Flipping moron. What the hell is this guy doing running a company?
It has nothing to do with liquidity, it's DEBT DEBT DEBT! Jesus christ, hasn't he been watching the major headlines for the past SEVEN MONTHS of trillions of "liquidity" being pumped?
--
"Kevin at Genworth: I continue to get surprised every day. The biggest change to me has been the rapid deterioration of both the Florida and the California experience, uh, nobody ever would have predicted the extent of the home price downgrade in those markets..."
Why do you guys have to lie? Many people had known. The only question was when would this start.
Even some ex-Fed officials say no one could have known. What a bunch of liars to absolve themselves of the responsibility for causing the problems.
Anyone notice that Ford gave everything back that it gained yesterday. so much for a turnourand in sentiment. Anyone care to explain the rise is rates 2 year while housing breaks down and LIBOR rises
Yal writes:
they all still think it is about liquidity. It is not.
it is about affordability.
Think about what Genworth does. They just raised "prices" 20%. Prices of what? Risk insurance. And that worries me most. Why 20%? Why not 18.6% or "between 10 and 33% depending on the product"? 20% sounds like a wild guess as to what the market will bear without actually scaring away the customers. This business niche could go the way of muni bond insurance. Same inning, different batter.
He doesn't seem to link 'prices' and 'sound underwriting', either... which means he might miss the whole thing all over again. The walkaways do seem to correlate to price drops, so any mortgage writer ought to be reexamining the methods used for appraisal and the loan-to-value ratios.
tranches-That's interesting-I posted on earlier thread this ?
Does anybody know the results of the borrowed redemption of the TAF facility for today? Did the banks take back thier mbs or ?. Today is 28 days after first auction. It would be interesting to know..
Anyone care to explain the rise is rates 2 year while housing breaks down ...
Anyone care to explain why anyone loans the USA money at any rate? I mean, really, what are the odds of it being paid back in dollars that remotely resemble the one we know today?
Rates are artificially low all up and down the treasury ladder, IMHO.
Short-term incentives will always trump long-term priorities and cloud one's vision.
Wishful thinking helps the executive to dismiss the significance of the inevitable downturn, and continue to operate as though the downturn will not come. Put some good spin on it and submit the plan and results for the current year bonus. Worry later about a possible bad next year. Now those bad next years have come. The business is cyclical - who knew!
Something like half the responses so far have singled out the "liquidity" comment for special derision. I'd like some serious discussion on this confluence. Is CR becoming an echo chamber of like minds? Is the financial industry really so out of touch that they cannot see what is so very obvious to so many? Are the financial industry leaders so scared that they cannot touch the real issues and thus devolve to comfortable memes like "liquidity" in the hopes that people don't look behind the curtain?
Genworth is losing money because they didn't understand the risks they were insuring. That's what happens, no big deal. What is so wrong with admitting to a problem and promising to fix it?
Multiple choice question:
Suppose you have a company with $50,000 liabilities. You crap into a bucket, cover it with a nice piece of plastic and try to sell it for $100,000 and nobody buys it. You have:
(a) liquidity problem
(b) solvency problem
Suppose you take it to the Fed Auction Facility and they eagerly accept it as collateral for $100,000. This constitues
(a) sound fiscal policy by the Fed
(b) bailout by the Fed
(c) possibly illegal activity by the Fed
I'll grant him on truth, and that is that it really is surprising how quickly everything has deteriorated. I've realized quite awhile ago that our comm & tech improvements have made for a very efficient market. When rates drop, mtg volume goes up quickly. When rates rise, it doesn't slow down, it stops.
Unfortunately, the speed of the price drops still surprises, even though it shouldn't. - On the flip side, when it does turn-around, it may not languish as everyone expects, but take off to the upside, and then tanta will be saying, "Hoocoodanode?"
House prices will never go down in California. The demand can only grow due to influx of new immigrants. We have highly educated upper-middle class immigrants in high tech area. Even working-class immigrants are making progress into middle class. The population are young and growing. The demographics suggest that the housing demand can only grow.
