Merrill sold $36 Billion of CDO (mortages) for 22 cents on the dollar.  Ouch.  Overall, it will take about $45 Billion in loses related to its sojourn in the mortages.  Ouch.  Ouch.   They also lent the purchaser of their mortages $5 Billion to complete the sale.  Ouch.  By valuing their mortage business at 22 cents on the dollar it may force other big companies to revalue their mortage businesses.  Bottom line.  Lots more writeoffs coming from big companies.

Can you imagine selling a mortage to somebody at 1% and not verifying their income or fairly assessing their ability to repay the loan?  To make matters worse, the purchaser did not realize that after a year the rate would be adjusted based on market conditions.  Shock and awe.  The purchaser’s mortgage payment increased by 500% or more.  Surprise.  Surprise.  The purchaser was not able to meet the new demand.

Was it expected?  Sure.  Anybody with a freshman business course could have predicated this could not be sustained.  Yet, the best and the brightest financial people in the US were sucked into such a scam.  Merrill probably doesn’t even hire people without graduate degrees in business and finance.  Unfortunately, these same people skipped the course on greed.  And why not?  They have been  taking their giant bonuses and buying high end real estate in Manhattan for years.

The ultimate cost will probably be around $1 TRILLION.  Ouch.

Don’t you just lose capitalism?  I don’t.  Because capitalism doesn’t work.

This country cannot afford health care for all of its citizen because it will cost $60 Billion a year but we can blow  $1 TRILLION dollars due to greed and unethical behavior.  Also, if we take the profit out of health care, it probably won’t cost the US anything additional.   Currently, there are hundreds of billions of dollars in profits that are sucked out of the health care system that go to investors that provide nothing to patents.

Fuck. Fuck. Fuck. Fuck.