Suspension of Mark to maket Means...

[Sammy Jankis]

1) They can do lots of things they aren't going to do.

2) New capital will devalue existing shares. Surely I don't have to explain this to you. And no, the bad debt is not going to go away automatically, but until the holders of the debt get realistic as to its value (i.e. practically worthless) the solvency problem will persist. The holders can't get real about the value because to do so would be admitting to insolvency.

And the whole reason they love wallstreet it because they know in the end, fascism will rescue them from actual consequences, and the that the whole POINT is to create a completely new class of human beings, backed by the power of currency creation, committed to using this power to enslave others, moving forward.

 

[Sammy Jankis]

We are witnessing the bifurcation of humanity.

 

[Cancel 2016.2]

1) They can do lots of things they aren't going to do.

2) New capital will devalue existing shares. Surely I don't have to explain this to you. And no, the bad debt is not going to go away automatically, but until the holders of the debt get realistic as to its value (i.e. practically worthless) the solvency problem will persist. The holders can't get real about the value because to do so would be admitting to insolvency.

LMAO...

1) So your point is that they are not going to do it, just because you say they won't? They have already been talking about doing just that. Obviously we won't know for sure what they do until they do it, but to act like it is not going to happen is premature.

2) Again, you proclaim that the debt is practically worthless. That is complete bullshit. To be completely worthless or anywhere near that would imply that all or almost all of the underlying assets would default. Explain why you believe that to be the case. Because again, currently the default rate is about 8%. These assets are already pricing at levels that indicate a 50-75% default rate.

 

[Bonestorm]

LMAO...

1) So your point is that they are not going to do it, just because you say they won't? They have already been talking about doing just that. Obviously we won't know for sure what they do until they do it, but to act like it is not going to happen is premature.

2) Again, you proclaim that the debt is practically worthless. That is complete bullshit. To be completely worthless or anywhere near that would imply that all or almost all of the underlying assets would default. Explain why you believe that to be the case. Because again, currently the default rate is about 8%. These assets are already pricing at levels that indicate a 50-75% default rate.

1) Yes.

2) What's going on with the values of the assets securing the debt? Solely focusing on the default rate is where your problem seems to be.

 

[Cancel 2016.2]

1) Yes.

2) What's going on with the values of the assets securing the debt? Solely focusing on the default rate is where your problem seems to be.

They are not going to zero. Not even close. Yes, many have lost equity and if the downward spiral continues could lose more equity. But again, the current valuations are assuming that 50-75% of the assets are going to default. Do you honestly believe that we are going to see trillions of dollars in defaults on these loans? That the underlying properties are going to be worth less than 25-50% of the loan values?

No question we are in a bad situation economically right now, but we are no where near the level your position would dictate.

Side note... the reason I use the default rate is because it takes into account the value of the underlying assets relative to the individuals ability to repay the loan. If a property value sinks to the point that it sends equity below loan value, then defaults will tend to increase (as we have seen). If a persons income falls (or the loan payment increases on an ARM) and it puts them into a position that they cannot pay the loan, then that too is reflected in the default rate.

 

[Sammy Jankis]

They are not going to zero. Not even close. Yes, many have lost equity and if the downward spiral continues could lose more equity. But again, the current valuations are assuming that 50-75% of the assets are going to default. Do you honestly believe that we are going to see trillions of dollars in defaults on these loans? That the underlying properties are going to be worth less than 25-50% of the loan values?

No question we are in a bad situation economically right now, but we are no where near the level your position would dictate.

Side note... the reason I use the default rate is because it takes into account the value of the underlying assets relative to the individuals ability to repay the loan. If a property value sinks to the point that it sends equity below loan value, then defaults will tend to increase (as we have seen). If a persons income falls (or the loan payment increases on an ARM) and it puts them into a position that they cannot pay the loan, then that too is reflected in the default rate.

You have presented no argument besides shock and disbelief. It is that bad. All prices were based on grossly speculated values from a completely different era of credit availability

 

[uscitizen]

And if we can just resoore that credit availability everything will be fine seems to be the eggspurts illogic.

