Using Veritas to Construct the "Per…

29-04-2017 Hits:87116 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:81055 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:80891 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:85365 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:81871 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:84056 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:55105 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:83302 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:83048 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:82943 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:89183 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:86917 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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From Bloomberg :

June 5 (Bloomberg) -- The day after Countrywide Financial Corp. Chief Executive Officer Angelo Mozilo arranged to start $139 million in stock sales, he told two top deputies there was “no way” to value one of its most popular mortgages.

“We are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales,” he wrote in a 2006 e-mail released yesterday by the Securities and Exchange Commission. “We have no way, with any reasonable certainty, to assess the real risk of holding these loans on our balance sheet.”

[Actually, I sort have an idea of how those loans will behave. See the content from a previous post:

Analysts at Moody's Investors Service warned Tuesday that U.S. banks with debt that is rated by the Moody's Corp. unit face about $470 billion in losses through next year. If the economy continues to suffer, those losses could swell to $640 billion, and Moody's would likely accelerate its bank-debt downgrades.

"In such a scenario, absent continuation, and likely deepening, of U.S. government capital and liquidity support programs for the banking industry, numerous banks would be insolvent," the Moody's analysts wrote. [We all know where you have heard that before. Review the data in my recent posts if you doubt this:

  1. BoomBustBlog.com's Realistic Recast of SCAP BoomBustBlog.com's Realistic Recast of SCAP 2009-05-12 14:52:09
  2. My comments on the NYC condo market which seems to have wrinkled a few overly-sensitive feathers. Be sure to read through the comment section.
  3. Then be sure to read The Truth About the Banks Has Been Released: the open source spreadhseet edition and The Re-Release of the Open Source Mortgage Default Model. 
  4. After that, if you're bored, there is always the T2 Partners analysis or even the NY Times' perspective.]

The funny thing is, the industry is still flying blind, still cannot value the mortgages, and the only thing that they really do know is that they are value vacuums. Thus, the healthier banks ate the sick banks with government

 

medicinal monies. The healthier banks hence became sicker banks, but want to give the government medicine back because they don't like the after-taste. The now sick banks have all of this stuff on their books that killed off the original sick banks as property values continue to plummet and unemployment continues to rise at quite a healthy pace. Notice, there are no bank executives buying stock now! Just investors that see green shoots in the yards of foreclosed and REO houses.]

Mozilo, 70, co-founded Countrywide in 1969 and built it into the nation’s biggest home lender. Yesterday he became the most prominent executive targeted by the SEC in a regulatory autopsy of the subprime crisis. He, and the two deputies who received his e-mails on so-called pay-option ARM loans, were accused of hiding deteriorating lending standards before the housing bubble burst. The agency quoted Mozilo’s messages, arguing he avoided losses by making illegal insider trades.

 ...

Not ‘The Whole Story’

“The complaint does not tell the whole story of either internal communications or the public disclosures,” said Mozilo’s lawyer, David Siegel, at Irell & Manella LLP in Los Angeles, in a statement. “The mix and risks of Countrywide’s loan portfolio and its underwriting standards were well disclosed to and understood by the marketplace.”

[How could they be well disclosed and understood by the marketplace if they weren't even understood by the vendor's CEO, CFO and COO? That's going to be a hard sell to a jury! ]

The agency is pursuing the lender’s executives because of its “well-publicized enforcement failures” in other cases, said Walter Brown, Sambol’s attorney. “Making groundless allegations and losing in court will not help the SEC restore its reputation,” Brown said. [Failure is right! I don't see why they don't go after the Bear Stearns CEO who says that his company had ample liquidity 48 hours before failure, Lehman's top brass who called Einhorn a liar after being busted hiding the sausage, GGP who actually tried to insult me! I can go on with this list... WaMu, Freddie, Fannie, and IndyMac, GE, the Treasury Secretary under the Bush Administration! Where would we stop! How about the rating companies???]

Countrywide made detailed credit-risk disclosures, he said, and investors and rating companies knew that the company had “liberalized” its lending practices, as had almost all other lenders at the time. Sambol disclosed details about subprime products, the risks they carried and other information that the SEC now says was absent from filings, Brown said.

 ...

Sieracki bought Countrywide stock during the period the SEC claims he believed the company was withholding information from the market, said his lawyer, Shirli Weiss. He said Sieracki didn’t violate securities law and called the lawsuit “completely without merit.”

Countrywide helped trigger the subprime bubble by offering loans to people with below-average credit scores. From 2005 through 2007, the lender expanded its underwriting guidelines and wrote increasingly risky loans, while reassuring investors it focused mainly on so-called prime quality mortgages, the SEC said. Mounting defaults ultimately slashed its stock price, prompting its sale to Bank of America Corp. last year.

“It’s the first case of true notoriety” to target fraudulent practices in mortgage lending, said Jacob Frenkel, a former SEC lawyer now at Shulman Rogers Gandal Pordy & Ecker PA in Rockville, Maryland. “It clearly signals the opening of the spigot to both civil and the criminal cases.” [Oh, it certainly does. There is not one major bank not guilty of what Countrywide's C-suite is being charged with. I find it absolutely amazing that with all the risk rampant withing these companies, people are foolish enough to buy the stock now.]

...

 Worried about the so-called pay-option ARMs, which offered low introductory monthly payments that could later balloon, Mozilo urged Sambol to sell the portfolio, saying the company was “flying blind” on how the loans would perform in a sagging economy.

...

While Mozilo acknowledged in e-mails the risks associated with Countrywide’s loans and the company’s need to sell the option-ARM portfolio, he was simultaneously arranging to dump his own holdings, according to the SEC’s complaint.

In the final months of 2006 he began establishing four sale plans “while in possession of material, non-public information concerning Countrywide’s increasing credit risk,” the SEC said. From those plans, he exercised over 5.1 million stock options and sold the underlying shares for total proceeds of almost $139 million.

The SEC authorized such plans in 2000 to let executives sell shares without the appearance of tapping current information on their companies. Still, the SEC may make its case against Mozilo, if it can show he had significant information that the market lacked when he arranged his sales, said Robert Hillman, a securities law professor at the University of California, Davis.

“These plans are not a get-out-of-jail card,” he said.