In addition, habitable lands in this state is so limited and zoning regulations and water rights severely limit their expansions.
It's simple economics. With limited supply and growing demand, the house prices in California can only go up
Wally says, "ought to be reexamining the methods used for appraisal and the loan-to-value ratios"
Exactly! The whole concept of "comparables" is so misleading, and is self-perpetuating. Is there any residential appraiser who has ever heard of "intrinsic value" in terms of rents? This sets an economic value, anything in excess of this needs to be funded by the downpayment, IMHO. Otherwise, the bank becomes an investor (and subject to the appropriate risks, as they are beginning to grasp), not a lender.
As far as I can tell, Genworth has potential mortgage insurance liabilities well beyond their basic homeowner's protection.
"In connection with flow insurance, we perform fee-based contract underwriting services for mortgage lenders. The provision of underwriting services by mortgage insurers eliminates the duplicative lender and mortgage insurer underwriting activities and speeds the approval process. Under the terms of our contract underwriting agreements, we agree to indemnify the lender against losses incurred in the event we make material errors in determining whether loans processed by our contract underwriters meet specified underwriting or purchase criteria, subject to contractual limitations on liability."
"In the U.S., we have entered into a number of reinsurance agreements in which we share portions of our flow mortgage insurance risk written on loans originated or purchased by lenders with captive reinsurance companies, or captive reinsurers, affiliated with these lenders. As of December 31, 2007, our total mortgage insurance risk in-force reinsured to all captive reinsurers was $3.8 billion, and the total capital held in trust for our benefit by all captive reinsurers was $0.9 billion. These captive reinsurers are not rated, and their claims-paying obligations to us are secured by an amount of capital held in trust as determined by the underlying treaties."
"Under our primary bulk insurance, we insure a portfolio of loans in a single, bulk transaction. Generally, in our bulk insurance, the individual loans in the portfolio are insured to specified levels of coverage and there may be deductible provisions and aggregate loss limits applicable to all of the insured loans. We base the premium on our bulk insurance upon our evaluation of the overall risk of the insured loans included in a transaction and we negotiate the premium directly with the securitizer or other owner of the loans. Premiums for bulk transactions generally are paid monthly by lenders, investors, or a securitization vehicle in connection with a securitization transaction or the sale of a loan portfolio. Prior to 2006, the majority of our bulk insurance business was related to loans financed by lenders who participated in the mortgage programs sponsored by the Federal Home Loan Banks (FHLBs). In 2006, we increased our participation in the GSE low documentation, or Alt-A, programs and began to provide bulk insurance on lender portfolios. During 2007, we continued to provide bulk insurance on GSE Alt-A programs. Additionally, we provided bulk insurance on lender portfolios, a substantial portion of which was comprised of low loan-to-value and high Fair Isaac Company (FICO) score payment option arm loans."
"Premiums for bulk transactions generally are paid monthly"
How does that work, I wonder? Wouldn't you pay a fixed amount for a particular loan? Would all coverage drop if the monthly payment wasn't made? Does the insurer have the right to end the contract on a monthly basis?
I'll bite - any of the finance types with more than half a lobe functioning knows how deep they are in the sh!t - to fully address as a solvency issue is to court BK/runoff.
Also, the 'kick the can down the road' meets 'maybe the horse will learn to sing.'
This is not individual homeowner's mortgage insurance. This is like what some of the bond insurer's did in taking on partial risk of repayment for mortgage-backed bonds.
Genworth is basically insuring whole pools of mortgage loans. Maybe some of these aren't securities but rather privately held pools, such as those lenders kept on their own books.
It does seem like Genworth is saying: "We'll keep insuring as long as you keep paying your monthly premiums."
You can bet those pools/lenders are paying their insurance premiums.
House prices will never go down in California. The demand can only grow due to influx of new immigrants. We have highly educated upper-middle class immigrants in high tech area. Even working-class immigrants are making progress into middle class. The population are young and growing. The demographics suggest that the housing demand can only grow.
In addition, habitable lands in this state is so limited and zoning regulations and water rights severely limit their expansions.
