Any chance that this means that the sales guys who pulled down the huge commissions and bonuses, and turned their heads while holding their noses as they handed off the bags of garbage to the unsuspecting, might see some of that ill-gotten loot clawed back out of their hands?
This should be fun. Does this mean that the hundreds of Trillions of derivatives are about to be asked for by the holders of the worthless paper?
jo6pac
The race to the bottom continues.
Many of the contracts with "Wholesale Lenders" that I've seen contained clauses that the broker would have to buy back the loan if there was a first payment default or a 60 day late within the first 6 months or a 90 day late within 1 year.
I wonder if the wholesalers had the same type of arangement with the investment bankers.
A banker is a banker is a banker. If a banker is left holding the bag (doubtful) it will surely be by Gucci, perhaps the one made of gunmetal leather with silver/gold hardware which is available for a mere ₤780 at Gucci - 2009 fall winter handbags
Beef costs to rise. Folow up froma previous thread where Dryfly had some prescient comments.
A 1,250-pound (567-kilogram) steer in the U.S. is worth about 4.2 times the cost of the corn he consumes over five months to reach slaughter weight, down from almost 12 times in December 2005 and the lowest since June 1996.
Cattle may not remain cheap for long. Prices jumped 6.5 percent last month, the most since August 2006, and there are signs of reduced supply from U.S. producers.
As of May 1, feedlots held 11.1 million head, down 1.4 percent from a year earlier, the government said. Ranchers last year cut the number of young females they held by 3.5 percent to 5.67 million on Jan. 1, the second straight annual decline
"are trying to force banks and mortgage companies to repurchase a growing pile of troubled loans."
Okaaay. So I guees that the banks and mortgage companies are now going to give them their money back?
Uh, there is a reason that treasuries yeild a little less than MBS and ABS paper. It is often reffered to as risk. But then again, I guess these people now fully comprehend that.
And no. They are not going to get their money back nor should they.
"Experience is what you get when you don't get what you want."
-Dan Stanford.
Judging by the Mortgage Lender Implode-o-meter I think the large majority (by business entity count) of originators, and virtually all of the small ones, have already gone BK, so the remaining action will be a battle of the titans--big investors (pension funds and the like) that bought the waste vs. big originators like BofA, WaMu, etc. It will be an interesting battle to watch, and in the end I think the investors will win--there are bound to be smoking gun emails no matter how hard these guys are trying to shred everything in sight. Sadly it will take years to play out, but at least it will provide some ongoing entertainment.
The yen traded near a one-month low against the euro as rising stocks spurred investors to add to holdings of higher-yielding assets funded in Japan's currency.
The currency also traded near a three-month low versus the Australian dollar, a favorite for so-called carry trades, as crude oil fell for a second day.
More financial and economic ruin in the future so the hedgies can make a profit at the expense of the rest of us.
OT:
Yeah BigRig Driver, food cost will continue to capture a larger share of the citizens budget. Meat production cost is based largely on breeder herds, beef, chicken, hogs etc. Woun't go into the cost cycle but expect lower inventory this time next year and much higher prices.
Tanta and I were discussing who the eventual bagholders would be way back in 2005 - while the bubble was still inflating - and although the picture is much clearer today, some bagholders still don't want to be, uh, bagholders! And who could blame them?
Rule No. 1 of Bagholding... you aren't REALLY a bagholder if you can somehow find somebody else to hold the bag. In which case you are NOT a bagholder but are instead a 'middleman'.
Rule No. 2 of Bagholding... always be on the lookout for a person to pass the bag to. They are out there somewhere - FIND THEM!
When they were kids, I bet the executives at New Century, WMC, and the like used to put flaming bags of dog shit on their neighbor's porches and run like hell.
Beef costs to rise. Folow up froma previous thread where Dryfly had some prescient comments.
Ya I saw that article earlier today - hoocoodanode.
I'm kinda like Allen M, been filling my freezer with beef as I find deals.
I won't put high grade steaks in there - not for long - they don't freeze as well (need to eat them pretty fast to save the flavor, avoid burn). But there are cuts that freeze real well, keep real long IF sealed up well.
Just dumped a couple big briskets in there selling for about $1.20/lb. - I'll bbq them later this summer... family will gorge on some right out of the smoker and refreeze the rest (real bbq later next winter when 'the pit' is buried in snow - yum). Also threw some short ribs in there (they were less than a dollar/lb - perfect to grill or do Korean braised ribs).
