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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (46814)	12/8/2005 1:34:46 PM
From: russwinter	Respond to of 110194

They have way too many employees and too many offices, what else do they have to do but churn and burn their customers. It's utterly amazing how almost all the players in these markets just head right over the cliff at 60 mph, without even breaking, moral hazard and Humpty Dumpty running amok virtually everywhere. What isn't a Bubble any more? This just goes to show that the industry is totally incapable of self policing or ethical behavior. The regulators will have their hands full on the new guidelines too.

To: Ramsey Su who wrote (46814)	12/8/2005 1:42:03 PM
From: ild	Read Replies (1) \| Respond to of 110194

<<<moving so strongly into the higher risk areas>>> Do they have any choice if many of their competitors have moved into the higher risk areas? IMO they don't. Servicing revenue is not something the market will assign a high P/E for. All banks have margin pressure because of overcapacity and flat curve. Apparently Option ARM has higher margins, so this is what they try to sell. Very similar to the move the big banks when they aggressively moved into subprime squeezing LEND/NEW margins.