One of my readers sent these links:
At December 31, 2007, our total mortgage portfolio, which includes our retained portfolio and credit guarantee portfolio, was $2.1 trillion, while the total U.S. residential mortgage debt outstanding, which includes single-family and multifamily loans, was approximately $11.8 trillion.
With $11.8 trillion, the remaining $3 trillion is held on the books of the investment banks as well as the CDO and CMO markets.
These entities comprise the the $11.8 trillion mortgage market (by face value).
Let's suppose a $3 trillion dollar write down, 25% of the value of the mortgages outstanding. I would suppose that that would be more concentrated within the commercial and investment banks, as the GSE's (Fannie Mai and Freddie Mac) have higher lending standards and their average mortgagor more equity in their homes (again, I think... anybody have any data countering that best guess?). The balance of write offs between the GSE and the others would have to be done on best guess basis... not that I think it REALLY matters.
Getting shot in the head with a .44 Magnum makes a bigger mess and a more dramatic presentation at the morgue than does a .38 Special... but the victim is just as dead.
Reports are coming in in which analysts are suggesting that a 50% decline in home values in much of the formerly hot markets is quite possible. (That would make a 25% write down on the mortgage face value a very reasonable assumption). For the most part the only analysts I have any faith in is me, and our resident mad scientist, the good Dr. Lalani... but in this case the guys are using some of the very reasonable metrics regarding price to income that I would use. And, as you know, I think those income assumptions are going to have to come down, HARD.
More to come.
Mentatt (at) yahoo (d0t) com
2 comments:
Today on june 9th 2008-I was deleted by wecansolveit.org-
the organization looking for alternative energy for america has deleted me- the man who solved the energy crisis-
why- because i say I am a messenger of god
you want your cake and eat it too- you want life exactly the way you want it and not told by another
you dont pick your messengers- they are chosen-
i had enough- i have now endured 13 months on this net being deleted by every arrogant organization run by humans and just regular folk like you who have always ignored my messages since my time upon the net-
well i am done with your stupidity-
let your oil prices go up- let your food prices go up- watch your economies crumble- see your jobs lost- get rid of all your pet animals as you cannot feed your family and pet dog as so many are giving them to the pound-
I have come openly with a solution 13 months ago only to be ignored-
now a gluttonous world playing on the internet shall all learn how primitive man is and must be civil to one another- instead of shunning someone bringing forth a solution- in the months to follow- you will learn there is no alternative fuel- panic mode will set in very soon-
when you understand clearly how important energy is- i guess your arragance will stop and just implement my scientific deeds - as for my messenger duties- it will make sense in time- all is well- but it will only get better after your destruction- i am sorry i have to say this- but it is I who has now watched you completely ignore and ridicule a man of god- as always you will learn the hard way-
time will tell
solomon azar
noblefuse.org
Ah yes, another religious crank with no scientific background and wild claims of perpetual motion and magical forces.
I have read your website Solomon, and there's nothing on it but the rantings of a severely disturbed individual.
fallout11 (BSME '96, MScPE '99)
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