Felix Salmon
pestering preening potentates
Counterparties
Indiviglio defends securitization by saying it should have been done right, in which case it would never have taken off — Atlantic
Konczal’s requiem for the vanilla option — Rortybomb
37signals is now a $100 billion company, after investors bought 0.000000001% of the company for $1. Genius! — 37signals
The flack-to-hack ratio rises above 2 — BusinessWeek
This is the most amazing map of NYC I’ve ever played with — Oasis
Is this the greatest headline ever? — Twitpic
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The assumption that underwrote MBS issuance was home prices wouldn’t go down. There might be a default, but principal would be protected by rising home values. Too much money was to be had by buying into that assumption, and the investors that didn’t believe that would just be priced out of the MBS sales and sit on the sidelines.
Securitization was tainted by the ‘home prices only go up’ assumption, but so was the rest of the market.
If you’re inclined to reply to this statement: “Salmon’s claim that “no one really knows” what’s in a securitization is common perception. It’s also completely false.” you might find this article useful: http://www.housingwire.com/2009/09/25/se curitization-group-launches-code-to-trac k-loans/