DISQUS

macfan · 1 year ago

"Now, if washington could just put a bow on this bailout plan, then investors could concentrate on lifting this market."

I could not agree more. Esentially what Paulson and Bernake are trying to do is capitalize on what is the most attractive buying opportunity in mortgage backed securities that we've ever seen. Yes there is a substantial amount of worthless paper out there, but that is what has created so much neagtivie sentiment and drawn down the market value (not intrinsic value) of the entire mortgage market. That sentiment and the reality of the potential breakdown have spread to other markets.

I think a better name for this fed action should "The Federal Mortgage Opportunity Fund". Not only is there potential to make money on this deal (and Paulson well knows it), but it is an immediate boost in confidence to markets everywhere due to the creation of liquidity.

Listening to the meetings over the past couple days shows that some members of congress really get it and some others just have no idea what Bernake and Paulson are saying.

End of the day...This gets done and we should be able to operate in a much more stable, value driven market.

macfan · 1 year ago

Excuse me..the senate not congress.

marcos · 1 year ago

Don't count on Washington DC. Those fools can't find their behinds with both hands. The oversold conditions will become MORE oversold because frustration with political wrangling will be taken with a huge dose of "it ain't gonna happen" which will torpedo the market all the more. Wait and see.

tao jones · 1 year ago

if they just change the mark to market rules for these mortgage packages a lot of this "crisis" would desolve on its own. the paper that these companies are unable to value has tangible assets and many homeowners are struggling to make payments and are not about to let a bank take their house. the problem seems to be that the 3% bad apples are soiling the whole barrel. at one point these "worthless" instruments will show either a satisfied mortgage or a chunk of land to sell. last time i looked over 30 years you pay about 300 precent of the original purchase price to the holders of these papers. i don't see how a 3% default rate could sink these packages. the problem seems to be they can't be valued as collateral because no one can figure what they are worth. I don't think that is a problem bad enough for the government to elbow its way in and actually seize these companies
I don't want the bushies to have a blank check with 3 months to go in office . Let me see how do you spell Haiburton ?

macfan · 1 year ago

I think you are right on about the mark to market rule. However, coming up with an actual value for most of this stuff is actually pretty doable once you have your assumptions in line...prepayment speeds, default rates, interest rate curves...

That is how this market works and how the fed will be determining their value. That said, removing the mark to market rules and making holders use quantitave methods to determine value would probably help a lot.

Thom · 1 year ago

Well, Mark to Market is a good thing if you have shares in one of these companies. It prevents them from hiding the garbage and shareholders and bondholders have a right to know. The 3% bad paper figure (or 1 or 2) is a misnomer. Approx 3% are defaulting right now but the rest of the papers value has fallen with the housing market so while you have people making payments, the collateral they have, the home, is worth less than the loan which makes the likelyhood of default far greater. Another problem is, even though a vast majority of these loans are being paid timely they were mis-rated. Almost all were given AAA or Alt-A and investigation has proven this to be false (thanks MBIA, Moody's etc!) so their value is wrong. Sarb/Ox and Mark to Market was implimented to give transperancy which allows more intelligent investing but if the figures are fudges from the get go it doesn't matter.

My beef with the bill is the speed they are trying to jam this thing down our throats. With this much money and the ramifications this will cause the face of American Capitalism DEMAND clear thinking. I mean it took over a year to ok the Sirius/XM deal and we want to do this in a week? THAT'S crazy.

I also feel that for every $ spent buying crap loans we put a $ towards a New Deal infrastructure project to put some asses to work. These loans wont pay themselves. People need jobs, we still need better high tech infrastructure and if we are going to dillute the dollar we might as well get some fiber optic, wimax, windmmill, new roads out of it.

Apologies for all the mis-spellings

mehovey · 1 year ago

Okay I got stuck with a loan I cannot afford but having made the aggrement, I have stuck to it. My payment (with taxes) started in July of 2006 at $1701. Its a 7.25% 30year fixed but my payment now is $1794.46. My income is now $2500 a month and the only reason I get this is a personal policy I took out with state farm for dissability income. I got severly injured on Oct. 9, of 2007. The say they are going to helf financially stress mortgages and lower the interest to around 6% for people with ARM's, most likely who don't make there payments. What about people like me who go without just to live up to there word and pay there payments.
ME Hovey

Web Design · 9 months ago

looks like everybody is struggling to make their points. Is apple really dependent this much on political main stream.