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LA_Renter
ParticipantFor what it’s worth this is K Denninger’s take at market-ticker;
“The market has not yet gotten its arms around the Moody’s announcement on the securitization credit rating process as I outlined in the ticker the other night. It will. When? I can’t tell you that, but what I can tell you with certainty is that the squeeze in the mortgage marketplace will get much worse, will implode more lenders and will materially impact all of them.
The warning on this was when S&P said they were re-jiggering their models for mortgage ABS issues. But – they didn’t put any hair on that dog. Moody’s did, however, and then turned it rabid and let it loose.
Ignore this at your peril if you are long the market.
As I have said repeatedly – 30% of the demand that exists now in the housing market is going to be flushed as the ALT-A and Subprime pipeline is either shut down entirely or repriced to near credit-card rates. This IS happening – right now – and it WILL drag the economy into a recession. This will not end until there is a serious price contraction in housing prices so that affordability returns to historical norms.
Now go back and read that again guys. And then again. And then again.”
http://market-ticker.denninger.net/
Yikes!
ParticipantFor what it’s worth this is K Denninger’s take at market-ticker;
“The market has not yet gotten its arms around the Moody’s announcement on the securitization credit rating process as I outlined in the ticker the other night. It will. When? I can’t tell you that, but what I can tell you with certainty is that the squeeze in the mortgage marketplace will get much worse, will implode more lenders and will materially impact all of them.
The warning on this was when S&P said they were re-jiggering their models for mortgage ABS issues. But – they didn’t put any hair on that dog. Moody’s did, however, and then turned it rabid and let it loose.
Ignore this at your peril if you are long the market.
As I have said repeatedly – 30% of the demand that exists now in the housing market is going to be flushed as the ALT-A and Subprime pipeline is either shut down entirely or repriced to near credit-card rates. This IS happening – right now – and it WILL drag the economy into a recession. This will not end until there is a serious price contraction in housing prices so that affordability returns to historical norms.
Now go back and read that again guys. And then again. And then again.”
http://market-ticker.denninger.net/
Yikes!
ParticipantI don’t think these guys are going to make it to the finish line.
ParticipantI don’t think these guys are going to make it to the finish line.
ParticipantI think there is a difference of a mortgage broker trying to get you into one of these loans and have the loan go through. It sounds like in your case since you have good credit it wouldn’t be a problem. It’s my understanding that the underwriting of these loans are tightening up but I keep hearing the same stories that these products are still available. Can anybody shed some light on how this looks at the street level verses they 2004-06. Are 2/28’s still abundant?
Also, with the constant bad news about these products I think many people (not all) have wised up to the consequences of getting into these mortgages.
ParticipantI think there is a difference of a mortgage broker trying to get you into one of these loans and have the loan go through. It sounds like in your case since you have good credit it wouldn’t be a problem. It’s my understanding that the underwriting of these loans are tightening up but I keep hearing the same stories that these products are still available. Can anybody shed some light on how this looks at the street level verses they 2004-06. Are 2/28’s still abundant?
Also, with the constant bad news about these products I think many people (not all) have wised up to the consequences of getting into these mortgages.
Participant“Right now every CEO of every sizable bank and brokerage has sent the message out to ‘REDUCE BALANCE SHEET RISK IMMEDIATELY,'”
That is pretty much what happened to Japan.
Participant“Right now every CEO of every sizable bank and brokerage has sent the message out to ‘REDUCE BALANCE SHEET RISK IMMEDIATELY,'”
That is pretty much what happened to Japan.
ParticipantBubblesitter,
I found this on a yahoo chat board for an HB. Since you were venting I thought you would appreciate this
“S&P etal
A while back A&E ran a program about a hit man from north Jersey named Kuklinski who developed a method for dispatching some of his victims by mixing a cocktail of potassium cyanide and DMSO (transfer agent) which allowed him to swab this mixture on the skin of the hapless target with the result that the cyanide went thru the epidermis and straight into the blood stream causing death in moments. Due to this it is now standard practice for medical examiners to test for tell tales of this pernicious practice as standard practice.
