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gandalf
ParticipantCareer 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!
ParticipantExactly correct. Even a 25% nominal repricing, as we are currently experiencing (50% real?), is going to have significant consequences.
True, there are upsides to ‘play’, but losses in ‘paper’ wealth are still losses in a ‘paper’ economy, and the consequences are going to be overwhelming negative for the vast majority of stakeholders.
ParticipantExactly correct. Even a 25% nominal repricing, as we are currently experiencing (50% real?), is going to have significant consequences.
True, there are upsides to ‘play’, but losses in ‘paper’ wealth are still losses in a ‘paper’ economy, and the consequences are going to be overwhelming negative for the vast majority of stakeholders.
ParticipantRight now you are down and out and feeling really crappy,
When I see how sad you are, it sort of makes me … happy?
Sorry Nicky, human nature, nothing I can do,
It’s Schadenfreude! Making me feel glad that I’m not you!– Avenue Q, Schadenfreude
ParticipantRight now you are down and out and feeling really crappy,
When I see how sad you are, it sort of makes me … happy?
Sorry Nicky, human nature, nothing I can do,
It’s Schadenfreude! Making me feel glad that I’m not you!– Avenue Q, Schadenfreude
ParticipantDaveLJ,
Funny coincidence with name, I used to work at DLJ in a former lifetime, secondary mortgage market, MBS desk, whole loan analyst. Good job, interesting work for a while. Loved the math, yield curve, loan characteristics, pricing mechanics. RTC cleanup was mild compared to the ‘junk’ out there today.
I think you’re exactly correct, BTW. Both in your read of the situation, and predicting the outcome. Superfund will help to shore up cash flow deficiencies, defer re-marking the securities. But at the end of the day, it’s an awful lot of bad paper.
ParticipantDaveLJ,
Funny coincidence with name, I used to work at DLJ in a former lifetime, secondary mortgage market, MBS desk, whole loan analyst. Good job, interesting work for a while. Loved the math, yield curve, loan characteristics, pricing mechanics. RTC cleanup was mild compared to the ‘junk’ out there today.
I think you’re exactly correct, BTW. Both in your read of the situation, and predicting the outcome. Superfund will help to shore up cash flow deficiencies, defer re-marking the securities. But at the end of the day, it’s an awful lot of bad paper.
ParticipantThe Dude abides…
ParticipantMarket will start to rebound in 2012, with real housing prices off 50-60% when all is said and done. Next 2-3 years are going to be tumultuous. Nominally, losses will present themselves somewhere in the 20-30% range. Five-year window, I’m also factoring in high probability of significant devaluation of the dollar relative to other currencies.
ParticipantMarket will start to rebound in 2012, with real housing prices off 50-60% when all is said and done. Next 2-3 years are going to be tumultuous. Nominally, losses will present themselves somewhere in the 20-30% range. Five-year window, I’m also factoring in high probability of significant devaluation of the dollar relative to other currencies.
ParticipantMarket will start to rebound in 2012, with real housing prices off 50-60% when all is said and done. Next 2-3 years are going to be tumultuous. Nominally, losses will present themselves somewhere in the 20-30% range. Five-year window, I’m also factoring in high probability of significant devaluation of the dollar relative to other currencies.
ParticipantParticipantParticipantCoronado is nice, wonderful place to live. Excellent schools, safe streets, terrific parks, good restaurants, nice community with friendly people, and a fiscally solvent local government.
Prices will drop 30% over the next 4-5 years. Nobody wants to talk about it, monster under the bed. Unfortunate for anybody locked in with a note they can’t afford to carry.
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