Well written article in Fortune Magazine about the Subprime Mortgage mess:
Junk mortgages under the microscope
A close-up of one deal shows how subprime mortgages went bad
(Fortune Magazine) -- It's getting hard to wrap your brain around subprime mortgages, Wall Street's fancy name for junk home loans. There's so much subprime stuff floating around - more than $1.5 trillion of loans, maybe $200 billion of losses, thousands of families facing foreclosure, umpteen politicians yapping - that it's like the federal budget: It's just too big to be understandable.
So let's reduce this macro story to human scale. Meet GSAMP Trust 2006-S3, a $494 million drop in the junk-mortgage bucket, part of the more than half-a-trillion dollars of mortgage-backed securities issued last year. We found this issue by asking mortgage mavens to pick the worst deal they knew of that had been floated by a top-tier firm - and this one's pretty bad.........
http://money.cnn.com/2007/10/15/markets/junk_mortgages.fortune/index.htm?postversion=2007101609
Replies
3
Beach Fanatic
to summarize:
"I think that's dumb lending and it's dumb borrowing,"
Warren Buffet
"I think that's dumb lending and it's dumb borrowing,"
Warren Buffet
Beach Fanatic
This is an excellent article. It demonstrates how complex this issue is, and how far-reaching the effects can be.
Which is why it is ridiculous to me that our elected officials are all running around promoting their version of a knee-jerk reaction, when there are perhaps 6 of them who could read and understand this article.
(I have a mental picture of a group of staffers using hand-puppets and play-doh attempting to explain this all to W.)
Which is why it is ridiculous to me that our elected officials are all running around promoting their version of a knee-jerk reaction, when there are perhaps 6 of them who could read and understand this article.
(I have a mental picture of a group of staffers using hand-puppets and play-doh attempting to explain this all to W.)
Edited
SoWal InsiderAuthor
(I have a mental picture of a group of staffers using hand-puppets and play-doh attempting to explain this all to W.)
Thanks for the visual
.
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