Edward Jones Fed Subprime?

How about this reasoning:



My grandmother had a Discover card during those same years and Morgan Stanley owned Discover. She probably carried a balance some of those months and may have paid interest. Her interest was fed into Morgan Stanley. Morgan Stanley bought CDOs etc. I think that makes my grandmother personally responsible for the real estate meltdown.



If you want her address to send complaints to, pm me.

EDJ were supplying massive amounts of cash to Lehman & Bear…they provided the fuel for these firms to buy the derivatives

so did my grandma

dummy,



your grandma was the one borrowing not providing the cash

in 03, 04, 05 & 06 EDJ was selling massive amounts of structured notes to clients of Lehman, Bear Stearns, Morgan Stanley, Household Finance, Goldman ect…it appears alot of this cash was being used so these firms had cash to invest in lower quality CDOs & CMOs.

I’ve been gone from EDJ for a while. Is EDJ admitting this or is anything being brought up there about this?

she borrowed the interest? I thought she paid it.

[quote=josephjones107]in 03, 04, 05 & 06 EDJ was selling massive amounts of structured notes to clients of Lehman, Bear Stearns, Morgan Stanley, Household Finance, Goldman ect…it appears alot of this cash was being used so these firms had cash to invest in lower quality CDOs & CMOs. I’ve been gone from EDJ for a while. Is EDJ admitting this or is anything being brought up there about this?

[quote=josephjones107] [quote=SometimesNowhere] [quote=josephjones107]in 03, 04, 05 & 06 EDJ was selling massive amounts of structured notes to clients of Lehman, Bear Stearns, Morgan Stanley, Household Finance, Goldman ect…it appears alot of this cash was being used so these firms had cash to invest in lower quality CDOs & CMOs. I’ve been gone from EDJ for a while. Is EDJ admitting this or is anything being brought up there about this?[/quote]

you don’t think those firms were buying derivatives with that cash? where do you think Bear & Lehman got the cash to buy the derivatives?

You're right a lot of the structured notes were financials.  I had two clients who lost with a Lehman bond, but the couple I have with a Bear Sterns note are still being paid.  I've got a managed account client where RNC Genter had purchased a Lehman bond, so I'm sure a lot of brokerages sold them.

I’m not saying who is to blame. I’m saying reps (unknowingly) were helping to feed the process.   The structured notes were Bear’s & Lehmans fuel for buying the toxic assets.

Is this really how you wasted some of your obviously limited brain cells?  Trying to think of ways that Jones could have caused the mortgage crisis? 

JoJones!  Hold on a minute there captain.  I thought in the other thread you said that it was all Joe Schmoe's fault for this.  Didn't pay his mortgage remember!  You need to decide if it was the average everyday American or big bad corporations. 

I'm at least happy you're coming around to the thought that corporations had more to do with this than Joe.

Listen moron,

Don’t be in denial. You convinced your clients to provide cash for these firms to buy their toxic assets. The worst thing about this is the Jones reps don’t even understand that. They’re that clueless.

This is kinda reaching…

Jo, what’s with all the pent up anger? 

a HUGE % of EDJ clients fixed income were in structured notes to these firms for the direct purchase of CMOs and CDOs. (WERE TALKING BILLIONS)



Alot of Hedge funds would short the stock and go long the debt to reduce risk.



Institutional money had a much smaller % of their fixed income in structured notes with Lehman, Bear, Merrill

Jo,

do you think Lehman, Bear and Merrill just had cash lying around to invest in toxic assets? no, they needed to borrow the money (via structured notes)



they got the cash from the structured note (Costing them say 5%) and made say 8-9 %

OK, now this is just getting tiresome.  It’s like banging your head against a brick wall.

I would hope EDJ knew what they were doing with the proceeds of the structured notes.





If you direct BILLIONS of your clients assets into investment vehicles you sure as hell better know where that money is ending up.



If they didn’t know ,then they didn’t do their due dilignence.



These investment banks ended up with 40:1 leverage, and EDJ helped them get there.