It's simple economics. With limited supply and growing demand, the house prices in California can only go up
Replace "houses in California" with oil or food or gold.
"Eva Braun's Rolleiflex camera--is for sale"
mp | 04.25.08 - 1:40 pm
Will you please cut that out! I keep wanting it to read "Leni Riefenstahl's camera"then I get all worked up and have to come back and re-read it to set myself straight.
As a Genworth stockholder, I don't have a problem with Genworth losing money on mortgage underwriting this quarter. Property/casualty insurers lose money in quarters when hurricanes happen.
But I do have a problem with the company losing money investing in subprime mortgage pools. This is inexcusable on two counts: (1) they ought to know how bad those credits are, and (2) they should use their investment portfolio to diversify risk, not concentrate it in the US mortgage market. Genworth management has shown astonishing incompetence.
this was posted two threads down by ac and others but bears repeating
a writer at WSJ actually recommends stocking up (hoarding?) food as a better investment than mm funds CDs etc as roi due to increasing food costs will beat other safe investments.
"Mistakes were made..." but nobody actually made them.
They just, you know, happened....
TCA | 04.25.08 - 1:37 pm |
You'd be depressed to see how much accounting policy & procedures, as well as forensics are written in the passive tense. I was once instructed to rewrite something in the passive tense...you know, because we weren't really sure who was doing it afterall.
Multiple choice question:
Suppose you have a company with $50,000 liabilities. You crap into a bucket, cover it with a nice piece of plastic and try to sell it for $100,000 and nobody buys it. You have:
(a) liquidity problem
(b) solvency problem
Suppose you take it to the Fed Auction Facility and they eagerly accept it as collateral for $100,000. This constitues
(a) sound fiscal policy by the Fed
(b) bailout by the Fed
(c) possibly illegal activity by the Fed
That's not really fair to the Fed, anonymous. The Fed forces a 15% haircut on all buckets of crap accepted as collateral.
Anyone care to explain why anyone loans the USA money at any rate?
Because they have known that it was not worth squat from day one. It is not about being paid back with paper with fancy ink on it. It was about modernising a country based on paper with fancy ink on it buying somebody else paper with fancy ink on it.
Rob Dawg writes:
"Is the financial industry really so out of touch that they cannot see what is so very obvious to so many?"
"Genworth is losing money because they didn't understand the risks they were insuring. That's what happens, no big deal. What is so wrong with admitting to a problem and promising to fix it?"
Rob Dawg | Homepage | 04.25.08 - 1:04 pm | #
I think that what is at stake here is much greater than that. One must realize that the world of finance and economics has invested heavily in an almost religous adherence to objectivism.
The motives were relatively straightforward. The quest for knowledge enjoys enormous prestige in our society and scientific-technical-factual information has hegemony over other modes of seeking knowledge. This is so, as Daniel Yankelovich has obsrved, because the natural sciences--chemistry and physics--have contributed so much to our national successes in extending longevity, creating affluence, and using technology to make life more comfortable, convenient, and stimulating. The trend is to entrust the experts with ever more power and influene."
So the rewards--enhanced power and influence--of fitting economics and finance into the scientific technical-factual mold were/are enormous. Economists and financiers jumped on the band wagon.
As Alfred Whitehead pointed out, the abstractions of scientific materialism illuminated one aspect of physical reality that helped seventeenth-century physics to fructify. But when we come to the truths of human experience, these abstractions (can we say economic models?) are utterly inappropriate. They have been a total disaster in the scientific study of mental and social processes, of which economics is very much a part.
The message from the philosopher Richard Bernstein is this: In our reliance on objectivism, we are unleashing a destructive force that distorts reality and undermines wisdom and good sense. Unless it is moderated, it will destroy all that our society deems precious: freedom, democracy, cohesion and stability, and perhaps even life on earth.
Genworth is still peddling mortgage insurance in Canada's bubble province of British Columbia (as unaffordable as California) and I have been wondering why for some time now.
Page 31 for GDP, page 39 for mortgages and consumer credit.
b-, this is the Statistical Abstract of the United States. Awesome (but cumbersome) source of historical data -- financial, crime, population, etc.
