The Subprime Mortgage Crisis
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S&P sued. Conspiracy or idiocy?
Link: How has it taken 5 years to get to this point? The US government, after “a fallout in talks”, has notified Standard & Poors that it intends to sue them over their standardly poor (in that they were useless) ratings of CDOs and RMBSs in 2007. Of course, the catch in all of this is that the US is […]
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Daily News Roundup 2012: Friday 27 April
Good morning The headlines: Deutsche Bank quarterly profits are down by 35%. Part of the loss (about a third) was a result of DB writing off its investment in Actavis; the sale of which was announced yesterday. Awkward on the face of it. Link: Deutsche Bank announces quarterlies. I’m enjoying watching the Catholic criticism of US […]
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Greek CDS Exposure: Proving the ISDA and Bloomberg Wrong
According to numerous news reports, the net exposure arising as a result of Friday’s decision to declare the activation of Greek CACs a credit-default event amounts to approximately $3.16 billion (assuming that the bonds achieve no value at the ISDA auction on March 19). Where is the data coming from? On the same day that […]
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The Subprime Mortgage Crisis
Alright, before I begin, I’d like to make the following observations: Some of the concepts/instruments I am going to mention have been explained more fully in a number of previous posts: Mortgages (see here) Mortgage-Backed Securities (MBS) (see here) Collateralised Debt Obligations (CDO) (see here) Ratings Agencies (see here) The content is based on a […]
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Collateralised Debt Obligations. Robligations?
So, in my last article post on this topic, I talked about Mortgage-Backed Securities AKA Collateralised Mortgage Obligations (click here). The key points: A bank/mortgage-lender builds a pool of mortgages. It repackages the cash-flows that it will receive from the mortgage pool, and sells them to investors as Mortgage-Backed Securities (MBSs). The MBSs are split […]
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Books: Liar’s Poker
After yesterday’s post on Mortgage-Backed Securities (click here), I felt that I should write something on the book that talks about the origination of the MBS (which, for the record, is a pun: Origination refers to the collection of mortgages and repackaging them as an MBS). Michael Lewis, before he became famous for writing books, was a […]
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What is: A Mortgage-Backed Security
My last post was on mortgages, and focused on the home-owner (see here). If you’ll recall: The Home-Owner has a mortgage liability, which is the obligation to pay back the instalments over the mortgage term; and The Bank has a mortgage asset, which is the right to receive instalments over the mortgage term. Now this […]
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What is: A Mortgage
Given the recent news around the US Housing Market and the Freddie Mac, I thought that I should start tackling the Subprime Mortgage crisis, the Debt Ceiling Crisis, the America-in-General crisis, and all the fun stuff that goes with it. But before I can get to that, I think I may have to back-track a […]
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Daily News Roundup 2012: Wednesday 1 February
So, the news that I’m reading: The Eurozone Debt Crisis Greece one step away from Debt Deal (Associated Press via CNBC) link: http://www.cnbc.com/id/46205601 Europe’s Central Bank can’t fix “dysfunctional” EU (CNBC) link: http://www.cnbc.com/id/46205597 What happens if Greece defaults? (CNBC) Link: http://www.cnbc.com/id/43425042?slide=1 Slide 11 is frankly unnecessary. Portugal Pressures ECB to Halt Contagion (Bloomberg) Link: http://www.bloomberg.com/news/2012-01-31/portugal-as-greece-pressures-ecb-to-halt-contagion-prompting-nascent-bulls.html The key points: Everything […]
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