David, I actually was 99.99% sure I knew what those prospecti said before I looked, but since I was about to use my subtle prose style to slyly insinuate that a NYT reporter is acting like a nitwit, I thought it wise to check. After I went to all the trouble of checking, I thought, hell, make everybody read this! No free-ridin' today!
I tell you. I am so tempted to write a blog entry accusing GM of shorting CFC and printing bogus rumors. I have as much evidence for my claim as she has for hers.
But I'm just an anonymous blogger, so I'll content myself with pointing out that she wasn't at the station when the Clue Train left.
I can't figure out how Gretchen manages to put pen to paper each day...(or whatever it is she does.) I'd just give up already. Maybe she always wanted to be a sparring dummy for Mike Tyson, but couldn't land the gig.
With the volume of adjustable-rate mortgages that Countrywide has originated, their liquidity crunch potentially eliminates a viable tool to keep mortgages affordable in the face of impending interest rate resets, said Kevin Byers, a principal at Parkside Associates, a consulting firm in Atlanta and an authority on securitizations.
Agreeing to buy back loans that are modified is highly unusual and perhaps unique among pools issued by companies like Countrywide, Mr. Byers said. Pools backed by mortgages issued by Fannie Mae and other government-sponsored entities typically include such language.
but she had corroboration from a securitization authority!
OT, but there was an article mentioning that credit card delinquencies were rising on CNN/Money. I think more people will be needing these "older than dirt" workouts soon Tanta.
. . .
"After falling for three consecutive months, delinquent payments on credit cards -- defined as more than 30 days late - increased slightly in July, to 4.64 percent from 4.62 percent in June, according to CardWeb.com. A year ago, the delinquency rate was 4.18 percent.
The amount of credit card debt consumers are paying off, meanwhile, has fallen. The portion of outstanding balances paid in July slipped to 18.3 percent from 18.4 percent a month earlier."
. . .
You should be a professor. I always learned the most from the professors that taught part time and either were retired or worked in the real world full time.
Sometimes they lacked the ability to distill things like a great teacher, but every once and a while I had one that was both a great teacher and had great real world front line experience.
You have that unique ability to take knowledge learned over many years and explain it in a way this nitwit can understand. I know I am learning something when I read the prospectus clips and I know what you are going to say.
Fed pumps in another 17.25B. A first injection of seven billion dollars at 8:30 am was followed by another of the same amount at 9:40 am and a third of 3.25 billion at 9:55 am
i will offer up a vague defense for GM (please forgive me). i think CFC has unusual language in their prospecus supplements. this is more common, it never uses the word "repurchase":
The sponsor may from time to time implement programs designed to encourage refinancing. These programs
may include, without limitation, modifications of existing loans, general or targeted solicitations, the offering of pre-approved applications, reduced origination fees or closing costs, or other financial incentives. Targeted
solicitations may be based on a variety of factors, including the credit of the borrower or the location of the mortgaged property. In addition, The sponsor may encourage assumptions of mortgage loans, including
defaulted mortgage loans, under which creditworthy borrowers assume the outstanding indebtedness of the
mortgage loans which may be removed from the mortgage pool. As a result of these programs, with respect to
the mortgage pool underlying any trust, the rate of principal prepayments of the mortgage loans in the mortgage pool may be higher than would otherwise be the case, and in some cases, the average credit or
collateral quality of the mortgage loans remaining in the mortgage pool may decline.
i think in most prosupps, the word "repurchase" is only used to refer to the option for the issuer to buy back delinquent loans within the first 90 days or whatever, or in relation to a clean-up call.
Note the following things:
1. "States and nonprofits rush to provide help to those victimized by subprime loans" "victimized"!!!!
This sentence sounds crazy: "It just goes to show if you provide a prime mortgage that's affordable over the long term to what the industry considers a subprime borrower they become a prime borrower."
What is this corporation? --> "Neighborhood Assistance Corporation of America would be offering $1 billion in rescue money to beleaguered borrowers has prompted more than 50,000 inquiries"
How are they giving these terms to people: "Still, NACA's program, which offers no-money-down, no-points, no-fee loans at 5.75 percent interest to borrowers with credit scores often below 600, has been wildly popular."
Who is going to be on the hook for these loans????
Fed is just delaying the inevitable.
The Yen will most likely trade below 100 before we reach the next island of stability. As for anything with a world price- forget it- that is where there will be massive inflation. Food, metals, energy all will rise with the easing of the Fed and printing of US dollars. Housing will be cheap for the next decade, and getting relatively cheaper.
Taxe rates will increase as a lot of the speculative ventures that provided large gains disappear along with their multiplier effects in the general economy.
I see nobody is interested in bailouts quite yet for the poor mortgage suckers to mitigate their lack of spending power. I guess the fed will have to crack the gates and lower rates again to bail out the debt classes. if they don't the recession will be deep and wide- but 'zillo thinks that is baked into the cake. I tend to agree.
Well, with the loss of almost 150 mortgage paperwork providers, how long until the real estate market siezes up due to lack of funding? Lots of Realtors are not employees, but independent contractors, as is a lot of the construction industry.
This crisis just keeps going and going, and the Tan man has it right- if nobody buys beyond the GSEs, there is no market in California or Manhattan.
I just read that article, you left out the best quote.
""I am hiring a ton of staff and we're growing," he said. "It just goes to show if you provide a prime mortgage that's affordable over the long term to what the industry considers a subprime borrower they become a prime borrower."
Cool, I am now soliciting investors for my new company. I will provide prime rates to sub prime borrowers, we will make a fortune. See we can package these things together and sell them to investors. Best of all, these borrowers will become prime borrowers.
All the have to do is put the mortgage papers under their pillow and the Prime Credit Fairy will come in while they sleep and decrease their debt obligations and increase their assets and cash inflows in the dark of night.
"I'd fax that Fed reserve cap letter thingy to that Gretchen chick pronto. I want to read Tanta's temper tantrum tomorrow"
I'd rather skip confusion and go straight to enlightenment (or at least vague comprehension).
The thing about Gretchen is that she's got a great nose for hot stories. She's just got an instictive "there's a business that's shafting the little guy attitude" attitude. I guess you can't have one without the other. If she would just learn a little bit about finance though.....
think in most prosupps, the word "repurchase" is only used to refer to the option for the issuer to buy back delinquent loans
I agree with you about that. In TantaSpeak, a "repurchase" is a put-back, or a forced purchase of the loan by the party who sold it to me to begin with.
A "buyback" or, more usually, a "buyout," is an "economic transaction" for somebody.
But what's really entertaining about all this is that it's all pretty advanced back-room mortgage geek that has gone on for decades, and perfectly nice normal people like our blog readers got to live long, fulfilling lives not caring about it.
Now it's front-page news, so suddenly we're trying to walk the fine line between using tedious insider-jargon and being clear enough for government work.
I can actually make clear and customary distinctions between ABS, RMBS, MBS, CMBS, and BS, but some days it's not worth it so I say "mortgage-backeds" or "securities" or something like that. It isn't that I mean to mislead, it's that we all only care so much.
GM should be familiar with this problem; any business reporter should. What she got hosed on, in my view, was "modification," not "repurchase/buyback/buyout." She assumed that "modfication" = "workout."
I know, who is financing them? Their website says they have "10 Billion committed" - is it some credit unions or something? Should depositors be worried?
They also say: "NACAs beginning
NACA began in 1988 in Boston as the Union Neighborhood Assistance Corporation (UNAC). Its roots are with the Hotel Workers Union - Local 26, an activist union that won and established the countrys first housing trust fund for union members. NACA employed the unions activist tactics to confront lenders that were redlining communities by denying credit to minority neighborhoods and exploiting low- and moderate-income homeowners."
actually, there has been confusion in the comments relating to ABS, RMBS, HEL, etc. it might be a handy ubernerd to just put up a glossary of how the industry uses various terms.
Just my 2 cents worth. I read something yeasterday that brought up the idea that if a contract is entered into fraudulently, then the execution of it is nullified. I am no lawyer but it seems to me that if that is true and if the ramification is that the lender just becomes another creditor in that case, could it be that Countrywide is in serious CYA mode? I mean this new contract would have to be full disclosure to cover their tracks, so what if they have less coming in in the way of payments, at least something is paying off the debt and it cannoot get lost due to a good lawyer finding the chink in their armor (which apparently has been let out of the bag).
Tanta,
Check ebay or alibris in about a month- lots of folks are going to get the layoff and score some freebies to sell cheap;-} Funny how folks who have been laid off just have no loyalty about returning books;-} Tell me what edition and I will keep an eye out at the yard sales;-}
Judging by the splatter we are experiencing, a lot of high end "stuff" will be hitting the 'bay cheap- Coach purses, armani this and that, golf clubs, the usual overpriced stuff that sells cheap to the accompanying wail "but I paid full price!";-}
Forgive me, but I'm having a good time imagining your average reporter (or any normal human being, for that matter) slogging through the HMBS.
i was given the new edition when i made the mistake of going to work for a living. the SSB Guide to MBS and ABS is also fun to take to the beach with you on the weekend, like i do. boy, my life is sad
Thing is, AllenM, at the rate this is all going, we will "rescind" so many of these "innovations" in the MBS world that my old beat-up 2nd Edition will all of a sudden be Word again!
It's the people who bought 6 (is it 6, bd?) who will be screwed.
In case anyone was curious, there is no tax event for an interest rate adjustment, as long as the new rate is not below market (which just means it's somewhat reasonable). The borrower would simply have lower deductions from lower interest expense.
If the lender lowers the interest to, say 1%, there is a case for the IRS to calculate back the NPV of payments and call it a forgiveness of debt. But, that's not going to happen, so it's just a theory.
