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What if (sub prime fiasco)

CrikeyBobs

Critical Thinker
C
Joined
Oct 14, 2005
Messages
420
The repackaging of sub prime bits of scrag end as prime cuts precipitated this ungodly disaster. If the quality of these assets had not been misrepresented then presumably we would not be experiencing a credit crunch. However, how would a more realistic appraisal of these assets have affected the national/international economic climate? Presumably it wouldn't have boomed to the extent that it did, but would anyone care to venture something more specific?

And while I'm at it, who first started this sub prime repackaging? I reckon they have a lot to answer for (along with the rest of the financial industry for going along with it). :mad: :mad:
 
Just listened to the first few minutes. Sounds like it's going to be a very interesting and informative piece. I'll put aside some time tomorrow to listen to it in full. Thanks.
 
Kestrel said:
You may also want to watch this sketch by two British comedians.

Click to expand...

Many a true word is said in jest!

I've been recommending this since the end of last year. You can even find it in a couple of my posts here on JREFF.
 
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Just listened to the radio broadcast. I must say it was quite shocking how lackadaisical the whole system became (it also became very greedy, but that is not so shocking). Home buyers were implicitly encouraged to misrepresent their income because they knew no-one would check. Mortgage providers didn't care about borrowers' ability to repay because they sold on the mortgages after a couple of months to large financial institutions. Millions of these "dodgy" mortgages were then bundled together and received AAA seals of approval (as good as money, as good as government treasury bonds) based on mis-used/understood historical data.

The show lasts one hour and is a mixture of interviews and analysis. It starts of with an award ceremony for a variety of financial instruments, including the one which "nearly brought down the global financial system". There is a brief interview with a guy called Jim Finkel, who created one of these instruments (I think it might have been the instrument). The transcript of the broadcast reads "I was happy to see there were no major suicides". If you listen to the broadcast itself, he says "I was happy to see there were no sui- major suicides."

Jim Finkel created the Monterey Collateralized debt obligationWP. I looked it up and found two contrasting appraisals, separated in time by about two years:

Fitch rating in 2006

Fitch downgrade in 2008
 
CrikeyBobs said:
Just listened to the radio broadcast. I must say it was quite shocking how lackadaisical the whole system became (it also became very greedy, but that is not so shocking). Home buyers were implicitly encouraged to misrepresent their income because they knew no-one would check. Mortgage providers didn't care about borrowers' ability to repay because they sold on the mortgages after a couple of months to large financial institutions. Millions of these "dodgy" mortgages were then bundled together and received AAA seals of approval (as good as money, as good as government treasury bonds) based on mis-used/understood historical data.

The show lasts one hour and is a mixture of interviews and analysis. It starts of with an award ceremony for a variety of financial instruments, including the one which "nearly brought down the global financial system". There is a brief interview with a guy called Jim Finkel, who created one of these instruments (I think it might have been the instrument). The transcript of the broadcast reads "I was happy to see there were no major suicides". If you listen to the broadcast itself, he says "I was happy to see there were no sui- major suicides."

Jim Finkel created the Monterey Collateralized debt obligationWP. I looked it up and found two contrasting appraisals, separated in time by about two years:

Fitch rating in 2006

Fitch downgrade in 2008
Click to expand...

Boy, they really did a good job of rating those the first time, didn't they? Who rates the rating agencies? :rolleyes:
I don't suppose that rating agencies have any real accountability either, do they?
 
Puppycow said:
Um, why do they keep emphasizing this "unemployed black man" as the recipient of these subprime loans? Why is it necessary to drag race into this?
Click to expand...

Satirically speaking, from the perspective of the middle class white investment banker, the poor and ignorant masses are typified by the image of an unemployed black man in a string vest, sitting on crumbling porch in Alabama.

It serves to highlight the perception that these extremely wealthy and powerful financiers preside in ivory towers, with no true idea of what goes on outside, except for what they pick up in their exclusive men's clubs. Oh and of course from their largely immigrant household staff.

After that sketch, who wasn't thinking that the people who caused this crisis are a complete bunch of [some offensive expletive]?
 
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