Federal Bail-out, Return to the Source?

When the news hit the street, subprime borrowers took the first hit. No one seems to remember the sequence of federal manipulations or new mortgage terms, which were onerous to the point of being predatory. Terms which were deceptive and misrepresented by the mortgage brokers and lenders. Everyone in the industry wants to wheel and …

Berkshire Hathaway Company Eliminates Bank Deposit Insurance

Jay Leno may joke about tracking the path of a hurricane by tracing the area of insurance cancellations prior to the storm season, but when Kansas Bankers Surety, (a Berkshire Hathaway company since 1996) eliminates private bank deposit insurance for deposits exceeding FDIC protection, need I say more? On 7 September 2008 the FDIC had …

CDO Decision, Sell at a Loss or Milk for What It’s Worth

Ambac paid $850 million to CitiBank for impairment to a CDO (collateralized debt obligation) reportedly worth One Trillion 400 million dollars ($1.4 Trillion) and let Cibibank keep the assets. I found it interesting because the compensation was in regard to the difference in value from to mark to model as opposed to mark to market. …

Fixed Payment Option ARM is a Demented Product

A Barclays Financial report devoted to the impact of Option Arm estimates 48% of the loans will default when the mortgage payments reset or are recast. Mortgage payments are estimated to increase between 60 and 80%. I am not privy to their information, figures, and calculations but under today¬ís circumstances I feel Barclays report is …