"trader_4" wrote in message
...
On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into securities
and
selling shares in them to investors. It was fundamentally sound, not
leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier loans
to
people with marginal ability to be able to keep up with the payments on
real
estate that had already appreciated sharply and was over valued. And
then
when the problems started, it was further complicated by the fact that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a lot
of
people got evicted. There were huge losses there, because the values of
the
properties declined, the real estate market turned poor, millions of
properties
were under water, not worth the mortgage value. THAT is what lead to the
huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt), held
by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in "bets".
It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into
MBS
and sold to investors.

And anyone was free to gamble in the housing market with
no downside at all, when the bubble burst, as it always does,
they were free to hand the keys back and suffer no penalty
at all if they had borrowed more than the property was
worth. They didnt even lose the early mortgage payments,
the lender had lent them that money too.

There were derivative securities based on MBSs that
transferred risk, but blaming them for the disaster is silly.

Yep, he watched that stupid movie and didnt even notice it is fiction.

It would be like blaming options on GM stock for
being responsible for GM going bankrupt, instead
of their low sales, high expenses and losses.

And their stupid pension scheme.

Or blaming futures on soybeans for putting them in the
toilet, when prices dropped because of Trump's tariffs.

Maybe you could just watch the "Big Short"
movie if you don't like to read.

I see part of your problem. You think movies are factual.

Yep, he actually is that stupid.

Maybe you could post proof here to back up your claims.

Best not hold your breath about that.

Commercial banks like BoA were heavily
invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They
originated
the mortgage loans, packaged them into MBS and sold them to investors.
And banks have always had exposure to mortgage loan risk, that's their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was
similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I
never
heard of *any* of the 2009 bail out money going to foreign investors. It
was
a worldwide crisis, because when the core of the US financial system is
in crisis, it
will always be a worldwide crisis. I can't help again notice that you're
just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware
that they
repaid all the bailout money, with interest. So did all the banks. Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it went
to foreigners.

On Thu, 18 Mar 2021 04:36:12 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:12:27 AM UTC-4, wrote:
On Wed, 17 Mar 2021 01:31:20 -0500, Jim Joyce
wrote:

On Tue, 16 Mar 2021 22:12:13 -0400, wrote:

On Tue, 16 Mar 2021 15:31:23 -0700 (PDT), trader_4
wrote:

On Tuesday, March 16, 2021 at 3:18:27 PM UTC-4, wrote:

Funny you weren't making posts like that when Trump gave you your tax cut
and increased spending, turning a $500 bil deficit into a $1 tril one.

Trumpets all suffer from extreme tunnel vision.
Trader has the worst tunnel vision of anyone I know. Everything is
framed around Trump., We could be talking about plywood and Trader
would try to make it about Trump.

I understand Trump is gone. Trader, not so much.

It's impossible to not frame much of what is going on around Trump, because
of the extraordinary damage he's caused to this country, ending in an insurrection.

Like I said, get over it. Trump is GONE.

Wishful thinking. Trump is FAR from gone. He still controls the GOP and its
fundraising, he's hanging around and threatening to run again, and he's the
subject of multiple civil and criminal investigations. If he's gone from
your view, that's probably a result of your unwillingness to read about
current events. The rest of us will be dealing with Trump and the aftermath
of his incredible damage to the country for many years to come.
He is NOT the president, nor does he hold any political office or
wield any official powers. He is just a private citizen but he still
seems to be able to scare the **** out of you.

He should scare the **** out of all Americans after seeing the enormous damage
he did to this country over the past 5 years. The damage started while he was a
private citizen and it's continuing as he's a private citizen. Just because he had even
more capacity to do damage, like lying about a stolen election that he lost, destroying the
credibility of our elections, ending in an insurrection, doesn't mean that it's over.
He's the leader of the Republican Party, they are still solidly behind him.


What damage?
The main damage seems to be the assault on the sensibilities of
snowflakes like you.

On Thu, 18 Mar 2021 05:13:20 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:47:04 AM UTC-4, wrote:

You weren't listening.

Sure, it's my listening, even after you pretty much confirmed it here again yesterday,
by saying that you only pointed out that Trump's tax cut benefitted Joe Six pack too.

Maybe I am just not as big a whiner as you and you can't talk about
anything without whining about Trump.

If you want to talk about whiners, the biggest whiner has been Trump. It's always
someone else that's to blame, always someone else to demonize and complain
about. That's what he did for 4 years, instead of doing his job.


In 10 years Trump will just be another unpopular president, along with
some of the others like GW Bush who we don't hear much about today. I
remember when he was the worst president ever too.

Please, don't try to normalize Trump by trying to equate him to Bush or any other
former president. In ten years, Trump will be starting to earn his place in the
history books for the despicable, un-American POS that he is.




That;s yet another lie. I spoke out against the tax cut as being irresponsible
when we already had a $500 bil deficit and the economy was doing OK.
YOU responded again and again, justifying it, saying it was going to many
Americans, not just the rich, never saying it was a bad idea. And the rich
not only got a taste, they got an order of magnitude more benefit than
Joe Sixpack.

Listen I said ANY ****ING TAX CUT was a bad idea. Is that clear
enough?

You sure weren't saying that when you defended Trump's tax cut that helped
double the deficits. Like you confirm now, you just said that it benefitted
Joe Six pack in addition to rich people. And you never said it while Trump
was in office. But now you're concerned about deficits, with Biden in office.


I am the only guy here who seems to think the debt is important.

That's a lie, I spoke out against Trump's tax cut, while you were defending it.
I've spoken out here about the national debt, in many threads directly with you
for years. I spoke out about it again this week.


Your complaint about the cut wasn't that it was a bad idea, only that
you thought the people who pay the most taxes were getting a break.

That's another lie. I spoke about both.

I did say the tax cut was a bad idea, many times. I even suggested we
are not paying enough tax in light of the debt load. Your TDS just
would not let you see that.



In a way this is very much like 2007. Everyone said the housing market
could never fail and real estate was always a safe investment, until
the first house lost money. Then it was an avalanche.
We think people will always be lined up to buy our debt but as soon as
that is not true, it will be the same type of avalanche.

I've said the same thing many times. I said it when Trump was cutting taxes
and increasing spending. You didn't.

Yes I did. I have said we should cut the DoD budget for years but you
still think we have that red menace and no amount is too much.

Show us a single post where I advocated for spending more on defense.
Or where I said anything at all about the defense budget.

Show me where you complained about it. That seems to be the bar.

I spoke out against Trump's irresponsible tax cut and increased spending.
I told you it would greatly increase the deficits, while Trump and the Republicans
lied and claimed it would not. That was enough. We need to address the
overall problem. Trump addressed it alright. He made it twice as bad.

Trumps tax cut did the same thing to the deficit as Biden's $1.9T
giveaway.. along with the one before that was sending tax money all
over the world to serve democrat causes like gender education in
Pakistan and other bull**** like that. Between CARES and ARP, it was
twice as much as the tax cut.
You
are also the first one to talk about how we need to protect ourselves
from the evil russians. You were in favor of every war we have had in
the last 30 years. It certainly sounds like you support ther DoD
budget to me.

That is the elephant in the room. It is second only to the
entitlements and more than interest on the debt.
You could really say it started in 2009 anyway when the Fed had to buy
$4.5T of our debt with money they printed out of thin air because the
market couldn't absorb it.

That's not true either. There was no US debt that had to be bought from
the US treasury. The FED bought the debt in the open markets, from people
already holding it, exactly as it has always done when it needs to provide liquidity,
to stimulate the economy, to lower interest rates. The US didn't suddenly
issue $4.5T of new debt.

Bull****, Nobody was holding that $4.5T they bought. It went straight
from the treasury to the fed. (or vice versa depending on how you look
at the phony bookkeeping).

That's wrong too. You clearly don't understand how the FED works. The
US govt did not issue $4.5T in new debt. If they did, where did that cash go?
The deficit circa 2009 was $1.4T. That is all the new debt the govt had to issue.
The rest, the bulk of the money creation was the FED buying securities in the open
market, as they have done since day one to control the money supply. It's the
FED's Open Market Operations. And they didn't just buy US govt securites in 2009,
they bought mortgage backed securities too. Further, the FED NEVER buys
securities directly from the Treasury.

If the fed is buying US debt they are buying it from the treasury ...
period.

Attempt to move goal posts and obfuscate, noted. This is what you posted:

"It went straight from the treasury to the fed. "



Calling it the open market is just more smoke and mirrors.

Perhaps to you. Fact is the open markets are trading US treasuries around the
world among buyers and sellers of all kinds, institutions, govts, central banks,
not just the FED.

.... but that open market COULD NOT ABSORB $4.5T so the fed bought it.


The
debt came from the bailout. There was no way "the market" was going to
absorb an extra $4.5T so the fed bought the debt.

There was no $4.5T in debt from the bailout in 2009. Can't you do simple math?
The budget deficit was ~$1.4 tril, not $4.5 tril. If the US govt issued $4.5T in
new debt, where did the other $3.4 tril go? Again, you're confusing FED
Open Market Operations with govt borrowing. They are totally different.
And of that $1.4 tril deficit, maybe $500 bil was TARP, which was REPAID
by the recipients to the govt in later years.

I just know what was called "quantitative easing" AKA monetizing the
debt.
You can generate all the phony paperwork you want but the bottom line
was the government borrowed $4.5T more than the market was able to
lend so the fed printed the money.

Wrong, wrong, wrong. You're just like Trump. Get it all wrong, then just keep
doubling and tripling down.


They called it "quantitive easing"
a euphemism for monetizing debt.

That is when the FED buys existing securities in the OPEN MARKET. It's not
the issuance of NEW DEBT. It's the FED acquiring securities that already
exist, buying them in the US financial market where they are tradeed. And while
previously the FED only bought US treasury securities, in 2009 the bought
a lot of mortgage backed securities, that was a large part. Following your
claims of how the process works, the US govt would have had to issue new
mortgages and the FED would have bought them directly from the US govt.
It doesn't work that way.


Bull****. The US created $4.5T in bonds the market would not buy so
the fed did. You can spin that any way you like but that was the
bottom line


If Bernie Maydolf could have just printed the money to cover his debts
he would still be in Palm Beach sipping Pina Coladas.




I haven't seen how they paid for this latest give away since it hasn't
showed up on the deficit yet. (according to the treasury web site)

They will pay for it the same way that all US spending in excess of revenue
is paid for, by issuing new debt.

At a certain point who is buying it? We are reaching the point that
there is not that much liquidity in the world economy.

Oh please. The world economy is as liquid as it's ever been.

Exactly and that is not liquid enough to absorb huge debts like that
so the fed creates money out of thin air to buy the debt.

Wrong, as always and previously explained.



Bernie Madoff went to prison for that kind of bookkeeping.

That's wrong too. What the US is doing is on the books, available for all to see.
Banks, institutions, world banks, all see it, they know exactly what the US govt
is doing. Bernie was a lying crook who issued totally made up financial statements.

All can see but if you really look, what you see looks a lot like what
Bernie did. We have trillions that we say is a trust fund but it is
really just debt. The fed prints money to cover debt the treasury
can't sell on the market.

Again, that is simply wrong. The FED never buys securities directly from the
Treasury and they are not buying them because no one else wants them.
The FED buys securities in the markets to increase or decrease the available
money supply.

Yummy Kool Ade you got there scooter.

Fine, remain ignorant, your choice.




Most people just believe that because the
government says this is OK, that it is. You are one of them.

That's a lie. I've spoken out against deficits and the national debt,
constantly, including when Trump irresponsibly cut taxes and increased
spending.


Google up Weimar Republic and see what happens when debts overwhelm a
country's ability to pay.
At a certain point we are going to have to start paying an interest
rate that more correctly reflects the market and that will blow out
the deficit.
If we have to pay Carter era interest it is almost all of our current
revenue without spending another dime on SS/MC, federal pensions or
any of the "discretionary" spending.
Carter isn't ancient history either. It was 45 years ago.

