Comments on: Some Informative Credit, Housing, and Mortgage Charts http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and.html Mon, 23 Nov 2009 05:03:06 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and.html#comment-8094 Anonymous Thu, 15 May 2008 22:40:00 +0000 http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and-mortgage-charts/#comment-8094 what are these reports called (titles and/or links) - esp. the moody's and usb. i would like to read them.<br/><br/>thanks what are these reports called (titles and/or links) – esp. the moody’s and usb. i would like to read them.

thanks

]]> By: Anonymous http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and.html#comment-8086 Anonymous Thu, 15 May 2008 13:47:00 +0000 http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and-mortgage-charts/#comment-8086 AK, all good points. Thanks for the proper framing. -- MD (anonymous) AK, all good points. Thanks for the proper framing. — MD (anonymous)

]]> By: AK http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and.html#comment-8065 AK Wed, 14 May 2008 20:21:00 +0000 http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and-mortgage-charts/#comment-8065 I think you have to keep in mind that these are $55 marks on subprime backed CDO paper. Ignoring the accounting subtleties for the moment, that's very close to a fair mark. A high grade ABS CDO was backed mostly by A & AA pieces of 06/07 subprime ABS, a lot of which will get wiped out, housing reform or not. All you really have to do is compare the default pipeline (so reo+FC+60+delinws) with current subordination on those A pieces and it's not farfetched. Now because the ABS CDO is comprised of these A tranches, as well as other CDO's any losses on the underlying will quickly translate to losses on the mother cdo...<br/>Note, if the High Grade ABS CDO was made up of just AAA pieces of subprime ABS then this woldn't be true, since many of those are still money good I think you have to keep in mind that these are $55 marks on subprime backed CDO paper. Ignoring the accounting subtleties for the moment, that’s very close to a fair mark. A high grade ABS CDO was backed mostly by A & AA pieces of 06/07 subprime ABS, a lot of which will get wiped out, housing reform or not. All you really have to do is compare the default pipeline (so reo+FC+60+delinws) with current subordination on those A pieces and it’s not farfetched. Now because the ABS CDO is comprised of these A tranches, as well as other CDO’s any losses on the underlying will quickly translate to losses on the mother cdo…
Note, if the High Grade ABS CDO was made up of just AAA pieces of subprime ABS then this woldn’t be true, since many of those are still money good

]]> By: Anonymous http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and.html#comment-8059 Anonymous Wed, 14 May 2008 17:48:00 +0000 http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and-mortgage-charts/#comment-8059 Yves, thank you for these goodies. <br/><br/>How can a super senior be marked at 55 when the economics suggest a remote chance of experiencing loss, even in this environment? I understand that FAS requires mark to market at the exit price which means when liquidity dries up the price is 55. But holding it means the performance of the bonds should be fine and then the investor would later accrete as earnings what he just wrote down, net of any actual losses. The problem is that banks and others are raising REAL capital until/if those returns or lack of losses are realized. It seems that FASB has not dealt very well with the chasm between the marks (which must go through earnings) and expected actual performance of the investment. It's a huge inefficiency and poor use of capital (whether the system is adequately capitalized in absolute terms is anopther question).I think the financial press hyper ventilates about "losses". Nobody is selling !! Yves, thank you for these goodies.

How can a super senior be marked at 55 when the economics suggest a remote chance of experiencing loss, even in this environment? I understand that FAS requires mark to market at the exit price which means when liquidity dries up the price is 55. But holding it means the performance of the bonds should be fine and then the investor would later accrete as earnings what he just wrote down, net of any actual losses. The problem is that banks and others are raising REAL capital until/if those returns or lack of losses are realized. It seems that FASB has not dealt very well with the chasm between the marks (which must go through earnings) and expected actual performance of the investment. It’s a huge inefficiency and poor use of capital (whether the system is adequately capitalized in absolute terms is anopther question).I think the financial press hyper ventilates about “losses”. Nobody is selling !!

]]> By: S http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and.html#comment-8042 S Wed, 14 May 2008 14:10:00 +0000 http://www.nakedcapitalism.com/2008/05/some-informative-credit-housing-and-mortgage-charts/#comment-8042 brokers are 2/3 through writing down what? The "annoucned" exposures. That is merely a distractor to the gluttonous balance sheets and namely the LEvel 2-3 assets catagories. Not to suggest all are worthless, but it take mereley a fraction to make the entire complex insolvent. brokers are 2/3 through writing down what? The “annoucned” exposures. That is merely a distractor to the gluttonous balance sheets and namely the LEvel 2-3 assets catagories. Not to suggest all are worthless, but it take mereley a fraction to make the entire complex insolvent.

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