the rate of CDO were going to go down to junk, credit and borrowing money would go high, and there is no way any profit would be made.

    So in this market structure – independent of the funds provided – the better think was to close the funds as quickly as possible, because all funds with this strategy – even with a more cautious strategy – meaning less leverage and more liquidity – would go down.

    Epstein wasn’t any problem. Banks lending money to poor people with bad credit behavior was the problem that would kill the « absolute return » strategy.

    • Replies: @The Alarmist
    , @anon
  21. Epstein won the Powerball Lottery.

    Seriously.

    He won $41 million back in 2008.

    Unfortunately, that came to “only” $29 million after taxes.

    On the day before Epstein’s “suicide,” former New Mexico Governor Bill Richardson was named as one of the men who abused girls trafficked by Epstein.

    So interesting “coincidence.”

    • Replies: @Dave Pinsen
    , @Kyle
  22. High-Grade Structured Credit Strategies Enhanced Leverage hedge fund ….

    I thought BS reserved these funds for widows and orphans. The term sheet for this fund required at least 40 days written notice from the last business day of the month and provided for a not insignificant redemption fee for an ad hoc redemption; he would have escaped the redemption fee with 60 days prior written notice at an annual anniversary of his initial contribution to the fund, or if the GP waived the redemption fee. Given how much leverage Epstein seemed to have over everybody, it is not inconceivable that the fee would be waived, but BSAM would have been in no hurry to disgorge the cash; in fact, the fund essentially went bust in June 2007, when BS poured $1.6B to bail it out while it made redemptions like those of Epstein. It was formally bust at the end of July, so not quite a year.

    In any case, Epstein seemed to have a talent for not realising, “Gee, it’s time to get out of Dodge,” until it was too late.

    … Ralph Cioffi and Matthew Tannin, two of very few Wall Street executives ever put on criminal trial over The Crash. (They beat the rap.)

    The only surprise here was that they were ever put on trial, but I guess Goldman Sachs wanted to be sure these guys were dead and buried. Oddly enough, BS was also known for firing Larry Kudlow, ostensibly for his cocaine addiction, which was another rarity … the firing for the addiction, not the addiction itself.

  23. Epstein’s corpse looks different from his previous pictures.

    I wonder why.

  24. @AnotherDad

    How to safely, stably finance mortgages–i.e. having to tie up money for long terms–is not some rocket science unsolvable problem. Even a financial non-genius like me can solve it. …. The purpose of finance is not to provide looting opportunities for financial parasites … but to actually finance productive activity!

    This is why you don’t get multi-million dollar bonuses.

  25. Dave Pinsen says: • Website
    @JohnnyWalker123

    Looks like it was a different Zorro Trust.

    • Replies: @Mr. Anon
    , @Barnard
  26. @JohnnyWalker123

    Kind of looks like Charlie Crist in that one profile shot … has anyone seen Charlie lately?

  27. Fascinating that the father of US Attorney General and former CIA officer (1973-77) William Barr, whose Kirkland & Ellis law firm had Epstein as a client –

    AG Bill Barr’s Jewish-born father, later converting to Catholicism, & also former intel officer (OSS, WW2) Donald Barr –

    Who was headmaster of the Dalton School which gave Jeffrey Epstein his first job –

    Don Barr authored a 1973 fantasy book on the topic of sexual slavery, including scenes involving the rape of barely adolescent young teens, ‘Space Relations’, book still available on the web – photo of the book by Donald Barr

    And as well as 4chan announcing the ‘death of Jeffrey Epstein’ well before any news media –

    Fascinating too that a little over 3 hours after the ‘discovery of Jeffrey Epstein’s body’, 4chan also had another post by someone claiming to be working at Epstein’s jail, saying that the morning Epstein allegedly ‘died’, it appears Epstein was put in a wheelchair and driven out of the jail in a van, escorted by a man in a green military uniform – 4chan post here, with timestamp Pacific West Coast time so about 10:44am NYC time

    Indeed if Epstein was running a giant underage-sex-blackmail operation for Mossad & the CIA for a couple of decades, one of Mossad’s biggest projects, a priority for Mossad would be to rescue their Mossad operative from a negative fate … a fake-seeming ‘suicide’ would be the right kind of ‘Mossad jailbreak’ … which a ‘former’ CIA officer like Attorney General Barr might be glad to assist

    “Epstein is a hero in Israel and they would do anything to save him.”
    – Gordon Duff of Veterans Today

  28. @JohnnyWalker123

    Epstein’s death was on “4 Chan” almost an hour (40 minutes) before it was published by the news media. Buzzfeed is reporting this.

    How would an Anonymous “4 Chan” user know that?

    Even more interesting. 10 minutes before Epstein’s death was announced on tv, an Anonymous “4 Chan” poster (who claimed to be the same guy who announced the death) claimed the Epstein corpse was a body double.

    So when you consider how the pictures of alive Epstein look different from the corpse, the above “4 Chan” user may have offfered a reason why………..

    • Replies: @Polynikes
    , @Svigor
  29. Gordo says:

    I’ve always had a slight concern that lotteries are fixed.

    I thought though it was just my paranoid tendencies driving that concern.

    But what an opportunity if it was.

    What other big money items can anyone think of that could be skimmed? The EU springs to mind, exchange rates with insider trading, captured Buttf*ckistan gold reserves.

    Is that where a lot of the money goes, or am I just paranoid?

