Thursday, December 06, 2007

What's a C.D.O.?

I second what FT Alphaville has to say. Maybe they should send the link to all the "smart money" guys that are holding all this stuff so that they finally understand what they are holding.....

Ich kann mich nur FT Alphaville anschließen. Man sollte diesen Link all denen schicken die Besitzer dieser Papiere sind damit Sie endlich begreifen was für eine halsbrecherische Konstruktion den Weg in die Bücher gefunden haben und warum es täglich vorkommen kann das aus AAA über Nacht Junk werden kann. Ich denke da ganz besonders an ein paar deutsche Landesbänker......

Far and away one of the best graphics we’ve seen. Kudos to Felix Salmon and the people at Portfolio


Make sure you click here to start the interactive beauty!

Laßt euch dieses Schmuckstück nicht entgehen und klickt hier um die interaktive Schönheit zu betrachten.

It remains to be seen if the write down from Royal Bank Of Scotland is enough.... Maybe the age of the CDO portfolio is an explanation why they still value the mezzanine tranche with 70 percent..... The same CDO in 07 would be definitley close to zero....

Bin gespannt ob die Abschreibung der Royal Bank Of Scotland genug sein wird.....Evtl. ist ads bereits fortgeschrittenen Alter des CDO Portfolios ja die Erklärung dafür das die Mezzanine Tranche immer noch mit 70% bewertet wird. Ein CDO mit Baujahr 2007 würde wohl eher bei null notieren......

At 30 November, GBM's exposure to these super senior tranches, net of hedges and write-downs, totalled £1.1 billion to high grade CDOs which include commercial loan collateral as well as prime and sub-prime mortgage collateral, and £1.3billion to mezzanine CDOs based predominantly on residential mortgage collateral. The CDOs are largely based on ABS issued between 2004 and the firsthalf of 2006

And with news like this Surge in Auto-Loan DelinquenciesIs Latest Trouble for the Economy via the WSJ it should be clear that the problem is spreading to all parts of securitisations.

Und mit Meldungen wie diesen Surge in Auto-Loan DelinquenciesIs Latest Trouble for the Economy dürfte auch bald der nächste Pfeiler der Verbriefungskredite mehr als nur leichte Schlgseite bekommen....

First came housing loans and the subprime-mortgage crisis.

Now, signs of stress are creeping into another key consumer area: auto loans.

Delinquencies in the auto-loan market are ticking up to their highest level in several years. Lenders are tightening terms in some cases, and interest rates have risen from the rock-bottom levels of a few years ago. About $575 billion in loans for new and used cars are made annually, according to the National Automotive Finance Association.

About 4.5% of auto loans made in 2006 to top-rated borrowers were at least 30 days delinquent as of the end of September, up from 2.9% the previous month,according to a Lehman Brothers survey of companies servicing these loans. That is the biggest one-month jump in at least eight years. Lehman says 12% of subprime borrowers, who have poorer credit records, were delinquent on their 2006 auto loans as of September. That is the highest level since 2002 and up from 11.1% the previous month.

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6 Comments:

Anonymous eh said...

J-M,

Now, signs of stress are creeping into another key consumer area: auto loans.

Maybe the govt should be organizing a bailout for delinquent or 'at-risk' car buyers instead. After all, the average American cannot do without his car, i.e. you cannot drive your house to work, but you can certainly live in your car, as some people have proven.

Oder?

3:26 AM  
Blogger jmf said...

Moin Eh,

good point :-)

It is really fascinating to watch how this all plays out. During the dot.com bust i was a naive investor who got burned badly. I really havn´t had a clue how the dots were connected.

To have the chance to witness an even greater mess within a decade is just unbelievable.

I assume not even a London betting office would have accepted a bet that Wall Street and London are going to become promoters for socialism...

And they still accept bets that Elvis is alive and kicking.. :-)

3:37 AM  
Blogger jmf said...

You gotta love the BOE

"Bank of England: Downside risks to output, inflation"

4:10 AM  
Anonymous Anonymous said...

Ja ich bin echt froh, dass es IBB und HBB gibt, wenn man die normale Presse liest, dann kriegt man ja nur Rauchfahnen im Kopf.
Ich frage mich ja bloss, wie die sogenannten hochbezahlten 'Analysten' ihren Titel verdient haben, wenn sie nach einem teuren MBA Studium nicht mal wissen, wie die Fed funktioniert, wie hier vor kurzem beschrieben wurde.
Das Ganze ist spannend, aber auch schrecklich. Erfahrung meinerseits ist die, dass weder Bankfachleute mittleren Levels noch meine US-Bekannten darueber wissen noch wissen wollen.

Gruss

4:42 AM  
Blogger jmf said...

Mahlzeit Anon,

manchmal wünschte ich mir auch es einfach nicht besser zu wissen :-)

Bin am meisten dankbar dafür das der Blick hinter die "Kulissen" dazu geführt das ich zeitig auf Gold aufmerksam geworden bin :-)

Und die tagtäglichen Meldungen bestätigen mich leider auf Neue das diese Art der Absicherung notwendiger denn je ist.

5:53 AM  
Blogger Edgar said...

Yes, socialism for the rich and powerful, raw capitalism for the rest.

2:46 PM  

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