Comments on: Counterparties http://blogs.reuters.com/felix-salmon/2009/09/25/counterparties-8/ A slice of lime in the soda Sun, 19 May 2013 14:44:14 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: anon http://blogs.reuters.com/felix-salmon/2009/09/25/counterparties-8/comment-page-1/#comment-7132 anon Fri, 25 Sep 2009 19:22:37 +0000 http://blogs.reuters.com/felix-salmon/2009/09/25/counterparties-8/#comment-7132 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/securitization-group-launches-code-to-track-loans/ 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/

]]> By: winstongator http://blogs.reuters.com/felix-salmon/2009/09/25/counterparties-8/comment-page-1/#comment-7123 winstongator Fri, 25 Sep 2009 13:36:30 +0000 http://blogs.reuters.com/felix-salmon/2009/09/25/counterparties-8/#comment-7123 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. 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.

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