Post by NOTTHOR on Feb 16, 2009 17:32:30 GMT -6
online.wsj.com/article/SB123457562896186709.html
Pretty solid op-ed. Last week in another post I noted that:
"The banks are key in creating money and getting credit flowing, but they are far from the only players. There were tons of players in the asset backed securities space in 2006. I called a buddy who did asset backed securities legal work, he told me he hasn't closed one of those deals bince August 2007. Without buyers for credit card receivalbes, bundled mortgages, car loans, etc., our credit market will only be a shell of what it was 2 years ago no matter how hard the banks try to lend and no matter how reckless they get. "
The WSJ argues:
"In fact, the nonbank credit market is normally much bigger than bank lending. But new issues backed by auto loans, credit cards and the like have been rare this year, as markets wonder how the government's next move will change the value of such investments. Buyers and sellers of existing securities are "sitting on the sidelines," according to Asset-Backed Alert, waiting for still another Washington recalibration of risk and reward.
Most investors who lend in these markets are not recipients of financial bailout money, so Congress can't simply browbeat them into making another big bet on the American consumer. They've been burned badly. They need reassurance that our capital markets operate with a consistent set of rules. The Committee on Doubt and Uncertainty offered only the assurance that the rules will keep changing."
Enjoy.
Pretty solid op-ed. Last week in another post I noted that:
"The banks are key in creating money and getting credit flowing, but they are far from the only players. There were tons of players in the asset backed securities space in 2006. I called a buddy who did asset backed securities legal work, he told me he hasn't closed one of those deals bince August 2007. Without buyers for credit card receivalbes, bundled mortgages, car loans, etc., our credit market will only be a shell of what it was 2 years ago no matter how hard the banks try to lend and no matter how reckless they get. "
The WSJ argues:
"In fact, the nonbank credit market is normally much bigger than bank lending. But new issues backed by auto loans, credit cards and the like have been rare this year, as markets wonder how the government's next move will change the value of such investments. Buyers and sellers of existing securities are "sitting on the sidelines," according to Asset-Backed Alert, waiting for still another Washington recalibration of risk and reward.
Most investors who lend in these markets are not recipients of financial bailout money, so Congress can't simply browbeat them into making another big bet on the American consumer. They've been burned badly. They need reassurance that our capital markets operate with a consistent set of rules. The Committee on Doubt and Uncertainty offered only the assurance that the rules will keep changing."
Enjoy.
