Today’s Originations links on the fourth quarter stock outlook, loan limit battle in Washington, and fallout from EU’s big decision.

Edward Harrison of CreditWritedowns was all over the EU announcement today, and ended the day with a post about how the “voluntary” 50% writedown on Greek debt by banks skirts a default. Which means that investors who bought credit default swaps (CDS)—insurance where investors get paid in the event of a default—don’t get paid. Net [...]

At the end of last week a leading Wall Street researcher wrote, “The general tone at ABS East was somewhat gloomy, however most participants view the non-agency sector relatively attractive versus other sectors. The market has seen a recent drop in PrimeX prices, and it is important to understand the collateral underlying in the Prime [...]

The mortgage industry melted down August 2007, then whole financial world melted down September 2008. The Subprime Primer, a hilarious powerpoint chronicle of the crisis, made the rounds back then. I just stumbled across it, and I’ll repeat what I said at the time: Of all the deep analysis of the subprime crisis, this is [...]

This is a good one…

When I was writing my 2011 rate outlook last month, I asked some former colleagues—CFA types much smarter than me—for their views on what a possible municipal bond implosion might mean for mortgage backed securities (MBS). I asked because consumer mortgage rates are tied to MBS, and I was testing a theory on whether MBS [...]

In all of the post-bubble analysis of what went wrong lots of blame is placed on credit default swaps (CDS), which are fairly new, having not existed before 1994. Inauspiciously enough, CDS stemmed from a disaster.

Fed’s Conflicting Recovery Agenda The Federal Reserve Bank of New York has joined forces with BlackRock, PIMCO and other major bond investors in trying to force Bank of America to repurchase $47b of mortgages that were packaged into securities. Bank of America defended its position. “We’re not responsible for the poor performance of loans as [...]

Citi Revenue $25b in Quarter Citgroup announced earnings this morning with earnings per share of 15 cents versus a $0 expected. Revenue was $25 billion versus $21 billion anticipated. Like BofA’s, and Chase’s, these are solid results, but unfortunately overshadowed.

Treasury Secretary Tim Geithner is testifying before congress this morning about the AIG bailout in Fall 2008. At issue is whether AIG counterparties should have been paid in full for AIG’s obligations to them using government aid. As the testimony points out, Treasury and the Fed were mostly concerned about broad economic meltdown and had [...]