Comments on: Securitization Reform: Don’t Hold Your Breath http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html Mon, 23 Nov 2009 05:40:52 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Yves Smith http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html#comment-4053 Yves Smith Sat, 16 Feb 2008 04:08:00 +0000 http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your-breath/#comment-4053 For the record, I'm not a fan of securitization because the incentives are terrible, and the proof is in the results we've seen. But life without it means banks will hold a ton more equity, and no one is (yet) prepared for that. We need a fundamental rethink, but the powers that be are unwilling to go there. So it appears we'll have to have a good deal of distress before this problem is engaged seriously. For the record, I’m not a fan of securitization because the incentives are terrible, and the proof is in the results we’ve seen. But life without it means banks will hold a ton more equity, and no one is (yet) prepared for that. We need a fundamental rethink, but the powers that be are unwilling to go there. So it appears we’ll have to have a good deal of distress before this problem is engaged seriously.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html#comment-4052 Anonymous Sat, 16 Feb 2008 03:58:00 +0000 http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your-breath/#comment-4052 you want reform:<br/><br/>1. Let the home-owners who can't pay get foreclosed on<br/><br/>2. Let the lenders et al go bankrupt worldwide<br/> <br/><br/>No taxpayer bailout...special govt plan....nothing !<br/><br/>With enough pain...that will discourage this from occurring in the future ! you want reform:

1. Let the home-owners who can’t pay get foreclosed on

2. Let the lenders et al go bankrupt worldwide

No taxpayer bailout…special govt plan….nothing !

With enough pain…that will discourage this from occurring in the future !

]]> By: Anonymous http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html#comment-4050 Anonymous Sat, 16 Feb 2008 00:38:00 +0000 http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your-breath/#comment-4050 I brought this up last night under links, any reply?<br/><br/>>Yives: What about a P/E kinda valuation where we can compare the yield of a bond to a bond, to a stock, to a CDO, to a money market account...... securities should all have a simple yield and then of course, simple balance sheets which are audited by SEC/FBI accountants...... and sorry, but we have to get rid of bogus FASM/GAAP stuff and end the charades which allow tax evasion, so re-write IRS codes...... which can all be done in The Next Greater Depression! I brought this up last night under links, any reply?

>Yives: What about a P/E kinda valuation where we can compare the yield of a bond to a bond, to a stock, to a CDO, to a money market account…… securities should all have a simple yield and then of course, simple balance sheets which are audited by SEC/FBI accountants…… and sorry, but we have to get rid of bogus FASM/GAAP stuff and end the charades which allow tax evasion, so re-write IRS codes…… which can all be done in The Next Greater Depression!

]]> By: Anonymous http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html#comment-4048 Anonymous Fri, 15 Feb 2008 22:00:00 +0000 http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your-breath/#comment-4048 You need clean monolines with models that actually work under stress. You need clean monolines with models that actually work under stress.

]]> By: atamris http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html#comment-4045 atamris Fri, 15 Feb 2008 18:27:00 +0000 http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your-breath/#comment-4045 It makes for sense for the true nature of an assets risk and return profile to be reflected in the price. It also makese sense for a security to be liquid and tradeable on an open market place. Just shove the securitisation process to an open market and let the market decide the risk and the price. We would probably find that a market can more easily diversify risk and price it, obviating the need for monolines, SIVs etc. <br/><br/>Andrew Teasdale<br/><br/>The TAMRIS Consultancy It makes for sense for the true nature of an assets risk and return profile to be reflected in the price. It also makese sense for a security to be liquid and tradeable on an open market place. Just shove the securitisation process to an open market and let the market decide the risk and the price. We would probably find that a market can more easily diversify risk and price it, obviating the need for monolines, SIVs etc.

Andrew Teasdale

The TAMRIS Consultancy

]]> By: Anonymous http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html#comment-4041 Anonymous Fri, 15 Feb 2008 16:46:00 +0000 http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your-breath/#comment-4041 David--This sounds a lot like the development of thinking about forest fires. I won't hold my breath for it, though. David–This sounds a lot like the development of thinking about forest fires. I won’t hold my breath for it, though.

]]> By: David http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html#comment-4040 David Fri, 15 Feb 2008 15:26:00 +0000 http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your-breath/#comment-4040 In the longer run, though, the absence of guarantors will allow senior-sub structures to perhaps prosper a little more, because of the lesser competition... that is, until senior-sub goes through its next boom-bust cycle.<br/><br/>Memo to Ben Bernanke: We keep trying to eliminate "busts" but somehow they keep finding us. Perhaps we should let them happen; it would let some pressure off the system in the long run. In the longer run, though, the absence of guarantors will allow senior-sub structures to perhaps prosper a little more, because of the lesser competition… that is, until senior-sub goes through its next boom-bust cycle.

Memo to Ben Bernanke: We keep trying to eliminate “busts” but somehow they keep finding us. Perhaps we should let them happen; it would let some pressure off the system in the long run.

]]> By: SPECTRE of Deflation http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your.html#comment-4036 SPECTRE of Deflation Fri, 15 Feb 2008 12:03:00 +0000 http://www.nakedcapitalism.com/2008/02/securitization-reform-dont-hold-your-breath/#comment-4036 It's toast! Until they restore trust in what someone is actually buying, this market is the definition of the "walking dead". It’s toast! Until they restore trust in what someone is actually buying, this market is the definition of the “walking dead”.

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