helplessobserver

One Easy CDS Fix

Wow, GS has liabilities that exceed its ability to pay by 1056%. It had better not return the TARP equity injection. Such lunacy demands correction.

Monolines Trying CDO Buyouts

crashof2008 has it mostly right. Each CDO is backed up by physical assets that have depreciated, but are not a pile of ashes.

Housing Market Tracker - Killer Leverage

Judy,
As usual, a great post. Keep us informed.
observer

Ambac's Announcement is a Joke; Disagreeing with Whitman on Monolines

Ah, yes the home equity and second mortgages loans are in the wilderness and naked. Some lenders have even quit trying to collect on these loans.

The Jury is Still Out on the Monolines

Yor readers are too sophisticated. These companies are toast and are in runout mode. In the coming crisis they won't payoff their CDO obligations and their munibond portfolios will be transferred to Buffett, Ross and company.

The Great Monoline Debate Goes to Washington

All of these are good arguments and these stocks were too high at their highs and now are too low at their lows. For investors calculating a 99.9% confidence level on most anything is difficult, and with the number of variables in this problem it is impossible.

Auction-Rate Bonds Fail to Find Buyers

And I remember Paul Wessel saying bank capital reserves at $2900 billion were adequate to extinguish the sub-prime mortgage problem. Also Ben Stein noted that sub-prime was only 5% of the mortgate market and no problem in a $14 trillion economy. So much for the experts, I hope they muzzle them in the future.

Pundit Failure: We Are in a Bear Market and This Is a Recession

One of the first lessons I learned in investments not to pay much attention to the recommendations of stockbrokers. In our local office if you want to know how Saturday's football games will turn out, ask the brokers. If you want advice on investments get to know the people with grey hair watching the tape.

The Future of the Monolines

When only munibonds were insured a low capital reserve might suffice, but when they went to CDO insurance the game changed. In a lot of places you can't see the sun for the clouds of circiling vultures.

Buffett: We Are Not in a Credit Crunch

I think Buffett will find his words were ill spoken. Banks have to maintain loan loss reserves and these are being eaten alive as they hold LBO paper and take CDOs(ugg, full of mortgages, the worst kind of loans)on to their balance sheets. BBT called my wife(first time)suggesting she rollover her CD at a reduced interest rate. This show that those in the trenchs have been told to make every effort to hold on to cash assets.

Bond Insurers, Not Fed, Driving Market

According to the WSJ the initial CDO contracts with the monolines was in the form of an insurance policy. This irritated the investment bankers and they forced the contracts into the form of a CDS so they could make even more money betting on credit quality. Greed knows no bounds.

The Unusual Suspects in an Ambac Bailout

I think it is the invisible hand of the market pointing to financial collapse.

Wall Street Breakfast: Must-Know News

I somehow think investors and the markets do not comprehend how serious the troubles in the financial sectors are. Every time a bank takes a CDO on to its balance sheet is equivalent to making a big loan without even knowing the name of the borrower or even worse nothing about his financial circumstances. I frankly have never seen anything like this in my years of borrowing and investing. Loan officers I've encountered over the years were tough cookies. Nothing good can come from these going on.

Ripple Impact of $534 Billion Debt Downgrade

The rating agencies are a joke, and the insurers are only worth their run-out values. Buy BRK. Buffett will enter this business and run it on a sound basis. He stripped the CDS's out of General Re, said it took several years to find and settle up with the owners of only $400M of these contracts.

The Monolines Need $200 Billion? No Way

Question is after they lose their ratings and go to run out mode where does the money come from after their capital is used up. Surely they don't have $900B sitting on the shelf.