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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (427892)	10/18/2008 12:56:42 PM
From: tejek	1 Recommendation Respond to of 1575920

This is exactly what I have been saying..........they are so desperate to malign the Dems and Obama they are lying through their teeth at every turn.........inoys, harris, bummer, jlallen, t.fowler......the whole lot of them. They are the very least of us and they are trying to keep the very best of us from being president. It ain't going to happen! What ever happened to PMI? In the old days, I guess it wasn't a law, but every lender, if you didn't have a 20% downpayment, made you get private mortgage insurance. And it was expensive. Actually, PMI became part of the subprime/credit/liquidity problem. Prior to 2000, PMI mostly was provided by companies like MGIC. By 2000, however, monoline insurers like ABK and MBI, who primarily insured municipal loans, began to see the residential insurance as a lucrative market. So they began to insure residential loans too....in a very big way. Well, that was fine except that there is a significant difference between municipal and residential loans.......muni loans rarely go into default. So apparently, if a muni loan was valued at a million dollars, the monoline insurer would not provide insurance dollar for dollar on the loan. Instead they would have a pool of $50 million to cover muni loans totalling say $200 million. In their history, that had worked fine because like I said its rare when a muni loan goes into default and its even rarer when a majority of muni loans default at the same time. So naturally they took the same approach with residential loans.......setting up an insurance pool to cover all the loans they were insuring. Unfortunately, res. loans aren't like muni loans and a whole bunch can default at one time....in fact, a whole lot of them. The rest is history. The monoline insurers found themselves in the untenable positon of not being able to provide all the insurance on defaulting loans for which they had made committments. That, of course, made life at the effected lenders even more difficult and treacherous, and further exacerbated an already serious problem. Bottomline: ABK and MBI now trade at $3 and $9 respectively, down from $62 and $61 respectively in less than a year. And both are on S&P credit watch. As I have said before, there was not any aspect of the real estate/lending business that did not get real quirky either by intent or by stupidity after Bush took over the presidency. Too many unusual twists and turns happened for it all to be coincidence IMO.