Barely, you owe me a beer on this. It took me 30 minutes to find this, again (I made hardcopy, of the important pages, but did not write down the web address).
Thanks jg. Interesting, but not what I am looking for.
I want current ratings agency ratings on MBS ABS CMBS... by CUSIP, or title. I can find reports on alacrastore but I can't afford $1000 just to see the scorings. Basically, my 401k fund has assets that they DON'T market-to-market and I want to get a sense of how bad the assets actually are.
You can build a mansion, but you just can't live in it
You're the fastest runner but you're not allowed to win
Some break the rules, and let you cut the cost
The insecurity is the thing that won't get lost
And you want her, and she wants you
We want everyone
And you want her and she wants you No one, no one, no one ever is to blame ...
I especially like the line about the mansion. How deliciously ironic.
Unbacked paper money is the root cause of all these financial problems. Fiat money, yet another infringement on our rights by the gov't. Add it to the ever-growing list of violations:
They violate the 1st Amendment by opening mail, caging demonstrators and banning books like America Deceived (book) from Amazon.
They violate the 2nd Amendment by confiscating guns during Katrina.
They violate the 4th Amendment by conducting warrant-less wiretaps.
They violate the 5th and 6th Amendment by suspending habeas corpus.
They violate the 8th Amendment by torturing.
They violate the entire Constitution by starting 2 illegal wars based on lies and on behalf of a foriegn gov't.
Write in Dr. Ron Paul and save this great country.
Its all about liquidity...
He misspelled "solvency."
Its all about liquidity,
Flipping moron. What the hell is this guy doing running a company?
It has nothing to do with liquidity, it's DEBT DEBT DEBT! Jesus christ, hasn't he been watching the major headlines for the past SEVEN MONTHS of trillions of "liquidity" being pumped?
WHY?!
Why is HE running a company?!
Execute him!
they all still think it is about liquidity. It is not.
it is about affordability.
Liquidity that's what they are begging for from the Fed. They are speaking to Old Ben Kenobi asking for lower rates.
It would worry me more if he knew how bad it was and still made these outlandish comments. I would question his sanity.
--
"Kevin at Genworth: I continue to get surprised every day. The biggest change to me has been the rapid deterioration of both the Florida and the California experience, uh, nobody ever would have predicted the extent of the home price downgrade in those markets..."
Why do you guys have to lie? Many people had known. The only question was when would this start.
Even some ex-Fed officials say no one could have known. What a bunch of liars to absolve themselves of the responsibility for causing the problems.
A system of the Crooks...
Jas
Anyone notice that Ford gave everything back that it gained yesterday. so much for a turnourand in sentiment. Anyone care to explain the rise is rates 2 year while housing breaks down and LIBOR rises
Yal writes:
they all still think it is about liquidity. It is not.
it is about affordability.
Think about what Genworth does. They just raised "prices" 20%. Prices of what? Risk insurance. And that worries me most. Why 20%? Why not 18.6% or "between 10 and 33% depending on the product"? 20% sounds like a wild guess as to what the market will bear without actually scaring away the customers. This business niche could go the way of muni bond insurance. Same inning, different batter.
How can so many nobodies not be somebody? Nobodies are going to get a complex.
"what has surprised you the most about lets say whats going on or customer behavior in [this] whole complicated situation?"
Right, "complicated" - give loans on overinflated properties to borrowers with $0 down, take the fees, show some quick profits, and run.
That's "complicated". Quite a choice of words. Always attempting to obfuscate any responsibility on any executives' behalf.
He doesn't seem to link 'prices' and 'sound underwriting', either... which means he might miss the whole thing all over again. The walkaways do seem to correlate to price drops, so any mortgage writer ought to be reexamining the methods used for appraisal and the loan-to-value ratios.
OT: Iraqi govt revenues way up thanks to oil price. Funds deposited at FRBNY. Things that make you go "hmmmm."
Harvard Business School already have him lined up as a visiting professor.
tranches-That's interesting-I posted on earlier thread this ?
