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Mortgage Backed Securities


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2006 Oct 9, 10:26am   18,579 views  253 comments

by Patrick   ➕follow (59)   💰tip   ignore  

Ultimately, most of the money that financed the bubble is owed to the owners of mortgage-backed securities. What are these securities? Who owns them? Do these investors realize the risk?

It would be very interesting to see graphs of mortgage-backed bonds trading. Does anyone know the ticker symbols for these bonds and a free way to look up the graphs?

Patrick

#housing

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128   Paul189   2006 Oct 10, 12:44pm  

If I have to guess, I would say more of the same!

129   skibum   2006 Oct 10, 12:56pm  

The odds of winning the $500,000 model home at $50 per ticket:

1 ticket at $50: 1 in 10,000
10 tickets at $500: 1 in 1,000
100 tickets at $5,000: 1 in 100

Our friend Casey clearly has no understanding of simple probability. He's basing the odds of winning on the cost he hopes to recoup for his $500k house, rather than on the total # of tickets sold. What a doofus!

130   Peter P   2006 Oct 10, 1:25pm  

Our friend Casey clearly has no understanding of simple probability. He’s basing the odds of winning on the cost he hopes to recoup for his $500k house, rather than on the total # of tickets sold. What a doofus!

He said he will return money if not enough tickets are sold. Well, IF he gets more than 10000 tickets sold... :)

IF hell freezes over...

131   astrid   2006 Oct 10, 1:38pm  

Didn't he say he is already down to his last couple hundred dollars? How would someone in that position do anything, even buy a pack of ramen for sustenance?

132   Peter P   2006 Oct 10, 1:47pm  

Didn’t he say he is already down to his last couple hundred dollars? How would someone in that position do anything, even buy a pack of ramen for sustenance?

A pack of ramen, even premium one, is at most $5. No toro for him though. :)

133   Peter P   2006 Oct 10, 2:41pm  

We are coming up with new ideas for flavored Almonds and Pistachios, do you have any suggestions?

Hmmm... you must have garlic flavor already, right?

How about parmesan and chili flakes? I have no idea how flavors are infused though.

How about tea? Not necessarily green tea.

134   Peter P   2006 Oct 10, 2:42pm  

As long as someone’s paying the taxes though it might work.

What if the squatter pays the tax?

135   DinOR   2006 Oct 10, 2:52pm  

Just a quick joke to cheer Casey up on his way to prison.

Dude is going to prison for the first time and he's plenty nervous about his prospective "cell mate". Sure enough the guard stops by the cell with the biggest meanest looking 'con' in the joint. Guard says, "Prisoner 635014, you may enter your cell!"

Dude goes in and arranges his meager possesions on the top bunk.

Cell mate says in a very deep voice, "In my cell we like to play a little game called "house".

Dude (nervously says) Uh, o.k how do we play? (fearing the worst).

Cell mate says "Well since you're new here I'll let you pick". "Do you want to be the mommy or the daddy?"

Dude is totally relieved and eagerly shares that he'd like to be the "daddy!"

Cell mate says, "Good, now get over here and s@ck mommy's d@ck!"

136   astrid   2006 Oct 10, 3:09pm  

J Galt,

Do you guys have a genuine Buffalo flavored almond or pistachio? My boyfriend is also always on the look out for ultra hot sinus clearing scotch bonnet flavored nuts. Also, not sure if curry flavoring would work. The Chinese have a very mild curry that would probably taste very good (not spicy at all, very aromatic and a little sweet). Another one of personal interest to me would be rose water flavored almonds or pistachios. I know the flavor is pretty harmonious in baclavas, and I'd be interested to try a rose flavored almond (maybe a sweet rose or jasmine flavored candy shell coating the almond?)

Coconut flavored nuts would also be nice, especially combined with curry spices.

137   astrid   2006 Oct 10, 3:10pm  

"Casey’s problems aren’t as grave as he imagines. All he needs to do is win a couple of nobel prizes in the next few weeks and his financial woes are gone."

