Junk Mortgages

[SHELLY]

Well written article in Fortune Magazine about the Subprime Mortgage mess:

Junk mortgages under the microscope
A close-up of one deal shows how subprime mortgages went bad

(Fortune Magazine) -- It's getting hard to wrap your brain around subprime mortgages, Wall Street's fancy name for junk home loans. There's so much subprime stuff floating around - more than $1.5 trillion of loans, maybe $200 billion of losses, thousands of families facing foreclosure, umpteen politicians yapping - that it's like the federal budget: It's just too big to be understandable.

So let's reduce this macro story to human scale. Meet GSAMP Trust 2006-S3, a $494 million drop in the junk-mortgage bucket, part of the more than half-a-trillion dollars of mortgage-backed securities issued last year. We found this issue by asking mortgage mavens to pick the worst deal they knew of that had been floated by a top-tier firm - and this one's pretty bad.........

http://money.cnn.com/2007/10/15/markets/junk_mortgages.fortune/index.htm?postversion=2007101609

[Capricious]

to summarize:



"I think that's dumb lending and it's dumb borrowing,"


Warren Buffet

[Here4Good]

This is an excellent article. It demonstrates how complex this issue is, and how far-reaching the effects can be.

Which is why it is ridiculous to me that our elected officials are all running around promoting their version of a knee-jerk reaction, when there are perhaps 6 of them who could read and understand this article.

(I have a mental picture of a group of staffers using hand-puppets and play-doh attempting to explain this all to W.)

[SHELLY]

(I have a mental picture of a group of staffers using hand-puppets and play-doh attempting to explain this all to W.)

Thanks for the visual :D

.