MBS
Angel Oak Mortgage-Backed Securities ETF
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Trump received a pearl necklace from MBS looks like
He's trying to be a despot, he envies the power that people like Putin, MBS have
Lol. Actually I think MBS might genuinely believe this is a way to modernize Saudi Arabia, it just seems odd and unlikely to work
It doesn’t palantir is like 500 and shits still going up they’re trading on vibes. Tesla and palantir CEOs however were seen speaking directly with MBS
They didn’t make their money by themselves is the point. Didn’t build a company or make it themselves for the most part so that wealth shouldn’t be counted. But I’ll provide the mainstream answers: Why Vladimir Putin Isn’t on Billionaire Lists While some estimates suggest that Putin’s net worth could be as high as $200 billion, these figures are speculative and lack concrete evidence. Forbes has stated that it cannot verify sufficient assets to include Putin in its billionaire rankings. His official disclosures report modest earnings and assets, but investigative reports suggest he may control significant wealth through proxies and hidden networks.    ⸻ 🏰 Why Mohammed bin Salman Isn’t Ranked As the Crown Prince of Saudi Arabia, MBS’s wealth is deeply intertwined with the Saudi royal family’s assets and the state’s resources. Estimates of his personal net worth vary widely, with figures ranging from $5 billion to $25 billion. However, the lack of transparency and the difficulty in distinguishing personal assets from state-owned wealth make it challenging to accurately assess his individual fortune.
And they would have gotten away with it too, if wasn't for those pesky MBS's!
Oh, he gave the 9/11 host country .6 trillion in weapons to make Saudi oil great again bc MBS gave Jared 2 billion? What’s with trump being so cheap in the bribe/benefit ratio? He’s like bribe temu. Oh he doesn’t math good? Makes sense. #TariffWokePenguinsBigly
So is everyone over there going to an MBS Freak Off tonight? Don't miss out on the Sheik Down! 
Did MBS drug Donnie to make him fall asleep during the presser? I hope secret service is watching out for bone saws.
And that murderer MBS greeted him when he landed yesterday. It’s hard to keep up with all the corruption.
If you negotiate with MBS, the winner will always be MBS…
MBS please pump GOOG instead of PLTR 
Mortgage backed securities (MBS) - too risky with the inflated home market? Or am I still fighting the nightmare of 2008? I've found some really nice Bond Funds (focusing on 1 thru 5 year defined term or 1-5 year maturity funds) with good returns and AA+/- average quality. But when I look at the portfolio, they have a good bit in MBS/ABS/Mortgage Agency bonds. Am I living the last "war" and should reset on MBS'? 1. The home market seems inflated, possibly to the point of a bubble. If we do have a recession, I think it will burst. Rating MBS' AA-BBB might be overestimating quality. 2. And maybe the most influence on me, the 2008 crisis with MBS bundling of really unknown quality and CDS' makes me stay away from (or at best, heavily discount credit ratings) for funds with heavy MBS' portfolio.
"And now to conclude, I will fellate MBS while at the same time tickling his balls."
I wonder what MBS actually thinks of hm
I'm 98% sure that MBS can speak fluent English, but just chooses not to for some reason.
🥭 already brought his chosen pumps to make MBS’s job easier
Trump and MBS: “JD, why don’t you go pay King Salman a visit 💀”
Did Jensen sign MBS boobs or something?
AMD holders really gotta ask themselves if they honestly think MBS is gonna buy billions of infrastructure from a her. Seeing trump, MBS, and Jensen chilling and shaking hands, laughing. Was cousin Lisa even allowed in the room?
Coercing MBS to get up on the world stage to help solve Gaza, Iran, China and Russia. Guy has an ego bigger than Trump.
Musk shaking hands with MBS? Tesla 350.
Shorting when they are meeting with Saudi’s MBS to discuss investments? You really are a true regard. Thanks for your service. https://preview.redd.it/i0m2mu01460f1.jpeg?width=1170&format=pjpg&auto=webp&s=194ae0173b9d1d50d8346a0d6eb54e474cf29a7d
Not saying you are right, but I think people that think Trump's admin will fail no matter what in terms of the stock market's valuation are also being kind of ridiculous. I'm still bullish until proven otherwise after that Zweig breadth thrust hit the other week. That said, I'm still thinking mainstreet might not have the best employment situation coming up. But traders that want to make money have to remember that in this QE economy, employment going down the toilet won't mean anything unless it's very extended, especially with not only looming QE whenever needed, but also the guaranteed MBS in case some people do need to sell/foreclose on their homes (inevitably to one of the large investors that's been stacking homes.)
So what you just described is almost exactly how China handled the situation. Except they executed some of their bankers. The only thing I'd say about 2008 is that it was really the result of the dot com crash in 2001... when that bubble popped, they simply created the MBS bubble, which is what blew up in 2008. Just like the current "everything" bubble is the result of the 2008 crash. But yes, 2008 was the last chance to turn back from the insanity of a runaway debt-based economy and the powers that be chose not to turn back. So here we are.
