Mortgage Backed Securities Quotes

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Goldman Sachs and other investment banks understood the ensuing problem so well that they began betting against the very mortgage-backed securities they were underwriting!
Douglas Rushkoff (Life Inc.: How the World Became a Corporation and How to Take it Back)
In my first meeting with Vladimir Putin in the spring of 2001, he complained that Russia was burdened by Soviet-era debt. At that point, oil ws selling for $26 per barrel. By the time I saw Putin at the APEC summit in Sydney in September 2007 oil had reached $71--on its way to $137 in the summer of 2008. He leaned back in his chair and asked how were Russia's mortgage-backed securities doing.
George W. Bush (Decision Points)
And to whom were these bundles of unrecognizably mashed-up mortgages ultimately sold? Quite often, to you and me. Our pension funds, municipalities, and money-market accounts were made up largely of these “mortgage-backed securities.
Douglas Rushkoff
Old Mama Saturday" “Saturday’s child must work for a living.” “I’m moving from Grief  Street. Taxes are high here though the mortgage’s cheap. The house is well built. With stuff to protect, that mattered to me, the security. These things that I mind, you know, aren’t mine. I mind minding them. They weigh on my mind. I don’t mind them well. I haven’t got the knack of  kindly minding. I say Take them back but you never do. When I throw them out it may frighten you and maybe me too. Maybe it will empty me too emptily and keep me here asleep, at sea under the guilt quilt, under the you tree.
Marie Ponsot
We bought the big white house, at last, by merely signing our names on a piece of paper. Mr. Gore and Mr. Andrews down at the bank arranged the financial transference with an almost invisible maneuver of figures on a card. When my husband asked if we could borrow our money right back again and use the house as security, everybody laughed.
Shirley Jackson (Raising Demons)
Speculators, meanwhile, have seized control of the global economy and the levers of political power. They have weakened and emasculated governments to serve their lust for profit. They have turned the press into courtiers, corrupted the courts, and hollowed out public institutions, including universities. They peddle spurious ideologies—neoliberal economics and globalization—to justify their rapacious looting and greed. They create grotesque financial mechanisms, from usurious interest rates on loans to legalized accounting fraud, to plunge citizens into crippling forms of debt peonage. And they have been stealing staggering sums of public funds, such as the $65 billion of mortgage-backed securities and bonds, many of them toxic, that have been unloaded each month on the Federal Reserve in return for cash.21 They feed like parasites off of the state and the resources of the planet. Speculators at megabanks and investment firms such as Goldman Sachs are not, in a strict sense, capitalists. They do not make money from the means of production. Rather, they ignore or rewrite the law—ostensibly put in place to protect the weak from the powerful—to steal from everyone, including their own shareholders. They produce nothing. They make nothing. They only manipulate money. They are no different from the detested speculators who were hanged in the seventeenth century, when speculation was a capital offense. The obscenity of their wealth is matched by their utter lack of concern for the growing numbers of the destitute. In early 2014, the world’s 200 richest people made $13.9 billion, in one day, according to Bloomberg’s billionaires index.22 This hoarding of money by the elites, according to the ruling economic model, is supposed to make us all better off, but in fact the opposite happens when wealth is concentrated in the hands of a few individuals and corporations, as economist Thomas Piketty documents in his book Capital in the Twenty-First Century.23 The rest of us have little or no influence over how we are governed, and our wages stagnate or decline. Underemployment and unemployment become chronic. Social services, from welfare to Social Security, are slashed in the name of austerity. Government, in the hands of speculators, is a protection racket for corporations and a small group of oligarchs. And the longer we play by their rules the more impoverished and oppressed we become. Yet, like
Chris Hedges (Wages of Rebellion)
