COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

It may take many years but eventually everyone will realize how pernicious this securitization scheme became — like the worm used to destroy Iranian equipment or the viruses that are spread as mal-ware throughout our computer system. Only yesterday did it dawn on anti-terrorism experts that Mubarak had done the impossible when he was resisting his ouster: he hit the off switch for Egypt alone. That means it could be done anywhere.

The principle is simple — why work hard to make a profit when you can make a fortune creating a loss? It is so antithetical to the American dream of working upward to achieve and to aspire to greater things that our collective minds cannot accept the fact that Wall Street simply took the money and walked away with it, came back for some more and walked away with that, now they are back taking houses too, and they are even creating new profit opportunities for themselves while they continue to cheat and lie to investors around the world.

On this blog I have shown how the worse the mortgage quality, the higher the profit earned by Wall Street and securitizers and pretender lenders. I have shown how the even the highest tranche was torpedoed by the sale of credit default swaps on the lowest tranche. The game was on and the worse things got for investors the more Wall Street made. The article below gives the impression that there is actually a return to be expected from these toxic assets. The fact is that they are toxic because they are worse than worthless. The receivable may not exist, the security was eviscerated long ago, and the investors are again going to be paid out of their own money just long enough to create the impression of a deal that didn’t work out.

Everyone who is still thinking about the homeowner as getting windfall of a free home should examine the facts. How is it free after all this? Who really is getting the free home — the parties foreclosing who never lent a dime on the home, screwed the investors and never purchased, transferred or endorsed the loan because the original deal was fatally defective.

Give me the MOST skeptical far right ideologue and let me show him or her the facts and then let’s see what their view is of who is getting screwed and who is getting a windfall. Stop listening to the spin on cable news. They don’t know what they are talking about. And please, don’t tell me you don’t trust government then use government figures to argue against me — you can’t have it both ways.

‘Toxic’ US mortgage securities boost bank and hedge fund profits

Elena Moya and Radi Khasawneh

14 Feb 2011

Investment banks and hedge funds are once again making money from a sector that was defunct only 18 months ago: US mortgage-backed securities, the loan products that spread the credit crunch throughout the world.

Only two years later, and despite the fact that many US cities are on the edge of bankruptcy, these securities have turned into one of the most lucrative profit areas for banks that specialise in fixed income trading, such as Credit Suisse.

The Swiss lender said last week that its investment banking sales and trading income had benefited from a strong US residential mortgage-backed securities market. The bank earns fees from buying and selling the assets on behalf of clients, including hedge funds, which have flocked to the $11 trillion US mortgage market.

“In large part, the buoyancy comes from government support for the US mortgage market, both for agency securities backed by the government and also for deals which don’t have direct government backing,” said Deepak Narula, a former Lehman Brothers mortgage-bond trader, who now runs New York-based hedge fund Metacapital Management. “The successful attempts by the central bank to bring down mortgage rates, along with many other programmes aimed at reviving housing have also helped.”

Some US mortgage loan prices have almost doubled since 2008, when they plunged following the collapse of Lehman Brothers and credit markets came to a halt. Hedge funds investing in global mortgage products have gained 22% in 2010, according to the HFN mortgages index.

RMBS hedge funds are among the best-performing in the world over the past 12 months. Metacapital and SPM Structured Servicing Holdings have both gained 51% over the past 12 months, while Nisswa Fixed Income Fund and SPM Opportunity fund have risen by 34% over the same period, according to data compiled by HFMWeek. Those gains are substantially above the 10% average returns offered by the hedge fund industry in 2010 or the 17% gained by the FTSE100 Index over the past 12 months.

Investors are after the strong yields of between 6% and 8% offered by the securities – much higher than other credit investments such as the 2.3% yield offered by the benchmark five-year US Treasury bonds.
Price gains have also delivered profits, as the “2008 pricing in scenarios were far more pessimistic than what has unfolded subsequently – mainly because of the government support”, Narula said.

However, the role of the US government in the mortgage industry may be revamped soon. Last week the administration of President Barack Obama unveiled proposals to restructure the market, which may include the shrinking of the present government-backed mortgage agencies Fannie Mae and Freddie Mac. Narula said: “Uncertainty over the future of the agencies creates opportunity – depending on the final outcome, there may be a substantial repricing of mortgages: the over $5 trillion of existing agency-backed bonds may increase in value as new, non-guaranteed bonds are issued in the future.”

