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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: John O'Neill who wrote (31821)	8/11/1999 1:11:00 AM
From: Robert O	Read Replies (2) \| Respond to of 70976

ot ok I can tell by the look on Duker's last face that he is not into kick-boxing and can't say as I blame him. I'm gonna do a reader's digest here and say 1.) it is tempting to want to compare much of what one sees today appearing to be 'large' scale lending as synonymous with the S&L or 'derivative hedging' disasters prior. Main diff. for Fanny Mae is loans actually are collateralized to great extent. S&L's 95% leveraging not so common after losing trillions that way ;-) 2)um, if I lend money at, say, a locked in 9% (and borrow it for less I might add) and market rates subsequently go up and I could have lent at 10% it's true a piece of paper evidencing a debt to be paid to me at 9% is not as valuable as a new note had I waited and lent at 10%. If I collect on my 9% note anyway though (hold till maturity) I still get 9%, ya know? Given these loans are well collateralized i.e., borrower is gonna make it to the end and if not there is enough value in property to bail out lender, as Natalie Merchant would say: 'what's the problem here?' RO p.s. these concepts don't even mention that the use of derivative-type instruments actually help make the entire securitization process less risky, not more.