tag:blogger.com,1999:blog-30643134.post2801464270953588962..comments2023-12-26T01:10:26.319-05:00Comments on Accrued Interest: What does a AAA mean anyway?Accrued Interesthttp://www.blogger.com/profile/05096191765979971184noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-30643134.post-39248009355621599152012-08-30T23:41:39.329-05:002012-08-30T23:41:39.329-05:00I fully tie in with everything you have printed.I fully tie in with everything you have printed.Violahttp://www.dnsops.gov/cgi-bin/dnsops-redir.pl?url=http://www.camobel.comnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-70406879201476360432008-09-21T04:01:00.000-05:002008-09-21T04:01:00.000-05:00nice blog i must admit.check out my site at http:/...nice blog i must admit.<BR/>check out my site at http://www.demureholidays.com<BR/>if interested to link with my site pls respond.<BR/>jamesmonishhttps://www.blogger.com/profile/02399621355570925192noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-80639510389303965832008-07-17T01:45:00.000-05:002008-07-17T01:45:00.000-05:00This comment has been removed by a blog administrator.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-55634310528361364592008-02-29T09:19:00.000-05:002008-02-29T09:19:00.000-05:00Let's not ignore where a huge grey area exists. Bi...Let's not ignore where a huge grey area exists. Big underwriters sold these CDO's to their customers and when the CDO's turned sour, the big dealers fired their CDO traders and stopped making markets in any of the CDO's.<BR/><BR/>So we have no idea if the market value even remotely resembles the NPV of any recovery. Nonetheless, banks are being held accountable for the market value of those securities when a market barely exists.<BR/><BR/>The icing on the cake is that the next time the big dealer who sold the customer the CDO calls with his next great product, the customer will take his call rather than slamming the phone on him. <BR/><BR/>If you sell it, you need to maintain some kind of market for it.<BR/><BR/>spongeworthyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-61415935972477229802008-02-29T08:50:00.000-05:002008-02-29T08:50:00.000-05:00Another blog recently compared the financials of P...Another blog recently compared the financials of Pfizer and MBIA. S&P recently downgraded Pfizer to AA but did not downgrade MBIA. The differences in the two financial statements is stunning. It goes a long way to show the unevenness of their ratings.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-72253329413305810882008-02-28T23:43:00.000-05:002008-02-28T23:43:00.000-05:00S & P says MBIA is AAA. The market says MBIA is B...S & P says MBIA is AAA. The market says MBIA is B. Because S & P's is the opinion that counts, the biggest prop to the muni market is not kicked out, and banks have access to more capital to ease the onging credit crunch.<BR/><BR/>It looks to me like the fix was in, and if MBIA has enough assets to weather this storm, than thank God the fix was in. Aside from Ackman, does anyone really WANT to go through the fallout if the monolines get downgraded?<BR/><BR/>Now, if MBIA management gets through this period, dodges the bullet, and then runs back out into the line of fire by insuring more toxic waste, that would be amazing.<BR/><BR/>Similarly, if S & P doesn't start tightening up their rating assumptions, now that everyone knows how risky these CDO's really were...well, that would be criminal.Christopher Wheelerhttps://www.blogger.com/profile/03011681827652509509noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-52822131632233929722008-02-28T22:32:00.000-05:002008-02-28T22:32:00.000-05:00Wall Street doesn't know?Would that it were true.A...Wall Street doesn't know?<BR/><BR/>Would that it were true.<BR/><BR/>Alan Greenspan knew precisely what he was doing: financing the Iraq war.<BR/><BR/><I>THE Iraq war has cost the US 50-60 times more than the Bush administration predicted and was a central cause of the sub-prime banking crisis threatening the world economy, according to Nobel Prize-winning economist Joseph Stiglitz.<BR/><BR/>The former World Bank vice-president yesterday said the war had, so far, cost the US something like $US3trillion ($3.3 trillion) compared with the $US50-$US60-billion predicted in 2003.<BR/><BR/>...<BR/><BR/>Professor Stiglitz told the Chatham House think tank in London that the Bush White House was currently estimating the cost of the war at about $US500 billion, but that figure massively understated things such as the medical and welfare costs of US military servicemen.<BR/><BR/>The war was now the second-most expensive in US history after World War II and the second-longest after Vietnam, he said.<BR/><BR/>The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit.<BR/><BR/>"The regulators were looking the other way and money was being lent to anybody this side of a life-support system," he said.<BR/><BR/>That led to a housing bubble and a consumption boom, and the fallout was plunging the US economy into recession and saddling the next US president with the biggest budget deficit in history, he said.</I>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-39833363707953199822008-02-28T21:33:00.000-05:002008-02-28T21:33:00.000-05:00From 2005-2007, every news paper and magazine was ...From 2005-2007, every news paper and magazine was running stories about the housing bubble. No offense to any journalist that reads this comment, but these people are english majors-- they don't have an economics background or an MBA/CFA.<BR/><BR/>Somehow, Wall Street was caught completely off guard when the bubble collapsed.<BR/><BR/>People who have economic backgrounds and are paid six or more figures a year didn't see anything coming. Greenspan, Bernanke and a Federal Reserve full of PhDs apparently saw nothing wrong. Greenspan even told Americans to switch into ARMs. Meanwhile, a bunch of english majors saw right through the AAA rating nonsense.<BR/><BR/>So now, every news station, paper and magazine is talking about inflation. Members of Congress (usually the last group to figure anything out) are asking about it; today a **democrat** Congressman questioned Bernanke if inflation would limit his ability to lower rates. <BR/><BR/>Oil, corn, sugar, soybeans, CRB index are all at highs. The dollar keeps hitting lows. M2 is growing 6% year over year. The clues are all there-- the english majors and Congress are seeing them anyway.