this administration has totally caved to TBTF, too big to failThe alchemists of Wall Street are at it again.
The banks that created risky amalgams of mortgages and loans during the boom — the kind that went so wrong during the bust — are busily reviving the same types of investments that many thought were gone for good. Once more, arcane-sounding financial products like collaterized debt obligations are being minted on Wall Street.
The revival partly reflects the same investor optimism that has lifted the stock market to new heights. With the real estate market and the economy improving, another financial crisis seems a distant prospect. What’s more, at a time when the Federal Reserve has pushed interest rates close to zero, the safest of these new investments offer interest rates almost double that paid by ultrasafe United States Treasury securities, according to RBS Securities, which was involved in such instruments in the past.
But the revival also underscores how these investments, known as structured financial products, have largely escaped new regulations that were supposed to prevent a repeat of the last financial crisis.
Banks are turning out some types of structured products as fast or faster than they did before the bottom fell out. So far this year, for instance, banks have issued $33.5 billion in bonds backed by commercial mortgages, slightly more than they did in early 2005, when the real estate market was flying high, according to data from Thomson Reuters.
much (to the tune of trillions) of the action taken by this administration has only served to bail out and prop up the greatest (in magnitude) of our private corporations
well, let's let eric holder say it, 6 weeks ago
Holder: Banks May Be Too Large to Prosecute - Washington Wire - WSJ
here's where ows (occupy wall street) and tea partiers overlap (even if the latter do tend to clean up after themselves)
this administration has institutionalized the socialization of big business losses while privatizing its gains
the grey lady presents the perfect picture of it
it's also where rand son of ron fits like a glove
who would also, by the way, if not wish you a happy 4-20, at least he'd leave you alone
as of today, notes the times, 34% of outstanding money in commercial mortgage backed securities is in interest-only loans
3+ trillion of qe by the fed, essentially buying junk
interest rates kept near zero forever
how much hot air can a balloon take?
the least problematic structured loan in 08---collateralized loan obligations---involve pools of loans advanced to companies with junk ratings
q1 of '13 saw more loans of this nature processed than q1 of 07
the fed released guidance last month warning that "prudent underwriting practices have deteriorated"
let the lady leave off on a lift:
bank profits from securitizations are +68% in 2012