With the GSEs "Nationalized, " Will There Still be a Market for Mortgage Insurance?
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Blame the models and Risk Based Pricing
Tue, 30 Sep 2008 14:13:08 ESTModels only cover certain variables and the crisis involved much more than mortgage pricing and a few macroeconomic issues. Risked based pricing as used in the mortgage industry had an underlying flaw that caused the models to fail. Greed played the other part.Joseph SmithGood News about Economy Crisis of the Century
Mon, 29 Sep 2008 06:25:11 ESTActual financial shockof the Wall Streetwill initially have bigger impact on Asia and Europe then on US itself, but on the long run itmightset backthe USeconomy tostagnation thatcould last 10-15 years. Nevertheless, there's still a place for good news and hope in this situation.Stanislav MilanovicWAMU CLOSED: SOLD TO JP MORGAN CHASE FOR $1.9 BILLION
Mon, 29 Sep 2008 06:11:01 ESTRumors had been swirling over the last few weeks that WAMU was shopping for a buyer, however, the OTS (the Office of Thrift Supervision) couldn't allow WAMU to continue its operations under constraints of deposit outflows exceeding $16 billion in the last week or so and JP Morgan Chase becomes the benefactor of WAMU's collapse and acquires WAMU's deposits for a low ball amount of $1.9 billion. WAMU may have staved off a collapse if the proposed $700 billion bailout plan had been approved, however, what we witnessed this week was alot of grandstanding and political posturing but no agreement to pass and legislate the proposed $700 billion bailout plan. WAMU becomes the latest news headline and the largest FDIC-insured institution on the list of bank failures in 2008. The FDIC fund wasn't impacted by WAMU's collapse, however, other S&L's and thrifts that have failed to meet their fiduciary responsibilities have only added to the downward spiral of the U.S. economy.Kamala WorthingtonBankers need to change their attitude
Mon, 29 Sep 2008 06:09:38 EST1. Current crisis is the child of greedy bankers. 2. Fast loans are not criteria for high bonus.Harnath SithamrajuCollapse may possibly be delayed but it can only be stopped by default
Mon, 29 Sep 2008 06:07:22 ESTNelson D. Schwartz in Paris noted in the September 20-21 issue of the International Herald Tribune that 100 years ago, J.P. Morgan and colleagues stopped the Panic of 1907 in its tracks. But the crisis of 2008, building for months, still endures. Market turbulence continues with credit hard or impossible to find. It appears that only the power of the U.S. Government can save the day. A massive injection of federal borrowing is required. Will that work? No one knows. It is Alice in Wonderland. Today’s bankers have no comprehension of what their firms own nor do they grasp the speed of market movement. Complexity of products makes them incomprehensible in terms of dollars and cents. Complacency set in as traders willingly accepted the new arcane investments. No one thought that it would ever be necessary to liquidate the exotic bonds. They would trade to maturity. A generation of bankers was trained in the new financial theories. Alas, they were flawed and the end is nigh.Michael LynchStock Market:Is this Deja Vu?
Mon, 22 Sep 2008 05:36:17 ESTHave governmental regulations failed us?Are we simply going to repeat history?Martin AlpertAIG:How to Read the Roadmap to Avoid Disaster!
Mon, 22 Sep 2008 05:33:37 ESTWhat do some analysts opine was the real reason for AIG's debacle?What real lessons can be learned from this financial predicament?Martin AlpertJ.P. Morgan, Goldman Sachs may survive. Others may not.
Mon, 22 Sep 2008 05:08:01 ESTCarter Dougherty in Frankfurt, in the September 19 issue of the International Herald Tribune, asked rhetorically if future historians will write about the Great Depression of the 2000s.the world’s central bankers are flooding the international financial system with liquidity on the amount $180 billion hoping the answer to the question will be “no.” This contrasts to the inaction of the U.S. Federal Reserve in the 1930s. The Fed stood idly by as the banking system in the U.S. collapsed. Today, central bankers, acting in coordination, are taking a different approach. Benjamin Strong, visionary chairman of the Fed in the 1920s, foresaw the crisis and appreciated its global ramifications. But he died in 1928 too soon to exert influence. His scenario became reality in 1933 when the Austrian bank, Creditanstalt failed, pulling Europe into the abyss. Now, banks mustraise additional capital at a time when little exists. They are acting like fortresses under siege.Michael LynchHow to fix the Economy (without it costing too much)
Mon, 22 Sep 2008 04:56:33 ESTThe recently proposed bailout was an inevitable solution to a ever-growing problem. The $800B will be the most costly endevour by the U.S. government since The New Deal proposal from the Great Depression. The key to the issue at-hand is two fold: first, the stabilization of the real estate prices. Second is the rising (and continuation of) delinquencies and foreclosures. The pain HAS to be shared by the U.S. taxpayer AND the investing community. Here's a solution.James ButlerAll the King’s horses and all the King’s men couldn’t put Humpy Dumpy back together again
Fri, 19 Sep 2008 17:09:49 ESTThe key implications are too numerous to cover in this space. To many of us its apparent that we are on the verge of a major economic meltdown the likes of which haven’t been seen since the Great Depression. The one major implication will be greater rules and regulations that the free market folks will dread, but they have themselves to blame along with all the King’s merry henchmen. This article spreads the blame from the feet of Alan Greenspan to the CEO’s of the major Wall St. banks that allowed greed to take the place of wise and intelligent investing.Robert CanterReality Impact - Grasping the Cost of Not Acting to Restore Trust in Capital Markets
Fri, 19 Sep 2008 05:44:14 ESTThere are significant arguments today on what should or should not be done to address the current capital market crisis. In reality, market economies first and foremost rely on trust. When trust is lacking, the ramifications are significant and far reaching. The mistrust of one sector multiples into problems throughoutother sectors. A good example is the impact of capital markets on nonfinancial servicesbusinesses. This point is easily seen in the cost of credit, or the lack of credit. Howeverthe impact is much greater than mere credit. An example is unfudned pension and other post retirement benefit plans (OPEB). The cost of not restoring trust in the capital markets needs to be understood, in all aspects. The price is high (e.g., government spending and assuming risk) on both sides of the argument. However all costs, on both sides, must be understood and measured beforejudgements are made.Robert KempBe wary of synthetic markets
Thu, 18 Sep 2008 05:35:27 ESTThe analysis in this article is generally on point, but keep in mind this is a synthetic market.John JukoskiIs the market ready to start adopting advanced time and attendance at a more rapid pace?
