spanish moss

How Much Longer Must This Deleveraging Process Go On?

I read the article you attached w/ Bush speaking about goal of higher minority ownership and mortgage originators only wanting the loan to pay for a 90 day or 6 month period to be beyound the push back period... it is, as far as it goes, truthful, but does not, paradoxically, provide the big picture.

My sense is that there are a lot of players in the chain who could and now wish they had done things differently... the lower on the chain one goes, the better protected the player... because all the upstream types, the Mortgage Insurance companies writing coverage on the loans (down to 80% LTV) , the I-Banks bundling Alt-A and subprime credits into securitizations, the agencies rating the Asset Backed Securities, the AIGs providing credit enhancements, including with various other entities the writing of Collateral Default Swaps... and the hedge funds who took vast sums of capital from the very wealthy and leveraged it 50x, 70x and more to buy bad paper with a good yield... for a season.

I think the culprits are more toward the top than the politicians and the mortgage smoes and the home buyers. But... none of those three are innocent either... expecially the home buyers who were buying over thier heads and especially when they were buying over their heads for speculative purposes rather than housing... which returns us to the clip of Bush... I don't think he was advocating all minorities buy a house using cheap financing and sell before the teaser rate expired to make a bunch of money. No, he and other public policy types were trying to put people into homes that woud be shelter for their families... it is the top of the financial food chain that is looking at housing as a source of continued investment products upon which to profit... and that boys and girls is the disconnect... the perspective on one is housing... of the other it is ABS, CDS, CDO and other alphabetical buggers that have kilt the golden goose and ushered in a wave of anti-capitalism. Here endeth the opinion.