Fannie and Freddie executives were innocent bystanders to the credit crisis, and share no blame for anything that has gone wrong the past several years, or so they told Congress today. Mr. Syron, formerly of Freddie Mac, was asked why he fired his Chief Risk Officer who warned about taking on the no document loans or ALT-A loans, and he replied that the risk officer was not fired because of his views on credit. Yahoo! Finance NYTimes.com washingtonpost.comWarning about the risk was virtually a sure path to dismissal or career suicide at best. But according to the current retrospectives being peddled by the titans of finance, no one was dismissed by any of the major financial institutions for warning about the risky loans, for there were always "other" reasons for the many dismissals besides standing in the way of those hell bent- like W- to do something no matter what. I also think some Democrats like Barney Frank are suffering amnesia about their role in enabling the GSCs to take on more risky loans (briefly discussed in this earlier post TRUST CERTIFICATE AON BOND KTN and in this article by the NYT NYTimes.com) When one really makes an effort to become informed about issues, using all the tools available to citizens these days, it is difficult to accept pious and self serving declarations by politicians of either party. I am an equal opportunity critic.
I can not offer a reason why JZE closed at 20.61 today, up over 11% whereas the slightly higher yielding TC JZJ containing the same AT & T senior bond closed at 18.5, up 5.7%. I do not make an effort to understand irrational behavior, but I am simply a messenger pointing it out. As I have mentioned, I am use to irrational pricing in the market for Trust Certificates. It was not long ago that I bought JZE at 12.5 and have since received a semi-annual interest payment. I have decided to be a long term holder of these two TCs, until maturity or an early call of the underlying bonds by AT & T which would result in the call of the TC and payment of its 25 par value.
My buy of the ETF for natural gas this morning will be a trade. I am just hoping to make a couple of hundred sometime in the first quarter of 2009. This buy was the first commodity purchased this year. I looked at the oil ETF, symbol OIL, and it looked exactly like someone jumping off a tall building. It hit 87 in July 2008 and shows no signs of finding a bottom having fallen to 24.55 today. It does make one wonder about the $150 price per barrel a few months ago being a legitimate number based on supply and demand or just another number manipulated by those seeking to profit from the spike. Demand for oil in the world has changed during the past several weeks but nowhere near enough to account for the dramatic fall in the price of oil over the past 4 months. I am always reminded of the claims by Enron denying market manipulation of the skyrocketing price of electricity in the unregulated wholesale power market, and then tapes turn up showing how the sellers were conspiring to artificially manipulate the price, higher of course. California electricity crisis - Wikipedia, the free encyclopedia(washingtonpost.com) Los Angeles Times