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SD Realtor
15 years ago

I was amazed at the
I was amazed at the announcement about that yesterday Rich.

You were much to kind… “questionable collateral” is quite a nice way of saying POS collateral. What nobody seems to have noticed is this is basically the government trading cash for crap. I am not sure how long the terms are for those loans. Are they 30 days?

Anyways I would strongly agree that for better or worse, (I think worse) the government is going to be proactive as the storm gets worse.

15 years ago

I’m starting to wonder if the
I’m starting to wonder if the gubmint hasn’t drawn a line in the sand with Fannie and Freddie. They bailed out Bear Sterns because the thought it was a one-off deal, not realizing the storm was a-brewin’.

Then, they realized it and decided to back F/F. By doing this, they solve a large percentage of the problem with a single act, and keep mortgage deals flowing. Plus, the F/F move is much more justifiable and more politically acceptable than saving private banks.

I’m wondering (hoping) they are done with the individual bail-outs at this point. They did their thing with F/F and may be out of money and/or political clout to do mre. Sure, they’ll pump money into the system, lower rates, lend more, but my uneducated guess is that the banks will fall where they may from here on out.

15 years ago
Reply to  sdduuuude

I’m proven wrong so quickly.
I’m proven wrong so quickly.

15 years ago

Failures seem to be que’d-up
Failures seem to be que’d-up for weeks to come. I think we’ve had about 4 weeks in a row of failure news and activity. I guess the DOW at 7500 is not that far away. What will RE prices look like this time next year???

15 years ago

Do you think many CEO’s will
Do you think many CEO’s will line up for an AIG style bail-out? Let’s see, the Fed takes 80% of your company, fire you, get’s veto rights on dividends and sets a plan to liquidate your assets all for a loan paying Libor + 850 basis points?

For some reason, I don’t see Wagoneer liking that deal. Nor do I see the replacement at Wamu liking it.

and I wonder if ‘too big to fail’ BofA’s Lewis will want a piece of it if Countrywide and Merrill’s problems prove too big.

I don’t really see CEO’s lining up for a bailout like this…

15 years ago

I’m not going to try and
I’m not going to try and pretend I understand CDSs, but like any insurance, I would expect large risk to be re-insured out through the market. The reinsurance market is complex, and security therefore impossible to assess, but it at least offers a buffer by spreading the risk down through several layers. Does anyone know if this is the case?

15 years ago

Where do you get these
Where do you get these questions? I have been investing all my life and I have never run into terms like this. I am glad I made my million before knowing this stuff was necessary.