Gold is already over 3,000. Not sure how much of this is op's write up, but at least it's mostly accurate as to what is going on. It fails, however, to mention that you could go back to 2008 and it seemed nothing could save the world from imminent collapse. And yet, by 2010, after putting all the toxic MBS on the gov and feds balance sheets, everything went back to normal. The cost of 2008 was that we have all been living in a world with a lower standard of living than we should otherwise have had (except the rich, they've been getting richer and richer). And that lower standard of living led to people voting for the Orange Mango. So how we handled 2008 is what gave us Trump. We'll probably get through this crisis, but the cost will be further erosion in standards of living. Does that lead to people finally voting against capitalism or embracing a revolution? Maybe. But it's just as likely they'll simply accept their fate as serfs to the rich in some dystopian landscape where the US becomes more like a third-world banana republic.
This is not QE, this is the Fed replacing treasuries that are already falling off their balance sheet (maturing). If they were buying more than that, it could be called QE. Also consider that JPow has already given forward guidance earlier in the year and in 2024 that they would like to move their balance sheet holdings out of MBS and has also made comments that further balance sheet roll off is not planned for now. So, putting two and two other if the Fed plans to downsize MBS holdings while keeping the balance sheet more or less constant, that means more treasury holdings.
States also bought the bad MBS during the lead up to the housing meltdown. Don't see how that makes it less of a scam.
I don't think so. That correction, and the subsequent rebound was news driven and had nothing to do with the underlying fundamentals going on in the market right now. My thesis is based more on the fact that equities and tech stocks are over valued IMO and the Buffett indicator (while some argue it's dated) I still think it holds water in this particular application. The tariffs are a completely different thing and will only exacerbate the decline into recession. We will just have to be patient because ever tease that 🥭 gives fuels the hopium so there will be more pumps before complete capitulation when the bulls give up. One of the reasons I picked 08-09 is because of the fraud going on. In 07-08 it was with the underlying MBS and CDO market and the banks lying to people and selling garbage making the market go up before the decline. This market is fueled by Washington clowns and ego but it seems to produce the same artificial sense of euphoria.
Nobody knows. I will say a couple things 1) Reddit and the media in general is full of negativity and doomers and 2) everyone’s idea of a recession is a full blown economic meltdown like the financial crisis of 2009. There have been a lot of negative signals recently for sure, but there’s also a very good chance things for turn around or at the very least the economy will survive without too many bruises. If you don’t believe that then ask why the stock market just went on its biggest winning streak in decades. Do you think everyone invested in the market is such a dumb actor they can’t reason about risk? And if we do end up going into a recession it doesn’t mean the world will end. The US economy is rather good fundamentally. There would probably be 2-3 quarters of a slowdown, the fed would begin aggressive rate cuts, and life will go on. The bottom is not going to fall out of the economy like it did with MBS.
But I thought you said GFC was only because of MBS and lawmakers and regulators went "ham" on them??? People buying 80% appreciated houses on record rates with 3% down payments, and this guy thought regulators went "ham". I'm so glad I shorted RE when I did. I looked at people like you to understand what I was missing...and I wasn't missing much...anyone who thinks the underlying issues of the GFC weren't simply transported to other parts of the market are not seeing. And some free advice, I'm upping my shorts on housing and builders...there is a LONG way to fall
NO ONE works on past numbers, not equities, Rates, options, CDX, CMBS, MBS, Treasuries, Corp.Bonds. Pay attention and maybe you'll learn something
Well they release their balance sheet activity for the previous week on every Weds so you can take a look tomorrow. I'd agree with the sentiment that the fed is still juicing bonds. But they won't call it QE unless they're buying more than they let expire ("runoff"). They've been at ~$5b net run off/ no for a while now. Still letting around $25b of MBS go. I wouldn't call that QT but they still consider it so
They did. MBS took a bunch of their money and invested so they can survive and Oil price shock.
What’s the reason that the sanctions wouldn’t apply anymore? I’m guessing it’s more so that the black market price won’t get any lower? And yea a part of me does think that Trump is pleading for lower oil to somewhat keep the economy pumping if the trade deals don’t get done fast enough and we have a recession, but the idk it hurts our oil businesses which Trump doesn’t care too much about I guess But yea Trump did MBS a huge favor by sticking with him so I’m sure MBS gets to save face with Trump while giving a message to the other opec countries
The overnight rate generally only impacts the 2yr treasury bonds. The longer-term rates get only a slight impact unless the fed starts buying longer term bonds or MBS's.
Bud, CLOs are not like MBS. CLOs have been around for a long time and faired well during 2008. They invest in corporate debt that is backed by corporate assets. They are much much lower risk than the MBS with subprime mortgages. Make sure to read the article you linked to understand what a CLO is.
https://content.naic.org/sites/default/files/capital-markets-primer-collateralized-loan-obligations.pdf Here you go bud, it’s like the (MBS) mortgage tranches that fucked us all in the ass in 07 but with a new face and name. These are the same thing but on top of shit mortgages there shitty loans for cars, cell phones, home repairs, failing stock Yolos all bundled in as well. Everything past this is just me being salty as fuck Have you walked around in any metropolitan area like Chicago, Detroit, LA. Shits not good and even the upper middle class doesn’t seem to be able to see just how far the people beneath are struggling. Loans for groceries. Multiple times now I have seen people pull up an affirm app on their phone. That’s almost 24% interest on a fucking 200 dollar groceries bill when you are already down. This shit is dystopian lunacy and I’m sad my kids have to see it played out all over again like I have 3 god damn times now.
