MetaFilter posts tagged with subprime

The Giant Pool of Money

empath — Sun, 11 May 2008 22:20:37 -0800

The Giant Pool of Money. This American Life teams up with NPR News to explain the Housing Crisis. (I know everybody here already knows about TAL, but this is an exceptionally well done episode, and worth checking out even if you don't get the podcast.)

The financial turmoil of 2007-?

Kwantsar — Wed, 23 Apr 2008 15:31:00 -0800

The financial turmoil of 2007-?: a preliminary assessment and some policy considerations (pdf) "All episodes of financial distress of a systemic nature, with potentially significant implications for the real economy, arguably have at their root an overextension in risk-taking and in balance sheets in good times, masked by the veneer of a vibrant economy. This overextension generates financial vulnerabilities that are clearly revealed only once the economic environment becomes less benign, in turn contributing to its further deterioration." A scholarly, sane, relatively brief, accessible-to-the-layperson, and mostly apolitical look at the current turmoil.

America's Captains of Industry!

uaudio — Thu, 20 Mar 2008 16:02:50 -0800

As is the custom these days, GMAC Bank is suing mortgage broker HTFC for selling them improperly secured loans. The deposition of HTFC's CEO Aron Wider reads like a Joe Pesci role with 73 creative uses of the f-word over twelve hours of testimony. A federal judge fined Mr. Wider and his attorney $29K for Mr. Wider's constant use of bad language, insults, refusals to answer questions, and his lawyer's failure to control his client.

The Invisible Fist of the Free Market

ryoshu — Mon, 18 Feb 2008 16:32:00 -0800

What market has grown from $900 billion in 2000 to more than $45.5 trillion and is completely unregulated? Welcome to the world of Credit Default Swaps. Speculative derivatives have been described as "financial weapons of mass destruction" by some guy named Warren Buffet. Some people wonder how you can have "$1 trillion in swaps bet on the success or failure of GM when the entire market cap of GM is a mere $15 billion." Credit Default Swaps are being triggered from Northern Rock in the UK to ANZ Bank down under as the "subprime" crisis unravels. AIG's CDS loss portfolio has already climbed to $5 billion from a previsouly estimated $1 billion. Previously on MeFi.

Subprime Artistry

afx114 — Sun, 17 Feb 2008 11:00:14 -0800

The Subprime Primer. [via] An entertaining, lo-fi, comic-book style explanation of the complex Subprime Mortgage mess.

The You Generation

wallstreet1929 — Tue, 29 Jan 2008 12:47:46 -0800

Is foreclosure right for you? Walking, a click away.

Tough times for bond insurers.

clevershark — Wed, 23 Jan 2008 16:17:44 -0800

This is definitely not a good time to be in the bond insurance business. With large-scale insurers Ambac and MBIA -- and with smaller players faring no better -- one could well think that in the end the lending crisis has brought to light considerable flaws at the very basis of the American -- and indeed global -- financial sector. (all links above except the first lead to 6-month stock charts) The past week has been particularly difficult for all players in the bond insurance game, not just in terms of stock but in terms of core business losses. Ambac alone reported quarterly losses of $3.3B, and as past research has shown the subprime lending crisis seems likely to loom over the economy until well into the fall, which presumably means more large losses for bond insurers in the coming quarters. Today however saw good news as New York State insurance regulator Eric Dinallo met with the heads of financial institutions and came up with a bank-funded bailout plan which greatly diminishes the insurers' costs of doing business. Thus in one week two immediate financial crises have been not so much averted as put off for a while. The American consumer, in the short term, will not be able to keep consuming if his access to credit is reduced. And bond insurers will likely continue to see subprime-related losses well into the fall. Will 2008 be the year of bailouts?

Newsfiltered: A Big National Story That's A Lot of Big Local Stories

wendell — Fri, 04 Jan 2008 16:53:02 -0800

Yes, the Subprime Mortgage Crisis was 2007's top national business news story for the second year in a row (and odds on favorite to Threepeat), #2 news story overall (TIME put Pakistan at #1, for AP, it was the Virginia State Massacre). But then I saw that it was the #1 local news story in my town. We know it hit some areas harder than others, like Bend, Oregon, Trenton, New Jersey and Jerusalem?!? If local newspapers notice it more, it may be because it's hurting local newspapers. In Ohio and Michigan, they didn't need the Subprime Loan problems to have a crisis. And it's so bad in Stockton, California, that the BBC took notice. But London is having its own troubles.
But the most interesting local story of all involves tracing the crisis to its source: Orange County, California

quonsar — Sun, 18 Nov 2007 19:01:46 -0800

You have to make sure that St. Joseph is facing your house, if you face it out, the neighbor's house across the street will sell instead. "We buried our little gem under the for sale sign just like we were supposed to do. On October 4th, yes the 4th, just 24 hours after we buried him, we had a showing and after several counter-offers back and fourth, we finally signed a contract on October 19th!!!!! 7 months after the house was sitting and not getting any bites at all and after 1 day, its sold!!! I have complete and utter faith." America's desperate homesellers and realtors are turning to St. Joseph, Your Underground Real Estate Agent.

Cui bono?

Pastabagel — Thu, 20 Sep 2007 09:41:30 -0800

On Tuesday, the Federal Reserve cut interest rates by 0.5%. Wall Street aggressively demanded the cut to stop the sub-prime mortgage contagion from triggering a credit crisis among large US and foreign investment banks and the collapse of their over-leveraged hedge funds, which ultimately threatened to drag the US economy into recession. The market rallied this week in response to the Fed's move. But there is no free lunch. Oil rallied also, to an all-time high of $81/bbl. The rate cut shattered the dollar, sending it to new lows against the Euro and to parity with the Canadian dollar. The falling dollar puts pressure on China, whose dollar-pegged currency has attracted the ire of many US politicians, causing China to threaten the US with the "nuclear option" of diversifying its foreign currency reserves away from the dollar. Meanwhile, Saudi Arabia refuses to cut its interest rates in lockstep with the US for the first time ever, signaling that it may break its long standing dollar peg as well. In other words, foreign investors who currently own roughly 50% of the publicly-owned portion of the US national debt may flee the US bond markets. Result? We'll probably slide into recession anyway. But there is a silver lining: it turns out that many of those large investment banks and hedge funds were making far more money than anyone thought all along. Confused? Some background: Currency carry trade - how currencies are related to one another How interest rates, inflation, exchange rates, and trade deficits are interrelated How interest rates and bonds are related Peviously 1 2 3 4