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JPMorgan To Issue CMBS Backed By... Defaulted Loans
No, this is serious news. Dow Jones reports:
JP. Morgan Chase & Co. (JPM) next year plans to issue the first U.S. commercial mortgage-backed securities supported by defaulted loans since the 1990s as it revives a practice that regulators used to extricate the nation from the savings-and-loan crisis.
The investment bank has approached rating agencies with two pools of distressed loans that it acquired from European banks and other financial institutions, according to people familiar with the matter.
Uh.....
111011010010101010101011 Buffer Overflow
#Ref! #Ref! #Ref! #Ref! #Ref! #Ref! #Ref! #Ref! #Ref!
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I'll design the prospectus. They can pay me in .999 fine physical - in advance.
Don't see it yet? They're cashing out after 4 years of false starts in the market. They don't want to be the bag holders. They want you to be.
This time, it isn't Banker's fault, it is 100% encouraged by the fraud reserve headed by the dickhead Bernanke.
just because Jamie Dimon can
Actually, securitisations of NPLs (Non Performing Loans) have been done for a number of years.
The idea is this:
Loans which are secured on adequate collateral can be money good, even after they have defaulted (assuming the security is sufficient and enforceable)
However, banks may have to hold punitive levels of capital against such loans, or otherwise might be incentivised to dispose of them.
Investors who are interested in taking the credit risk on such defaulted loans may need leverage since they have limited funds and seek high returns.
The senior ranking tranche of a portfolio of NPLs can be highly rated since the question is simply one of timing of recovery.
So that how it 'works' - of course the degree to which the rating agencies or investors really understand the enforcement and/or recovery risk on the security is another matter...
I suspected it would be something like that. Thanks for the clarification. It still smells fishy to me though, I think a lot of valuations and even claims of title are dubious these days.
Yep, these were done quite a bit back during the RTC days. I kept up with a few that I saw come out of non-performing pools from good bank / bad bank arrangements and the higher rated tranches did ok.
Of course the economy was turning around by then so the value of the collateral wasn't much in question, it was just a matter of timing. Also back then the nature of commercial real estate was a little more gentlemanly than today as well such that street reputation from your last deal could effect your forthcoming deal.
All that said, I'm sure the ratings agencies will put their best people on it! And it will still be a crappy analysis since their best just aren't that good at anything other than historical statistics.
When I think we cannot get a more insane financial system, I get proved incorrect.
BS of CMBS can surely be abbreviation for bull and s**t.
Really JP Morgan? Really?????
Rated BBB. Backed By Bailouts.
JPM needs to "originate" this instrument so Paulson can buy CDs on it....
Smart. Makes sense.
How about they explore selling ABS's from worthless crap to african governments so they can easily dupe them into buying them.. From there they can split the principles from the agents on their end and leave them holding the bags when their derivatives expire
Soylent Green!
Food! Food! We have Food!
Soylent Green!
CNBC just flashed the headline that Soros has got some put options on GLD - huh ?
Wow. I look away for a minute, and, well, I don't know what to say. I would try to say something witty, but I am dumbfounded. Wow.
Um, gold Bitchez!?
Edit: I know. Don't they have a moral obligation not to sell shit?
Until all risk; bad failing debt is dumped on the sheeple in pensions, 401K's; IRA's, or any other fund to stuff we the people with worthless paper, nothing should surprise anyone. western bankstering vampire squids are the most heartless bastards to walk the earth. Monetary scorched earth policies of an evil empire.
Hi Tyler - i couldnt find that report on DJ (or JPM)......
would be glad for a link.......
I ALWAYS check......
Sorry to doubt - but my name was Thomas in a previous life.....
Expect a fund crammed full of vacation property next to Fukishima.
They didn't buy them from ANYBODY, come on, guys. Are you gonna fall for that?
That's funny. This means that the Federal Reserve wouldn't even buy the stuff and put it into its phantom reserves like Maiden Lane (lain, as in turbo virgin skull fuck), Maiden Lane I, and its sequel, Maiden Lane II. Not to mention the QE 2.5 we are experiencing now as the FED buys MBS from the insolvent to put alongside the likes of AMLF, CPFF, PDCF, TSLF, TALF, & TARP.
After eating all that shit, the FED can't (or won't) try to digest this shit, so you know its really SHIT.