Tue, 16 Sep 2008 05:27:36 ESTTime and attendance is still not as mission critical to many firms as it should be. Employers especially those with fewer than 500 employees still have trouble pulling the trigger on rolling out advanced time and attendance solutions. Is that about to change?Matthew EatonSouthern California Mortgage Lending Rates Drop
Mon, 15 Sep 2008 04:04:48 ESTEffective immediately after the Fannie/Freddie take over, the DITECH origination service of Cerberus'GMAC Financial Services launched a television campaign to offer 5.5% interest rate mortgage loans.Mark MariottiNew Colorado law makes it tougher for PEO providers.
Mon, 15 Sep 2008 04:04:16 EST1. A new subsection requires an employee leasing company to pay wages and collect and report taxes from its own accounts for all covered employees 2. Employee leasing companies must annually certify and execute and file a surety bond or deposit the equivalent of 50 percent of the average annual amount of unemployment tax assessed within the previous calendar year 3. An individual may not offer employee leasing company services or use the name “employee leasing company” or related names (such as PEO, administrative employer, staff leasing) without first obtaining certificationMatthew EatonWith the GSEs "Nationalized, " Will There Still be a Market for Mortgage Insurance?
Mon, 15 Sep 2008 03:59:33 ESTThe GSEs succeeded in supporting the creation of a broad, deep, liquid national market for mortgages. They used their market power to impose standardization on mortgage terms and underwriting. Thus was born the "conforming mortgage." Mortgage insurance is an artifact of this history. It is an inefficient and (at the individual whole loan level) unnecessary credit enhancement. But the rumors of MI's demise are premature. The last thing the new management of the GSEs want to do is spook the markets with sudden moves, loud noises or big changes. That said, there will be pressure to impose much more rigorous capital allocation/portfolio risk management controls. Politically, they can't reduce volume, per se, immediately at least, but the management of counterparty risk exposure to the MIs may well become more active. Bad news for weaker MIs. Later the survivors will again be caught between price competition and "innovation" (bad risk) in a smaller market. ...Martin KamarckThe Bear Sterns Equity Strip Model
Mon, 15 Sep 2008 03:45:51 ESTUnlikely that a suitor firm will take over Lehman directly by itself without assistance, perks or partners. As you may recall Bear Stearns in a similar situation, and remember that the Feds had to lend and assistJP Morgan with the acquisition.Mark MariottiWith the GSEs "Nationalized, " Will There Still be a Market for Mortgage Insurance?
Fri, 12 Sep 2008 05:32:26 ESTThe GSEs succeeded in supporting the creation of a broad, deep, liquid national market for mortgages. They used their market power to impose standardization on mortgage terms and underwriting. Thus was born the "conforming mortgage." Mortgage insurance is an artifact of this history. It is an inefficient and (at the individual whole loan level) unnecessary credit enhancement. But the rumors of MI's demise are premature. The last thing the new management of the GSEs want to do is spook the markets with sudden moves, loud noises or big changes. That said, there will be pressure to impose much more rigorous capital allocation/portfolio risk management controls. Politically, they can't reduce volume, per se, immediately at least, but the management of counterparty risk exposure to the MIs may well become more active. Bad news for weaker MIs. Later the survivors will again be caught between price competition and "innovation" (bad risk) in a smaller market. ...Martin KamarckWhat to expect from the bailout.
Fri, 12 Sep 2008 04:30:45 EST1. Shows how truly bad the mortgage industry has gotten and how scared the feds are of where we are going. 2. If the major source of liquidity can not survive, who will? 3. What should be the outcome.Joseph SmithWith the GSEs "Nationalized, " Will There Still be a Market for Mortgage Insurance?
Fri, 12 Sep 2008 04:02:07 ESTThe GSEs succeeded in supporting the creation of a broad, deep, liquid national market for mortgages. They used their market power to impose standardization on mortgage terms and underwriting. Thus was born the "conforming mortgage." Mortgage insurance is an artifact of this history. It is an inefficient and (at the individual whole loan level) unnecessary credit enhancement. But the rumors of MI's demise are premature. The last thing the new management of the GSEs want to do is spook the markets with sudden moves, loud noises or big changes. That said, there will be pressure to impose much more rigorous capital allocation/portfolio risk management controls. Politically, they can't reduce volume, per se, immediately at least, but the management of counterparty risk exposure to the MIs may well become more active. Bad news for weaker MIs. Later the survivors will again be caught between price competition and "innovation" (bad risk) in a smaller market. ...Martin Kamarck
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