Some of the genius bagholders probably don’t even have any whiff of their fate yet. For example, some pension funds probably did all of these and more:
1. loaded up on RMBS “highly rated” by Ratings Agencies (liars!)
2. loaded up on agency securities of Fannie and Freddie
3. loaded up on CDO’s and swaps (they could be on the wrong end of such swaps!)
4. paid huge fees to hedge fund managers so that these mismanagers can engage in gambling with the pension fund’s money (nice!! — See Amaranth.)
5. paid huge fees to investment banks (Bear Stearns) for banking services and transaction costs
6. retained and adding more high-priced lawyers so that they can sue all
#’s 1 though 5 above in the future. YAY!!!
To top it off, they borrowed tons of cash too, to give to the hedge fund managers for gambling.