What economic factors will lead to a severe recession this go around? In 2008, the entire world economy was directly or indirectly tied to the performance of mortgage backed securities. The MBS bonds themselves were misrepresented fraudulently. Ratings agencies falsely rated mortgage bonds to be AAA when in reality they were filled with predatory, high LTV, low quality loans. Consequently, when these bonds failed, the world’s wealth vanished and financial institutions collapsed. Fast forward to now. What is the problem? The mortgage market is overall healthy and not fraudulent enough to create economy wide issues. The problem is that the Fed printed too much money for the past 15 years. The result of too much money is at worst stagflation. That’s nowhere near as bad as 2008. You’re just dooming with this post. If anything the economy needs a reality check. It’s been propped up by government deficit spending and loose monetary policy. The can has been kicked and there should be some slow down, but to compare the modern day to 2008 is baseless.
With Tesla about to lose significant value, it’s critically important to national security or something that Leon never comes close to losing the status of being the #1 Bigly money ever yuge (richest on paper of course). After defeating Mr Bonesaw (MBS), the final boss, Putin appears. As expected, Leon isn’t as good at the game as he told everyone. Leon has died.
That's just ponzi squared. Then we can get to ponzi cubed. And then just like MBS we find out the house of cards can crumble in an instant.
I agree with your analysis of the Great Recession. I don’t like comparing it to a ‘could be’ recession today. All recessions are different and 2007-2009 was especially bad due to how leveraged banks were to MBS. Most recessions aren’t like that. Dot com, savings and loan, 1990 oil shock, etc were bad but nothing like the GR.
I loved studying the GFC. Outside of derivatives, which really are just insurance policies against failures...gambling... It was basically ladders of MBS leverage 40x at Bear/Lehman but still 30x at BofA, Wamu, Citi, etc. They were all running 3% leverage on 4% MBS returns many times over as a free money printer. Forgetting that the leverage amplifies the risk, or more realisticially willfully ignoring it. They dumped it if they could. That's how a jump from 3% default to 4% bankrupted them all. Not foreclosures mind you - defaults, with 40x leverage on a <1% spread cashflow risk is magnificently brutal on your bottom line. The icing on the cake was the failure to do any vetting on the MBS packages themselves. The run up of funds added to the system that built those leveraged positions, also artificially drops rates building the bubble itself. Today's market risk is built on money printed in 2020/2021 still - just look at the run up on MM funds over the last 10yrs, to include the build in 2020/21, and you can see it has NOT been burnt off with 5% rates yet...and won't be for a decade. That's the asset price bubble in the market now, but it will bleed into res-housing because that price bubble exists form the Fed thumb on the scale of mortgages too. Only thing keeping residential up is low inventory - it won't be the catalyst though - thats going to be tariffs - leading into job losses. Because do you see large cap building factories in America when they can't get components? Selling cars with consumer sentiment this bad? It's not happening, and it won't. It's not all doom and gloom for the US future, but it's going to be pain first.
A bunch of my buddies accepted jobs trading mortgage back securities in the summer of 2007, to start in June of 2008. MBS was already a disaster by then, but they figured the bottom was in, and things would be on the upswing again a year later…
Your position is woefully ignorant. Credit default swaps and mortgage backed securities are INVESTMENT PRODUCTS that pension funds, IRA’s, 401k, individual investors, institutions all own. Sure, AIG played a large role, but the idea that you are trying to lay all the blame at AIGs feet is simply moronic and shows you have little to no understanding of the crisis and how the financial industry works. This reads like you watched a 15 minute YouTube video on the crisis and they must’ve talked only about AIG. Somehow you blame AIG for the fact that every single large investor and institution owned MBS’s and they all owned shit tranches of MBSs. You don’t blame the mortgage bankers who made the loans to people with insufficient credit. You don’t blame the investment bankers who spun off bad debt into high-grade MBS. You don’t blame the ratings agencies who refused to downgrade the debt from AAA (despite the debtors being in default). You don’t blame the banks who KNOWINGLY and WILLINGLY spun debt of bankrupt creditors off their books and sold it to others as AAA rated credit. You’re literally a shill for the credit rating agencies if I didn’t know any better 😂. There’s so much info out there on the crisis, educate yourself
ChatGPT says no to swaps, but does say Besides bonds (corporate, government, municipal), other debt securities that can be classified as held to maturity include: • Treasury notes and Treasury bills (shorter-term U.S. government debt) • Asset-backed securities (ABS) (e.g., securitized pools of loans like auto loans) • Mortgage-backed securities (MBS) (though MBS have prepayment risks, so many institutions classify them as Available for Sale instead) • Certificates of deposit (CDs) (if tradable on a secondary market) • Commercial paper (short-term corporate debt, if the intention is to hold it to maturity) • Municipal notes (short-term local government debt)
Eh, most of them are petro states, so they depend on oil to balance their budgets. De facto leader Saudi Arabia likes oil to be around $80/bbl to balance their budget, since MBS is spending so much to try to diversify their economy. But they are mainly doing it to appease mango, and also maybe take some market share back from U.S. shale as a tangential benefit.