Work" I laid telephone line, then cable when it came along. I pulled T-shirts off a silk-screen press. I cleaned offices in buildings thirty-five floors high. I filed the metal edges of grease fryers hot off a welding line. I humped sod in townhouse complexes, and when it became grass I cut it. I sorted mail. I washed police cars, and then I changed their oil. I installed remotes on gas meters so a truck could simply drive down the street and get the readings. I set posts and put up fences, wood and chain link. Five a.m. at the racetrack, I walked hot horses after their exercise. I bathed them. I mopped and swept aisles in a grocery store. Eventually, I stocked shelves. I corrected errors on mortgage papers for a bank. I racked tables in a pool hall. There’s more I’m not telling you. All of this befell me as an adult. As a kid, I cut neighbors’ lawns and delivered newspapers, and I watched after little kids while their parents worked. I painted houses. I collected frogs from ponds and sold them to pet stores. And so on. At fifteen, I went for a busboy position at an all-night diner, but they told me to come back when I turned sixteen. I did. Sometimes, on top of one, I took a second job. It gave me just enough time to sleep between the two. And eat. My father worked, harder than I did, and then he died. Then I worked harder. My mother said, “You’re the man of the house now.” I was seventeen. She kept an eye on me, to make sure I worked. I did. You've just read about all that. Eventually she died, too. I watched my social security numbers grow. I have a pretty good lump. I could leave it to somebody, a spouse or dependent. But there's no one. I have no plan to spend it, but I’ve paid into it. Today I quit my job, my jobs. I had them all written down, phone numbers too, and I called them. You should have seen me, dialing and dialing, crossing names off the list as I went. Some of them I called sounded angry. Some didn’t remember me, and a few didn’t answer. Others had answering machines, but I told the machines I quit anyway. I think about my father. How he worked. I sit by the phone now, after quitting all my jobs, and wish he could see this. A blank calendar on the wall. A single bulb hanging over my head, from a single cord, like the one he wrapped around his neck just before he died.
Michael Stigman
Most of the mortgaged farmers. Most of the white-collar workers who had been unemployed these three years and four and five. Most of the people on relief rolls who wanted more relief. Most of the suburbanites who could not meet the installment payments on the electric washing machine. Such large sections of the American Legion as believed that only Senator Windrip would secure for them, and perhaps increase, the bonus. Such popular Myrtle Boulevard or Elm Avenue preachers as, spurred by the examples of Bishop Prang and Father Coughlin, believed they could get useful publicity out of supporting a slightly queer program that promised prosperity without anyone's having to work for it. The remnants of the Kuklux Klan, and such leaders of the American Federation of Labor as felt they had been inadequately courted and bepromised by the old-line politicians, and the non-unionized common laborers who felt they had been inadequately courted by the same A.F. of L. Back-street and over-the-garage lawyers who had never yet wangled governmental jobs. The Lost Legion of the Anti-Saloon League—since it was known that, though he drank a lot, Senator Windrip also praised teetotalism a lot, while his rival, Walt Trowbridge, though he drank but little, said nothing at all in support of the Messiahs of Prohibition. These messiahs had not found professional morality profitable of late, with the Rockefellers and Wanamakers no longer praying with them nor paying. Besides these necessitous petitioners, a goodish number of burghers who, while they were millionaires, yet maintained that their prosperity had been sorely checked by the fiendishness of the bankers in limiting their credit. These were the supporters who looked to Berzelius Windrip to play the divine raven and feed them handsomely when he should become President, and from such came most of the fervid elocutionists who campaigned for him through September and October.
Sinclair Lewis (It Can't Happen Here)
Just as the financial crisis was incubated when unaccountable bank executives created a culture of rewarding short-term profits without wanting to know the ugly details about their mortgage-backed securities, so too does medicine’s lack of accountability create an institutional culture that fosters overtreating and runaway costs.
Martin Makary (Unaccountable: What Hospitals Won't Tell You and How Transparency Can Revolutionize Health Care)
agencies began to downgrade scores of RMBS CDOs (short for ‘residential mortgage-backed security collateralized debt obligations’, the very term testifying to the over-complex nature of these products).