Bet you could fetch top $s on Ebay if you repurpose it as a cure for insomnia. We can even do a trade "in kind". I just got a copy of 2007 Overview of Telecom Regulation in 52 Jursidictions Worldwide. Data retention obligations in Poland = hot!
In the case of the Neighborhood Assistance Corporation, the $1 billion program has run into situations where lenders seem to be cooperating but then are charging high fees to close the loans.
That's unacceptable to NACA CEO Bruce Marks, who sharply criticized many of the lenders his group has tried working with.
"We will not do a loan if we're going to basically be financing on predatory terms," Marks said. "These are ARMs that will result in the strangulation of the homebuyers."
OT. Maybe, CR or Tanta should open a thread on this.
--
Bill Gross, manager of the worlds biggest bond fund at Pacific Investment Management Co., urged the Bush administration, rather than the Federal Reserve, to bail out U.S. homeowners to avoid destructive housing deflation.
This is disgusting. Did he asked the govt. to interfere with destructive housing inflation?
The very idea that anyone with a brain would suggest this tells you how corrupt our system is and how corrupt the thinking in America has become.
A system of the...
Jas
Pimco's Gross Urges Bush to Bail Out U.S. Homeowners (Update3)
Did you see the second last paragraph in your post?
"He argued that action by the White House would not only help homeowners who might lose their home. Wall Street, which created, marketed and invested in complex securities backed by subprime mortgages over the years, could benefit as well."
Oh really? Wall street could benefit? Wow, what a nice side effect to a bailout. I am sure no one ever considered that!!!
"Judging by the splatter we are experiencing, a lot of high end "stuff" will be hitting the 'bay cheap- Coach purses, armani this and that, golf clubs, the usual overpriced stuff that sells cheap to the accompanying wail "but I paid full price!";-}"
Garage saler here. I like the folks who want six bucks for a three-year-old hardcover fiction best-seller; "I paid $25!" Yeah, and as soon as the paperback came out, the operative answer became "So what?" And don't get me started on people who want top dollar for used exercise machinery. It's hard to give that stuff away.
You'll know things are really tough when you start seeing more garage sales in high-end neighborhoods. Not many of them yet, discounting the occasional estate sale. The rich tend to want too much money for their stuff, but if they're moving out of the country or to a smaller place (and we may see more of that), they usually suck it up and face reality. Painfully.
Tanta -- thanks for highlighting the basic value of english reading skills and basic logic -- time and again. I get so infuriated hearing people -- supposedly intelligent and educated people -- mangle both english and logic, often in the same breath, out of plain laziness. Just today on the morning commute I heard some Leareh disciple "mortgage industry pundit" spouting some nonesense on NPR and I just wanted to smack them -- NPR and the "pundit" -- right through the dash. Even NPR can't seem to tell the difference between the flowers and the manure. Then we have to hear our co-workers repeat this nonesense over lunch and try not to choke on our sandwich.
Let the government bail us unfortunate homebuyers out and let's bail out the Street as well. Let the government help us, write those checks and make 'em plentiful, go ahead and sell more government debt to the markets and let's use this money for good purpose. Let's worry about tax issues later.
After all - we're all in it, aren't we? Even that yet unborn generation that we'll leave all the excess debt on to? Moral hazard, what's that - something to eat?
Elvis, you left out the Venn-diagram-this-sentence horror of "not all mods are" vs. "all mods are not." After "calling all tools" this morning, I was more than usually in the mood to dangle my modifications.
Matt, these agreements do vary. But the one the NYT is referencing limits mods for retention to 5%. There is no limit on mods for workout: you can, theoretically, do that until the numbers won't work out any longer.
Some deals may have badly-written agreements that limit any modifying to 5%, without distinction. They're in trouble right now, I suspect. But I can't be everyone else's lawyer.
I spent years having to sit in stuffy conference rooms with legal team on stuff that I, being just a business twit, wanting to sign and run with because hey! deals gotta get done and so on. I learned important lessons from that.
Much of what we see here does, in my view, probably come from some people wanting to "recyle" old legal work for an old deal without having to pay counsel again. As a cheapskate I can relate, but also as a cheapskate I shake my head. That's not the place to cut corners, sometimes.
But try suggesting that you'll pay the lawyers now or you'll pay them later. (It's more fun if you try suggesting that it come out of the sales side bonuses.)
Never been in those meetings? You don't know what "rancor" is.
I actually believe that "equal" is a predicate adjective here.
Compare "Not all people are born paranoid. Some people become paranoid."
"Not all people are born paranoiacally" would cast aspersions on a laboring woman and the OB/GYN. That seems unfair.
Similarly, to create things equally might suggest that God not spend any more time working on you than on me. But I think the idea was to suggest that God got more or less the same results.
Thanks for writing this. This is worthy of a subject heading in your "compleat ubernerd" section. Well, really it shouldn't be, but you'd be surprised how many people IN THE BIZ don't quite get the whole "loss mit-mod" vs. "retention-mod" thing.
Tanta,Look at ABE Books.com,you will probably find a copy for $10 plus shipping.It is a wonderful site.As far as GM,well the NYT still employs Judith Miller...
I read this blog and the comments precisely because I know nothing about financial markets and the economy and because I want to learn about them. To me, it is counterproductive to engage too merrily in the take-down of a reporter who is only trying to make a very complex problem clearer to people like myself. If the reporter has made egregious errors in logic and if her erroneous assumptions have muddied the waters even more, then certainly this should be pointed out to her. But couldn't it be done in a less conspicuous fashion? There is something unseemly about trumpeting your expertise publicly at the expense of one less well-trained.
It is exactly this attitude of exasperated expertise that keeps readers like myself from asking questions or -- god help us -- expressing an opinion, as the astonished and smug dismay at the stupidity of those outside the real realm of finance is immediate and quite wounding.
I doubt that many journalists have the sort of professional training that economists and financiers such as Tanta do, and thus their reporting will often require correction. Journalists simply cannot always be expected to have the same expertise in financial minutia that the hardened veteran of many career experiences would own. (And, in case you wondered, I am not a journalist.)
To be fair, I also read this blog for its intelligence, wit, and its vast insight. Tanta's comments are mostly entertaining and informative. Calculated Risk is always courtly and polite. And the aside yesterday by Yal about wanting to be a Rembrandt and paint a picture of bankers at the discount window with red lights, for example, far exceeds the sort of entertainment one would find at any other blog, no matter what its focus.
All the same, if I have a question about macroeconomics or just a simple question about how something in finance works, I would probably ask that question on a blog like Mish's. I guess it's because I stand in such awe of the people here. Even though the level of discourse at Mish's is coarser and much rowdier, I wouldn't feel like such a glaring idiot there for exposing my ignorance.
Nice idea, Shnaps, but I think I'll go back to using the old-fashioned term "workouts."
Of course young 'uns think I'm talking about exercise bikes or something.
But "workouts" are working things out, as long as the numbers work out. The Endless Argument Over Mods tends to work out to people who want to argue that the numbers will never work out. I tend to think that for a nontrivial segment of a lot of deals or portfolios, there's some working out that could work out.
Piss me off, on the other hand, and I will introduce the concept of "novations" and "assumptions" and "consolidation agreements." That'll just make everybody want to go back to "mod-mods" and "mods."
"It is exactly this attitude of exasperated expertise that keeps readers like myself from asking questions or -- god help us -- expressing an opinion, as the astonished and smug dismay at the stupidity of those outside the real realm of finance is immediate and quite wounding."
As a fellow ignoramus, I find that asking a simple question here usually gains a quick and courteous answer, or at least a link. Where the answer isn't courteous, it's usually from someone almost as ignorant as I. Do ask questions.
Tanta, in illumination to your previous post, the Solent is the strait of water between the south coast of England and the Isle of Wight. It is one of the main yachting hubs of the UK and thus the name of the fund mainsail. All very nautical!
Are you happy with the idea that a reporter in the bloody Times could publish some accusation that the company you own could be liable for billions in defaulted loans, only to discover later on that this is a misunderstanding?
I won't be surprised if she gets sued for this. Read it again, and ask yourself how many people might have sent in a sell order on CFC after reading this. And it turns out to be about something that improves the value of CFC's servicing portfolio and is perfectly legal and legit.
We are only in the middle of a terrible market crisis. Now is not the time for professional reporters to traffic in rumors, innuendos, or panics. I don't care whether you're an investor or a just a good citizen: you don't need this kind of thing to go on.
Of course I'm harder on GM than on commenters to this blog. She's in the NYT and she can move markets. With such privilege comes pretty serious responsibility.
I think we've lost our moral compass big time if this kind of thing can go un-called. Witness the uproar (not) over the WSJ printing rumors about Berkshire buying CFC. Somebody was manipulating the press in order to make a buck at the expense of the "little guy." Please don't accuse me of not having the novice's best interests at heart.
I agree with Bob Dobbs. I am stupid and I have plenty to say or ask. And 99% of the answers are civil and helpful.
Besides, what are we going to do, even if we did think you were an idiot? Look up 'Anne' in the phone book and post a sign out front of your house? How mortified can you be, even by the worst insult in the comments section of a blog where everyone is anonymous?
Bob & M-F, you guys aren't stupid, but it's nice of you to claim the label in order to defend me.
I fail at my own standards as much as anyone else does if not more. But I do try to live up to my own rules. One of them is "pick on someone your own size." Another is "then pick on someone a whole lot bigger than you."
If I just wanted to make nonexperts feel stupid because they're nonexperts, the posts would be shorter.
Maybe someone will explain to me how jet engines work again.
