Comments on: Shiller tries to defend subprime mortgages http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/ 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: biju005 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-21493 Sat, 04 Dec 2010 04:27:14 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-21493 The foreclosure rate in the third quarter rose by almost 30 % as compared to that in the second quarter. Even though the government is trying to come up with feasible solution to the problems of distressed homeowners, with a good number of loans due to resent by mid of year 2008, the foreclosure rates are expected to remain high. Thus housing market is expected to remain slump throughout next year and even in early 2009.
=================================
Best Mortgages

]]>
By: jennyping http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-19707 Tue, 19 Oct 2010 12:32:01 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-19707 Have a great thought that We need consumer products that people can use properly, and if this is what “plain vanilla” means, that’s a good thing. But we also need financial innovation.
***********
jenny

Best Mortgages

]]>
By: DanO http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-4536 Thu, 23 Jul 2009 03:24:34 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-4536 Don’t forget the greed for up front fees. None of this possible without complicit activity of the professional real estate appraiser…You want how much? Well ,sir, that seems to be the exact value of your place. Puhleeze

]]>
By: Walt http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-4524 Wed, 22 Jul 2009 21:50:42 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-4524 How about all the innovations of the good Dr. Bernanke and his partners, Mssrs. Paulson and Geithner? Several writers have commented that many of these rapid-fire innovations prevented a market melt-down, which most of us would consider a good.

I’ll cite one: the declaration in September ’08 that the FDIC would insure money-market funds, made in the face of a pending huge run on them — about $1.5 trillion, as I understand it — that developed in *one* day following the Reserve Fund debacle.

These funds were not officially bank deposits, but somehow had been allowed (for decades, not just under Greenspan’s Ayn Randism) to pretend as if, without the protection that Diamond & Dybvig said decades ago were necessary, albeit only probably sufficient, to prevent runs.

Ergo, here is an innovation that corrected a long-standing insecurity in our financial system. We could follow it up by requiring that ALL funds that promise a $1.00 NAV be treated as deposit-taking banks, moving from the panic-induced backstop to a sensible long-term framework.

]]>
By: beezer http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-4492 Tue, 21 Jul 2009 22:13:38 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-4492 I’m not sure mortgages with prepayment penalty clauses were often sold. The reason. Mortgages without them were about 60 basis points more expensive. And in a trillion dollar market, 60 basis points adds up to a lot more money for originators, securitizers and investment bank salesmen.

]]>
By: Grant http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-4469 Tue, 21 Jul 2009 07:50:40 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-4469 How about interest rate swaptions (80s), tri-party repos (90s), ETFs (90s), weather derivatives (mid 90s), ECNs (late 90s), CBOE volatility index or VIX (90s), VIX futures and options (mid 2000s), CDARS – FDIC insured deposit network (2000s)?

These examples may not have all originated in the past decade, but they are pretty close and have certainly seen their most dramatic growth in popularity recently. Their relative merits may be debated but a very strong case could be made for them being ‘good’.

I think rather than debating whether financial innovation is good or bad, the more interesting question is who can tell good financial innovation from bad IN ADVANCE? Who has the wisdom and foresight to act as the gatekeeper to let the good innovations through? Like all areas of human innovation, including flight, medicine, engineering and even art, failure can be just as important as success.

When policies and regulations are put in place out of fear of the unknown to create a gatekeeper, society becomes stagnant and innovation (especially the good kind) is stifled. Call it what you like -creative destruction, trial and error or just plain experimentation- but this dynamism is the essence of capitalism, democracy and human ingenuity.

]]>
By: MrBill, Eurasia http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-4468 Tue, 21 Jul 2009 07:00:53 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-4468 Gee, Felix, you cannot think of any useful financial innovations in the past decade or so? Futures, options, ETFs, ABS, MBS, online trading, discount brokers, etc.? Or is your analysis so simplistic that you cannot differentiate between financial innovation and improper use of financial products? If so, you better stay away from sharp knives.

In defence of subprime mortgages? Okay, I will bite. How about self-employed people that cannot qualify for a regular mortgage? Or those that have the down payment, but not the FICO score? Such as those that are new the USA and have not built-up a credit rating? Or those between jobs?

]]>
By: Jeff Wirsing http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-4456 Mon, 20 Jul 2009 20:39:35 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-4456 Creativity and innovation are what made this country great. I tend to compare mortgage products to the gun control analogy, “Guns don’t kill people, people kill people”. The guns themselves don’t hurt people…its people acting irresponsibly that are the problem. Mortgage products don’t hurt people…it’s the irresponsible mortgage lenders that are the problem. Mortgage products aren’t “good or bad” they’re just different and serve different purposes.

Unfortunately, creative products produced unintended consequences…namely untrained mortgage lenders using sophisticated financial products. That doesn’t sound like a problem that can’t be fixed.

]]>
By: A.J. Franks http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-4455 Mon, 20 Jul 2009 20:23:31 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-4455 The first time I’ve read Mr. Salmon and very well done. I remained concerned that it seems like the top end of the Pyramid (Banks, etc) are getting bailed out but the People who need it still can’t get loans.

]]>
By: Unsympathetic http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/comment-page-1/#comment-4452 Mon, 20 Jul 2009 19:23:38 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/shiller-tries-to-defend-subprime-mortgages/#comment-4452 WM: Nice of a Republican spinmeister to drop by – now please try again using actual fact. The private market originated over 80% of those subprime (and Alt-A) loans between 02 and 07. The private market is solely to blame for the current crisis, not the .gov’s response to selfish morons.

Human life depends on USEFUL innovation. Madoff is about to find out what going backwards actually means.. the prisoners at his destination have made some fun public statements.

WM, I have an innovative investment opportunity – and this is the private market, so you can be sure I’m honest. I have a bridge in Florida that you can buy sight unseen. I also have a Nigerian compatriot who will be dealing with my finances. Untold riches for both of us!

]]>