Today Bank of America stock rallied. The Fed is talking about ‘quantative easing.’ We are alarming our friends and allies by crimping the US dollar worldwide in an effort to improve exports and ‘pump prime’ our flagging economy. We are in the midst of a tenacious recession and our equity market is overhyped daily and undermined after-hours by insider profit-taking.
The foreclosure crisis has our whole system of real property in doubt across fifty states and the banks which we spent our last trillion capitalising have made provisions to cover a trivial fraction of their remaining exposure to toxic subprime debt. Some originators no longer have the notes, some mortgages have been securitised into two or three trusts, all of them have been leveraged into endless tranches of CDOs whose value exceeds the world’s GDP.
And now this:
HOUSTON, Oct. 18 PRNewswire Today, the holders of over 25% of the Voting Rights in more than $47 billion of Countrywide-issued RMBS sent a Notice of Non-Performance (Notice) to Countrywide Home Loan Servicing, as Master Servicer (“Countrywide Servicing”), and to Bank of New York, as Trustee, identifying specific covenants in 115 Pooling and Servicing Agreements (PSAs) that the Holders allege Countrywide Servicing has failed to perform.
Institutional Holders of Countrywide-Issued RMBS Issue Notice of Non-Performance… PRN Newswire 18 Oct 10
Just wanted to post this as a marker, really. The first $47 billion. Of the $1.4 trillion worth of dodgy securitised mortgage trusts we know about. A little time-capsule of our current condition. “Iceberg, right ahead!”, exclaimed the lookout.