After several weeks of chipping roof ice, emptying buckets and trash cans, and moving things out of the attic and three rooms, I can finally see the end of winter (by happenstance, just a couple of hours from now, celestially speaking). And it’s snowing.
Saving my “stuff” and the house from the depredation of water coming in took priority these last couple of weeks.
I did get to spend part of two days giving an interview to an industry publication called “National Mortgage News.” The reporter, Bonnie Sinnock, has been on the mortgage “beat” for nearly twenty years, so it was a pleasure to speak with her. She also read all of Finance Monsters before the interview….
Like others who read it and know the people, Bonnie said she laughed out loud at some of the incidents that show readers how the Finance Monsters think and behave.
It’s always interesting to see what others find significant in your work. In her case, she was right on the money saying that the so-called “toxic waste” of structured mortgage bonds wasn’t the real problem. She also saw that her “tribe” – reporters – got some of the blame for the depth and speed of the collapse. And she was quite fair by citing the fact that those supposedly “worthless” bonds that were so thoroughly reviled during the crisis turned into the best-performing US Dollar bonds for each of the three years following the bottom in 2009. So I guess they weren’t exactly worthless, right?
It didn’t make it into the article, but I will share a fact I discovered when The Big Short came out in 2010…. there were three subprime bond deals from 2004 mentioned by issuer and series name in that book. Naturally, the implication is that they were terrible deals, and that Lewis’ heroes in the book made a fortune betting against them. Except those three deals had each already paid off more than 90 cents on the dollar by the time his book was published, according to the remittance reports from the Trustees. Hmmm….
I do believe those hedge funds made huge profits buying CDS against the bonds he named, but I also wonder whether the hedgies made their money on the price decline in the panic rather than profiting from their credit analysis. Just something to think about.
By the way, Slo-Mo Promo is a reference to the fact that since the interview was published in that somewhat arcane specialty press outlet, the Finance Monsters “Amazon best-seller” rank has gone flying up from over one millionth on the list to the top 100,000. In case you’re wondering, that means a handful of brave souls are risking the dough to buy the book each day since the article hit the web. Nice.
Maybe even better was the first comment on the article on the National Mortgage News website:
“This is the most intelligent article I’ve yet seen about the “meltdown”. The man clearly knows what he’s talking about, which is a lot more than can be said for most commentators and pundits.”
Thank you, anonymous mortgage pro. That made my day.