Mind Over Market

Note: Black Box Casino is to be published September 30 by Praeger. In writing this account of the financial crisis, the author found that ultimately some of what he had written had to be cut from the book. Below is an excerpt that was written too late to make it into Chapter 7: "Fast Money and High Stakes." By Robert Stowe England July 20, 2011 The Evanston, Illinois hedge fund Magnetar Capital LLC stated in April 2010 that it engaged in trading activities that its senior management claimed were neutral towards the housing market. That is, Magnetar claimed that they were making simultaneous shorts and longs on various pieces of collateralized debt obligations, which were backed by mostly subprime mortgage-backed securities. The point being made with the claim of neutrality was they were not betting against the housing market and bad subprime loans and securities. After a number of news stories surfaced in 2010 about the $50 billion or more in losses from CDOs deals in which...

Part 1 Karl Denninger, who offers his commentary on the markets at market-ticker.org, speaks on the economic crisis at Liberty Alliance's stop in Tallahassee, Florida. http://www.youtube.com/watch?v=LNaBYZ6IDWk For more information on Liberty Alliance, go to this link: http://americanlibertytour.com/ Selected Quotes: "Credit has expanded in our economy in the last 28 years faster than the economy has grown in every year but one . . . . Eventually, it's going to blow up." "We have to return to sound credit and sound banking." "All the people who broke the law need to go to jail." "We need to stop the looting and start prosecuting instead." Part 2 http://www.youtube.com/watch?v=yvvZlguz2fg Selected Quotes: "Henry Paulson, our Treasury Secretary at the time, went to the SEC in 2004 and had them remove the leverage limits from the investment banks. Formally 14 to 1, he had them take it off so they could put on as much leverage as they wa...