  30. Polynikes says:
    @Dave Pinsen

    At the end of the day,minus immigration, the population growth is flat and need for vast additional construction is not there. “More availability of mortgages” just means more inflation of home prices. They accomplish this by lowering down payment standards which are basically 5% now instead of the traditional 20%.

    This is good for people who own homes, not those buying them. It isn’t necessarily a good, or bad, thing overall. Just picking winners and losers by government intervention.

    • Replies: @Hhsiii
  31. George says:

    Jeffrey Epstein is the real life Forrest Gump.

  32. Polynikes says:
    @JohnnyWalker123

    Anyone can post on 4chan. You can right now. That one (of thousands? Millions?) of the users posted something accurate does not mean anything else there is necessarily accurate.

    Lots of problems with that theory and narrative. First, if it was some covert operation why would anybody in the van be wearing military fatigues? Also, to what end does snuggling him out help anyone? Isn’t simply killing him the easiest? If somebody wanted him out, seems like bumping off/buying off a couple witnesses would be easier than involving the whole cia/FBI to fake his death. Etc, etc, etc..

    • Replies: @Anon
  33. Anon[278] • Disclaimer says:

    Betteridge’s law of headlines: Any headline that ends in a question mark can be answered by the word no.

    Anyway, I thought the latest conspiracy theory was that Epstein’s whole investment/Wall Street thing was fake, nobody had ever heard of him, he didn’t know what he was doing. I called that out as BS, and it is, but now the pendulum has swung to the point that oh yeah he was big into investment and in fact took down the global financial system. Oh, lordy!

    My advice in times like this: Tune it out, wait six months or a year, and then see what in fact turned out to be true. Unless Epstein personally shoved his dick in your ass, you don’t need to know the details anytime soon. I did that with Russia, although it took almost three years, and it saved me a lot of grief and time. Anytime I saw “Russia” or “ Mueller,” click, and I was off to something else.

  34. Hhsiii says:
    @Polynikes

    I have bought a couple of coop apartments since the crash and both required 20% down. The last one I bought in 2018 and put down 50% (from selling the first one). Maybe housesyou can put down less, but that’s usually through programs for which I wouldn’t qualify.

    • Replies: @Polynikes
  35. @Achmed E. Newman

    The problem is a lack of sound money, and the FED is THE promoter of unsound money. For those Socialists around here that will soon point out “Capitalism! Capitalism!”, please understand that the Federal Reserve’s distortion of the biggest market there is, the price of money, is what’s allowed those big highly-leveraged “banks” to exist in the form they did.

    But the Fed is the ultimate private (‘independent’) bank. It isn’t owned by the public, but by Wall Street. So how is the Fed socialist?

    • Replies: @Achmed E. Newman
  36. Kyle says:
    @JohnnyWalker123

    The nerds on reddit say purchasing winning lottery tickets is a method of laundering money. That doesn’t explain how he knew who had the winning ticket, but it does exonerate him from somehow rigging the lottery. Reddit is also saying that it’s common for lawyers to contact lottery winners and ask to purchase tickets. Maybe lawyers have access to information about winners before the public does so they can call and offer services?

    • Replies: @Polynikes
    , @Jack D
  37. @Bruno

    … the fund weee[sic] just buying the most secure chunk of bonds (CDO) – AAA – with borrowed money, making a profit out of the difference of interest rates.

    CDOs/CMOs have a number of tranches of varying credit quality, but the fact is that even the AAA-rated tranches were AAA in name only, as the underlying CMO pools were AAA only in the sense they had a first claim on cash flows from repayments on the underlying subject to an assumed default rate. It was assumed the underlying borrowers would behave as they should and not as they might. They used leverage because the coupon on AA- or better tranches was pretty unspectacular and they were considered relatively safe, so while there was a play on interest rate differentials, that was a secondary consideration to juicing up “a sure thing.”

    BTW, the BSAM fund allowed for aspired to up to 90% of the fund being invested in AA- and above and up to 10% to ratings below that. Wanna bet they were dancing closer to AA- than AAA?

    The problem is that there was a big amount of delinquencies among home owners. So the creditors (banks) that had taken CDO as collateral of their credit to borrowers were feeling the pain because both the credit and it’s collateral were going down.

    No, commercial banks originated the loans, then packaged them into CMOs originated by investment banks “buying” the loans and selling the pools of them in various tranches to investors willing to hold the risk at various levels of return for a given tranche. This in turn freed up bank capital to make even more loans. The fees in originating loans and selling them to investors were far more reliable than the returns on actually investing in the risk of pesky consumer debt. The commercial banks felt the real pain when the housing market locked up and nobody was transacting; the investment banks got a double whammy from no fees for originating new CMOs as well as for the hit to value of any they might have held in proprietary trading.

    Epstein wasn’t any problem. Banks lending money to poor people with bad credit behavior was the problem that would kill the « absolute return » strategy.

    No, if Epstein wanted to pull that much money, he was a problem. If he was pulling this much money, he would certainly not have been alone, which is how it turned out. To redeem, BSAM had to sell the underlying assets, and found there were no takers at any prices near those assumed when they had valued the fund at various points in time. It was like a run on a bank; as long as everyone kept their money in the fund and took their losses as provided for by the tranching structure, everyone might not be happy, but they would for the most part have gotten out with perhaps more than they ultimately got.

    As for the deadbeat borrowers, the whole house of cards was predicated on more than a few of them defaulting; the “poor” were almost certainly less of a problem than greedy middle- and upper-class borrowers who were carrying way too much in mortgages and even multiple mortgages on properties the value of which they were sure could only go up.

