The following has ben pinging round the inter-tubes for weeks . . . The author is Cameron Crise of Fortis Investments in London:
>>>
Broker Joe!
Show me some flow
I need the dough!
I’m Broker Joe!
>>>
>>
>>>
That Broker Joe!
That Broker Joe!
I do not like
That Broker Joe!
>>>
>
>>>
>>>
Would you buy my CDO?
>>>
I do not like them, Broker Joe
I do not like your CDO!
>>>
Would you like it here or there?
>>>>>>
I would not like it here or there
I would not like it anywhere
I do not like your CDO
I do not like it, Broker Joe
>>>>>>
>>>
Would you like to sell some yen?
>>>
I do not want to sell the yen
The big fat tail just kills my zen
If you don’t sell now, then when?
I will not sell it here or there
I will not sell it anywhere
I do not like your CDO
I do not like it, Broker Joe
>>>
Our SIV has had a few rough knocks
>>>
Get in now, you sly old fox!
>>>
I am slyer than a fox
And I don’t think you have the docs
That you must have if you foreclose
And so a judge will thumb his nose
At you, your SIV, and CDO
>>>
Who owns the mortgage?
I don’t know
And you don’t either, Broker Joe
>>>
I would not know it here or there
I would not know it anywhere
I will not buy your CDO
I will not buy it, Broker Joe!
>>>
We have some hedge funds who are long
>>>
Those guys are smart! They can’t be wrong!
>>>
Some funds are long and some are not
The ones who are, are feeling caught
The short ones make a lot of sense
And they are up lots of percents
No SIV, no yen
>>>
Not now, not then
Not here, not there
I would not touch it anywhere
I will not buy your CDO
I will not buy it, Broker Joe!
>>>
>>>
But you can trust the agencies
>>>
They’ve rated this stuff Triple-B!
>>>
This tranche is still investment grade
>>>
You buy it here, your year is made!
>>>
The agencies have been asleep
Their ratings are just like ‘Bo Peep
That is, they’re from a fairy tale
As fiction goes, they’re off the scale
>>>
And I do not believe them, Joe
And so your tranche is a no-go
You think at 50 it’s a do
Until it falls to twenty-two
I do not like your CDO,
I will not buy it, Broker Joe!
>>>
>>>
Have you met our in-house quant?
>>>
He’ll model anything you want!
>>>
>>>
Except, that is, transactions costs
No thanks, I do not want the loss
From any quant’s sexy black box
Or mortgages unbacked by docs
Or mindless buys of kiwi-yen
Or ABX headed to 10
Or any other credit turd
>>>
I’ve spoken, Joe, so hear the word
I do not like your CDO,
I will not buy it, Broker Joe!
>>>
>>>
What?
>>>
What must I do, What must I do
>>>
What must I do to trade with you?
>>>
>>>
Perhaps you should avoid the drink
And use your brain sometimes to think
And not assume what’s gone before
Will follow on, and thus ignore
That circumstances sometimes change
And things that once seemed awfully strange
Can swiftly become commonplace
And then vanish once more, sans trace.
In short, you’ll have to look ahead
To win your future daily bread
In your head you have two eyes,
Use them, please, to analyze
And then you’ll see your business grow
So THINK THINK THINK THINK, Broker Joe!
>>>
I see! I see! I start to think
>>>
That all of my ideas stink
>>>
That CDO is mark-to-myth
>>>
The model’s written by a Sith
>>>
I’ll call my custies on the phone
>>>
And say “hey leave the yen alone!”
>>>
I’ll leave it to the black-box nerds
>>>
To buy up all the subprime turds!
>>>
I’ll say “you’re welcome”, “thanks”, and “please”
>>>
And just ignore the agencies
>>>
And as for our beleaguered SIV
>>>
The guy who runs it is a spiv
>>>
I’d stay away if I were youYes, that’s the wisest thing to do!
>>>
It’s been a quite eventful year
>>>
Weak hands have been found out, I fear
>>>
At bonus time they’ll feel the pinch
>>>
And find they’re working for the Grinch
>>>
(that begs the question: which is worse?
>>>
That bonus cheque, or all this verse?)
