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  • August 23, 2008 at 2:41 PM #13653
    j
    Participant

    I keep hearing politicians and regulators saying that the Mortgage Crisis is bad, but it is not as bad as the S&L Crisis. Are they on crack or just trying to fill the cracks in the dyke with their fingers. Lincoln Savings was the largest failure of the S&L crisis, which I believe is a smaller failure than Bear Sterns let alone the emanate failures of Fannie and Freddy. Not to mention the simi-failure of Countrywide, which still may fail the way B of A is treating Countrywide debt. (Plus we all know many more failures are coming.)

    I just do not believe the crap I hear on CNBC, so I googled a few thinks, and it gets scary.

    If you look at the facts behind Lincoln Saving’s failure you will wonder what regulators learned from from the S&L Crisis. It is especially troublesome that a key consultant on Lincoln’s behalf was Alan Greenspan. Greenspan stated that Lincoln’s activities were not risky and would not cost investors or the tax payers. http://en.wikipedia.org/wiki/Charles_Keating Looks like Greenspan never understood banking.

    There was also a key employee that clearly was not qualified to do a job in a key decision making posision. I keep hearing about all these bartenders and checkers getting jobs bundling mortgages and underwritting loans, but Charles Keating III went from college dropout to busboy to Chairman of the Board of a S&L. http://www.nysscpa.org/cpajournal/old/10691661.htm

    While I know that most people on this site know what has been going on in the Mortgage Crisis, many may be too young to remember the S&L Crisis of the 90’s that was lead by Lincoln Savings.

    August 23, 2008 at 11:34 PM #260851
    gandalf
    Participant

    You’re correct.

    In the early 1990’s, I worked through the RTC cleanup as an analyst on a mortgage bond trading desk, whole loan securitization, pouring over pools of mortgages, working with underwriters, analyzing characteristics of the underlying debt instruments so as to optimize the return on the securitization process for the bank.

    The quality of debt in circulation now is easily 3-5 times worse, and I suspect that’s a conservative estimate. If total losses end up in the range of $1-2T, I believe that puts us about 30% of the way through the write-downs. Many more failures on the way, major institutions beyond Bear and IndyMac.

    Also, I would suggest that the impact of today’s crisis has spread far beyond subprime and the secondary mortgage market. The larger market for credit has become extremely tight, which exerts further downward pressure on the economy just as we are entering into a fairly serious business cycle correction / contraction.

    On top of this, we’re going to have to cut spending at the state and local levels — again, just as we’re entering into a contraction. The federal side is in a bind as well, walking the monetary tightrope between stagant growth and inflation. Things are precarious right now, and I’m quite concerned.

    August 23, 2008 at 11:34 PM #261049
    gandalf
    Participant

    You’re correct.

    In the early 1990’s, I worked through the RTC cleanup as an analyst on a mortgage bond trading desk, whole loan securitization, pouring over pools of mortgages, working with underwriters, analyzing characteristics of the underlying debt instruments so as to optimize the return on the securitization process for the bank.

    The quality of debt in circulation now is easily 3-5 times worse, and I suspect that’s a conservative estimate. If total losses end up in the range of $1-2T, I believe that puts us about 30% of the way through the write-downs. Many more failures on the way, major institutions beyond Bear and IndyMac.

    Also, I would suggest that the impact of today’s crisis has spread far beyond subprime and the secondary mortgage market. The larger market for credit has become extremely tight, which exerts further downward pressure on the economy just as we are entering into a fairly serious business cycle correction / contraction.

    On top of this, we’re going to have to cut spending at the state and local levels — again, just as we’re entering into a contraction. The federal side is in a bind as well, walking the monetary tightrope between stagant growth and inflation. Things are precarious right now, and I’m quite concerned.

    August 23, 2008 at 11:34 PM #261058
    gandalf
    Participant

    You’re correct.

    In the early 1990’s, I worked through the RTC cleanup as an analyst on a mortgage bond trading desk, whole loan securitization, pouring over pools of mortgages, working with underwriters, analyzing characteristics of the underlying debt instruments so as to optimize the return on the securitization process for the bank.

    The quality of debt in circulation now is easily 3-5 times worse, and I suspect that’s a conservative estimate. If total losses end up in the range of $1-2T, I believe that puts us about 30% of the way through the write-downs. Many more failures on the way, major institutions beyond Bear and IndyMac.

