The attempts to pin last weeks worldwide securities losses on a single trader at a French firm, raises red flags, if not outright security alarms. Attempting to gain a reputation as an elite securities dealer in the firm, he placed huge leveraged positions that initially worked to his advantage, but turned against him during some stage of last weeks turmoil.
The drop in new home sales in 2007 is the largest since they started keeping records. This is the worst overall housing slump in over two decades. Billions upon billions of dollars of dubious home loans were bundled as securities, and a 20 something hot shot caused the whole mess in last weeks financial markets?
I don't know about all that, there is a verifiable paper trail that records trades, so more than a couple of individuals should have noticed. Seven billion, is not just going to fall through the cracks.
It is a convenient diversion at just the right time, maybe even a scapegoat? The season of cover your a** has begun, the first lawsuits concerning sub-prime have been filed. Over the next several months, the truth about sub-prime will be exposed, just like Enron and steroids in baseball.
Federal Reserve meets Wednesday, expect a cut in interst rates, probably 50 basis points. After that, it will turn into a game of who blinks first, again.
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