<BR/><BR/>Wall Street has every single US Treasury out past the 10yr note trading BELOW the recent CPI reading.<BR/><BR/>So if history holds, Wall Street will act all surprised in a year, year and a half, when inflation "suddenly" appears.<BR/><BR/>All this discussion of supposedly AAA ratings is making people realize the folks on Wall St don't really know what is going onAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-37457501823818713322008-02-28T21:23:00.000-05:002008-02-28T21:23:00.000-05:00PNL4LYFE,What was AAA at a higher yield? The mono...PNL4LYFE,<BR/>What was AAA at a higher yield? The monoline or the CDO? <BR/>I think there is a big distinction here - to my understanding the insurer AAA of Ambac (and insuring senior tranches) vs the AAA of a CDO is comparing apples to oranges.<BR/>I wouldn't argue with you about the validity of a CDO's AAA, but I would disagree with a monoline's AAA. Or at least, some of the monolines.<BR/>Please correct me if I am missing your point...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-57314418969051788222008-02-28T20:04:00.000-05:002008-02-28T20:04:00.000-05:00One argument that I heard is that while many diffe...One argument that I heard is that while many different securities are rated AAA they all do not have the same definitive risk structure. For example I received an "A" in my intro to macroeconomic class while my friend also received and "A" however my grade point average was a 93 but my friend's average was a 98. There is a pretty large difference between our grades while we got grouped together in the same grade category. Same thing w/AAA rated securities.BackOfficeMonkeyhttps://www.blogger.com/profile/09838740415779467431noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-54763129363174735502008-02-28T18:43:00.000-05:002008-02-28T18:43:00.000-05:00even AAA ratings represent a small chance of defau...even AAA ratings represent a small chance of default. Would you rate giant heavily defended space station with a single unshielded exhaust vent, as an AAA risk, but there's always a chance something can happen. <BR/><BR/>If memory serves, I read an article that the ratings companies were effectively gamed. A bank would call and ask "what is required to get an AAA rating" and fashioned the tranche or pool to match those requirements.Chrisfshttps://www.blogger.com/profile/00518482424112974379noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-1489332617766645142008-02-28T17:12:00.000-05:002008-02-28T17:12:00.000-05:00What are the odds that the social structure of the...What are the odds that the social structure of the US will break down?<BR/><BR/>We've been being told that Government is evil for a long, long time.<BR/><BR/>Suppose people felt that they had been betrayed and that their livelihoods were in danger.<BR/><BR/>Off topic? I don't think so. "AAA" ratings were supposed to be solid gold.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-72885325384531241922008-02-28T15:26:00.000-05:002008-02-28T15:26:00.000-05:00PNL4LYFE:Very, very good comment. Feel the greed....PNL4LYFE:<BR/><BR/>Very, very good comment. Feel the greed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-48559414053146859752008-02-28T13:24:00.000-05:002008-02-28T13:24:00.000-05:00The current rating agency model (issuer pays) is u...The current rating agency model (issuer pays) is unlikely to change as a result of this. How could they keep ratings from being obtained by investors that didn't pay for them? The internet virtually guarantees that ratings will be widely available at no cost. And Egan-Jones doesn't work as a counterargument. The reason no one makes an effort to 'steal' Egan-Jones ratings now is that you can still look at the other three. <BR/><BR/>It bothers me that there are people out there who pretend they were completely blindsided by AAA rated securities that are now in question. Most of the CDO and other structured products traded with higher yields than "real" AAA from the very beginning. In fact, that's why people bought them! The only way to interpret the wider spread is that the market knew all along that they were riskier. Clearly, it didn't know quite how much...PNL4LYFEhttps://www.blogger.com/profile/10009165302340487456noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-8047601293309882752008-02-28T12:24:00.000-05:002008-02-28T12:24:00.000-05:00If I told you the odds your flight to Chicago woul...If I told you the odds your flight to Chicago would land in Lake Michigan were 1 in a 100 would you get on the plane?<BR/><BR/>One in a hundred.<BR/><BR/>No. You wouldn't.<BR/><BR/>We now discover that an AAA rating is a lot less secure than commercial air travel.<BR/><BR/>And people are all up in arms about it. Well, I guess that's not entirely accurate. They're not quite up in arms about it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-14566739501622822272008-02-28T11:33:00.000-05:002008-02-28T11:33:00.000-05:00What alternately amuses and annoys me is all the n...What alternately amuses and annoys me is all the noise from people who barely knew what a credit rating was at this time last year, but now how very definite and strongly expressed feelings about the subject.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-79401235697506189482008-02-28T11:06:00.000-05:002008-02-28T11:06:00.000-05:00All that's needed for the ratings hoo-hah to end i...All that's needed for the ratings hoo-hah to end is for Congress to mandate that ratings agencies can only receive income from investors.<BR/><BR/>This nonsense of being paid by Bear Stearns to rate Bear Stearns needs to stop - yesterday. Yeah, no conflict of interest there. None.<BR/><BR/>What does AAA mean? A company rated AAA can repay any and all of its debts on time regardless of what happens - unless we get nuclear winter. Berkshire, GE, and the US government are the only AAA I can think of right now. One could argue that China is AAA right now as well, except for their nasty habit of squicking all non-Chinese companies doing business within their borders.<BR/><BR/>"AAA relative to the companies playing in that specific sandbox" is 110% inane. Either the market does the right thing here or we will continue to slide sideways at best. Opacity is not a good thing - do we need another 1930's style depression to remind folk of that?Unsympathetichttps://www.blogger.com/profile/01139905123679721805noreply@blogger.com