DrStool Posted December 6, 2007 Author Report Posted December 6, 2007 This so called bailout will result in the immediate and total shutdown of the residential real estate finance market, because all of the MBS and MBS backed CDO and SIV must be written down to reflect the change in expected cash flow. If it goes through. Which it can't. 630417[/snapback] Doc, what do you mean it can't? 630456[/snapback] There may be lip service to an agreement, but from a practical standpoint, they just can't do it. It's not only not feasible, it's not possible to implement on any kind of broad scale. So some of the players will say that they agree, but they won't be able to implement the plan. The investors and the market simply won't allow it. Just the uncertainty it introduces will usher in a reign of terror and chaos in credit markets that have already essentially ceased to function. There's an unbelievable evaporation of fictitious capital under way right now. A rising stock market in the face of that will eventually pay a terrible price. A terrible, terrible price. 630459[/snapback] Doc, what you say is probably true, but that won't stop the politicians from doing it if they think there is a few votes plus a lot of donations from the Fraudsters and the Banksters. If you don't believe the incompetence of the complete bunglers we have representing us, watch the joint congressional hearings when Helo Ben. appears. 630462[/snapback] The politicians can "say" whatever they want. That doesn't make it enforceable. The market simply will not allow it. The investors who hold the affected securities will not allow it. The market would cease to function. Money market funds will start falling like dominoes. That's going to happen anyway, but any appearance of an agreement on this measure would only bring it on sooner. One way or another we are headed for total chaos. You can change the terms of securities on a wholesale basis and expect the market to function. It just won't. Bond investors base purchase decisions on a fixed set of expectations about the return on and return of investment. You just can't unilaterally impose a new set of expectations after the securities are in the hands of the investor. My god. The lawsuits alone would simply lock up the legal system and the markets simultaneously.
Mies van der Rump Posted December 6, 2007 Report Posted December 6, 2007 I never heard this talked about on CNBS today. I wonder why? US job cuts jumped 16 pct in November -- Challenger Wed Dec 5, 2007 7:31am ET NEW YORK, Dec 5 (Reuters) - U.S. companies announced layoffs jumped 15.9 percent last month as the economy grappled with a worsening housing slump and credit crisis, outplacement firm Challenger Gray & Christmas reported on Wednesday. Curiously, housing-related layoffs actually fell, with the auto and energy industries leading the jump in planned job cuts to 73,140 in November from 63,114 in October. The financial sector was also hard hit, not surprising given adverse market conditions that have all but paralyzed many sectors of the investment world. "We probably have not seen the last of financial job cuts tied to the housing slump and the subsequent collapse in credit markets," said Chief Executive Officer John Challenger. http://today.reuters.com/news/articleinves...NGER-URGENT.XML 630466[/snapback] Quit being such a pessimist and buy some GOOG ADP report says all is well: +189,000 jobs
No Einstein Posted December 6, 2007 Report Posted December 6, 2007 The politicians can "say" whatever they want. That doesn't make it enforceable. The market simply will not allow it. The investors who hold the affected securities will not allow it. The market would cease to function. Money market funds will start falling like dominoes. That's going to happen anyway, but any appearance of an agreement on this measure would only bring it on sooner. One way or another we are headed for total chaos................ 630470[/snapback] doc, you sure do sound like Hypertiger...
elh Posted December 6, 2007 Report Posted December 6, 2007 Can anyone suggest a book that I can study concerning the financial and economic effects of the recently past devaluation in Japan. My question picks up on a comment by Doc, I believe, yesterday that our gocernment may bury all of the toxic waste similar to what Japan did. If we do, then perhaps we might avoid an all out calamity, but I would like to learn more about what happened in Japan at both the economic as well as the personal. It seems to me that we are in the 6th month of knowledge about the credit crisis or real estate crisis or whatever it is called. Despite that we have not had any significant impact on a day to day living level. Perhaps life will not be all that bad if Japan is any model. 630469[/snapback] Dude, you need to lose the books.