Niall Ferguson (The Ascent of Money: A Financial History of the World: 10th Anniversary Edition)
then resold their loans in bulk to Wall Street banks. The banks, in turn, bundled the loans into high-yielding residential mortgage-backed securities (RMBS) and sold them on to investors around the world, all eager for a few hundredths of a percentage point more return on their capital. Repackaged as collateralized debt obligations (CDOs), these subprime securities could be transformed from risky loans to flaky borrowers into triple-A rated investment-grade securities.
Niall Ferguson (The Ascent of Money: A Financial History of the World: 10th Anniversary Edition)
The idea was to reinvent mortgages by bundling thousands of them together as the backing for new and alluring securities that could be sold as alternatives to traditional government and corporate bonds - in short, to convert mortgages into bonds.
Niall Ferguson (The Ascent of Money: A Financial History of the World: 10th Anniversary Edition)
Mortgage securities. Pooled together from thousands of mortgages around the United States, these bonds are issued by agencies like the Federal National Mortgage Association (“Fannie Mae”) or the Government National Mortgage Association (“Ginnie Mae”). However, they are not backed by the U.S. Treasury, so they sell at higher yields to reflect their greater risk. Mortgage bonds generally underperform when interest rates fall and bomb when rates rise. (Over the long run, those swings tend to even out and the higher average yields pay off.) Good mortgage-bond funds are available from Vanguard, Fidelity, and Pimco. But if a broker ever tries to sell you an individual mortgage bond or “CMO,” tell him you are late for an appointment with your proctologist.
Benjamin Graham (The Intelligent Investor)
Regulators lent a helping hand. On a spring afternoon in late April 2004, five members of the Securities and Exchange Commission gathered in a basement hearing room to meet a contingent of representatives from Wall Street’s big investment banks to talk about risk. The banks had asked for an exemption for their brokerage units from a regulation that limited the amount of debt they could hold on their balance sheets. The rule required banks to hold a large reserve of cash as a cushion against big losses on those holdings. By loosening up these so-called capital reserve requirements, the banks could become more aggressive and deploy the extra cash in other, more lucrative areas—such as mortgage-backed securities and derivatives.
Scott Patterson (The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It)
Ever heard of collateralized debt obligations? Mortgage-backed securities? Non-bank asset-backed commercial paper? What about income trusts? Or even mutual funds?
David Trahair (Enough Bull: How to Retire Well without the Stock Market, Mutual Funds, or Even an Investment Advisor)
You can go straight to Westminster from your press conference.” What? I stare at the phone in horror. No, I can’t pick up a bloody report. I need to pick up my VISA card! I need to secure my scarf. “Can’t Clare go?” I say. “I was going to come back to the office and finish my research on …” What am I supposed to be writing about this month? “On mortgages.
Sophie Kinsella (Confessions of a Shopaholic (Shopaholic, #1))
The Global Financial Crisis of 2007–08 represented the greatest financial downswing of my lifetime, and consequently it presents the best opportunity to observe, reflect and learn. The scene was set for its occurrence by a number of developments. Here’s a partial list: Government policies supported an expansion of home ownership—which by definition meant the inclusion of people who historically couldn’t afford to buy homes—at a time when home prices were soaring; The Fed pushed interest rates down, causing the demand for higher-yielding instruments such as structured/levered mortgage securities to increase; There was a rising trend among banks to make mortgage loans, package them and sell them onward (as opposed to retaining them); Decisions to lend, structure, assign credit ratings and invest were made on the basis of unquestioning extrapolation of low historic mortgage default rates; The above four points resulted in an increased eagerness to extend mortgage loans, with an accompanying decline in lending standards; Novel and untested mortgage backed securities were developed that promised high returns with low risk, something that has great appeal in non-skeptical times; Protective laws and regulations were relaxed, such as the Glass-Steagall Act (which prohibited the creation of financial conglomerates), the uptick rule (which prevented traders who had bet against stocks from forcing them down through non-stop short selling), and the rules that limited banks’ leverage, permitting it to nearly triple; Finally, the media ran articles stating that risk had been eliminated by the combination of: the adroit Fed, which could be counted on to inject stimulus whenever economic sluggishness developed, confidence that the excess liquidity flowing to China for its exports and to oil producers would never fail to be recycled back into our markets, buoying asset prices, and the new Wall Street innovations, which “sliced and diced” risk so finely, spread it so widely and placed it with those best suited to bear it.