Look, just buy a portfolio of crap with a face value of $1,000,000 for a cash outlay of $100,000. Obviously, you would book the crap at face value, and walah, you're a millionaire and it only cost you $100,000 to become one. This enables individuals and small firms to realize some of the fancy book keeping techniques the big boys get to use. Of course, for tax purposes, you would show a loss of $90,000 on the $100,000 that you initially spent. See how easy this is. Next thing you know you will have your own TV show driving a fancy car to a big McMansion and telling people how easy it is to make money with your simple program which you will sell them for the low, low price, today only, of $39.95 while they last.
First Bank Of America and now JPMorgan.
I wonder who is next on the chopping block......
Anyone still turning over his cash to the Wall Street scum deserves to loose his ass.
Which European Banks...?
What Financial Institutions...?
How perfectly captured in a single headline, all that is broken!
They might as well be selling rotten produce. This smells as bad as the settling ponds at a sewage treatment plant.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
what's even more of a joke, is that when i showed this article to my co-workers they either gave me a blank stare or just plain didn't care.
UPDATE jpm_docket
SET entry_type='AFFIDAVITS', entry_subtype1='AMOUNTS DUE AND OWING', entry_subtype2='NOTICE'
WHERE entry_type=''
AND MATCH(entry) AGAINST('+aff* +amount* +due* +notice*' IN BOOLEAN MODE);
What should happen is that when they submit this they should be summarily arrested and sent to jail.
Endgame desperation: must get money.
JPMoron.
Just had a flashback to a long-ago hunting trip, when I crapped in the woods and my dog wolfed it down.
Brilliant! Let's see, there are likely thousands of pension fund managers looking to increase yield. I'd bet JPM will be offering 5% or more on these hot rocks. The real question is: how much for a CDS based on this stuff? Is that John Paulson I see smiling in the next room?
Uh oh , More more Cow Anus Sausage to be crammed up the taxpayers arse at 100 cents on the dolla'. Terrific...
Fubar Overflow.
Bail me out from this madness...
Why is there not revolution?
We're way past any injustice that was done to the colonists by the Crown. Way past it. The American people are being openly gutted, why are bankers not being killed?
Hey JPM is onto something. Take this vomit w no clear title due to MERS bullshit recordation resulting in splitting of note from det holder w no clear way to rejoin the twain and thus no standing to sue for foreclosure, sell it to retarded portfolio mangers at any price (it doesn't matter because its worthless anyway), take the money, run like hell before the court system delivers the bad news to the buyer. Or better yet, sell it to the G-Mint, have them sue for foreclosure, no federal judge will say no and ice his career, establish new title and sell to crony capitalists , bank the future payback when revolving door starts to turn.
Hey JPM is onto something. Take this vomit w no clear title due to MERS bullshit recordation resulting in splitting of note from det holder w no clear way to rejoin the twain and thus no standing to sue for foreclosure, sell it to retarded portfolio mangers at any price (it doesn't matter because its worthless anyway), take the money, run like hell before the court system delivers the bad news to the buyer. Or better yet, sell it to the G-Mint, have them sue for foreclosure, no federal judge will say no and ice his career, establish new title and sell to crony capitalists , bank the future payback when revolving door starts to turn.
FLASH CRASH ON GOLD! CHECK YOUR 15MIN charts....
Ok, so you made me look. Thanks for nothing, chump!
:-)
01000110 01010101 01000011 01001011 00100000 01001010 01010000 01001101
Watch there will be a bigger tax break if you purchase than the loss on these investments. So the rich will clean them up, pay less tax and the gov will have to tax us surfs even more so it all works out the tax payers pay without really knowing. Slight of hand is what it will all be about to stick it to the middle class without minimal revolt.
Upgrade to 64 bit. Buffer overflow problem solved.
Maybe they can get Bernie Made-off out of retirement to run it from the joint. He'll know how to operate it and sell it to the dumb money.
Federal Government To Reduce Madoff's Sentence If He Can Infiltrate U.S. Economy In 48 Hours And Turn It Around
http://www.theonion.com/articles/federal-government-to-reduce-madoffs-sentence-if-h,26390/
Wow... I think the last RTC securitization I saw was back in 93 or 94. Interesting how the much maligned technology of securitization is being used again.
Can't wait for a DPBS.
(Dead Pool Backed Security)
I'll buy the ones with Barneys Frank in 'em.
