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Old 09-14-2008, 06:53 AM
 
Location: Los Angeles Area
3,306 posts, read 3,764,839 times
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This is old news. Although the effects on house prices will be similar (except that it will target more mid/high end homes) the effects on the financial markets will be different. Alt-As weren't packaged into MBS in the same way the subprime crap was. This is going to hit the banks balance sheets directly where as the effects on the credit markets could potentially be less serious (Of course, the bank failures could indirectly cause the credit markets to collapse further).

Anyhow, this reminds me nobody has been talking about Wachovia lately but they have a lot of this crap on their books. I always figured they would fail before Wamu.
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Old 09-14-2008, 07:16 AM
 
Location: America
6,993 posts, read 16,349,054 times
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Quote:
Originally Posted by Humanoid View Post
This is old news. Although the effects on house prices will be similar (except that it will target more mid/high end homes) the effects on the financial markets will be different. Alt-As weren't packaged into MBS in the same way the subprime crap was. This is going to hit the banks balance sheets directly where as the effects on the credit markets could potentially be less serious (Of course, the bank failures could indirectly cause the credit markets to collapse further).

Anyhow, this reminds me nobody has been talking about Wachovia lately but they have a lot of this crap on their books. I always figured they would fail before Wamu.
link

link

what exactly do you mean?
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Old 09-14-2008, 08:02 AM
 
Location: Los Angeles Area
3,306 posts, read 3,764,839 times
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Quote:
what exactly do you mean?
Rephrase to this:

"Alt-A weren't packaged into MBS to the same degree that the subprime crap was". That is to say, Alt-As were more often kept on the banks books than subprime for a variety of reasons. Although its also true that they weren't packaged into MBS in the same matter this is not what I was trying to say in that sentence.
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Old 09-14-2008, 08:16 AM
 
Location: America
6,993 posts, read 16,349,054 times
Reputation: 2083
Quote:
Originally Posted by Humanoid View Post
Rephrase to this:

"Alt-A weren't packaged into MBS to the same degree that the subprime crap was". That is to say, Alt-As were more often kept on the banks books than subprime for a variety of reasons. Although its also true that they weren't packaged into MBS in the same matter this is not what I was trying to say in that sentence.
By "same degree" I assume you mean the amount securitized was not as much as sub prime? If so where did you get that from? I have not read on the level of securitization for Alt-A or prime to have a opinion on the matter. just curious to see where you got that from.

also what does "they weren't packaged into MBS in the same matter" mean?

I have to look into the matter further but I found this

Quote:
About $950 billion of Alt-A mortgage securities are outstanding, compared with about $650 billion of subprime securities and $500 billion of prime-jumbo securities, according to Frank. Potential losses stemming from subprime-backed bonds are larger because of two-sided derivative contracts linked to the debt, many of which have been packaged into collateralized debt obligations and turned into securities.
which could explain it

link
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Old 09-14-2008, 08:33 AM
 
Location: Los Angeles Area
3,306 posts, read 3,764,839 times
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Quote:
If so where did you get that from?
I've read it from multiple sources, the only one I could quickly find is:

Lex gets it very, very wrong on Alt-A : Housing Wire

Quote:
also what does "they weren't packaged into MBS in the same matter" mean?
Many Alt-A have different characteristics as a result they aren't securitized in the same way, but this has little to do with my point. My point was rather that the defaults in Alt-A are going to have a different effect on the markets as many were kept on banks books rather than be securitized.
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Old 09-14-2008, 09:28 AM
 
Location: Chino, CA
1,458 posts, read 3,108,636 times
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Quote:
Originally Posted by 70Ford View Post
I'm counting on it................


//www.city-data.com/forum/seatt...al-estate.html
wow, a story of a parasite ... moral of the story... suck america dry... and you can live in Tenessee
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Old 09-14-2008, 10:14 PM
 
Location: Georgia, on the Florida line, right above Tallahassee
10,474 posts, read 14,860,145 times
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Quote:
Originally Posted by chuck22b View Post
wow, a story of a parasite ... moral of the story... suck america dry... and you can live in Tenessee
One man's parasite is another man's entrepeneur...
I think everything is a matter of perspective. All depends on where you are standing.

There Will Be Blood (2007)
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Old 09-14-2008, 10:29 PM
 
Location: Chino, CA
1,458 posts, read 3,108,636 times
Reputation: 555
Quote:
Originally Posted by 70Ford View Post
One man's parasite is another man's entrepeneur...
I think everything is a matter of perspective. All depends on where you are standing.

There Will Be Blood (2007)
Haven't seen that movie.... but yup, just the kind of mindset that brought us into this mess. Americans deserve what's coming to us. We brought it upon ourselves.

-chuck22b
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