Nomura reduced its U.S. subprime loan portfolio to 71.1 billion yen at the end of June from 210.2 billion yen on March 31. The company buys subprime loans, packages them into securities and sells them. Demand from investors declined as loan defaults reached a 10-year high in the U.S.
We took a hit from the subprime loan business,'' Chief Financial Officer Masafumi Nakada said at a press conference in Tokyo.We kept reducing our position rapidly, but the market's deterioration was faster.''
We took a hit from the subprime loan business,'' Chief Financial Officer Masafumi Nakada said at a press conference in Tokyo.We kept reducing our position rapidly, but the market's deterioration was faster.''
July 25 (Bloomberg) -- The credit market rout caused by the slump in U.S. subprime loans gives serious reasons to worry'' and is areality check,'' without posing a systemic threat, according to Moody's Investors Service....others are ready to acquire assets at lower prices, given the ``ample liquidity'' available......there is no generalized threat to the integrity of the financial system....
Moody's, Standard & Poor's and Fitch Ratings have been criticized by investors because their ratings on bonds backed by mortgages to people with poor or limited credit didn't reflect the highest default rate in 10 years. Some bonds backed by subprime mortgages fell by more than 50 cents on the dollar this year without their credit ratings changing.....
Moody's in its report today said the criticism of its subprime debt rankings stem from a lingering confusion'' about its role. Credit ratings provide an assessment of default risk for thehold-to-maturity credit world'' rather than addressing the ``volatility-liquidity issues'' that interest investors such as hedge funds....`Ratings are not and cannot be predictors of market prices,'' the report said....
``The main risk in our view at this juncture is not that the system may suddenly collapse but rather that it derives a feeling of invulnerability from this episode, when losses have been eventually digested.''
(end quote)
So lets get this straight, their ratings should not be used as predictors of value, but are only an assessment of default risk. But the problem with this claim is that either their assessment of default risk was wildly off, or the true nature of the risk was not conveyed to the purchaser by their rating system. Either way, still a problem for them.
I like the last paragraph of this story, the uber-optimism, Moodys feels that the main risk is that we will so easily overcome this minor bump in the road that we will indeed think we are masters of the universe!!
If you visit the yahoo message boards of all those subprime lenders you will see a lot of emotionally unstable who invest all their savings into that kind of companies. I think they have gambling addiction. Last year article about tax on stupidity:
theroxylandr,
I believe most active stock traders are gambling addicts who kid themselves that they are investors. Have you ever seen Jim Cramer's Mad Money show? The set even looks like a casino, with buttons to press, lots of noise and eye candy. His producers know his audience's mental affliction.
I think Cramer himself suffers from the same delusions as his audience. Warren Buffett has a standing offer of $1 million for anyone who can prove any hedge-fund has over time outperformed an index fund. No takers so far. That person will have to prove out facts as glossy promotional literature would not work well with Buffett.
"The credit market rout caused by the slump in U.S. subprime loans gives serious reasons to worry'' and is areality check,'' without posing a systemic threat, according to Moody's Investors Service"
"Without posing a systemic threat". If these guys are so good at being able to see into the future, I totally trust their insight.
Oh, wonder why they didnt look into the same crystal ball on those AAA rated securities that were downgraded???
The complaint is being called the "Forrest Gump" suit because it compares Accredited's situation with that of the two main characters in the 1994 film.
Thought I would share a link to
( well, not a link actually, but a reference to )
a transcript of a small conference of mortgage lenders and consumer advocates, sponsered by the Federal Reserve, in which is there is much interesting dialog about the subprime mortgage business, and where they specifically explore ( and explain ) some of the "problem' areas, like
prepayment penalties,
qualifying borrowers based on teaser rate opposed to fully indexed rate,
failure to require escrowing of property taxes and insurance,
stated income and low doc loans.
Its about 290 pages of text, but quality info., offering a variety of perspectives. The context is the Fed exploring improvements ( as to rulemaking )going forward.
Nomura Profit Soars on Trading, Asset Management Fees (Update6) - Bloomberg.com
From the article
Nomura reduced its U.S. subprime loan portfolio to 71.1 billion yen at the end of June from 210.2 billion yen on March 31. The company buys subprime loans, packages them into securities and sells them. Demand from investors declined as loan defaults reached a 10-year high in the U.S.