Howard Marks (Mastering The Market Cycle: Getting the Odds on Your Side)
high end” of finance—the investment banks, junk bonds, hedge funds, mortgage-backed securities, private equity, quants, etc.—and this is where many of the astronomical earnings have shown up in recent years.
Abhijit V. Banerjee (Good Economics for Hard Times: Better Answers to Our Biggest Problems)
If the Fed had curbed leverage and raised interest rates in the mid 2000s, there would have been less craziness up and down the chain. American households would not have increased their borrowing from 66 percent of GDP in 1997 to 100 percent a decade later. Housing finance companies would not have sold so many mortgages regardless of borrowers’ ability to repay. Fannie Mae and Freddie Mac, the two government-chartered home lenders, would almost certainly not have collapsed into the arms of the government. Banks like Citigroup and broker-dealers like Merrill Lynch would not have gorged so greedily on mortgage-backed securities that ultimately went bad, squandering their capital. The Fed allowed this binge of borrowing because it was focused resolutely on consumer-price inflation, and because it believed it could ignore bubbles safely. The carnage of 2007–2009 demonstrated how wrong that was. Presented with an opportunity to borrow at near zero cost, people borrowed unsustainably.
Sebastian Mallaby (More Money Than God: Hedge Funds and the Making of a New Elite)
And in 2006, just before the financial system began to collapse, an analyst from Standard & Poor’s, a credit-rating agency that consistently and knowingly gave the highest ratings to near-worthless mortgage-backed securities, said in an internal e-mail, “Let’s hope we are all wealthy and retired by the time this house of cards falters.
Bernie Sanders (Bernie Sanders Guide to Political Revolution)
Power relations among new people and existing owners evolve, but always as politics. Activists and unions in Los Angeles once fought off a Walmart successfully. It is not biological evolution if Walmarts grow when planted. It’s the struggle of history. Joan Didion left California, sold to McDonald’s, and chose to re-zone the ranch. Her brother, whom she worked with to do this, was a powerful lobbyist for the National Realty Committee during the time when such lobbyists pushed to deregulate mortgage underwriting. He participated in the lead-up to the crisis in mortgage-backed securities in 2008. Powerful land-owning families play a role in how we build our cities, how we claim and imagine the land. I wanted Didion to cop to her role in the process.
Steffie Nelson (Slouching Towards Los Angeles: Living and Writing by Joan Didion’s Light)
• Loads are sales charges that kick in when you buy (front-end load) or sell (back-end load) open-end mutual fund shares. • Expense ratio refers to ongoing fees for the fund, which range from 0.09 percent to more than 3 percent; lower fees are associated with index funds, higher fees with managed funds. • Minimum investment requirement for open-end funds typically ranges from $500 to $3,000 for the initial investment only. • NAV (net asset value) equals the total current value of all assets held by the fund minus any outstanding liabilities divided by the total number of outstanding shares [(assets – liabilities)/shares].