It is disgusting that someone who has the prestige of writing for the NYT has no concurrent sense of responsibility for getting her analysis straight. GM, Judith Miller and the multitude of other examples of gross ineptititude at the Times have pretty much gotten me to swear off MSM journalism.
My cleaning woman frets more about making a mistake than this supposed crack business journalist.
Anne, dont be scared. So what if some dweebs point and laugh at your question? I'm certain others will answer in the curteous style you prefer. But if you are so fragile, this may be indicitive of other problems worse than a lack of finanacial knowledge.
"The thing about Gretchen is that she's got a great nose for hot stories. She's just got an instictive "there's a business that's shafting the little guy attitude" attitude. I guess you can't have one without the other. If she would just learn a little bit about finance though....."
OH BS, Tantas got chops, Tantas has the hard won wisdom of real life problem solving, Tanta writes in more depth, more clearly and god knows more accurately than GM.
GM has nothing more than a nose for what gets you ahead in liberal elite world and the entitlement to put her plans in action. That's why she's got a pulitzer and a by-line, and Tantas got a tip jar.
Thank you for pointing out how serious the potential ramifications could be from the reporter's misunderstanding. I didn't appreciate how severe the fallout could be from reading your original post.
And yes, I know from reading your other posts that you have the best interests of smaller investors like myself at heart. I didn't mean to accuse you of that, in any case. I do appreciate your expertise, even if I am often intimidated by how it is expressed.
To be perfectly frank, I had been entertaining the idea of going back to school and studying finance with an idea of possibly getting into the business of economic reporting. When I read your post this morning, my infant aspirations were rather stunned. I realized, all of a sudden, how financial journalists could never possibly be consistently reliable unless they had the sort of expertise gained from immersion in a career in finance or economics, before they waded into journalism.
In that connection, you would probably make a better business journalist for the New York Times than Ms. Morgensen, because of your experience. I say that sincerely.
Piss me off, on the other hand, and I will introduce the concept of "novations" and "assumptions" and "consolidation agreements." That'll just make everybody want to go back to "mod-mods" and "mods."
Tanta, same for me, the madder I get, the more the vocabulary comes out.
The mistake people make is that they don't realize you're being interpersonally considerate and they think you're innate kindness is an opportunity to get the upper hand.
Big mistake, especially with strong women. I wanted to have a enlightening conversation, but you want to have a logic-ment, OK, lets have at it. We'll dispense with all this concern I've had for your ego up until now.
At what point is anyone "only" doing anything? She's not working for the college paper, she's getting paid for her words. Therefore, quality standards are a justifiable expectation.
The reason Tanta's reply is dead on is because the reporter didn't know what she didn't know. If she'd walked in asking the CFC guy "Please explain this to me from front to back" he probably would have .. and there'd have been no story.
" Journalists simply cannot always be expected "
Yes, they can. That's precisely the job requirement for a position at CNBC. [ Solid effort at creating an unassailable excuse for the reporter, though! ] Cramer is allowed to create a defense for his psychotic break.. yet, Tanta is somehow held to a higher standard?
" couldn't it be done in a less conspicuous fashion? "
That article is a great example of why newspapers print retractions. The reporter's job is to be thorough and precise, and she failed. That's all there is to it -- welcome to the real world. Her only deliverable is the article, and she completely flubbed it.
Bottom line: I don't expect a journalist to know everything about their material, but I do expect them to master the art of asking the correct questions.
The unfortunate note to all this.. there's so many journalistic gems waiting to be unearthed that it's disappointing this non-issue got published. For instance, I have yet to see an in-depth piece with interviews on how the ratings agencies will be monitored after this plays out. We could see a series of articles detailing precisely how the fraud would work - yes, it's obvious in hindsight, but stories detailing phone calls from the AHF's of the world would be good for a laugh or two, followed by a copy-paste to the SEC. Or, dare I mention it, the conversations within structured finance departments about how useless they know their bonds are.. while they're selling!
When I read your post this morning, my infant aspirations were rather stunned. I realized, all of a sudden, how financial journalists could never possibly be consistently reliable unless they had the sort of expertise gained from immersion in a career in finance or economics, before they waded into journalism.
Anne, parachute journalism is a huge problem, they used to have people who, even if they didn't work in the field, they spent years developing sources and immersing themselves in the cultures they were writing about. Now you have an entire profession of people who don't know what they don't know and, nonetheless, feel free to annoit themselves as experts.
As I once explained to Matt, who is a real professional reporter, I happen to like blogging.
I am aware that I could, theoretically, get a job at a newspaper.
I have had corporate jobs for many years. I am also in not great health. I have decisions to make about how I'll spend my time.
Blogging is fun, because you can say all those things you wanted to say for years, but had to be all corporate-nicey about. Not because you feared being fired (that wasn't generally my problem), but because that's the corporate culture.
Blogging for me allows hair to be let down, or would if I had that much hair. I appreciate all the tips we get, but I do this for free when the tips don't come in. For free, you get lip.
I still work very hard to make it accurate and "fair," in my own definition of "fair," which has something to do sometimes with people who write in that cloying NYT tone about those Bad Guys at CFC deserving what they get. Ahem.
There are lots of people who find the tone of a lot of GM's stuff really compelling. For these people, I sound like a snotty little brat.
There are lots of people who are themselves snotty little brats, and they think I sound like a snotty little brat. The miracle of target marketing.
Toucan, the Wall Street Journal is quoting the NYT. You should call and complain.
The language is murky. The prospectus is quoted as stating "If a borrower requests such a reduction, the Master Servicer will be permitted to agree to the rate reduction provided that (i) Countrywide Home Loans purchases the Mortgage Loan from the Trust Fund immediately following the modification and..."
The NYT article states the language was changed in the later prospectus to make it more clear that the repurchase was not required to repurchase loans at risk of default.
That appears to be the case. The language was changed, and it is much more clear. The original intent may have been to require repurchase only in non-loss-mit-mod situations, but the company obviously determined its own language was unclear and decided to change it, which was reported.
I checked the prospectus myself and it also states "Countrywide Home Loans, Inc. also will be obligated to purchase any mortgage loan with respect to which it has modified the mortgage rate at the request of the borrower."
EVERYTHING!! IS NEFARIOUS!!1! AND A CRISIS!!! BUY NEWSPAPERZ!!!1!
i would buy the NYT if i saw that headline....but as is, they don't even have comics last time i looked, which is really the only useful part of the newspaper.
"I realized, all of a sudden, how financial journalists could never possibly be consistently reliable unless they had the sort of expertise gained from immersion in a career in finance or economics, before they waded into journalism"
Anne, everybody starts from ignorance and learn as they go on. Good reporters figure out what questions to ask and who to ask if they don't know an answer. And most business reporters would rather work in a different beat (politics) so you're a step ahead. You'll need a lot thicker skin if you want to enter this line of work. Good luck.
thanks for responding. i previously asked around and heard that about 5%, but I never thought to ask if that was for all mods or just loss mitigation mods. Now I'm kicking myself. But I will keep working on it before publishing. Sometimes some reporters do try and get their facts straight.
Matt, you know I love you. That's why I'll never let you forget the "rancor" comment. We only hurt the ones we love.
When the NYT gets a comment section that the reporters participate in, or GM develops the fortitude to show up here and jump my case back, like rcyran and Matt have, then we'll talk about thick and thin skins.
I assume reporters learn their beats the way I, a fresh out of school lit major, learned the mortgage business. I have asked every stupid question that there is.
Had I asked every stupid question that there is six times, I'd still be in the file room and you wouldn't be reading this. Had I failed to spend many years thereafter answering every stupid question that there is for my own newbies, I'd have been shown the door.
Some days I think I'd like to see reporters negotiate large bulk loan deals with, oh, CFC. Your skins would thicken up.
I don't wish to romanticize people who work in high-stress financial businesses, but let's face it. GM isn't hedging CFC's servicing portfolio today. Possibly her source was a little too freaking busy to explain how a bill becomes a law to a reporter, especially if we don't know where she got this idea for this story to begin with. All I know is I never had time to waste educating people who were letting my competitors tell them stupid stories.
There are lots of people who are themselves snotty little brats, and they think I sound like a snotty little brat. The miracle of target marketing.
Tanta,
It seems that there are a few of us here with mathematics degrees.. and if there ever were a place to inure oneself to vicious verbal combat (not to be confused with viscous verbal wombat).. it'd be the mathematics department at your local university.
If someone calls you out for being stupid, either you are or you aren't. If you aren't, you fight back by clearly explaining why you aren't. If you are, stop wasting everyone's time.
With respect to the Bloomberg piece on the $891 billion, the authors state that "Some companies that use commercial paper to buy asset-backed securities or collateralized debt obligations backed by subprime mortgages are having trouble finding investors." That shouldn't be a surprise. Given that the valuations of no ABS's or CDO's related to mortgages can be trusted right now, why would anyone want even the shortest term CP related to these as there could be insta-default loans hidden in said CP.
Clearly the issuers of ABS CP do so as a sort of bridge financing while they find long term buyers of the ABS. Personally, I think that the seize-up of the market for this sort of CP is healthy as it will force issuers of ABS to demonstrate plainly that the mortgages they are selling warrant the ratings they receive
Toucan, it happened a time or two back in the day.
I wrote a really pissy "media inquiries policy" which you can read if you want to--link top left box of main blog page.
I got so damned tired of taking an hour out of my jam-packed day to explain ass vs. hole in ground to someone, and then pick up the paper the next morning to see myself quoted, by name, having said something that sounded absolutely butt-headed. Usually it was the magic of ellipsis: Tanta remarked that "modfications are . . . changes." Something like that. My collegues would rub my nose in it for years. "Hey, Tanta! Are modifications . . . changes? HAHAHA! Did you tell them we use base 10?"
