Sunday, February 11, 2007

rating agencies fallen asleep.../ doug kass

23,5% of loans problematic and still no downgrade? wow. they are really behind the curve and have fallen asleep......almost every reader of the numerous housing bubble blogs could have done a better job just by screening the daily news. looks like the call for more competitions in the rating sector is more than justified!

23,5% faule und problembeladene kredite und immer noch keine runterstufung? unfassbar! die sind wirklich unfähig, gucken nur in den rückspiegel und sind im tiefschlaf. jeder gelegentliche leser der diversen bubble blogs hätte hier einen besseren job gemacht. wird zeit das die großen 3 endlich neue konkurrenz bekommen.


The little-known secret in the subprime market is that the ratings agencies have been lax in their downgrades of subprime paper. The recalcitrant agencies -- Moody's, Fitch and Standard & Poor's -- have quietly abetted (blessed) the mushrooming of very aggressive subprime lending that has allowed the Wall Street firms selling these mortgage products to prosper. According to Jim Grant, the number of downgrades at Moody's, for example, were even with upgrades in 2005. Last year, the downgrades/upgrades ratio rose slightly to 1.19:1. The problem is that the historical downgrade/upgrade ratio stands at 2.5:1!

Up to now, lenders (and borrowers) have greased the subprime market -- making it the swiftest-growing portion of residential real estate lending from 2001 to 2007. Lenders relied on the candor of the borrowers -- as nearly half of the subprime mortgages originated last year were low or undocumented.

Here is an example of the relaxed behavior of the agencies. This week's Grants Interest Rate Observer calls attention to a 13-month-old, $350 million asset-backed pool of mortgages, MABS 2006-FRE1.
Foreclosures now stand at 9%, delinquencies at 10.5% and real estate owned at 3.5%.
in other words, about 23% of the loans are problematic -- and neither Fitch nor S&P has downgraded the issue. No doubt investors in MABS 2006-FRE1 (hedge funds, brokerages, institutions, etc.) mark the issuance to par (since it has not been downgraded).


But what will happen when the ratings agencies finally downgrade MABS 2006-FRE1? (Which seems inevitable, but late!) Answer: Investors will sell.

Anyone for a 60-bid....(as you can see on the bbb- this can happen quickly.....wie man hier bei dem bbb- sehen kann dauert ein verfall nicht allzu lange....)
What is astonishing to this observer is the almost universal view that the prime market is in good shape and that the weakness in subprime will be contained.
there is hope out there doug, the "a paper" looks to be also in trouble...(aa and aaa hangs still in there close to 100, but this can change very quickly.....)
es gibt noch hoffnung für doug, so sehen die einfach a besicherten papiere aus. die aa und aaa sind noch nahe 100. betonung liegt auf noch....

Labels: , , ,

9 Comments:

Anonymous Anonymous said...

hey jan,

catch you at russ winter and prudentbear. my email is majickzos@yahoo.com give me a holla.
jim

1:58 PM  
Anonymous Anonymous said...

michael kors, nike trainers, tn pas cher, true religion jeans, sac longchamp, sac guess, true religion outlet, ray ban pas cher, nike free run uk, air jordan pas cher, nike air max, true religion jeans, coach purses, nike air max, converse pas cher, vans pas cher, nike free, louboutin pas cher, timberland, hollister, michael kors, nike roshe run, true religion jeans, nike huarache, hogan, longchamp pas cher, vanessa bruno, air max, nike air max, oakley pas cher, hollister, lacoste pas cher, lululemon, burberry, abercrombie and fitch, ralph lauren uk, nike blazer, mulberry, replica handbags, air force, michael kors, longchamp, michael kors, ray ban uk, nike roshe, north face, ralph lauren pas cher, north face, coach outlet, new balance pas cher

7:39 PM  
Blogger Unknown said...

It is nice.
visit link:
Click Here

10:45 PM  
Blogger jaibalajipackers said...

Jai Balaji Packers and Movers are the best packers and movers in Thane. For services like packing and moving, warehousing services, loading and unloading and car carrier services choose Jai Balaji packers and movers Thane.

11:34 PM  
Blogger Kamal Cargo Packers and Movers said...

Thanks for sharing this amazing article. Keep posting
Packing and moving is a hectic task to do however Kamal Cargo Movers and packers in Thane make it simple for you. Kamal Cargo packers and movers are one of the best specialist co-ops with specialization in relocation services.
http://kamalcargopackersmovers.in/packers-and-movers-in-thane/

4:55 AM  
Blogger Unknown said...

Amazing article… Keep sharing
We Ankitech provide vast range of best quality hospital bed and other hospital equipments in India. These beds have unique elements both for the solace and prosperity of the patient and for the comfort of social insurance specialists. Our hospital beds are the best in all India.
Hospital Bed
Hospital Furniture
http://www.ankitech.in/

4:52 AM  
Anonymous Anonymous said...

A wanderer journaling her travel stories all while journeying and eating her way through the world with her one and only. Aditi is a Dubai based Indian travel blogger whose work and life hasn’t stopped her from aiming to check the entire world off her bucket list. Her travel stories are based around experiencing the culture of a place while highlighting their food and as much as possible jet-setting off to off-beat and usual destinations around the globe with her globetrotter husband.https://bohemianontherun.com

11:12 PM  
Blogger Unknown said...

Wonderful article. Thanks for sharing. Keep posting
Are you planning for the birthday photography for your kid in Delhi, NCR and Gurgaon? My Baby 247 has a professional photographer that create cherished memories photo for you. For more information Visit Us!
http://www.mybaby247.com/” rel=”nofollow”>birthday-photo-shoot-mybaby247
http://www.mybaby247.com/” rel=”nofollow”>new-born-photography-mybaby247
http://www.mybaby247.com/” rel=”nofollow”>toddlers-photoshoot-new-delhi-gurgaon-noida-faridabad

12:11 AM  
Blogger Unknown said...

This is a very nice blog. Your uploaded photographs are pretty amazing. Wonderful article. Thanks for sharing. Keep posting.
Are you planning for the Wedding photography for your Princess or Prince in Delhi, New Delhi, NCR and Gurgaon? Click here to find out the best Wedding photography in NCR for your big day!

12:02 PM  

Post a Comment

<< Home