Michele Cagan (Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate (Adams 101))
Examples of publicly traded commercial mREITs include: • Jernigan Capital (JCAP), which specializes in self-storage facilities and has a 6.62 percent yield • Apollo Commercial Real Estate Finance (ARI), which holds commercial real estate debt and has a yield of 9.86 percent • Blackstone Mortgage Trust (BXMT), which originates loans backed by commercial properties in the US and Europe and has a yield of 7.15 percent
Michele Cagan (Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate (Adams 101))
The most common certifications include: • LEED (Leadership in Energy and Environmental Design), an internationally recognized green building rating and certification system • HERS (Home Energy Rating System), a nationally recognized rater of a building’s energy efficiency • Energy Star, a US government-backed symbol for energy-efficient products
Michele Cagan (Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate (Adams 101))
The three main players in the MBS market are: • Government National Mortgage Association, or GNMA (pronounced “Ginnie Mae”), is backed by a federal agency and guarantees mortgage payments on loans issued through federal loan programs (like the VA and the FHA). Unlike other MBS, bonds guaranteed by GNMA are backed by the full faith and credit of the US government, just like Treasury bonds. • Federal National Mortgage Association, or FNMA (“Fannie Mae”), is a private corporation that buys mortgages from large commercial banks, repackages them into bonds, and sells those bonds to investors. FNMA is not backed by the federal government (even though the government created it), so these bonds carry higher credit risk (the risk that you won’t get your money back). • Federal Home Loan Mortgage Corporation, or FHLMC (commonly called “Freddie Mac”), works almost the same way as FNMA. It buys up mortgages from smaller lenders, like savings and loan banks or credit unions, then packages them to create MBS. Freddie Mac bonds are not backed by the US government.
Michele Cagan (Real Estate Investing 101: From Finding Properties and Securing Mortgage Terms to REITs and Flipping Houses, an Essential Primer on How to Make Money with Real Estate (Adams 101))
It was the German powerhouse Deutsche Bank AG, not my fictitious RhineBank, that financed the construction of the extermination camp at Auschwitz and the nearby factory that manufactured Zyklon B pellets. And it was Deutsche Bank that earned millions of Nazi reichsmarks through the Aryanization of Jewish-owned businesses. Deutsche Bank also incurred massive multibillion-dollar fines for helping rogue nations such as Iran and Syria evade US economic sanctions; for manipulating the London interbank lending rate; for selling toxic mortgage-backed securities to unwitting investors; and for laundering untold billions’ worth of tainted Russian assets through its so-called Russian Laundromat. In 2007 and 2008, Deutsche Bank extended an unsecured $1 billion line of credit to VTB Bank, a Kremlin-controlled lender that financed the Russian intelligence services and granted cover jobs to Russian intelligence officers operating abroad. Which meant that Germany’s biggest lender, knowingly or unknowingly, was a silent partner in Vladimir Putin’s war against the West and liberal democracy. Increasingly, that war is being waged by Putin’s wealthy cronies and by privately owned companies like the Wagner Group and the Internet Research Agency, the St. Petersburg troll factory that allegedly meddled in the 2016 US presidential election. The IRA was one of three Russian companies named in a sprawling indictment handed down by the Justice Department in February 2018 that detailed the scope and sophistication of the Russian interference. According to special counsel Robert S. Mueller III, the Russian cyber operatives stole the identities of American citizens, posed as political and religious activists on social media, and used divisive issues such as race and immigration to inflame an already divided electorate—all in support of their preferred candidate, the reality television star and real estate developer Donald Trump. Russian operatives even traveled to the United States to gather intelligence. They focused their efforts on key battleground states and, remarkably, covertly coordinated with members of the Trump campaign in August 2016 to organize rallies in Florida. The Russian interference also included a hack of the Democratic National Committee that resulted in a politically devastating leak of thousands of emails that threw the Democratic convention in Philadelphia into turmoil. In his final report, released in redacted form in April 2019, Robert Mueller said that Moscow’s efforts were part of a “sweeping and systematic” campaign to assist Donald Trump and weaken his Democratic rival, Hillary Clinton. Mueller was unable to establish a chargeable criminal conspiracy between the Trump campaign and the Russian government, though the report noted that key witnesses used encrypted communications, engaged in obstructive behavior, gave false or misleading testimony, or chose not to testify at all. Perhaps most damning was the special counsel’s conclusion that the Trump campaign “expected it would benefit electorally from the information stolen and released through Russian efforts.