 

[Cancel 2016.2]

You have presented no argument besides shock and disbelief. It is that bad. All prices were based on grossly speculated values from a completely different era of credit availability

LOL.... tell us ass... what evidence have you presented?

Bottom line, those homes have values. They are not all going to go to zero. It won't happen. Thus the securities are not worthless. On top of that, you are not going to have 50% of those loans default. If the default rate gets to 20% I would be completely shocked. The reason those securities are pricing so low is that they are being deliberately driven that low.... you have manipulation of stocks on the short side that forced the liquidation of these securities at a time everyone is freaked out about the financial sector. This leads to distressed pricing.

Then people like you and Dung buy into the fear of these securities and believe the BS line that they are worthless (or near worthless). The math does not justify that belief.

 

[Bonestorm]

LOL.... tell us ass... what evidence have you presented?

Bottom line, those homes have values. They are not all going to go to zero. It won't happen. Thus the securities are not worthless. On top of that, you are not going to have 50% of those loans default. If the default rate gets to 20% I would be completely shocked. The reason those securities are pricing so low is that they are being deliberately driven that low.... you have manipulation of stocks on the short side that forced the liquidation of these securities at a time everyone is freaked out about the financial sector. This leads to distressed pricing.

Then people like you and Dung buy into the fear of these securities and believe the BS line that they are worthless (or near worthless). The math does not justify that belief.

The math doesn't justify the belief? Where are they trading right now? Why aren't they being sold? Why does the government have to buy them at price that the market simply cannot support?

Today, they are near worthless. The justification for purchasing them is that, while they might be near worthless today, in the long-run they will be fantastic investments. Now, you might believe that but that doesn't make it so, nor does it change the fact that the crap is near worthless.

 

[Sammy Jankis]

LOL.... tell us ass... what evidence have you presented?

Bottom line, those homes have values. They are not all going to go to zero. It won't happen. Thus the securities are not worthless. On top of that, you are not going to have 50% of those loans default. If the default rate gets to 20% I would be completely shocked. The reason those securities are pricing so low is that they are being deliberately driven that low.... you have manipulation of stocks on the short side that forced the liquidation of these securities at a time everyone is freaked out about the financial sector. This leads to distressed pricing.

Then people like you and Dung buy into the fear of these securities and believe the BS line that they are worthless (or near worthless). The math does not justify that belief.

Look dipshit, they're so worthless people are AFRAID to price them. That's why they suspended mark to market. These are not debateable facts.

 

[Cancel 2016.2]

The math doesn't justify the belief? Where are they trading right now? Why aren't they being sold? Why does the government have to buy them at price that the market simply cannot support?

Today, they are near worthless. The justification for purchasing them is that, while they might be near worthless today, in the long-run they will be fantastic investments. Now, you might believe that but that doesn't make it so, nor does it change the fact that the crap is near worthless.

My dear little dung... the market is pricing based on fear. Not on fundamentals. Pretty much the reverse of what it was doing in 1999 when everyone was overly euphoric. That is the whole point. They are pricing to market right now... they are not pricing on the fundamentals. The reason no one is buying them closer to fair value is that it is a buyers market. They can continue chipping away at the firesale prices. Cash is king.... and the buyers know that the sellers are continually being forced to sell assets at these prices.

 

[Bonestorm]

My dear little dung... the market is pricing based on fear. Not on fundamentals. Pretty much the reverse of what it was doing in 1999 when everyone was overly euphoric. That is the whole point. They are pricing to market right now... they are not pricing on the fundamentals. The reason no one is buying them closer to fair value is that it is a buyers market. They can continue chipping away at the firesale prices. Cash is king.... and the buyers know that the sellers are continually being forced to sell assets at these prices.

You're pretending that you have the ability to determine the "fair value" of these assets when the reality is that you cannot. How much does uncertainty cost? The idea that suspending mark to market as a means to fix the uncertainty problem is laughable.

 

[Sammy Jankis]

My dear little dung... the market is pricing based on fear. Not on fundamentals. .

What about when pricing is based on loose credit, not fundamentals, or bad loans, not fundamentals?

You want to profit from bubbles, but then blank out reality when they pop. You're fundamentally retarded.

