Quotes About Bonds

The "consumer loan" piles that Wall Street firms, led by Goldman Sachs, asked AIG FP to insure went from being 2 percent subprime mortgages to being 95 percent subprime mortgages. In a matter of months, AIG FP, in effect, bought $50 billion in triple-B-rated subprime mortgage bonds by insuring them against default.

Before Volcker's speech, bonds had been conservative investments, into which investors put their savings when they didn't fancy a gamble in the stock market. After Volcker's speech, bonds became objects of speculation, a means of creating wealth rather than merely storing it.

Mike Burry didn't own any triple-B-rated subprime mortgage bonds, or anything like them. He had no property to "insure"; it was as if he had bought fire insurance on some slum with a history of burning down.

There are a lot of really crappy bonds in these CDOs,'" said Charlie. They didn't realize yet that the bonds inside their CDOs were actually credit default swaps on the bonds, and so their CDOs weren't ordinary CDOs but synthetic CDOs, or that the bonds on which the swaps were based had been handpicked by Mike Burry and Steve Eisman and others betting against the market. In many ways, they were still innocents.

mortgage bonds, the industry was also fraught with moral hazard. "It was a fast-buck business," says Jacobs. "Any business where you can sell a product and make money without having to worry how the product performs is going to attract sleazy people.

March 2008 the stock market had finally grasped what every mortgage bond salesman had long known: Someone had lost at least $240 billion. But who? Morgan Stanley still owned $13 billion or so in CDOs, courtesy of Howie Hubler. The idiots in Germany owned some, Wing Chau and CDO managers like him owned some

By early 2005 all the big Wall Street investment banks were deep into the subprime game. Bear Stearns, Merrill Lynch, Goldman Sachs, and Morgan Stanley all had what they termed "shelves" for their subprime wares, with strange names like HEAT and SAIL and GSAMP, that made it a bit more difficult for the general audience to see that these subprime bonds were being underwritten by Wall Street's biggest names.

default swaps on subprime mortgage bonds. Only a triple-A-rated corporation could assume such risk, no money down, and no questions asked. Burry was right about this, too, but it would be three years before he knew it. The party on the other side of his bet against subprime mortgage bonds was the triple-A-rated insurance company AIG—American International Group, Inc. Or, rather, a unit of AIG called AIG FP. AIG Financial Products was created

The big fear of the 1980s mortgage bond investor was that he would be repaid too quickly, not that he would fail to be repaid at all. The pool of loans underlying the mortgage bond conformed to the standards, in their size and the credit quality of the borrowers, set by one of several government agencies: Freddie Mac, Fannie Mae, and Ginnie Mae. The loans carried, in effect, government guarantees; if the homeowners defaulted, the government paid off their debts.

As the bonds were all priced off the Moody's rating, the most overpriced bonds were the bonds that had been most ineptly rated. And the bonds that had been most ineptly rated were the bonds that Wall Street firms had tricked the rating agencies into rating most ineptly.

2005 there would be $625 billion in subprime mortgage loans, $507 billion of which found its way into mortgage bonds. Half a trillion dollars in subprime mortgage–backed bonds in a single year.

At Salomon Brothers he traded bonds while being hollered at by six salesmen, eating a morning cheeseburger, and watching Ranieri hold a Bic lighter under the balls of a fellow trader.

These Ginnie Maes suck. They get longer [in maturity] when rates go up, and shorter when rates go down, and nobody wants them

For that purpose, partly as the result of Ranieri's persistent lobbying, two new facilities had sprung up in the federal government alongside Ginnie Mae. They guaranteed the mortgages that did not qualify for the Ginnie Mae stamp. The Federal Home Loan Mortgage Corporation (called Freddie Mac) and the Federal National Mortgage Association (called Fannie Mae) between them, by giving their guarantees, were able to transform most home mortgages into government-backed bonds.

After Volcker's speech, bonds became objects of speculation, a means of creating wealth rather than merely storing it. Overnight the bond market was transformed from a backwater into a casino.

No longer were the prices of ordinary mortgage bonds allowed to roam inefficiently, for they were now linked to the CMO market, in much the same way that flour is linked to the market for bread. Fair value for CMOs (the finished product) implied a fair value for conventional mortgage bonds (the raw materials).

If you ever care to see how all the world's most awful jokes spread, spend a day on a bond trading desk. When the Challenger space shuttle disintegrated, six people called me from six points on the globe to explain that NASA stands for "Need Another Seven Astronauts.

How could anyone be so stupid as to trust a trader? The best thing I could do was pretend to others at Salomon that I had meant to screw the customer. People would respect that. That was called jamming. I had just jammed bonds, albeit unknowingly, for the first time. I had lost my innocence.

Relationships are interesting to me. Not just between men and women, but fathers and sons, brothers and sisters and friends.

Pack is built on the bonds of family, of mating, of love. You come first. You always will.

an atmosphere ultraviolet rays from the sun, even from a weak sun, would have tended to break apart any incipient bonds made by molecules. And yet right there"—she tapped the stromatolites—"you have organisms almost at the surface. It's a puzzle.

All these different types of plastics have one thing in common: They contain carbon. Carbon, it turns out, is useful in creating all sorts of different materials because it bonds easily with a wide variety of different elements; in the case of plastics, it's usually clustered with hydrogen and oxygen.

Cohn was astounded at Trump's lack of basic understanding. He tried to explain. If you as the federal government borrow money through issuing bonds, you are increasing the U.S. deficit. What do you mean? Trump asked. Just run the presses—print money.

children, you can use any EE Savings Bonds purchased after 1989 and all I Bonds, regardless of purchase date, tax-free, for all qualifying educational expenses. However, to qualify for this tax-free educational benefit, the Savings Bonds must be registered in one or both parents' names.