Saturday, October 24, 2009

Credit Bubble Stocks a Year Ago

Here's the fact pattern:
A. Massive credit bubble followed by real estate and asset price crash. Dishonesty from financial institutions. Constant manipulation of prices by central planners leading to market confusion.
B. You are "allowed" to sell stock that you possess even when the price just went down by a whole penny.
Which one is the reason that the market is crashing? A or B?
"The second company for which Eisman was given sole responsibility was Lomas Financial, which had just emerged from bankruptcy. 'I put a sell rating on the thing because it was a piece of shit,' Eisman says. 'I didn’t know that you weren’t supposed to put a sell rating on companies. I thought there were three boxes—buy, hold, sell—and you could pick the one you thought you should.'"

No comments: