投行内部流转的次贷危机解释-非常形象

nullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullnullForget it nullnullnullnullnullnullnullmade a mistake nullnullmade a mistake nullnullmade a mistake nullnullmade a mistake null$#D^&^%$$ !!! nullSame to you. But I’ve got my fees..Contributing Factors - MortgagesContributing Factors - MortgagesAdjustable Rate Mortgages (ARM’s) Honeymoon rate for initial period Borrowers ‘betting’ on falling rates (didn’t happen) or Rising house prices and refinancing (didn’t happen) Origination Agents (not banks) creating the loans Don’t care about impact on bank balance sheet No relationship angle Bad loans now in the bond market not the banks balance sheetContributing Factors - OriginationContributing Factors - OriginationSPV are in non regulated jurisdiction Lack of regulatory oversight Investment bankers earn large fees Employee based incentive issueContributing Factors – CDO/CMOContributing Factors – CDO/CMO‘Recycled’ debt from prior securitisation Difficult for bond holder to assess risk on the underlying cash flows Rating Agencies Gave high credit rating Hedge Funds Begging for ‘High Yield’ (risky) securities Unregulated Lack of direct issued quality debt for fund managersContributing Factors – CDO/CMOContributing Factors – CDO/CMO‘Equity’ (riskiest) tranche Cant sell so investment banks put on own balance sheet Leverage High return (‘cause is high risk, baby) Employee incentive schemes If they don’t take it, the transaction wont happen so no fees Protect with Credit Default Swaps (CDS) Spreads the risk to other financial institutions (AIG)Domino Effect 1Domino Effect 1US Fed raises interest rates 2005 rises from 2.25 to 4.25 2006 rises from 4.25 to 5.25 Domino Effect 2Domino Effect 2Falling House Prices 2006 Domino Effect 3Domino Effect 3Bond Market Securitised bond values fall as mortgages default Equity Market Rising uncertainty Domino Effect 4Domino Effect 4Loss of Confidence in US Markets Presidential election Ability of regulators to respond Transfer to USD asset classes and other currenciesUS Sub Prime Crisis goes overseasUS Sub Prime Crisis goes overseasUS Bond and Equity market instability Rising commodity prices due to speculation Overseas markets become volatile..null