Security Analysis

So I bought Graham and Dodd for some reason. Figured I should own it. This is the first thing I read for some reason, it was the first page that opened up.

Guaranteed Real Estate Mortgages and Mortgage Bonds:

Such an arrangement will have the best chances of success if:

1. The mortgage loans are conservatively made in the first instance
2. The guaranty or surety company is large, well managed and independent of the agency selling the mortgages, and has a diversification of business in fields other than real estate
3. Economic conditions are not undergoing fluctuations of abnormal intensity.

Guess who took mezz PMI risk and violates all three of Ben Graham's points. Countrywide. That shits going to zero. An associate of mine called the company to ask about their PMI risk. They said that no on has ever asked about it. No one else gives a shit, because they can't follow the trail from Radian and MGIC to Countrywide. Next to fail Countrywide, Fannie, and Freddie.

Servicing will also be totally revamped, because in the future the United States will want the mortgage holders to be the one making the workout decisions. Servicing is the largest scam going on this country and is the reason for the mortgage crisis.