Daniel Silva (The Cellist (Gabriel Allon, #21))
An old farmer said he quit tobacco for good one day when he discovered he had left his tobacco home and started to walk the two miles for it. On the way, he “saw” that he was being “used” in a humiliating way by a habit. He got mad, turned around, went back to the field, and never smoked again. Clarence Darrow, the famous attorney, said his success started the day that he “got mad” when he attempted to secure a mortgage to buy a house. Just as the transaction was about to be completed, the lender’s wife spoke up and said, “Don’t be a fool. He will never make enough money to pay it off.” Darrow himself had had serious doubts about the same thing. But something happened when he heard her remark. He became indignant, both at the woman and at himself, and determined he would be a success. A businessman friend of mine had a very similar experience. A failure at 40, he continually worried about “how things would come out,” about his own inadequacies, and whether or not he would be able to complete each business venture. Fearful and anxious, he was attempting to purchase some machinery on credit, when the seller’s wife objected. She did not believe he would ever be able to pay for the machinery. At first his hopes were dashed. But then he became indignant. Who was he to be pushed around like that? Who was he to skulk through the world, continually fearful of failure? The experience awakened “something” within him—some “new self”—and at once he saw that this woman’s remark, as well as his own opinion of himself, was an affront to this “something.” He had no money, no credit, and no way to accomplish what he wanted. But he found a way—and within three years he was more successful than he had ever dreamed of being—not in one business, but in three.
Maxwell Maltz (Psycho-Cybernetics: Updated and Expanded)
In the Adaptive Markets framework, complexity means we don't have a good narrative for the system. The solution is obvious: we need to get smarter. Complexity can sometimes be reduced by developing a deeper understanding of the underlying structure of the system. For example, now that we understand the potential for liquidity spirals in statarb portfolios, thanks to August 2007, we can better prepare for them. But the Adaptive Markets framework points to a second problem with complexity, which is the potential divisiveness of special knowledge and the potential for conflict. If the financial system becomes so complex that only a small number of elites truly understand its function and proper maintenance, this knowledge divides the population into those who know and those who don't. Of course, this situation arises with any piece of unique information - I know how to make scallion pancakes in a particular way so they're crispy on the outside but soft and chewy on the inside, and you probably don't. But that piece of knowledge is hardly worth keeping a secret, and the fact that you don't have that knowledge isn't going to get you too upset. But suppose I know how to cure diabetes and you don't. Or I know how to prevent cancer by avoiding certain common foods and you don't. Or I know how to price mortgage-backed securities and credit default swaps and you don't. In these cases, the knowledge I possess confers a certain power and status to me. Complexity creates the need for better narratives and those who have those narratives will become the high priests of complex systems, the gatekeepers of critical, life-altering knowledge. And the difficulty in joining the priesthood - earning an MD/Ph.D. in molecular biology and having twenty year of work experience at biotech and pharmaceutical companies, in the case of curing diabetes - coupled with the societal values of the special knowledge will determine the divisiveness of this elitism.
Andrew W. Lo (Adaptive Markets: Financial Evolution at the Speed of Thought)
This story is not being told as much as it should be. In the late ’70s, the spread [or difference in interest rates] between mortgages at the consumer level and the 10-year US Treasury bond was about 450 basis points, or four and a half percent. Through securitization, we brought down that spread to about 150 basis points, or one and a half percent. When you think about the savings of America and the mechanism for home ownership, securitization was a foundational reason why more Americans were able to buy homes.III Changes to government-influenced underwriting characteristics, which first occurred in 2004, focused on having more people have home ownership and on reducing down payments. The result was that individuals with lower-quality credit would be able to get mortgages that previously would not have been available to them. These were typically called “subprime mortgages.” That led to the financial crisis. The structure of mortgage-backed securities remained strong and good and helpful for society. All good things, if not properly governed, can lead to bad outcomes. That’s what really happened.
