The View From Inside a Depression

[patientrenter]

[quote=briansd1]Without the “infection” effect, the crisis would have been contained.[/quote]

LoL!

Yes, you can let housing become overvalued by ten trillion dollars, and lend against the overvaluation by another few trillion, and the problem is the “infection” of letting the values come back down to earth.

[briansd1]

LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.

[briansd1]

LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.

[briansd1]

LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.

[briansd1]

LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.

[briansd1]

LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.

[jpinpb]

[quote=briansd1]LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.[/quote]

brian – I agree w/you. It was like a disease that spread on some many sectors and everyone was touched by it in one form or another. Infection is a good way to describe it. You have mentioned the wherewithal before and it’s evident by all the NODs.

[jpinpb]

[quote=briansd1]LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.[/quote]

brian – I agree w/you. It was like a disease that spread on some many sectors and everyone was touched by it in one form or another. Infection is a good way to describe it. You have mentioned the wherewithal before and it’s evident by all the NODs.

[jpinpb]

[quote=briansd1]LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.[/quote]

brian – I agree w/you. It was like a disease that spread on some many sectors and everyone was touched by it in one form or another. Infection is a good way to describe it. You have mentioned the wherewithal before and it’s evident by all the NODs.

[jpinpb]

[quote=briansd1]LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.[/quote]

brian – I agree w/you. It was like a disease that spread on some many sectors and everyone was touched by it in one form or another. Infection is a good way to describe it. You have mentioned the wherewithal before and it’s evident by all the NODs.

[jpinpb]

[quote=briansd1]LOL too.. 🙂

The collateral is gone but the loans are still there. The borrowers still owe the money.

As I keep on saying, borrowers didn’t borrow based on their wherewithal to service the debt (otherwise there would not be “infection”).

Buyers borrowed based on the value of the pledge assets, and the smug certainty (at time of purchase) to sell at a profit, and pocket the difference.

Since we have already determined that there was no wherewithal to begin with (in general), then we just need to wait for the unwinding process to complete.

This is just looking at the macro picture. Of course, it’s different house to house.[/quote]

brian – I agree w/you. It was like a disease that spread on some many sectors and everyone was touched by it in one form or another. Infection is a good way to describe it. You have mentioned the wherewithal before and it’s evident by all the NODs.

[ucodegen]

Arraya we absolutely agree on that… yes I would agree that as of about 2003 Wall Street and even companies like AIG knew that for sure it was a no lose bet. Either you win and make money or you lose and get bailed out.

I think that Arraya is more pissed off at Goldman than AIG. He should really be pissed off at AIG. They were a primary insurer for MBS(s). Goldman recognized that a problem was coming down the pike and extricated themselves as best they could. AIG continued to do business as usual (They even tried to pay themselves as usual too). The result was that risk was mis-priced everywhere (AIG was considered an ‘expert’ at CDS(s)). This is why I feel AIG should be liquidated. To prevent systemic risk.. the gov would have to step in and make good on any CDS(s) that were in force for a period of time (duration of the existing contract). The liquidated portions of AIG should go up for bid and the money from the purchasers should go to cover as much of the cost as possible.

[ucodegen]

Arraya we absolutely agree on that… yes I would agree that as of about 2003 Wall Street and even companies like AIG knew that for sure it was a no lose bet. Either you win and make money or you lose and get bailed out.

I think that Arraya is more pissed off at Goldman than AIG. He should really be pissed off at AIG. They were a primary insurer for MBS(s). Goldman recognized that a problem was coming down the pike and extricated themselves as best they could. AIG continued to do business as usual (They even tried to pay themselves as usual too). The result was that risk was mis-priced everywhere (AIG was considered an ‘expert’ at CDS(s)). This is why I feel AIG should be liquidated. To prevent systemic risk.. the gov would have to step in and make good on any CDS(s) that were in force for a period of time (duration of the existing contract). The liquidated portions of AIG should go up for bid and the money from the purchasers should go to cover as much of the cost as possible.

[ucodegen]

Arraya we absolutely agree on that… yes I would agree that as of about 2003 Wall Street and even companies like AIG knew that for sure it was a no lose bet. Either you win and make money or you lose and get bailed out.

I think that Arraya is more pissed off at Goldman than AIG. He should really be pissed off at AIG. They were a primary insurer for MBS(s). Goldman recognized that a problem was coming down the pike and extricated themselves as best they could. AIG continued to do business as usual (They even tried to pay themselves as usual too). The result was that risk was mis-priced everywhere (AIG was considered an ‘expert’ at CDS(s)). This is why I feel AIG should be liquidated. To prevent systemic risk.. the gov would have to step in and make good on any CDS(s) that were in force for a period of time (duration of the existing contract). The liquidated portions of AIG should go up for bid and the money from the purchasers should go to cover as much of the cost as possible.

[ucodegen]

Arraya we absolutely agree on that… yes I would agree that as of about 2003 Wall Street and even companies like AIG knew that for sure it was a no lose bet. Either you win and make money or you lose and get bailed out.

I think that Arraya is more pissed off at Goldman than AIG. He should really be pissed off at AIG. They were a primary insurer for MBS(s). Goldman recognized that a problem was coming down the pike and extricated themselves as best they could. AIG continued to do business as usual (They even tried to pay themselves as usual too). The result was that risk was mis-priced everywhere (AIG was considered an ‘expert’ at CDS(s)). This is why I feel AIG should be liquidated. To prevent systemic risk.. the gov would have to step in and make good on any CDS(s) that were in force for a period of time (duration of the existing contract). The liquidated portions of AIG should go up for bid and the money from the purchasers should go to cover as much of the cost as possible.

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