How does this relate to sub-prime you ask? Well the rank amateurs on this board have been screaming for at least the past two years about the poisonous dealings of the HBs and their pals in the finance world with total accuracy as to the outcome. The rating agencies knew what was going on and as the examiners of the fetid items presented to them they acted as the transfer agents allowing this toxin to be passed thru the skin of the financial markets as sweet investment grade candy. The point is that if we knew what was going on you know damn well that they did – the investment grade rating simply allowed them to sell junk bonds into a huge pool of of what should have been forbidden money. This was a scam from top to bottom and in my view the perps all knew it from the get go.”These people seem a little too comfortable playing with dynamite in the global credit markets.
ParticipantBubblesitter,
I found this on a yahoo chat board for an HB. Since you were venting I thought you would appreciate this
“S&P etal
A while back A&E ran a program about a hit man from north Jersey named Kuklinski who developed a method for dispatching some of his victims by mixing a cocktail of potassium cyanide and DMSO (transfer agent) which allowed him to swab this mixture on the skin of the hapless target with the result that the cyanide went thru the epidermis and straight into the blood stream causing death in moments. Due to this it is now standard practice for medical examiners to test for tell tales of this pernicious practice as standard practice.
How does this relate to sub-prime you ask? Well the rank amateurs on this board have been screaming for at least the past two years about the poisonous dealings of the HBs and their pals in the finance world with total accuracy as to the outcome. The rating agencies knew what was going on and as the examiners of the fetid items presented to them they acted as the transfer agents allowing this toxin to be passed thru the skin of the financial markets as sweet investment grade candy. The point is that if we knew what was going on you know damn well that they did – the investment grade rating simply allowed them to sell junk bonds into a huge pool of of what should have been forbidden money. This was a scam from top to bottom and in my view the perps all knew it from the get go.”These people seem a little too comfortable playing with dynamite in the global credit markets.
ParticipantI have no idea how the markets will shake out today. The world markets are jitterey over this sub prime thing. i found this article which I thought helped explain some of the market moves as of late. This is an interesting read;
“Posted by Jim Kingsland at 10:07 PM
Dow Down 146, or Lesson Number 316 That Structured Credit REALLY Matters
Talk about a trading range today – about 300 points for the Dow and we nearly nearly tested upward resistance at S&P 1490 only to hit at brick wall at the 50 day moving average in the 1484 area and then see the index close down at 1455. C’mon did you really expect that all would be forgotten and that Friday’s low was a buying opportunity? There were a lot of ‘sparkies’ out there thinking that, apparently. This is not last February and a brief Shanghai stock market plunge. The market is dealing with some pretty complicated stuff that will make it hard for the short-attention-span people to keep from buying on every dip.
Last night I briefly ruminated that bad news in structured credit (eg. subprime), or corporate high yield credit would spur carry trade unwinding. It happened again today.
Let me be clear: Carry trade unwinding is driven in large part by the perception that risk taking ability is dropping here in the U.S. due to recent structured credit troubles.
There’s a lack of understanding concerning the above emboldened line. Why? Because there are too many folks blaming things like subprime, or LCDX exclusively for stock market declines and ignoring the carry trade, or citing the carry trade as the sole culprit for market declines. Rising risk aversion due to the mortgage meltdown and contagion into corporate high yield debt are intertwined with the carry trade.
It’s really a vicious and dangerous cycle because as more yen carry trade unwinding occurs there will come a trigger point when the Japanese yen rises enough for carry trade unwinding to go from orderly and voluntary to forced and disorderly. When carry trade unwinding takes on a disorderly life of its own it will then beget liquidation of whatever speculation it previously funded which would bring on further pressure to stocks and any other paper tied to speculative bets. It’s a financial super highway with lots of traffic, no speed limit and no center barrier. It’s this vicious cycle that one of these days bring us a 1,000 point down day for the Dow.
The risk game has always relied on the ability to take risks. Duh. How so many still fail to grasp that a meltdown in one risky area of the market can simply be “contained” (eg. subprime) and not impact risk in other areas, I’ll never know.”