On that point, you're correct, that interest rates will rise at some point.
Hopefully Treasury has the vast majority of debt in 20+ maturities, in which
case the immediate impact won't be severe.
They don't
There are about $5T in bills that expire in weeks or months
There is $11T in Notes that may only last 2 years, 10 max
$2.9T is in T bonds.
Most of the T bonds are held by SS/MC.
$6.4T is in "Series" bonds. (the kind regular folks buy)
The rest is a mix of other paper.

https://www.treasurydirect.gov/govt/...cipal_debt.htm

You're right about that. I guess the morons are doing the ARM mortgage deal.
Take on huge risk of interest rates rising in order to keep today's payments
low. So if rates rise, there will be an immediate impact, I see about 25%
is in Tbills, 50% in 2 to 10 year maturities.
The question is how old are those notes? When do they have to be
rolled over? It is clear we have no way to redeem them without just
printing the money.

They get redeemed just like they have mostly been redeemed forever. Treasury
issues new ones.

It would be helpful if you could trim posts.

You can trim anything you want but don't be bitching when I point out
I said something. You are becoming another Rod

On Thu, 18 Mar 2021 05:18:03 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:48:16 AM UTC-4, wrote:
On Wed, 17 Mar 2021 05:39:10 -0700 (PDT), trader_4
wrote:

On Tuesday, March 16, 2021 at 10:12:34 PM UTC-4, wrote:
On Tue, 16 Mar 2021 15:31:23 -0700 (PDT), trader_4
wrote:

On Tuesday, March 16, 2021 at 3:18:27 PM UTC-4, wrote:

Funny you weren't making posts like that when Trump gave you your tax cut
and increased spending, turning a $500 bil deficit into a $1 tril one.

Trumpets all suffer from extreme tunnel vision.
Trader has the worst tunnel vision of anyone I know. Everything is
framed around Trump., We could be talking about plywood and Trader
would try to make it about Trump.

I understand Trump is gone. Trader, not so much.

It's impossible to not frame much of what is going on around Trump, because
of the extraordinary damage he's caused to this country, ending in an insurrection.
Like I said, get over it. Trump is GONE.

You're the one that is again in denial. Trump is the undisputed head of the GOP.
Leading Republicans are still behind him, saying that the party needs him going
forward. Trump's trumptard pick, McDaniels, still runs the RNC, even after
delivering unprecedented defeat. Trumpets control the state GOPs and they
are hell bent on punishing anyone that isn't on the Trump train, that dares to
speak out against him. The Republicans want Trump to help them win 2022.



Biden has saddled our kids with a third of Trump's debt in less than 2
months. He says he is not through yet.

Again, funny how you only complain about Biden's debt. Where were all
the posts about "Trumps debt"? Hell Trump added $2.9 tril in Covid relief
in less than one year. Not a peep there, only about Biden's $1.9 tril.

Trump never added $2T in one day.


So, what was this then? Fake news? Alternate facts?

https://www.cnbc.com/2020/03/27/hous...-to-trump.html

"Trump signs $2 trillion coronavirus relief bill as the US tries to prevent economic devastation

President Donald Trump signed a $2 trillion coronavirus relief bill on Friday, as Washington tries to blunt economic destruction from the pandemic ripping through the United States.
The House earlier passed the stimulus package, believed to be the largest in U.S. history, by voice vote, which simply measures if more lawmakers shout for €œaye€� or €œnay€� on whether to support it."

The Democrats passed that bill and loaded it up like the one the other
day. Republicans were largely against it because of the wasteful
spending but it was as good as they were going to get.

On Thu, 18 Mar 2021 07:01:41 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:34:43 AM UTC-4, Ed Pawlowski wrote:
On 3/18/2021 8:21 AM, trader_4 wrote:
On Wednesday, March 17, 2021 at 4:08:40 PM UTC-4, Jim Joyce wrote:

Yep, I saw that. Of course, as a public figure, Trump has no legal basis on
which to stand, but the RNC totally caved. I guess they've seen the WH, the
House, and the Senate slip away and all they can think of is, "We need more
of what this guy is selling."

Actually the RNC didn't cave in, they told Trump to go screw himself on that one.
They said he's a public figure and they can continue to do what they've been doing,
using his name and photos. Next move is up to Trump. But it does show how
despicable and deranged he is. And how he doesn't care about the RNC or country,
only himself.

I'm not sure it was a good idea yet. I can support a real Republican
candidate but not a Trumpster. If you associate yourself with the
shyster you lose my vote. If you distance yourself, you got my vote.

I'm 100% with you Ed. And sadly most of the Republicans politicians are
still supporters.

I suppose it is just because they want someone who can win. I get
criticized here all the time for supporting candidates I agree with
and not just the one with the best chance of winning. (None have been
R or D in over 30 years in the presidential races)
For most of you, it doesn't matter anyway. Your state is either red or
blue and your vote is "wasted" either way. Spend your time looking at
your local races where your vote may make a difference.

On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4, wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the problems.
The "derivatives" were simply pooling mortgages together into securities and
selling shares in them to investors. It was fundamentally sound, not leveraged
and it increased funding for mortgages. The only problem was in the lending
practices where banks and institutions made progressively riskier loans to
people with marginal ability to be able to keep up with the payments on real
estate that had already appreciated sharply and was over valued. And then
when the problems started, it was further complicated by the fact that investors
only knew they had an investment in mortgages, without any way of knowing
how many of those mortgages were in trouble, what the properties were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a lot of
people got evicted. There were huge losses there, because the values of the
properties declined, the real estate market turned poor, millions of properties
were under water, not worth the mortgage value. THAT is what lead to the huge
losses, those were real and would have been widespread whether the mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt), held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim that MBSs
resulted in one mortgage being turned into may times as much in "bets". It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with marginal
ability to pay. ARM loans with low introductory rates, 5% down mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk, but blaming
them for the disaster is silly. It would be like blaming options on GM stock for
being responsible for GM going bankrupt, instead of their low sales, high expenses
and losses. Or blaming futures on soybeans for putting them in the toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.



Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They originated
the mortgage loans, packaged them into MBS and sold them to investors.
And banks have always had exposure to mortgage loan risk, that's their business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I never
heard of *any* of the 2009 bail out money going to foreign investors. It was
a worldwide crisis, because when the core of the US financial system is in crisis, it
will always be a worldwide crisis. I can't help again notice that you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own some of
the stock, then just about every bailout is going to be bailing out foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware that they
repaid all the bailout money, with interest. So did all the banks. Ive told you that
many times here over the years. Yet folks like you keep ignoring it, pretending it
was a taxpayer give away. And now the new claim is that much of it went to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

writes:
On Thu, 18 Mar 2021 05:18:03 -0700 (PDT), trader_4
wrote:



So, what was this then? Fake news? Alternate facts?

https://www.cnbc.com/2020/03/27/hous...-to-trump.html

"Trump signs $2 trillion coronavirus relief bill as the US tries to prevent economic devastation

President Donald Trump signed a $2 trillion coronavirus relief bill on Friday, as Washington tries to blunt economic destruction from the pandemic ripping through the United States.
The House earlier passed the stimulus package, believed to be the largest in U.S. history, by voice vote, which simply measures if more lawmakers shout for €œaye€� or €œnay€� on whether to support it."

The Democrats passed that bill and loaded it up like the one the other
day.

By voice vote? Pull the other one.

On 3/18/2021 1:03 PM, wrote:
On Thu, 18 Mar 2021 07:01:41 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:34:43 AM UTC-4, Ed Pawlowski wrote:
On 3/18/2021 8:21 AM, trader_4 wrote:
On Wednesday, March 17, 2021 at 4:08:40 PM UTC-4, Jim Joyce wrote:

Yep, I saw that. Of course, as a public figure, Trump has no legal basis on
which to stand, but the RNC totally caved. I guess they've seen the WH, the
House, and the Senate slip away and all they can think of is, "We need more
of what this guy is selling."

Actually the RNC didn't cave in, they told Trump to go screw himself on that one.
They said he's a public figure and they can continue to do what they've been doing,
using his name and photos. Next move is up to Trump. But it does show how
despicable and deranged he is. And how he doesn't care about the RNC or country,
only himself.

I'm not sure it was a good idea yet. I can support a real Republican
candidate but not a Trumpster. If you associate yourself with the
shyster you lose my vote. If you distance yourself, you got my vote.

I'm 100% with you Ed. And sadly most of the Republicans politicians are
still supporters.

I suppose it is just because they want someone who can win. I get
criticized here all the time for supporting candidates I agree with
and not just the one with the best chance of winning. (None have been
R or D in over 30 years in the presidential races)
For most of you, it doesn't matter anyway. Your state is either red or
blue and your vote is "wasted" either way. Spend your time looking at
your local races where your vote may make a difference.


I've voted for many of the third part candidates with the idea that
perhaps it sends a message to the R & D guys they are not reaching some
of us. Mostly it is wasted though.

Truth is, few in Congress have the balls to buck the party line and vote
for what their constituents really want. he ones that do are then
vilified by the party. Look at Liz Cheney.

writes:
On Thu, 18 Mar 2021 07:01:41 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:34:43 AM UTC-4, Ed Pawlowski wrote:
On 3/18/2021 8:21 AM, trader_4 wrote:
On Wednesday, March 17, 2021 at 4:08:40 PM UTC-4, Jim Joyce wrote:

Yep, I saw that. Of course, as a public figure, Trump has no legal basis on
which to stand, but the RNC totally caved. I guess they've seen the WH, the
House, and the Senate slip away and all they can think of is, "We need more
of what this guy is selling."

Actually the RNC didn't cave in, they told Trump to go screw himself on that one.
They said he's a public figure and they can continue to do what they've been doing,
using his name and photos. Next move is up to Trump. But it does show how
despicable and deranged he is. And how he doesn't care about the RNC or country,
only himself.

I'm not sure it was a good idea yet. I can support a real Republican
candidate but not a Trumpster. If you associate yourself with the
shyster you lose my vote. If you distance yourself, you got my vote.

I'm 100% with you Ed. And sadly most of the Republicans politicians are
still supporters.

I suppose it is just because they want someone who can win.

The true sign of a fool, indeed. Are you claiming that most
republican voters are fools, then?

On Fri, 19 Mar 2021 03:23:19 +1100, cantankerous trolling geezer Rodent
Speed, the auto-contradicting senile sociopath, blabbered, again:

FLUSH the trolling senile asshole's latest troll**** unread

03:23??? And you are up and trolling ALREADY, you sick pig? Can't you even
TRY to hide how MISERABLE you are, you lonely, sleepless pig?

--
Norman Wells addressing trolling senile Rodent:
"Ah, the voice of scum speaks."
MID:

On Fri, 19 Mar 2021 03:02:36 +1100, cantankerous trolling geezer Rodent
Speed, the auto-contradicting senile sociopath, blabbered, again:

FLUSH the trolling senile asshole's latest troll**** unread

03:02 in Australia??? And you are up and trolling ALREADY? Do sick senile
troll know NO shame AT ALL?

--
Richard about senile Rodent:
"Rod Speed, a bare faced pig and ignorant ****."
MID:

wrote in message
...
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks
and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound, not
leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier loans
to
people with marginal ability to be able to keep up with the payments on
real
estate that had already appreciated sharply and was over valued. And
then
when the problems started, it was further complicated by the fact that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a
lot of
people got evicted. There were huge losses there, because the values of
the
properties declined, the real estate market turned poor, millions of
properties
were under water, not worth the mortgage value. THAT is what lead to
the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in "bets".
It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into
MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk, but
blaming
them for the disaster is silly. It would be like blaming options on GM
stock for
being responsible for GM going bankrupt, instead of their low sales, high
expenses
and losses. Or blaming futures on soybeans for putting them in the
toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you
could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

But that isnt what produced 2008.

Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They
originated
the mortgage loans, packaged them into MBS and sold them to investors.
And banks have always had exposure to mortgage loan risk, that's their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was
similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I
never
heard of *any* of the 2009 bail out money going to foreign investors.
It was
a worldwide crisis, because when the core of the US financial system is
in crisis, it
will always be a worldwide crisis. I can't help again notice that
you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware
that they
repaid all the bailout money, with interest. So did all the banks. Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it went
to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

That's not what produced the meltdown of the financial system.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

Which doesn't say anything like your stupid claim that it was banks gambling
with
depositors money using derivatives that imploded the financial system so
spectacularly.

