CNBC: MBS, CDO by diagram...from inception to blowup.

[Sapiens]

[don]

Re: CNBC: MBS, CDO by diagram...from inception to blowup.

Thanks in no small part to iTulip, much of this is old news. What's interesting is seeing how the cover story is being spun out. The omission of some of the basics is, as always, part of the alchemy. I notice that little is said of the good credit, higher income home buyers, that came with downpayments in hand, that were corraled into alt-primes due to the pyramiding housing pricetags few of them could match. I suspect the mix of distain, patronizing sympathy and never overlook race, in the media's audience, makes the sub-prime folks the stars in the housing debacle feature in-progress.

[bill]

Re: CNBC: MBS, CDO by diagram...from inception to blowup.

I notice that little is said of the good credit, higher income home buyers,

Good point,
What are AAA John and Jane home owners going to do when BBB Tom and Sally gets foreclosed on and the home ends up in the REO pile in the same neighborhood with the AAA home owner looking down the street at all the for sale signs? When AAA Jane calls the for sale signs in the neighborhood and talks to the REO Broker and finds out the asking price is way below her principal balance she has on her palace, what is AAA John and Jane going to do? Maybe Moody’s and S&P should look at putting some risk reporting data together regarding the chain of events about to take place in regards to AAA paper.