Paulson just came out and said subprime is contained. Talk about looking like Baghdad Bob.
ParticipantI have no idea how the markets will shake out today. The world markets are jitterey over this sub prime thing. i found this article which I thought helped explain some of the market moves as of late. This is an interesting read;
“Posted by Jim Kingsland at 10:07 PM
Dow Down 146, or Lesson Number 316 That Structured Credit REALLY Matters
Talk about a trading range today – about 300 points for the Dow and we nearly nearly tested upward resistance at S&P 1490 only to hit at brick wall at the 50 day moving average in the 1484 area and then see the index close down at 1455. C’mon did you really expect that all would be forgotten and that Friday’s low was a buying opportunity? There were a lot of ‘sparkies’ out there thinking that, apparently. This is not last February and a brief Shanghai stock market plunge. The market is dealing with some pretty complicated stuff that will make it hard for the short-attention-span people to keep from buying on every dip.
Last night I briefly ruminated that bad news in structured credit (eg. subprime), or corporate high yield credit would spur carry trade unwinding. It happened again today.
Let me be clear: Carry trade unwinding is driven in large part by the perception that risk taking ability is dropping here in the U.S. due to recent structured credit troubles.
There’s a lack of understanding concerning the above emboldened line. Why? Because there are too many folks blaming things like subprime, or LCDX exclusively for stock market declines and ignoring the carry trade, or citing the carry trade as the sole culprit for market declines. Rising risk aversion due to the mortgage meltdown and contagion into corporate high yield debt are intertwined with the carry trade.
It’s really a vicious and dangerous cycle because as more yen carry trade unwinding occurs there will come a trigger point when the Japanese yen rises enough for carry trade unwinding to go from orderly and voluntary to forced and disorderly. When carry trade unwinding takes on a disorderly life of its own it will then beget liquidation of whatever speculation it previously funded which would bring on further pressure to stocks and any other paper tied to speculative bets. It’s a financial super highway with lots of traffic, no speed limit and no center barrier. It’s this vicious cycle that one of these days bring us a 1,000 point down day for the Dow.
The risk game has always relied on the ability to take risks. Duh. How so many still fail to grasp that a meltdown in one risky area of the market can simply be “contained” (eg. subprime) and not impact risk in other areas, I’ll never know.”
Paulson just came out and said subprime is contained. Talk about looking like Baghdad Bob.
ParticipantI just saw Cramer on CNBC and that Doom and Gloom scenario wasn’t as much satire as I thought he was trying to portray. He basically said the CFC conference call last week was probably the most important conference call of the year. He indicated Mozillo was not exaggerating the state of housing and that ALT-A is subprime. He really has gone very bearish on this sector. He basically said Indymac will go the way of AHM today. He lays the blame on Greenspan in creating these products more so than the lenders. Right now he sounds like a poster on Piggington. It is Cramer so take it with a grain of salt, he is good entertainment and does have a great deal of knowledge of the market and he can be incredibly wrong at times like everybody else trying to read a market. But after seeing him today it is very apparent he was not making fun of the doom and gloom scenario, it was more like breaking the ice to joe 6 pack that this is going to be bad. That’s my take at least.
ParticipantI just saw Cramer on CNBC and that Doom and Gloom scenario wasn’t as much satire as I thought he was trying to portray. He basically said the CFC conference call last week was probably the most important conference call of the year. He indicated Mozillo was not exaggerating the state of housing and that ALT-A is subprime. He really has gone very bearish on this sector. He basically said Indymac will go the way of AHM today. He lays the blame on Greenspan in creating these products more so than the lenders. Right now he sounds like a poster on Piggington. It is Cramer so take it with a grain of salt, he is good entertainment and does have a great deal of knowledge of the market and he can be incredibly wrong at times like everybody else trying to read a market. But after seeing him today it is very apparent he was not making fun of the doom and gloom scenario, it was more like breaking the ice to joe 6 pack that this is going to be bad. That’s my take at least.
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