On Thu, 18 Mar 2021 15:11:16 GMT, (Scott Lurndal)
wrote:

trader_4 writes:
On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4, wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the problems.
The "derivatives" were simply pooling mortgages together into securities and
selling shares in them to investors. It was fundamentally sound, not leveraged
and it increased funding for mortgages. The only problem was in the lending
practices where banks and institutions made progressively riskier loans to
people with marginal ability to be able to keep up with the payments on real
estate that had already appreciated sharply and was over valued. And then
when the problems started, it was further complicated by the fact that investors
only knew they had an investment in mortgages, without any way of knowing
how many of those mortgages were in trouble, what the properties were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a lot of
people got evicted. There were huge losses there, because the values of the
properties declined, the real estate market turned poor, millions of properties
were under water, not worth the mortgage value. THAT is what lead to the huge
losses, those were real and would have been widespread whether the mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt), held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim that MBSs
resulted in one mortgage being turned into may times as much in "bets". It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with marginal
ability to pay. ARM loans with low introductory rates, 5% down mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into MBS
and sold to investors.

Here's a reference for Fretwell to chew on.

https://www.investopedia.com/terms/c/cdo.asp

No problem there. The value is NOT the underlying asset, it is value
derived from that. Basically they take a $50M mortgage package that is
still worth $50M and create another value from that.

"A CDO is a particular type of derivative because, as its name
implies, its value is derived from another underlying asset. These
assets become the collateral if the loan defaults".

To put this in simple terms this is not a mortgage anymore where the
only value is what you can get for the house when the borrower
defaults. Now they have established an dollar value. That is based on
the redemption value of the mortgage at full term. Not many people
stay with a mortgage, full term and that is particularly true of the
"flippers". They plan on being out before the ARM adjusts.
That is your first inflation of the value. Then the owner of the CDO
understands that this may be a shaky investment so he buys insurance
(Credit Default Swap). That is where AIG came in. Then these default
swaps get traded like commodities (Why the 2000 CFMA is important).
By the time they are done that $500K mortgage may be trading at well
over a million or more when you add up all of the paper "Derived" from
it.
When the original mortgage fails, the bank of Iceland or RBS is not
going to foreclose on some LLC in the US and they have no interest in
trying to auction the house, they going after AIG or some other
similar operation that insured that original CDO. That pile of paper
suddenly becomes worthless unless someone bails them out.

On Thu, 18 Mar 2021 17:33:34 GMT, (Scott Lurndal)
wrote:

writes:
On Thu, 18 Mar 2021 07:01:41 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:34:43 AM UTC-4, Ed Pawlowski wrote:
On 3/18/2021 8:21 AM, trader_4 wrote:
On Wednesday, March 17, 2021 at 4:08:40 PM UTC-4, Jim Joyce wrote:

Yep, I saw that. Of course, as a public figure, Trump has no legal basis on
which to stand, but the RNC totally caved. I guess they've seen the WH, the
House, and the Senate slip away and all they can think of is, "We need more
of what this guy is selling."

Actually the RNC didn't cave in, they told Trump to go screw himself on that one.
They said he's a public figure and they can continue to do what they've been doing,
using his name and photos. Next move is up to Trump. But it does show how
despicable and deranged he is. And how he doesn't care about the RNC or country,
only himself.

I'm not sure it was a good idea yet. I can support a real Republican
candidate but not a Trumpster. If you associate yourself with the
shyster you lose my vote. If you distance yourself, you got my vote.

I'm 100% with you Ed. And sadly most of the Republicans politicians are
still supporters.

I suppose it is just because they want someone who can win.

The true sign of a fool, indeed. Are you claiming that most
republican voters are fools, then?

A democrat in a red state is a fool then.
If you are a democrat in Lee County Florida you don't even get a vote
in a lot of local elections because the democrats won't run a
candidate and they are decided in the primary. There are usually a few
no chance write ins that maintain the closed primaries.

On Fri, 19 Mar 2021 04:57:59 +1100, "Rod Speed"
wrote:



wrote in message
.. .
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks
and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound, not
leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier loans
to
people with marginal ability to be able to keep up with the payments on
real
estate that had already appreciated sharply and was over valued. And
then
when the problems started, it was further complicated by the fact that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a
lot of
people got evicted. There were huge losses there, because the values of
the
properties declined, the real estate market turned poor, millions of
properties
were under water, not worth the mortgage value. THAT is what lead to
the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in "bets".
It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into
MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk, but
blaming
them for the disaster is silly. It would be like blaming options on GM
stock for
being responsible for GM going bankrupt, instead of their low sales, high
expenses
and losses. Or blaming futures on soybeans for putting them in the
toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you
could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

But that isnt what produced 2008.

Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They
originated
the mortgage loans, packaged them into MBS and sold them to investors.
And banks have always had exposure to mortgage loan risk, that's their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was
similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I
never
heard of *any* of the 2009 bail out money going to foreign investors.
It was
a worldwide crisis, because when the core of the US financial system is
in crisis, it
will always be a worldwide crisis. I can't help again notice that
you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware
that they
repaid all the bailout money, with interest. So did all the banks. Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it went
to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

That's not what produced the meltdown of the financial system.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

Which doesn't say anything like your stupid claim that it was banks gambling
with
depositors money using derivatives that imploded the financial system so
spectacularly.

You didn't read it did you?

"Increased debt burden or overleveraging
Leverage ratios of investment banks increased significantly between
2003 and 2007.


Prior to the crisis, financial institutions became highly leveraged,
increasing their appetite for risky investments and reducing their
resilience in case of losses. Much of this leverage was achieved using
complex financial instruments such as off-balance sheet securitization
and derivatives, which made it difficult for creditors and regulators
to monitor and try to reduce financial institution risk levels. "

On Thursday, March 18, 2021 at 12:33:29 PM UTC-4, wrote:
On Thu, 18 Mar 2021 04:36:12 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:12:27 AM UTC-4, wrote:
On Wed, 17 Mar 2021 01:31:20 -0500, Jim Joyce
wrote:

On Tue, 16 Mar 2021 22:12:13 -0400, wrote:

On Tue, 16 Mar 2021 15:31:23 -0700 (PDT), trader_4
wrote:

On Tuesday, March 16, 2021 at 3:18:27 PM UTC-4, wrote:

Funny you weren't making posts like that when Trump gave you your tax cut
and increased spending, turning a $500 bil deficit into a $1 tril one.

Trumpets all suffer from extreme tunnel vision.
Trader has the worst tunnel vision of anyone I know. Everything is
framed around Trump., We could be talking about plywood and Trader
would try to make it about Trump.

I understand Trump is gone. Trader, not so much.

It's impossible to not frame much of what is going on around Trump, because
of the extraordinary damage he's caused to this country, ending in an insurrection.

Like I said, get over it. Trump is GONE.

Wishful thinking. Trump is FAR from gone. He still controls the GOP and its
fundraising, he's hanging around and threatening to run again, and he's the
subject of multiple civil and criminal investigations. If he's gone from
your view, that's probably a result of your unwillingness to read about
current events. The rest of us will be dealing with Trump and the aftermath
of his incredible damage to the country for many years to come.
He is NOT the president, nor does he hold any political office or
wield any official powers. He is just a private citizen but he still
seems to be able to scare the **** out of you.

He should scare the **** out of all Americans after seeing the enormous damage
he did to this country over the past 5 years. The damage started while he was a
private citizen and it's continuing as he's a private citizen. Just because he had even
more capacity to do damage, like lying about a stolen election that he lost, destroying the
credibility of our elections, ending in an insurrection, doesn't mean that it's over.
He's the leader of the Republican Party, they are still solidly behind him.


What damage?
The main damage seems to be the assault on the sensibilities of
snowflakes like you.

No surprise that the guy who defended everything that Trump did can't
see the huge damage inflicted, even after the despicable lies about a "stolen
election" that directly lead to the insurrection at the capitol. As I said so many
times over the past four years, all hail Trump!

On Thursday, March 18, 2021 at 12:52:44 PM UTC-4, wrote:
On Thu, 18 Mar 2021 05:18:03 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:48:16 AM UTC-4, wrote:
On Wed, 17 Mar 2021 05:39:10 -0700 (PDT), trader_4
wrote:

On Tuesday, March 16, 2021 at 10:12:34 PM UTC-4, wrote:
On Tue, 16 Mar 2021 15:31:23 -0700 (PDT), trader_4
wrote:

On Tuesday, March 16, 2021 at 3:18:27 PM UTC-4, wrote:

Funny you weren't making posts like that when Trump gave you your tax cut
and increased spending, turning a $500 bil deficit into a $1 tril one.

Trumpets all suffer from extreme tunnel vision.
Trader has the worst tunnel vision of anyone I know. Everything is
framed around Trump., We could be talking about plywood and Trader
would try to make it about Trump.

I understand Trump is gone. Trader, not so much.

It's impossible to not frame much of what is going on around Trump, because
of the extraordinary damage he's caused to this country, ending in an insurrection.
Like I said, get over it. Trump is GONE.

You're the one that is again in denial. Trump is the undisputed head of the GOP.
Leading Republicans are still behind him, saying that the party needs him going
forward. Trump's trumptard pick, McDaniels, still runs the RNC, even after
delivering unprecedented defeat. Trumpets control the state GOPs and they
are hell bent on punishing anyone that isn't on the Trump train, that dares to
speak out against him. The Republicans want Trump to help them win 2022.



Biden has saddled our kids with a third of Trump's debt in less than 2
months. He says he is not through yet.

Again, funny how you only complain about Biden's debt. Where were all
the posts about "Trumps debt"? Hell Trump added $2.9 tril in Covid relief
in less than one year. Not a peep there, only about Biden's $1.9 tril..

Trump never added $2T in one day.


So, what was this then? Fake news? Alternate facts?

https://www.cnbc.com/2020/03/27/hous...-to-trump.html

"Trump signs $2 trillion coronavirus relief bill as the US tries to prevent economic devastation

President Donald Trump signed a $2 trillion coronavirus relief bill on Friday, as Washington tries to blunt economic destruction from the pandemic ripping through the United States.
The House earlier passed the stimulus package, believed to be the largest in U.S. history, by voice vote, which simply measures if more lawmakers shout for €œaye€� or €œnay€� on whether to support it."

The Democrats passed that bill and loaded it up like the one the other
day. Republicans were largely against it because of the wasteful
spending but it was as good as they were going to get.

ROFL. So the Republicans helped pass it, Trump eagerly signs it, and it's
all the Democrats fault. Trump didn't add $2 tril, those pesky Democrats did
it. That's a good one! At least you found some of your math skills, and you're
not arguing that it wasn't a $2 tril Covid bill that Trump signed. But whoaaah!
Biden signs a $1.9 tril one and now suddenly Fretwell is awake.

On Thursday, March 18, 2021 at 1:27:19 PM UTC-4, wrote:
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4, wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the problems.
The "derivatives" were simply pooling mortgages together into securities and
selling shares in them to investors. It was fundamentally sound, not leveraged
and it increased funding for mortgages. The only problem was in the lending
practices where banks and institutions made progressively riskier loans to
people with marginal ability to be able to keep up with the payments on real
estate that had already appreciated sharply and was over valued. And then
when the problems started, it was further complicated by the fact that investors
only knew they had an investment in mortgages, without any way of knowing
how many of those mortgages were in trouble, what the properties were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a lot of
people got evicted. There were huge losses there, because the values of the
properties declined, the real estate market turned poor, millions of properties
were under water, not worth the mortgage value. THAT is what lead to the huge
losses, those were real and would have been widespread whether the mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt), held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim that MBSs
resulted in one mortgage being turned into may times as much in "bets". It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with marginal
ability to pay. ARM loans with low introductory rates, 5% down mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk, but blaming
them for the disaster is silly. It would be like blaming options on GM stock for
being responsible for GM going bankrupt, instead of their low sales, high expenses
and losses. Or blaming futures on soybeans for putting them in the toilet, when
prices dropped because of Trump's tariffs.
AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

See what Scott just posted,, he's trying to help you. And again, almost all the
TARP money was repaid, yet you continue to pretend that it was a "bailout"
implying that the money was given away, that the taxpayers paid for it and
never were reimbursed.