Next target will be to load up on some real cheap pork shoulders or 'fresh ham' - to make bbq pulled pork sandwiches. Stock pile some of those for next winter too - if I can get a good price for a some big ones.
Anyway - I see myself reverting to the habits I learned from being raised by depression era parents in the 70s.
You have to wonder if the banks want the deals unwound, wouldn't they have to account for their losses sooner? Probably a riddle wrapped in a conundrum and an enchilada.
Red beans and rice. It be good.
trail | 05.27.08 - 10:16 pm | #
I'm the only one in the family that will eat the stuff - but the recipe I work off is from my BIL... he grew up in New Orleans, you think its a meatless dinner think again - not with all the ham/hocks & sausage that goes it to traditional Nawlins' RB&R. But that stuff is pretty inexpensive per serving because the little bit of expensive stuff is stretched out with all the beans & rice.
I could live on that stuff but I'd have to live alone or work outside.
Owner Earnings writes:
The buyers (brokers) are being forced to eat their own cooking (shit).
Owner Earnings | Homepage | 05.27.08 - 10:41 pm | #
Probably explains in part why there hasn't been a lot of lay offs yet - need staff to pick through the shit & prep the defense. Its make-work for the drones remaining at the IBs. The minute these things get settled - the pink slip machine goes into full gear.
Drones working at these IBs better be rooting for the lawyers ON BOTH SIDES!
Liao noted that Chinese financial institutions need regulatory approval to launch individual products, making it nearly impossible for complex financial instruments -- like the ones blamed for the subprime crisis -- to exist in China.
Un Huh, wait until the western banks get in their shit hooks in over there, they'll show you all how it's done.
Anonymous | 05.27.08 - 10:54 pm | #
Are you F-ing kidding? They'll be better at this than us after the first weekend. Imagine what happens when all those DVD copy cats figure out how to clone MBS-look-a-like?
It'll be like movie pirating - you'll be able to buy 'genuine' JPM securitizations on the street in Shanghai before they are even released for Wall Street. We'll be getting the email notifications along with pleas to help Nigerian royalty and pitches for watches & viagra. 'Finest kind, I swear'.
Are you F-ing kidding? They'll be better at this than us after the first weekend. Imagine what happens when all those DVD copy cats figure out how to clone MBS-look-a-like?
Okay, okay - I'm exaggerating. Point is they won't need us to teach them much - they'll get real good at this real fast. Like gambling - not a lot different.
Re: Boomer's-N. Hate to feed the troll, but.. can someone on the inside track his IP address back to his parent's basement and humiliate him, or at the very least block him. A good troll is one thing, can even be fun. This one...? No.
As someone that had to use an old soviet "toilet" on a train in Hungary a few years back, I'm just thankful I don't have to use a Russian toilet.
Chicago Dude | 05.27.08 - 11:41 pm |
Been to China?
A buddy just got back from rural China factory site... brings meaning to the phrase 'stand & deliver'. Of course after looking around - would you even want to sit down? No thank you I'll stand...
Continued Housing Downturn Drives First Quarter Thrift Industry Loss
The Office of Thrift Supervision (OTS) reported today that the nations thrift industry posted a $617 million loss during the first quarter of 2008 after setting aside record provisions for loan losses expected from the continued downturn in the housing market.
If the FDIC and other banking regulators had been doing its job this could not have happened on such a massive scale. It's another great example of regulatory failure during the Bush years like fucking FEMA was in control of the banks as well.
What does FEMA have to do with the current problems?
Also, how come over 98% of the complaints have come from New Orleans? There were other cities in other states that took a nasty hit from Katrina.............they just didn't happen to be "a tragedy waiting to happen" like New Orleans.
I've been saying since September that the biggest losses would be realized by the securitization sponsors once investors realized the extent of their put-back rights. The reality is that most MBS are wildly underpriced given that a large percentage of the bad loans they contain are ultimately going to be put back to the sponsors (names like Citi, DB and BOA) at par. It's anyone's guess whether the big sponsors will stand, but I reckon that's why the folks at Citi have been packing on reserves of late.