>>>
>>>>>>
>>>
But now, at last, the race is run
>>>
Both year and verse are almost done
>>>
I hope your holidays are great
>>>
I’ll see you in 2008!
>>>
>>>
Comments! Comments? You want comments on that doggerel. Bah, humbug.
Very Nice! (with Borat inflection)
Brilliant. But who can I send it to?
To laugh or cry is relative,
At least we do not own a SIV.
To short or long the market here?
Or in the headlights like a deer?
But what I really want to know…
Is the recession a full go?
Housing’s down, durables too,
CRE is staging a coup.
All that’s left is consumer spend,
If that goes we are near the end.
My shorts would love a drastic fall,
But I’d rather avoid recession hell!
Happy New Year!
Hope it’s a good one, without any fear!
Finally Barry, you understand my level! Happy New Year to You and Yours!
Dear CNBC cameraman,
Thank you!… Thank you!… Thank you!
First it was the red… then the mauve… then the hot pink… and now, today, the lavender… Thank you!… Thank you!… THANk YoU!!
Those are the TWO most awesome and inspiring things I’ve seen during the holidays. If you do canary yellow Monday, I’ll be forever grateful!
Please God, don’t let me go blind!!!!!
You have aroused the wrath of the great and powerful Dr. Seu55 Enterprises…
correction…..bank of america WILL have soap in their restrooms…
In Holiday times with all good cheer
We wish on all an…OK year!
;-)
Seuss… would you buy them in the dark? (So many did.)
We knew this was coming…a typical example of shenanigans to come. All remember Deloitte approved this..
”
December 1, 2007 = MARK TO MARKET HELL!
Hi Bill,
Here’s a very interesting thought. December 31, 2007 is that last day of the year for many companies. All those who have financial derivatives are trying to figure out what to put on their books. How do you value a thing that is ONLY traded at a significant discount… if at all? All companies are required to “mark to market” all of their assets for the financial statements filed with the SEC. Not only that but thanks to Sarbanes-Oxley the officers have to certfiy those filings or risk a oneway ticket to the klink ala Enron execs.
I recently dicussed this with the treasurer of a significanlty large manufacturing company and he said that he “talked his auditors (Deloitte) into marking their short term MBS paper to NAV (Net Asset Value) instead of market”. Basically, taking the supposed stream of payments minus the expenses and arriving at a value even though those payments and expenses are now very questionalbe. I asked him if he was scared of the potential liability and he said “yes, but the alternative is I would likely end up fired or in jail as well”. He takes a little comfort that his auditors have agreed to sign off on it…at least at the moment. I told him that was the same thing Enron did with Arthur Anderson and look how that turned out.
I told him he was an idiot to even play these games. The more they cover-up the deeper the fraud and the stiffer the penalties. There will be many companies who do the right thing and take their licks, so those that don’t will be villified by the world when the house of cards comes crashing down.
He is now rethinking his position.
Bix
”
Stuart,
…Speed just 10 mph over the speed limit past a stationary state trooper on the interstate when you’re in relatively sparse traffic, and he’ll probably pull out, run you down and give you a ticket.
…Drive 85 mph in bumper-to-bumper traffic on any perimeter interstate past the same trooper, and he knows he’ll be taking his life in his hands, plus the lives of dozens more, to attempt to stop you and write you a ticket.
Metaphors R-Us,
Eclectic
Eclectic, I feel a big crash coming!
Eclectic,
You left out the part that all the 85 mph bumper-to-bumper vehicles are traveling in a fog bank with visibility of zero.
Fix-a-Phor, International
Winston
Now if you can imgaine what would happen if one of the lead vehicles blew a tire and slammed on the brakes, you get an idea of what is happening in the ABCP markets.
Analogies-in-Motion
Winston
Stuart, my own personal opinion (not a legal one in any way) is marking to *expected* income stream minus *expected* expenses, using an independent rating, like an updated rating on the bonds/instruments with the implied default rate, and current recovery rate vs foreclosure, etc.
That won’t look too pretty, and should be at least conservatively weak.
(Note: “Weak” useage: something that is noteably *less* than before, not flat or -0.5%! This min-rant brought to you via TBPic useage re retail sales.)
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That must have taken you a long time to think of all those rhymes, thats a dr suess novel in itself.