Hell with that. Reporters who want to learn from me can read my freaking blog.
There is no limit on mods for workout: you can, theoretically, do that until the numbers won't work out any longer.
Help me out here -- I was always under the impression that PSAs by and large limited what a servicer could and could not do in terms of loan mods -- and that many servicer's loss mit departments, particularly those that filled the role of third party specialists, had entire departments designed to do nothing but obtain either waivers or modifications to original PSA covenants? I also thought this was because getting investor approval one-off for an individual loan wasn't just time consuming and likely to push the borrower into foreclosure before said approval ever arrived, but also because investors would tire of four hundred one-off requests for modification.
That sort of understanding above would be patently wrong if there was practically no limit during workout, as you suggest.
Where am I failing to connect the dots here? I'm sure I'm missing something.....
All I mean, P., is that servicers use "best execution to the deal" models to decide what "works out."
Your model, in other words, compares the loss-to-deal of modification with short sale, DIL, FC, etc., and tells you what mitigates loss best.
You can write, say, 5% into your contract if you want. Good luck making the RE market conform to your expectations. Your RE market might decide to keep making it cheaper for you to mod than to FC.
Similarly, the yield curve can spite you. Rates can rise, taking borrowers out of the money for refis, leaving you with a deal that has characteristics you didn't count on.
So the model can, theoretically, tell you the numbers "work" up to and including modifying 50% of the loans in the pool.
Yet that would be a surprising development. So it's not stupid for noteholders to put some speedbumps in the way from 5% to 50%. The noteholder also has a lot to say about how that model works.
I am only trying to draw attention to the term "workout." It is not likely that noteholders would like a deal with 50% mods in it, but that could work out better than 50% FCs.
OTOH, with the retention mods? If you don't put some kind of limit on that, you are in essence risking your servicer buy out your entire pool in the first six months. Who would want that? (OK, sure, in hindsight some noteholders probably wish that had happened, but . . .)
Looks like we were on the same page -- I see the spirit in which your comments were made in re: retention versus distressed mods.
I will say from past experience, however, that loan modifications were a bad word for most investors during the boom -- even when servicing ops knew what was coming and would ask for them. I know a few that tried to get their PSAs updated on acquisition of a portfolio and getting it done was tougher than working with the borrowers.....imagine that one.
I'm sure that game has changed significantly at this point, of course.
And LOL re: your last comment. I commented a while back that Wall Street has learned a lesson most of us learned in grade school: a bunch of lemons, pooled together and sliced into wedges, is still a bunch of lemons.
Tanta, an excellent exposition in the blog, but I thought the most important statement you made was in a comment:
" . . . what's really entertaining about all this is that it's all pretty advanced back-room mortgage geek that has gone on for decades, . . . .
"Now it's front-page news, . . . ."
This, along with deadlines, is why the GM's of the world write the articles they do. They may sound omniscient at times, but they're just human. I wouldn't blame a business reporter for not having the jargon down perfectly and giving a literal interpretation to what she does read.
Meanwhile, CR is blogging about the horror that could result from certain of those "certain events" that could affect the conversion price of BofA's $2B infusion into Countrywide when someone working at dark-thirty in the morning might have pointed out to him that the language is pretty standard.
Fortunately, the comments to CR's blog did just that and apparently persuaded him to do a little editing, which I think is great.
We're all still learning from each other. Anyone who doesn't admit that is a fool.
Ironically, I'm all for express disclosures and that was all that CR was seeking while IMHO that's the only reason the language changed from the earlier CFC's prospectus to the later editions.
Continue to strive for the ultimate clarity and thanks for your efforts.
HGY, sorry about the "allowing" part, but that comment got posted while I was sound asleep. Comments aren't held for moderator approval here, you know.
I could delete it, but I think I prefer to suggest to Anne that she put her hands on her hips, look old FFDIC in the eyes (metaphorically speaking), and tell him to stop being such an insufferable sexist pig.
Then I can post right behind Anne, saying "what Anne said!"
But since Anne didn't get a chance to jump FFDIC's case first, I'm glad you did and I'm happy to assist.
FFDIC, I have no idea what makes you think that aged, graying, dessicated sexist line about getting laid is funny. I'm not interested in knowing that, either. The only real choice you have at this point is to put your tail between your legs, lower your ears, point your snout at the floor, and say you're sorry.
You need not grovel forever; this is a blog, not a marriage. We accept lively, venacular, and even occasionally juvenile humor around here, and lines get crossed. Just uncross them, and we'll all get over it.
Yes, yes of course I apologize to Anne, the bloggers, CR and Tanta. I should never post after midnight after a week of one disaster after another. Again, my sincere regrets to all and thanks for quickly calling me out. I needed that!
"I could delete it, but I think I prefer to suggest to Anne that she put her hands on her hips, look old FFDIC in the eyes (metaphorically speaking), and tell him to stop being such an insufferable sexist pig."
Hah! Actually, I revisited this blog to see if anyone else suggested I was thin-skinned (I am). And thin-skinned me laughed when I read FFDIC's comment. Sex in this century would be great!
Tanta, my apologies to you for not remembering that you cannot monitor the blog 24/7.
Anne, perhaps you are the one we need to educate. Tanta's approach: call it, drop it and go back to having fun with the guys is (in my experience) the only way to keep a happy, healthy mixed-gender party going. And Anne, FFDIC didn't offer that comment to be attentive to you, quite the contrary, you (and women in general) were just the target of his frustration.
Tanta,
Thanks for wading into the prospectuses, especially at dark-thirty.
Where does "truth in lending" come into play?
Thanks. Quite the eye popper piece!!
Tanta, thanks! That is what I suspected.
"I have been trying to say since dirt that it has been this way since dirt, but there's dirt to report!"
ROFLOL!
Best Wishes,
Shiloh
David, I actually was 99.99% sure I knew what those prospecti said before I looked, but since I was about to use my subtle prose style to slyly insinuate that a NYT reporter is acting like a nitwit, I thought it wise to check. After I went to all the trouble of checking, I thought, hell, make everybody read this! No free-ridin' today!
I tell you. I am so tempted to write a blog entry accusing GM of shorting CFC and printing bogus rumors. I have as much evidence for my claim as she has for hers.
But I'm just an anonymous blogger, so I'll content myself with pointing out that she wasn't at the station when the Clue Train left.
I can't figure out how Gretchen manages to put pen to paper each day...(or whatever it is she does.) I'd just give up already. Maybe she always wanted to be a sparring dummy for Mike Tyson, but couldn't land the gig.
With the volume of adjustable-rate mortgages that Countrywide has originated, their liquidity crunch potentially eliminates a viable tool to keep mortgages affordable in the face of impending interest rate resets, said Kevin Byers, a principal at Parkside Associates, a consulting firm in Atlanta and an authority on securitizations.
Agreeing to buy back loans that are modified is highly unusual and perhaps unique among pools issued by companies like Countrywide, Mr. Byers said. Pools backed by mortgages issued by Fannie Mae and other government-sponsored entities typically include such language.
but she had corroboration from a securitization authority!
i wonder if he just responded to her claim that CFC was required to repurchase loss mit mods without checking the prospectus for herself?
Shame, shame, shame. That Gretchen chick is a hoot and a half.
OT, but there was an article mentioning that credit card delinquencies were rising on CNN/Money. I think more people will be needing these "older than dirt" workouts soon Tanta.
Subprime may be hitting credit cards, too - Aug. 23, 2007
. . .
"After falling for three consecutive months, delinquent payments on credit cards -- defined as more than 30 days late - increased slightly in July, to 4.64 percent from 4.62 percent in June, according to CardWeb.com. A year ago, the delinquency rate was 4.18 percent.
The amount of credit card debt consumers are paying off, meanwhile, has fallen. The portion of outstanding balances paid in July slipped to 18.3 percent from 18.4 percent a month earlier."
. . .
Cat herding attempt:
FFDIC!!! TANTA!!! Have you seen the FRB's why bother with reserve capital letter?
http://www.federalreserve.gov/boarddocs/legalint/bhc_changeincontrol/2007/20070821.pdf
This is some major freaky stuff here.
MaxedOutMama | Homepage | 08.23.07 - 11:49 am | #
Exactly, bacon dreamz. It went like this:
GM: "Is it usual for a servicer to buy back delinquent loans to modify them?"
KB: "No, that's highly unusual."
GM: WOW! I'VE GOT A SCOOP!
Tanta,
You should be a professor. I always learned the most from the professors that taught part time and either were retired or worked in the real world full time.
Sometimes they lacked the ability to distill things like a great teacher, but every once and a while I had one that was both a great teacher and had great real world front line experience.
You have that unique ability to take knowledge learned over many years and explain it in a way this nitwit can understand. I know I am learning something when I read the prospectus clips and I know what you are going to say.
thanks for the time you and CR spend here.