Hapsburger: think of it like this. The wrap providers have agreed to cover all or a portion of the losses on the CDO as they materialize. As long as the CDO is in place, those losses will materialize on a payment schedule over the life of the CDO--usually at least 7 years and often much longer (like 30 years). But when the CDO unwinds, the losses are realized all at once. For a cash-strapped wrap provider, the difference is between going BKK now and going BKK a few years hence (though I can't imagine why they wouldn't jump at the opportunity to convert some of this bad debt to worthless equity).
In essence, since the securitized assets are virtually worthless, the wrap providers have sold the bondholders an annuity. They're arguing now about whether that annuity must be paid over its term or whether it can be cashed out at present value.
Note, however, that since the holders of CDO bonds are often the sponsors of the MBS deals that the CDO components came out of, the legal picture gets very murky. To the extent there was fraud (or just a failure to underwrite the ultimately underlying loans to the announced standards), the sponsors of the original MBS will end up with liability to whoever ends up holding the bonds that came out of that MBS--which, to some extent, will be the wrap providers, if they pay on the CDO losses. So you get all kinds of claims that offset in weird ways that nobody has really worked out yet. In such a situation, the one hard-and-fast rule is that it's better to have your cash in hand and let someone else fight to take it away from you than it is for them to have it while you fight to get it. Accordingly, regardless of what their legal obligations may be, the wrap providers are going to be extremely reluctant to do anything that requires them to pony up cash to anyone--at least in the short term.
If we can have business recall bad products, why can't we have banks the sell the toxic financial wastes (packaged as AAA) take back what they have sold ?????
lunatic fringe
othing to say. But I'm finding I must input something to be able to read the other comments. Problems with haloscan. UNLESS I'M TRULY 1st.
I get the same thing happening re. haloscan. It's like user pay, in a way.
Any chance that this means that the sales guys who pulled down the huge commissions and bonuses, and turned their heads while holding their noses as they handed off the bags of garbage to the unsuspecting, might see some of that ill-gotten loot clawed back out of their hands?
This should be fun. Does this mean that the hundreds of Trillions of derivatives are about to be asked for by the holders of the worthless paper?
jo6pac
The race to the bottom continues.
"contained mistakes or fraud."
You mean like maybe 90% of them.
"some bagholders still don't want to be, uh, bagholders! And who could blame them?"
Don't think the taxpayers or anyone in this country being raped by
Helicopter Ben have a choice.
Many of the contracts with "Wholesale Lenders" that I've seen contained clauses that the broker would have to buy back the loan if there was a first payment default or a 60 day late within the first 6 months or a 90 day late within 1 year.
I wonder if the wholesalers had the same type of arangement with the investment bankers.
If you don't want to be a bagholder you're going to have to move to another country.
To this I can't help but quote the Firesign Theatre:
"Open up the bag, and see what you've won!"
"Why, this...this is a bag of sh*t!"
"But it's really great sh*t, Mrs. Kresky!"
Firesign Theatre:
Perfect, I set through a few of those shows. Thanks ratefink
jo6pac
The Bagholder Battles: Investors vs. Banks
You forgot "taxpayers"
A banker is a banker is a banker. If a banker is left holding the bag (doubtful) it will surely be by Gucci, perhaps the one made of gunmetal leather with silver/gold hardware which is available for a mere ₤780 at Gucci - 2009 fall winter handbags
OT
http://www.bloomberg.com/apps/news?pid=20601109&sid=axIrowbBQ7fo&refer=home
Beef costs to rise. Folow up froma previous thread where Dryfly had some prescient comments.
A 1,250-pound (567-kilogram) steer in the U.S. is worth about 4.2 times the cost of the corn he consumes over five months to reach slaughter weight, down from almost 12 times in December 2005 and the lowest since June 1996.
Cattle may not remain cheap for long. Prices jumped 6.5 percent last month, the most since August 2006, and there are signs of reduced supply from U.S. producers.
As of May 1, feedlots held 11.1 million head, down 1.4 percent from a year earlier, the government said. Ranchers last year cut the number of young females they held by 3.5 percent to 5.67 million on Jan. 1, the second straight annual decline
Corn Costs Signal Biggest Beef Surge Since 2003 as Herds Shrink - Bloomberg.com
"are trying to force banks and mortgage companies to repurchase a growing pile of troubled loans."
