Say, from where does this money come, again?

[xmtpedprl]

Hi,

I'm no financial genius - or any other kind of genius for that matter - but when I read stuff like this is kinda makes me go, "Hmmmmmmm."

Perhaps those here with a greater understanding than myself can interpret the tea leaves here, and help my little gerbil wheel slow down a bit, as it's working overtime right now running the scenario:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aur2QcWbKf2U&refer=home

I mean, where's this all coming from, again...?

And what, if anything, does this mean for us in the coming years...? Must mean *something*. Beyond IVPI, HVCC, ABC and XYZ, that is...

Thanks,

Dave...

 

[The Bob]

http://blogs.wsj.com/economics/2007/08/12/how-does-the-fed-inject-money-into-the-economy-a-primer/

 

[Hamlet]

Bank of America Corp. Chief Executive Officer Kenneth Lewis urged policy makers today to choose between bailing out Wall Street investment banks or letting the ``hotbeds of risky financial innovation'' fail as the market dictates.
``I understand the argument for opening up the Fed's discount window to investment banks in this environment,'' Lewis said in a speech today at New York University's Stern School of Business. ``But I'd also say that providing a public backstop to an inherently risky business that is not required to backstop itself is a tough sell for taxpayers.''

Interesting comment....

 

[xmtpedprl]

Yep, those comments had my attention, as well.

Dave...

 

[Elliott]

Adept asked, where's this all coming from ?

They make it the old fashion way, they print it,
we'll actually its just an accounting function.
In yester year, the financial collapse of so many
of the companies who took 'billion dollar' loses
would have caused a run on the banks, but it
has now virtually been capitalized....it shows up
in a weak dollar and inflation (we are all paying
for it).

 

[The Bob]

You think those are interesting comments? Read on............

Mishkin identified the genesis of the housing bubble in a breakdown of underwriting standards, linked to the distorted incentives that paid firms to originate a large volume of loans, rather than high quality loans. As prices rose, the views of investors and banks alike were clouded by the expected high returns that blinded them to the risks.

"These problems became apparent only in retrospect," he said, casting off any responsibility for the Fed to have caught the problem in time. "Neither the market nor regulators had sufficient information for evaluating the nature of the risks involved."

http://www.marketwatch.com/news/sto...BBA-9FD4-F64F2F25FD3F}&tool=1&dist=bigcharts&

 

[GCJim]

"Neither the market nor regulators had sufficient information for evaluating the nature of the risks involved."

How about an appraisal from an honest, ethical, qualified appraiser?
(The joke / yoke is on us.)

 

[GCJim]

PS-I'm getting very tired of comments (aka CRAP) from 'industry leaders'.
Analyzing loan risk is nearly down to a science at this point, and it ain't rocket science. These problems are very easy to fix (but, EXPENSIVE for the big players. Thus, all the hot air...)

 

[Hamlet]

"These problems became apparent only in retrospect,"

Really...m2:

 

[Elliott]

The small banks didn't sucumb to the subprime products.
The products were leverage 30 to 1. The market delt
well with the problem. Now we have a bunch of industries
fighting to 'fix' the problem...'Hey, we have the solution,
write legislation to favor us.' Hopefully sanity will prevail.
But we had years of the 'national' lenders who cared little
about borrower or property standards.