The changes under consideration could result in higher guarantee fees, more stringent credit guidelines and lower loan limits. This may result in higher mortgage rates, translating into higher refinancing costs to the homeowner, and therefore, causing the value of existing securities to appreciate.

“This will be the focal point of debate for the evolution of the housing market in the US. It is a multi-year solution that will begin to be felt in the markets immediately, but its full impact will resonate for many years,” said Paul Heyrman, ABS product specialist at CQS, a $10bn multi-strategy asset manager that manages a $1.2bn ABS fund.

In Europe, the RMBS market has slowly started to pick up. The steady performance of spreads and primary issuance volumes has pushed investors into the lower-rated bonds, called mezzanine tranches, in the secondary market. Trading in those securities pushes up margins for banks as investors look to markets that have been oversold since the financial crisis.

Heyrman said: “What we have seen in both Europe and the US is an acceleration of a trend towards putting money to work in the ABS market. Limited new issue supply and a fundamental reassessment of relative value across credit have driven some pretty significant price appreciation and spread tightening in response to secondary market demand.”

19 Responses

  1. Does the daffy duck follower really know what te end game will be.

  2. Yep love the daffy duck remark
    the deutsche whatever it all stinks like indymac bank indymac bank fsb like one west DBS indymac mortgage services they are all working for wall street and the shadow banking mafia don’t underestimate daffy duck

  3. deb wynn- that was Deutsche Bourse, not DeutscheBank, although duetsche bank may have a hand in the deal. So the icon of american capitalism is being sold off for peanuts. As Neil said some time ago, “Who are they taking orders from, Daffy Duck?”

  4. Ian the digusting part… Deutsche bank got billions as did credit Suisse when fed bought back worthless bonds. … So they use American tax dollars to buy the stock exchange I’m laughing we are a laughing stock

  5. Ian,

    The “Deal” — another way to escape regulation???

  6. Bon’s search friendly blog content stuffing campaign, for Neil Garfield. LOL

    the American Dream. strReplace (“Nightmare”) in it’s infancy, waaaaaaah, wahhhhhhhhhhahhhhhh, wahhhhhhh.

    Just the hypocritical, ridiculous, and enormous irony of it all, makes me LOL, like a nervous, LOL, because it’s really not that funny, LOL

  7. The single biggest red flag tip, in American, and global history. That’s an hypothesis.

    Also playing into the general ignorance and directed denial, is a simple fact, that if your getting stroking the beast, no compplaints, if the beast has you clawed, or is eating you alive, resistance is a given
    So, in a corporate or post-industrial brothel like America and others, we have the poor American ho, all of us. We are taking it in one end or the other, in one way or another, and it affects our interpretation of “reality. If the cash is flowing from Johnny or the pimp, “no rape!, another day, another dollar, it’s my job”. If the money is not flowing in, and possibly exiting, then “Johnny is raping me!”, another day, another hollar…
    Amazing, simply amazing. Remote control hopium, and delusional anti-scare-eroine

  8. KaChingDom

    What’s really funny here, is banking is numbers.

    I bring my theory up, and just as this website 2 years ago, it is brushed off with the famous sauve of cataclysmic threat, “your not a conspiracy theorist are you?” ha ha

    1. Well first off, this is done in broad daylight, and as stated earlier, it is also based on numbers, by an industry that employs, many, many high level mathematicians, as cigarette companies employee high level chemists.

    2. Mathematically the arena of numbers, in hindsight is grand! Why? You can reverse engineer formulas and algorithms more reliable than say, reversing engineering legislation (That is possible too). You can build a scenario, which based on the arithmetic nature of the support industry in banking and accounting, leads to a simple truth in numbers, across a very limited target. Where are the numbers adding up? Where are the numbers pointing to? The banks.

    The banks are more a conduit than a repository, so it’s just common sense to wonder, where their bowels are connecting to, and the subject for another “calculative reverse engineer”, eg, “conspiracy” theorist.