You've got lots of great points. And I agree with your overall sentiment. But there are some things to address: The 2008-2009 credit card debt peak was over 5%. Overall unemployment now remains low at 4.1% compared to 10% in 2009. Current consumer debt is diversified (credit cards, auto loans, student loans) and lacks the same concentrated risk. Mortgage delinquency rates, critical in 2008, are low at ~3.6% vs. 7.5% in 2009. Post-2008 regulations (Dodd-Frank, Basel III) mandate stricter collateral standards and higher capital reserves, reducing risk compared to 2008’s subprime-laden instruments. CLOs, backed by corporate loans, are diversified and considered less risky than pre-2008 CDOs, though they could face stress if corporate defaults rise significantly. Current instruments are subject to better underwriting and oversight. For example, the share of subprime mortgages in MBS is now minimal (~2% of issuance in 2024 vs. ~20% in 2006. The current savings rate, while low, is not unprecedented. The decline is concerning but not a definitive crisis trigger. Layoffs contribute to consumer stress but are not at 2008 levels (2.6 million jobs lost in 2008). While few bankers faced criminal charges post-2008, firms paid billions in fines (e.g., $13 billion from JPMorgan), and regulations like Dodd-Frank were enacted. Still, great analysis!
Thing is, people like MBS have infinite dollars, and have already backed Elmo. He doesn't want a powerful USA.
Whilst MBS likes the destructive he is doing politically, his infinite dollar pile will keep him afloat.
This reads like someone who googled a few things and watched the big short as their DD. First off, CDOs and MBS played a role in the 2008 crash for sure but, equating CLOs with them oversimplifies things. CLOs are primarily made up of corporate loans, not subprime mortgages or consumer credit card debt. Yes, they are tranches of debt packaged and sold off like bonds, but they operate differently and have different default profiles. Also CLOs performed better than CDOs during the 2008 crash. If you're comparing the two products as if they're the same thing you really don't know what you're talking about. Second, the rising credit card delinquency rate you show is worth paying attention to but it's rising off of historic lows. Stimulus payments, pandemic-related spending drops, and a surprisingly strong post COVID labor market kept delinquencies artificially low. Now, as things normalize, delinquencies are climbing back toward pre-pandemic levels. concerning, sure, but it’s not clear that we’re seeing a trend that guarantees a system-wide collapse. You’re estimating the trajectory, but the magnitude isn’t really alarming when you look at long term charts. Third, while the personal savings rate has fallen compared to the early COVID years, it’s still within the range seen in the 2000s. The pandemic created an artificial bump in savings from stimulus and reduced spending, so it’s not quite fair to treat the decline as an absolute warning sign. What would be more useful is to pair the savings data with income growth and inflation-adjusted consumer spending like if wages are flatlining while spending rises and savings fall. That date would probably help your argument more. Another issue is the GDPNow projection. You be leaning on that Atlanta Fed model a little too hard. It’s a nowcasting model that fluctuates frequently and doesn’t carry the same weight as two consecutive quarters of real GDP decline or a broad-based slowdown across leading economic indicators. Using a -2.5% GDPNow projection from a single point in time as proof of economic stagnation is pure reguard behavior. Also no mention of monetary policy? How can you forget Daddy Jerome Powell. The Federal Reserve still has tools it can use to prop up the economy. If delinquencies spike and consumer debt becomes a drag, they can and will begin cutting rates again. That doesn’t solve the structural problems you’re pointing out, but it can delay the fallout and keep things looking relatively stable in the short term.
Bro the money printer you speak or IS asset backed securities. That's how they printed money. That's why everyone is heavily invested in them. There are also SLABS, which look good on paper, and even auto loan back securities. This is how it's done right now. If we go into a recession, all of these CDOs are going to become worthless. Obama admin implemented more oversight to MBS by regulating the collateralization process, so the banks just ran amok with new CDOs.
Not really. He could get rates far higher than that on other types of corporate debt / longer-term debt. Hell agency debt / MBS pays far more. However, then he would have to give up liquidity
Didn't MBS just buy like 400mil shares?
This may just be my ignorance on the nuts and bolts but was GSachs really that exposed to the MBS collapse? I thought as they were selling these products they were actively betting against the housing market and in the aftermath at least claimed they “made it known” they were doing so.
Risky mortgages were packaged into MBS’s and sold to others. It was a game of hot potato. Everyone made money except whoever was left holding the bag when the bottom fell out. I think that was the premise of the movie “Margin Call.”
It's called spread. It's not a conspiracy. The reason the spread is so high is because MBS holders know that everyone is going to refinance out of their loan the absolute soonest they possibly can. If rates drop to 4 or 5%, every MBS at 6+ is gone. Spreads also tend to increase during inverted yield curves, because financing a loan because inherently more risky. So you end up with 2 reasons spreads get higher: it's a riskier proposition to loan right before an economic downturn AND the long term profit margin is not there. So the spread is higher. Not a conspiracy.
MBS is going to stuff him down the drain
MBS literally killed an American journalist. Yet we still do business with them. So imo, you can go all the way up to killing foreign nationals and trade will still happen lmao
Didnt the housing market crash and the MBS debacle happen under this guy’s watch?