 

[Cancel 2016.2]

You're pretending that you have the ability to determine the "fair value" of these assets when the reality is that you cannot. How much does uncertainty cost? The idea that suspending mark to market as a means to fix the uncertainty problem is laughable.

1) Lol... it is not hard to determine a range for fair value based on current default rates and expected increases to the default rates. True, it is not going to be precise. Which is why you see such disparity even in the firesale prices. But again Dung... and do try to address this point this time....

Do you think that more than 50% of the debt is going to default? If yes, do you think that those underlying properties are going to be valued at zero?

2) Suspending mark to market is not designed to 'fix' uncertainty. Temporarily suspending it is designed to relieve the banks from the illiquid fire sale pricing that is currently ongoing. But as I said, IF they suspend mark to market, then they need to enforce complete transparency from the banks in terms of the assets they hold. To the penny. Otherwise you have the same vicious downward cycle just a different catalyst.

 

[Cancel 2016.2]

What about when pricing is based on loose credit, not fundamentals, or bad loans, not fundamentals?

You want to profit from bubbles, but then blank out reality when they pop. You're fundamentally retarded.

No Ass... I bitched about the irrational nature of the market in 1999 as well. When the market stops trading on fundamentals there is a friggin problem. Normally that problem is one of two things... irrational fear or irrational euphoria.

I have also bitched continuously about the stupidity that led to the loose lending practices that we have seen since the mid 1990s. Because again, much of our current problem is a direct result of such practices.

 

[Sammy Jankis]

No Ass... I bitched about the irrational nature of the market in 1999 as well. When the market stops trading on fundamentals there is a friggin problem. Normally that problem is one of two things... irrational fear or irrational euphoria.

I have also bitched continuously about the stupidity that led to the loose lending practices that we have seen since the mid 1990s. Because again, much of our current problem is a direct result of such practices.

Still. Those toxic assets are worth shit, and refusing to put a price on them is a tactic of trying to hide how much the taxpayer will get screwed if we're forced to buy them. I don't care what you bitched about when. It's irrelevant.

 

[Cancel 2016.2]

Still. Those toxic assets are worth shit, and refusing to put a price on them is a tactic of trying to hide how much the taxpayer will get screwed if we're forced to buy them. I don't care what you bitched about when. It's irrelevant.

Again Ass, I will ask you the same question I asked Dung...

Do you think all of those loans are going to default AND the underlying assets valuations will all go to zero?

Side note... of all the people on the site you would not have been on my list of those that would buy it this fear mongering.

You stated that I only wanted to benefit from the hype on the upside... that is why I addressed bitching about the hype on the upside too. It was to refute your strawman attempt.

 

[Sammy Jankis]

Again Ass, I will ask you the same question I asked Dung...

Do you think all of those loans are going to default AND the underlying assets valuations will all go to zero?

Side note... of all the people on the site you would not have been on my list of those that would buy it this fear mongering.

You stated that I only wanted to benefit from the hype on the upside... that is why I addressed bitching about the hype on the upside too. It was to refute your strawman attempt.

Your question is irrelevant. The issue is the value of securities based on mortgages on underlying assets. The value of those securities is so bad, that everyone is afraid to price them, so the taxpayer will never be able to figure out how much he's getting screwed.

The refusal to price, is the refusal to acknowledge reality. For someone who claims to understand markets, you're amazingly retarded.

 

[Cancel 2016.2]

Your question is irrelevant. The issue is the value of securities based on mortgages on underlying assets. The value of those securities is so bad, that everyone is afraid to price them, so the taxpayer will never be able to figure out how much he's getting screwed.

The refusal to price, is the refusal to acknowledge reality. For someone who claims to understand markets, you're amazingly retarded.

How is it irrelevant. You just stated that the issue is the value based on the mortgages on the underlying assets. How exactly do you think that value is determined?

The value is determined based on PV of cash flow and the return on investment. So it most certainly matters how many of those loans default and what the value of the underlying collateral is.

Unless both go to zero, then these securities are not worthless. Period.

 

[Cancel 2016.2]

That said, you are correct... FEAR is indeed driving the price of these assets right now. THAT is the bullshit. Securities should not be priced based on fear or priced based on a firesale. Especially in a market that is being maniupulated by the shorts.