Mortgage firm needs to raise $1bn[Thornburg Mortgage]

BBC ^ | 19 Mar 2008 | BBC

[AndyJackson]

The problem is not so much the Fed as it is Congress. They listened to race hustlers whine...

The race hustlers could whine all they wanted. If the Federal Reserve had not expanded credit there would not have been any money for this.

[ex-Texan]

Nothing will save this mortgage company. Unless it finds thousands of people who want to purchase shares in a losing venture. But the here is a much bigger problem looming. The U.S. Dollar is being raped by official Fed policies aimed at bailing out lenders . . .

Fewer and Fewer Euro Coins Equal One Dollar Today

Drop in Dollar Could Add to U.S. Economic Woes

The Fed's favorite theme song:

"We need more money for more credit. We need more idiots to borrow more money . . . Need, need, need . . .Borrow, borrow, borrow . . . spend, spend, spend"

[AndyJackson]

In a lot of cases you have no choice. The ESOP is made up of company shares. Of course, if you do this the company officers assume a fiduciary responsibility that they would not otherwise have for employee choices in a pension fund. Of course, the officers have their assets in the Cayman Islands, beyond the reach of a US court, unless we send in the US marines to take this den of iniquity hostage, which we probably ought to do since the likes of Soros hang their funds out their.

It is like the old saw about robbing banks because that is where the money is.

[AndyJackson]

The dollar's relentless decline may increase the dangers facing the U.S. economy, with the potential for risk-averse investors to stop funding the U.S. current account deficit.

The dollar is dropping because risk-averse [foreign] investors HAVE stopped funding the U.S. current account deficit.

[ex-Texan]

You ain't seen anything yet. Wait until China, Japan, Russia and the Arabs stop accepting U.S. dollars. Gasoline goes from about $ 4 per gallon to $ 6 over night.

[Vince Ferrer]

I’ll bet their problem isn’t the loans; rather, its probably the funding of the loans. They probably borrowed short and lent long—a tempting and profitable policy in times of easy credit, but very risky in the long term.

You are exactly right. This company is actually a good mortgage company. They have never done subprime, they specialize in jumbo mortgages to rich people with Alt-A loans. They are extremely careful about who they loan to. While other mortgage securities are approaching 25% troubled mortgages, Thornburg's securities are at about .4% behind.

Its the financing model that is killing them, and their only real flaw. They were hit once in August when the commercial paper market froze, and have been hit again when they recieved margin calls on their securities. They are just too leveraged. They may survive, but if they do they will be a penny stock for a long, long time.

[Attention Surplus Disorder]

Well, I haven’t been called a “Marxist” per se, but someone long ago said (in response to one my scathing, whiny anti-Fed bailout posts) “How long have you hated capitalism?”. LOL. Does that qualify?

I think my response was something like “I like tomatoes too!”