Comments on: Madoff/subprime – spot the difference http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/ Wed, 07 Oct 2015 17:23:32 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: keebo http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/comment-page-1/#comment-1993 Mon, 20 Jan 2014 16:36:29 +0000 http://blogs.reuters.com/edward-hadas/?p=613#comment-1993 Subprime along with other real estate loan categories were good speculation only so long as investors piling into it, in the search for yield, got out before reality set in. I wonder what happens when reality concerning the Fed’s pumped up speculative scheme sets in.

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By: EconCassandra http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/comment-page-1/#comment-1992 Sat, 18 Jan 2014 18:33:11 +0000 http://blogs.reuters.com/edward-hadas/?p=613#comment-1992 It is truly frightening for me to realize I have begun to believe in the credibility of a couple of your recent articles.

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By: walstir http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/comment-page-1/#comment-1991 Fri, 17 Jan 2014 21:16:11 +0000 http://blogs.reuters.com/edward-hadas/?p=613#comment-1991 Securitized subprime mortgages were supposedly good investments not because subprime borrowers were supposed to be good credit risks. The subprimes had low credit rating scores precisely because they are worse than average risks. Subprime mortages were supposedly good investments because the collateral (the house) that backed the mortgage was (going to be) more valuable than the loan. If and when a subprime failed to repay their mortgage, the lender could foreclose and resell the house to recoup his investment. Even if an investor believed that 10% or 20% or more of their subprime borowers would eventually default; they could limit their own investment to the senior tranches of the pool of mortgages being securitized and none of those defaults would impact their own investment.

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By: walstir http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/comment-page-1/#comment-1990 Fri, 17 Jan 2014 21:16:11 +0000 http://blogs.reuters.com/edward-hadas/?p=613#comment-1990 Securitized subprime mortgages were supposedly good investments not because subprime borrowers were supposed to be good credit risks. The subprimes had low credit rating scores precisely because they are worse than average risks. Subprime mortages were supposedly good investments because the collateral (the house) that backed the mortgage was (going to be) more valuable than the loan. If and when a subprime failed to repay their mortgage, the lender could foreclose and resell the house to recoup his investment. Even if an investor believed that 10% or 20% or more of their subprime borowers would eventually default; they could limit their own investment to the senior tranches of the pool of mortgages being securitized and none of those defaults would impact their own investment.

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By: njglea http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/comment-page-1/#comment-1989 Fri, 17 Jan 2014 13:31:44 +0000 http://blogs.reuters.com/edward-hadas/?p=613#comment-1989 Thank you for an excellent article, Mr. Hadas. Yes, honest traders must help develop serious regulatory safeguards for investors and average Americans who entrust their hard-earned 401k money to them.

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By: BidnisMan http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/comment-page-1/#comment-1987 Thu, 16 Jan 2014 12:13:49 +0000 http://blogs.reuters.com/edward-hadas/?p=613#comment-1987 Edit: “investors affect your country” should read “investments affect your country”.

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By: BidnisMan http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/comment-page-1/#comment-1986 Thu, 16 Jan 2014 12:12:20 +0000 http://blogs.reuters.com/edward-hadas/?p=613#comment-1986 Reality – you are correct that hindsight is easier. But I disagree that foresight is not possible. Those who believe that the ‘world should protect investors’ while they sit back and relax are gravely mistaken. Pay attention to what you are really buying into. PAy attention to how those investors affect your country, your city, your family. If it is not clear – then don’t invest. The old way of ‘seeking out the best returns’ is now a proven method of seeking out the snake oil salesmen.

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By: reality-again http://blogs.reuters.com/edward-hadas/2014/01/15/madoffsubprime-spot-the-difference/comment-page-1/#comment-1985 Wed, 15 Jan 2014 17:48:55 +0000 http://blogs.reuters.com/edward-hadas/?p=613#comment-1985 Hindsight is 20:20
A few years down the road from now you’d be telling the story of the big QE bubble and its duped investors.
You’d wonder how so many people could have believed that printing fictional money in a manner limited by no law, term or other formally agreed means of measuring success (or failure) could have been taken seriously.
You’d wonder how lawmakers and economists failed to see that the US was spending (wasting) millions of dollars for each new low-payed hamburger-flipping job created since 2010.

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