    • Replies: @Bruno
  38. BB753 says:

    Did Epstein also start WWI?

    • Replies: @Lurker
  39. Sean says:

    Did Jeffrey Epstein Personally Set Off the Financial Crash of 2008?

    Yes. Great post.

    Epstein appears to have been one day ahead of Cioffi and Tannin in figuring out the end was nigh:

    NO.

    Retail Billionaire Behind Victoria’s Secret Says Jeffrey Epstein ‘Misappropriated Vast Sums of Money’ From Him L Brands founder Les Wexner said he discovered funds had been misappropriated after he decided in late 2007 to sever ties with his longtime …
    Leslie Wexner, in letter to foundation, said the amount was at least $46 million

    The schoolgirl at Palm Beach High calling a 14 year old a prostitute sugarberbaby, thereby starting a fight that led to the discovery she had hundreds of dollars on her; the principle calling in the police; Epstein getting charged with procuring under age girls; Les Wexner deciding to fire the arraigned Epstein as the money manager of the Wexner fortune in late 2007, and as a result discovering Epstein had embezzled about 50 million and forcing him to repay it . Then Jeffrey, needing to return that money fast had to pull it out of investments immediately.

    Wexner’s money came from dressing women the way they dreamt of. The Palm Beach High catfight was doubtless sparked by a jealousy of the 14 year old girl for wearing beautiful expensive clothes. The circle of life. World War Victoria’s Secret Sugar Daddy.

    • LOL: Dieter Kief
    • Replies: @Steve Sailer
    , @Alden
  40. @AnotherDad

    You obviously haven’t been paying attention; real productive activities are icky, unless it’s on a handicraft scale.

  41. @Sean

    Leslie Wexner, founder of The Limited, is a genius of women’s clothes. Is he entirely straight?

  42. Svigor says:

    It was just about a year ago that (((Jeffrey Epstein))), the reclusive financier, was being charged with pimping underage girls soliciting prostitutes in Palm Beach

    FIFT.

    “Reclusive,” lol. WTF.

    (Be careful with that (((Wikipedia))) article Steve, it’s a moving target)

    Despite his penchant for privacy

    WTF is the author smoking? He flew all over the world throwing underage rape parties on a constant basis for years and years. He was the front man for a (((human trafficking party ring))) the whole world knew about.

  43. Art Deco says:

    Trump detractors are spreading the meme that Epstein introduced Trump to Melania, even though the name of the modeling impresario who introduced the two of them has been known for some time. People seem to fancy Epstein is the Devil, present at every occasion of ill.

    • Replies: @Svigor
  44. Svigor says:

    Regulatory filings show that Mr. Epstein’s firm had voting power over 10 percent of the equity in the Bear Stearns fund, which, aided by loans from some of Wall Street’s biggest banks, bet heavily on the securities linked to the market for subprime mortgages, or those to homeowners with weak credit histories.

    Yeah, and we know he got that 10% of one of the world’s largest financial firms by working his way up from the mail room fronting for some glow-in-the-dark Jewish oligarchs. Maybe got his tipoff about the subprime meltdown from their Mossad buddies, or whoever.

  45. Svigor says:
    @Art Deco

    Shhh. Let the “Trump connection” ride. Maybe it’ll set some stupid but connected leftists onto helpful paths.

    Trump might’ve been the guy who set the whole Epstein investigation in motion in the first place. Trump and Epstein didn’t like each other. Trump dropped dime on Epstein’s habit of molesting underage girls, way back in like 2005 or something – had him banned from his properties for forcing himself onto one of his employees’ daughters, something like that.

    But don’t tell the shitlibs.

    Oh, almost forgot:

    https://therightstuff.biz/2019/08/13/tds479-2/

  46. Anon[377] • Disclaimer says:
    @Mr. Anon

    I was hoping this would be brought up, this is as fishy as it gets. AA also mentioned Parkland parents winning lotteries post shooting. Maybe the lotteries are deep state slush funds.

  47. Anon[377] • Disclaimer says:
    @Polynikes

    Hehe…’snuggling.’

  48. @BenKenobi

    “Perhaps it would be simpler to dissolve the elite and form a new one.”
    – Bentolt Kebrecht

    They used to call this a revolution. Fast those are at times. Simple maybe at first glance. That’s one of the itchy aspects of modern life: It’s complicated.

  49. A Name says:
    @Mr. Anon

    You know who else once won millions in the lottery? Whitey Bulger.

    Some people have all the luck….

    • Replies: @Cagey Beast
  50. Sean says:
    @Steve Sailer

    Are geniuses at anything entirely straight?

    For what it is worth, Victoria Roberts Giuffre accused Les Wexner of having sex with her while she was working for Epstein, but then she she also accused the former majority leader of the United States Senate, the former Prime Minister of Israel, the former ambassador to the United Nations, and the inventor of artificial intelligence, of having sex with her while she was working for Epstein. (Possibly Prince Harry and William banged her but they would have been younger than her at the time and even if true I don’t expect we will be from hearing from her about it). Dershowitz has always said a ten figure shakedown of Wexner is the real objective of Giuffre and her counselors.

    • Replies: @Alden
    , @Svigor
  51. Lurker says:
    @BB753

    There’s a Monty Python sketch where a man (Eric Idle I think) is accused of numerous crimes – including personally starting WW2.

    “No I never!”

    “Yes you did, I saw you.”

    Sadly I can’t remember what the title was.