You think that the collapse of the USD is just going to be isolated to the US? Every single financial institution in the world, along with all foreign governments also hold Treasury securities in massive quantities. Bad MBS nearly took down the global financial system, and there were something like $1T of total outstanding underlying value. This is $30T of risk-free shit having to be repriced instantly. BTC is at risk because it demands fucking power and compute to even function. If the Internet collapses under the weight of the failure of the US dollar, how is Internet money going to work? Where would you even convert it?
He only paid for part of it though. Some other big players backed it like MBS, binance, etc
A complete collapse of the supply chain seems a bit crazy IMO. But a credit death spiral accentuated by the bond market tension plus Chinese shenanigans on US MBS could completely crush the housing market.
I highly doubt the tariffs rivals the over-leveraged MBS we had in 2008.
Sorry for the confusion, I was talking about foreign investors holding US mortgage-backed securities (MBS).
The fixes are actually quite easy. There are 3 underlying aspects that need to be addressed. 1) if wages and houses compound at the same rate housing will always outpace wage growth. 2) agents being hesitant to accept lower offers despite interest rates indicating prices should drop because they have no incentive. 3) banks lending more money than an individual can borrow because it gives them bigger returns when they sell the mortgage to a firm who makes MBS because a larger loan fetches more interest. Here's how you address these issues 1. Calculate the rate at which housing can grow and still be the same % of the median area pay. This tells you the max rate of housing increase that keeps housing prices inline with wages 2. Any capital gains from the sale over this rate of increase are taxed at 100%. The taxes on this portion are levied *prior to* deduction of agent commission and other closing costs. This means people cannot profit massively off of selling a house. We cannot have housing be affordable *and* an appreciating asset. People need houses, so we eliminate the asset side of the equation 3. Agent commission is based on the sale price, but because the commission cannot be paid from any part of the sale which would yield capital gains above the rate of wage growth, the seller would then be forced to pay higher commission than what the house is really valued at and therefore would not want an agent which drives listing price above local market value. 4. Interest rates are limited to 4-5.5% and the base rate is calculated using a sigmoidal function based off the Fed funds rate. This ensures that both lender and borrow get approximately a fair deal. The lower end the borrow pays slightly less interest than principle and the upper end slightly more, but generally everyone wins. This ensures that being 2 years older or younger doesn't make someone's house payment drastically different. House pricing should change at a rate proportional to wage growth, not other market dynamics. 5. If a banker finds it too risky to lend to someone within that rate then they cannot approve the loan. They must communicate to the prospective borrower what price range would be approved, what income rate, other financial changes, or what amount of down payment would help. This prevents banks from increasing the forcing function to lend people more and more, and this also has a downward forcing function on price gains 6. Banks cannot sell their mortgages. If the bank has to retain the loans it originates, then it must make smart lending decisions because its long term viability depends on reliable consistent cash flows from things like mortgages. Selling mortgages absolves the originator of all long term responsibility for the loan because they get their profits alwithin days of issuing the loan
They would love a.recession. That's when average citizens have to sell assets at the lowest value. It and their buddies then scoop up assets with loans at lower than market rates (because they artificially crippled demand) only to sell once everything rebounds and the loans are due. Rinse and repeat (Keating in '89, dot.com in 99/00 and MBS in 2008) until all the wealth is concentrated in as few hands as possible.
Agency MBS mREITs will always go up during interest rate cuts. AGNC all the way
General gist was kind of the same thing mentioned above, the saudis up until they started going ham with the mega projects had a breakeven of like $20/barrel and had the cash reserves to stand the gaff even longer below that, and could raise production by tens of millions of barrels per day for like 6 months at least. This was in essence the sword by which they forced OPEC production to their goals, if you didn’t follow their guidelines they’d flood and ruin every extractor economy, which would be either yours or your neighbors. This in the course of the policy debate topic would be argued by the negative (read: against alternative energy incentives) that it would trigger the Saudi flood, which would a) destabilize the shit out of every oil economy, and b) make the incentives not work. This being policy debate (policy debate has become this insanely technical and ultra high speed [the average varsity debater will read out loud around 250-300 wpm] beast through a couple decades of evolution, it’s really not what you think of when you hear debate anymore), you then said this lead to economic ruin and nuclear war, cause you always did. It doesn’t really go that severely here though, partially because MBS kinda fucked it up with the mega projects such that their breakeven is multiple digits above where it used to be so they themselves can’t stand the gaff that bad, and really I think it’s more likely opec falls apart more as the alternative energy economics, which even since 09 have dramatically improved, move us away from oil.
Yesss bring on the agency MBS gains from rate cuts it’s about gd time
MBS' vanity megaprojects can't finance themselves, especially when oil income is declining. Saudi Arabia's debt was decreasing up until 2015; it had literally 0 international debt in 2015, and the domestic debt was like 2% of the GDP. Then MBS announced Saudi Vision 2030 in 2016, chock full of some of the most idiotic and overpriced infrastructure ideas out there. So they've been issuing bonds like crazy the past 10 years to pay for nonsense like their line city or artificial snow for winter games in the middle of a sweltering desert.