The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.

A CDO is very similar to an MBS, a bundling of debt securities, see Scotts link.




Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

The basic fact is you don't know what you're talking about, again.



Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They originated
the mortgage loans, packaged them into MBS and sold them to investors..
And banks have always had exposure to mortgage loan risk, that's their business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....

Still waiting.....



Much of that bail out money also went to bail out foreign investors..
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I never
heard of *any* of the 2009 bail out money going to foreign investors. It was
a worldwide crisis, because when the core of the US financial system is in crisis, it
will always be a worldwide crisis. I can't help again notice that you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own some of
the stock, then just about every bailout is going to be bailing out foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware that they
repaid all the bailout money, with interest. So did all the banks. Ive told you that
many times here over the years. Yet folks like you keep ignoring it, pretending it
was a taxpayer give away. And now the new claim is that much of it went to foreigners.
The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

Maybe read this



Maybe you should read it? The very first sentences:

"The financial crisis of 2007€“2008, also known as the global financial crisis (GFC), was a severe worldwide financial crisis. Excessive risk-taking by banks,[2] combined with the bursting of the United States housing bubble, caused the values of securities tied to U.S. real estate to plummet and damaged financial institutions globally;[

While the causes of the bubble are disputed, the precipitating factor for the Financial Crisis of 2007€“2008 was the bursting of the United States housing bubble and the subsequent subprime mortgage crisis, which occurred due to a high default rate and resulting foreclosures of mortgage loans, particularly adjustable-rate mortgages. Some or all of the following factors contributed to the crisis:[191][67][68"

About MBS/CDO they say:

As part of the housing and credit booms, the number of mortgage-backed securities (MBS) and collateralized debt obligations (CDO), which derived their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors to invest in the U.S.. housing market. As housing prices declined, these investors reported significant losses.[220]"

Exactly as I have said. They further enumerate the contributing factors as all of these:


"Lax underwriting standards and high mortgage approval rates led to an increase in the number of homebuyers, which drove up housing prices. This appreciation in value led many homeowners to borrow against the equity in their homes as an apparent windfall, leading to over-leveraging.
The high delinquency and default rates by homeowners, particularly those with subprime credit, led to a rapid devaluation of mortgage-backed securities including bundled loan portfolios, derivatives and credit default swaps. As the value of these assets plummeted, buyers for these securities evaporated and banks who were heavily invested in these assets began to experience a liquidity crisis.
Securitization allowed for shifting of risk and lax underwriting standards: Many mortgages were bundled together and formed into new financial instruments called mortgage-backed securities, in a process known as securitization. These bundles could be sold as (ostensibly) low-risk securities partly because they were often backed by credit default swaps insurance.[192] Because mortgage lenders could pass these mortgages (and the associated risks) on in this way, they could and did adopt loose underwriting criteria (due in part to outdated and lax regulation[citation needed][193]).
Lax regulation allowed predatory lending in the private sector,[194][195] especially after the federal government overrode anti-predatory state laws in 2004.[196]
The Community Reinvestment Act (CRA),[197] a 1977 U.S. federal law designed to help low- and moderate-income Americans get mortgage loans encouraged banks to grant mortgages to higher risk families.[198][199][200]
Reckless lending by lenders such as Bank of America's Countrywide Financial unit, caused Fannie Mae and Freddie Mac to lose market share and to respond by lowering their own standards.[201]
Mortgage guarantees by Fannie Mae and Freddie Mac, quasi-government agencies, which purchased many subprime loan securitizations.[202] The implicit guarantee by the U.S. federal government created a moral hazard and contributed to a glut of risky lending.
Government policies that encouraged home ownership, providing easier access to loans for subprime borrowers; overvaluation of bundled subprime mortgages based on the theory that housing prices would continue to escalate; questionable trading practices on behalf of both buyers and sellers; compensation structures by banks and mortgage originators that prioritize short-term deal flow over long-term value creation; and a lack of adequate capital holdings from banks and insurance companies to back the financial commitments they were making.[203][204]
The Wall Street and the Financial Crisis: Anatomy of a Financial Collapse (Levin€“Coburn Report) by the United States Senate concluded that the crisis was the result of "high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street".[205]
In its January 2011 report, the Financial Crisis Inquiry Commission (FCIC) concluded that the financial crisis was avoidable and was caused by:[206][207][208][209][210]
"widespread failures in financial regulation and supervision", including the Federal Reserve's failure to stem the tide of Toxic assets;
"dramatic failures of corporate governance and risk management at many systemically important financial institutions" including too many financial firms acting recklessly and taking on too much risk;
"a combination of excessive borrowing, risky investments, and lack of transparency" by financial institutions and by households that put the financial system on a collision course with crisis;
ill preparation and inconsistent action by government and key policy makers lacking a full understanding of the financial system they oversaw that "added to the uncertainty and panic"
a "systemic breakdown in accountability and ethics" at all levels.
"collapsing mortgage-lending standards and the mortgage securitization pipeline"
deregulation of over-the-counter derivatives, especially credit default swaps
"the failures of credit rating agencies" to correctly price risk
The 1999 Gramm-Leach-Bliley Act, which partially repealed the Glass-Steagall Act effectively removed the separation between investment banks and depository banks in the United States and increased speculation on the part of depository banks.[211]
Credit rating agencies and investors failed to accurately price the financial risk involved with mortgage loan-related financial products, and governments did not adjust their regulatory practices to address changes in financial markets.[212][213][214]
Variations in the cost of borrowing.[215]
Fair value accounting was issued as U.S. accounting standard SFAS 157 in 2006 by the privately run Financial Accounting Standards Board (FASB)€”delegated by the SEC with the task of establishing financial reporting standards.[216] This required that tradable assets such as mortgage securities be valued according to their current market value rather than their historic cost or some future expected value. When the market for such securities became volatile and collapsed, the resulting loss of value had a major financial effect upon the institutions holding them even if they had no immediate plans to sell them.[217]
Easy availability of credit in the US, fueled by large inflows of foreign funds after the 1998 Russian financial crisis and 1997 Asian financial crisis of the 1997€“1998 period, led to a housing construction boom and facilitated debt-financed consumer spending. As banks began to give out more loans to potential home owners, housing prices began to rise. Lax lending standards and rising real estate prices also contributed to the real estate bubble. Loans of various types (e.g., mortgage, credit card, and auto) were easy to obtain and consumers assumed an unprecedented debt load.[218][191][219]
As part of the housing and credit booms, the number of mortgage-backed securities (MBS) and collateralized debt obligations (CDO), which derived their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors to invest in the U.S. housing market. As housing prices declined, these investors reported significant losses.[220]
Falling prices also resulted in homes worth less than the mortgage loans, providing borrowers with a financial incentive to enter foreclosure. Foreclosure levels were elevated until early 2014.[221] drained significant wealth from consumers, losing up to $4.2 trillion[222] Defaults and losses on other loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy. Total losses were estimated in the trillions of U.S. dollars globally.[220]
Financialization - the increased use of leverage in the financial system.
U.S. government policy from the 1970s onward emphasized deregulation to encourage business, which resulted in less oversight of activities and less disclosure of information about new activities undertaken by banks and other evolving financial institutions. Thus, policymakers did not immediately recognize the increasingly important role played by financial institutions such as investment banks and hedge funds, also known as the shadow banking system. Some experts believe these institutions had become as important as commercial (depository) banks in providing credit to the U.S. economy, but they were not subject to the same regulations.[223] These institutions, as well as certain regulated banks, had also assumed significant debt burdens while providing the loans described above and did not have a financial cushion sufficient to absorb large loan defaults or losses.[224] These losses affected the ability of financial institutions to lend, slowing economic activity."

Note they don't say that it was caused by derivatives that leveraged mortgages by many
times.

On Thursday, March 18, 2021 at 3:15:49 PM UTC-4, wrote:
On Thu, 18 Mar 2021 15:11:16 GMT, (Scott Lurndal)
wrote:
trader_4 writes:
On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4, wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the problems.
The "derivatives" were simply pooling mortgages together into securities and
selling shares in them to investors. It was fundamentally sound, not leveraged
and it increased funding for mortgages. The only problem was in the lending
practices where banks and institutions made progressively riskier loans to
people with marginal ability to be able to keep up with the payments on real
estate that had already appreciated sharply and was over valued. And then
when the problems started, it was further complicated by the fact that investors
only knew they had an investment in mortgages, without any way of knowing
how many of those mortgages were in trouble, what the properties were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a lot of
people got evicted. There were huge losses there, because the values of the
properties declined, the real estate market turned poor, millions of properties
were under water, not worth the mortgage value. THAT is what lead to the huge
losses, those were real and would have been widespread whether the mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt), held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim that MBSs
resulted in one mortgage being turned into may times as much in "bets". It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with marginal
ability to pay. ARM loans with low introductory rates, 5% down mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into MBS
and sold to investors.

Here's a reference for Fretwell to chew on.

https://www.investopedia.com/terms/c/cdo.asp
No problem there. The value is NOT the underlying asset, it is value
derived from that. Basically they take a $50M mortgage package that is
still worth $50M and create another value from that.

That's another lie. An MBS, CDO is taking a bunch of mortgages and pooling
them together. You know, 1+1+1 =3 not your twelve.



"A CDO is a particular type of derivative because, as its name
implies, its value is derived from another underlying asset. These
assets become the collateral if the loan defaults".

To put this in simple terms this is not a mortgage anymore where the
only value is what you can get for the house when the borrower
defaults. Now they have established an dollar value.

That;s wrong too. The value of an MBS or CDO is whatever investors are willing
to pay for it based on the underlying assets it represents.


That is based on
the redemption value of the mortgage at full term.

No **** Sherlock, sure the value of a mortgage is partly based on that. The other
factors are the interest rate of the mortgage, the current interest rate, the
probability of default and the value of the underlying asset. MBSs didn't change
that.


Not many people
stay with a mortgage, full term and that is particularly true of the
"flippers". They plan on being out before the ARM adjusts.
That is your first inflation of the value.

Cuckoo for cocoa puffs.

Then the owner of the CDO
understands that this may be a shaky investment so he buys insurance
(Credit Default Swap). That is where AIG came in. Then these default
swaps get traded like commodities (Why the 2000 CFMA is important).
By the time they are done that $500K mortgage may be trading at well
over a million or more when you add up all of the paper "Derived" from
it.


Cuckoo for cocoa puffs. Again, this is like saying that soybean prices plummeted
because there were futures and option on soybeans, not because of Trump's
tariffs that had the soybeans piling up, with no buyers.

When the original mortgage fails, the bank of Iceland or RBS is not
going to foreclose on some LLC in the US and they have no interest in
trying to auction the house, they going after AIG or some other
similar operation that insured that original CDO. That pile of paper
suddenly becomes worthless unless someone bails them out.

Nothing stopped them from foreclosing to recover what they can from
their investment and I would expect that in almost all cases, that is indeed
exactly what happened. The property was foreclosed on, the proceeds were
sent to the investors. You act like because someone pools 1000 mortgages
together, suddenly no one can foreclose. So,by your theory, all the original
owners are still owning and living in those 2009 properties or later sold
them correct?

You really need to just stop. You're about to come out somewhere in China
from the hole you've dug.

On Thursday, March 18, 2021 at 3:56:08 PM UTC-4, wrote:
On Fri, 19 Mar 2021 04:57:59 +1100, "Rod Speed"
wrote:



wrote in message
...
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks
and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound, not
leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier loans
to
people with marginal ability to be able to keep up with the payments on
real
estate that had already appreciated sharply and was over valued. And
then
when the problems started, it was further complicated by the fact that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a
lot of
people got evicted. There were huge losses there, because the values of
the
properties declined, the real estate market turned poor, millions of
properties
were under water, not worth the mortgage value. THAT is what lead to
the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in "bets".
It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into
MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk, but
blaming
them for the disaster is silly. It would be like blaming options on GM
stock for
being responsible for GM going bankrupt, instead of their low sales, high
expenses
and losses. Or blaming futures on soybeans for putting them in the
toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you
could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

But that isnt what produced 2008.

Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They
originated
the mortgage loans, packaged them into MBS and sold them to investors.
And banks have always had exposure to mortgage loan risk, that's their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was
similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I
never
heard of *any* of the 2009 bail out money going to foreign investors.
It was
a worldwide crisis, because when the core of the US financial system is
in crisis, it
will always be a worldwide crisis. I can't help again notice that
you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware
that they
repaid all the bailout money, with interest. So did all the banks. Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it went
to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

That's not what produced the meltdown of the financial system.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

Which doesn't say anything like your stupid claim that it was banks gambling
with
depositors money using derivatives that imploded the financial system so
spectacularly.
You didn't read it did you?

"Increased debt burden or overleveraging
Leverage ratios of investment banks increased significantly between
2003 and 2007.




Prior to the crisis, financial institutions became highly leveraged,
increasing their appetite for risky investments and reducing their
resilience in case of losses. Much of this leverage was achieved using
complex financial instruments such as off-balance sheet securitization
and derivatives, which made it difficult for creditors and regulators
to monitor and try to reduce financial institution risk levels. "

That's the leverage ratio of the bank, not specific to MBSs or anything else.
It just means that the investment bank was less prepared to weather any
unforeseen calamity. The US is more leveraged right now that any time since
WWII. If a war erupts and we are less able to fund it, does that mean that
the increased leveraging caused the war? And note that it doesn't say what
you claimed, which was that derivatives somehow leveraged pooled mortgages
many times over.

wrote in message
...
On Fri, 19 Mar 2021 04:57:59 +1100, "Rod Speed"
wrote:



wrote in message
. ..
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people
got
evicted. The thing that made it a global crisis was that the banks
and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound, not
leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier
loans
to
people with marginal ability to be able to keep up with the payments
on
real
estate that had already appreciated sharply and was over valued. And
then
when the problems started, it was further complicated by the fact
that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a
lot of
people got evicted. There were huge losses there, because the values
of
the
properties declined, the real estate market turned poor, millions of
properties
were under water, not worth the mortgage value. THAT is what lead to
the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in "bets".
It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it.
Appraisers
over valuing properties. Those mortgages were then pooled together into
MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk,
but
blaming
them for the disaster is silly. It would be like blaming options on GM
stock for
being responsible for GM going bankrupt, instead of their low sales,
high
expenses
and losses. Or blaming futures on soybeans for putting them in the
toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you
could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

But that isnt what produced 2008.

Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They
originated
the mortgage loans, packaged them into MBS and sold them to
investors.
And banks have always had exposure to mortgage loan risk, that's
their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this
was
similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign
investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I
never
heard of *any* of the 2009 bail out money going to foreign investors.
It was
a worldwide crisis, because when the core of the US financial system
is
in crisis, it
will always be a worldwide crisis. I can't help again notice that
you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're
unaware
that they
repaid all the bailout money, with interest. So did all the banks.
Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it
went
to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

That's not what produced the meltdown of the financial system.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

Which doesn't say anything like your stupid claim that it was banks
gambling
with
depositors money using derivatives that imploded the financial system so
spectacularly.

You didn't read it did you?

Corse I did.

"Increased debt burden or overleveraging
Leverage ratios of investment banks increased
significantly between 2003 and 2007.

That's not banks gambling with depositors money using derivatives

Prior to the crisis, financial institutions became highly leveraged,
increasing their appetite for risky investments and reducing their
resilience in case of losses. Much of this leverage was achieved using
complex financial instruments such as off-balance sheet securitization
and derivatives, which made it difficult for creditors and regulators
to monitor and try to reduce financial institution risk levels. "

That's a tiny part of what that wiki says is the cause.

Its stupid to claim that the cause of the the implosion of much
of the world financial system was cause by banks gambling with
depositors money using derivatives because Summers got Clinton
to change what banks were allowed to do and that wiki says nothing
even remotely like that.

On Fri, 19 Mar 2021 09:19:24 +1100, cantankerous trolling geezer Rodent
Speed, the auto-contradicting senile sociopath, blabbered, again:

FLUSH senile troll****

--
Marland answering senile Rodent's statement, "I don't leak":
"That¢s because so much **** and ****e emanates from your gob that there is
nothing left to exit normally, your arsehole has clammed shut through disuse
and the end of prick is only clear because you are such a ******."
Message-ID:

On Thu, 18 Mar 2021 09:28:56 -0400, wrote:

On Wed, 17 Mar 2021 23:44:43 -0500, Jim Joyce
wrote:

On Wed, 17 Mar 2021 16:24:57 -0400, wrote:

On Wed, 17 Mar 2021 15:00:33 -0500, Jim Joyce
wrote:

On Wed, 17 Mar 2021 10:07:43 -0400, wrote:

On Wed, 17 Mar 2021 01:11:41 -0500, Jim Joyce
wrote:

On Tue, 16 Mar 2021 21:18:58 -0400, wrote:

It was that asshole Larry Summers along with Greenspan and Rubin that
got us into the housing mess in the first place so I am not sure
taking their advice was wise. They are the ones who convinced Clinton
to "unchain" Wall Street. (repealing most of the New Deal banking
regulations put in place after the previous depression).

I am also not sure the Constitution actually says the government can
just print trillions of dollars every time things get hard. Can you
cite that?

Interesting. You seem to sincerely care about the Constitution and what it
says, yet you had no use for the Constitution when the previous President
was being impeached and tried in the Senate. I guess that makes you
something of a fair weather Constitutional supporter.

I had little use for the way some democrats wanted to interpret parts
of the constitution while ignoring other parts.

Like you're doing right now?

I am looking at more than one phrase

No, you wanted to ignore the Constitution when it talked about House
impeachments and subsequent Senate trials. You wanted to toss the
impeachment trial into the Federal court system, remember? And now that you
agree with something that you think is supported by the Constitution,
you're all on board.

You can't expect to make stuff up and not have anyone notice.

How many examples of trials after the person left office can you come
up with? We have Belknap and Trump. (both failed on constitutional
grounds) Do you have another one?

Where are you with your effort to get the Constitution amended so that
impeachment trials can be handled by the Federal courts rather than the
Senate? Have you made progress?

On Thu, 18 Mar 2021 14:23:53 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:15:49 PM UTC-4, wrote:
On Thu, 18 Mar 2021 15:11:16 GMT, (Scott Lurndal)
wrote:
trader_4 writes:
On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4, wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the problems.
The "derivatives" were simply pooling mortgages together into securities and
selling shares in them to investors. It was fundamentally sound, not leveraged
and it increased funding for mortgages. The only problem was in the lending
practices where banks and institutions made progressively riskier loans to
people with marginal ability to be able to keep up with the payments on real
estate that had already appreciated sharply and was over valued. And then
when the problems started, it was further complicated by the fact that investors
only knew they had an investment in mortgages, without any way of knowing
how many of those mortgages were in trouble, what the properties were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a lot of
people got evicted. There were huge losses there, because the values of the
properties declined, the real estate market turned poor, millions of properties
were under water, not worth the mortgage value. THAT is what lead to the huge
losses, those were real and would have been widespread whether the mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt), held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim that MBSs
resulted in one mortgage being turned into may times as much in "bets". It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with marginal
ability to pay. ARM loans with low introductory rates, 5% down mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into MBS
and sold to investors.

Here's a reference for Fretwell to chew on.

https://www.investopedia.com/terms/c/cdo.asp
No problem there. The value is NOT the underlying asset, it is value
derived from that. Basically they take a $50M mortgage package that is
still worth $50M and create another value from that.

That's another lie. An MBS, CDO is taking a bunch of mortgages and pooling
them together. You know, 1+1+1 =3 not your twelve.



"A CDO is a particular type of derivative because, as its name
implies, its value is derived from another underlying asset. These
assets become the collateral if the loan defaults".

To put this in simple terms this is not a mortgage anymore where the
only value is what you can get for the house when the borrower
defaults. Now they have established an dollar value.

That;s wrong too. The value of an MBS or CDO is whatever investors are willing
to pay for it based on the underlying assets it represents.


That is based on
the redemption value of the mortgage at full term.

No **** Sherlock, sure the value of a mortgage is partly based on that. The other
factors are the interest rate of the mortgage, the current interest rate, the
probability of default and the value of the underlying asset. MBSs didn't change
that.


Not many people
stay with a mortgage, full term and that is particularly true of the
"flippers". They plan on being out before the ARM adjusts.
That is your first inflation of the value.

Cuckoo for cocoa puffs.

Then the owner of the CDO
understands that this may be a shaky investment so he buys insurance
(Credit Default Swap). That is where AIG came in. Then these default
swaps get traded like commodities (Why the 2000 CFMA is important).
By the time they are done that $500K mortgage may be trading at well
over a million or more when you add up all of the paper "Derived" from
it.


Cuckoo for cocoa puffs. Again, this is like saying that soybean prices plummeted
because there were futures and option on soybeans, not because of Trump's
tariffs that had the soybeans piling up, with no buyers.

When the original mortgage fails, the bank of Iceland or RBS is not
going to foreclose on some LLC in the US and they have no interest in
trying to auction the house, they going after AIG or some other
similar operation that insured that original CDO. That pile of paper
suddenly becomes worthless unless someone bails them out.

Nothing stopped them from foreclosing to recover what they can from
their investment and I would expect that in almost all cases, that is indeed
exactly what happened. The property was foreclosed on, the proceeds were
sent to the investors. You act like because someone pools 1000 mortgages
together, suddenly no one can foreclose. So,by your theory, all the original
owners are still owning and living in those 2009 properties or later sold
them correct?

You really need to just stop. You're about to come out somewhere in China
from the hole you've dug.

The people with the tranches got bailed out long before any
foreclosures happened. Some of those properties sat vacant for 5 years
before they finally went through foreclosure.
Explain that if it was all just based on the value of the house.
You keep ignoring the credit default swaps and that was where
companies like AIG came in.

On Thu, 18 Mar 2021 14:28:27 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:56:08 PM UTC-4, wrote:
On Fri, 19 Mar 2021 04:57:59 +1100, "Rod Speed"
wrote:



wrote in message
...
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks
and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound, not
leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier loans
to
people with marginal ability to be able to keep up with the payments on
real
estate that had already appreciated sharply and was over valued. And
then
when the problems started, it was further complicated by the fact that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a
lot of
people got evicted. There were huge losses there, because the values of
the
properties declined, the real estate market turned poor, millions of
properties
were under water, not worth the mortgage value. THAT is what lead to
the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in "bets".
It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into
MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk, but
blaming
them for the disaster is silly. It would be like blaming options on GM
stock for
being responsible for GM going bankrupt, instead of their low sales, high
expenses
and losses. Or blaming futures on soybeans for putting them in the
toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you
could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

But that isnt what produced 2008.

Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They
originated
the mortgage loans, packaged them into MBS and sold them to investors.
And banks have always had exposure to mortgage loan risk, that's their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was
similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I
never
heard of *any* of the 2009 bail out money going to foreign investors.
It was
a worldwide crisis, because when the core of the US financial system is
in crisis, it
will always be a worldwide crisis. I can't help again notice that
you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware
that they
repaid all the bailout money, with interest. So did all the banks. Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it went
to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

That's not what produced the meltdown of the financial system.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

Which doesn't say anything like your stupid claim that it was banks gambling
with
depositors money using derivatives that imploded the financial system so
spectacularly.
You didn't read it did you?

"Increased debt burden or overleveraging
Leverage ratios of investment banks increased significantly between
2003 and 2007.




Prior to the crisis, financial institutions became highly leveraged,
increasing their appetite for risky investments and reducing their
resilience in case of losses. Much of this leverage was achieved using
complex financial instruments such as off-balance sheet securitization
and derivatives, which made it difficult for creditors and regulators
to monitor and try to reduce financial institution risk levels. "

That's the leverage ratio of the bank, not specific to MBSs or anything else.
It just means that the investment bank was less prepared to weather any
unforeseen calamity. The US is more leveraged right now that any time since
WWII. If a war erupts and we are less able to fund it, does that mean that
the increased leveraging caused the war? And note that it doesn't say what
you claimed, which was that derivatives somehow leveraged pooled mortgages
many times over.


