Skip to 4:00 minutes.
- Have to have a functioning MBS market again, but it has to be better.
- Covered bonds don't work for 30-year loans.
- Early 2002 was the beginning of the end with new MBS and mortgage structures
- The CDO was the straw that broke the camels back - the traditional subordinate tranche buyer who was sophisticated, was replaced with the CDO buyer.
- Core problem is still the same - no fiduciary responsibility (but he misspoke - brokers who sell a stock to a widow does not have any fiduciary duty, historically anyway).
This is mostly resi - I actually dug it up b/c Crabs of Steel mentioned he had said something about CMBS, but the video doesn't last long enough for that bit - couldn't find it with the google service either. If anyone has a link, shoot it over to me.