QE was going on for the better part of a decade in one fashion or the other before the pandemic after the financial crisis of 2008. During the majority of that period inflation was underwhelming and there were consisten concerns that the US was underscoring coming out of *that* crisis, and we were still doing better than other advanced economies. QE was a big part of our studies when I got my econ degree, and it was roundly, and rightfully, seen as a massive success as a whole. QE/money printing/whatever was not the reason for the prices of housing exploding. That's private capital coming in and buying housing by the thousands while housing starts underperformed since the housing crash from the MBS bubble that caused a worldwide recession and almost financial system collapse in 2008-9 if it weren't for very intelligent people at Treasury, the Fed and central banks around the world who coordinated with the US to inject liquidity in the system to prevent the financial system freezing up. People legit forget how bad the 2008 financial collapse was. The pandemic, honestly, at least in the US, had nothing on the job losses and absolute black pit we were looking at with that economic hole and loss of aggregate demand. Housing did not recover until shortly before the pandemic, and housing starts had lagged for better part of a decade from the previous recession. That on top of private capital consumption of available housing smashing into a pandemic that freed up people to relocate drove housing up precipitously, not QE.
How were they wrong to buy MBS's in 2008?
The thing about 2008 was that it was a perfect storm of multiple factors. It's true that ARMs played a role, but ARMs were not the _cause_ of 2008. Subprime borrowers were also not the cause of the crisis, but they also played a role. Same thing with MBSs. All of these things have existed before without issue and they still exist today without the same risk, because there are mitigators for preventing fallout from them. 2008 happened due to a combination of these things: * Subprime borrowers we granted loans that they realistically were never able to pay off. Lenders had an incentive to create as many new mortgages as possible because the MBS product was in very high demand due to its returns and perceived risk. On top of that a lot of these loans were ARMs with attractive intro rates, which meant that in due time they would fail (time bomb). The thing to note here is that _normally_ subprime loans are mitigated by having shit credit ratings so people don't buy them. The bombs aren't dangerous because everyone knows they're bombs and won't touch them without proper compensation. Unless... * Credit rating agencies were _fraudulently_ rating these financial products as not just safe, but _AAA_, the highest possible rating you can give. The kickback from giving these ratings was too attractive. Nobody wanted to be the one to stop the party. * Because on paper you had products that were supposedly extremely safe AND provided high returns, people started applying leverage. Derivative assets based on the trajectory of all of this flooded the market because there was so much money to be made. All of these assets became completely intertwined with all other assets, which is why the crisis had a global effect. From all of this, it paints a clear picture of how this system teeters on a delicate balance. Once the subprime loans started to default all of the other financial products failed too, causing the whole thing to topple over.
It's not JUST Covid and post-Covid BS Powell had to deal with: 1. Tasked to take the US of GFC era infinite QE 2. Had to hike rates without crashing the market 3. Had to balance declining economy with Trump instigated trade war. 4. Had to normalize rates while ignoring Trump's calls to cut rates in hopes of boosting his own election odds. 5. Had to manage Covid shutdowns impact on the economy. At that time the prevailing opinion was either to pump money while citizens isolated or don't and let them die. Most of the countries that spent (Japan/Luxembourg) ended up better than those that didn't (Brazil/Peru). 6. Had to manage the reopening impact on the economy 7. Biden admin comes in and pumps even more money to restart the economy. At that time the prevailing opinion was to either "pump hard to restart economy hot" or "slowly ramp up economy". And China vs USA since 2020 has shown that the right answer was to go all out to restart our economy. 8. Too much spending, influx of capital, smaller workforce, and other factors did lead to more upward pressure on inflation that the downward pressure of "unlocked supply chains and bottlenecks". The Fed honestly got this one wrong. They shouldn't have been buying MBS, aiming for maximum employment, or still QEing after the vaccines rolled out Q2 of 2021. They could have started lightening the gas. 9. Russian invasion of Ukraine upending supply chains, spiking commodity costs, increasing sanctions, splitting global supply chains, etcetcetc. JPow wasn't responsible for this and it was another wrinkle in why "transitory inflation" was wrong. But the JPow had to navigate this too. 10. Had to do a complete 180 shift to tamper inflation. Got renominated by Biden and Dems who's concerns quickly shifted from "maximum employment" and "making sure even minorities got stable jobs" to "holy shit we're going to see a red wave in 2022 because of inflation". Biden & Dem leadership don't tweet it but you can be 10000% sure they put pressure on the Fed to shift towards tamping inflation because JPow and Fed types don't usually do 180 turns like that. 11. Had to navigate the political BS of the 2024 election. 12. Has to navigate the fucking BS of Trump's tweets again. 13. Has to navigate the fucking BS of Trump tariffs and trade wars. I'd put JPow pretty fucking high on the list of Fed chairs. Sure he wasn't perfect but let me remind you the fucking BS we've been through since 2018. JPow's had to do deal with that while also getting dunked on from both sides (like he's some NBA ref).
Gold is the CDS in the big short. It‘s a hedge. But not against MBS but against the entire system. And the system is going to shambles day by day. A very bullish case for Gold. I do not trust the stock market anymore. This is not the regular „It will go up eventually.“ type situation. More like 1929 vibes.
