WHY were these MBSs rated AAA Kush ?
Because they were supposedlly backed 100% by the United States Government.
Which wasn't true of-course as only Mortgages bought and sold by GINNIE-MAE have a 100% US backing.
Fannie-Mae started turning low quality loans into toxic securities in 1997, long before they were created privately and it wasn't until after 2000 that they started to lose their market share.
By 2004 they had purchased over 40% of all privately created toxic MBSs.
An attempt to add false value of-course by manipulating demand.
Without a AAA rating Fannie and Freddie's corruption wouldn't have lasted but for a couple of years.
Real estate backed mortgage securities derive their value from the cash flow streams of mortgage payments. Bundling alternative risk classes is a private securitization method used to hide risk and provide high beta returns. The risk of a security is determined by the quality of the underlying mortgages that represent them, and hence a MBS composed of low FICO score borrowers should (by definition) should raise red flags by risk managers.Because they were supposedlly backed 100% by the United States Government.
You seem confused.
Absolutely false! The data is what is important, and you have nothing.Fannie-Mae started turning low quality loans into toxic securities in 1997, long before they were created privately and it wasn't until after 2000 that they started to lose their market share.
Toxic securities were primarily composed of adjustable rate mortgages, which were much more likely to go into default than standard fixed rate mortgages. Between 2001 and 2008, 88% of all mortgages purchased by GSE's were fixed. This varies heavily with respect to private mortgage origination and securitization, of which 70% of all private label loans were made up of ARM's.
You cannot even define a toxic MBS, nor do you understand the fundamentals of bond pricing necessary to make such determinist statements.By 2004 they had purchased over 40% of all privately created toxic MBSs.
It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
"Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911
It is like the old adage, 'Success is nothing new, or complicated, all one has to do is look at what the steps are, and copy them.'
“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes
But Mr. Hanson says the magnitude of the negative impacts, as found in their research, surprised him despite his years of studying the economics of trade.
As people are pushed out of jobs by Chinese imports, the research found a substantial increase in government transfer payments to individuals in the form of things like unemployment insurance and disability benefits.
The potential offset is that US consumers (including families affected by job losses) reap benefits from access to lower-cost goods from China.
An important conclusion of the new research, however, is that the economic losses to the US may be roughly equal in size to those gains for consumers.
The government "transfers fall far short of offsetting the large decline in average household incomes found in local labor markets that are most heavily exposed to China trade," write Hanson and his colleagues. And as the use of public benefits goes up, "our estimates imply that the losses in economic efficiency ... are, in the medium run, of the same order of magnitude as US consumer gains from trade with China." How much does US-China trade hurt American workers? Slowly, a clearer picture. - CSMonitor.com
Who cares if items are cheaper if the whole process continuously reduces the number of citizens with gainful employment who can pay for them? When a business like Wal-Mart enters a community there is short-term benefit and long-term loss, both to the local economy and the general economy at large. As stated, the money used to purchase these cheap items leaves the community and goes overseas to pay foreign workers and buy foreign resources.
Meanwhile Wal-Mart employees also use most of their low wages primarily to buy at the Wal-Mart store. Wal-Mart becomes the biggest local employer and the community becomes completely dependent on it giving it significant economic and political power.
The cycle continues at every locale a new Wal-Mart springs up. It's like a frickin virus, and it needs to be cured.
Last edited by Captain Adverse; 08-06-13 at 01:12 PM.
If I stop responding it doesn't mean I've conceded the point or agree with you. It only means I've made my point and I don't mind you having the last word. Please wait a few minutes before "quoting" me. I often correct errors for a minute or two after I post before the final product is ready.