100 Billion dollar subprime Fund

[patientlywaiting]

Isn’t this like a bunch of neighbors getting together to buy each other’s houses to keep the market from tanking? How long can they do that? Sounds like market manipulation to me.

[4runner]

Can someone explain why this isn’t an antitrust violation?

[4runner]

Can someone explain why this isn’t an antitrust violation?

[zzz]

Government bailout / meddling and big banks looking to make more money. Why is anyone shocked? LTCM was bailed out because they made stupid bets. No ones wants to see foreigners owning too much of America.

Whether its right or wrong, if it presents a wide spread economic impact by doing nothing – read recession – then would you rather they get together and prop each other up so that good ol Americans don’t lose their jobs?

[zzz]

Government bailout / meddling and big banks looking to make more money. Why is anyone shocked? LTCM was bailed out because they made stupid bets. No ones wants to see foreigners owning too much of America.

Whether its right or wrong, if it presents a wide spread economic impact by doing nothing – read recession – then would you rather they get together and prop each other up so that good ol Americans don’t lose their jobs?

[bsrsharma]

Isn't this like a bunch of neighbors getting together to buy each other's houses to keep the market from tanking?

The way I understand this (superficially), it is like this: you want to make some money by making burgers in your backyard and selling them. Just happens that people hesitate to buy from you. Now, you go to your friendly neighbor who works at McDonalds and get  him to wrap your burgers in McD wrapper and sell them as BigMacs. Now, since McDonald corp was not really robbed of any monetary asset (if you ignore the cost of wrappers), they may never come to know about this. But you have fooled people into paying BigMac prices for your backyard burger and made money.

[bsrsharma]

Isn't this like a bunch of neighbors getting together to buy each other's houses to keep the market from tanking?

The way I understand this (superficially), it is like this: you want to make some money by making burgers in your backyard and selling them. Just happens that people hesitate to buy from you. Now, you go to your friendly neighbor who works at McDonalds and get  him to wrap your burgers in McD wrapper and sell them as BigMacs. Now, since McDonald corp was not really robbed of any monetary asset (if you ignore the cost of wrappers), they may never come to know about this. But you have fooled people into paying BigMac prices for your backyard burger and made money.

[zzz]

The people selling backyard wrapped McD burgers are trying to sell them to Burger King employees – this is not a naive group we’re talking about here.

[zzz]

The people selling backyard wrapped McD burgers are trying to sell them to Burger King employees – this is not a naive group we’re talking about here.

[bsrsharma]

why this isn't an antitrust violation?

What antitrust violation when the U.S. Treasury goads unwilling bankers into collusion to prevent monetary collapse? This is more like the actions of a Banana republic where one honcho controls everything rather than free market capitalism.

[bsrsharma]

why this isn't an antitrust violation?

What antitrust violation when the U.S. Treasury goads unwilling bankers into collusion to prevent monetary collapse? This is more like the actions of a Banana republic where one honcho controls everything rather than free market capitalism.

[gandalf]

Career in MBS? Wow! Long-time ago, no wife, no kids. RTC days… I enjoyed working on Wall Street though. Most of the work I was doing back then was on the machine (computers) — assisting the traders, analyzing loan pools, programming, crunching statistics, developing reports, etc. Enjoyed the machine so much, that’s what I do for a living now, software engineer, building systems.

Developed a property and facilities information system about 10 years ago, important for institutional clients. Evolved into running a business (CEO), so things are good. It’s interesting work we enjoy (most days), solving real-world problems (no leverage) for good people (higher ed).

All these years though, I’m still an Econ-nerd at heart. I watch and try to understand what’s happening. Truthfully, I’m amazed at how things have unfolded the past 10 years, it’s challenged my assumptions and understanding about the economy. Have to add that I’m fairly concerned about the general direction of things these days (and not just on the economics side).

The current thread is fascinating material. There’s an assumption in asset-backed securities that the if the expected revenue stream fails due to higher percentages delinquencies and foreclosures, the underlying assets provide this kind of backstop of value for the investor. Kind of like an insurance policy.

Not true anymore. The revenue streams are failing, housing values have depreciated and it’s likely to continue along these lines for a couple more years. Meantime, a huge number of financial streams, balance sheets and price points in our ‘paper’ economy have been ‘marked’ to these values. The repercussions of the correction are likely to be, as we say in software, ‘non-trivial’. As much as I would wish otherwise.

Best!

[gandalf]

Career in MBS? Wow! Long-time ago, no wife, no kids. RTC days… I enjoyed working on Wall Street though. Most of the work I was doing back then was on the machine (computers) — assisting the traders, analyzing loan pools, programming, crunching statistics, developing reports, etc. Enjoyed the machine so much, that’s what I do for a living now, software engineer, building systems.

Developed a property and facilities information system about 10 years ago, important for institutional clients. Evolved into running a business (CEO), so things are good. It’s interesting work we enjoy (most days), solving real-world problems (no leverage) for good people (higher ed).

All these years though, I’m still an Econ-nerd at heart. I watch and try to understand what’s happening. Truthfully, I’m amazed at how things have unfolded the past 10 years, it’s challenged my assumptions and understanding about the economy. Have to add that I’m fairly concerned about the general direction of things these days (and not just on the economics side).

The current thread is fascinating material. There’s an assumption in asset-backed securities that the if the expected revenue stream fails due to higher percentages delinquencies and foreclosures, the underlying assets provide this kind of backstop of value for the investor. Kind of like an insurance policy.

Not true anymore. The revenue streams are failing, housing values have depreciated and it’s likely to continue along these lines for a couple more years. Meantime, a huge number of financial streams, balance sheets and price points in our ‘paper’ economy have been ‘marked’ to these values. The repercussions of the correction are likely to be, as we say in software, ‘non-trivial’. As much as I would wish otherwise.

Best!

[bsrsharma]

May be at first, but the hope is eventually, you will end up eating it, after all the trading. They may even serve it with free (authentic) McD fries to fool you into believing the burgers are McD’s. { This is the basis of CDOs, where they add some flavoring of good debt to floor sweepings and sell them as “hotdogs” }

[bsrsharma]

May be at first, but the hope is eventually, you will end up eating it, after all the trading. They may even serve it with free (authentic) McD fries to fool you into believing the burgers are McD’s. { This is the basis of CDOs, where they add some flavoring of good debt to floor sweepings and sell them as “hotdogs” }

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