>The difference with the Fed is that the market will impose punishment, including the bond market. > >Bessent strongly favors an independent Fed and has an objective of Treasuries <3%. One of the instances of a free market actually doing its job, but then again the bond market is very heavily skewed towards federal debt (total American debt market is roughly 50 trillion while the federal debt is at roughly 29 trillion, though I am not sure if this is Apple's to apples), so I can imagine some nonsense happening there to mess with price discovery. I am curious what would happen to other debt not related to the federal government, for example state debt, municipal debt, or even corporate debt. Hell, what about MBS's? I don't really know of any ways to hedge against both a weakening dollar *and* American debt becoming volatile. World excluding the USA is still tied so closely to the USA that if the USA fails to be a safe haven, well, where else can you go?
Kinda doesnt matter, they all vote on policies. If the policies are bad then the rest of the members will vote them down. But my guess is they would immediately drop the rates and stop selling MBS to get the housing market going again.
its just another way to package crap and instead of selling it to accredit investors like MBS in 05-08 going directly to retail
> I wouldn't call it a scam, QE, and it was effective, and the world did not overly suffer for it either that I can recall from my econ classes, though the MBS crisis with the 2008 crash impacted the world and the Euro with their currency crisis among other nations. > > QE was absolutely a scam and it harmed a huge chunk of Americans for decades to come. Look at the price of housing or assets in general? There are multiple generations that will be fucked because Obama / Biden wanted to appease boomers
They were wrong on transitory and buying MBS in general. They are correct here.
But we are still stuck in basic level of material competition despite the abundance of ideology, and availability of hope and dreams. Realpolitik is the governing principle of each government. Biden MBS fist bump shows it all. Ideology just makes it all more dangerous and blinds the common folk of the elitist decisions, so I say don’t take it too seriously. keep a cool head and see each action and reaction by every nation in practical sense.
I wouldn't call it a scam, QE, and it was effective, and the world did not overly suffer for it either that I can recall from my econ classes, though the MBS crisis with the 2008 crash impacted the world and the Euro with their currency crisis among other nations. Still, great breakdown of why having the world reserve currency status insulated us from a lot of economic pain throughout the decades, as those are just the recent ones, and allowed for an outsized purchasing power in the world economy. I fear that's changed permanently now without something dramatic keeping the world close to the US after this economic meltdown and tantrum from top down in cognitive dissonance land.
How did he get the US out of Covid? Prices are up 30% or more. Real estate is now unaffordable for most because the Fed bought trillions more in MBS when housing prices were already stretched. All they did was print more money and taxed the poor and the middle class that are affected by inflation the most.
There's too many secondary players in the housing market making weird dynamics. The MBS market means the higher price the more desirable the MBS because it has a larger interest payout over the life. And because banks make about 2% of the principle when they sell the loan(s) the incentive is for higher prices, there's no downward forcing function because the banks don't keep them on their books. Real estate agents pay as a percent of closing prices incentivize them to push prices up. The only people it hurts are buyers who then have to spend an ever larger portion of their income for housing year over year.
Probably the Saudi backers. They’ve got an unlimited supply of money and don’t want to see their investment in the toilet. I’ve always held the belief that MBS is a huge backer of Musk so he can get Optimus robots to replace the migrant workers across the Middle East. So whatever saudi fund is balls deep is going to do what they can to pump this dumpster fire above 200.
I have a theory that the orange one could actually strangle the Chinese economy completely just by inviting the Saudi king and giving him an offer he can’t refuse. Could you imagine if something *unfortunate* were to happen to all of those refineries and wells? It would be *very* unfortunate to leave China completely dependent on Russian oil that they have no way of buying with anything but yuan, which Russia just so happens to want none of so they can get around their own currency controls and 19% inflation. If he wants to end this fast the door is through Riyadh. A few carrier battle groups should send the message pretty clearly. Allies have to look out for each other, right MBS? ;)
2020-2021 MBS ETFS straight $130B a month. So, yes they can, but it sure wasn't on the down low - and the market cratered before that.