    What has happened, not under the American’s nose, but right on top of it, is a classic self supporting Ponzi based scheme, which has multiple cycles of continuing the invisible financial pillage, through ever expanding channels of cash flow. Done with the poor “homeowner” and investors? Go for the public kitty as well. The layers in this are too complex of course, to layout in such a linear simpleton fashion, and the subject of future books, and multi-volume studies on what is in the works, 5 years from now, a complete monetary rape, driven by science, law and greed.

    When you just see the tip of the iceberg, of political collusion, legislative architectural aid, and bank designed math playing out for real, you know this may be semi-coincidental on the fringes, but at it’s core, it is too efficient, systemic, empowered and protected to have just happened spontaneously.

    This is a well designed money “making” and wealth redirection/redistribution engine, playing out in a pattern that can easily clone to other environments pre-designed for it’s operation in extensive phases and cycles.

    It truly is amazing, how little attention people are paying to the fact, that the boat they are in, is heading to the lip of the Niagra falls, and no one seems to think it’s real. I think part of it, like a person backing into the Grand Canyon, it’s just not seen, because also a supporting factor to it’s widespread success, was if not filtering out of the media entirely, it would be such an extensive net, who would talk about it anyways, from a perspective of classic materialistic distraction?
    Very few.
    It’s also a bubble popping threatening image, when it’s future implications are drawn out, even in speculation.
    This thing was more intensively pre-designed and developed, than a Mercedes, Lexus, and Lear Jet combined, upon very basic formulas, which needed supporting financial plumbing, political grease and redirection of responsibility, and corporate fuel, to feed a centrally design repository, the mathematical beneficiary.

    Amazing, America’s rampantly active “Jeffrey Dahmer” of the public economic body, is still collecting and consuming more monetary and wealth tissues, and apparently, is as starved as ever.

    It’s the “Prader-Willi $yndrome”: Insatiable Appetite and Compulsive Greed, in an institutional frenzy form. (sad really)

    The single biggest red flag tip, in American, and global history. That’s an hypothesis.

  9. And for those who haven’t yet seen or heard the news, Germany’s Deutsche Bourse is in final negotiations to buy the New York Stock Exchange by acquisition of the NYSE’s parent company. The deal, valued at about $10bn usd, would give DB about 60% of the new co., while giving NYSE 40%. Shareholders of NYSE are protesting through the Delaware courts. About the only major detail left to discuss is what the new name of the merged entity will be. Check WSJ for more details.

  10. America, inspite of it’s denial, has many of the earmarks of 1990’s USSR.

    The USSR collapse is of course documented, and undeniable.

    The American one, democracy, socialisms albino twin, is being documented, but the intertia of denial?

    Pad it with printed money, LOL.

    And on to the historic plunge of the Ruble with George Washington’s face on it.

  11. People, if we are going to “take it to the streets,” WE MUST GET ORGANIZED!!!

    The Huffington Post is calling for Nationwide Meetups on Tues, March 8th.

    Organize this meetup in your city. This is your country, what do you want it to look like??? It is in your hands. ORGANIZE NOW!

  12. They put the TARP money in offshore accounts because they know the dollar is going to crash soon. I would guess they converted the money to another currency.

    They are going to triple the value of that money once the dollar crashes.

    Once we are all sitting on bank accounts worth nothing, they will bring that money back into the United States and have us all working like third world nation citizens.

    We will be begging them for work, and they will give us plenty. At really low wages and no benefits.

    Use your voice now, or prepare yourselves for the worst.

    I think Ron Paul may be right on some things. We may need to remove government right now since it is all so corrupt. Less is more.

    The idea of government is good, but the heart of man is too easily corrupted.

  13. MERS Exits Stage Left, Tells Members Not To Foreclose In MERS’ Name

    After the MERS Valentine’s Day Massacre, previously reported on Zero Hedge, where Judge Robert Grossman found that MERS has no right to transfer mortgages, the company appears to have proceeded with the logical next step: professional Harakiri. In an announcement sent out to all MERS Members, the company stated that according to a proposed amendment to Membership Rule 8, it will require “members not to foreclose in MERS’ name.” MERS is seeking comments in a 90-day period, but since this is a directive driven from external judicial decision(s), it is unlikely that MERS members’ opinions will matter at all. Basically MERS may have just exited the US mortgage scene, stage left, for good.

