NINJA is slang for no income, no job, no assets. The problem is that there is no rational process to assess risk for assets and borrowers where both have blanks on their data sheets. One datum that seems to have been overlooked. Did anyone notice that the subprime market started deteriorating at the same time the FBI instituted automated income reporting procedures? What are those called again? Oh yes. 4506-T requests that started the first week of October 2006.
Friday, August 10, 2007
NINJA Loans
NINJA is slang for no income, no job, no assets. The problem is that there is no rational process to assess risk for assets and borrowers where both have blanks on their data sheets. One datum that seems to have been overlooked. Did anyone notice that the subprime market started deteriorating at the same time the FBI instituted automated income reporting procedures? What are those called again? Oh yes. 4506-T requests that started the first week of October 2006.
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22 comments:
FIRST Again Loozers!!!!!!!
Look out below!
Hey Casey had mad NINJA Skillz!!!!
tee he
Murst.
FMW, that would be NINJAS for fliptard. No income, no job, no assets, and no skills.
I see the fed injected more money into the banking system. Credit crunch, my ass. That's right, this will cover stuff in the pipeline, but what about new loans that the secondary market won't buy. What's the point of injecting money when there are no reasonable loans to make. This is just a psychological boost that does not address the underlying problems.
LOL @ RatLab.
This, not so funnyZ:
World stocks plunge on credit fears
By TOBY ANDERSON, AP Business Writer 1 hour, 25 minutes ago
LONDON - Stock markets plunged worldwide Friday with turmoil from the U.S. mortgage crisis rippling across the globe.
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Stock markets in Europe tumbled, unappeased by the European Central Bank's decision to inject another $83.9 billion into the banking system Friday, a day after it provided almost $130.8 billion, the bank's biggest infusion ever.
http://news.yahoo.com/s/ap/20070810/ap_on_bi_ge/world_markets
is there a potential buyout coming?
I can see it now... everyone with a house in foreclosure getting a $100,000 check from the government to stay afloat and then the country sells out of escalades.
And down we go. Anyone who thought this market could stay green is welll.....unaware of the process of short covering.
Sea of red before closing. Like I said you'd have to be a masochist carrying anything into this weekend. Follow-through on Monday could be sickening.
The market couldn't hold in the black and quickly dropped down into the red, definitely a sign of pessimism. TK is probably right, the buying may be more short covering than anything else.
But take a look at NFI--up 25%, and that after announcing a massive loss. I suspect that punishing shorts through massive short squeezes on volatile stocks has become the day traders' latest game. This isn't the first time there's been a melt-up on NFI, or on any of the other surviving mortgage lenders. Short sellers beware.
Can someone explain the $35 billion injection the US government did or the "European Central Bank's decision to inject another $83.9 billion"
Am I right in guessing that this is just the Governments buying a lot of those junk CDO bonds which will likely flop in a vein attempt to jump start the CDO market? Is the Government planning on one day selling those loans to get back the money?
I wonder if I can sell some paper to Uncle Sam and get a peice of that $35 billion. It would be no less valuable then the paper Countrywide is unloading on them.
In late Feb or so, I tried to short 1000 shares of Indymac, but eTrade said it did not have any shares to short.
I am pretty ticked right about now.
With respect to the liquidity injections, I suspect that what they've done is simply make short-term loans to banks as needed. They also could pump more money into the system by buying bonds, but then they'd usually buy Treasuries. My general impression is that U.S. and European central banks rarely buy large numbers of non-government securities, simply because they have more direct methods that are less risky.
That doesn't rule out the possibility of the Fed buying up securities like MBSs, but I suspect that they'd need a Congressional directive to do that on a large scale.
Wikipedia: Monetary Policy Tools
I've tried to short a bunch of stuff recently (CFC, IndyMac, PGIC) and BoA never has enough shares for me to short. Lame.
LEND is up 60% today. Short covering? Most likely. Haven't checked for news blurbs yet. NFI up 13%. FMT up 5%.
I thought about some stocks that dropped a bunch today, but I'm not going to hold anything over the weekend. I'll live with holding virtually nothing this weekend. I suppose a smarter trader would put stops, but one bad weekend and Monday morning's bid/ask could blow past the stops and leave you holding the bag. No thanks.
Dow in the black with 4 minutes left in the day. Final short covering before the weekend?
And now falling fast into the red with 1 minutes left.
I think the markets decided to call the party, or the riot, or whatever, off after the Fed came out announcing it was putting money into the system. I'm guessing the general attitude is to wait and see what happens next week.
One point is that the markets closed almost right back at where they started, which happens to coincide with a number of moving averages. Next week will test those averages to see if they provide support--or resistance.
But yeah, I wouldn't recommend holding through the weekend--there could be some severe gaps on the open Monday.
Before you start bitching 'there are no shares to short' check the NYSE SHO list.
http://www.nyse.com/regulation/memberorganizations/Threshold_Securities.shtml?date=20070809
Notice those stocks you folks just mentioned are listed.
You're welcome.
No, I don't know how to make it a clicky thingy.
Sho thing. Itsallgood. Itsallgood. Itsallgood. Itsallgoosd.
Personally, I've shorted everything and plan to keep it that way.
The FBI has absolutely nothing to do with it. IRS Form 4506-T allows a transcript of the tax return to be requested at little or no cost. Before, Oct 2006, Form 4506 was used by the lenders to get copies of tax returns.
This is such old news, are all of your "news" items this out of date?
End of Liar Loans?
Direct link to the article on new income verification tools
Mistype. IRS not FBI.
Are all of your corrections tp a mistype so acid?
Thanks for the linky.
Are all of your "mistypes" intentional?
Not hardly. In fact the best are accidental. This case however, it was merely that mindblock thing of meaning to type one thing and typing another and reading it back didn't notice anything wrong with the content because the structure was intact.
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