Developing Affordable Housing Ecosystems World Wide
[Continued from yesterday's Part 4 and the previous Part 1, Part 2, and Part 3.]
When two symbiotic organisms differ vastly in scale, the smaller’s survival depends on the health (or at least survivability) of the host. Self-aware smaller symbiotes may thus root for their host’s prosperity, particularly if they are fed from nutrients captured by the larger, [...]
[Continued from yesterday's Part 3 and the previous Part 1 and Part 2.]
Hubris, the Greeks knew, was always followed by nemesis.
In the subprime residential lending sector, the Wall Street Journal’s lengthy article has documented how the rating agencies’ looser credit standards proved both popular (volume boomed) and successful (few defaults). Everyone was happy, [...]
[Continued from yesterday's Part 2 and the previous Part 1.]
Fueling the rise of subprime lending were complex securities that investors bought in bulk because they had favorable ratings. As suggested by the Wall Street Journal, who rates the raters?
It’s Juvenal to worry about such things
Ratings result from algorithms, data, and judgment. Where’d the raters get [...]
[Continued from yesterday's Part 1.]
In the subprime mess, everybody involved looks somewhere between shady and naïve:
Aspirant borrowers signed up for loans, often making questionable or few disclosures on their applications
Mortgage originators booked themselves fees for placing people in loans they would be unable to pay on a reset
Underwriters sliced them into securitizations, passing along the [...]
“Symbiosis — threat or menace?”
That, at any rate, is the accusatory damned-if-you-don’t thesis presented by the Wall Street Journal in a lengthy and intriguing, albeit insufficiently interpreted article on the subprime mess and the contributory, one might even say enabling, role plated by the trio of rating agencies:
I know whom I’m going to blame!
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