Comments on: Howie Hubler’s second act http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/ 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: dismayed http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/comment-page-1/#comment-12992 Mon, 29 Mar 2010 20:48:39 +0000 http://blogs.reuters.com/felix-salmon/?p=3057#comment-12992 Dear Mr. Salmon,

You write that Mr. Hubler “might make up for some tiny part of the chaos he caused during the crisis” through his current venture.

I would suggest that his role was hardly “tiny” as it was his $9.0 billion loss that put in motion the rapid descent of Morgan Stanley, ultimately leading to the Federal Reserve’s rescue. If one believes — and I think many do — that Goldman Sachs would have followed MS into the abyss had it not been for the Fed’s intervention, then I think Mr. Hubler’s part in this crisis is much greater than you suggest.

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By: ChrisMaresca http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/comment-page-1/#comment-12933 Fri, 26 Mar 2010 16:33:10 +0000 http://blogs.reuters.com/felix-salmon/?p=3057#comment-12933 This sounds a lot like the principal reduction program Bank of America announced a few days ago. Maybe I’m thick, but I don’t see why an outside group is needed to do this…

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By: framed http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/comment-page-1/#comment-12911 Thu, 25 Mar 2010 17:56:01 +0000 http://blogs.reuters.com/felix-salmon/?p=3057#comment-12911 I’m not really making any objection, just curious about how it works. You’re correct as there is no sale here, but there is a recognized reduction in value equal to the present value of the payment offered to the borrower. If we are to have indexes offering systematically unbiased information, then all such mutually agreed upon transactions should somehow be reflected in the data.

I would (and do) have the same questions about loan modifications using principal reductions.

That being said, there is clear evidence of a huge dead weight loss when banks foreclose on properties. If the LVG can identify the subset of borrowers that are most likely to strategically default if no intermediary steps in, then it appears to provide a lot of value to both borrowers and lenders.

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By: FelixSalmon http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/comment-page-1/#comment-12905 Thu, 25 Mar 2010 14:56:15 +0000 http://blogs.reuters.com/felix-salmon/?p=3057#comment-12905 I really don’t understand the objections here. If a house falls in value, its reduced value is not normally “recorded in any official manner” unless and until it is sold. So why should that happen here, where there is no sale?

It’s true that the value of the *mortgage* should probably be reduced by some sum, maybe by layering onto the mortgages the contingent liabilities of the rewards. But how is that bad for the *homeowner*?

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By: HBC http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/comment-page-1/#comment-12900 Thu, 25 Mar 2010 08:00:49 +0000 http://blogs.reuters.com/felix-salmon/?p=3057#comment-12900 This is highly distasteful; not only because of shady minus-multibillionaires involved at the top, but because the official numbers so blatantly don’t add up.

Where do you think the sucker cash bribes LVG’s offering come from? A bank-side write-down by any other name, is where. Just like with any other rotten old shylock consolidation, there’s a deal behind the scenes. You can bet on it.

Fence-sitting homeowners should run, not walk, rather than buy this Trojan gift horse.

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By: spencercat http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/comment-page-1/#comment-12892 Wed, 24 Mar 2010 23:52:09 +0000 http://blogs.reuters.com/felix-salmon/?p=3057#comment-12892 Dear Felix Salmon: You never really responded fully to the posted substantiated comments/critiques of your defence of CDSs in your posts a week or so back. I suspect that this post will expose you to a similar level of substantial criticism – i.e. you are defending once again financial products that seek to profit off underlying market imperfections rather than offering an analysis aimed at how to resolve the deeper causes. E,g, as the previous poster noted, lack of transparency appears to be a feature vs. a defect of the offered product from a marketing standpoint. But how is this helpful to restoring confidence in markets?

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By: csodak http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/comment-page-1/#comment-12885 Wed, 24 Mar 2010 20:41:32 +0000 http://blogs.reuters.com/felix-salmon/?p=3057#comment-12885 This is bs. What, a bond trader who puts other peoples money at risk at GS in instruments he doesn’t remotely understand is ‘admired’ when he intimidates authority that questions the legitimacy of trades that threaten the liquidity of the firm like a punk street gangbanger in a suit.

Do you know what transaction friction is in an economic system? This is pathetically waistful. This is a role for the Fed and US Treasury not private sector morons who’ve already proven their to inept to make feduciary financial decisions. The following quote from the hyperlink above says it all…”It is no different from me putting $20,000 in a sack on a kitchen table and saying, ‘This is your money,’” Frank Pallotta, the firm’s executive vice president, and a former Morgan Stanley banker, told me this week. “I can’t talk through numbers. But we’ve signed up many. We’re live and we’re rolling.”)

Felix, is this your form of crony reporting?

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By: framed http://blogs.reuters.com/felix-salmon/2010/03/24/howie-hublers-second-act/comment-page-1/#comment-12877 Wed, 24 Mar 2010 17:22:16 +0000 http://blogs.reuters.com/felix-salmon/?p=3057#comment-12877 This sounds pretty interesting. While, as you argue, it appears to be a win-win for borrowers and lenders, will the reduced value of the house be recorded in any official manner? I guess what I would worry about (as an academic) is that if there is no reporting of the recognized reduced value of the home, then house price indexes will not accurately reflect the true value of the house in public records.

Of course, this seems to be a feature, rather than a bug, for all parties involved as banks seem to be willing to do anything to avoid taking the corresponding principal write-down.

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