David M. Rubenstein (How to Invest: Masters on the Craft)
There’s no real definition of a shadow bank, but a shadow bank is basically a financial institution that performs banking functions. A shadow bank can be anything from an REIT (Real Estate Investment Trust) to a mortgage finance company to a hedge fund to a broker-dealer. Think of what banks do. In the simplest terms, a bank takes in deposits and makes mortgage loans. The mortgage loans are the bank’s investments. The deposits are the bank’s funding. Anyone with a savings or checking account is lending money to a bank. The bank borrows money from the depositors and loans money to the homeowners. Mortgage REITs are a great example of shadow banking. The REIT buys mortgage-backed securities (MBSs) and borrows money to finance the purchases in the Repo market. The mortgage-backed securities are just like a bank writing a mortgage loan, except they’re a security, and the Repo transactions are just like the deposits. But the REIT is not a bank. It’s a shadow bank.
Scott E.D. Skyrm (The Repo Market, Shorts, Shortages, and Squeezes)
It’s importance, however, is bigger than that. Treasury securities are the risk-free yield curve for all of the financial markets. That’s right, the yields of Treasury Bills, Notes, and Bonds from overnight to 30 years make up a yield curve that is used to price all other fixed-income securities. The Treasury market is the reference rate for interest rates. Treasurys are a tool for pricing corporate bonds, municipal bonds, emerging market bonds, federal agencies, mortgage-backed securities, and other dollar assets. On top of that, they’re also a tool for speculation and hedging risk.
Scott E.D. Skyrm (The Repo Market, Shorts, Shortages, and Squeezes)
It was the German powerhouse Deutsche Bank AG, not my fictitious RhineBank, that financed the construction of the extermination camp at Auschwitz and the nearby factory that manufactured Zyklon B pellets. And it was Deutsche Bank that earned millions of Nazi reichsmarks through the Aryanization of Jewish-owned businesses. Deutsche Bank also incurred massive multibillion-dollar fines for helping rogue nations such as Iran and Syria evade US economic sanctions; for manipulating the London interbank lending rate; for selling toxic mortgage-backed securities to unwitting investors; and for laundering untold billions’ worth of tainted Russian assets through its so-called Russian Laundromat. In 2007 and 2008, Deutsche Bank extended an unsecured $1 billion line of credit to VTB Bank, a Kremlin-controlled lender that financed the Russian intelligence services and granted cover jobs to Russian intelligence officers operating abroad. Which meant that Germany’s biggest lender, knowingly or unknowingly, was a silent partner in Vladimir Putin’s war against the West and liberal democracy. Increasingly, that war is being waged by Putin’s wealthy cronies and by privately owned companies like the Wagner Group and the Internet Research Agency, the St. Petersburg troll factory that allegedly meddled in the 2016 US presidential election. The IRA was one of three
Daniel Silva (The Cellist (Gabriel Allon, #21))
What are your feelings from Bush to Obama? Besides being responsible for the death of half a million people, I feel like Bush dealt a huge economic and social blow to the USA, one from which we may never fully recover. He directly flushed 3 trillion dollars down the toilet on hopeless, pointlessly destructive wars in Afghanistan and Iraq …and they’re not even over! For years to come, we’ll be paying costs for all the injured veterans (over 50,000) and destabilizing three countries, because you have to look at the impact that the Afghan war has on Pakistan. Bush expanded the use of torture, and created a whole new layer of government bureaucracy (the “Department of Homeland Security”) to spy on Americans. He created Indefinite Detention (at Guantanamo and other US military bases) and expanded the use of executive-ordered assassinations using the new drone technology. On economic issues, his administration allowed corporations to run things and regulate themselves. The agency that was supposed to regulate oil drilling had lobbyist-paid prostitutes sleeping with employees while oil industry lobbyists basically ran the agency. Energy companies like Enron, and the country’s investment banks were deregulated at the end of the Clinton administration and Bush allowed them to run wild. Above all, he was incompetent and appointed some really stupid people to important positions at every level of government. Certainly, Obama has been involved in many of these same activities. A few he’s increased, such as the use of drone assassinations, but most of them he has at least tried to scale back. At the beginning of his first term, he tried to close the Guantanamo prison and have trials