The selling and speculation on the credit default swaps is where the
leveraging came in and banks were buying into that market with
borrowed money.

On 03/18/2021 11:33 AM, Ed Pawlowski wrote:
Truth is, few in Congress have the balls to buck the party line and vote
for what their constituents really want. he ones that do are then
vilified by the party. Look at Liz Cheney.

That rotten apple didn't fall far from the diseased tree.

wrote in message
...
On Thu, 18 Mar 2021 14:23:53 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:15:49 PM UTC-4, wrote:
On Thu, 18 Mar 2021 15:11:16 GMT, (Scott Lurndal)
wrote:
trader_4 writes:
On Thursday, March 18, 2021 at 9:35:25 AM UTC-4,
wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people
got
evicted. The thing that made it a global crisis was that the
banks and
mortgage companies leveraged these mortgages with derivatives
that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound,
not leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier
loans to
people with marginal ability to be able to keep up with the
payments on real
estate that had already appreciated sharply and was over valued.
And then
when the problems started, it was further complicated by the fact
that investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties
were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant
a lot of
people got evicted. There were huge losses there, because the
values of the
properties declined, the real estate market turned poor, millions
of properties
were under water, not worth the mortgage value. THAT is what lead
to the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One
mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in
"bets". It
was not a leverage problem with MBSs, it was a leverage problem with
the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it.
Appraisers
over valuing properties. Those mortgages were then pooled together
into MBS
and sold to investors.

Here's a reference for Fretwell to chew on.

https://www.investopedia.com/terms/c/cdo.asp
No problem there. The value is NOT the underlying asset, it is value
derived from that. Basically they take a $50M mortgage package that is
still worth $50M and create another value from that.

That's another lie. An MBS, CDO is taking a bunch of mortgages and
pooling
them together. You know, 1+1+1 =3 not your twelve.



"A CDO is a particular type of derivative because, as its name
implies, its value is derived from another underlying asset. These
assets become the collateral if the loan defaults".

To put this in simple terms this is not a mortgage anymore where the
only value is what you can get for the house when the borrower
defaults. Now they have established an dollar value.

That;s wrong too. The value of an MBS or CDO is whatever investors are
willing
to pay for it based on the underlying assets it represents.


That is based on
the redemption value of the mortgage at full term.

No **** Sherlock, sure the value of a mortgage is partly based on that.
The other
factors are the interest rate of the mortgage, the current interest rate,
the
probability of default and the value of the underlying asset. MBSs didn't
change
that.


Not many people
stay with a mortgage, full term and that is particularly true of the
"flippers". They plan on being out before the ARM adjusts.
That is your first inflation of the value.

Cuckoo for cocoa puffs.

Then the owner of the CDO
understands that this may be a shaky investment so he buys insurance
(Credit Default Swap). That is where AIG came in. Then these default
swaps get traded like commodities (Why the 2000 CFMA is important).
By the time they are done that $500K mortgage may be trading at well
over a million or more when you add up all of the paper "Derived" from
it.


Cuckoo for cocoa puffs. Again, this is like saying that soybean prices
plummeted
because there were futures and option on soybeans, not because of Trump's
tariffs that had the soybeans piling up, with no buyers.

When the original mortgage fails, the bank of Iceland or RBS is not
going to foreclose on some LLC in the US and they have no interest in
trying to auction the house, they going after AIG or some other
similar operation that insured that original CDO. That pile of paper
suddenly becomes worthless unless someone bails them out.

Nothing stopped them from foreclosing to recover what they can from
their investment and I would expect that in almost all cases, that is
indeed
exactly what happened. The property was foreclosed on, the proceeds were
sent to the investors. You act like because someone pools 1000
mortgages
together, suddenly no one can foreclose. So,by your theory, all the
original
owners are still owning and living in those 2009 properties or later sold
them correct?

You really need to just stop. You're about to come out somewhere in
China
from the hole you've dug.

The people with the tranches got bailed out
long before any foreclosures happened.

Because the bailouts needed to happen quickly
to avoid another great depression or worse.

Some of those properties sat vacant for 5 years
before they finally went through foreclosure.

Because it made sense to wait to foreclose until recovery had happened.

Explain that if it was all just based on the value of the house.

He never said that.

You keep ignoring the credit default swaps and
that was where companies like AIG came in.

All irrelevant to your stupid claim that the implosion of much
of the world financial system was cause by banks gambling
with depositors money using derivatives because Summers
got Clinton to change what banks were allowed to do.

wrote in message
...
On Thu, 18 Mar 2021 14:28:27 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:56:08 PM UTC-4, wrote:
On Fri, 19 Mar 2021 04:57:59 +1100, "Rod Speed"
wrote:



wrote in message
...
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4,
wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of
people got
evicted. The thing that made it a global crisis was that the
banks
and
mortgage companies leveraged these mortgages with derivatives
that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound,
not
leveraged
and it increased funding for mortgages. The only problem was in
the
lending
practices where banks and institutions made progressively riskier
loans
to
people with marginal ability to be able to keep up with the
payments on
real
estate that had already appreciated sharply and was over valued.
And
then
when the problems started, it was further complicated by the fact
that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties
were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant
a
lot of
people got evicted. There were huge losses there, because the
values of
the
properties declined, the real estate market turned poor, millions
of
properties
were under water, not worth the mortgage value. THAT is what lead
to
the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went
bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One
mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in
"bets".
It
was not a leverage problem with MBSs, it was a leverage problem with
the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people
with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it.
Appraisers
over valuing properties. Those mortgages were then pooled together
into
MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk,
but
blaming
them for the disaster is silly. It would be like blaming options on
GM
stock for
being responsible for GM going bankrupt, instead of their low sales,
high
expenses
and losses. Or blaming futures on soybeans for putting them in the
toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like
to
read.

I see part of your problem. You think movies are factual. Maybe you
could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

But that isnt what produced 2008.

Commercial
banks like BoA were heavily invested in them with depositor
money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS.
They
originated
the mortgage loans, packaged them into MBS and sold them to
investors.
And banks have always had exposure to mortgage loan risk, that's
their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie,
this was
similar.

They were exposed because of vehicles like AIG that sold insurance
on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign
investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS.
I
never
heard of *any* of the 2009 bail out money going to foreign
investors.
It was
a worldwide crisis, because when the core of the US financial
system is
in crisis, it
will always be a worldwide crisis. I can't help again notice that
you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other
similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners
own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're
unaware
that they
repaid all the bailout money, with interest. So did all the banks.
Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it
went
to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

That's not what produced the meltdown of the financial system.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

Which doesn't say anything like your stupid claim that it was banks
gambling
with
depositors money using derivatives that imploded the financial system
so
spectacularly.
You didn't read it did you?

"Increased debt burden or overleveraging
Leverage ratios of investment banks increased significantly between
2003 and 2007.




Prior to the crisis, financial institutions became highly leveraged,
increasing their appetite for risky investments and reducing their
resilience in case of losses. Much of this leverage was achieved using
complex financial instruments such as off-balance sheet securitization
and derivatives, which made it difficult for creditors and regulators
to monitor and try to reduce financial institution risk levels. "

That's the leverage ratio of the bank, not specific to MBSs or anything
else.
It just means that the investment bank was less prepared to weather any
unforeseen calamity. The US is more leveraged right now that any time
since
WWII. If a war erupts and we are less able to fund it, does that mean
that
the increased leveraging caused the war? And note that it doesn't say
what
you claimed, which was that derivatives somehow leveraged pooled mortgages
many times over.


The selling and speculation on the credit default swaps is where the
leveraging came in and banks were buying into that market with
borrowed money.

Still nothing like your stupid claim that the implosion of
much of the world financial system was cause by banks
gambling with depositors money using derivatives because
Summers got Clinton to change what banks were allowed to do.

On Fri, 19 Mar 2021 14:28:19 +1100, cantankerous trolling geezer Rodent
Speed, the auto-contradicting senile sociopath, blabbered, again:

FLUSH 257!!! lines of the trolling senile asshole's latest troll****
unread

Learn to trim your quotes, senile troll from Oz!

--
John addressing the senile Australian pest:
"You are a complete idiot. But you make me larf. LOL"
MID:

On Thursday, March 18, 2021 at 10:48:02 PM UTC-4, wrote:
On Thu, 18 Mar 2021 14:23:53 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:15:49 PM UTC-4, wrote:
On Thu, 18 Mar 2021 15:11:16 GMT, (Scott Lurndal)
wrote:
trader_4 writes:
On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4, wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the problems.
The "derivatives" were simply pooling mortgages together into securities and
selling shares in them to investors. It was fundamentally sound, not leveraged
and it increased funding for mortgages. The only problem was in the lending
practices where banks and institutions made progressively riskier loans to
people with marginal ability to be able to keep up with the payments on real
estate that had already appreciated sharply and was over valued. And then
when the problems started, it was further complicated by the fact that investors
only knew they had an investment in mortgages, without any way of knowing
how many of those mortgages were in trouble, what the properties were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a lot of
people got evicted. There were huge losses there, because the values of the
properties declined, the real estate market turned poor, millions of properties
were under water, not worth the mortgage value. THAT is what lead to the huge
losses, those were real and would have been widespread whether the mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt), held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim that MBSs
resulted in one mortgage being turned into may times as much in "bets". It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with marginal
ability to pay. ARM loans with low introductory rates, 5% down mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into MBS
and sold to investors.

Here's a reference for Fretwell to chew on.

https://www.investopedia.com/terms/c/cdo.asp
No problem there. The value is NOT the underlying asset, it is value
derived from that. Basically they take a $50M mortgage package that is
still worth $50M and create another value from that.

That's another lie. An MBS, CDO is taking a bunch of mortgages and pooling
them together. You know, 1+1+1 =3 not your twelve.



"A CDO is a particular type of derivative because, as its name
implies, its value is derived from another underlying asset. These
assets become the collateral if the loan defaults".

To put this in simple terms this is not a mortgage anymore where the
only value is what you can get for the house when the borrower
defaults. Now they have established an dollar value.

That;s wrong too. The value of an MBS or CDO is whatever investors are willing
to pay for it based on the underlying assets it represents.


That is based on
the redemption value of the mortgage at full term.

No **** Sherlock, sure the value of a mortgage is partly based on that. The other
factors are the interest rate of the mortgage, the current interest rate, the
probability of default and the value of the underlying asset. MBSs didn't change
that.


Not many people
stay with a mortgage, full term and that is particularly true of the
"flippers". They plan on being out before the ARM adjusts.
That is your first inflation of the value.

Cuckoo for cocoa puffs.

Then the owner of the CDO
understands that this may be a shaky investment so he buys insurance
(Credit Default Swap). That is where AIG came in. Then these default
swaps get traded like commodities (Why the 2000 CFMA is important).
By the time they are done that $500K mortgage may be trading at well
over a million or more when you add up all of the paper "Derived" from
it.


Cuckoo for cocoa puffs. Again, this is like saying that soybean prices plummeted
because there were futures and option on soybeans, not because of Trump's
tariffs that had the soybeans piling up, with no buyers.

When the original mortgage fails, the bank of Iceland or RBS is not
going to foreclose on some LLC in the US and they have no interest in
trying to auction the house, they going after AIG or some other
similar operation that insured that original CDO. That pile of paper
suddenly becomes worthless unless someone bails them out.

Nothing stopped them from foreclosing to recover what they can from
their investment and I would expect that in almost all cases, that is indeed
exactly what happened. The property was foreclosed on, the proceeds were
sent to the investors. You act like because someone pools 1000 mortgages
together, suddenly no one can foreclose. So,by your theory, all the original
owners are still owning and living in those 2009 properties or later sold
them correct?

You really need to just stop. You're about to come out somewhere in China
from the hole you've dug.
The people with the tranches got bailed out long before any
foreclosures happened.

Again, TARP was all repaid back, they were loans or equity positions. If you got
temporary, emergency help because your financial situation was dire, would you
then pay it back and just forget about what you were owed that caused it?
I don't think so.



Some of those properties sat vacant for 5 years
before they finally went through foreclosure.
Explain that if it was all just based on the value of the house.

