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

To: ild who wrote (47780)	12/20/2005 12:59:05 PM
From: ild	Read Replies (1) \| Respond to of 110194

FannieMae Economic & Mortgage Market Developments December 20, 2005 fanniemae.com

To: ild who wrote (47780)	12/20/2005 1:34:38 PM
From: CalculatedRisk	Respond to of 110194

Federal Financial Regulatory Agencies Propose Guidance on Nontraditional Mortgage Products fdic.gov The federal financial regulatory agencies today issued for comment proposed guidance on residential mortgage products that allow borrowers to defer repayment of principal and sometimes interest. These nontraditional mortgage products include "interest-only" mortgage loans where a borrower pays no principal for the first few years of the loan and "payment option" adjustable-rate mortgages where a borrower has flexible payment options, including the potential for negative amortization. Institutions are also increasingly combining these mortgages with other practices, such as making simultaneous second-lien mortgages and allowing reduced documentation in evaluating the applicant’s creditworthiness. While innovations in mortgage lending can benefit some consumers, the agencies are concerned that these practices can present unique risks that institutions must appropriately manage. They are also concerned that these products and practices are being offered to a wider spectrum of borrowers, including subprime borrowers and others who may not otherwise qualify for more traditional mortgage loans or who may not fully understand the associated risks of nontraditional mortgages. The proposed guidance discusses the importance of carefully managing the potential heightened risk levels created by these loans. Toward that end, management should: * Assess a borrower’s ability to repay the loan, including any balances added through negative amortization, at the fully indexed rate that would apply after the introductory period. The agencies recognize that this requirement differs from underwriting standards at some institutions and are specifically requesting comment on this aspect of the guidance. * Recognize that certain nontraditional mortgage loans are untested in a stressed environment and warrant strong risk management standards as well as appropriate capital and loan loss reserves. * Ensure that borrowers have sufficient information to clearly understand loan terms and associated risks prior to making a product or payment choice. Comment is requested on all aspects of the guidance, particularly on the section regarding comprehensive debt service qualification standards. Comments are due sixty days after publication in the Federal Registrar. The guidance is attached. Guidance on Non Traditional Mortgages fdic.gov

To: ild who wrote (47780)	12/20/2005 8:46:38 PM
From: aknahow	Read Replies (1) \| Respond to of 110194

"Why does anyone have to be short?" An ETF is neither an open end nor a closed end mutual fund. If it were a closed end fund the premium/discount would end up all over the map, while if it were an open end fund there would be no premium or discount. True anyone wanting to buy, (or sell)any amount of shares can do that just by buying or selling on the NYSE. More willing buyers than willing sellers would result in the premium increasing. GLD's function is to hold gold delivered to it until delivery of such gold is requested. Only when gold is delivered are shares issued. Only when shares are redeemed is gold exchanged for the shares. Thus there is an incentive for the participant broker/dealers to go short shares whenever the premium provides opportunities for profitable arbitrage. What I don't and probably can't understand is how and what determines or the timing of the short sale and the decision to cover. I agree $50,000,000 is not a large amount for a mutual fund, financial institution nor a broker dealer.