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JP Morgan (JPM) plans to next year issue mortgage-backed securities supported by defaulted loans...

JP Morgan (JPM) plans to next year issue mortgage-backed securities supported by defaulted loans that it bought from EU and other financial institutions, the WSJ reports. The move would revive a practice that regulators used in the early 1990s to solve a savings and loan crisis.
Comments (5)
  • You simply cannot make this stuff up. The bankers truly rule the world. What a sick and twisted reality we face.
    16 Nov 2011, 08:56 AM Reply Like
  • What is wrong with this? Why the comment "bankers truly rule the world"?

     

    This seems like the smart thing to do for all parties involved. Similar to credit card companies selling their noncollectable accounts to debt collection companies
    16 Nov 2011, 09:04 AM Reply Like
  • Oh, sorry. Excuse my skepticism. I am sure these junk securities will be rated accordingly and marketed by the bankers with full disclosure, right?

     

    yeah.
    16 Nov 2011, 09:12 AM Reply Like
  • lol. I see then.

     

    I'm sure they will all be AAA rated!
    16 Nov 2011, 09:42 AM Reply Like
  • This [would] be a good idea if the entire pool of MBS were re-issued @ prevailing prime + current mortgage LIBOR and used to refy existing under H20 mortgages. If underH20 1st & 2nd mortgages were refy'd to lower monthly payments between $3-4B/month (see CoreLogic) would be pumped back into US economy by homeowners in the form of goods, services and investment (potentially a 1.5-2% lift monthly). By far, the best way to ramp up domestic spending with the lowest impact on inflation or gov't debt.
    Instead, if it works, we'll see banks give bigger dividends + higher bonuses or----if they screw the pooch again with poor hedging---come back to USA/EU for another "if we don't survive the world as we know it will end" chorus.
    In either case the consumer/voter/backbone of the economy will get the sow's ear while the bank takes the silk purse.
    16 Nov 2011, 09:31 PM Reply Like
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