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To: The Ox who wrote (8953)	3/14/2008 11:26:43 PM
From: Hawkmoon	Read Replies (3) \| Respond to of 33421

The major banks are eliminating competition in the mortgage industry. Gotta couple of questions as I continue to try and get my arms around this mortgage problem.. The banks repackaged all of these CDO/CMOs and sold them off to investors as securities, right? And now that these investors are left with illiquid CMO paper, the banks are still obligated to pay these investors off, right? Or do the banks have any obligation to the holders of these CMO/CDOs?.. I have to assume the investors who purchased them have a claim against the assets that were bundled into these traunches.. Or are they "SOL"? So if the Banks write off these CMO/CDOs as worthless, they still unofficially remain on the bank's balance sheets, since they effectively paid off the investors, right? And should the value of these assets be restored, even to 50% of their original value, does this mean that the balance sheets of the banks that now hold them will jump 50%? After all, the real property (homes and property) that underlie the value of these mortgage bonds can't realistically be expected to decline to zero also. So eventually the banks will straighten out what the realistic remaining intrinsic value is of these asset backed securities and then reapply that to their balance sheets... Appreciate any assistance y'all can provide in helping me understand this.. Hawk

To: The Ox who wrote (8953)	3/14/2008 11:39:42 PM
From: robert b furman	Read Replies (2) \| Respond to of 33421

Hi OX, To a large degree it was the mortgage originators as in not the banks that got us where we are today. The hot shots that changed the market and didn't price in risk are gone and the banks are left trying to survive. If they pick up the pieces why should they let the intermediaries who fraudulently lied and cheated recover to be once again competition. Paulson's speech today made that clear.IMO Bob

To: The Ox who wrote (8953)	3/15/2008 11:04:25 PM
From: Lee Lichterman III	Respond to of 33421

Your thinking way too hard about why the 10 year is high and going higher as are many others, especially the talking heads. There is conspiracy theory thing going on and no one is trying to squeeze out competition. The long rates are high and going higher because the Fed has made it clear they will cut short term rates and inject obscene amounts of liquidity to try and prop up the market and housing markets along with liquifying the banks. This in turn is inflationary thus long rates need to be higher to match the higher inflation expectations. NOBODY believes the bogus CPI data and everyone can apply the old CPI formula to realize that inflation is running 3-4 times as high as the new fangled CPI lie method states it as. If you are staring high inflation in the face (seen oil, wheat, Soybeans, Healthcare, insurance etc etc) and the Fed is indicating that they will cut and inject even more, then you want higher rates to risk a bond purchase. I think rates are actually too low and anyone buying a bond right now is giving money away. I am actually hoping to take on some debt at this level and let the fed inflate my debt away in the years ahead. If you know mw at all, I despise debt and avoid it at all costs but when I am looking ahead at being able to pay dollars back for pennies, why not? Good Luck, Lee