Does anybody know the results of the borrowed redemption of the TAF facility for today? Did the banks take back thier mbs or ?. Today is 28 days after first auction. It would be interesting to know..
FEDERAL RESERVE BANK of NEW YORK market..._Historical.cfm
Anyone care to explain the rise is rates 2 year while housing breaks down ...
Anyone care to explain why anyone loans the USA money at any rate? I mean, really, what are the odds of it being paid back in dollars that remotely resemble the one we know today?
Rates are artificially low all up and down the treasury ladder, IMHO.
Bad link
Term Securities Lending Facility - Federal Reserve Bank of New York
Its all about liquidity...
Ooops. Somebody misspelled "people with no money borrowing hundreds of thousands of dollars and buying really expensive stuff".
Must have hit the wrong key.
Short-term incentives will always trump long-term priorities and cloud one's vision.
Wishful thinking helps the executive to dismiss the significance of the inevitable downturn, and continue to operate as though the downturn will not come. Put some good spin on it and submit the plan and results for the current year bonus. Worry later about a possible bad next year. Now those bad next years have come. The business is cyclical - who knew!
Something like half the responses so far have singled out the "liquidity" comment for special derision. I'd like some serious discussion on this confluence. Is CR becoming an echo chamber of like minds? Is the financial industry really so out of touch that they cannot see what is so very obvious to so many? Are the financial industry leaders so scared that they cannot touch the real issues and thus devolve to comfortable memes like "liquidity" in the hopes that people don't look behind the curtain?
Genworth is losing money because they didn't understand the risks they were insuring. That's what happens, no big deal. What is so wrong with admitting to a problem and promising to fix it?
I do, however, appreciate how he declined to grasp the walkaway card Lehman's Berg was pushing so conspicuously.
And where was the problem? Underwriters. Um, yeah, that's it. . . underwriters! Is Wall St. becoming the new Brenner Pass?
"Liquidity issues..." roughly translates to "still waiting for my bailout".
Brenner Pass???? Is that near Donner's Pass?
Multiple choice question:
Suppose you have a company with $50,000 liabilities. You crap into a bucket, cover it with a nice piece of plastic and try to sell it for $100,000 and nobody buys it. You have:
(a) liquidity problem
(b) solvency problem
Suppose you take it to the Fed Auction Facility and they eagerly accept it as collateral for $100,000. This constitues
(a) sound fiscal policy by the Fed
(b) bailout by the Fed
(c) possibly illegal activity by the Fed
...when the liquidity dried up and went away things jumped off the charts
Wouldn't this point to a problem with speculative purchases
scav, thanks.
No, they're not close at all, but Donner's what I intended.
burnside, you mean it's not an actual economic analytical term? Oh fink! and I thought I'd finally learned something.
I'll grant him on truth, and that is that it really is surprising how quickly everything has deteriorated. I've realized quite awhile ago that our comm & tech improvements have made for a very efficient market. When rates drop, mtg volume goes up quickly. When rates rise, it doesn't slow down, it stops.
Unfortunately, the speed of the price drops still surprises, even though it shouldn't. - On the flip side, when it does turn-around, it may not languish as everyone expects, but take off to the upside, and then tanta will be saying, "Hoocoodanode?"
House prices will never go down in California. The demand can only grow due to influx of new immigrants. We have highly educated upper-middle class immigrants in high tech area. Even working-class immigrants are making progress into middle class. The population are young and growing. The demographics suggest that the housing demand can only grow.
In addition, habitable lands in this state is so limited and zoning regulations and water rights severely limit their expansions.
It's simple economics. With limited supply and growing demand, the house prices in California can only go up
[up, up, up,.... echo continues].
Wally says, "ought to be reexamining the methods used for appraisal and the loan-to-value ratios"
Exactly! The whole concept of "comparables" is so misleading, and is self-perpetuating. Is there any residential appraiser who has ever heard of "intrinsic value" in terms of rents? This sets an economic value, anything in excess of this needs to be funded by the downpayment, IMHO. Otherwise, the bank becomes an investor (and subject to the appropriate risks, as they are beginning to grasp), not a lender.