1+1 = 7 again. The length of a foreclosure isn't determined by the value of
the house. Foreclosures can be dragged out by legal maneuvers, filing for
bankruptcy and at the time, there were foreclosures everywhere with the
courts and whole process overloaded.




You keep ignoring the credit default swaps and that was where
companies like AIG came in.

You're ignoring that all that did was transfer risk from one party to another for
a premium. It was like insurance. When a house burns down, did the insurance
cause it?

On Thursday, March 18, 2021 at 10:49:50 PM UTC-4, wrote:
On Thu, 18 Mar 2021 14:28:27 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:56:08 PM UTC-4, wrote:
On Fri, 19 Mar 2021 04:57:59 +1100, "Rod Speed"
wrote:



wrote in message
...
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks
and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound, not
leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier loans
to
people with marginal ability to be able to keep up with the payments on
real
estate that had already appreciated sharply and was over valued. And
then
when the problems started, it was further complicated by the fact that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a
lot of
people got evicted. There were huge losses there, because the values of
the
properties declined, the real estate market turned poor, millions of
properties
were under water, not worth the mortgage value. THAT is what lead to
the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in "bets".
It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into
MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk, but
blaming
them for the disaster is silly. It would be like blaming options on GM
stock for
being responsible for GM going bankrupt, instead of their low sales, high
expenses
and losses. Or blaming futures on soybeans for putting them in the
toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you
could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

But that isnt what produced 2008.

Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They
originated
the mortgage loans, packaged them into MBS and sold them to investors.
And banks have always had exposure to mortgage loan risk, that's their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was
similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I
never
heard of *any* of the 2009 bail out money going to foreign investors.
It was
a worldwide crisis, because when the core of the US financial system is
in crisis, it
will always be a worldwide crisis. I can't help again notice that
you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware
that they
repaid all the bailout money, with interest. So did all the banks. Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it went
to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

That's not what produced the meltdown of the financial system.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

Which doesn't say anything like your stupid claim that it was banks gambling
with
depositors money using derivatives that imploded the financial system so
spectacularly.
You didn't read it did you?

"Increased debt burden or overleveraging
Leverage ratios of investment banks increased significantly between
2003 and 2007.




Prior to the crisis, financial institutions became highly leveraged,
increasing their appetite for risky investments and reducing their
resilience in case of losses. Much of this leverage was achieved using
complex financial instruments such as off-balance sheet securitization
and derivatives, which made it difficult for creditors and regulators
to monitor and try to reduce financial institution risk levels. "

That's the leverage ratio of the bank, not specific to MBSs or anything else.
It just means that the investment bank was less prepared to weather any
unforeseen calamity. The US is more leveraged right now that any time since
WWII. If a war erupts and we are less able to fund it, does that mean that
the increased leveraging caused the war? And note that it doesn't say what
you claimed, which was that derivatives somehow leveraged pooled mortgages
many times over.

The selling and speculation on the credit default swaps is where the
leveraging came in and banks were buying into that market with
borrowed money.

Show us some examples of banks borrowing money and using it to by CDSs.
I'm betting you can't because I don't believe it happened, I don't believe banks
even bought CDSs. Some banks might have SOLD them to reduce risk, but
I highly doubt they were buying them to take on risk. But show us what you;ve got.....

On 3/18/2021 12:23 PM, Rod Speed wrote:



despite seeing what working with the Trump
magic has produced for the past five years.

It produced millions more voting for
Trump than did the first time, stupid.

Yes, he is a showman, shyster, like some of those ministers flying in
their private jets.


I predicted five years ago that Trump would result
in a disaster for Republicans and conservatives.

But it didnt. He did lose, but not by much.

But I didn't see it ending with them continuing
to follow him down the toilet.



The Republicans want more.

They realise that Joe will inevitably **** up and that
they could easily see the repugs back in control
of all but the presidency after the half terms.

The unfortunate consequence of getting rid of Trump was getting Joe.
Not the best choice.

In article , says...

The unfortunate consequence of getting rid of Trump was getting Joe.
Not the best choice.



I can see how many would want to get rid of Trump, but just can not
understand how out of all the other democrats that they picked Biden to
even run. The only reason I can think of is that no democrat that
really wanted to be president wanted to go against Trump after what
happened with Clinton. She was a big favoite tuil the votes came in.

Maybe the better democrats thought that would hapen again and did not
want a loss on their record. That or as I think, the democrats will
somehow force Biden out and move Harris up .

Heywood wrote
Rod Speed wrote

despite seeing what working with the Trump
magic has produced for the past five years.

It produced millions more voting for
Trump than did the first time, stupid.

Yes, he is a showman, shyster, like some of those ministers flying in
their private jets.

I predicted five years ago that Trump would result
in a disaster for Republicans and conservatives.

But it didnt. He did lose, but not by much.

But I didn't see it ending with them continuing
to follow him down the toilet.

The Republicans want more.

They realise that Joe will inevitably **** up and that they could easily
see the repugs back in control of all but the presidency after the half
terms.

The unfortunate consequence of getting rid of Trump was getting Joe. Not
the best choice.

Yeah, the american political system is completely broken when the best
it can manage is Trump and Biden and Trump and Clinton before that.

Fortunately america will survive that fine.

Ralph Mowery wrote
wrote

The unfortunate consequence of getting rid of Trump was getting Joe.
Not the best choice.

I can see how many would want to get rid of Trump,
but just can not understand how out of all the other
democrats that they picked Biden to even run.

Essentially they were so effective at ensuring that AOC and
Sanders couldn't get to run that they ended up with Biden.
They had the same problem with that stupid Clinton woman.

The only reason I can think of is that no democrat that really
wanted to be president wanted to go against Trump after what
happened with Clinton. She was a big favoite tuil the votes came in.

I don't buy that she was given that she lost the first time around.

Maybe the better democrats thought that would
hapen again and did not want a loss on their record.

More that they though Biden would appeal more to the voters
and they did get that right. Clinton never did appeal to the voters.

That or as I think, the democrats will somehow
force Biden out and move Harris up .

Not even possible unless he dies or ends up as a vegetable etc.

On Sat, 20 Mar 2021 04:42:57 +1100, cantankerous trolling geezer Rodent
Speed, the auto-contradicting senile sociopath, blabbered, again:

FLUSH the trolling senile asshole's latest troll**** unread

--
The Natural Philosopher about senile Rodent:
"Rod speed is not a Brexiteer. He is an Australian troll and arsehole."
Message-ID:

On Thu, 18 Mar 2021 21:43:49 -0500, Jim Joyce
wrote:

On Thu, 18 Mar 2021 09:28:56 -0400, wrote:

On Wed, 17 Mar 2021 23:44:43 -0500, Jim Joyce
wrote:

On Wed, 17 Mar 2021 16:24:57 -0400, wrote:

On Wed, 17 Mar 2021 15:00:33 -0500, Jim Joyce
wrote:

On Wed, 17 Mar 2021 10:07:43 -0400, wrote:

On Wed, 17 Mar 2021 01:11:41 -0500, Jim Joyce
wrote:

On Tue, 16 Mar 2021 21:18:58 -0400, wrote:

It was that asshole Larry Summers along with Greenspan and Rubin that
got us into the housing mess in the first place so I am not sure
taking their advice was wise. They are the ones who convinced Clinton
to "unchain" Wall Street. (repealing most of the New Deal banking
regulations put in place after the previous depression).

I am also not sure the Constitution actually says the government can
just print trillions of dollars every time things get hard. Can you
cite that?

Interesting. You seem to sincerely care about the Constitution and what it
says, yet you had no use for the Constitution when the previous President
was being impeached and tried in the Senate. I guess that makes you
something of a fair weather Constitutional supporter.

I had little use for the way some democrats wanted to interpret parts
of the constitution while ignoring other parts.

Like you're doing right now?

I am looking at more than one phrase

No, you wanted to ignore the Constitution when it talked about House
impeachments and subsequent Senate trials. You wanted to toss the
impeachment trial into the Federal court system, remember? And now that you
agree with something that you think is supported by the Constitution,
you're all on board.

You can't expect to make stuff up and not have anyone notice.

How many examples of trials after the person left office can you come
up with? We have Belknap and Trump. (both failed on constitutional
grounds) Do you have another one?

Where are you with your effort to get the Constitution amended so that
impeachment trials can be handled by the Federal courts rather than the
Senate? Have you made progress?
No amendment necessary.
The constitution wrote the impeachment language to get around the
immunity the president has and it specifically states that once he is
out of office this could be pursued in federal court.
Trump was out of office when the senate trial started, what did they
hope to win? If they really had a case it should have been in court,
not a partisan political stunt with no real consequence.

On Fri, 19 Mar 2021 14:26:19 +1100, "Rod Speed"
wrote:



wrote in message
.. .
On Thu, 18 Mar 2021 14:23:53 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:15:49 PM UTC-4, wrote:
On Thu, 18 Mar 2021 15:11:16 GMT, (Scott Lurndal)
wrote:
trader_4 writes:
On Thursday, March 18, 2021 at 9:35:25 AM UTC-4,
wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people
got
evicted. The thing that made it a global crisis was that the
banks and
mortgage companies leveraged these mortgages with derivatives
that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound,
not leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier
loans to
people with marginal ability to be able to keep up with the
payments on real
estate that had already appreciated sharply and was over valued.
And then
when the problems started, it was further complicated by the fact
that investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties
were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant
a lot of
people got evicted. There were huge losses there, because the
values of the
properties declined, the real estate market turned poor, millions
of properties
were under water, not worth the mortgage value. THAT is what lead
to the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One
mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in
"bets". It
was not a leverage problem with MBSs, it was a leverage problem with
the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it.
Appraisers
over valuing properties. Those mortgages were then pooled together
into MBS
and sold to investors.

Here's a reference for Fretwell to chew on.

https://www.investopedia.com/terms/c/cdo.asp
No problem there. The value is NOT the underlying asset, it is value
derived from that. Basically they take a $50M mortgage package that is
still worth $50M and create another value from that.

That's another lie. An MBS, CDO is taking a bunch of mortgages and
pooling
them together. You know, 1+1+1 =3 not your twelve.



"A CDO is a particular type of derivative because, as its name
implies, its value is derived from another underlying asset. These
assets become the collateral if the loan defaults".

To put this in simple terms this is not a mortgage anymore where the
only value is what you can get for the house when the borrower
defaults. Now they have established an dollar value.

That;s wrong too. The value of an MBS or CDO is whatever investors are
willing
to pay for it based on the underlying assets it represents.


That is based on
the redemption value of the mortgage at full term.

No **** Sherlock, sure the value of a mortgage is partly based on that.
The other
factors are the interest rate of the mortgage, the current interest rate,
the
probability of default and the value of the underlying asset. MBSs didn't
change
that.


Not many people
stay with a mortgage, full term and that is particularly true of the
"flippers". They plan on being out before the ARM adjusts.
That is your first inflation of the value.

Cuckoo for cocoa puffs.

Then the owner of the CDO
understands that this may be a shaky investment so he buys insurance
(Credit Default Swap). That is where AIG came in. Then these default
swaps get traded like commodities (Why the 2000 CFMA is important).
By the time they are done that $500K mortgage may be trading at well
over a million or more when you add up all of the paper "Derived" from
it.


Cuckoo for cocoa puffs. Again, this is like saying that soybean prices
plummeted
because there were futures and option on soybeans, not because of Trump's
tariffs that had the soybeans piling up, with no buyers.

When the original mortgage fails, the bank of Iceland or RBS is not
going to foreclose on some LLC in the US and they have no interest in
trying to auction the house, they going after AIG or some other
similar operation that insured that original CDO. That pile of paper
suddenly becomes worthless unless someone bails them out.

Nothing stopped them from foreclosing to recover what they can from
their investment and I would expect that in almost all cases, that is
indeed
exactly what happened. The property was foreclosed on, the proceeds were
sent to the investors. You act like because someone pools 1000
mortgages
together, suddenly no one can foreclose. So,by your theory, all the
original
owners are still owning and living in those 2009 properties or later sold
them correct?

You really need to just stop. You're about to come out somewhere in
China
from the hole you've dug.