We took a hit from the subprime loan business,'' Chief Financial Officer Masafumi Nakada said at a press conference in Tokyo.We kept reducing our position rapidly, but the market's deterioration was faster.''
Interesting last sentence.
CR,
Someplace in the last few comment ques, you mention that you have seen recent state revenue data. Could you point to the source(s)?
Thanks.
Hey Tanta,
Check this out . . .
Defaults on Some `Alt A' Loans Surpass Subprime Ones (Update1) - Bloomberg.com
We took a hit from the subprime loan business,'' Chief Financial Officer Masafumi Nakada said at a press conference in Tokyo.We kept reducing our position rapidly, but the market's deterioration was faster.''
That's confidence inspiring.
July 25 (Bloomberg) -- The credit market rout caused by the slump in U.S. subprime loans gives serious reasons to worry'' and is areality check,'' without posing a systemic threat, according to Moody's Investors Service....others are ready to acquire assets at lower prices, given the ``ample liquidity'' available......there is no generalized threat to the integrity of the financial system....
Moody's, Standard & Poor's and Fitch Ratings have been criticized by investors because their ratings on bonds backed by mortgages to people with poor or limited credit didn't reflect the highest default rate in 10 years. Some bonds backed by subprime mortgages fell by more than 50 cents on the dollar this year without their credit ratings changing.....
Moody's in its report today said the criticism of its subprime debt rankings stem from a lingering confusion'' about its role. Credit ratings provide an assessment of default risk for thehold-to-maturity credit world'' rather than addressing the ``volatility-liquidity issues'' that interest investors such as hedge funds....`Ratings are not and cannot be predictors of market prices,'' the report said....
``The main risk in our view at this juncture is not that the system may suddenly collapse but rather that it derives a feeling of invulnerability from this episode, when losses have been eventually digested.''
(end quote)
So lets get this straight, their ratings should not be used as predictors of value, but are only an assessment of default risk. But the problem with this claim is that either their assessment of default risk was wildly off, or the true nature of the risk was not conveyed to the purchaser by their rating system. Either way, still a problem for them.
I like the last paragraph of this story, the uber-optimism, Moodys feels that the main risk is that we will so easily overcome this minor bump in the road that we will indeed think we are masters of the universe!!
If you visit the yahoo message boards of all those subprime lenders you will see a lot of emotionally unstable who invest all their savings into that kind of companies. I think they have gambling addiction. Last year article about tax on stupidity:
The tax on stupidity and elections « The Theroxylandr in Flame
theroxylandr,
I believe most active stock traders are gambling addicts who kid themselves that they are investors. Have you ever seen Jim Cramer's Mad Money show? The set even looks like a casino, with buttons to press, lots of noise and eye candy. His producers know his audience's mental affliction.
I think Cramer himself suffers from the same delusions as his audience. Warren Buffett has a standing offer of $1 million for anyone who can prove any hedge-fund has over time outperformed an index fund. No takers so far. That person will have to prove out facts as glossy promotional literature would not work well with Buffett.
"The credit market rout caused by the slump in U.S. subprime loans gives serious reasons to worry'' and is areality check,'' without posing a systemic threat, according to Moody's Investors Service"
"Without posing a systemic threat". If these guys are so good at being able to see into the future, I totally trust their insight.
Oh, wonder why they didnt look into the same crystal ball on those AAA rated securities that were downgraded???
Nothing to see here move along folks.
There's a Chewbakka Defense joke in there somewhere.
While LEND may be one of the few independents left afloat, you gotta wonder what they will be selling that makes that stockholder see green.
Suit was probably filed by Joe's mother...........
Greetings,
Thought I would share a link to
( well, not a link actually, but a reference to )
a transcript of a small conference of mortgage lenders and consumer advocates, sponsered by the Federal Reserve, in which is there is much interesting dialog about the subprime mortgage business, and where they specifically explore ( and explain ) some of the "problem' areas, like
prepayment penalties,
qualifying borrowers based on teaser rate opposed to fully indexed rate,
failure to require escrowing of property taxes and insurance,
stated income and low doc loans.
Its about 290 pages of text, but quality info., offering a variety of perspectives. The context is the Fed exploring improvements ( as to rulemaking )going forward.
Go to Board of Governors of the Federal Reserve System
Follow Links:
News and Events
Speeches FRB Members
Speech of 06/14/07, Gov. Krosner
Agenda
Transcript
Enjoy,
SpyBoy