As far as I can tell, Genworth has potential mortgage insurance liabilities well beyond their basic homeowner's protection.
"In connection with flow insurance, we perform fee-based contract underwriting services for mortgage lenders. The provision of underwriting services by mortgage insurers eliminates the duplicative lender and mortgage insurer underwriting activities and speeds the approval process. Under the terms of our contract underwriting agreements, we agree to indemnify the lender against losses incurred in the event we make material errors in determining whether loans processed by our contract underwriters meet specified underwriting or purchase criteria, subject to contractual limitations on liability."
"In the U.S., we have entered into a number of reinsurance agreements in which we share portions of our flow mortgage insurance risk written on loans originated or purchased by lenders with captive reinsurance companies, or captive reinsurers, affiliated with these lenders. As of December 31, 2007, our total mortgage insurance risk in-force reinsured to all captive reinsurers was $3.8 billion, and the total capital held in trust for our benefit by all captive reinsurers was $0.9 billion. These captive reinsurers are not rated, and their claims-paying obligations to us are secured by an amount of capital held in trust as determined by the underlying treaties."
"Under our primary bulk insurance, we insure a portfolio of loans in a single, bulk transaction. Generally, in our bulk insurance, the individual loans in the portfolio are insured to specified levels of coverage and there may be deductible provisions and aggregate loss limits applicable to all of the insured loans. We base the premium on our bulk insurance upon our evaluation of the overall risk of the insured loans included in a transaction and we negotiate the premium directly with the securitizer or other owner of the loans. Premiums for bulk transactions generally are paid monthly by lenders, investors, or a securitization vehicle in connection with a securitization transaction or the sale of a loan portfolio. Prior to 2006, the majority of our bulk insurance business was related to loans financed by lenders who participated in the mortgage programs sponsored by the Federal Home Loan Banks (FHLBs). In 2006, we increased our participation in the GSE low documentation, or Alt-A, programs and began to provide bulk insurance on lender portfolios. During 2007, we continued to provide bulk insurance on GSE Alt-A programs. Additionally, we provided bulk insurance on lender portfolios, a substantial portion of which was comprised of low loan-to-value and high Fair Isaac Company (FICO) score payment option arm loans."
How can so many nobodies not be somebody? Nobodies are going to get a complex.
Next meme... "Nobody is to blame !"
Conference call audio uploaded, for all you iPod listeners:
http://drop.io/sacrealstats001/
"Premiums for bulk transactions generally are paid monthly"
How does that work, I wonder? Wouldn't you pay a fixed amount for a particular loan? Would all coverage drop if the monthly payment wasn't made? Does the insurer have the right to end the contract on a monthly basis?
Next meme... "Nobody is to blame !"
RayOnTheFarm | 04.25.08 - 1:33 pm | #
"Mistakes were made..." but nobody actually made them.
They just, you know, happened....
Rob Dawg,
I'll bite - any of the finance types with more than half a lobe functioning knows how deep they are in the sh!t - to fully address as a solvency issue is to court BK/runoff.
Also, the 'kick the can down the road' meets 'maybe the horse will learn to sing.'
"...or whatever you want to call it."
Exactly. Whatever.
Eva Braun's Rolleiflex camera--the one she used for all of her Berchtesgaden shutterbugging--is for sale. Hoocoodanode?
Wally,
This is not individual homeowner's mortgage insurance. This is like what some of the bond insurer's did in taking on partial risk of repayment for mortgage-backed bonds.
Genworth is basically insuring whole pools of mortgage loans. Maybe some of these aren't securities but rather privately held pools, such as those lenders kept on their own books.
It does seem like Genworth is saying: "We'll keep insuring as long as you keep paying your monthly premiums."
You can bet those pools/lenders are paying their insurance premiums.
"Liquidity issues..." roughly translates to "still waiting for my bailout".
What are the congressmen waiting for? They know they'll get their kickbacks through the lobbyists.
"10% of any bailout goes straight into your pocket."