elh Posted December 6, 2007 Report Posted December 6, 2007 doc, you sure do sound like Hypertiger... 630472[/snapback] Doc needs that last systemic crisis that will finally shake up the masses. The proletariat will finally rise up and set up a socialist utopia using grain-based money.
elh Posted December 6, 2007 Report Posted December 6, 2007 One way or another we are headed for total chaos. You can change the terms of securities on a wholesale basis and expect the market to function. It just won't. Bond investors base purchase decisions on a fixed set of expectations about the return on and return of investment. You just can't unilaterally impose a new set of expectations after the securities are in the hands of the investor. My god. The lawsuits alone would simply lock up the legal system and the markets simultaneously. I would love to see investors boycotting the Treasury market en masse if Uncle Sam tries to do this. In Norway, the government won't bail out the towns that lost money on SIVs, but the Norwegian central bank continues to bail out Fannie and the U.S. Treasury. Hypocrites.
jickiss Posted December 6, 2007 Report Posted December 6, 2007 jickiss is back! jickiss is back! and, fwiw, if Doc is conceptually correct in terms of his analysis of the mortgage securities being locked up by a 5 year extension of terms due to reset under "Contract" then, RE will trade only for cash, and the cash transaction prices will determine the real "Floor" for any properites....if that becomes true, as a Direction or Tendency, then, for sure, Massive Defaults will ensue in Mortgages Outstanding which are Not in default today, for, at the margin, it will PAY to stop Paying and to buy Gold and Silver Physical at the margin.... no? meanwhile, take a good look at GG tomorrow, for the wedge should be bought with Both Hands, for sure. jickiss!!!!!!!
No Einstein Posted December 6, 2007 Report Posted December 6, 2007 .............using grain-based money. 630474[/snapback] as along as that grain based money is vodka ...I am all for it...
Benny Hoo Hoo Posted December 6, 2007 Report Posted December 6, 2007 Shorty is gonna love this one. REO's get even more expensive If there are no homeowners to pay the snow removal costs, it will be forwarded to the bank that owns the foreclosed home. Maybe Hank and George can come up with a plan to reduce the costs charged by the city. Better yet, maybe they can stop it from snowing. What a freakin' mess.
Private Skidmark Posted December 6, 2007 Report Posted December 6, 2007 Shorty is gonna love this one. REO's get even more expensive If there are no homeowners to pay the snow removal costs, it will be forwarded to the bank that owns the foreclosed home. Maybe Hank and George can come up with a plan to reduce the costs charged by the city. Better yet, maybe they can stop it from snowing. What a freakin' mess. 630478[/snapback] If they're consistent, they'll just break the measuring device so that no matter how much snow falls, it will always be a trace amount and not in need of plowing.
elh Posted December 6, 2007 Report Posted December 6, 2007 Does anybody know how REOs work in a securitized world? There's a servicer who processes the income stream on behalf of the bagholders. When the homoaner defaults, the bagholders collectively own the house and should pay for upkeep. Obviously, the bagholders can't take possession of the house. What are their responsibilities to upkeep and their share should the house get auctioned? Is the securitized bagholder the impasse in auctioning off these homes at firesale prices?
cwd Posted December 6, 2007 Report Posted December 6, 2007 I never heard this talked about on CNBS today. I wonder why? US job cuts jumped 16 pct in November -- Challenger Wed Dec 5, 2007 7:31am ET NEW YORK, Dec 5 (Reuters) - U.S. companies announced layoffs jumped 15.9 percent last month as the economy grappled with a worsening housing slump and credit crisis, outplacement firm Challenger Gray & Christmas reported on Wednesday. Curiously, housing-related layoffs actually fell, with the auto and energy industries leading the jump in planned job cuts to 73,140 in November from 63,114 in October. The financial sector was also hard hit, not surprising given adverse market conditions that have all but paralyzed many sectors of the investment world. "We probably have not seen the last of financial job cuts tied to the housing slump and the subsequent collapse in credit markets," said Chief Executive Officer John Challenger. http://today.reuters.com/news/articleinves...NGER-URGENT.XML 630466[/snapback] Quit being such a pessimist and buy some GOOG ADP report says all is well: +189,000 jobs 630471[/snapback] I am about $500/share late on GOOG.