Maybe he could win a couple McArthur foundation genius grants too.

138   astrid   2006 Oct 10, 3:19pm  

I have to give credit where credit is due, his suggestion of going on Oprah takes top prize.

Other ideas:

Learn Arabic and become a warzone interpreter in Iraq at upwards of $200K/year

Go join the military to stop foreclosure (hey, real estate always goes up and by the time he's back from Iraq sans a leg, appreciation will bail him out)

Drug muling, already suggested on the blog

Hustling and pimping (legally!) in Nevada

blow the rest of money on lottery tickets and WIN!

buy huge life insurance on family members and then, just his luck, have them die mysteriously in a manner that doesn't implicate him

Win world championship poker

...

No, it's not hopeless at all.

139   astrid   2006 Oct 10, 3:19pm  

his = DS's

140   Randy H   2006 Oct 10, 3:35pm  

Sorry I missed the fun :)

Thanks Paul for all the info. I thought I remembered a call of US Gov't bonds, but I didn't recall the specifics.

As to Casey, I'll go look at what that piece of work is up to now. IANAL, so I don't know if raffling off his debt is legal, but it sure smells bad.

141   B.A.C.A.H.   2006 Oct 10, 3:35pm  

About Casey.

His website is fascinating. It could be a hoax, but I met someone, an inlaw of an inlaw, who did the Casey and by now probably has a half dozen or so properties under water. They are better capitalized so they aren't facing a crisis like that yet.

142   Brand165   2006 Oct 10, 3:41pm  

SFGuy Says: The idea is to stop human beings from exploiting other human beings.

So, uh, doesn't that negate the entire purpose of this blog? :) I mean, we're all waiting for the crash to wipe out speculators and FB's so we can "rightfully" get housing at a "deserving" price. Competition is as natural as evolution.

@Peter P: Just gotta tell ya man, green tea ice cream RULES!

143   astrid   2006 Oct 10, 3:50pm  

sybrib,

"who did the Casey and by now probably has a half dozen or so properties under water"

It sounds like we got a new word for the glossary

144   astrid   2006 Oct 10, 3:53pm  

I can't believe we had contemplated the bubble bust to be dull or anti-climactic. Casey is a born performance artist, he gives and he gives and he never gets "smarterer." He is going to "loose" his shirt in a hugely entertaining manner.

145   astrid   2006 Oct 10, 4:05pm  

Hiding,

That's brilliant. I think you've just found the successor to American Idol and the Apprentice. We certainly won't lack for Caseys desperate enough to participate. America can indulge in scheudenfraude like never before.

Quick! Copyright the idea and send it to Fox before Casey gets his grubby little hands on this idea.

146   astrid   2006 Oct 10, 4:07pm  

"It’s not a financial collapse people, it’s just a very effective diet plan."

Rachel Ray's 50 cents a day???

147   Peter P   2006 Oct 10, 4:10pm  

Rachel Ray’s 50 cents a day???

If it is a financial collapse 50 Yen may get you a big meal. :)

148   astrid   2006 Oct 10, 4:14pm  

I can't wait for SQT's feedback on these ideas.

149   Peter P   2006 Oct 10, 4:29pm  

Somehow I admire Casey for certain things, if he is telling the truth in his blog.

150   Peter P   2006 Oct 10, 4:31pm  

Tea is more delicate. I’ll bring it up, Thanks!

Green tea is now used in all kind of snacks. I wonder if a medium-strong red tea will do.

If we go to trials, I’ll send you some.

Cool. Thanks! :)

151   astrid   2006 Oct 10, 4:41pm  

J Galt,

I definitely recommend woolong type half fermented tea. I find green tea (especially lesser green tea used in most snack foods) to be too weak and a little off. Red tea tend to be strong and lacks a good tea fragrance. woolong tea has a strong dry fragrance that would cut nicely into the richness of the nuts.

Have you eve considered experimenting with star anise for flavoring? A little bit works great for flavoring tofu, eggs and meats, might be good for nut products too.