House prices will never go down in California. The demand can only grow due to influx of new immigrants. We have highly educated upper-middle class immigrants in high tech area. Even working-class immigrants are making progress into middle class. The population are young and growing. The demographics suggest that the housing demand can only grow.
In addition, habitable lands in this state is so limited and zoning regulations and water rights severely limit their expansions.
It's simple economics. With limited supply and growing demand, the house prices in California can only go up
Replace "houses in California" with oil or food or gold.
Sound familiar?
We have seen this movie before, kind of:
Household debt (mortgages + consumer credit)/GDP
1922: 45%
1929: 53%
Depression ensued
1980: 46%
2007: 94%
Quadruple depression ensued
Liquidity my arse.
Quick question... Does liquidity problem refer to the inability of financial wizards to keep their buttcheeks squeezed together for much longer?
RayOnTheFarm writes:
How can so many nobodies not be somebody? Nobodies are going to get a complex.
Next meme... "Nobody is to blame !"
I can't be the only person who is picturing a family circus cartoon:
"Who broke my economy!" with the ghostly image of "not me" running away.
"Eva Braun's Rolleiflex camera--is for sale"
mp | 04.25.08 - 1:40 pm
Will you please cut that out! I keep wanting it to read "Leni Riefenstahl's camera"then I get all worked up and have to come back and re-read it to set myself straight.
Just quit it!
As a Genworth stockholder, I don't have a problem with Genworth losing money on mortgage underwriting this quarter. Property/casualty insurers lose money in quarters when hurricanes happen.
But I do have a problem with the company losing money investing in subprime mortgage pools. This is inexcusable on two counts: (1) they ought to know how bad those credits are, and (2) they should use their investment portfolio to diversify risk, not concentrate it in the US mortgage market. Genworth management has shown astonishing incompetence.
QUESTION - IMMEDIATE NEED - What's the best public site to get current ratings for bonds, MBS, ABS...
this was posted two threads down by ac and others but bears repeating
a writer at WSJ actually recommends stocking up (hoarding?) food as a better investment than mm funds CDs etc as roi due to increasing food costs will beat other safe investments.
R.O.I. - WSJ.com
"Mistakes were made..." but nobody actually made them.
They just, you know, happened....
TCA | 04.25.08 - 1:37 pm |
You'd be depressed to see how much accounting policy & procedures, as well as forensics are written in the passive tense. I was once instructed to rewrite something in the passive tense...you know, because we weren't really sure who was doing it afterall.
That nice man Mr. Bernankie will be around next week with another rate cut he'll show those oil and home prices a thing ot two.
jg writes:
We have seen this movie before, kind of:
Household debt (mortgages + consumer credit)/GDP
1922: 45%
1929: 53%
Depression ensued
Where did you dig these nums from?
thx
Multiple choice question:
Suppose you have a company with $50,000 liabilities. You crap into a bucket, cover it with a nice piece of plastic and try to sell it for $100,000 and nobody buys it. You have:
(a) liquidity problem
(b) solvency problem
Suppose you take it to the Fed Auction Facility and they eagerly accept it as collateral for $100,000. This constitues
(a) sound fiscal policy by the Fed
(b) bailout by the Fed
(c) possibly illegal activity by the Fed
That's not really fair to the Fed, anonymous. The Fed forces a 15% haircut on all buckets of crap accepted as collateral.
Anyone care to explain why anyone loans the USA money at any rate?
Because they have known that it was not worth squat from day one. It is not about being paid back with paper with fancy ink on it. It was about modernising a country based on paper with fancy ink on it buying somebody else paper with fancy ink on it.
CR & Tanta-
Nothing to see here...he did not say walk away.
Cheers!
Rob Dawg writes:
"Is the financial industry really so out of touch that they cannot see what is so very obvious to so many?"
"Genworth is losing money because they didn't understand the risks they were insuring. That's what happens, no big deal. What is so wrong with admitting to a problem and promising to fix it?"
Rob Dawg | Homepage | 04.25.08 - 1:04 pm | #
I think that what is at stake here is much greater than that. One must realize that the world of finance and economics has invested heavily in an almost religous adherence to objectivism.