    • LOL: BB753
  52. Bruno says:
    @The Alarmist

    « The fact is that even the AAA-rated tranches were AAA in name only »
    —> that’s ex post.

    « No, commercial banks originated the loans »

    —> I never said otherwise. The IB had to take into account the default on loans made by Commercial bank because it was the root of their product. And then it had to impact the fund who leveraged the gap.

    « No, if Epstein wanted to pull that much money, he was a problem. If he was pulling this much money, he would certainly not have been alone, which is how it turned out. « 

    —> you are unwillingly making my point. It’s not his 10% share of the fund (57 out of 600) pull that mattered (Bear had the 1,6 b liquidity) but the market conditions. It’s not good to mix cause and consequence.

    PS : sorry for the English + spelling mistakes (my corrector is for French only) and English is only a foreign language (I don’t use on the emission side outside of blogs comments). And I don’t intend to live nor work in any English speaking country btw . I am very happy in Paris.

  53. FPD72 says:
    @AnotherDad

    You either don’t understand how fractional reserving works or you are calling for a complete restructuring of our nation’s financial system, at least as it pertains to home loans. If fractional reserving (which involves leverage) were prohibited in mortgage lending, it would destroy the industry as we now know it.

    Ten year Treasuries are paying around 3%. They are essentially risk free (in terms of return of principle, not adjusted for inflation). What would mortgage companies have to pay in order to secure 30 year loans, with default possibility, greater inflation risk, etc., or in your scenario, what expected rate of return would draw the capital you would need? I’m guessing at least 6%, and that is probably low. In order to make a profit after expenses (transaction costs, loan defaults, etc.), what interest rate would you have to charge borrowers? Somewhere around 8-10%? And what borrowers are going to pay that, when they can get a 4% loan across the street?

    Imagine this scenario: your plan is put into operation. Fractional reserving in the mortgage industry is prohibited. Interest rates are doubled, or more. What would happen to the price of existing housing stock? It would plummet. That would be great for those who currently don’t own homes, but bad for homeowners. It would be catastrophic for the lending industry, because the collateral for the loans would drop in value, resulting in upside down loans that borrowers would walk away from. And I’m not talking about NINJA loans or liar loans, but loans based on supposedly sound underwriting practices.

    Maybe the resulting collapse would be worth it to eliminate fractional reserving and the inflationary pressures that it creates, but there would be a huge price to be paid, including the loss of capital by your original mortgage investors. For better or worse, fractional reserving has been the norm for several centuries, beginning with the Dutch in the seventeenth century. Every modern industrial society practices it. I’m not defending it; I’m just saying that there would be a huge short-term cost involved in eliminating it from our financial system.

    • Replies: @Art Deco
    , @Sean
    , @AnotherDad
  54. @A Name

    It looks like Whitey Bulger imposed himself on a South Boston lottery winner, rather than won a lottery:

    US orders lottery to hold Bulger’s winnings
    Says reputed mobster bought into $14m ticket to launder cash from illegal gang operations
    Globe Staff / July 18, 1995
    http://archive.boston.com/news/local/massachusetts/articles/1995/07/18/us_orders_lottery_to_hold_bulgers_winnings/

  55. Polynikes says:
    @Hhsiii

    Residential houses for your own use can be as low as 5% with a PMI. Rentals require more.

  56. Polynikes says:
    @Kyle

    It is pretty tightly regulated. There’s actual interstate motivation to monitor it closely because the winning ticket can mean millions to a state in the form of income taxes.

  57. @Mister.Baseball

    So you think Mr. Sailer’s suggestion has as much merit as claiming Epstein killed Kennedy? There are others bellow in the comments who compare this to an accusation that Jeffery Epstein started WW1. No, this theory is more like suggesting a welder, who was working in the part of a factory where a fire started, started the fire.

  58. Ben H says:

    Pretty amazing, though given good time Jeff’s connections to big money guys in general (the kind of guys who can buy at the market bottom especially if they have foreknowledge) – it leads to the theory that the 2008 crash was an orchestrated event.

    That is, the house of cards was appreciated by some people who were able to place a strategic card and then pull it out at an opportune time. Taking the risk that they would lose the money that they had placed into the system, with the hope of a much greater reward later (because otherwise they were highly liquid).

    A character like Epstein in the middle of the 2008 crash does not seem like something that can be “just one of those things).

  59. Is Jeffrey Epstein the not retarded Jewish version of Forrest Gump? He seems to be in the room during every important event lol.

  60. Mr. Anon says:
    @Anonymous

    What no one is talking about is what is going to become of his 727. There aren’t really a lot of customers for them, because they require a three man crew and are not especially fuel efficient.

    It appears that Epstein might have sold the Lolita Express shortly before his arrest:

    https://truepundit.com/epstein-sold-lolita-express-weeks-before-arrest-court-document/

  61. @Steve Sailer

    Is anyone entirely straight? There’s a reason we have at least 72 orientations by which one might self-identify.

  62. Art Deco says:
    @FPD72

    Maybe the resulting collapse would be worth it to eliminate fractional reserving and the inflationary pressures that it creates,

    It doesn’t generate ‘inflationary pressures’. There’s a money multiplier, but it doesn’t have an escalating value. (In fact, it’s value went through the floor in 2008).

  63. Art Deco says:
    @Mr. Anon

    The speculation has been that the trust was a straw buyer for someone else. It does seem quite strange. I assume state lotteries have failsafes structured into their operation.