O/T
Fed pumps in another 17.25B. A first injection of seven billion dollars at 8:30 am was followed by another of the same amount at 9:40 am and a third of 3.25 billion at 9:55 am
Total to date: 120B
i will offer up a vague defense for GM (please forgive me). i think CFC has unusual language in their prospecus supplements. this is more common, it never uses the word "repurchase":
The sponsor may from time to time implement programs designed to encourage refinancing. These programs
may include, without limitation, modifications of existing loans, general or targeted solicitations, the offering of pre-approved applications, reduced origination fees or closing costs, or other financial incentives. Targeted
solicitations may be based on a variety of factors, including the credit of the borrower or the location of the mortgaged property. In addition, The sponsor may encourage assumptions of mortgage loans, including
defaulted mortgage loans, under which creditworthy borrowers assume the outstanding indebtedness of the
mortgage loans which may be removed from the mortgage pool. As a result of these programs, with respect to
the mortgage pool underlying any trust, the rate of principal prepayments of the mortgage loans in the mortgage pool may be higher than would otherwise be the case, and in some cases, the average credit or
collateral quality of the mortgage loans remaining in the mortgage pool may decline.
i think in most prosupps, the word "repurchase" is only used to refer to the option for the issuer to buy back delinquent loans within the first 90 days or whatever, or in relation to a clean-up call.
rcyran,
Fax that Fed reserve cap letter thingy to that Gretchen chick pronto. I want to read Tanta's temper tantrum tomorrow.
Speaking of refinancing, look at this article:
The mad rush for housing help - Aug. 23, 2007
Note the following things:
1. "States and nonprofits rush to provide help to those victimized by subprime loans" "victimized"!!!!
Who is going to be on the hook for these loans????
Bloomberg.com
Banks Have $891 Billion at Risk in Commercial Paper, Fitch Says...
Banks Have $891 Billion at Risk in CP, Fitch Says (Correct) - Bloomberg.com
Fed is just delaying the inevitable.
The Yen will most likely trade below 100 before we reach the next island of stability. As for anything with a world price- forget it- that is where there will be massive inflation. Food, metals, energy all will rise with the easing of the Fed and printing of US dollars. Housing will be cheap for the next decade, and getting relatively cheaper.
Taxe rates will increase as a lot of the speculative ventures that provided large gains disappear along with their multiplier effects in the general economy.
I see nobody is interested in bailouts quite yet for the poor mortgage suckers to mitigate their lack of spending power. I guess the fed will have to crack the gates and lower rates again to bail out the debt classes. if they don't the recession will be deep and wide- but 'zillo thinks that is baked into the cake. I tend to agree.
Well, with the loss of almost 150 mortgage paperwork providers, how long until the real estate market siezes up due to lack of funding? Lots of Realtors are not employees, but independent contractors, as is a lot of the construction industry.
This crisis just keeps going and going, and the Tan man has it right- if nobody buys beyond the GSEs, there is no market in California or Manhattan.
Someday this war's gonna end...
Seriously, I forwarded the Fed letter to Mark Pittman at Bloomberg.
www.mpittman@bloomberg.net
Please tip Tanta if Bloomberg picks it up. Thanks.
M-F
I just read that article, you left out the best quote.
""I am hiring a ton of staff and we're growing," he said. "It just goes to show if you provide a prime mortgage that's affordable over the long term to what the industry considers a subprime borrower they become a prime borrower."
Cool, I am now soliciting investors for my new company. I will provide prime rates to sub prime borrowers, we will make a fortune. See we can package these things together and sell them to investors. Best of all, these borrowers will become prime borrowers.
All the have to do is put the mortgage papers under their pillow and the Prime Credit Fairy will come in while they sleep and decrease their debt obligations and increase their assets and cash inflows in the dark of night.
COME THE HELL ON PEOPLE CAN'T BE THIS STUPID.
FFDIC-
"I'd fax that Fed reserve cap letter thingy to that Gretchen chick pronto. I want to read Tanta's temper tantrum tomorrow"
I'd rather skip confusion and go straight to enlightenment (or at least vague comprehension).
The thing about Gretchen is that she's got a great nose for hot stories. She's just got an instictive "there's a business that's shafting the little guy attitude" attitude. I guess you can't have one without the other. If she would just learn a little bit about finance though.....
think in most prosupps, the word "repurchase" is only used to refer to the option for the issuer to buy back delinquent loans
I agree with you about that. In TantaSpeak, a "repurchase" is a put-back, or a forced purchase of the loan by the party who sold it to me to begin with.
A "buyback" or, more usually, a "buyout," is an "economic transaction" for somebody.
But what's really entertaining about all this is that it's all pretty advanced back-room mortgage geek that has gone on for decades, and perfectly nice normal people like our blog readers got to live long, fulfilling lives not caring about it.
Now it's front-page news, so suddenly we're trying to walk the fine line between using tedious insider-jargon and being clear enough for government work.
I can actually make clear and customary distinctions between ABS, RMBS, MBS, CMBS, and BS, but some days it's not worth it so I say "mortgage-backeds" or "securities" or something like that. It isn't that I mean to mislead, it's that we all only care so much.
GM should be familiar with this problem; any business reporter should. What she got hosed on, in my view, was "modification," not "repurchase/buyback/buyout." She assumed that "modfication" = "workout."
FFDIC-
I forwarded it to several reporters who cover that beat.
we are all screwed,
I know, who is financing them? Their website says they have "10 Billion committed" - is it some credit unions or something? Should depositors be worried?
Their website is: https://www.naca.com/about_naca/nacaHistory.jsp
They also say: "NACAs beginning
NACA began in 1988 in Boston as the Union Neighborhood Assistance Corporation (UNAC). Its roots are with the Hotel Workers Union - Local 26, an activist union that won and established the countrys first housing trust fund for union members. NACA employed the unions activist tactics to confront lenders that were redlining communities by denying credit to minority neighborhoods and exploiting low- and moderate-income homeowners."
maybe Tanta Claus should send GM a copy of the handbook of mortgage-backed securities for christmas.
I'm still hoping someone will send me a copy of the HMBS for Christmas.
Mine is very old, battered, and out-of-date. The most recent edition retails for over $100. I no longer have an employer I can stick with that.
So, being cheap, I just call people who expensed the updated version and make them read it to me. It's a wonder anybody takes my calls these days.
Forgive me, but I'm having a good time imagining your average reporter (or any normal human being, for that matter) slogging through the HMBS.
actually, there has been confusion in the comments relating to ABS, RMBS, HEL, etc. it might be a handy ubernerd to just put up a glossary of how the industry uses various terms.
Just my 2 cents worth. I read something yeasterday that brought up the idea that if a contract is entered into fraudulently, then the execution of it is nullified. I am no lawyer but it seems to me that if that is true and if the ramification is that the lender just becomes another creditor in that case, could it be that Countrywide is in serious CYA mode? I mean this new contract would have to be full disclosure to cover their tracks, so what if they have less coming in in the way of payments, at least something is paying off the debt and it cannoot get lost due to a good lawyer finding the chink in their armor (which apparently has been let out of the bag).
Just got this emailed to me...do not have a link for it. Obviously in addition to the pier lones held by the IBs, there also swwms to be a CP backup:
+++++++++++
Banks Have $891 Billion at Risk in Commercial Paper, Fitch Says
2007-08-23 12:57 (New York)
By Mark Pittman
Aug. 23 (Bloomberg) -- Banks worldwide have $891 billion at
risk in asset-backed commercial paper facilities because of
credit agreements that ensure investors are paid back when the
short-term debt matures, Fitch Ratings said.
The investment vehicles, which carry top credit ratings,
sell debt that matures in one to 270 days and invest in longer-
term securities with higher yields, Fitch said in a report. Some
of those securities are subprime mortgage bonds, which have been
losing value as default rise to the highest in 10 years.
In a sign that banks are shouldering more risk, U.S. asset-
backed commercial paper shrank by its biggest weekly percentage
since 2000 as investors shunned debt linked to mortgages and
opted for the safety of Treasuries. The asset-backed market has
dropped by $180 billion in the past two weeks, according to the
Federal Reserve.
``On average, exposures are manageable,'' said Ian Lennel,
head of Europe, Middle East and Asian Bank Group at Fitch.
Lennel pointed out during a conference call presentation that
the world's biggest banks each have more than $1 trillion in
assets.
All commercial paper dropped $90.2 billion, or
4.23 percent, to a seasonally adjusted $2.04 trillion as of
yesterday from Aug. 15, according to the Federal Reserve. The
percentage drop is the biggest since at least November 2000,
according to data compiled by Bloomberg.
Some companies that use commercial paper to buy asset-
backed securities or collateralized debt obligations backed by
subprime mortgages are having trouble finding investors.
Commercial paper buyers, in the face of attempts by the Federal
Reserve to ease the credit crunch, have headed for Treasury
bills, where yields on Aug. 20 fell the most since the stock
market crash of 1987.
--With reporting by Darrell Hassler in Chicago. Editor
Tanta,
Check ebay or alibris in about a month- lots of folks are going to get the layoff and score some freebies to sell cheap;-} Funny how folks who have been laid off just have no loyalty about returning books;-} Tell me what edition and I will keep an eye out at the yard sales;-}
Judging by the splatter we are experiencing, a lot of high end "stuff" will be hitting the 'bay cheap- Coach purses, armani this and that, golf clubs, the usual overpriced stuff that sells cheap to the accompanying wail "but I paid full price!";-}
Someday this war's gonna end...
lotsa typos, but you get the drift
Forgive me, but I'm having a good time imagining your average reporter (or any normal human being, for that matter) slogging through the HMBS.
i was given the new edition when i made the mistake of going to work for a living. the SSB Guide to MBS and ABS is also fun to take to the beach with you on the weekend, like i do. boy, my life is sad
p.s. why don't you just take out a reverse mortgage? then you can buy all the books you want, and screw your relatives all at the same time!
bacon,
What's truly sad is that the average American reads less than one book per year.
Thing is, AllenM, at the rate this is all going, we will "rescind" so many of these "innovations" in the MBS world that my old beat-up 2nd Edition will all of a sudden be Word again!
It's the people who bought 6 (is it 6, bd?) who will be screwed.
In case anyone was curious, there is no tax event for an interest rate adjustment, as long as the new rate is not below market (which just means it's somewhat reasonable). The borrower would simply have lower deductions from lower interest expense.