Brisbane Bear Posted December 6, 2007 Report Posted December 6, 2007 it cant be all that bad, according to Reuters we are headed for a shallow recession.. Shallow first-half recession seen for U.S. economy U.S. exports will grow rapidly thanks to the weak dollar and demand from emerging markets, but that will not make up for the ripple effect of shrinking construction and consumer spending, Adibi said. http://www.reuters.com/article/ousiv/idUSN...lBrandChannel=0 myself, I am in the hard landing camp,but am thinking of moving into the 'very' hard landing camp..
Brisbane Bear Posted December 6, 2007 Report Posted December 6, 2007 the cost of living is so high these days,its no wonder students are falling behind in their payments. Infact I don't know how anyone can afford to live in this day and age. Everyone watches shows like Desperate Housewives or The OC and think thats how life is supposed to be.Party on 24/7. The reality will be very painful when people realise that they have been sold a pup. NEW YORK (Reuters) - The shares of First Marblehead Corp (FMD.N: Quote, Profile, Research), one of the largest securitizers of student loans, plunged more than 20 percent to a two-year low on Wednesday after an anal cyst cut his rating on the stock and Moody's Investors Service threatened to downgrade some of its securities. Signs that more students are falling behind on payments prompted Michael Taiano, an anal cyst at Sandler O'Neill & Partners LP, to cut his rating on First Marblehead to "hold" from "buy." He said uncertainty about margins might also limit potential for the shares to rise. http://www.reuters.com/article/hotStocksNe...564400920071205
Hausbare Posted December 6, 2007 Report Posted December 6, 2007 Wow! Aren't we lucky to live in a Democracy where Free Mkt Capitalists can lobby for Communism?! Shrub is turning into a "Compassionate Socialist" and Christ only knows what Hillary is turning into. Suddenly, they're conceptually aligned. Both are wanting to interfere with said free markets and change deals in mid stream. Hillary is good at this -- remember White Water? And let's not forget our collective guilt as racists and welcome the most unabashed free marketer -- or should I say -- extortionist to Wall St on the 10th, none other than the REVEREND JESSE JACKSON. He will be marching on Wall St in protest of his disenfranchised minions demanding Mortgage Reparations! So Shrub is leaning toward Communism, Hillary toward.... Theocracy or maybe Sheocracy, and Jesse toward organized crime... HEY kinda like Wall St! Supposedly, Shrub has reached an agreement with U.S. Bankers of some sort. Hillary's plan -- not to be out done -- is "voluntary". Wonder if Shrub's is "voluntary." And will he/she/they decree that this is a Marshall Law thing so that law suits cannot be filed in time of national emergency or some such thing? And supposedly this will not effect anyone monetarily -- in a bad way. Maybe they'll use the half billion dollars they gave to Hurricane Katrina victims for emergency relief, which said victims squandered on booze, smokes, tattoos, and gambling. (Uncle Sam is trying to track down the miscreants and get his money back, so he can give it to the Mortgage Victims, who will HONESTLY represent themselves as victimized and traumatized when they apply for the Teaser Rate Relief.) I guess they'll have to set up a new bureacracy to run this thing, and won't they have to have hearings on this in Congress? Or will it be where Shrub can shoot first and be asked questions later. And just think, its all happening around Christmas time. (I don't mean to offend anyone by saying Christmas).... er ... around Winter Solstace Time. Kumbaya!!! Is this a great country or WHAT?
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