    Also, I would suggest that the impact of today’s crisis has spread far beyond subprime and the secondary mortgage market. The larger market for credit has become extremely tight, which exerts further downward pressure on the economy just as we are entering into a fairly serious business cycle correction / contraction.

    On top of this, we’re going to have to cut spending at the state and local levels — again, just as we’re entering into a contraction. The federal side is in a bind as well, walking the monetary tightrope between stagant growth and inflation. Things are precarious right now, and I’m quite concerned.

    August 23, 2008 at 11:34 PM #261108
    gandalf
    Participant

    You’re correct.

    In the early 1990’s, I worked through the RTC cleanup as an analyst on a mortgage bond trading desk, whole loan securitization, pouring over pools of mortgages, working with underwriters, analyzing characteristics of the underlying debt instruments so as to optimize the return on the securitization process for the bank.

    The quality of debt in circulation now is easily 3-5 times worse, and I suspect that’s a conservative estimate. If total losses end up in the range of $1-2T, I believe that puts us about 30% of the way through the write-downs. Many more failures on the way, major institutions beyond Bear and IndyMac.

    Also, I would suggest that the impact of today’s crisis has spread far beyond subprime and the secondary mortgage market. The larger market for credit has become extremely tight, which exerts further downward pressure on the economy just as we are entering into a fairly serious business cycle correction / contraction.

    On top of this, we’re going to have to cut spending at the state and local levels — again, just as we’re entering into a contraction. The federal side is in a bind as well, walking the monetary tightrope between stagant growth and inflation. Things are precarious right now, and I’m quite concerned.

    August 23, 2008 at 11:34 PM #261147
    gandalf
    Participant

    You’re correct.

    In the early 1990’s, I worked through the RTC cleanup as an analyst on a mortgage bond trading desk, whole loan securitization, pouring over pools of mortgages, working with underwriters, analyzing characteristics of the underlying debt instruments so as to optimize the return on the securitization process for the bank.

    The quality of debt in circulation now is easily 3-5 times worse, and I suspect that’s a conservative estimate. If total losses end up in the range of $1-2T, I believe that puts us about 30% of the way through the write-downs. Many more failures on the way, major institutions beyond Bear and IndyMac.

    Also, I would suggest that the impact of today’s crisis has spread far beyond subprime and the secondary mortgage market. The larger market for credit has become extremely tight, which exerts further downward pressure on the economy just as we are entering into a fairly serious business cycle correction / contraction.

    On top of this, we’re going to have to cut spending at the state and local levels — again, just as we’re entering into a contraction. The federal side is in a bind as well, walking the monetary tightrope between stagant growth and inflation. Things are precarious right now, and I’m quite concerned.

    August 24, 2008 at 12:03 PM #261016
    peterb
    Participant

    @Gandalf, it sounds like you know the debt business fairly well. Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?
    Thanks.

    August 24, 2008 at 12:03 PM #261216
    peterb
    Participant

    @Gandalf, it sounds like you know the debt business fairly well. Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?
    Thanks.

    August 24, 2008 at 12:03 PM #261224
    peterb
    Participant

    @Gandalf, it sounds like you know the debt business fairly well. Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?
    Thanks.

    August 24, 2008 at 12:03 PM #261275
    peterb
    Participant

    @Gandalf, it sounds like you know the debt business fairly well. Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?
    Thanks.

    August 24, 2008 at 12:03 PM #261314
    peterb
    Participant

    @Gandalf, it sounds like you know the debt business fairly well. Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?
    Thanks.

    August 24, 2008 at 2:00 PM #261061
    ucodegen
    Participant

    Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?

    You might want to clarify. There is a difference between treasury rates, fed reserve window rates and mortgage rates.

    August 24, 2008 at 2:00 PM #261261
    ucodegen
    Participant

    Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?

    You might want to clarify. There is a difference between treasury rates, fed reserve window rates and mortgage rates.

    August 24, 2008 at 2:00 PM #261269
    ucodegen
    Participant

    Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?

    You might want to clarify. There is a difference between treasury rates, fed reserve window rates and mortgage rates.

    August 24, 2008 at 2:00 PM #261321
    ucodegen
    Participant

    Given this situation as you’ve described above, where do you see interest rates on mortgages headed in the next 12 months?

    You might want to clarify. There is a difference between treasury rates, fed reserve window rates and mortgage rates.

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