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Fun with Subprime Debt

Wednesday, June 27, 2007 | 02:15 PM

in Derivatives | Fixed Income/Interest Rates | Hedge Funds | Psychology/Sentiment

Following yesterday's cartoon take (via Bloomie) on the SubPrime issue, today we see a different graphic approach -- comic-like nonetheless -- from the free section of the WSJ:

>
click for larger 'toon

Via WSJ

The following chart can give you an idea as to how much in CDOs are out there:

Subprime Market Contracts

Sources:
How Wall Street Stoked The Mortgage Meltdown
Lehman and Others Transformed the Market For Riskiest Borrowers
MICHAEL HUDSON
WSJ, June 27, 2007; Page A1
http://online.wsj.com/article/SB118288752469648903.html

Bonds Becoming a Tougher Sale
Investors Finally Balk At Prices for Risky Debt; New Rules for LBOs
TOM LAURICELLA and SERENA NG
WSJ, June 27, 2007; Page C1
http://online.wsj.com/article/SB118291541531649694.html

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Comments

For dead-on humor on the topic, the best I've seen so far is from Tim Price, CIO of Union Bancaire Privee on his blog.

"Lake Tahoe Housewife to Blame"
http://thepriceofeverything.typepad.com/the_price_of_everything/2007/06/junk-debt-crisi.html

Posted by: Jason | Jun 27, 2007 2:32:43 PM

First picture link is broken?

~~~

BR: Seems to be fine now

Posted by: TexasHippie | Jun 27, 2007 2:54:44 PM

Barry,

Fyi: The first graphic ("Follow the mortgage") displays ok on the main page, but the link (to display full size) is still broken.

Posted by: HARM | Jun 27, 2007 4:17:19 PM

Great link Jason!

"Substandard & Poors" Indeed.

Posted by: Pool Shark | Jun 27, 2007 4:42:19 PM

I commented on this same issue today. I call it a "(sub)Prime Example of Greed..."

Essentially, the diagram from WSJ (shown in Barry's post) shows what I would call a "cycle of greed."

Thanks......

Posted by: The Financial Philosopher | Jun 27, 2007 5:33:45 PM

Jason--great link! I'm not sure what was funnier, the firm called Toxique Funding of Pasadena, or the zero coupon perpetual bonds bought for a retirement fund.

Posted by: P. K. | Jun 27, 2007 6:23:06 PM