Okaaay. So I guees that the banks and mortgage companies are now going to give them their money back?
Uh, there is a reason that treasuries yeild a little less than MBS and ABS paper. It is often reffered to as risk. But then again, I guess these people now fully comprehend that.
And no. They are not going to get their money back nor should they.
"Experience is what you get when you don't get what you want."
-Dan Stanford.
FYI the world is facing much more serious problems right now:
The international space station's lone toilet is broken, leaving the crew with almost nowhere to go.
Great AC, now who is going to clean up the piss jugs in orbit?
Great, an other story of someone shi**ng on us peons.
Judging by the Mortgage Lender Implode-o-meter I think the large majority (by business entity count) of originators, and virtually all of the small ones, have already gone BK, so the remaining action will be a battle of the titans--big investors (pension funds and the like) that bought the waste vs. big originators like BofA, WaMu, etc. It will be an interesting battle to watch, and in the end I think the investors will win--there are bound to be smoking gun emails no matter how hard these guys are trying to shred everything in sight. Sadly it will take years to play out, but at least it will provide some ongoing entertainment.
A tip for all you unemployed mortgage brokers: Get a law degree!
The orgy never ends:
The yen traded near a one-month low against the euro as rising stocks spurred investors to add to holdings of higher-yielding assets funded in Japan's currency.
The currency also traded near a three-month low versus the Australian dollar, a favorite for so-called carry trades, as crude oil fell for a second day.
More financial and economic ruin in the future so the hedgies can make a profit at the expense of the rest of us.
Thanks Federal Reserve, ECB, BoJ, et. al.
Yen Trades Near One-Month Low Versus Euro on Carry Trade Demand
OT:
Yeah BigRig Driver, food cost will continue to capture a larger share of the citizens budget. Meat production cost is based largely on breeder herds, beef, chicken, hogs etc. Woun't go into the cost cycle but expect lower inventory this time next year and much higher prices.
Tanta and I were discussing who the eventual bagholders would be way back in 2005 - while the bubble was still inflating - and although the picture is much clearer today, some bagholders still don't want to be, uh, bagholders! And who could blame them?
Rule No. 1 of Bagholding... you aren't REALLY a bagholder if you can somehow find somebody else to hold the bag. In which case you are NOT a bagholder but are instead a 'middleman'.
Rule No. 2 of Bagholding... always be on the lookout for a person to pass the bag to. They are out there somewhere - FIND THEM!
The international space station's lone toilet is broken, leaving the crew with almost nowhere to go.
Plumber Bob's got a sure ticket to ride on the next shuttle flight.
Regarding the soaring beef prices:
Red beans and rice. It be good.
I'm doing great. My bag is big if you know what I mean. I'm pimp'n these gals in my nice nice home. I'm a baller, shotcaller!
You's guy are just poor renter. LMAO!!!
When they were kids, I bet the executives at New Century, WMC, and the like used to put flaming bags of dog shit on their neighbor's porches and run like hell.
One big game of hot potato. This could get entertaining.
BTW, whatever happened to the rice shortage? Is that over?
The japanese housewives are holders of the bag(s) of rice.
Beef costs to rise. Folow up froma previous thread where Dryfly had some prescient comments.
Ya I saw that article earlier today - hoocoodanode.
I'm kinda like Allen M, been filling my freezer with beef as I find deals.
I won't put high grade steaks in there - not for long - they don't freeze as well (need to eat them pretty fast to save the flavor, avoid burn). But there are cuts that freeze real well, keep real long IF sealed up well.
Just dumped a couple big briskets in there selling for about $1.20/lb. - I'll bbq them later this summer... family will gorge on some right out of the smoker and refreeze the rest (real bbq later next winter when 'the pit' is buried in snow - yum). Also threw some short ribs in there (they were less than a dollar/lb - perfect to grill or do Korean braised ribs).
Next target will be to load up on some real cheap pork shoulders or 'fresh ham' - to make bbq pulled pork sandwiches. Stock pile some of those for next winter too - if I can get a good price for a some big ones.
Anyway - I see myself reverting to the habits I learned from being raised by depression era parents in the 70s.