The people with the tranches got bailed out
long before any foreclosures happened.

Because the bailouts needed to happen quickly
to avoid another great depression or worse.

Some of those properties sat vacant for 5 years
before they finally went through foreclosure.

Because it made sense to wait to foreclose until recovery had happened.

Certainly, for the banks anyway who still held the mortgages
themselves but the investors in the derivatives had already been made
whole.

Explain that if it was all just based on the value of the house.

He never said that.

He said the value of the mortgages was not leveraged.

You keep ignoring the credit default swaps and
that was where companies like AIG came in.

All irrelevant to your stupid claim that the implosion of much
of the world financial system was cause by banks gambling
with depositors money using derivatives because Summers
got Clinton to change what banks were allowed to do.


Argue that with people smarter than both of us. I will just say if it
wasn't because of the deregulation on where commercial banks could
invest and how derivatives were treated as commodity futures by CFMA
we would not have needed Dodd Frank.

On Fri, 19 Mar 2021 05:23:04 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 10:48:02 PM UTC-4, wrote:
On Thu, 18 Mar 2021 14:23:53 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:15:49 PM UTC-4, wrote:
On Thu, 18 Mar 2021 15:11:16 GMT, (Scott Lurndal)
wrote:
trader_4 writes:
On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4, wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the problems.
The "derivatives" were simply pooling mortgages together into securities and
selling shares in them to investors. It was fundamentally sound, not leveraged
and it increased funding for mortgages. The only problem was in the lending
practices where banks and institutions made progressively riskier loans to
people with marginal ability to be able to keep up with the payments on real
estate that had already appreciated sharply and was over valued. And then
when the problems started, it was further complicated by the fact that investors
only knew they had an investment in mortgages, without any way of knowing
how many of those mortgages were in trouble, what the properties were really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a lot of
people got evicted. There were huge losses there, because the values of the
properties declined, the real estate market turned poor, millions of properties
were under water, not worth the mortgage value. THAT is what lead to the huge
losses, those were real and would have been widespread whether the mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt), held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim that MBSs
resulted in one mortgage being turned into may times as much in "bets". It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with marginal
ability to pay. ARM loans with low introductory rates, 5% down mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into MBS
and sold to investors.

Here's a reference for Fretwell to chew on.

https://www.investopedia.com/terms/c/cdo.asp
No problem there. The value is NOT the underlying asset, it is value
derived from that. Basically they take a $50M mortgage package that is
still worth $50M and create another value from that.

That's another lie. An MBS, CDO is taking a bunch of mortgages and pooling
them together. You know, 1+1+1 =3 not your twelve.



"A CDO is a particular type of derivative because, as its name
implies, its value is derived from another underlying asset. These
assets become the collateral if the loan defaults".

To put this in simple terms this is not a mortgage anymore where the
only value is what you can get for the house when the borrower
defaults. Now they have established an dollar value.

That;s wrong too. The value of an MBS or CDO is whatever investors are willing
to pay for it based on the underlying assets it represents.


That is based on
the redemption value of the mortgage at full term.

No **** Sherlock, sure the value of a mortgage is partly based on that. The other
factors are the interest rate of the mortgage, the current interest rate, the
probability of default and the value of the underlying asset. MBSs didn't change
that.


Not many people
stay with a mortgage, full term and that is particularly true of the
"flippers". They plan on being out before the ARM adjusts.
That is your first inflation of the value.

Cuckoo for cocoa puffs.

Then the owner of the CDO
understands that this may be a shaky investment so he buys insurance
(Credit Default Swap). That is where AIG came in. Then these default
swaps get traded like commodities (Why the 2000 CFMA is important).
By the time they are done that $500K mortgage may be trading at well
over a million or more when you add up all of the paper "Derived" from
it.


Cuckoo for cocoa puffs. Again, this is like saying that soybean prices plummeted
because there were futures and option on soybeans, not because of Trump's
tariffs that had the soybeans piling up, with no buyers.

When the original mortgage fails, the bank of Iceland or RBS is not
going to foreclose on some LLC in the US and they have no interest in
trying to auction the house, they going after AIG or some other
similar operation that insured that original CDO. That pile of paper
suddenly becomes worthless unless someone bails them out.

Nothing stopped them from foreclosing to recover what they can from
their investment and I would expect that in almost all cases, that is indeed
exactly what happened. The property was foreclosed on, the proceeds were
sent to the investors. You act like because someone pools 1000 mortgages
together, suddenly no one can foreclose. So,by your theory, all the original
owners are still owning and living in those 2009 properties or later sold
them correct?

You really need to just stop. You're about to come out somewhere in China
from the hole you've dug.
The people with the tranches got bailed out long before any
foreclosures happened.

Again, TARP was all repaid back, they were loans or equity positions. If you got
temporary, emergency help because your financial situation was dire, would you
then pay it back and just forget about what you were owed that caused it?
I don't think so.



Some of those properties sat vacant for 5 years
before they finally went through foreclosure.
Explain that if it was all just based on the value of the house.

1+1 = 7 again. The length of a foreclosure isn't determined by the value of
the house. Foreclosures can be dragged out by legal maneuvers, filing for
bankruptcy and at the time, there were foreclosures everywhere with the
courts and whole process overloaded.




You keep ignoring the credit default swaps and that was where
companies like AIG came in.

You're ignoring that all that did was transfer risk from one party to another for
a premium. It was like insurance. When a house burns down, did the insurance
cause it?


The insurance became an investment itself, having nothing to do with
the original mortgage and traded at much more money.

Do a little homework yourself. What was the total value of failed
mortgages 2005-9? (Maybe a $T)
What was the total economic damage caused by all of the MBSs, CDOs,
and Credit Default Swaps? (Several $T)

The difference is the leverage I was talking about.

On Fri, 19 Mar 2021 05:27:55 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 10:49:50 PM UTC-4, wrote:
On Thu, 18 Mar 2021 14:28:27 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 3:56:08 PM UTC-4, wrote:
On Fri, 19 Mar 2021 04:57:59 +1100, "Rod Speed"
wrote:



wrote in message
...
On Thu, 18 Mar 2021 07:25:44 -0700 (PDT), trader_4
wrote:

On Thursday, March 18, 2021 at 9:35:25 AM UTC-4, wrote:
On Thu, 18 Mar 2021 04:30:54 -0700 (PDT), trader_4
wrote:

On Wednesday, March 17, 2021 at 10:04:25 AM UTC-4,
wrote:

Clueless again.
The housing failure alone would have simply meant a lot of people got
evicted. The thing that made it a global crisis was that the banks
and
mortgage companies leveraged these mortgages with derivatives that
were worth many times more than the underlying mortgages.

That's wrong too. AFAIK, there was no leveraging that caused the
problems.
The "derivatives" were simply pooling mortgages together into
securities and
selling shares in them to investors. It was fundamentally sound, not
leveraged
and it increased funding for mortgages. The only problem was in the
lending
practices where banks and institutions made progressively riskier loans
to
people with marginal ability to be able to keep up with the payments on
real
estate that had already appreciated sharply and was over valued. And
then
when the problems started, it was further complicated by the fact that
investors
only knew they had an investment in mortgages, without any way of
knowing
how many of those mortgages were in trouble, what the properties were
really
worth at the moment, etc.

And absent the MBSs, it most certainly would not have simply meant a
lot of
people got evicted. There were huge losses there, because the values of
the
properties declined, the real estate market turned poor, millions of
properties
were under water, not worth the mortgage value. THAT is what lead to
the huge
losses, those were real and would have been widespread whether the
mortgages
were part of MBSs, held by Fannie or Freddie (which went bankrupt),
held by banks,
or held by the seller.


You really need to read more about what derivatives are. One mortgage
ended up being many times as much in "bets" for and against that
mortgage.

I know exactly what derivatives are. You show us proof for your claim
that MBSs
resulted in one mortgage being turned into may times as much in "bets".
It
was not a leverage problem with MBSs, it was a leverage problem with the
mortgages themselves. It was not the MBSs that created the problem.
The problem was lenders making increasingly risky loans to people with
marginal
ability to pay. ARM loans with low introductory rates, 5% down
mortgages,
mortgages where with two incomes they could barely afford it. Appraisers
over valuing properties. Those mortgages were then pooled together into
MBS
and sold to investors.

There were derivative securities based on MBSs that transferred risk, but
blaming
them for the disaster is silly. It would be like blaming options on GM
stock for
being responsible for GM going bankrupt, instead of their low sales, high
expenses
and losses. Or blaming futures on soybeans for putting them in the
toilet, when
prices dropped because of Trump's tariffs.

AIG never wrote a single mortgage and they got the most money from
TARP. Look up CDO and Credit Default Swap then get back to me.

The CDO values in 2008-9 far exceeded the value of the underlying MBS
they "protected:.


Maybe you could just watch the "Big Short" movie if you don't like to
read.

I see part of your problem. You think movies are factual. Maybe you
could post
proof here to back up your claims.

The basic facts about the derivatives were absolutely true.

But that isnt what produced 2008.

Commercial
banks like BoA were heavily invested in them with depositor money.

That's wrong too. AFAIK, BOA and similar didn't invest in MBS. They
originated
the mortgage loans, packaged them into MBS and sold them to investors.
And banks have always had exposure to mortgage loan risk, that's their
business.
Prior to MBSs banks passed mortgages on to Fannie and Freddie, this was
similar.

They were exposed because of vehicles like AIG that sold insurance on
the mortgage or insurance on the insurance on the mortgage. .

Waiting for proof.....


Much of that bail out money also went to bail out foreign investors.
That is why it was claimed to be a global crisis.

Show us your proof for that claim, because I suspect it's also BS. I
never
heard of *any* of the 2009 bail out money going to foreign investors.
It was
a worldwide crisis, because when the core of the US financial system is
in crisis, it
will always be a worldwide crisis. I can't help again notice that
you're just like
Trump, just make it up on the fly.

Again look at who was invested just in AIG. (there were other similar
operations, just not as big).

If the test is that if the govt bails out any company and foreigners own
some of
the stock, then just about every bailout is going to be bailing out
foreigners.
Bringing up AIG as an example was a bad idea. Apparently you're unaware
that they
repaid all the bailout money, with interest. So did all the banks. Ive
told you that
many times here over the years. Yet folks like you keep ignoring it,
pretending it
was a taxpayer give away. And now the new claim is that much of it went
to foreigners.

The question wasn't whether they paid the money back, we were talking
about the leveraging effects of CDOs and CDS's on the initial MBS.

That's not what produced the meltdown of the financial system.

Maybe read this

https://en.wikipedia.org/wiki/Financ...7%E2%80%932008

Which doesn't say anything like your stupid claim that it was banks gambling
with
depositors money using derivatives that imploded the financial system so
spectacularly.
You didn't read it did you?

"Increased debt burden or overleveraging
Leverage ratios of investment banks increased significantly between
2003 and 2007.




Prior to the crisis, financial institutions became highly leveraged,
increasing their appetite for risky investments and reducing their
resilience in case of losses. Much of this leverage was achieved using
complex financial instruments such as off-balance sheet securitization
and derivatives, which made it difficult for creditors and regulators
to monitor and try to reduce financial institution risk levels. "

That's the leverage ratio of the bank, not specific to MBSs or anything else.
It just means that the investment bank was less prepared to weather any
unforeseen calamity. The US is more leveraged right now that any time since
WWII. If a war erupts and we are less able to fund it, does that mean that
the increased leveraging caused the war? And note that it doesn't say what
you claimed, which was that derivatives somehow leveraged pooled mortgages
many times over.

The selling and speculation on the credit default swaps is where the
leveraging came in and banks were buying into that market with
borrowed money.

Show us some examples of banks borrowing money and using it to by CDSs.
I'm betting you can't because I don't believe it happened, I don't believe banks
even bought CDSs. Some banks might have SOLD them to reduce risk, but
I highly doubt they were buying them to take on risk. But show us what you;ve got.....

BoA would be a great example, via Merrill Lynch, their subsidiary.
That was what Glass Steagall prevented, up until the Clinton cabal
repealed it.
Dodd Frank broke them up again. Commercial banks can not swap funds
with brokerage houses now.