I would hope EDJ knew what they were doing with the proceeds of the structured notes.


If you direct BILLIONS of your clients assets into investment vehicles you sure as hell better know where that money is ending up.

If they didn’t know ,then they didn’t do their due dilignence.

These investment banks ended up with 40:1 leverage, and EDJ helped them get there.

I absolutely despise Jones… but there is no way you can pin this on them. Jones was never close to being a large part of the selling group on those deals.



Another thing… it’s possible Lehman lied to Jones about what they were doing anyway, because up until the Friday they went bankrupt, GENIUS fixed income guy Mario DeRose was saying that Lehman didn’t have any problems and that client money was safe.

Jones rep in Tupelo, MS (former trucker), raised money from his investor via lehman structured note, Lehman then provides the cash to a mortgage broker (former pizza delivery guy) to provide financing for sub prime mortgage.





The problem is you have a former trucker and former pizza delivery guy responsible for dealing with the individuals providing and receiving the money.

Jones rep in Tupelo, MS (former trucker), raised money from his investor via lehman structured note, Lehman then provides the cash to a mortgage broker (former pizza delivery guy) to provide financing for sub prime mortgage.


The problem is you have a former trucker and former pizza delivery guy responsible for dealing with the individuals providing and receiving the money.

I hate Jones too but agree with Moraen, Jones not a player in this mess. Never had any Lehman but had GMAC, Citigroup, almost had Congress Financial (Wachovia)…I can’t resist.

Jones had sold alot of Lehman, Bear, & Goldman structured notes which were directly used to purchase sub prime cmos.



investment banks were just the middle man between the rep selling the structured note and the mortgage company that originated the loan

Wow, I never realized Jones was the only firm selling financial structured notes.  I guess every other firm knew a year ago that whole industry would blow up, and Jones was the only one selling them.  It’s remarkable that we have $500B in firm-held assets, more than half of which are mutual funds, which leaves $250B for CD’s, bonds, stocks, SMA’s, money market, UIT’s, etc.  Sooooo, let’s assume for arguments sake that 10% of the 50% was in structured notes.  That’s $25B.  Of that, a good portion was not in financials, but in other industries.  So let’s say half was in financials - that’s $12.5B spread among maybe 6 or 7 different firms.  So we’re talking MAYBE $2B per financial firm.

Josephjones107,

You are going to lose this argument.  B24 made a valid point and there is nothing you can write or say to back up your arguments.  I'll bet EJ sold less structured notes than the bigger firms like Morgan, Merrill and Goldman. 

Lapide

My turn–I was at Jones for 14 years and now at LPL for 2 years.  I hold nothing against Jones and to try and blame them for selling those notes is nuts!  LPL and CommonWealth sold them too!  Everybody sold them!  I even bought some for my own portfolio!!!

I, too, believe it or not, will say just how ridiculous this thread is.  This is like a really bad episode of Matlock.  You're trying to connect dots that just aren't there.  Almost every time I tranfer the account of some retiree, no matter what firm, indy-wirehouse-Jones-bank, I'm likely to find these notes.  For the record, I sold some of these notes early in my career--mostly Bear Stearns with coupons around 8%.  All of them were called in the last couple of years.  I have some Lehman Bros. on my book ($25K to be exact; my work) as well as some Ford and GMAC paper (transferred in).  Most of the GMAC stuff is very small positions, some as small as $1000, and you can hardly get bids on it anyway at this point. 

Hey Josie Jones,



If you have been watching these boards for any amount of time, you would know that when half the Jones bashers get on here and defend Jones, well, you’re bird is cooked.



It’s obvious that you’re making some sort of feeble attempt at creating a public controversy surrounding the credit meltdown and trying to connect Jones to it. But the fact is, you have to have real, hard facts to back it up. I have no more inside information than anyone in the firm that reads our financials, and it wasn’t hard to deduce the fact that we are just not a big enough pawn in this game to make a difference. Truth be-told, I don’t think any one firm or person has sole responsibility for the entire mess.

