A slice of Danish

Ok, the world is coming to an end, and we are helpless to stop our demise.

bite my danish?

Ok, the world is coming to an end, and we are helpless to stop our demise.

And history's death certificate will show the cause of death to be suicide by overdose of a toxic cocktail of greed, class warfare, and stangulation by political correctness.

http://www.economist.com/finance/displayStory.cfm?story_id=12855447&source=hptextfeatureA slice of Danish

Dec 30th 2008
From The Economist print edition
An ancient Scandinavian model may help modern mortgage markets

COPENHAGEN?S winding streets and curved waterways are not obvious places to find the answers to one of finance?s most pressing questions. Yet some argue that it was here, amid the devastation of the city?s great fire of 1795, that a mortgage-lending model was developed that may offer a way to thaw today?s mortgage markets in America and Europe.

Denmark has not escaped the credit crunch entirely. Its economy is contracting, house prices are falling and several of its smaller banks have been bailed out after making risky commercial loans. Nevertheless, the country?s mortgage banks are continuing to sell bonds and issue mortgages at a pace similar to that before the credit crisis. ?We have been issuing bonds every day, even in the worst days,? says Henrik Hjortshoj-Nielsen of Nykredit, Denmark?s biggest mortgage lender. ?We haven?t seen lower volumes.?

When a Danish mortgage bank grants a mortgage it is obliged to sell an equivalent bond with a maturity and cashflow that matches those of the underlying loan almost perfectly. This may not seem very different from the ?originate-to-distribute? securitisation models that flourished in America and parts of Europe in recent years. But the Danish system has two characteristics that change it almost completely. The first is that the issuers of mortgage bonds remain responsible for making payments on them. This avoids a flaw that was so painfully exposed in America?s mortgage market: lax lending is encouraged when the link is broken between those who sell mortgages and those who bear the risk of default.

The second feature of the Danish system is that mortgage-holders can also buy the bonds in the market and use them to redeem their mortgages. This is useful if a rise in interest rates (or a fall in house prices) causes mortgage-backed bonds to trade at a discount. Redeeming their bonds allows homeowners to reduce the amount they owe. In America, for instance, mortgage-backed securities have fallen far below their fundamental value in thinly traded markets, partly because the people who would benefit most from buying them have no mechanism to do so. ?Everybody can buy that bond at a discount except that one guy who is most involved with the loan, the homeowner,? says Alan Boyce, a mortgage expert who has worked with George Soros, an investor and philanthropist, on promoting the Danish model in emerging markets. In Denmark, by contrast, a fall in the value of mortgage bonds usually encourages homeowners to snap them up to redeem their own mortgages, as is happening now.

Although this might seem to make such bonds less attractive to investors, in practice it seems to have done the opposite. Ted Lord of Barclays Capital, an investment bank, says that Danish investors see their country?s mortgage bonds as no more risky than their government?s debt. Regulations limit the amount that can be loaned to homeowners to no more than 80% of the value of the home. Denmark?s legal system also makes it easy for banks to seize the homes of defaulters.

Interesting read and Copenhagen is truely a beautiful city!

And they make good snuff!

I have no idea what snuff is???? Unless you are talking about video taping deaths???

I have no idea what snuff is???? Unless you are talking about video taping deaths???

Oh Cod have you opened a can of worms.

Actually snuff is a finely ground tobacco that can be snorted. The tobacco product called Copenhagen that traderx is referring to is dip which is placed between the lip and teeth and sucked on. Then the remnants are spit out. Dip generally also has fine bits of glass in it to "enhance" the experience through micro cuts allowing the nicotine faster entry into the blood stream.

Oh Cod have you opened a can of worms.

Actually snuff is a finely ground tobacco that can be snorted. The tobacco product called Copenhagen that traderx is referring to is dip which is placed between the lip and teeth and sucked on. Then the remnants are spit out. Dip generally also has fine bits of glass in it to "enhance" the experience through micro cuts allowing the nicotine faster entry into the blood stream.

Yuk!!!

Oh Cod have you opened a can of worms.

Actually snuff is a finely ground tobacco that can be snorted. The tobacco product called Copenhagen that traderx is referring to is dip which is placed between the lip and teeth and sucked on. Then the remnants are spit out. Dip generally also has fine bits of glass in it to "enhance" the experience through micro cuts allowing the nicotine faster entry into the blood stream.

I am behind the curve on video taping deaths. Is that a custom in Copenhagen?

which reminds me of a local 7-11 employee telling me about an ex-major league manager[mets] berating her for not having a rebate coupon for Copenhagen. Apparently the ex-mets manager likes to take the dip overseas where availabilty is limited and the multi purchase of copenhagen sans rebate was not forgiven. hows that for tangential minutiae?