The bond guarantors just can't stay out of the limelight, so says jesse crossroads cafe:
Jesse's Café Américain: Banks Anxious to Dump Debt Threaten Monolines Solvency
You have to wonder if the banks want the deals unwound, wouldn't they have to account for their losses sooner? Probably a riddle wrapped in a conundrum and an enchilada.
trail writes:
Regarding the soaring beef prices:
Red beans and rice. It be good.
trail | 05.27.08 - 10:16 pm | #
I'm the only one in the family that will eat the stuff - but the recipe I work off is from my BIL... he grew up in New Orleans, you think its a meatless dinner think again - not with all the ham/hocks & sausage that goes it to traditional Nawlins' RB&R. But that stuff is pretty inexpensive per serving because the little bit of expensive stuff is stretched out with all the beans & rice.
I could live on that stuff but I'd have to live alone or work outside.
u genetic mistakes better get married soon before the gay marraige law gets changed.
The buyers (brokers) are being forced to eat their own cooking (shit).
Owner Earnings writes:
The buyers (brokers) are being forced to eat their own cooking (shit).
Owner Earnings | Homepage | 05.27.08 - 10:41 pm | #
Probably explains in part why there hasn't been a lot of lay offs yet - need staff to pick through the shit & prep the defense. Its make-work for the drones remaining at the IBs. The minute these things get settled - the pink slip machine goes into full gear.
Drones working at these IBs better be rooting for the lawyers ON BOTH SIDES!
I hear the NAR have to open up the MLS to competition? Great news! home prices will go up.
Liao noted that Chinese financial institutions need regulatory approval to launch individual products, making it nearly impossible for complex financial instruments -- like the ones blamed for the subprime crisis -- to exist in China.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Un Huh, wait until the western banks get in their shit hooks in over there, they'll show you all how it's done.
good stuff
ac writes:
"If you don't want to be a bagholder you're going to have to move to another country".
Actually, if you don't want to be a bagholder, you're going to have to move to another planet.
Un Huh, wait until the western banks get in their shit hooks in over there, they'll show you all how it's done.
Anonymous | 05.27.08 - 10:54 pm | #
Are you F-ing kidding? They'll be better at this than us after the first weekend. Imagine what happens when all those DVD copy cats figure out how to clone MBS-look-a-like?
It'll be like movie pirating - you'll be able to buy 'genuine' JPM securitizations on the street in Shanghai before they are even released for Wall Street. We'll be getting the email notifications along with pleas to help Nigerian royalty and pitches for watches & viagra. 'Finest kind, I swear'.
Not unless the PRC shoots them on sight - they will get real good, real fast. Faster than Macao stole gambling from Las Vegas.
To kind of quote For Whom The Bell Tolls, do not ask who will be the bag holder, it will be all of us. Taxes or destroyed currency pick your poison.
Are you F-ing kidding? They'll be better at this than us after the first weekend. Imagine what happens when all those DVD copy cats figure out how to clone MBS-look-a-like?
Okay, okay - I'm exaggerating. Point is they won't need us to teach them much - they'll get real good at this real fast. Like gambling - not a lot different.
ac --
The international space station's lone toilet is broken, leaving the crew with almost nowhere to go.
Another story about people stealing copper plumbing pipes?
Actually, that is kind of a feel-good story. No matter how bad things get, be thankful you don't have to pee in a jar weightless.
Dryfly has a great point.
Enron's favorite energy hedging customers were casinos and other financial houses.
They understood the premise and potential promise.
The bag holder will be the one with the most money and the least brains: The US tax payer.
Re: Boomer's-N. Hate to feed the troll, but.. can someone on the inside track his IP address back to his parent's basement and humiliate him, or at the very least block him. A good troll is one thing, can even be fun. This one...? No.
Actually, that is kind of a feel-good story. No matter how bad things get, be thankful you don't have to pee in a jar weightless.
As someone that had to use an old soviet "toilet" on a train in Hungary a few years back, I'm just thankful I don't have to use a Russian toilet.
No, not jars...
New Challenge for Space Station Crew: A Broken Toilet
The crew, including astronaut Judith Resnick, had to urinate in plastic Apollo bags that are stored on board.
Hey, I think we found the bagholders!
As someone that had to use an old soviet "toilet" on a train in Hungary a few years back, I'm just thankful I don't have to use a Russian toilet.
Chicago Dude | 05.27.08 - 11:41 pm |
Been to China?