  64. Well, Epstein’s a scumbag, now a dead one, but can’t blame him for wanting to abandon a sinking hedge fund. How did he find time, between statutorily raping underage teens, to do the research and uncover the scam? We’re constantly told that only sophisticated mathematical analysis could reveal just how unstable this toxic garbage was. Who tipped off Mr. Epstein?

    • Replies: @Svigor
  65. nier says:

    so If you are well connected jew, you can be a bad investor and still have 500 million net worth

  66. Hopscotch says:
    @Mr. Anon

    Possibly claiming the ticket for someone else, who wished to preserve their anonymity?

  67. eah says:

    Could be — he was still alive back then anyway — and not in jail.

    Straight from the horse’s mouth: mystery solved.

    • Disagree: Harry Baldwin
    • Replies: @Harry Baldwin
    , @J.Ross
    , @eah
  68. Alden says:
    @Sean

    Wow, just wow. It gets better and better.

  69. Alden says:
    @Steve Sailer

    There’s rumors Epstein and Wexner were lovers when Epstein was young. Who knows.

  70. Barnard says:
    @Dave Pinsen

    That explanation makes a lot more sense. It is common for lottery winners to setup a trust and claim the prize that way. If it was Epstein, it seems so flagrant, I can’t believe Richardson or anyone else prominent would think they could get away with it. I would think they would want to launder to money through multiple intermediary shell trusts before it got to Epstein. Even our elites aren’t this stupid.

  71. Alfa158 says:
    @JohnnyWalker123

    Yes, as a matter of fact it does look like Jeffrey Epstein. But then who am I going to believe, Haze or my lying eyes.
    Some people put too much faith in the power of suggestion to make the suckers see things they want you to see. That only works if you’re a professional magician doing your act. Otherwise:
    “Look at my blow-up of a Kodak Instamatic photo of the grassy knoll, it’s a man holding a rifle.” Uh, no it isn’t.
    “Look at my blow-up of footage of astronauts jumping on the moon. You will see the wires holding them up”. Uh, no I don’t.
    If, as seems credible, Jeff didn’t commit suicide it would have been vastly easier and safer to just murder him instead of spiriting him away. If still alive anywhere, he is no longer useful to anyone, and a constant danger.

    • Agree: Dissident
  72. Alden says:
    @Sean

    Why not? It’s a modern American Cinderella story. Instead of being abused by a wicked step mother, Virginia is abused by Epstein & Co for a few years. She’s saved by the Prince Charming Personal Injury Law Firm.

    Virginia, what a name for a prostitute.

    I wonder if Epstein had his workmen’s compensation insurance company pay for STD treatment and abortions or if he paid those medical costs out of pocket?

  73. Spangel says:

    This story has illustrated that a tiny elite cabal seem to run everything. Epstein and the clintons and trumps are all pals. Epstein recommended girls to Charlie rose and Weinstein. Epstein was the straw that broke the camels back with bear sterns. Barr’s father hired Epstein as a teacher at dalton and Barr now evaluates this case.

    Its as if a country of 350 million people is run by a group of a few thousand who all know each other. And share child prostitutes.

    • Replies: @Harry Baldwin
  74. @Kronos

    More like 27 times. Both with and without the secret service.

    Unlike Cosby, who barked at his prosecutor, “He doesn’t have a plane,” Epstein likely had a fleet.

    Perhaps the 727 was the introductory flight and, once Willy was “on board”, so to speak, more intimate craft were used thereafter.

    • Replies: @Kronos
  75. @Digital Samizdat

    The chain of ownership is something like: Wall Street owns the US Feral Gov’t who owns the non-Federal No-reserves who makes the money. As much as I’d like to print you up a copy of the title, and scan it and embed it here, D.S., it was unfortunately lost in lower Manhattan on 9/11/01.

    I didn’t say the FED was Socialist, though. It sure as hell is not capitalist. Unsound money has no place in real capitalism.

  76. @Steve Sailer

    Leslie Wexner, founder of The Limited, is a genius of women’s clothes. Is he entirely straight?

    Tommy Hilfiger, who got both sexes to wear his name splashed across tricolor jackets, has five children. His flagrant marketing was the idea of George Lois, a New York adman who fits every stereotype except for his Greek ancestry. Going against type wasn’t new to Lois.

    Lois’s book is a fun read, except for one PC chapter. He counsels going against some stereotypes that by then had become a stereotype itself to go against.

    But he did give high praise to Doyle Dane Bernbach for “selling a Nazi car in a Jewish town”. He also damned Mad Men as an inaccurate caricature.

  77. Jack D says:

    To bring the saga of Epstein’s suicide up to date, see this:

    https://www.nytimes.com/2019/08/13/nyregion/jeffrey-epstein-jail-officers.html

    At the time of his suicide, I predicted that it would be determined that his guards were sleeping rather than checking on Epstein and falsifying their logs – that appears to have been borne out.

    I also said that this is the kind of stuff that happens in third world-ish places with brown populations and that you didn’t need to posit a grand conspiracy when simple incompetence would do. Well, it turns out that the name of the warden of MCC (who has now been transferred to a desk job) is Lamine N’Diaye. I believe that is a Senegalese name. It turns out that prison warden is another one of those jobs that Americans don’t want to do. There is a famous soccer coach of that name but the warden is a different Lamine N’Diaye.

  78. Jack D says:
    @Mr. Anon

    There have been attempts by some quant types to buy every possible number for certain drawings where the jackpot exceeds the cost of doing so (normally it doesn’t) . It wouldn’t surprise me if this was some sort of scheme of that nature.