Greed and ignorance. That’s all it was.

JoJones,

I too would fall on the side of Jones on this matter.I still have AMBAC insured (what’s that worth?) Alt-A Countrywide CMO’s (you can’t go wrong with AAA rating)on the books…Statements look crummy but at least the income is still paying…Spiff- As my 5 year old  daughter would say HEAR THIS!!!

See, I knew you folks really deep down…way deep down…love and care for good ole EDJ.  I’m going to send all of you a new EDJ green koozie.   

i am surprised people took the time to respond to the initial post. 

Spiff…you know, now that I think about it…XBox 360’s theme colors are white & green…they would match the office decor just fine! 

KUMBAYA MY LORD, KUMBAYA    (AHHHH LOVE IS IN THE AIR!) 

By selling strutured product.  Yes, big I-banks sold them, but generally not to their individual wealth management clients.  Most investment advisors at that level ran away any structured product that their banks put in front of them to sell.  That’s why they turned around and sold them to lower level corner brokers like EDJ, because their salesforce is just that, a salesforce.  They don’t question the quality of a product with the same degree of knowledge that a wealth manager has.  Not their fault, they were educated by EDJ and with a BS in Geology from University of Southwest Nowhere State, instead of having a CFA and a Harvard MBA.  Who could expect them to peel back the layers of documentation that accompanied those structured products.  But did they really care anyway?  Cause it makes it easier to sleep at night and claim ignorance, while at the same time cashing in on their clients misfortunes.

By selling strutured product.  Yes, big I-banks sold them, but generally not to their individual wealth management clients.  Most investment advisors at that level ran away any structured product that their banks put in front of them to sell.  That’s why they turned around and sold them to lower level corner brokers like EDJ, because their salesforce is just that, a salesforce.  They don’t question the quality of a product with the same degree of knowledge that a wealth manager has.  Not their fault, they were educated by EDJ and with a BS in Geology from University of Southwest Nowhere State, instead of having a CFA and a Harvard MBA.  Who could expect them to peel back the layers of documentation that accompanied those structured products.  But did they really care anyway?  Cause it makes it easier to sleep at night and claim ignorance, while at the same time cashing in on their clients misfortunes.

By selling strutured product.  Yes, big I-banks sold them, but generally not to their individual wealth management clients.  Most investment advisors at that level ran away any structured product that their banks put in front of them to sell.  That’s why they turned around and sold them to lower level corner brokers like EDJ, because their salesforce is just that, a salesforce.  They don’t question the quality of a product with the same degree of knowledge that a wealth manager has.  Not their fault, they were educated by EDJ and with a BS in Geology from University of Southwest Nowhere State, instead of having a CFA and a Harvard MBA.  Who could expect them to peel back the layers of documentation that accompanied those structured products.  But did they really care anyway?  Cause it makes it easier to sleep at night and claim ignorance, while at the same time cashing in on their clients misfortunes.

I don’t think he has a problem with salespeople, he is simply saying that the only thing Jones people are are salespeople.



I would be interested to know if NewRep has a CFA and a Harvard MBA. And if so, I want to know when he graduated and who he his instructor was for Portfolio Management was.

it’s interesting how EDJ demonized fixed and variable annuities. Saying they were too expensive. After the market decline it appears they were a pretty good deal for investors (at least old investors bene’s have a chance at recouping some losses.)



Instead EDJ focused on mutual funds with no guarantees and invdividual structured notes for the fixed part of invstors porfolios.



the structured note part is now part of the biggest scam and financial meltdown in the history of the world

By selling strutured product. Yes, big I-banks sold them, but generally not to their individual wealth management clients. Most investment advisors at that level ran away any structured product that their banks put in front of them to sell. That’s why they turned around and sold them to lower level corner brokers like EDJ, because their salesforce is just that, a salesforce. They don’t question the quality of a product with the same degree of knowledge that a wealth manager has. Not their fault, they were educated by EDJ and with a BS in Geology from University of Southwest Nowhere State, instead of having a CFA and a Harvard MBA. Who could expect them to peel back the layers of documentation that accompanied those structured products. But did they really care anyway? Cause it makes it easier to sleep at night and claim ignorance, while at the same time cashing in on their clients misfortunes.