A buddy just got back from rural China factory site... brings meaning to the phrase 'stand & deliver'. Of course after looking around - would you even want to sit down? No thank you I'll stand...
Children, children. Must it always devolve to potty humor?
Continued Housing Downturn Drives First Quarter Thrift Industry Loss
The Office of Thrift Supervision (OTS) reported today that the nations thrift industry posted a $617 million loss during the first quarter of 2008 after setting aside record provisions for loan losses expected from the continued downturn in the housing market.
The loss was an improvement... .. .
Continued Housing Downturn Drives First Quarter Thrift Industry Loss
If the FDIC and other banking regulators had been doing its job this could not have happened on such a massive scale. It's another great example of regulatory failure during the Bush years like fucking FEMA was in control of the banks as well.
potty humor
gallows humor
About all we got when the world is crashing around us as we detail each and very disaster.
Almost make me pine for the days when I read about disasters in history books instead of being inside of it and aware.
US big bank regulator wants appraisal deal withdrawn
UPDATE 1-US big bank regulator wants appraisal deal withdrawn
| Reuters
Vader, with all that is going on in the world (and orbiting it), dark humor is all we really have left.
What does FEMA have to do with the current problems?
Also, how come over 98% of the complaints have come from New Orleans? There were other cities in other states that took a nasty hit from Katrina.............they just didn't happen to be "a tragedy waiting to happen" like New Orleans.
If they are dealing with going concerns, my money would be on the GSE's. They have the leverage to encourage compliance.
The mortgage insurers may also put up a pretty good fight.
I would rate the CMO's as least likely to get much traction on this.
Yves posted an article on the potential unwinding of CDOs and the effect on the monoline insurers.
Monoline Death Watch: CDO Unwind Disputes « naked capitalism
Could Tanta or others add some color to how a CDO unwinds and whether this would trigger losses for the monolines?
Hapsburger, I was wondering if that piece and FT's tie-in:
FT Alphaville » Blog Archive » Monolines back in the spotlight
were related to this fingerpointing bagholderfest.
These two pieces certainly seem to imply that the monolines are on the hook much earlier than their business model assumes.
Between this and FASB 163, I think these guys are on deathwatch. The family is gathered around in the waiting room. A priest has been sent for...
Of course, they are now far too low to consider shorting.
I've been saying since September that the biggest losses would be realized by the securitization sponsors once investors realized the extent of their put-back rights. The reality is that most MBS are wildly underpriced given that a large percentage of the bad loans they contain are ultimately going to be put back to the sponsors (names like Citi, DB and BOA) at par. It's anyone's guess whether the big sponsors will stand, but I reckon that's why the folks at Citi have been packing on reserves of late.
What is it with "Progressives" and scatology, anyway?
Hapsburger: think of it like this. The wrap providers have agreed to cover all or a portion of the losses on the CDO as they materialize. As long as the CDO is in place, those losses will materialize on a payment schedule over the life of the CDO--usually at least 7 years and often much longer (like 30 years). But when the CDO unwinds, the losses are realized all at once. For a cash-strapped wrap provider, the difference is between going BKK now and going BKK a few years hence (though I can't imagine why they wouldn't jump at the opportunity to convert some of this bad debt to worthless equity).
In essence, since the securitized assets are virtually worthless, the wrap providers have sold the bondholders an annuity. They're arguing now about whether that annuity must be paid over its term or whether it can be cashed out at present value.
Note, however, that since the holders of CDO bonds are often the sponsors of the MBS deals that the CDO components came out of, the legal picture gets very murky. To the extent there was fraud (or just a failure to underwrite the ultimately underlying loans to the announced standards), the sponsors of the original MBS will end up with liability to whoever ends up holding the bonds that came out of that MBS--which, to some extent, will be the wrap providers, if they pay on the CDO losses. So you get all kinds of claims that offset in weird ways that nobody has really worked out yet. In such a situation, the one hard-and-fast rule is that it's better to have your cash in hand and let someone else fight to take it away from you than it is for them to have it while you fight to get it. Accordingly, regardless of what their legal obligations may be, the wrap providers are going to be extremely reluctant to do anything that requires them to pony up cash to anyone--at least in the short term.
If we can have business recall bad products, why can't we have banks the sell the toxic financial wastes (packaged as AAA) take back what they have sold ?????