    • Replies: @EdwardM
  79. @Achmed E. Newman

    But capitalists support the FED and what it does. Capitalists like the “anti-capitalist” things it does. Because what it does is not “anti-capitalist.” It is exactly what capitalism ends up doing every single time. And what would that be? Being crooked.

    “There is no free market. It’s all crooked.”
    Anonymous billionaire.

  80. Jack D says:
    @Kyle

    The other possibility is that the Zorro Trust that cashed in the lottery ticket had nothing to do with Epstein’s Zorro named entities except that they had a similar name and people are just jumping to imaginary conclusions. There seems to be a lot of that connected to Epstein – the less we know about him, the more we can fill it in with imaginary details.

  81. Jack D says:
    @Steve Sailer

    Believe it or not, the garment business was once not the exclusive realm of gay men. Ralph Lauren is as straight as can be.

  82. Bugg says:
    @Mr. Anon

    Whitey Bulger at one point became aware some guy in south Boston had own the Mass. lottery. So he did what you would expect of a murderous sociopath; give me the ticket or I’ll kill you.And thus Whitey Bulger had a steady plausible income, and in may be even kicked back a few beans to the real winner. Also, NY Governor Hugh Carey’s son is a 2-time NY lottery winner. Despite all those hard-charging NY journalists you hear about, no eyes were ever raised.

    Perhaps Epstein was happy go lucky driving through Oklahoma one lucky day and made an impulse purchase. And perhaps he grew despondent over his situation last weekend. But would wager both are extremely unlikely.

    • Replies: @Coemgen
  83. anon[419] • Disclaimer says:
    @Bruno

    The real problem?

    It was the CDO^2 structure that proved the most toxic.

    Unengineered AAA never resulted in much credit loss. The higher rated tranches of CDO’s of risky loans are mostly good. It’s a safe bet that 99% of the people buying the CDO’s of CDO’s never knew what they were buying.

    These were CDO’s constructed out of unsalable pieces of CDO’s.

    • Agree: Bruno
  84. anon[419] • Disclaimer says:
    @Steve Sailer

    He was a retail beneficiary of the whole enclosed mall boom.

    When an “industry” collapses, that’s when the inner workings become widely discussed.

    The enclosed mall concept is a structure that pits the Department Stores against the inline specialty stores.

    Women’s under garments were a mainstay of the Department Stores, but Les’s Victoria Secret extracted those profits. Which was all fine and good until Department Stores started failing.

    Not that Malls will disappear or anything. But the old model is toast, along with maybe 1/2 of them that will disappear.

    Les was a master of the old ecosystem. Knew the real Estate guys. Good at logistics and supply chain management before we had words for it.

  85. @Jack D

    Jack, you’re right about this one. It seems pretty clear now that Epstein’s suicide was exactly what it appeared to be. He had the motive, the means, and the opportunity to kill himself, while the theory that he was somehow offed in jail has far too many moving parts. Given the life he lived, he had a very black and diseased soul that hastened to its proper place once it had run out of road.

    A very strange inversion has taken place in what’s considered “mainstream” opinion. On any internet forum I visit, the conspiracy theorists seem to outnumber the suicide proponents 99 to 1, and yet it is the former who call the latter “sheeple.”

    The precipitous rush to not believe the official story in this case has done a great disservice to the truth, and it is distracting everyone from the real problems that have been brought to light, viz. that all throughout both public and private institutions, incompetence, under-staffing, and falsification of records prevail. This has all been the result of Six Sigma-style managerial decisions trying to squeeze efficiency and tech into every crevice of the workflow, combined with the fact that the nation as a whole has grown significantly poorer and less organized and is simply papering over the gaps with debt (the VA scandal was another classic instance of this, the significance of which was missed by nearly everyone).

    We are currently living amidst a flotilla of economic arrangements that simply do not work. All of our institutions are hollowed-out husks crewed by idiots where rewards apportioned based upon fidelity to the same corporate nonsense that is tearing the barques apart.

    I think the stresses in the system are now finally adding up to something that can no longer be hid. The Epstein suicide was a turning point, not in the sense that it will precipitate a mass revolt demanding “truth” (Americans are far to exhausted a people for that), but in the sense that a critical mass of people have just completely lost any desire to go on “buying in” to a system that is obviously a corrupt and impotent farce.

    • Agree: JMcG
    • Replies: @Dissident
  86. @FPD72

    You either don’t understand how fractional reserving works or you are calling for a complete restructuring of our nation’s financial system, at least as it pertains to home loans. If fractional reserving (which involves leverage) were prohibited in mortgage lending, it would destroy the industry as we now know it.

    PPD72–Yes, I understand how fractional reserve banking works, and yes i am calling for eliminating it for mortgage finance. And yes this would “destroy” “the industry”–the finance part, not the housing part–“as we know it today.”

    This is precisely the point. Fractional reserve banking is a very poor way to do mortgage finance because of the long-short mismatch problem. I.e. the lenders have borrowed short term money–demand deposits, CDs–but are lending long–15 and 30 year mortgages. It is precisely this mismatch which periodically stresses the heck out of the system or blows it up. Every competent finance person understands this is an issue.

    The current system we have already blew up and cost the taxpayers hundreds of billions of dollars. I’m old enough to remember the post-War regulated system where “Savings and Loans” could pay higher rates than banks, but there were limits on deposits and withdrawls. (I had my little passbook and would trudge down to the savings bank every few months when i’d saved another dollar and deposit it.) That system was fairly stable in the low-inflaction post-War environment, but with inflation, then deregulation it became prey for the financial hucksters to run their looting and the stresses blew it up in the late 80s-early 90s.

