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| User Info | The Real Story Behind Freddie Mac's NY Game in forum [Ticker] | |||
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Genesis Posts: 71432 Incept: 2007-06-26 
KD^2 
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http://market-ticker.denninger.net/archi....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-08-13 09:27:57
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Wisc-xc Posts: 4828 Incept: 2007-07-14 
outside chicago Online
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If this plays out as you suggest, then the Asian threat to Paulson ultimately fell on deaf ears, and might they be a little more than ****ed by the development? Won't this ultimately also have a detrimental effect on bond yields?
2008-08-13 09:41:52
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Their threat didn't fall on deaf ears. Paulson is just fixing to get spanked by the market, as happens when someone tries to meddle in a thing that can't be, on balance, meddled, ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-08-13 09:43:23
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Nomullet Posts: 3422 Incept: 2007-11-11
Duke City
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Wisc-xc, this(price action) doesn't have anything to do with their current balance sheet or the bailout. Bond buyers simply aren't buying new bond issues from FRANNIE.
---------- if you crap more than once a day you are eating too much Last modified:
2008-08-13 09:47:54 by nomullet
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Brucelee Posts: 837 Incept: 2007-09-12 detroit, mi
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gen, for the first time i felt the ticker was hard to understand. for me this is a new concept and it wasn't clear (at least to me) the machinations of what could happen and the result. it wasn't until i read nomullet's response that it all came together for me. it's such a powerful, powerful issue with so many capillaries that it would be interesting to see what else is affected.
---------- "There is no way it can be allowed to be more prosperous than those it has failed, and those who pay its salaries." - Bozonian
2008-08-13 09:54:38
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Wisc-xc Posts: 4828 Incept: 2007-07-14
outside chicago Online
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Nomullet, I didn't mean agency debt, I meant treasury debt. Wasn't the implicit threat from Asia centered around the quid pro quo of a taxpayer backstop on the fannie paper in exchange for continued purchases of U.S. debt?
2008-08-13 09:55:08
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Bozonian Posts: 14033 Incept: 2007-09-01
PFT - Pure F'n Tin
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I read it, I read MortgageSpy's Hideout, and I still don't understand why they can't exclude New York mortgages from the securitization products.
---------- I'm so depressed about outsourcing I called the suicide hotline and got a call center in Pakistan. They got all excited and asked me if I could drive a truck. Everything I write is my opinion and not to be considered proven fact. Nothing I write should be considered financial advice.
2008-08-13 09:55:57
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Nomullet Posts: 3422 Incept: 2007-11-11
Duke City
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wisc, your mixing the issues. The bailout cannot force the bond market to buy their bonds. The so called 'guarantee' hasn't made them any more attractive. ---------- if you crap more than once a day you are eating too much
2008-08-13 10:01:22
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Quote:The bailout cannot force the bond market to buy their bonds. The so called 'guarantee' hasn't made them any more attractive. Ding ding ding ding ding. "I got a bazooka!" "Uh, *******, I can see through the tube. You have a Bazooka LAUNCHER. Now please stand still while I shoot you!" ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me Last modified:
2008-08-13 10:03:22 by genesis
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Brucelee Posts: 837 Incept: 2007-09-12 detroit, mi
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oops, no one buying? that could be a problem!
---------- "There is no way it can be allowed to be more prosperous than those it has failed, and those who pay its salaries." - Bozonian
2008-08-13 10:07:10
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Mtgspy Posts: 6121 Incept: 2007-10-27 
Online
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I made it into a ticker!!!! Thank you Mr D! The two places are completely shutting down for some time now. Time to get busy on regionals again. ---------- It sounds antiquated, merchantilistic - until you figured out that I was hoarding for war.
2008-08-13 10:07:21
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Mrnome201 Posts: 598 Incept: 2007-07-24
NJ
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"And if so, there is exactly nothing that the government can do about it, because any attempt to use "The Bazooka in The Pocket(tm)" that Paulson was given simply transfers that consequence from the GSEs to government debt generally! In fact, there's an argument to be made that the strong showing for government debt the last couple of weeks has been precisely this sort of warning communicated in "Bond MarketSpeak" - "you may think you have a Bazooka but we've got the shells and an empty launcher won't do you a damn bit of good!" Gen, can u clarify why a rallying bond market is a sort of warning communicated in "Bond marketspeak"? Wouldn't BOTH a TSY and Agency Spread sell-off be a warning? ---------- "Listen you ****ers you screwheads, here's a man who would not take it anymore, a man who stood up against the scum, the ****s, the dogs, the filth, the ****" - Taxi Driver
2008-08-13 10:14:41
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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And the trade on this is? Short NLY, RWT? If there are fewer buyers for mortgage products the value goes down and levered mortgage REIT's go bust?
