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July 28, 2008 at 2:20 AM in reply to: Major event – BofA says no legal or moral obligation to contracts #248050July 28, 2008 at 2:20 AM in reply to: Major event – BofA says no legal or moral obligation to contracts #248207
gdcox
ParticipantIt is crazy that equity ranks ahead of bonds in such situaions.
This has been a common problem with buy-outs, though I am unsure if it has been for takeovers. The fault line here is in the bond’s conditions which should have had re-payments options in the case of certain corporate events such as takeover.
There’s a question to ask one’s broker before buying a bond.
July 28, 2008 at 2:20 AM in reply to: Major event – BofA says no legal or moral obligation to contracts #248210ParticipantIt is crazy that equity ranks ahead of bonds in such situaions.
This has been a common problem with buy-outs, though I am unsure if it has been for takeovers. The fault line here is in the bond’s conditions which should have had re-payments options in the case of certain corporate events such as takeover.
There’s a question to ask one’s broker before buying a bond.
July 28, 2008 at 2:20 AM in reply to: Major event – BofA says no legal or moral obligation to contracts #248273ParticipantIt is crazy that equity ranks ahead of bonds in such situaions.
This has been a common problem with buy-outs, though I am unsure if it has been for takeovers. The fault line here is in the bond’s conditions which should have had re-payments options in the case of certain corporate events such as takeover.
There’s a question to ask one’s broker before buying a bond.
July 28, 2008 at 2:20 AM in reply to: Major event – BofA says no legal or moral obligation to contracts #248279ParticipantIt is crazy that equity ranks ahead of bonds in such situaions.
This has been a common problem with buy-outs, though I am unsure if it has been for takeovers. The fault line here is in the bond’s conditions which should have had re-payments options in the case of certain corporate events such as takeover.
There’s a question to ask one’s broker before buying a bond.
ParticipantPersonally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.
If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.
ParticipantPersonally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.
If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.
ParticipantPersonally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.
If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.
ParticipantPersonally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.
If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.
ParticipantPersonally, I don’t think that housing discussion benefits from the use of real house prices, unless there is specific analytical reason. Nominal house price change is most useful since most people are concerned about how that stacks up against nominal mortgage rates and the nominal value of the mortgage. I do not know why Fitch would use real house prices changes unless it is to give the impression that they are super careful now (after they and their ratings agency pals caused about half a trillion losses round the world and catalysed a serious world slowdown) by exaggerating the headline percentage change figure quoted. And this will confuse many people. No doubt some people in SD are going around today saying that a rating agency has said “prices” will fall 47%.
If they have assumed a reasonable 3% inflation rate, that translates to a further 32% decline over five years in SD average prices. I get the sense from Piggs comments that such a forecast is overly pessimistic. Perhaps it relates, in effect , for their purposes, to the areas covered by the securitized loans they have rated. in which case they are saying a 32% decline in the ‘worst’ areas. hard to know without comment from Fitch.
ParticipantInfo on Fitch.
By the way, the mistake of the ratings agencies is very simple. None of their models allowed economists near them. It was all based on the statistics typical of actuaries (ie trends). If Rich has been let near their models in early 86, this whole thing would have been a lot less severe.
ParticipantInfo on Fitch.
By the way, the mistake of the ratings agencies is very simple. None of their models allowed economists near them. It was all based on the statistics typical of actuaries (ie trends). If Rich has been let near their models in early 86, this whole thing would have been a lot less severe.
ParticipantInfo on Fitch.
By the way, the mistake of the ratings agencies is very simple. None of their models allowed economists near them. It was all based on the statistics typical of actuaries (ie trends). If Rich has been let near their models in early 86, this whole thing would have been a lot less severe.
ParticipantInfo on Fitch.
By the way, the mistake of the ratings agencies is very simple. None of their models allowed economists near them. It was all based on the statistics typical of actuaries (ie trends). If Rich has been let near their models in early 86, this whole thing would have been a lot less severe.
ParticipantInfo on Fitch.
By the way, the mistake of the ratings agencies is very simple. None of their models allowed economists near them. It was all based on the statistics typical of actuaries (ie trends). If Rich has been let near their models in early 86, this whole thing would have been a lot less severe.
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