Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.

J. P. Morgan

"Sell down to your sleeping point"

Sunday, March 29, 2009

The Geitner plan

I was listening to Gregory on Meet the press.

Using a generic Bond rate from 2006

  • 3% CDO at $10,000= $300
  • 5K from Treasury, 5K from Pico.
  • Levered up 6X= $1800
  • $10000 investment returns $1800 per year=18% ROI(of course you can just multiply the interest times the leverage.
Even if the bond only performs for only 5 years you break even.

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