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View Diary: Seismic mortgage market event today (80 comments)

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  •  Liquidity. (1+ / 0-)
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    The Termite

    While I have problems with securitized bundling, it does provide a way to inject more capital into a lending market.

    If banks couldn't bundle, even credit unions would have to raise rates. With mortgage-backed-securities (traditional, not subprime), people can invest in a long-term vehicle with actual guarantees on the principle. At the same time, it makes more money available to lend to prospective home-owners.

    The market needs increased regulation, but the concept behind the transaction structure is sound. If you own a home, you probably benefited from it.

    Comments Signature: This will get attached to your comments.

    by Gravedugger on Thu Mar 06, 2008 at 10:36:14 AM PST

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    •  But injecting excess liquidity (2+ / 0-)
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      HeyMikey, The Termite

      just gives the lending institutions license to make riskier loans.

      So there's got to be a balance between how much liquidity they have, and how much is actually needed to service loans and do business.

      Banks, ironically, don't "save" money.  If there's enough extra, they'll find something to do with it.

      We...join arm in arm and decide we are going to remake this country block by block, precinct by precinct, county by county, state by state - that's what hope is

      by DemocraticOz on Thu Mar 06, 2008 at 10:45:18 AM PST

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    •  sure, there's benefits. (2+ / 0-)
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      HeyMikey, The Termite

      there's a benefit to all sorts of market "efficiencies". but there is also a downside. efficiency isn't the be-all and the end-all of human activity.

      I am further of the opinion that the President must be impeached and removed from office!

      by UntimelyRippd on Thu Mar 06, 2008 at 10:50:49 AM PST

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