Edward Jones Fed Subprime?

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Feb 13, 2009 3:00 pm

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?

Feb 13, 2009 3:17 pm

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.



Feb 13, 2009 3:19 pm

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

Feb 13, 2009 3:26 pm

so did my grandma

Feb 13, 2009 3:26 pm

dummy,



your grandma was the one borrowing not providing the cash

Feb 13, 2009 3:32 pm
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?

 
No offense, I think that is a stretch. There are a lot of companies that EDJ sells structured notes for, it doesn't mean they agree or even know what they are using those funds for, much less claim some responsibility.
Feb 13, 2009 3:33 pm

she borrowed the interest? I thought she paid it.

Feb 13, 2009 3:43 pm
SometimesNowhere:
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?



No offense, I think that is a stretch. There are a lot of companies that EDJ sells structured notes for, it doesn't mean they agree or even know what they are using those funds for, much less claim some responsibility.





regardless of what they knew or didn't know, bottom line was they were feeding ALOT of their investors cash to Bear and Lehman which were then used to buy CDOs and CMOs. They were a HUGE part of the food chain here.



Ever wonder why such a large % of EDJ's fixed income products in these years involved financial insitutions?



Feb 13, 2009 3:56 pm
josephjones107:
SometimesNowhere:
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?

 

No offense, I think that is a stretch. There are a lot of companies that EDJ sells structured notes for, it doesn't mean they agree or even know what they are using those funds for, much less claim some responsibility.



regardless of what they knew or didn't know, bottom line was they were feeding ALOT of their investors cash to Bear and Lehman which were then used to buy CDOs and CMOs. They were a HUGE part of the food chain here.

Ever wonder why such a large % of EDJ's fixed income products in these years involved financial insitutions?

 
While I do not agree, I can at least understand a lot of the criticism that EDJ gets. However, as I mentioned in my previous post, you are reaching.
Feb 13, 2009 3:58 pm

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?

Feb 13, 2009 4:23 pm

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.


The ones who really dropped the ball, imo, is the rating agencies.  Hell, Lehman was A rated the Friday before they declared bankruptcy.
Feb 13, 2009 4:29 pm

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.

Feb 13, 2009 4:47 pm

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? 

 
Anyone who ever did any business with any of the companies that had anything to do with mortgages or derivitives thereof are responsible for adding fuel to the fire.  If you're looking for scapegoats try hedge funds or institutional money managers.  Those guys weren't just buying $10K a pop for grandma and grandpa, they were buying whole issues and putting them into their portfolios.  Using your logic, if my clients owned a mutual fund that did biz with one of those companies, I'm to blame for the mess.  Trying to pin this on Jones is just a waste of your precious brain cells.  In fact, I wish I had some of mine that I just used back. 
Feb 13, 2009 4:55 pm

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.

Feb 13, 2009 5:00 pm

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.

Feb 13, 2009 5:20 pm

This is kinda reaching....

 
Same can be said of clients who banked with any of the failed banks(wamu, indymac, etc). Those banking customer provided the bank with money to leverage and invest in toxic assets.
 
 
 
Feb 13, 2009 5:22 pm

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

 
Others have already covered the fact that by your definition that if you did any business with these companies then you provided them the capital to buy "toxic assets".  By a very literal interpretation you are right. 
 
But your way of thinking is confusing to me.  Are you a conspiracy theorist? 
 
BTW in my other post I asked if the spoon was pure silver,  you didn't answer me.  Was it?
Feb 13, 2009 5:30 pm

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

Feb 13, 2009 5:37 pm

Jo,


You may or may not be right about that.  I'm not going to do the research to know for sure.  But you seem to believe that the big wigs at Ed Jones were in cahoots with Lehman and others and knew they'd be using that money for that purpose.   
Feb 13, 2009 5:41 pm

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 %