They should call them "pre-defaulted" loans.
Are they really that different than peripheral-euro sovereign debt, which seems very likely to default, but just hasn't officially done so yet?
That's what they packaged earlier - the "destined for default" loans.
Can you buy Credit Default swaps on them.
You know their as good as gold.
Well they needed some new product, didn't they, to rival the inanity of the squid being able to buy CDS on itself
Buffer overflow headline #2:
With US Data Improving, Markets May Ignore Europe
http://www.cnbc.com/id/45312374
Talk about backed by nothing. How about less than nothing.
At least they're not backed up by negatrons.
Really? Really Chase?
Hmmm, seems like esactly what Chase did before...only difference... the timing of the "fail".
What a sh*t company. Are they really that desperate to sell something that they'd package anything? Oh yeah, right...sorry. I forgot myself a sec.
.
.
.
the sucker of last resort must be in the future.
it is a temporal aberration thing. they are proposing,
market making, a security for a future sucker to bear ,
the burden of the fraud of the past, since become the
systemic fix. the art form of
con artistry, high art. all knives and daggers now,
no harmony or melody, no illusion of depth. plain
blood and guts and stealing in broad daylight. the morons
rule the world now.... and some object to people protesting
in the parks and at the churches and temples.
.
europe has enough trouble and fraud to contend with.
they are rejecting the shit wall street sold them, cds
be damned. someone has to sell it to the sucker of last
resort, that would be jpm. the sucker will be the pensioners
or the fed, aka treasury. (taxpayer).
just a guess.
meanwhile, the criminal murdering death department is seeking
further global plans to occupy regions far and wide, australia..etc
to wage campaigns of death and terrorism for the sake of
ideology and ignorance, not to mention stupidity and elitist
arrogance, against those who object to being debt slaves to
the global banking morons who know nothing, do nothing of value,
and produce nothing, create nothing and cannot think or enjoy
even a simple wet dream. yes, we are bettered by simpletons and
ignorant dunces.
life on earth, 2011.
OMG! LOL. THis is hilarious.
libertarian86.blogspot.com
JPM going rogue!! By doing so they would be putting a price on toxic mbs. Since the FED is holding a boat load of these but listed att face value, the FED is a risk of having a major haircut on their balance sheet. Will the other shareholder have the stones to stand up to JPM?
to me, it seems like a 'debt jubilee' for the banks (again). how about a debt jubilee for everyone ?
since we're the ones paying for the morgue's bad bets, we should be able to play too.. <sarc off>
which protest was it that had the guillotine rolled out on the street ?
http://www.guardian.co.uk/commentisfree/2011/nov/15/money-privatised-ste...
.
Money has been privatised by stealth
The greatest privatisation in history has gone unnoticed. It's time to take from the banks the power to produce money
Ben Dyson
guardian.co.uk, Tuesday 15 November 2011 05.47 EST
but only a fraction of the world's money is physical. Photograph: Paul Rapson/Alamy
.
"It's common knowledge that printing your own £10 notes at home is frowned upon by Her Majesty's police. Yet there's a small collection of companies that are authorised to create – and spend – more new money than the counterfeiters have ever been able to print. In industry jargon, these companies are called "monetary and financial institutions", but you probably know them by their street name: "banks".
The money that they create, effectively out of nothing, isn't the paper money that bears the logo of the government-owned Bank of England. It's the electronic money that flashes up on the screen when you check your balance at an ATM. Right now, this electronic money makes up over 97% of all the money in the economy. Only 3% of money is still in that old-fashioned form of real cash that can be touched.
Hard to believe, isn't it? Martin Wolf, one of the experts who sat on the independent commission on banking, put it bluntly, saying in the Financial Times that "the essence of the contemporary monetary system was the creation of money, out of nothing, by private banks' often foolish lending".
Here's how it works. When you ask the bank for the money to buy a one-bedroom box in London, the money that appears in your account isn't borrowed from some prudent grandmother's life savings. In fact, the bank simply types those numbers into your account, creating brand new money that you can now spend. As other banks do exactly the same, the amount of money in the economy grows and grows. Every new mortgage creates new money, which pushes up house prices just a little more and forces the next buyer to borrow even more from the banks. (A more detailed and fully-referenced explanation of this process is given in the book Where Does Money Come From? published by the New Economics Foundation.)
