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Greenspan warns subprime woes could spread
- Thread starter THE-BEAKER
- Start date
This whole housing bubble was arguably caused almost single-handedly by Alan Greenspan, so I find it ironic he is now "warning" about the fallout of his own policies. Question is: will the Fed once again try to inflate their way out of this crash, like they did in 2000-2003, thus causing yet another bubble in another asset market? He did it in 1998 and 2001, but will Bernanke do it in 2007-08?
Quote from Cutten:
This whole housing bubble was arguably caused almost single-handedly by Alan Greenspan, so I find it ironic he is now "warning" about the fallout of his own policies. Question is: will the Fed once again try to inflate their way out of this crash, like they did in 2000-2003, thus causing yet another bubble in another asset market? He did it in 1998 and 2001, but will Bernanke do it in 2007-08? [/QUO
the problem is cutting rates wont help.
there is already so much money swoshing about in the states that they do not know where to put it.
in the grand scheme of thing whats a 25 bp rate cut gonna do.
if there is a run on the dollar and a run on assets they will be putting rates up not down.
Quote from Cutten:
This whole housing bubble was arguably caused almost single-handedly by Alan Greenspan,
Please explain how in the world this is possible when the FOMC is comprised of 12 voting members.
Seriously, all you guys pointing fingers at Al G., have you ever heard the term "figurehead"?
http://www.marketwatch.com/News/Sto...x?guid={4A7839E2-AC2D-4BD0-B069-1513F703B9EB}
Can anyone explain the above to me? What is MBS? And is Countrywide safe? If they sold 92% of these loans to the market, then why would their stock keep falling?
The other question is, if they only keep 8% on their books, how do they make profit? Simply by re-selling those mortgages?
Banks and many analysts said the banks are largely hedged from defaults because on average, they keep only about 20% of the mortgage-loans they originate and sell the remaining 80% on the market as mortgage-backed securities (MBSs).
In the case of subprime mortgages, the numbers vary. Both Washington Mutual and Countrywide, the largest issuer of mortgages in the nation, roughly sold 92% of their subprime loans to the market through the second half, keeping only 8% on their books.
Can anyone explain the above to me? What is MBS? And is Countrywide safe? If they sold 92% of these loans to the market, then why would their stock keep falling?
The other question is, if they only keep 8% on their books, how do they make profit? Simply by re-selling those mortgages?
Quote from Happy Hopping:
http://www.marketwatch.com/News/Sto...x?guid={4A7839E2-AC2D-4BD0-B069-1513F703B9EB}
Can anyone explain the above to me? What is MBS? And is Countrywide safe? If they sold 92% of these loans to the market, then why would their stock keep falling?
The other question is, if they only keep 8% on their books, how do they make profit? Simply by re-selling those mortgages?
didnt you know.
this is the era of all hedge funds are hedged and make billions and all banks and institutions are hedged and make billions.
everybody is hedged and there is no risk whatsoever in the system.
its a no brainer.
risk free,full hedged profitable markets.
Has Greenspan ever used the word "insanity" before?
"I was shocked to find the credit derivatives market, which was working superbly, ends up with the settlement and clearing done with 19th century technology," Greenspan told the futures conference
"There's an insanity out there that I don't understand," he added. He called on the New York Federal Reserve Bank, which plays a crucial role in the U.S. central bank's financial settlements procedure, to stay involved or "we would face a really dangerous problem."
"I was shocked to find the credit derivatives market, which was working superbly, ends up with the settlement and clearing done with 19th century technology," Greenspan told the futures conference
"There's an insanity out there that I don't understand," he added. He called on the New York Federal Reserve Bank, which plays a crucial role in the U.S. central bank's financial settlements procedure, to stay involved or "we would face a really dangerous problem."