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2008-08-13 10:15:46
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Wisc-xc Posts: 4828 Incept: 2007-07-14
outside chicago Online
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Nomullet, The issues here are mixed. I understand that the $800 billion foreign investment at issue here wasn't treasuries. I also understand who the taxpayer bailout was in part intended to benefit. But my point is that if the taxpayer bazooka was invoked by Paulson to backstop FRE/FNM then the bond market (treasuries) would react negatively, which would ultimately kill the patient anyway. One thing I'm missing here for sure is do the GSE's survive with the NY law restricting purchases of these mortgage pools or does this expedite their death? In short is fannie and freddie terminal no matter what?
2008-08-13 10:19:07
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Quote:Gen, can u clarify why a rallying bond market is a sort of warning communicated in "Bond marketspeak"? Wouldn't BOTH a TSY and Agency Spread sell-off be a warning? Spreads are widening. The gambit was that the "Bazooka" would cause people to treat Agencies and Treasuries as IDENTICAL, as Treasury would support the agencies if required. The market is saying "horse****!" The market is never wrong, which means that if they now actually TRY to use the backstop they kill TREASURIES. That's NOT what they thought was going to happen. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-08-13 10:21:11
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Wisc-xc Posts: 4828 Incept: 2007-07-14
outside chicago Online
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Well, if there is no backstop, then is it right to assume that banks won't be offloading their toxic **** onto the gse balance sheets after all, spelling certain death for many financial gods?
2008-08-13 10:25:21
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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Doesn't this mean that Paulson will have to tell them that he really, really means it. 
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2008-08-13 10:26:27
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Wisc, there were a lot of so-called "pundits" making totally unsupported claims of various things. Note that I didn't buy into any of them - I want to see evidence, not bald-faced horse****. As for "unloading", exactly how many pounds of **** do you think someone was going to try to stuff in that can, when the can is already levered at 200:1? ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-08-13 10:27:44
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Guydaley Posts: 10915 Incept: 2007-07-10
Missouri & Wyoming
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New York has gone overboard, insane really, on their assistance for homeowners. They have THE most lenient foreclosure time period BY FAR of any state in the union. The lenders that are concerned about staying in business are going to make it virtually impossible to get a loan in New York. I wouldn't want to live there anyway, property taxes are outrageous; maybe agricultural is an exception. ---------- 2/17/09 = Hogzilla bill was signed = THE POINT OF NO RETURN = Cheers to the Reset, LONG LIVE THE UNDERGROUND ECONOMY! STARVE the BEAST! Adopt a J6P.
2008-08-13 10:30:05
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Wisc-xc Posts: 4828 Incept: 2007-07-14
outside chicago Online
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Once the market wraps its mind around the bazooka with blanks scenario then it's really, this time, lights out.
2008-08-13 10:31:35
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Nomullet Posts: 3422 Incept: 2007-11-11
Duke City
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If treasuries skyrocket, why would they backstop the failed bonds? I've said this from the beginning that the GSE bailout is still implicit, not explicit.
---------- if you crap more than once a day you are eating too much
2008-08-13 10:34:24
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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There was a time when lenders were not buying loans in GA. State laws placed too much liability upon lenders so they told GA clients to **** off. Lenders that did business there charged a premium. GA backed down eventually. I would expect the same thing to happen in NY.
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2008-08-13 10:36:21
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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TMD, this isn't about NY. You're being lied to. Stop listening to the pundits and crooners and listen to the market. The market never lies. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-08-13 10:40:20
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Mtgspy Posts: 6121 Incept: 2007-10-27
Online
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I have RELIABLE charts and information that I cannot publish unfortunately showing BOTH FRE AND FNM are taking 7-15x more loan deliveres in the 2-months periods preceding EACH of the two premium hikes. This is what happens when you announce price adjustments 3 months in advance and it takes 2 weeks using modern technologies to close loans, at most. THAT is exactly why THERE WON'T BE ANY MEANINGFUL IMPROVEMENT of 2008 loans relative to 2006-2007 because the credit standard is still F*ed. ---------- It sounds antiquated, merchantilistic - until you figured out that I was hoarding for war.
2008-08-13 10:47:20
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Yeah but the bond market has figured this out Mtg. That's the problem, in a nutshell...... They ain't buying the bull****. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-08-13 10:58:29
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