We're still talking about this?

You actually believe that the structured products groups at these firms weren’t moving their products down the line to sell them to those who they figured were not doing the analysis and due dilligence?  How do you think the distribution networks work?  Have you ever worked directly with one of those groups?  You say little silly little cliches like “paralysis by analysis”, but the fact is, those who did the due dilligence did not blow up their clients nearly as bad as those who just turned around and just sold the product without pouring through the documentation.  The mindset of the institutional salesperson is to find a channel least resistent to unload risk.  If you think I’m lying, do more research and talk to people who worked on those desks.  Comments like “you never sold” are just naive.  My insights, while sometimes harsh, come from experience and a perspective you most likely have never seen.  Bash away, but reality is reality.

You actually believe that the structured products groups at these firms weren’t moving their products down the line to sell them to those who they figured were not doing the analysis and due dilligence?  How do you think the distribution networks work?  Have you ever worked directly with one of those groups?  You say little silly little cliches like “paralysis by analysis”, but the fact is, those who did the due dilligence did not blow up their clients nearly as bad as those who just turned around and just sold the product without pouring through the documentation.  The mindset of the institutional salesperson is to find a channel least resistent to unload risk.  If you think I’m lying, do more research and talk to people who worked on those desks.  Comments like “you never sold” are just naive.  My insights, while sometimes harsh, come from experience and a perspective you most likely have never seen.  Bash away, but reality is reality.

[quote=iceco1d]Spiff…you know, now that I think about it…XBox 360’s theme colors are white & green…they would match the office decor just fine! 

Newrep, you sound intelligent, yet a pompus blowhard.  Any self respecting Joneser prides himself on being able to sell CAIBX and AIVSX to anybody and everybody.  Structured notes however are not that big of a part of the business.  The other “structured note” that was commonly found in inventory that got creamed were SLM bonds.  Is this what you are referring to?  While your brilliant “wealth mgmt” buddies were studying the documentation and pedaling ARS and CDOs, the humble  lower level corner brokers sold mutual funds and 30 year bonds from the likes of BAC, JPM, & T. 

You actually believe that the structured products groups at these firms weren’t moving their products down the line to sell them to those who they figured were not doing the analysis and due dilligence? Did this include ARS, SIVs, CDOs & CDSs? How do you think the distribution networks work? Apparently not very well in regards to the aforementioned products. Have you ever worked directly with one of those groups? Nope, but have you ever sold a bond to retail client? You say little silly little cliches like “paralysis by analysis”, but the fact is, those who did the due dilligence did not blow up their clients nearly as bad as those who just turned around and just sold the product without pouring through the documentation. I had less than 20 LEH bonds on the books when it went south. I have since transferred in another 20 from a managed account from Wachovia. I guess Wach’s SMA people didn’t do the research either. The mindset of the institutional salesperson is to find a channel least resistent to unload risk. Where were these great minds on the previously mentioned products. If you think I’m lying, do more research and talk to people who worked on those desks. Comments like “you never sold” are just naive. You say naive, I say true. My insights, while sometimes harsh, come from experience and a perspective you most likely have never seen. Bash away, but reality is reality.

Tap in inv,blowuptheworld to see inventory on the top secret investments Jones is now pushing to bring down the system.

surely the inventory is off the green screens by now…

Actually I'm jealous of the bond inventory they kept and the payout they had figured in.  where I'm at now I have to call the bond desk and see what's available and the payout sucks!

Haaa…jealous of Jones bond inventory…are you on crack?  Seriously, crack is whack!

yeah jealous, not on crack yet, ck back in 6 months.  Where else can you find a 30 yr bond and sell it to an 80year old.  They paid you fairly well to do that.