Comments on: The banks’ cunning MBS plan http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Tommy Vu http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/comment-page-1/#comment-3647 Fri, 03 Jul 2009 01:40:15 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/#comment-3647 “the market price will go higher than the price the banks have on their books”

Then they short them, dump them and make a fortune.

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By: kman http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/comment-page-1/#comment-3646 Fri, 03 Jul 2009 00:36:58 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/#comment-3646 Am I the only one feeling very uneasy about the middle men (the banks) making more profit (again) than any other industry? I am not sure what to do about this — and I don’t even know if anything can be done, but this just strikes me as a sign of an inefficient economy. The investors lose or make little, the invested (companies) lose or make little but the middle men are back on top again. I have a really bad feeling about this.

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By: Griff http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/comment-page-1/#comment-3644 Thu, 02 Jul 2009 23:59:07 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/#comment-3644 only a fool could believe that subprime MBS will be the root cause for any earnings power by financials in Q2. MBS of the highest quality has been down-trodden, which makes that yield arb a little easier to believe. and as Pimco keeps saying, shake hands with the US govt & make them your trading partner (until they try to command your bonus pay-outs, of course)

Sub prime is a sinkhole, and fortunately another 2 years there’ll be dramatically less of it than at the peak in 2007 (moreso from default as opposed to voluntary refi)

Hmm…fire people, temporarily reduce VAR, profit levels stabilize as underwriting becomes profitable again, pay goes up. 100% Believable

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By: silly things http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/comment-page-1/#comment-3636 Thu, 02 Jul 2009 22:09:50 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/#comment-3636 Mortgage back securities are already mark to market (the loans aren’t). MBS price overshot on the downside at the beginning of the year (like securities in every asset class). As such, it is only reasonable that there is bounce back for MBS (just like very asset class).

The relief of bank solvency question powered the financial stocks last quarter. MBS will probably power financial stocks this quarter. Hopefully, improving economy will power next quarter.

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By: Bryan X http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/comment-page-1/#comment-3630 Thu, 02 Jul 2009 20:56:23 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/the-banks-cunning-mbs-plan/#comment-3630 I like the last lines in her blog post:

“Even this year’s alleged record bonuses will probably be paid in illiquid, long-term stock that banks can pull back any time they like. Fake bonuses, then, for fake profits.”

Maybe for bonuses they should start using those little colorful bills that come with the Monopoly board game.

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