    The instability is baked into borrowing short to lend long. The fix is simply to not do that!

    ~

    The rest of your comment is just ridiculous hyperventilation. The current system can not magically produce lower rates than mortgages “deserve” to have. If the 10 year treasury is at X, that is going to be a baseline–a floor–on mortgage finance–as the average home buyer will hold their home for something in that ballpark. On top of that will be all the costs. (That’s true now, it will be true in the any future.)

    Having home buyers–or more precisely home borrowers actually pick up all those costs directly rather than distribute them to taxpayers and risk/instability in the financial system is a good thing not a bad thing. But your idea that rates will be wildly different 8-10% is laughable.

    We’re in a low interest rate environment right now so houses–prices floating off of what buyers can afford–are more expensive (relative to incomes) than they are likely to be in the future. I.e. some sort of bubble. There will be a correction when rates go up. (People like me have been expecting it for years and it hasn’t come.) But that’s a macronomic/political thing involving the world economy, the dollar’s role as reserve currency, the rise of China, trade frictions, etc. etc. It effects that valuation of all long term financial assets, like companies and their stocks and bonds, not just mortgages.

    But the scenario you harp on–mortgages are cheap now and it will be a disaster when rates go up–is precisely why my proposal makes sense. You want the stresses and strains–and financial risks–of possible future rising rates right out in the open, in the stock prices of these mortgage mega lenders … rather than being a source of instability in the financial system.

    In sum:
    — we want mortgage borrows to pay the full cost of mortgage finance, not have them on the government tit or subsidized by lower short rates at the cost of financial stress; (if it’s too much, maybe saving more or taking shorter terms would be goodness?)
    — we want housing prices to be as low (as affordable) as they can be for affordable family formation; while being as stable they can be; the less housing jumps around because of mortgage finance the better
    — we want the inherent instability of the borrowing-short, lending-long to be removed–isolated from–the rest of the banking system
    — we want to have maximum transparency in mortgage finance as well as the rest of financial system
    — we want all financial parasites and their shenanigans out of mortgage finance; we want to limit as much as possible the space for the shysters to operate; actually we want to limit all opportunities for people to make a living as parasites

    All these things are valuable goals and all of them are improved by isolating mortgage finance from the rest of the financial system.

    • Replies: @Jack D
  87. Jack D says:
    @AnotherDad

    It’s entirely possible to insure the long-short risk (and the default risk) the same way as we insure any other risk and have the premiums priced into the loans so that whole system is self sustaining and doesn’t require massive taxpayer bailouts. You just have to do proper actuarial work to assess the risk and the proper cost for the premium and you have to do underwriting so that you are not issuing policies to firetraps or arsonists. This is what the FDIC and FHA were supposed to do. We don’t live in tents because houses have a risk of burning down periodically and so it’s a waste of money to invest all that capital into something that is going to burn down someday anyway. Fractional reserve banking is a great idea and based upon the sound premise that all depositors are not going to ask for their money back on the same day (especially if the government tells them that their deposits are insured and they have no reason to worry).

    However for this to work you have to have the regulators keep their eye on the ball and for politicians to encourage and endorse risk limiting behaviors such as redlining instead of calling lenders evil for doing proper risk underwriting. In short you have to have responsible government but increasingly we have the Lamine N’Diaye’s of the world ostensibly in charge but in reality sleeping on the job so things blow up as badly as when Nigerian gasoline pipelines get holes drilled into them by looters.

  88. anon[277] • Disclaimer says:
    @Jack D

    “It turns out that prison warden is another one of those jobs that Americans don’t want to do.”

    Well, sure, of course not. Look at the class of people you have to associate with.

  89. Svigor says:
    @JohnnyWalker123

    So when you consider how the pictures of alive Epstein look different from the corpse, the above “4 Chan” user may have offfered a reason why………..

    If any of this adds up (I’d believe in faked internet timestamps a long time before faked corpses), it’ll be the murderers trying to muddy the water.

    The guy’s dead. Faking his death makes no sense. Alive he’s a problem again. It would be infinitely more difficult to fake his death than to make it happen. The body is, right now, still subject to easy verification via DNA testing and the like, and one person not in the conspiracy could easily blow it wide open.

    This is the sort of thing that makes people hate konspiracy kooks. Ironically, it’s precisely the sort of shit that gov’ts release or amplify, as disinfo to discredit conspiracy facts (by association, in the less-than-rigorous mind).

  90. Svigor says:
    @Jack D

    Murder, not suicide. Incompetent guards make it easier. Funny thing, btw, the guy that caught a nap today might’ve caught one at the same time yesterday, and the day before, and the day before, etc. Another funny thing, his coworkers and superiors tend to know…

    Another funny thing, “Ah wuz sleepin!” makes for a much better cover story than, “yeah I knew they were going to murder him and I took the bribe.” I’m guessing there won’t be much scrutiny on the people in key positions, a couple months from now. (((Big Media))) will be conveniently uninterested, very soon.

  91. EdwardM says:
    @Jack D

    Not sure about that. Powerball has around 300,000,000 possible combinations. With a maximum of around four days between drawings, that is 4 * 24 * 60 * 60 = 345,600 seconds. So to buy every combination, you’d need to print 300,000,000/345,600 = around 868 combinations per second non-stop for four days.