Through this process of creating money, banks have been able to inflate the money supply at a rate of 11.5% a year, pushing up the prices of houses and pricing out an entire generation.
Of course, the flipside to this creation of money is that with every new loan comes a new debt. This is the source of our mountain of personal debt – not money that had been prudently saved up by pensioners, but money that was created out of nothing by banks and lent to anyone and everyone. Eventually the debt burden becomes just too high, and we see the wave of defaults that triggered the start of the ongoing financial crisis.
But how did something as important as money become privatised? How did the power to create money fall into the hands of the same banks who caused the crisis, with such devastating consequences for millions of ordinary people?
Incredibly, the law that makes it illegal to print your own tenners at home has never been updated to apply to the electronic money that is now created by banks. As we began to use electronic money to make the vast majority of payments, cash became less important and the power to create money shifted to the banks that caused the crisis. Without anyone noticing, the power to create money was privatised by stealth.
So while criminal gangs manage to create about £2.5bn of fake cash each year, the banks collectively create more than £100bn a year without breaking a single law. Their reward for doing so is the interest that is currently being collected on nearly every pound in existence. The cost to the rest of us is a lifetime in debt.
" ......
If they do, at least we will get price discovery.
Are these rated triple A so I'll feel better when I buy?
so how soon can i buy some cds?
Can you pre-emptively sue someone for fraud? Before they even act?
How about putting someone away involuntarily to an asylum, before major anti-social tendencies appear?
Anyone who would touch any of this deserves to be institutionalized, one way or another; final incarceration location dependent only on whether they tried to buy or sell this abomination.
In what few would call "the good ole days", in the hermit kingdom of Bhutan, the Palace staff would clear the monarch's bedpan each morning, dry out what was there, and have it sold in the local market to subjects who knew exactly what it was they were buying (counterfeits aside). The subjects would then sprinkle the manna from heaven on their own repast, feeling sublime owing to their brush with royalty.
This is the closest historical precedent I can find to what JPM now is trying to do.
Seems kinda a good thing to me actually
There will be a massive run to it. Simply demand. No crisis.
Here's a question for you ... if they discount these defaulted loans by say 95% then can I buy my loan back?
Lets say you owe $100K and have stopped making payments. Can you buy your loan back for $5K?
Dear ZH'ers,
This appears to be a good thing. They are taking a non performing asset and selling it. YEA! My problem is that they stated that these assets were bought from Europe. We need this to happen in the good old USA!
HOW did this help us get tf outa the S&L crisis which was also somewhat fraudulent?
(paste): ...since the 1990s as it revives a practice that regulators used to extricate the nation from the savings-and-loan crisis.
extricate
we need extrication from execration of banksters' excretions?
fade that!
Pure alchemy - turning shit to gold.
This innovation reveals that in the nearest future it will be once again legal to sell and buy individuals as slaves (not bank slaves - actual, physical slaves). The first batch, personally blessed by the Archbishop of Detroit, will be made up of loan defaulters. And the eagle of American economy will soar again!
and.. the game of illusion has deadly consequences.
http://www.youtube.com/watch?v=y_Zhe2UUfcw
Former Ohio Rep. Jim Traficant "Israel Controls America"
.
http://www.australiamatters.com/cms/
http://verbewarp.blogspot.com/2011/03/operation-death-star-australis.html
This morning the words is that by Nov 1 2011 most Australian workers on Australian work sites in Australia owned by US firms will be sacked. Note: Obama signs the Permanent US Military Occupation Agreement with PM Julian Gillard this week.
We are being arse raped!
.
ass raping is not a sustainable model for human progress.
think about it.
it always comes around, that which goes around. call it karma?
you have the power, keep it and use it.
So this gives the buyer the right to go... "collect"? Aka break some knees?
They are packaging their worthless assets so that at some point in the future they can be marked to fantasy and sold to the FOMC to baillout the 20 TBTF's. This prevents marking to market, price discovery and bank detonation, but it does transfer every ¢ of the bad debt 2003-2011 on to sovereign balance sheets and the taxpayer.
JPM & Crew are end-gaming their garbage so that they can sell it to us at par.
All the bad mortgages, All of 'Em!, will be paid for by the taxpayer.
DIV/0!
of course it makes sense because wall street is living in a finanical fantasy land where the big banks and the fed cannot be wrong so everyone dont worry the US. dollar is safer then gold LOL