| To: gcrispin who wrote (28781) | 11/2/2007 8:32:45 AM | | From: Madharry | | | | "they dont expect actual losses from the CDO tranches they have insured"
they all say that but I have yet to hear an explanation as to why they wouldnt expect actual losses. can someone unbiased explain this to me? I would think that if you insure some financial instrument that everyone is now avoiding like the plague a rational person might want to re-examine his/her assumptions. |
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| To: Madharry who wrote (28783) | 11/2/2007 9:46:18 AM | | From: gcrispin | | | | Speaking of loonie, I received a solicitation through the mail for property my family has owned since the turn of the last century. This is the first time that I can remember when a mass mailing has hit my box for real estate in this area. Of course, the offer is to buy with cash with no fees to the sellers. The catch? The land is farmland.
My brother, who deals with hedge funds on a regular basis, says the hedgies are now interested in buying farmland. |
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| To: Madharry who wrote (28782) | 11/2/2007 10:59:17 AM | | From: Paul Senior | | | | "they dont expect actual losses from the CDO tranches they have insured"
As far as I know, the terms of the insurance agreements are not publicly stated or else not easily found or understood for the various tranches.
1. What is a loss? What is an "actual loss?"
2. What is being insured? If there's a default, is it the principal that the insurers are required to pay, or part of the principal (if the insurers have offloaded some risk to reinsurers) ? And when - after x number of late payments, at foreclosure, after foreclosure when the houses/commercial properties are resold? Or is it only the payments on the mortgage that the insurers have to come up with? If it's the payments, for how long are the insurers on the hook? Some fixed number of years of principal/interest payments - say ten years' worth, or is until the entire loan is paid off, what?
Regardless though, there's no comfort feeling for me with "they dont expect actual losses from the CDO tranches they have insured" Sounds like denial of the situation at worst, lying next worst, or gibberish-for-the-media at best. |
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| To: MCsweet who wrote (28710) | 11/2/2007 11:21:27 AM | | From: Paul Senior | | | | GNW market cap now about $11B.
If they've destroyed $1B in book value with their SIV/CDO or what ever junk they bought and they announce it, stock should recover eventually (couple years) and sell at a better p/bk.
Just seems like company confessionals though START at a minimum of $1B and work ever higher.
I've added a few more GNW shares to my position this a.m. |
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| To: Madharry who wrote (28785) | 11/2/2007 11:25:04 AM | | From: valueminded | | | | | I think the jobs report is like the inflation report in that at best it is misrepresentative. It looks to me like a recession is either imminent or already here - most leveraged financials (and the dollar) are in trouble and we will get another rate cut in December. (imo) |
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