I'll try to make this brief, but it's not really possible. The Fed will intervene when credit spreads blow out. The reason for that is kinda complex. Corporate debt is rated by Moody's and S\&P; investment grade, B-, BBB, etc. Well, those ratings imply a certain "credit quality", and if the ten year blows out, and credit spreads are 200 basis points, then that can affect things in a very serious way. If corporates have to refinance their debt at higher rates, they may suffer margin loss (less profits) which could cause a ***DOWNGRADE*** in their credit rating. If credit spreads blow out to like 400+ basis points ("investment grade" is like 4.5-6.75% currently), that's when the Fed will step in and bail out the tranche that just slipped into ***JUNK STATUS***. This risk is not currently priced in. It was their hope that Kamala would win, and then all the spend could just paper over the problems and the banks would try to keep everything on the downlow, just like they've been doing with the CRE/MBS/ABS/Leveraged Loan books etc. QE happens during a zero interest rate policy environment (inflation below target and low unemployment with GDP in the 1-2% range). So, no the Fed is not going to do QE unless some really bad stuff happens. They will start making markets in corporate debt (buying the junk/BBB to prop up the market and prevent bank insolvencies). I asked google the size of the triple BBB rated tranche and got this answer: *^(The total amount of BBB-rated debt in the US corporate market is substantial, exceeding $3 trillion. Specifically, it accounts for about 53% of all investment-grade bonds in the U.S. This indicates a significant portion of the US corporate debt is categorized as BBB, the lowest rung of investment-grade ratings)*
> The tech layoffs are a response to over-hiring during the pandemic Sure. But they’re also a response to companies firing a bunch of people and trying to replace them with AI, or with people who can build AI into their products. And they’re also, in some sectors, part of a continuing thread of struggles starting with 2018/2019 tariffs and through COVID supply chain woes, and you’ll never convince me otherwise because I literally lived through that shit, sat in the executive meetings, was forced to make lists of people to cut, and ended up on the list twice myself. > Interest rates will not go up. I would love for you to be right about this, but Jerome Powell is about to be fired and replaced by a Trump crony who is going to flood the market with freshly-minted cash to drive down rates, and t-bond holders are going to spook and sell and yields will go up and they’ll print more money and more people will sell bonds and… > The 2008 recession was caused by the housing market, this one is not, so nothing like what happened in 2008. I have no idea how you’re coming up with that. Ooooh I lived through this one, too. The 2008 recession was not caused by “the housing market”, it was caused by increasing number of defaults on a large number of sub-prime mortgages that had been issued in the early 2000s, many of them with Adjustable Rate Mortgages. Then (quoting straight from Wikipedia here), “as interest rates rose from 2004 to 2006, the cost of mortgages rose and the demand for housing fell; in early 2007, as more US subprime mortgage holders began defaulting on their payments, lenders went bankrupt…” Housing prices weren’t the cause, they were the symptom. **Low interest rates on variable-rate loans to weak borrowers resulted in widespread defaults when interest rates went up.** And it was compounded by having all of that toxic subprime mortgage debt hidden away everywhere as MBS — mortgage-backed securities. Sooooo tell me, is there anywhere else that lenders took advantage of low interest rates to make a bunch of bad loans to weak borrowers, that they then packaged up into cute-looking financial instruments with a three-letter acronym to sell? CDOs — Collateralized Debt Obligations, this time on corporate debt (like has been the case in many recessions other than 2008) As to where I “got the idea” for this, people have been writing articles warning about this for a decade: 2024: https://www.library.hbs.edu/working-knowledge/watching-for-the-next-economic-downturn-follow-corporate-debt 2024: https://www.forbes.com/sites/jimosman/2024/09/04/the-debt-time-bomb-how-corporate-borrowing-could-cripple-the-economy/ 2016: https://www.hks.harvard.edu/centers/mrcbg/publications/awp/awp60 2018: https://www.cnbc.com/amp/2018/11/21/theres-a-9-trillion-corporate-debt-bomb-bubbling-in-the-us-economy.html 2018: https://www.nytimes.com/2018/08/09/opinion/corporate-debt-bubble-next-recession.html 2014: https://www.cnbc.com/amp/2014/03/10/corporate-debt-fever-rises-to-new-record-in-2014.html This bubble hasn’t popped in a LONG time because every president and Fed chair since 2008 has tried their best to keep interest rates low — even when they probably shouldn’t have — to keep it from popping. But if the bond market spooks and yields go up outside of what the Fed or the President can do to rein them in, we trigger another debt crisis, just like in 2008, except that it’s with corporate debt and not consumer mortgage debt.
It seems there is sell off of MBS as well. Impacting companies which deal in MBS. NLY and AGNC dropped by a lot suddenly. [https://www.cnbc.com/2025/04/09/how-china-could-crush-the-us-housing-market.html](https://www.cnbc.com/2025/04/09/how-china-could-crush-the-us-housing-market.html)
Unironically yeah, probably. A fuckload of businesses are going to go under, and soon. Just tourism, construction and agg for instance, which were already royally fucked without the tariffs. That equity disappearing will mean margin calls, just like MBS. Comercial real estate was already on the brink... Dominos coming down
It's not just US debt they officially hold. They have 100s of billions off balance sheet and SPV holdings. They hold 100s of billions of MBS as well, so they can attack and crush the US mortgage market at will and basically halt mortgage collateralization which is when the housing market runs into major origination and liquidity issues. Additionally they hold hundreds of billions in Ts via Luxembourg, Cayman accounts to hedge the non-existence of cross default clauses for US Ts. Trump and his advisors probably didnt even bother to check any of this.
My take…. China will stop raising its tariffs here, but they hold a substantial amount of Mortgage Backed Securities and Treasuries that they will silently or many publicly leverage afterward. I think they run stimulus to increase domestic consumption, start printing the Yen to substantially devalue it, then start selling MBS to destabilize the bond market. China will misrepresent its economic numbers, as usual, the U.S. and possibly the world will go into recession. I can’t see ANY scenario that the global economy avoids recession, even if companies utilize Belt & Road to avoid the China tariff rate, that still raises logistics costs substantially hurting company earnings and consumer spending ability both. Dis boat going down, we can only hope it’s JUST a recession and that the leveraged assets aren’t so interwoven that it’s not a depression on a global scale.
China will sell all its MBS , dump the market & there you go USA have fun , Fed will have to come in & bail out to calm the market.
Xi has balls, no political threats whatsoever, no matter what, is a master bully and controls manufacturing of things that we love to consume, he also holds trillions of dollars in T-bills and MBS . Trump is a wanna be bully with no balls. He tried to bully someone who doesn't give a fuck and now he's finding out. Trumpnwill bend 1st and try to pretend it was Xi who did so.