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Contents contributed and discussions participated by Jasmine Ding

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Jasmine Ding

YouTube - Lloyd Blankfein Question at FCIC Hearing 1/13/2010.mov - 1 views

www.youtube.com/watch

video Goldman Sachs financial crisis economics inquiry Blankfein

shared by Jasmine Ding on 12 Jan 11 - No Cached
  • Jasmine Ding on 12 Jan 11
     
    Goldman Sachs CEO Blankein defending the firm
Jasmine Ding

Financial Crisis Inquiry Commission | Hearings & Testimony - 1 views

www.fcic.gov/...06-30-2010.php

inquiry financial crisis econ economics

shared by Jasmine Ding on 12 Jan 11 - Cached
  • Jasmine Ding on 12 Jan 11
     
    The official website of the financial crisis inquiry commission. There are some source documents, timelines, emails and original data provided.
Jasmine Ding

Raters Ignored Proof of Unsafe Loans, Panel Is Told - NYTimes.com - 0 views

www.nytimes.com/...27ratings.html

Goldman Sachs financial crisis econ inquiry proof

shared by Jasmine Ding on 12 Jan 11 - No Cached
  • Yet, Clayton found, Wall Street was placing many of the troubled loans into bundles known as mortgage securities.
  • The Massachusetts attorney general recently accused Morgan Stanley of deceptive practices in its financing of mortgage lenders during this period, saying that the firm had knowingly placed dubious mortgages into securitized pools. Morgan Stanley settled with the attorney general in June and paid $102 million. The facts in that case relied on Clayton reports of loan quality commissioned by Morgan Stanley.
  • According to testimony last week, from January 2006 to June 2007, Clayton reviewed 911,000 loans for 23 investment or commercial banks, including Citigroup, Deutsche Bank, Goldman Sachs, UBS, Merrill Lynch, Bear Stearns and Morgan Stanley.
  • ...5 more annotations...
  • The statistics provided by these samples, according to Mr. Johnson and Vicki Beal, a senior vice president at Clayton who also testified before the inquiry commission, indicated that only 54 percent of the loans met the lenders’ underwriting standards, regardless of how stringent or weak they were.
  • Some 28 percent of the loans sampled over the period were outright failures — that is, they were unable to meet numerous underwriting standards and did not have positive factors that compensated for their failings. And yet, 39 percent of these troubled loans still went into mortgage pools sold to investors during the period, Clayton’s figures showed.
  • At Goldman Sachs, 19 percent of loans failed to make the grade in the final quarter of 2006 and the first half of 2007, but 34 percent of those loans were still sold by the firm. Throughout this period, Goldman Sachs was also betting against the mortgage market for its own account, according to documents provided to government investigators.
  • A Goldman Sachs spokesman said the percentage of deficient loans that went into its pools was smaller than Clayton’s average, indicating that the firm had done a better job than its peers. Because these loan samples were provided to the Wall Street investment banks that commissioned them, they could see throughout 2006 and into 2007 that the mortgages they were financing and selling to investors were becoming increasingly sketchy.
  • A more proper procedure, analysts said, would have been for lenders like these — New Century Financial and Fremont Investment and Loan among them — to buy back the problem loans and replace them with higher-quality mortgages. But because these companies did not have enough capital to do that, they were happy to sell the troubled mortgages cheaply to the brokerage firms.
  • Jasmine Ding on 12 Jan 11
     
    "The commission, a bipartisan Congressional panel, has been holding hearings on the origins of the financial crisis. D. Keith Johnson, a former president of Clayton Holdings, a company that analyzed mortgage pools for the Wall Street firms that sold them, told the commission on Thursday that almost half the mortgages Clayton sampled from the beginning of 2006 through June 2007 failed to meet crucial quality benchmarks that banks had promised to investors. "
Ms Cuttle

Definitions - 98 views

financial crisis definitions
started by Ms Cuttle on 12 Dec 10 1 follow-up, last by Sophia Wang on 14 Jan 11
  • Jasmine Ding
    #10 Jasmine Ding on 10 Jan 11
     
    Since I'm doing investment banks here are some of the definitions I found useful:
    Investment Bank - IB
    A financial intermediary that performs a variety of services. This includes underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients.
    Investopedia explains Investment Bank - IB
    The role of the investment bank begins with pre-underwriting counseling and continues after the distribution of securities in the form of advice.

    Secondary Mortgage Market
    http://www.investopedia.com/terms/s/secondary_mortgage_market.asp
    The market where mortgage loans and servicing rights are bought and sold between mortgage originators, mortgage aggregators (securitizers) and investors. The secondary mortgage market is extremely large and liquid.
    Investopedia explains Secondary Mortgage Market
    A large percentage of newly originated mortgages are sold by their originators into the secondary market, where they are packaged into mortgage-backed securities and sold to investors such as pension funds, insurance companies and hedge funds. The secondary mortgage market helps to make credit equally available to all borrowers across geographical locations.
  • Jasmine Ding
    #11 Jasmine Ding on 10 Jan 11
     
    Mortgage-Backed Security (MBS)
    http://www.investopedia.com/terms/m/mbs.asp
    A type of asset-backed security that is secured by a mortgage or collection of mortgages. These securities must also be grouped in one of the top two ratings as determined by a accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. Furthermore, the mortgage must have originated from a regulated and authorized financial institution.

    Also known as a "mortgage-related security" or a "mortgage pass through".
    Investopedia Says
    Investopedia explains Mortgage-Backed Security (MBS)
    When you invest in a mortgage-backed security you are essentially lending money to a home buyer or business. An MBS is a way for a smaller regional bank to lend mortgages to its customers without having to worry about whether the customers have the assets to cover the loan. Instead, the bank acts as a middleman between the home buyer and the investment markets.

    This type of security is also commonly used to redirect the interest and principal payments from the pool of mortgages to shareholders. These payments can be further broken down into different classes of securities, depending on the riskiness of different mortgages as they are classified under the MBS.
Jasmine Ding

The Financial Crisis Timeline - 0 views

timeline.stlouisfed.org/index.cfm

shared by Jasmine Ding on 08 Jan 11 - Cached
  • Jasmine Ding on 08 Jan 11
     
    A detailed timeline of the financial crisis starting from February 2007
Jasmine Ding

100 To Blame | VF Daily | Vanity Fair - 0 views

www.vanityfair.com/...100-to-blame

financial crisis blame

shared by Jasmine Ding on 08 Jan 11 - No Cached
  • Jasmine Ding on 08 Jan 11
     
    A selection of articles from Vanity Fair blaming many institutions and people.
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