20 Aug

Posted at 12:07h in Credit Spectrum

Dear Students, past, present and future:

At this very moment, many of you are probably struggling with decisions that will affect your career over the next twenty years and beyond. The capital markets are in total disarray while most investment bankers have been reduced to glorified Maytag repairmen at best. Most of them have no choice but to believe that the future will look very much like the past, and in so doing are not completely wrong. Yes, the past is still the best predictor of the future, but this only means that somehow, deals will be done next year or the following. That’s true, but how will they be done, and by whom? This is no mere speculation. The rest of your life may hang in the balance. The fate of American finance, the one we know and love, depends on finding solutions to such seemingly unsolvable riddles.

25 Jul

Posted at 21:01h in Credit Spectrum

Structured credit ratings spectacularly failed AAA and AA investors, and they also hollowed out the market for mezzanine risk. A healthy structured market needs investors willing to sacrifice yield for certainty. It also needs investors willing to sacrifice certainty for yield, without whom risk transfer in structured finance...

22 Jul

Posted at 13:08h in Credit Spectrum

SIFMA's decision to exclude mortgages coming from a jurisdiction where the threat of eminent domain being exercised is material was a hot topic on Naked Capitalism on 7/20 (last Friday) where it turned into a wrangle about public policy that, IMHO, missed the point of...

18 Jul

Posted at 13:11h in Credit Spectrum

Patrick Klaybor sent me an email, asking: I am trying to determine the value of a video that I shot of Les Paul at a dinner in Madison Wi. Wanna help? Since we finance portfolios using securitization but don't do single-asset valuations, I connected him to...

05 Jul

Posted at 17:23h in Credit Spectrum

VSOP consists of long and short positions on 50 tranches from a variety of issuers and servicers. The deals come from a range of vintages going back before 2000 but most from 2006 or 2007. There is a high concentration of Class A tranches for...

18 Jun

Posted at 21:57h in Credit Spectrum
Everyone I know is anxious. Those who are employed are worried about how long their jobs will last. My entrepreneur-friends are all anxious that they are not making enough money, not getting enough recognition, not realizing their goals fast enough, etc. Of course those who are neither working nor "entrepreneuring" are also anxious. If we are going to eradicate the root of our economic problem, we must embrace the possibility that these three propositions are true:
  1. Balance sheet realities largely determine economic reality.

13 Dec

Posted at 11:50h in Credit Spectrum

American Banker had an interesting column co-written by William Isaac (former FDIC chairman) and William Dunkelberg on how the Fed has run out of tools to help small business. The most interesting part is the comment of M, who provides a succinct summary of the...

03 Nov

Posted at 12:17h in Credit Spectrum

R&R Consulting, an eleven-year-old Structured Finance consultancy expert in valuing complex securities, is offering new analysis to gauge the credit of prime non-agency residential mortgage backed securities. R&R’s analysis, which they dub PrimeTRAK, provides a current credit valuation on the synthetic mortgage index known as...