If the lender lowers the interest to, say 1%, there is a case for the IRS to calculate back the NPV of payments and call it a forgiveness of debt. But, that's not going to happen, so it's just a theory.
Bacon-
Bet you could fetch top $s on Ebay if you repurpose it as a cure for insomnia. We can even do a trade "in kind". I just got a copy of 2007 Overview of Telecom Regulation in 52 Jursidictions Worldwide. Data retention obligations in Poland = hot!
yes, Tanta, it is 6, and you're right about it being on the verge of obsolete.
@ I'm still hoping someone will send me a copy of the HMBS for Christmas.
Amazon wish list !
The mad rush for housing help - Aug. 23, 2007
In the case of the Neighborhood Assistance Corporation, the $1 billion program has run into situations where lenders seem to be cooperating but then are charging high fees to close the loans.
That's unacceptable to NACA CEO Bruce Marks, who sharply criticized many of the lenders his group has tried working with.
"We will not do a loan if we're going to basically be financing on predatory terms," Marks said. "These are ARMs that will result in the strangulation of the homebuyers."
Old habits die hard.
I haven't gone through all the comments but anyone post this yet?
GBill
Gross: Bush needs to rescue homeowners
I'm sure W will get right after it - soon as Iraq is taken care of and those pesky bushed are whacked back at the ranch.
OT. Maybe, CR or Tanta should open a thread on this.
--
Bill Gross, manager of the worlds biggest bond fund at Pacific Investment Management Co., urged the Bush administration, rather than the Federal Reserve, to bail out U.S. homeowners to avoid destructive housing deflation.
This is disgusting. Did he asked the govt. to interfere with destructive housing inflation?
The very idea that anyone with a brain would suggest this tells you how corrupt our system is and how corrupt the thinking in America has become.
A system of the...
Jas
Pimco's Gross Urges Bush to Bail Out U.S. Homeowners (Update3)
Pimco's Gross Urges Bush to Bail Out U.S. Homeowners (Update3) - Bloomberg.com
dryfly,
Did you see the second last paragraph in your post?
"He argued that action by the White House would not only help homeowners who might lose their home. Wall Street, which created, marketed and invested in complex securities backed by subprime mortgages over the years, could benefit as well."
Oh really? Wall street could benefit? Wow, what a nice side effect to a bailout. I am sure no one ever considered that!!!
Oh really? Wall street could benefit? Wow, what a nice side effect to a bailout. I am sure no one ever considered that!!!
Imagine a bond peddler concerned about credit markets - that's a shocker.
Oh, ya it's not for the bonds... it's for the children.
"Judging by the splatter we are experiencing, a lot of high end "stuff" will be hitting the 'bay cheap- Coach purses, armani this and that, golf clubs, the usual overpriced stuff that sells cheap to the accompanying wail "but I paid full price!";-}"
Garage saler here. I like the folks who want six bucks for a three-year-old hardcover fiction best-seller; "I paid $25!" Yeah, and as soon as the paperback came out, the operative answer became "So what?" And don't get me started on people who want top dollar for used exercise machinery. It's hard to give that stuff away.
You'll know things are really tough when you start seeing more garage sales in high-end neighborhoods. Not many of them yet, discounting the occasional estate sale. The rich tend to want too much money for their stuff, but if they're moving out of the country or to a smaller place (and we may see more of that), they usually suck it up and face reality. Painfully.
They should have invested in Rice instead:
Joe Montana's Firm Says Fund Declined 12% in August (Update4) - Bloomberg.com
I think Gross might have some MBS in his portfolio he does not want to write down?
Tanta,
Nice mix of information, rancor and comedy. So are servicers limited to 5% of principal balance on loss-mits? If not, what is the limit, if any?
Thanks.
-Matt
Tanta -- thanks for highlighting the basic value of english reading skills and basic logic -- time and again. I get so infuriated hearing people -- supposedly intelligent and educated people -- mangle both english and logic, often in the same breath, out of plain laziness. Just today on the morning commute I heard some Leareh disciple "mortgage industry pundit" spouting some nonesense on NPR and I just wanted to smack them -- NPR and the "pundit" -- right through the dash. Even NPR can't seem to tell the difference between the flowers and the manure. Then we have to hear our co-workers repeat this nonesense over lunch and try not to choke on our sandwich.
I think Gross might have some MBS in his portfolio he does not want to write down?
+10 Crispy. Gross is talkin' his book again, methinks the man doth protest too much.
On the subject of correct grammar:
In the title, "Equal" is an adverb. Therefore, the correct use of the word should be "Equally."
However, when modifying a well-known phrase for satirical puposes, I believe one is not obligated to correct the errors of our forefathers.
Yeah!! Gross, Pimco, way to go!
Let the government bail us unfortunate homebuyers out and let's bail out the Street as well. Let the government help us, write those checks and make 'em plentiful, go ahead and sell more government debt to the markets and let's use this money for good purpose. Let's worry about tax issues later.
After all - we're all in it, aren't we? Even that yet unborn generation that we'll leave all the excess debt on to? Moral hazard, what's that - something to eat?
Elvis, you left out the Venn-diagram-this-sentence horror of "not all mods are" vs. "all mods are not." After "calling all tools" this morning, I was more than usually in the mood to dangle my modifications.
Matt, these agreements do vary. But the one the NYT is referencing limits mods for retention to 5%. There is no limit on mods for workout: you can, theoretically, do that until the numbers won't work out any longer.
Some deals may have badly-written agreements that limit any modifying to 5%, without distinction. They're in trouble right now, I suspect. But I can't be everyone else's lawyer.
I spent years having to sit in stuffy conference rooms with legal team on stuff that I, being just a business twit, wanting to sign and run with because hey! deals gotta get done and so on. I learned important lessons from that.
Much of what we see here does, in my view, probably come from some people wanting to "recyle" old legal work for an old deal without having to pay counsel again. As a cheapskate I can relate, but also as a cheapskate I shake my head. That's not the place to cut corners, sometimes.
But try suggesting that you'll pay the lawyers now or you'll pay them later. (It's more fun if you try suggesting that it come out of the sales side bonuses.)
Never been in those meetings? You don't know what "rancor" is.
I actually believe that "equal" is a predicate adjective here.
Compare "Not all people are born paranoid. Some people become paranoid."
"Not all people are born paranoiacally" would cast aspersions on a laboring woman and the OB/GYN. That seems unfair.
Similarly, to create things equally might suggest that God not spend any more time working on you than on me. But I think the idea was to suggest that God got more or less the same results.
Thanks for writing this. This is worthy of a subject heading in your "compleat ubernerd" section. Well, really it shouldn't be, but you'd be surprised how many people IN THE BIZ don't quite get the whole "loss mit-mod" vs. "retention-mod" thing.
Maybe we just need to introduce a new term...
Mitification?
Thanks again, Tanta.
P.S. "Dark-Thirty"?...woot!
Tanta,Look at ABE Books.com,you will probably find a copy for $10 plus shipping.It is a wonderful site.As far as GM,well the NYT still employs Judith Miller...
I read this blog and the comments precisely because I know nothing about financial markets and the economy and because I want to learn about them. To me, it is counterproductive to engage too merrily in the take-down of a reporter who is only trying to make a very complex problem clearer to people like myself. If the reporter has made egregious errors in logic and if her erroneous assumptions have muddied the waters even more, then certainly this should be pointed out to her. But couldn't it be done in a less conspicuous fashion? There is something unseemly about trumpeting your expertise publicly at the expense of one less well-trained.
It is exactly this attitude of exasperated expertise that keeps readers like myself from asking questions or -- god help us -- expressing an opinion, as the astonished and smug dismay at the stupidity of those outside the real realm of finance is immediate and quite wounding.
I doubt that many journalists have the sort of professional training that economists and financiers such as Tanta do, and thus their reporting will often require correction. Journalists simply cannot always be expected to have the same expertise in financial minutia that the hardened veteran of many career experiences would own. (And, in case you wondered, I am not a journalist.)
To be fair, I also read this blog for its intelligence, wit, and its vast insight. Tanta's comments are mostly entertaining and informative. Calculated Risk is always courtly and polite. And the aside yesterday by Yal about wanting to be a Rembrandt and paint a picture of bankers at the discount window with red lights, for example, far exceeds the sort of entertainment one would find at any other blog, no matter what its focus.
All the same, if I have a question about macroeconomics or just a simple question about how something in finance works, I would probably ask that question on a blog like Mish's. I guess it's because I stand in such awe of the people here. Even though the level of discourse at Mish's is coarser and much rowdier, I wouldn't feel like such a glaring idiot there for exposing my ignorance.
Nice idea, Shnaps, but I think I'll go back to using the old-fashioned term "workouts."
Of course young 'uns think I'm talking about exercise bikes or something.
But "workouts" are working things out, as long as the numbers work out. The Endless Argument Over Mods tends to work out to people who want to argue that the numbers will never work out. I tend to think that for a nontrivial segment of a lot of deals or portfolios, there's some working out that could work out.
Piss me off, on the other hand, and I will introduce the concept of "novations" and "assumptions" and "consolidation agreements." That'll just make everybody want to go back to "mod-mods" and "mods."
"It is exactly this attitude of exasperated expertise that keeps readers like myself from asking questions or -- god help us -- expressing an opinion, as the astonished and smug dismay at the stupidity of those outside the real realm of finance is immediate and quite wounding."
As a fellow ignoramus, I find that asking a simple question here usually gains a quick and courteous answer, or at least a link. Where the answer isn't courteous, it's usually from someone almost as ignorant as I. Do ask questions.
