Comments on: Chicago Fed Fails to "Prove" Subprime Containment http://housingdoom.com/2007/06/30/chicago-fed-fails-to-prove-subprime-containment/ Sat, 11 Feb 2012 07:12:54 +0000 hourly 1 http://wordpress.org/?v= By: NotSoFunnyMoney http://housingdoom.com/2007/06/30/chicago-fed-fails-to-prove-subprime-containment/#comment-5934 NotSoFunnyMoney Sat, 30 Jun 2007 21:08:42 +0000 http://housingdoom.com/2007/06/30/chicago-fed-fails-to-prove-subprime-containment/#comment-5934 Containment to Sub-prime? Over the last couple of days I've seen both CDO/mortgage-backed securities as well as corporate bond offerings cancelled, postponed or significantly lowered in offering size; Blackstone has been crashing since it's IPO, and Bear Stearns' (and other's) CDO "toxic waste" offerings have been scrapped; credit default swaps (indicationg corporate default probability) are rising across the board; even emerging market country debt is down sharply... The CDO/mortgage-backed market currently is in freefall. Even the lowest "investment grade" segment(BBB-) is in complete freefall, reaching significant new lows just yesterday. The BBB- -index is down 40 % over the last six months, and 15 % over the last month to less then 55 cents to the dollar. ( http://www.markit.com/information/affiliations/abx/history ) Apparently the MSM, Fed and rating agencies all took the same PR-course David Lereah did. I can only assume that they are very freightened by the chaos that could ensue should they all start speaking the truth... Containment to Sub-prime?

Over the last couple of days I’ve seen both CDO/mortgage-backed securities as well as corporate bond offerings cancelled, postponed or significantly lowered in offering size; Blackstone has been crashing since it’s IPO, and Bear Stearns’ (and other’s) CDO “toxic waste” offerings have been scrapped; credit default swaps (indicationg corporate default probability) are rising across the board; even emerging market country debt is down sharply…

The CDO/mortgage-backed market currently is in freefall. Even the lowest “investment grade” segment(BBB-) is in complete freefall, reaching significant new lows just yesterday. The BBB- -index is down 40 % over the last six months, and 15 % over the last month to less then 55 cents to the dollar. ( http://www.markit.com/information/affiliations/abx/history )

Apparently the MSM, Fed and rating agencies all took the same PR-course David Lereah did.

I can only assume that they are very freightened by the chaos that could ensue should they all start speaking the truth…

]]> By: twist http://housingdoom.com/2007/06/30/chicago-fed-fails-to-prove-subprime-containment/#comment-5933 twist Sat, 30 Jun 2007 18:30:13 +0000 http://housingdoom.com/2007/06/30/chicago-fed-fails-to-prove-subprime-containment/#comment-5933 Sandman- I think it's like when an epidemic strikes. The greatest fatalities are usually among the very young, the very old, and the infirm- that doesn't mean that everyone else is immune though. You are right, prime borrowers are less likely to end up upside down on their mortgage. Once they are though, they become vulnerable as well. Sandman-

I think it’s like when an epidemic strikes. The greatest fatalities are usually among the very young, the very old, and the infirm- that doesn’t mean that everyone else is immune though.

You are right, prime borrowers are less likely to end up upside down on their mortgage. Once they are though, they become vulnerable as well.

]]> By: sandman http://housingdoom.com/2007/06/30/chicago-fed-fails-to-prove-subprime-containment/#comment-5932 sandman Sat, 30 Jun 2007 18:18:27 +0000 http://housingdoom.com/2007/06/30/chicago-fed-fails-to-prove-subprime-containment/#comment-5932 These "experts" have an amazing ability to not see the next obvious step in this crash. The reason subprime was hit first is because they had little to no skin in the game. Prices come down slightly, they move to being underwater, so they bail. Now take a prime borrower and wait another year or so until they're underwater. You expect them to act differently? Why? Aren't prime borrowers supposed to be the "smarter" bunch? Wouldn't the smart decision be to walk away and not overstretch yourself to hold a declining asset? It's just incredible how often "experts" have denied the next logical step in this, only to have it come true. Yet they retain full credibility in the MSM, who readily believe their next denial. It's actually quite sad. These “experts” have an amazing ability to not see the next obvious step in this crash. The reason subprime was hit first is because they had little to no skin in the game. Prices come down slightly, they move to being underwater, so they bail.

Now take a prime borrower and wait another year or so until they’re underwater. You expect them to act differently? Why? Aren’t prime borrowers supposed to be the “smarter” bunch? Wouldn’t the smart decision be to walk away and not overstretch yourself to hold a declining asset?

It’s just incredible how often “experts” have denied the next logical step in this, only to have it come true. Yet they retain full credibility in the MSM, who readily believe their next denial. It’s actually quite sad.

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