Reminds me of the movie Boiler Room. Its about young guys illegaly trading stocks during the stock boom of the late 90s. You can see a clip here:

Link Here

Adam, go over to the economics and investing forum, and read my thread on shorting WaMu. Yes, it is true! WaMu must have $1 bil of neg-am income on their books by now. 15% of their income is neg-am, that is income earned but not received, and I doubt it will ever be received. (Ok, some people will call me a doom and gloomer,but be real: if they can’t even afford to pay all the interest now, how will they afford it when the interest rate rises, and the higher loan balance is amortized over a shorter time period.) For this reason, I’m interested in shorting some of these crazy lenders…

I knew a guy (friend of mine) who was involved with one of these places a couple years ago. It was JUST like that video. Young kids, counterculture types, car salesmen, the whole bit. My friend was involved peripherally with the company and he’d call me to ask questions about appraisal stuff.

The way they ran their program was they’d start the kid out on the phones doing telemarketing – and you don’t even want to know how they got their lists. If the kid could last 30 days and bring in some qualified leads that closed they’d move up to account rep where they’d spend their time doing the grunt work on those leads. Enough of those and they’d move up to account manager where they were running their own team.

This company would not write a loan unless they could net at least $10,000 out of it. Some of these 18-year old, 22-year old high school dropouts were making $10,000, $15,000 and even $20,000 a month. Living large, bling bling and all that but most of them had no clue what to do with that kind of money.

The guys running the company were the most arrogant bastards I ever met. They hit me up to be their local appraiser, to which I politely declined because I was “too busy”. Truth is, I didn’t want my name associated with any of their paper. My participation was limited to giving technical advice on a couple occasions.

My friend lasted there about 6 months before he realized he couldn’t turn these guys around. So much for that plan. When he left they had about 150 employees, were leasing an entire floor in one of the high rises in Sorrento Valley, and the owners were swimming in cash. Needless to say, that company is gone now. It imploded about 6 months after my friend left, which would have been in early 2005 or so.

I’m sure those guys are still out there, though, hitting the phones everyday.

You bet they’re still out there hitting those phones. They have payments to make on their own overpriced homes and BMW 7 series.

Give it some time. They’ll be back living in a ratty apartment, driving a rusted out Honda with a broken taillight and 3 bald tires, they’ll be selling used cars or trying to make it big in Amway.

Karma’s a bitch……….