mcnees287

Julia

You assume available jobs are located near where teenagers live? In many cases the jobs are located in remote areas with small populations (most agricultural work).

Also, I want mine and your teenagers to be studying and preparing for their futures. These are jobs with limited upside, for the most part.

Second Ally Bank. I've used them for about 3 years now, and can only say good things. Their newly offered credit card is run by a third party, which I might avoid. Standard banking is really great. I don't miss the physical branches.

I think the comment is referring to the fact that one can write CDS on top of an underlying instrument. So, if I have $100 million in MBS, other parties, or even myself, can write CDS contracts that reference my $100 million MBS.

What I have just done is to create more exposure than the underlying MBS. The MBS is still only $100 million, but the total outstanding contracts on the pool (MBS + CDS) is now much larger.

What you are talking about is related to offsetting contracts, which is different.

AIG was left holding the bag for most of these. They are one of the few who did not offset like you are saying.

Yes. FHA and the GSEs pool mortgages from banks, stamp them with their guarantee, and then sell the loan pools as MBS to investors.

(Most) banks, especially small ones, are unwilling to sell and hold a fixed rate 30 year mortgage. There's way too much risk, price volatility (driven by rates) and uncertainty about what will happen over a 30 year time period.

Banks only do a 30 year mortgage because they know they can sell it to FHA or the GSEs.

It sounds like a reasonable theory on its face. However, the outcome of this is likely that banks will stop making loans all together. If they were to offer mortgages at all, it certainly would not be a 30 year fixed rate product.

It's not correct to say that banks can sell off all of their risk through securitization. They do in fact retain some of the risk. Though most has been transferred.

The buffer is (in theory) in excess of the losses. So, after a crises a bank would be left with the buffer and be able to continue to operate as a going-concern. The question is how to set the buffer and how big ?

It's just insurance. One side pays the other side if a certain outcome occurs. In exchange for protection from the outcome, the side seeking protection pays a fee.

Meaning, the mortgages (default risk) are guaranteed by the government, either explicitly (FHA) or implicitly through a government sponsored interprise (Fannie and Freddie).

After the housing crisis the private market (mostly banks) left very quickly. FHA and the GSEs stepped in and took their share.

It's likely priced in already.

And why is that? Technically, we could repay all of our debt, at any time, as we print our own currency. There are long-term implications for what you are talking about, but we are far away from anything approaching a crisis (not including self-imposed crisis by The Congress). There is no connection between a household 'maintaining a budget' and the way the US government finances itself. It is a false equivalency, but serves as a useful political cudgel.

Second the Benq. I'm using one with my macbook pro via miniDP. Great experience.

I think you're reading too much into the conspiracy theories here.

The quantitative easing (QE) programs are designed to decrease long-term rates, in other words, flatten the yield curve, which have been more-or-less successful. In the US this program is drawing to a close.

The EU is really a different story and a lot of what is going on there has to do with the fact that they failed to tackle their banking crisis in 2009-2010. The US was able to swallow the medicine more quickly.

The EU did put in place other programs, including the long term refinance operation, which has never has used explicitly.

The economic cycle is just that. Always expect the next downturn. The question is will there by another financial crisis in the next few years, or will the crisis come later?