Economic nightmare scenario

POSTED BY: SignyM
UPDATED: Tuesday, August 18, 2026 19:56
VIEWED: 4053
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CHRISISALL

Wednesday, February 6, 2008 9:51 PM

Quote:
Originally posted by rue:

LOTR - best NZ ad ever !

I thought that was Xena....*

LALALALALALAisall

FLETCH2

Wednesday, February 6, 2008 10:07 PM

Sweden takes more than it's fair share of persecuted minorities, you may not have much luck there (you're not needy enough.)

I recommend Holland, the Dutch were so grateful to US troops for liberating their country they used to give Americans living there a Tax deduction. You should see if you can still get it.

Bit flat though....

FLETCH2

Wednesday, February 6, 2008 10:07 PM

Sweden takes more than it's fair share of persecuted minorities, you may not have much luck there (you're not needy enough.)

I recommend Holland, the Dutch were so grateful to US troops for liberating their country they used to give Americans living there a Tax deduction. You should see if you can still get it.

Bit flat though....

SIGNYM

Wednesday, February 6, 2008 10:24 PM

Can't be any flatter, wetter, or more cloudy than Buffalo!

OTOH, there is global warming to consider...

Eh. Scratch Holland off the list!
---------------------------------
Always look upstream.

KIRKULES

Thursday, February 7, 2008 12:05 AM

Quote:
Originally posted by SignyM:
ABS, MBS, CMBS, CMO, CDO, CBO, and CLO are subset of what are generally characterized as structured products. Below is what the acronyms stand for.

MBS = Mortgage-Backed Securities, and the universe of MBS is vast, it is however reserved by market participants to denote the pass-through mortgage bonds (agency pass-through and nonagency pass-through).

CMBS = Commercial Mortgage-Backed Securities, which are trust certificates (bonds) backed by a pool of commercial mortgage loans. The certificates are tranched on the basis of prepayment and credit.

CMO = Collateralized Mortgage-backed Obligations, which are pool of pass-through mortgage bonds tranched to reflect the degree of sensitivity to prepayment (particularly, agency CMO).

ABS = Asset Backed Securities, for example home equity loans (HEL), credit cards, etc. These are securities backed by receivables [payments] that are either secured (HEL) or unsecured (credit card), tranched on the basis of prepayment and default risks.

CDO = Collateralized Debt Obligation, for example, ABS CDO which consist of a portfolio of different ABS bonds, and the payments to the holders of these trust certificates are derived from the cash flows of the ABS bonds.

CBO = Collateralized Bond Obligation, for example high yield [emerging market] CBO which consist of a portfolio of different high yield [emerging market] bonds.

CLO = Collateralized [leveraged] Loan Obligation which consist of a portfolio of different leveraged loans

The only real problem with these investment products is figuring out what they are worth on a daily basis when the assets backing them lose value rapidly. This makes them illiquid because nobody is willing to buy them when the price reflects the conditions of a month ago.

On the other hand there is a positive effect of having so many different investment vehicles. The losses of any one financial institution is limited because these securities are so widely held. These securities are held by Banks, Mutual Funds, Brokerages, Foreign Governments, etc. and some were even in Money Market type funds because the fund managers didn't understand what they were buying. The chances of an major bank or financial institution going under is somewhat reduced because they were able to spread their risk to others.

Most of the financial institutions holding these securities have already reported what they believe to be their worst case scenarios, so much of the down side risk is already baked into the cake.

KIRKULES

Thursday, February 7, 2008 12:25 AM

Quote:
Originally posted by chrisisall:
Signy, if it happens as written, it won't be literally overnight, so expect the conservative element here to spend a lot of time poo-pooing it- until they lose their jobs or homes, that is.

The sky needs supports Chrisisall

Conservatives do tend to be more optimistic about the future. We know that the economy is partially driven by psychological factors and it might be possible for liberals to push us into a shallow recession with their constant doom and gloom messages. Recent recessions do seem to correspond with election years when uncertainty is at its greatest.

All we can do is hope for the best and prepare for the worst.

Kirkules, poo-pooing

FREDGIBLET

Thursday, February 7, 2008 1:01 AM

Quote:
Originally posted by Kirkules:
All we can do is hope for the best and prepare for the worst.

Indeed, the problem that I see is that all too often the conservatives seem to think that we should prepare for the best and ignore the worst, even if it happens.

CHRISISALL

Thursday, February 7, 2008 2:07 PM

Quote:
Originally posted by fredgiblet:

Indeed, the problem that I see is that all too often the conservatives seem to think that we should prepare for the best and ignore the worst, even if it happens.

Real Conservatives don't think like that, only those rat-bastid NeoCon carpetbaggin' radical Skull&Bones dry-drunk creeps do. Unfortunately, they've been in power for the better part of a decade now, so damage has been done....

Not radical Chrisisall

HERO

Thursday, February 7, 2008 2:59 PM

Quote:
Originally posted by chrisisall:
Signy, if it happens as written, it won't be literally overnight, so expect the conservative element here to spend a lot of time poo-pooing it- until they lose their jobs or homes, that is.

Good point. If you believe there is going to be a crash...go to amazon.com, type in 'Crash' and you'll see a bunch of books telling you how to survive or profit from the coming global crash. Sure, most were about the crashes that never happened...but just buying the book will make you feel better.

Only a disaster that is external to the market and global in scope will cause the crash you refer to. So go ahead and play Chicken Little all you want...I've got work to do, money to make, things to buy, and life to live.

H

CHRISISALL

Thursday, February 7, 2008 3:25 PM

Quote:
Originally posted by Hero:
and life to live.

And idiots like me to reply to

.

You'll see mister. Ten years from now when you feel the strain, and have to fix something on your car as opposed to just replacing it....and you get an aftermarket part 'cause they don't MAKE your car anymore....and gas is $8 a gallon...

Don't come crying to Chrisisall

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