Relevant:
- Mortgage Defaults Continue to Rise, MI Firms Say
- Commercial Real Estate Problems: "Have the Potential to Intensify"
- What are QRMs? Qualifying Residential Mortgages Are Government's Newest Mistake In The Real Estate Market
- CMBS Defaults Climb, May Worsen on Stuyvesant Town, Reis Says
- Mortgage Insurers See Borrower Defaults Jump
2008-09-23 — ml-implode.com
"If defaults remain at roughly $20bb per month in CA and $50bb nationally and this new $700bb bailout is suppose to clean up banks past troubles, what is left for the potential $1tt in current defaults coming over the next two years? This plan is being debated today in Washington as if mortgage and housing crisis was over and they are trying to clean up the aftermath. I am sure many there really think this is about the real estate market."
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michaelblomquist at 03:23 2008-09-24 said:
The $700 billion will quickly turn into $4-5 trillion. The first thing we should do is to demand someone else other than Paulson to handle this mess. In fact, Paulson should be indicted and disgorged. Supposedly a prior T.S. stated the $700 billion was chicken feed; who? We need someone who is going to be honest and someone is not trying to conceal their crimes. We have been living in a fantasy land. Our entire economy has built upon a foundation of fraud in the housing and the financial markets. Income/taxes/equity extraction from stocks and housing will be gone regardless of any bail outs. Money should be spent on alternative energy we could end up selling elsewhere. As soon as we bail out the foreign investors they will be gone! NO MONEY for foreign investors or crooks. Permalinkrcastevet at 09:17 2008-09-24 said:
Bernanke said at the Senate Banking Committee Hearing today that the plan is to use the 700 bb to buy enough MBS to set a market price for all outstanding MBS so banks can move them from mark to market securities to hold to maturity securities. Apparently it is impossible to accurately determine the hold to maturity price of all those trillions of dollars of mortgage bonds. The 700bb bail out is only a means to price discovery and not an attempt to purchase more than a fraction of troubled loans. Permalinkitiswhatitis at 11:32 2008-09-24 said:
Achieving "price discovery" on this bad debt will certainly set a new price for the debt that is chosen to be held to maturity. If you're an unhealthy firm with lots of problems most bad debt priced in this fashion will be sold one way or another to raise capital. Only the more financially healthy companies will hold to maturity. Then of course, what happens to the price of debt already being held to maturity that was valued higher than the new "firesale price". Now we have further write downs. Am I wrong? Catch 22 perhaps? Permalinkadd a comment | go to forum thread
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