Tanta, in illumination to your previous post, the Solent is the strait of water between the south coast of England and the Isle of Wight. It is one of the main yachting hubs of the UK and thus the name of the fund mainsail. All very nautical!
Anne, do you own shares of any stock?
Are you happy with the idea that a reporter in the bloody Times could publish some accusation that the company you own could be liable for billions in defaulted loans, only to discover later on that this is a misunderstanding?
I won't be surprised if she gets sued for this. Read it again, and ask yourself how many people might have sent in a sell order on CFC after reading this. And it turns out to be about something that improves the value of CFC's servicing portfolio and is perfectly legal and legit.
We are only in the middle of a terrible market crisis. Now is not the time for professional reporters to traffic in rumors, innuendos, or panics. I don't care whether you're an investor or a just a good citizen: you don't need this kind of thing to go on.
Of course I'm harder on GM than on commenters to this blog. She's in the NYT and she can move markets. With such privilege comes pretty serious responsibility.
I think we've lost our moral compass big time if this kind of thing can go un-called. Witness the uproar (not) over the WSJ printing rumors about Berkshire buying CFC. Somebody was manipulating the press in order to make a buck at the expense of the "little guy." Please don't accuse me of not having the novice's best interests at heart.
Anne,
I agree with Bob Dobbs. I am stupid and I have plenty to say or ask. And 99% of the answers are civil and helpful.
Besides, what are we going to do, even if we did think you were an idiot? Look up 'Anne' in the phone book and post a sign out front of your house? How mortified can you be, even by the worst insult in the comments section of a blog where everyone is anonymous?
Take it easy
Bob & M-F, you guys aren't stupid, but it's nice of you to claim the label in order to defend me.
I fail at my own standards as much as anyone else does if not more. But I do try to live up to my own rules. One of them is "pick on someone your own size." Another is "then pick on someone a whole lot bigger than you."
If I just wanted to make nonexperts feel stupid because they're nonexperts, the posts would be shorter.
Maybe someone will explain to me how jet engines work again.
It is disgusting that someone who has the prestige of writing for the NYT has no concurrent sense of responsibility for getting her analysis straight. GM, Judith Miller and the multitude of other examples of gross ineptititude at the Times have pretty much gotten me to swear off MSM journalism.
My cleaning woman frets more about making a mistake than this supposed crack business journalist.
PS Can someone please send Tanta's post over to Moyer's people at PBS so we don't have to listen her wax prosaic on the housing market again.
I give up.... really.
Anne, dont be scared. So what if some dweebs point and laugh at your question? I'm certain others will answer in the curteous style you prefer. But if you are so fragile, this may be indicitive of other problems worse than a lack of finanacial knowledge.
How mortified can you be, even by the worst insult in the comments section of a blog where everyone is anonymous?
my driver's license says "Bacon M. Dreamz III, esquire" and Tanta revealed her identity just a couple days ago, right Eunice?
i bet you can't guess what the "M" stands for...
i bet you can't guess what the "M" stands for...
It's got to be either "market-mover" or "mayonnaise."
"How mortified can you be, even by the worst insult in the comments section of a blog where everyone is anonymous?"
Hehehe. Especially when you can change your nick on the fly.
Anyway, good posting Tanta! Let 'em burn! Oh, wait, you burned my shorts.. CFC is rising again, ashhh... back to the drawing board.
"The thing about Gretchen is that she's got a great nose for hot stories. She's just got an instictive "there's a business that's shafting the little guy attitude" attitude. I guess you can't have one without the other. If she would just learn a little bit about finance though....."
OH BS, Tantas got chops, Tantas has the hard won wisdom of real life problem solving, Tanta writes in more depth, more clearly and god knows more accurately than GM.
GM has nothing more than a nose for what gets you ahead in liberal elite world and the entitlement to put her plans in action. That's why she's got a pulitzer and a by-line, and Tantas got a tip jar.
Tanta,
Thank you for pointing out how serious the potential ramifications could be from the reporter's misunderstanding. I didn't appreciate how severe the fallout could be from reading your original post.
And yes, I know from reading your other posts that you have the best interests of smaller investors like myself at heart. I didn't mean to accuse you of that, in any case. I do appreciate your expertise, even if I am often intimidated by how it is expressed.
To be perfectly frank, I had been entertaining the idea of going back to school and studying finance with an idea of possibly getting into the business of economic reporting. When I read your post this morning, my infant aspirations were rather stunned. I realized, all of a sudden, how financial journalists could never possibly be consistently reliable unless they had the sort of expertise gained from immersion in a career in finance or economics, before they waded into journalism.
In that connection, you would probably make a better business journalist for the New York Times than Ms. Morgensen, because of your experience. I say that sincerely.
With best wishes,
It's got to be either "market-mover" or "mayonnaise."
Ha! I wish it was "Mayonnaise". "M" is for "Matzoh-ball", but only my mother calls me "Bacon Matzoh-ball"
Piss me off, on the other hand, and I will introduce the concept of "novations" and "assumptions" and "consolidation agreements." That'll just make everybody want to go back to "mod-mods" and "mods."
Tanta, same for me, the madder I get, the more the vocabulary comes out.
The mistake people make is that they don't realize you're being interpersonally considerate and they think you're innate kindness is an opportunity to get the upper hand.
Big mistake, especially with strong women. I wanted to have a enlightening conversation, but you want to have a logic-ment, OK, lets have at it. We'll dispense with all this concern I've had for your ego up until now.
" a reporter who is only trying "
At what point is anyone "only" doing anything? She's not working for the college paper, she's getting paid for her words. Therefore, quality standards are a justifiable expectation.
The reason Tanta's reply is dead on is because the reporter didn't know what she didn't know. If she'd walked in asking the CFC guy "Please explain this to me from front to back" he probably would have .. and there'd have been no story.
" Journalists simply cannot always be expected "
Yes, they can. That's precisely the job requirement for a position at CNBC. [ Solid effort at creating an unassailable excuse for the reporter, though! ] Cramer is allowed to create a defense for his psychotic break.. yet, Tanta is somehow held to a higher standard?
" couldn't it be done in a less conspicuous fashion? "
That article is a great example of why newspapers print retractions. The reporter's job is to be thorough and precise, and she failed. That's all there is to it -- welcome to the real world. Her only deliverable is the article, and she completely flubbed it.
Bottom line: I don't expect a journalist to know everything about their material, but I do expect them to master the art of asking the correct questions.
The unfortunate note to all this.. there's so many journalistic gems waiting to be unearthed that it's disappointing this non-issue got published. For instance, I have yet to see an in-depth piece with interviews on how the ratings agencies will be monitored after this plays out. We could see a series of articles detailing precisely how the fraud would work - yes, it's obvious in hindsight, but stories detailing phone calls from the AHF's of the world would be good for a laugh or two, followed by a copy-paste to the SEC. Or, dare I mention it, the conversations within structured finance departments about how useless they know their bonds are.. while they're selling!
When I read your post this morning, my infant aspirations were rather stunned. I realized, all of a sudden, how financial journalists could never possibly be consistently reliable unless they had the sort of expertise gained from immersion in a career in finance or economics, before they waded into journalism.
Anne, parachute journalism is a huge problem, they used to have people who, even if they didn't work in the field, they spent years developing sources and immersing themselves in the cultures they were writing about. Now you have an entire profession of people who don't know what they don't know and, nonetheless, feel free to annoit themselves as experts.
As I once explained to Matt, who is a real professional reporter, I happen to like blogging.
I am aware that I could, theoretically, get a job at a newspaper.
I have had corporate jobs for many years. I am also in not great health. I have decisions to make about how I'll spend my time.
Blogging is fun, because you can say all those things you wanted to say for years, but had to be all corporate-nicey about. Not because you feared being fired (that wasn't generally my problem), but because that's the corporate culture.
Blogging for me allows hair to be let down, or would if I had that much hair. I appreciate all the tips we get, but I do this for free when the tips don't come in. For free, you get lip.
I still work very hard to make it accurate and "fair," in my own definition of "fair," which has something to do sometimes with people who write in that cloying NYT tone about those Bad Guys at CFC deserving what they get. Ahem.
There are lots of people who find the tone of a lot of GM's stuff really compelling. For these people, I sound like a snotty little brat.
There are lots of people who are themselves snotty little brats, and they think I sound like a snotty little brat. The miracle of target marketing.
Toucan, the Wall Street Journal is quoting the NYT. You should call and complain.
The language is murky. The prospectus is quoted as stating "If a borrower requests such a reduction, the Master Servicer will be permitted to agree to the rate reduction provided that (i) Countrywide Home Loans purchases the Mortgage Loan from the Trust Fund immediately following the modification and..."
The NYT article states the language was changed in the later prospectus to make it more clear that the repurchase was not required to repurchase loans at risk of default.
That appears to be the case. The language was changed, and it is much more clear. The original intent may have been to require repurchase only in non-loss-mit-mod situations, but the company obviously determined its own language was unclear and decided to change it, which was reported.
I checked the prospectus myself and it also states "Countrywide Home Loans, Inc. also will be obligated to purchase any mortgage loan with respect to which it has modified the mortgage rate at the request of the borrower."
Best of luck to everyone.
EVERYTHING!! IS NEFARIOUS!!1! AND A CRISIS!!! BUY NEWSPAPERZ!!!1!
i would buy the NYT if i saw that headline....but as is, they don't even have comics last time i looked, which is really the only useful part of the newspaper.
