tag:blogger.com,1999:blog-14963913.post7470185569750314138..comments2023-10-27T20:27:57.900-04:00Comments on Kid Dynamite's World: Bernanke's Guaranteed Box Full of CrapKid Dynamitehttp://www.blogger.com/profile/17475987512856310577noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-14963913.post-48949999347571910542010-06-15T07:45:10.443-04:002010-06-15T07:45:10.443-04:00The funny thing here is that credit spreads have b...The funny thing here is that credit spreads have been screaming this for a while. Look at the spreads between U.S. Treasies and U.S. Corp.'s of similar maturities and you'll see that the spreads are narrowing QUICKLY. It's because the U.S. Gov chose the most shunned assets to absolve (i.e. subprime mortgage portfolios of Fan/Fred) and the recovery hasn't "caught".<br /><br />El-Erian has it right.... "Buckle Up"TraderRobhttp://www.diamondslice.comnoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-69334021509050695522010-06-12T15:59:10.792-04:002010-06-12T15:59:10.792-04:00You missed a great Phish last nightYou missed a great Phish last nightJameshttps://www.blogger.com/profile/12183085827525696523noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-46772402997313251702010-06-12T14:15:44.439-04:002010-06-12T14:15:44.439-04:00@ahab,
Sovereign debt vs. sovereign-backed secur...@ahab, <br /><br />Sovereign debt vs. sovereign-backed securities.Transor Znoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-9132915626753988502010-06-12T13:01:36.259-04:002010-06-12T13:01:36.259-04:00. . .and just to be clear- GNMA is a government ag.... . .and just to be clear- GNMA is a government agency- so by definition- it's debt is government debt- from GNMA's own web site:<br /><br /><i><b>Ginnie Mae securities are the only MBS to carry the full faith and credit guaranty of the United States government, which means that even in difficult times an investment in Ginnie Mae MBS is one of the safest an investor can make.</b></i><br /><br />although you won't find that same seal of approval from the USG for Fannie and Freddie everyone knows that the USG has their back-<br /><br />thus- they are de facto guaranteedAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-5702032398198433252010-06-12T12:44:37.953-04:002010-06-12T12:44:37.953-04:00"(MBS) are not equivalent to sovereign debt, ...<i><b>"(MBS) are not equivalent to sovereign debt, but they are fully guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae"</b></i><br /><br /> . . .then why stop there?<br /><br />why not buy Detroit or Los Angeles debt? it's guaranteed by the respective municipality- or why not P&G and Coca Cola?<br /><br />Ohhhhh- I get it- they don't have the complete backing of the USG-<br /><br />what the hell was I thinking-<br /><br />so BB really means MBS are pretty much the same as sovereign debt- but not <i><b>exactly</b></i> the same-<br /><br />it takes a smart man to understand these little nuancesAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-2124803112628600652010-06-12T12:18:16.607-04:002010-06-12T12:18:16.607-04:00The government is mismanging the country on a mass...The government is mismanging the country on a massive scale. What kind of person believes that we can borrow forever with no means of repaying?Jameshttps://www.blogger.com/profile/12183085827525696523noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-56230349967688977812010-06-12T10:04:55.879-04:002010-06-12T10:04:55.879-04:00I think Real estate related stocks have a hard ti...I think Real estate related stocks have a hard time falling because of this "guarantee". Its like the FED has taken a naked short position against short RE style ETFs. IYR keeps strong while SRS gets hammered.This will all change when RE takes its next leg down, and the fed defaults on its call to cover, or simply bond yields force the issue.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-54602982935708165232010-06-12T08:41:59.955-04:002010-06-12T08:41:59.955-04:00Guarantees for boxes of crap make up the balance o...Guarantees for boxes of crap make up the balance of the FED's balance sheet (2 ply?) and Bernanke wonders why Gold will not behave like corn or pork bellies, you know, a commodity.EconomicDisconnecthttps://www.blogger.com/profile/02802078645713106743noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-15561595461162704002010-06-11T23:43:19.890-04:002010-06-11T23:43:19.890-04:00The way BB put it is actually kind of an odd way o...The way BB put it is actually kind of an odd way of framing it. The stamp of guarantee is put on by Fannie and Freddie, but the guarantee they are authorized to make is to bind the full faith and credit of the U.S. to securities. Fannie and Freddie don't guarantee anything. As you correctly point out, they create sovereign-backed securities. <br /><br />Where the sovereign ends and the central bank begins is probably one of those Great Unanswerables. And I think they like it that way.<br /><br />:-)Transor Znoreply@blogger.com