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Timm

The Return Of Securitisation?

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http://www.ft.com/cms/s/0/47403c68-698f-11...144feabdc0.html

Investment banks, including Goldman Sachs and Barclays Capital, are inventing schemes to reduce the capital cost of risky assets on banks’ balance sheets, in the latest sign that financial market innovation is far from dead. The schemes, which Goldman insiders refer to as “insurance†and BarCap calls “smart securitisationâ€, use different mechanisms to achieve the same goal: cutting capital costs by up to half in some cases, at the same time as regulators are threatening to force banks to increase their capital requirements.

BarCap’s structures involve the pooling of assets from several clients into a secured financial product that can be sold on to other investors and rated by a credit rating agency, potentially reducing the capital allocated against the assets by between 10 per cent and 50 per cent. These new mechanisms are in some respects similar to the discredited structured products, which were widely blamed for fuelling the financial crisis. But the schemes’ backers argue there are two significant differences. First, they involve the securitisation of banks’ existing assets, rather than of new lending. Second, bankers argue that the new products do not disguise the transfer of risk.

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I think you'll find the catch is that no-one will want to buy them.

I'm sure the taxpayer will be co-opted.

It's Goldman Sachs - What could possibly go wrong?

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It seems that the Banks are completely seduced by these financial instruments of concealment and corruption ( FICC ) , lavish salaries and bonuses. We all need protection from these idiots who have taken away our livelihoods while they bathe in their plunder. Tax them heavily and create a BANKER F- -K UP FUND with the proceeds going to the NHS perhaps. Banks who dessent can all f - - k off out of here and take their usuary with them. Perhaps the creation of debt free money is the way forward. Bankers need to be pegged back to their equals e.g Estate Agents.

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Goldman, eh? No surprise there.

Barclays also in the trough.

This is simply untenable. Nothing more than a re-run of the same lunacy that crippled the world.

A poster above points out the flaw - with little trust in banks and rating agencies, who's going to buy it at a price worth trading?

US / UK / Euro / Asian regulators should crush this little scheme immediately. Even the FT's editorial is scathing about it :angry:

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Guest DissipatedYouthIsValuable
First, they involve the securitisation of banks’ existing assets, rather than of new lending.

Second, bankers argue that the new products do not disguise the transfer of risk.

First, the existing assets are worth next to nothing.

Second, the bankers don't give a toss about disguising risk transfer, because they know they'll get bailed out anyway.

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Guest DissipatedYouthIsValuable
I think you'll find the catch is that no-one will want to buy them.

I'm sure central banks will keep queueing up for them.

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Yep, much like "clean sh*t".

Wake up, smell the coffee!

(the very most expensive and exclusive coffee uses beans that have gone through the gut of a cat).

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The scary thing is it will be pension funds buying them.

What do you want Bank toxic debt at a cheap price with loans to multiple companies and individual mortgages in the mix to spread the risk of default.

OR

Gordon Browns fake Printy Printy money in you pension fund from a single source with a nutter as CEO and no credible plan to get paid back.

To me it is a no brainer.

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The scary thing is it will be pension funds buying them.

What do you want Bank toxic debt at a cheap price with loans to multiple companies and individual mortgages in the mix to spread the risk of default.

OR

Gordon Browns fake Printy Printy money in you pension fund from a single source with a nutter as CEO and no credible plan to get paid back.

To me it is a no brainer.

Pension funds were herded into this rubbish via monetary policy, can;t get a return on gilts/treasuries, buy mortgage backed shit. They were naive, but no longer, without any material change in the situation this stuff is as toxic as ever and the credit rating agency ratings are not worth the paper they are written on. Any pension fund with half a brain will not touch this stuff and wait to see where there are any long term sustainable growth opportunities and go for them. That will mean investing in asia probably and turning their back on the economies destroyed by debt.

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"Smart Securitization"..... isn't that a contradiction in terms?

Ohhh, a nice two letter acronym...

Whatever next, the Keynesian Growth Bond?

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Ohhh, a nice two letter acronym...

Whatever next, the Keynesian Growth Bond?

We're leaving the Non-Inflationary Consistent Expansion (or NICE) decade, ......... and beginning the State Holding Insolvent Trash (or SH*T) decade.

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I'm sure there is some stupid fecker out there who will buy them. There was last time, and let's face it, anyone with 1/2 a brain should have seen them for what they were back then. Only question is, who will that stupid fecker be? Who do we know with access to enormous quantities of money and who doesnt know his financial **** from his financial elbow......

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I'm sure there is some stupid fecker out there who will buy them. There was last time, and let's face it, anyone with 1/2 a brain should have seen them for what they were back then. Only question is, who will that stupid fecker be? Who do we know with access to enormous quantities of money and who doesnt know his financial **** from his financial elbow......

Do you mean Gordon Brown MP?

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