  14. None of this stuff is in any logical sense, legal. You can’t just add parties or assume a party’s positions to a 2 contract 3 party transaction and/or add new roles, without a “meeting of the minds” and all to thereby consenting (usually requires a new contract, otherwise it’s not binding).

    It’s a Constitutional right to contract or not to ontract, with whom you choose to and choose not to. That liberty of choice is taken away if whoeverso chooses were permitted to assume whoever’s contract at their own free will and the contracting party had no choice.

    Contracts are only binding for what they say and are NOT binding for what they do not say, implied or not, express or otherwise. You cannot oblige someone who has not assented of their own free will.

  15. Truth is truth believing it is the problem and it s warped by the media

  16. MERS Announcement No 2011-01 16 Feb 2011Feb 16, 2011 … MERS Announcement 2011-1. February 16, 2011. MERS to discontinue foreclosure in MERS’ name. Show More. Description: MERS Announcement 2011-1 … › Business/Law › FinanceGet more results from the past 24 hours

  17. Who says crime does not pay. Arizona Judges continue to rule for the criminals within Wall Street and the Big BAnks, they continue to steal your mortgage payment and the home. Judges rule against the innocent and promote the crime. You can now rest assured that your tax dollars are used on Capital Hill to support the financial holocaust. Justice is gone, the system no longer has integrity. Believe no more in the Red, White and Blue. .

  18. Same America, Different Russia

    But Armenian Radio has kept up with the times:

    Our listeners asked us:
    “What is chaos?”
    We’re answering:
    “We do not comment on economic policy.”

    “What is ‘Russian business’?”
    We’re answering:
    “To steal a crate of vodka, sell it, and drink the money away.”

    From The Tiger
    A True Story of Vengeance and Survival
    by John Vaillant

    There are many people who don’t believe this actually happened. They think it’s some phantasm of my imagination. But it was real. There are the facts.

    Trush and his team read the showdown etched in the snow: two sets of tracks — a human’s, northbound, and a tiger’s, southbound — heading toward one another as if they were meeting for an appointment. And then the northbound tracks disappeared.

    Scattered across the pink snow was a cartridge belt. A single glove. A jacket cuff. A hand. Bones protruding from the tops of thin rubber boots.

    That was all that remained of Vladimir Markov, a boisterous and popular hunter from an impoverished village. Never before in Trush’s dangerous career had he seen a human “so thoroughly and gruesomely annihilated,” Vaillant writes.

    What would lead a tiger to such a vehement and violent act? As the story unfolds, it becomes abundantly clear that this tiger did not just happen upon its victim. The tiger sought Markov out, carefully planning the encounter that lead to the hunter’s gruesome death. This was no random killing, Trush and his team agreed. It was a case of premeditated — and justified — murder. Because Markov, reliable sources said, was not just a hunter. He was a poacher, one who specifically targeted tigers — except this time the tiger targeted him, stalked him, claimed his cabin, and waited.

    The Boreal Forest of Far East Russia is a biotic and wildlife wonderland of overlapping subarctic and subtropical biomes. In a state of pristine condition, as primitive and diverse as 19th century Alaska in many places, it’s old forest solitude, is much like the pacific northwest on plant steroids. You can gather your thoughts and meditate in remote silence and solitude, and be plowed to attention and smithereens by the impact of a 25 foot lunge from a 550 pound Amura Tiger, whose head and body, crashing into you, can break your back, dislocate a hip and fracture your legs, without scratching you, in less than 3 seconds.

    Kinder than the banks of America, the Amura Tiger, has a larger skull than other tiger subspecies, carries more fat and a heavier coat, and these give it a rugged, primitive burliness that is missing from its sleeker tropical cousins. The thickly maned head can be as broad as a man’s chest and shoulders, and winter paw prints are described using hats and pot lids for comparison. Being beautifully clothed like a camouflaged stealth assassin in mottled shadows on tawny cream and white, you can walk through the snow covered forest understory, and not see her till you are able to step on her. But that’s rare. She usually makes the first contact.

    Tired of being poached by American banks? Let’s head to far east Russia and take our chances.

  19. Someone told me the TARP funds have even been removed from circulation in our country to off-shore accounts. I don’t know if that’s true. If it is, these people are not only criminals, they are traitors.

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