Also, do you guys have a nougat candy line? That would be a good carrier for flavorings and my family loves nougats.

152   Peter P   2006 Oct 10, 4:44pm  

I definitely recommend woolong type half fermented tea.

Now I want a tea egg. :(

I wonder if almonds can be smoked with tea and other spice. That should bring lots of fragrance.

Astrid is right, red teas probably has more after-taste than taste. They may also add bitterness to the almonds.

153   astrid   2006 Oct 10, 4:44pm  

SQT,

No, you won't be going to hell. Casey's pride and unwillingness to take constructive criticism is what got him into trouble on his blog. He deserve all that's coming to him.

I wonder how long until the banks are able to foreclose on Casey. It sounds like he is already 3-4 months behind on mortgage payments. Prrrrrrrrh (thinking like a cat anticipating fun tormenting a mouse).

154   astrid   2006 Oct 10, 4:47pm  

Peter P,

You can make your own tea egg if you have lipton tea bags, eggs, soy sauce, and star anise on hand. It's super easy.

I should also put up my recipe for easy fried rice.

BTW, I'm starting an occasional blog on food and food related thinking, would you be interested in being a commentor/administrator. IT won't involve heavy blogging responsibility.

Ditto for the other regulars here with an interest in food. Let me know and I'll email invites to you.

155   Peter P   2006 Oct 10, 4:56pm  

BTW, I’m starting an occasional blog on food and food related thinking, would you be interested in being a commentor/administrator. IT won’t involve heavy blogging responsibility.

Sure. :) Thanks for asking.

I can share some of my lazy recipes too.

156   Peter P   2006 Oct 10, 5:21pm  

Now back to HB, this jack@ss casey is going to try to get himself declared a charity, I just know it!!

Perhaps an FB rights activist?

157   Peter P   2006 Oct 10, 5:51pm  

Or perhaps you were just referring to the previous post that implied Activist=Nuts.

What kind of nuts? Are they flavored? :-P

158   Different Sean   2006 Oct 10, 6:07pm  

“Nuff said”
(Where is DifferentSean anyway?)

i'm here -- been visiting the best new bubble blog going - caseyserin.com...

but retreating to work on other projects that i've neglected... house, career, relationship, political advocacy, etc...

159   Different Sean   2006 Oct 10, 7:11pm  

good old Arthur Andersen/Accentura -- didn't they disappear in a puff of auditing smoke, based on overlooking some not so generally accepted accounting practice?

i'm thinking of moving to cooler climes in the south, or else back to UK... where housing affordability is even worse :(

160   Different Sean   2006 Oct 10, 7:37pm  

You gotta be a charity. There’s no way anybody that even pretends to be an attorney told him it was okay. IMO he’s jumped the shark and blown his cover.

i think he visited his attorney and explained his situation, then started regurgitating those great guru get-rich ideas from the seminars, to the point where the attorney just glazes over and says 'sure', 'why not', 'that'll work' until the half hour is up. casey then comes back to report on his blog that his RE attorney has endorsed, well, just about anything... but let's face it, we're living in a world where tom at myspace and whoever at youtube get paid hundreds of millions for an idea -- you just have to think big!

161   Different Sean   2006 Oct 10, 8:01pm  

i'm not too worried about small fry like casey -- he's like the innocent kid who's always left behind holding the can when the nasty kids have run off...

a recent article here pointed out that savvy 'investors' from the well-heeled suburbs invested in property right at the point interest rates went south, then sold at the top of the market a few years later. mom and pop investors from poorer suburbs bought in much later, probably after doing the guru course, and they're facing pain and foreclosure in droves now as prices collapse in the poorer areas. when the hairdresser is giving property tips...

here's a news story today about a billionaire developer who wants more, and when he can't sell his stock at top dollar, just rents it out indefinitely, having built it for 'wholesale' prices. he also wants to pave and skyscraper the whole planet if at all possible. read the 'Your Say' comments link particularly to see the reader reaction...