The motives were relatively straightforward. The quest for knowledge enjoys enormous prestige in our society and scientific-technical-factual information has hegemony over other modes of seeking knowledge. This is so, as Daniel Yankelovich has obsrved, because the natural sciences--chemistry and physics--have contributed so much to our national successes in extending longevity, creating affluence, and using technology to make life more comfortable, convenient, and stimulating. The trend is to entrust the experts with ever more power and influene."
So the rewards--enhanced power and influence--of fitting economics and finance into the scientific technical-factual mold were/are enormous. Economists and financiers jumped on the band wagon.
As Alfred Whitehead pointed out, the abstractions of scientific materialism illuminated one aspect of physical reality that helped seventeenth-century physics to fructify. But when we come to the truths of human experience, these abstractions (can we say economic models?) are utterly inappropriate. They have been a total disaster in the scientific study of mental and social processes, of which economics is very much a part.
The message from the philosopher Richard Bernstein is this: In our reliance on objectivism, we are unleashing a destructive force that distorts reality and undermines wisdom and good sense. Unless it is moderated, it will destroy all that our society deems precious: freedom, democracy, cohesion and stability, and perhaps even life on earth.
Barely, here you go:
1901-1950 Statistical Abstracts
jg... what is that?
Genworth is still peddling mortgage insurance in Canada's bubble province of British Columbia (as unaffordable as California) and I have been wondering why for some time now.
I think I have the answer now.
Barely, here is the specific source:
http://www2.census.gov/prod2/statcomp/documents/CT1970p1-07.pdf
Page 31 for GDP, page 39 for mortgages and consumer credit.
b-, this is the Statistical Abstract of the United States. Awesome (but cumbersome) source of historical data -- financial, crime, population, etc.
Barely, you owe me a beer on this. It took me 30 minutes to find this, again (I made hardcopy, of the important pages, but did not write down the web address).
Make that page 10 for GDP.
Thanks jg. Interesting, but not what I am looking for.
I want current ratings agency ratings on MBS ABS CMBS... by CUSIP, or title. I can find reports on alacrastore but I can't afford $1000 just to see the scorings. Basically, my 401k fund has assets that they DON'T market-to-market and I want to get a sense of how bad the assets actually are.
My mistake; I wrote 'Barely'; I should have written 'Barley.
How can so many nobodies not be somebody? Nobodies are going to get a complex.
Eureka! I think we have our Official Theme Song of the Hoocoodanode? crowd.
Paging Howard Jones!
Leo's Lyrics Database
- Howard Jones - No One Is To Blame lyrics
You can build a mansion, but you just can't live in it
You're the fastest runner but you're not allowed to win
Some break the rules, and let you cut the cost
The insecurity is the thing that won't get lost
And you want her, and she wants you
We want everyone
And you want her and she wants you
No one, no one, no one ever is to blame ...
I especially like the line about the mansion. How deliciously ironic.
It was Barley that asked for the GD numbers, not barely.
Unbacked paper money is the root cause of all these financial problems. Fiat money, yet another infringement on our rights by the gov't. Add it to the ever-growing list of violations:
They violate the 1st Amendment by opening mail, caging demonstrators and banning books like America Deceived (book) from Amazon.
They violate the 2nd Amendment by confiscating guns during Katrina.
They violate the 4th Amendment by conducting warrant-less wiretaps.
They violate the 5th and 6th Amendment by suspending habeas corpus.
They violate the 8th Amendment by torturing.
They violate the entire Constitution by starting 2 illegal wars based on lies and on behalf of a foriegn gov't.
Write in Dr. Ron Paul and save this great country.
Hoocoodanode?
I googled this - no answers - WTF does this mean? Maybe inner code on Inet for those who know and care.
I will be rude enough to request a definition.
As close as I can come: 'who woulda knowed?
Confused reader:
yes, exactly. "who could have known?" -> "who coulda knowed?" -> Hoocoodanode.
Liquidity= rate cuts= tax dollars= inflation= government socialism= get your ass to work and pay the man.