MBS- FNMA 4.5 price: 99-27
10-yr Treasury Yield: 3.87%
I’m completely convinced this is THE FINANCIAL STORY OF THE DECADE (from McClatchyDC.com):
NEW YORK — When financial titan Goldman Sachs joined some of its Wall Street rivals in late 2005 in secretly packaging a new breed of offshore securities, it gave prospective investors little hint that many of the deals were so risky that they could end up losing hundreds of millions of dollars on them.
McClatchy has obtained previously undisclosed documents that provide a closer look at the shadowy $1.3 trillion market since 2002 for complex offshore deals, which Chicago financial consultant and frequent Goldman critic Janet Tavakoli said at times met “every definition of a Ponzi scheme.”
The documents include the offering circulars for 40 of Goldman’s estimated 148 deals in the Cayman Islands over a seven-year period, including a dozen of its more exotic transactions tied to mortgages and consumer loans that it marketed in 2006 and 2007, at the crest of the booming market for subprime mortgages to marginally qualified borrowers.
In some of these transactions, investors not only bought shaky securities backed by residential mortgages, but also took on the role of insurers by agreeing to pay Goldman and others massive sums if risky home loans nose-dived in value — as Goldman was effectively betting they would.
Some of the investors, including foreign banks and even Wall Street giant Merrill Lynch, may have been comforted by the high grades Wall Street ratings agencies had assigned to many of the securities. However, some of the buyers apparently agreed to insure Goldman well after the performance of many offshore deals weakened significantly beginning in June 2006. Link to full article…
This one ought to be noticed. Hoping for everyone’s sake this trend goes the right way in 2010. It’s got to be the prime indicator of real improvement for Main Street.
NEW YORK (CNNMoney.com) — The number of Americans filing first-time claims for unemployment insurance fell sharply last week to the lowest level in 17 months, the government said Thursday. Analysts had expected an increase. Link to article…
Gotta say, I find this one interesting too (from FireDogLake.com):
When House leadership was handing out committee assignments to the freshmen class of 2008, in the midst of one of the biggest financial crises to ever rock the country, it was decided that the best thing to do was put new members who needed campaign cash for tough 2010 battles on the Financial Services Committee.
And so 11 freshmen members from conservative leaning districts were assigned to the committee, basically setting them up to be “bribed” by Wall Street. Link to article…