for many of the detainees in the United States but conservatives (including many Democrats) stirred up public resistance and blocked this from happening. He tried to get some kind of universal healthcare because over 50 million Americans don’t have health insurance. This is one of the leading causes of personal bankruptcies and foreclosures because someone gets sick in a family, loses their job, loses their health insurance (because American employers are source of most people’s healthcare) and they can’t pay their health bills or their mortgage. Or they use up all their money caring for a sick family member. So many people in the US wanted health insurance reform or single-payer, universal health care similar to what you have in the UK. Members of Obama’s own party (The Democrats) joined with Republicans to narrowly block “The public option” but they managed to pass a half-assed but not-unsubstantial reform of health insurance that would prevent insurers from denying you coverage when you’re sick or have a “preexisting condition.” The minute it was signed into law, Republicans sued in the courts (all the way to the supreme court) and fought, tooth and nail to block its implementation. Same thing with gun control, even as we’re one of the most violent industrial countries in the world. (Among industrial countries, our murder rate is second only to Russia). Obama has managed to withdraw troops from Iraq and Afghanistan over Republican opposition but, literally, everything he tries to do, they blast it in the media and fight it in Congress. So, while I have a lot of criticisms of Obama, he is many orders of magnitude less awful than Bush and many of the positive things he’s tried to do have been blocked. That said, the Democratic and Republican parties agree on more things than they disagree. Both signed off on the Afghan and Iraq wars. Both signed off on deregulation of banks, of derivatives, of mortgage regulations and of the energy and telecom business …and we’ve been living with the consequences ever since. I’m guessing it’s the same thing with Labor and Conservatives in the UK. Labor or Democrats will SAY they stand for certain “progressive” things but they end up supporting the same old crap... (2014 interview with iamhiphop)
Andy Singer
The Fed is normally very profitable, since we typically earn a higher interest rate on our Treasury and mortgage-backed securities than we pay on the bank reserves that finance our holdings
Ben S. Bernanke (Courage to Act: A Memoir of a Crisis and Its Aftermath)
In retrospect, I think our view of market expectations was too dependent on our survey of securities dealers. Futures markets gave us a reliable read of where markets thought the federal funds rate was going—but not for our securities purchases. For that, economists at the New York Fed asked their counterparts at the securities firms, who paid careful attention to every nuance of Fed policymakers’ public statements. In effect, our PhD economists surveyed their PhD economists. It was a little like looking in a mirror. It didn’t tell us what the rank-and-file traders were thinking. Many traders, apparently, didn’t pay much attention to their economists and were betting our purchases would continue more or less indefinitely. Some called it “QE-ternity” or “QE-infinity.” Their assumption was unreasonable and entirely inconsistent with what we had been saying. Nevertheless, some investors had evidently established market positions based on it. Now, like Metternich, they looked at our statements about securities purchases and asked, “What do they mean by that?” Their conclusion, despite the plain meaning of what I said at the press conference, was that we were signaling an earlier increase in our federal funds rate target. They sold their Treasury securities and mortgage-backed securities, driving up long-term interest rates.
Ben S. Bernanke (Courage to Act: A Memoir of a Crisis and Its Aftermath)
MBSs are difficult to hedge because their duration changes as the market moves. That’s because homeowners can prepay mortgage loans at any time. When homeowners move, refinance, or sell their house, they pay off their loans, and those prepayments are paid directly to the MBS bondholders. When interest rates decline, homeowners repay their mortgage loans faster. When interest rates rise, prepayments slow down and people stay in their homes longer. And therein lies the problem. When interest rates decline, MBS bondholders get more of their original investment back sooner than expected. When interest rates rise, the securities are outstanding for a longer period of time. It’s what’s called negative convexity. When interest rates fall, MBSs become shorter-term securities. When interest rates rise, they become longer-term securities.[
Scott E.D. Skyrm (The Repo Market, Shorts, Shortages, and Squeezes)