Triguboff: let's trade trees for homes

162   Allah   2006 Oct 10, 11:35pm  

Oh man, where’s Randy when you need him? Casey’s newest scheme is a “raffle.” You buy tickets for $50 or $100 bucks a pop and he raffles off his house.

Huh? Is this legal?

He should just turn those houses into casino's. I figure if you're going to break the law, you might as well go for the big bucks.

The only way he can legally raffle off the houses is if he is willing to give ALL procedes to a charity and he must also file for a permit. I think if he is not in jail by next year, he should write a book called, "How to Break All The Laws And Get Away With It".

163   Allah   2006 Oct 11, 12:21am  

The way the housing market is right now is like when the nasdaq crashed...but more like in slow motion. It's like the sellers are begging, "Please buy my stock (house), before it hits bottom". It's like their only salvation is if there is a sheeple out there that will put his head on a chopping block in place of the sellers. There are still some sheeple out there, but I don't think there are much more left.

164   DinOR   2006 Oct 11, 12:51am  

allah,

That is so true. Hardly a day goes where I don't wonder to myself, "Why are ALL of these homes being listed at the same time?" I mean everything! From some of Oregon's most stately McMansions to 2/1 ba. fixers gussied up in such a hurry the paint must still be wet!

What exactly is it that is motivating all of these people (sellers) with the same "primal urge" at precisely the same time?

Sales up to OCT 2005 seem to have been done out of a sense of greed. After that fear and protecting profits appear to be the primary drivers.

165   DinOR   2006 Oct 11, 1:42am  

George,

That is more than a little surprising. Especially considering that some of the most bearish comments we've heard have come from the public builders themselves! We are getting reports that wild expectations are in fact alive and well and have seen numerous listings in the Bend, OR area for 200K, just for a buildable lot! (Of course they're not selling but.....)

Even here in OR I've seen my share of "amenities" that never materialized! One of the silliest was a "3 Hole Golf Course". WTF? So you play it 3 times or what? Guess I'll never know b/c it's gone from being a "green space" to....... buildable lots.

166   astrid   2006 Oct 11, 2:05am  

J Galt,

The one instance you saw was a special case because there was an initial request to stay on topic. Usually I'm wholeheartedly into OT esoterica and I'm always happy to learn about interesting subjects like food industry process development (my boyfriend did a stint doing process development for new BBQ sauces and marinades - my verdict? all too sugary and high fructose syrup dependent).

I do like the idea of flavored pistachio and almond, I think they definitely have several advantages over potato chips. They're perceived as healthier and they are healthier than more processed foods. They're compact and easy to carry. They're impulse buy items so more flavors often mean multiple purchases.

At least with my personal purchase habits, I know that I will buy something that sounds appealing novel at least once, even if it is priced more than I would pay for a less novel comparable, and if I really like the flavor, I can be very attached to "my special item."

I know you folks probably know all this and I'm just an amateur shouting towards people at the deep end of the pool. I would definitely look to "upscale" potato chip manufacturers for ideas. Good flavored nuts with similar packaging would make an appealing substitute for KettleChips.

With woolong tea. Yeah, might be a little know fact, but Taiwanese preserves/snack food manufacturers (maybe the best in Asia outside of Japan) prefer woolong tea over green tea. They have a very floral and distinct scent that goes well with many foods.

*astrid, who has threadjacked several posts with OT kitchen knife discussions

167   skibum   2006 Oct 11, 2:15am  

@DinOR,

The doublespeak from the HB's IMO makes a lot of sense. On the one hand they are bearish to investors - setting themselves up for low profit expectations to protect stock value. On the other hand, they've already committed themselves with these completed or near-completed developments, and of course they've got to sell them. Once you've jumpedo out of the plane, there's no use trying to find your way back in - you've gotta turn your attention to finding that parachute ripcord.

George's Lennar observations are interesting, though. I wonder how Kara's operations were so different that they had to file for bankruptcy?

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