"I realized, all of a sudden, how financial journalists could never possibly be consistently reliable unless they had the sort of expertise gained from immersion in a career in finance or economics, before they waded into journalism"
Anne, everybody starts from ignorance and learn as they go on. Good reporters figure out what questions to ask and who to ask if they don't know an answer. And most business reporters would rather work in a different beat (politics) so you're a step ahead. You'll need a lot thicker skin if you want to enter this line of work. Good luck.
tanta,
thanks for responding. i previously asked around and heard that about 5%, but I never thought to ask if that was for all mods or just loss mitigation mods. Now I'm kicking myself. But I will keep working on it before publishing. Sometimes some reporters do try and get their facts straight.
-Matt
Tanta -
You beat me to it. Not an uncommon occurence.
I brought light to this over on HW as well. It's so eye-poppingly bad it needs to be discussed broadly.
thx - PJ
Matt, you know I love you. That's why I'll never let you forget the "rancor" comment. We only hurt the ones we love.
When the NYT gets a comment section that the reporters participate in, or GM develops the fortitude to show up here and jump my case back, like rcyran and Matt have, then we'll talk about thick and thin skins.
I assume reporters learn their beats the way I, a fresh out of school lit major, learned the mortgage business. I have asked every stupid question that there is.
Had I asked every stupid question that there is six times, I'd still be in the file room and you wouldn't be reading this. Had I failed to spend many years thereafter answering every stupid question that there is for my own newbies, I'd have been shown the door.
Some days I think I'd like to see reporters negotiate large bulk loan deals with, oh, CFC. Your skins would thicken up.
I don't wish to romanticize people who work in high-stress financial businesses, but let's face it. GM isn't hedging CFC's servicing portfolio today. Possibly her source was a little too freaking busy to explain how a bill becomes a law to a reporter, especially if we don't know where she got this idea for this story to begin with. All I know is I never had time to waste educating people who were letting my competitors tell them stupid stories.
There are lots of people who are themselves snotty little brats, and they think I sound like a snotty little brat. The miracle of target marketing.
Tanta,
It seems that there are a few of us here with mathematics degrees.. and if there ever were a place to inure oneself to vicious verbal combat (not to be confused with viscous verbal wombat).. it'd be the mathematics department at your local university.
If someone calls you out for being stupid, either you are or you aren't. If you aren't, you fight back by clearly explaining why you aren't. If you are, stop wasting everyone's time.
That's how I see it.
Some days I think I'd like to see reporters negotiate large bulk loan deals with, oh, CFC. Your skins would thicken up.
i don't want to see a reporter crying in the corner, they're people too, you know, even if they have weird names like "Matt".
Tanta, do the reporters ever call you as a source? What's it like being on the other end of that interaction?
With respect to the Bloomberg piece on the $891 billion, the authors state that "Some companies that use commercial paper to buy asset-backed securities or collateralized debt obligations backed by subprime mortgages are having trouble finding investors." That shouldn't be a surprise. Given that the valuations of no ABS's or CDO's related to mortgages can be trusted right now, why would anyone want even the shortest term CP related to these as there could be insta-default loans hidden in said CP.
Clearly the issuers of ABS CP do so as a sort of bridge financing while they find long term buyers of the ABS. Personally, I think that the seize-up of the market for this sort of CP is healthy as it will force issuers of ABS to demonstrate plainly that the mortgages they are selling warrant the ratings they receive
Toucan, it happened a time or two back in the day.
I wrote a really pissy "media inquiries policy" which you can read if you want to--link top left box of main blog page.
I got so damned tired of taking an hour out of my jam-packed day to explain ass vs. hole in ground to someone, and then pick up the paper the next morning to see myself quoted, by name, having said something that sounded absolutely butt-headed. Usually it was the magic of ellipsis: Tanta remarked that "modfications are . . . changes." Something like that. My collegues would rub my nose in it for years. "Hey, Tanta! Are modifications . . . changes? HAHAHA! Did you tell them we use base 10?"
Hell with that. Reporters who want to learn from me can read my freaking blog.
Tanta, I figured as much. I'm amazed anyone talks to the the press, what's the upside?
I still think you should freelance in some way, it's a crime to not have a voice as clear as yours regularly visible to the general public.
People don't realize what they are missing until they get a taste of what could be versus what is.
Tanta -
There is no limit on mods for workout: you can, theoretically, do that until the numbers won't work out any longer.
Help me out here -- I was always under the impression that PSAs by and large limited what a servicer could and could not do in terms of loan mods -- and that many servicer's loss mit departments, particularly those that filled the role of third party specialists, had entire departments designed to do nothing but obtain either waivers or modifications to original PSA covenants? I also thought this was because getting investor approval one-off for an individual loan wasn't just time consuming and likely to push the borrower into foreclosure before said approval ever arrived, but also because investors would tire of four hundred one-off requests for modification.
That sort of understanding above would be patently wrong if there was practically no limit during workout, as you suggest.
Where am I failing to connect the dots here? I'm sure I'm missing something.....
All I mean, P., is that servicers use "best execution to the deal" models to decide what "works out."
Your model, in other words, compares the loss-to-deal of modification with short sale, DIL, FC, etc., and tells you what mitigates loss best.
You can write, say, 5% into your contract if you want. Good luck making the RE market conform to your expectations. Your RE market might decide to keep making it cheaper for you to mod than to FC.
Similarly, the yield curve can spite you. Rates can rise, taking borrowers out of the money for refis, leaving you with a deal that has characteristics you didn't count on.
So the model can, theoretically, tell you the numbers "work" up to and including modifying 50% of the loans in the pool.
Yet that would be a surprising development. So it's not stupid for noteholders to put some speedbumps in the way from 5% to 50%. The noteholder also has a lot to say about how that model works.
I am only trying to draw attention to the term "workout." It is not likely that noteholders would like a deal with 50% mods in it, but that could work out better than 50% FCs.
OTOH, with the retention mods? If you don't put some kind of limit on that, you are in essence risking your servicer buy out your entire pool in the first six months. Who would want that? (OK, sure, in hindsight some noteholders probably wish that had happened, but . . .)
Looks like we were on the same page -- I see the spirit in which your comments were made in re: retention versus distressed mods.
I will say from past experience, however, that loan modifications were a bad word for most investors during the boom -- even when servicing ops knew what was coming and would ask for them. I know a few that tried to get their PSAs updated on acquisition of a portfolio and getting it done was tougher than working with the borrowers.....imagine that one.
I'm sure that game has changed significantly at this point, of course.
And LOL re: your last comment. I commented a while back that Wall Street has learned a lesson most of us learned in grade school: a bunch of lemons, pooled together and sliced into wedges, is still a bunch of lemons.
Dear Anne,
Stick with us! At a mimimum you will have a hell of a good time and you might have sex in this century which would improve your mood.
Tanta, an excellent exposition in the blog, but I thought the most important statement you made was in a comment:
" . . . what's really entertaining about all this is that it's all pretty advanced back-room mortgage geek that has gone on for decades, . . . .
"Now it's front-page news, . . . ."
This, along with deadlines, is why the GM's of the world write the articles they do. They may sound omniscient at times, but they're just human. I wouldn't blame a business reporter for not having the jargon down perfectly and giving a literal interpretation to what she does read.
Meanwhile, CR is blogging about the horror that could result from certain of those "certain events" that could affect the conversion price of BofA's $2B infusion into Countrywide when someone working at dark-thirty in the morning might have pointed out to him that the language is pretty standard.
Fortunately, the comments to CR's blog did just that and apparently persuaded him to do a little editing, which I think is great.
We're all still learning from each other. Anyone who doesn't admit that is a fool.
Ironically, I'm all for express disclosures and that was all that CR was seeking while IMHO that's the only reason the language changed from the earlier CFC's prospectus to the later editions.
Continue to strive for the ultimate clarity and thanks for your efforts.
FFDIC, spare us the mysogyny. You have a daughter if I recall, OK if some joker in her office offers the same advice?
Shame on CR and Tanta for allowing that post to appear on this thread.
HGY, sorry about the "allowing" part, but that comment got posted while I was sound asleep. Comments aren't held for moderator approval here, you know.
I could delete it, but I think I prefer to suggest to Anne that she put her hands on her hips, look old FFDIC in the eyes (metaphorically speaking), and tell him to stop being such an insufferable sexist pig.
Then I can post right behind Anne, saying "what Anne said!"
But since Anne didn't get a chance to jump FFDIC's case first, I'm glad you did and I'm happy to assist.
FFDIC, I have no idea what makes you think that aged, graying, dessicated sexist line about getting laid is funny. I'm not interested in knowing that, either. The only real choice you have at this point is to put your tail between your legs, lower your ears, point your snout at the floor, and say you're sorry.
You need not grovel forever; this is a blog, not a marriage. We accept lively, venacular, and even occasionally juvenile humor around here, and lines get crossed. Just uncross them, and we'll all get over it.
Yes, yes of course I apologize to Anne, the bloggers, CR and Tanta. I should never post after midnight after a week of one disaster after another. Again, my sincere regrets to all and thanks for quickly calling me out. I needed that!
"I could delete it, but I think I prefer to suggest to Anne that she put her hands on her hips, look old FFDIC in the eyes (metaphorically speaking), and tell him to stop being such an insufferable sexist pig."
Hah! Actually, I revisited this blog to see if anyone else suggested I was thin-skinned (I am). And thin-skinned me laughed when I read FFDIC's comment. Sex in this century would be great!
FFDIC, apology accepted.
Tanta, my apologies to you for not remembering that you cannot monitor the blog 24/7.
Anne, perhaps you are the one we need to educate. Tanta's approach: call it, drop it and go back to having fun with the guys is (in my experience) the only way to keep a happy, healthy mixed-gender party going. And Anne, FFDIC didn't offer that comment to be attentive to you, quite the contrary, you (and women in general) were just the target of his frustration.