    They have forms that can request multiple combinations on one ticket, I believe 10. So that means printing 87 multi-combination tickets per second (say, 435 tickets every five seconds if that’s how long it took to feed and print each one), which would certainly be feasible. I suppose you could hire laborers in India, or a machine (is that allowed?) to fill in the forms in advance, over a period of years if you wanted to, waiting until the jackpot grew large enough, then commandeered the machines at hundreds of 7-11s non-stop for four days with a well-organized assembly line to feed in the forms and print the tickets. Even if you hacked the machines somehow to print the tickets in a loop without needing the forms, it would still take time to print.

    Given that tickets cost $2, you would need the prize to net $600M to have a positive expected return (you’d win some small prizes too but those are miniscule in comparison). Assuming one-third in taxes, that means $900M. With the lump-sum value of around 50% of the nominal jackpot, it would have to be a jackpot of $1.8B, which is larger than any jackpot yet.

    This also assumes that you don’t split the jackpot, which usually happens with the large jackpots where a significant majority of the possible combinations are purchased.

    • Replies: @Jack D
  92. Coemgen says:

    One way or the other, it seems very convenient that the 2008 crash occurred just before the presidential election and the response was to give the newly elected president $1,000,000,000,000 to spend any way he wished (ARRA). Very convenient.

  93. Coemgen says:
    @Bugg

    James “Whitey” Bulger was murdered in prison. He also likely had some degree of relationship with Robert “decorated war veteran” Mueller.

    We know being a “decorated war veteran” is a good thing because Time Magazine’s 1938 “Man of the Year,” Adolf Hitler was a “decorated war veteran” whose image is further enhanced by him being a child immigrant to Germany.

  94. @Mr. Anon

    What fascinates me is that Epstein won the New Mexico lottery in 2008 when one of his clients, Bill Richardson, happened to be New Mexico’s governor. Ain’t that odd?

  95. @eah

    That was supposed to be a LOL.

  96. @Spangel

    …And Kubrick died immediately after revealing the kinky sex rituals of the elite in “Eyes Wide Shut.”

  97. J.Ross says:
    @eah

    Reality stranger than satire: he’s absolutely gotta mention the island catching fire after a Caribbean earthquake. There’s just too much weirdness here to fit into a quip.

  98. eah says:
    @eah

  99. Svigor says:
    @Sean

    How many of Israel’s former heads of Mossad attended Robert Maxwell’s funeral? Six?

    I’m assuming that’s all the ones who were alive.

    As for former PMs, pretty sure Ehud Barak is one, and IIRC, he and Epstein were good buddies.

    Interestingly, and I forgot to mention, Trump is on Team Bibi, and Bibi and Barak are rivals, to put it mildly.

    Oh, and ol’ Ehud’s relationship with Epstein was recent: 2004-2016.

  100. Svigor says:
    @VivaLaMigra

    This is a serious question that Team Hasbara seems to want to gloss over; when was “financial wizard” Epstein actually doing any finance? He seems to have spent all his time running his Mossad op.

    Alfa158:

    If, as seems credible, Jeff didn’t commit suicide it would have been vastly easier and safer to just murder him instead of spiriting him away. If still alive anywhere, he is no longer useful to anyone, and a constant danger.

    The “here’s a shiny, retarded konspiracy theory for you to play with” thing is as much a part of Team Hasbara’s playbook as the “nothing to see here, move along, move along” thing is.

  101. Kronos says:
    @Reg Cæsar

    Maybe, I can imagine Bill Clinton pulling a plane-to-plane passenger crossover “Bane Style” while mid-air. The man’s been known to do a lot of things for sex.

  102. I’s always seemed unwise to name a trading firm “Bear Stearns” (a bit like “Lemon’s Used Cars”).

    Still, too, in these modern days isn’t it time we had a firm called “Bull Dike?” More optimistic, anyway, write?

  103. Dissident says:
    @Intelligent Dasein

    [A reply I submitted here two days ago is still showing as awaiting moderation. Since this would appear to be the result of a mere oversight or technical hiccup, I am taking the liberty of submitting a slightly modified version now.]

    The precipitous rush to not believe the official story in this case has done a great disservice to the truth, and it is distracting everyone from the real problems that have been brought to light, viz. that all throughout both public and private institutions, incompetence, under-staffing, and falsification of records prevail.

    I am inclined to agree. I would add, further, that distraction from the real problems is precisely the effect that both fantastic conspiracy theories such as ‘Pizzagate’, as well as lurid sex scandals in general (even when entirely credible) have. The real problems here being the Invade/Invite/In-Hock and pro-degeneracy policies advanced by the ruling alliance. For the overwhelming majority of people, such threats as those posed by interventionist, warmongering foreign policy; by the pernicious, corrosive influence of the LGBTQ lobby; by the ubiquity of abject smut; by mass third-world immigration; by incitement against Whites; and by the war on decency and objective reality,are all vastly greater than any threat posed by any given high-profile sexual predator. And even if Pizzagate-type allegations were to be proven to be true, the same basic comparative analysis would apply to them as well.

    This has all been the result of Six Sigma-style managerial decisions trying to squeeze efficiency and tech into every crevice of the workflow,[…]

    While I do not dispute the legitimacy and relevance of any of the factors that you named, I must ask: Haven’t you omitted what is perhaps the most salient and germane factor of all, one that was by no means omitted from the post of Jack D.’s that you were replying-to? Namely, the valuing of diversity over qualification and competency; the phenomenon of underqualified Affirmative Action hires and the consequences they bring.

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