Why is overall credit market tanking on mortgage defaults

[bubba99]

I get why the CMO backed securities are tanking on mortgage defaults, but how and why is this affecting overall credit availability for business?

Banks still have money they need to lend, and business takeovers still need financing. How is overall financial liquidity being impacted by the small mortgage market? Is it as simple as the perception of the coming recession? Are all Collateralized debts being lumped into the mortgage mess? And what happened to the alleged insurance on the mortgages?

Thanks in advance for your help

Confused

[joebaduba]

because they either have to boost reserves and/or use the money they would otherwise lend out to these other businesses to cover losses on the POS CDOs

[joebaduba]

because they either have to boost reserves and/or use the money they would otherwise lend out to these other businesses to cover losses on the POS CDOs

[joebaduba]

because they either have to boost reserves and/or use the money they would otherwise lend out to these other businesses to cover losses on the POS CDOs

[bubba99]

Im with you, but the reserve increases are a only few basis ponts, and the POS CDO’s were supposed to be insured. Is the insurance less than required, or lost in their leveraging or bankrupt?

[bubba99]

Im with you, but the reserve increases are a only few basis ponts, and the POS CDO’s were supposed to be insured. Is the insurance less than required, or lost in their leveraging or bankrupt?

[bubba99]

Im with you, but the reserve increases are a only few basis ponts, and the POS CDO’s were supposed to be insured. Is the insurance less than required, or lost in their leveraging or bankrupt?

[(former)FormerSanDiegan]

FEAR

[(former)FormerSanDiegan]

FEAR

[(former)FormerSanDiegan]

FEAR

[LA_Renter]

Interesting day wouldn’t you say. So the FED will open the credit window. Two injections today. We have found a buyer for the mortgage backed securities….great! You would think the market would jump for joy but so far that isn’t happening. If you want to know how serious this is, the last time Japan, Europe, and the US all injected liquidity at the same time was after 9/11. From my view the FED is not inspiring confidence. They appear to stumbling along not really knowing what to do. And they also look like they are being bullied by Wall Street. I don’t like it! We are in an environment where there is no margin for error and I have a feeling these guys are going to error. My real worry is a dollar crisis and they are taking baby steps into that scenario right now.

[LA_Renter]

Interesting day wouldn’t you say. So the FED will open the credit window. Two injections today. We have found a buyer for the mortgage backed securities….great! You would think the market would jump for joy but so far that isn’t happening. If you want to know how serious this is, the last time Japan, Europe, and the US all injected liquidity at the same time was after 9/11. From my view the FED is not inspiring confidence. They appear to stumbling along not really knowing what to do. And they also look like they are being bullied by Wall Street. I don’t like it! We are in an environment where there is no margin for error and I have a feeling these guys are going to error. My real worry is a dollar crisis and they are taking baby steps into that scenario right now.

[LA_Renter]

Interesting day wouldn’t you say. So the FED will open the credit window. Two injections today. We have found a buyer for the mortgage backed securities….great! You would think the market would jump for joy but so far that isn’t happening. If you want to know how serious this is, the last time Japan, Europe, and the US all injected liquidity at the same time was after 9/11. From my view the FED is not inspiring confidence. They appear to stumbling along not really knowing what to do. And they also look like they are being bullied by Wall Street. I don’t like it! We are in an environment where there is no margin for error and I have a feeling these guys are going to error. My real worry is a dollar crisis and they are taking baby steps into that scenario right now.

[SHILOH]

From what I read….many didn’t even build reserves into the risk from all the low-grade mortgages.

[SHILOH]

From what I read….many didn’t even build reserves into the risk from all the low-grade mortgages.

[Author]

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