Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

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They’re B‑A-A-A-C‑K! Subprime, er, “Non-Prime” Mortgage-Backed Securities

Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. The new dri­ve is a 32-giga­byte dri­ve that is cur­rent as of the pro­grams and arti­cles post­ed by late spring of 2015. The new dri­ve (avail­able for a tax-deductible con­tri­bu­tion of $65.00 or more) con­tains FTR #850.  

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COMMENT: Albert Ein­stein is reput­ed to have defined insan­i­ty as; “Repeat­ing the same action over and over and expect­ing a dif­fer­ent result.”

Hun­gry investors are now focus­ing on bonds backed by US res­i­den­tial mort­gages that do not meet strict cred­it guide­lines.

Let’s hope the reas­sur­ances in the sto­ry below are on tar­get. We wish we could say we were opti­mistic.

Inter­est­ed listeners/readers should take the time to view a superb doc­u­men­tary on the finan­cial col­lapse–“Inside Job.” It is NOT reas­sur­ing.

We also note that, in FTR #412,  we direct­ly fore­shad­owed the finan­cial cri­sis in ear­ly 2003.

“Sub­prime Repack­aged as Investors Feel Ready to Embrace Risky Bor­row­ers Again” by Joe Ren­ni­son and Anna Nico­laou; Finan­cial Times; 9/8/2015; p. 1.

Yield-hun­gry investors are ready to endorse a revival of bonds backed by riski­er US res­i­den­tial mort­gages, as lenders warm to house­buy­ers who do not meet strict bor­row­ing guide­lines intro­duced after the finan­cial cri­sis.

But the now tox­ic label of sub­prime mort­gages has been dropped. Instead, Angel Oak Cap­i­tal is in the process of pric­ing a deal for a bond offer­ing of so-called “non-prime mort­gages” — a term funds are using to describe mort­gages that do not meet gov­ern­ment stan­dards. Lone Star Funds com­plet­ed a deal worth $72m in August.

Low­er-qual­i­ty sub­prime mort­gage-backed secu­ri­ties have drawn fierce crit­i­cism for their promi­nent role in the 2008 hous­ing crash, with bond king Bill Gross say­ing 2m home­own­ers were “thrown to the wolves”

But those who sup­port efforts to breathe life back into the mar­ket say this time is dif­fer­ent. . . .


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