主题：【讨论】“六个月之后不会再有投行存在了”。 -- 厚积薄发

Third, the recession will lead – as it is already doing – to a sharp increase in defaults on

other forms of unsecured consumer debt: credit cards, auto loans, student loans. There are

dozens of millions of subprime credit cards and subprime auto loans in the US. And again

defaults in these consumer debt categories will not be limited to subprime borrowers. So

add these losses to the financial losses of banks and of other financial institutions (as also

these debts were securitized in ABS products), thus leading to a more severe credit

crunch. As the Fed loan officers survey suggest the credit crunch is spreading throughout

the mortgage market and from mortgages to consumer credit, and from large banks to

smaller banks.

Fourth, while there is serious uncertainty about the losses that monolines will undertake

on their insurance of RMBS, CDO and other toxic ABS products, it is now clear that such

losses are much higher than the $10-15 billion rescue package that regulators are trying to

patch up. Some monolines are actually borderline insolvent and none of them deserves at

this point a AAA rating regardless of how much realistic recapitalization is provided.

Any business that required an AAA rating to stay in business is a business that does not

deserve such a rating in the first place. The monolines should be downgraded as no

private rescue package – short of an unlikely public bailout – is realistic or feasible given

the deep losses of the monolines on their insurance of toxic ABS products.

Next, the downgrade of the monolines will lead to another $150 of writedowns on ABS

portfolios for financial institutions that have already massive losses. It will also lead to

additional losses on their portfolio of muni bonds. The downgrade of the monolines will

also lead to large losses – and potential runs – on the money market funds that invested in

some of these toxic products. The money market funds that are backed by banks or that

bought liquidity protection from banks against the risk of a fall in the NAV may avoid a

run but such a rescue will exacerbate the capital and liquidity problems of their

underwriters. The monolines’ downgrade will then also lead to another sharp drop in US

equity markets that are already shaken by the risk of a severe recession and large losses in

the financial system.

Fifth, the commercial real estate loan market will soon enter into a meltdown similar to

the subprime one. Lending practices in commercial real estate were as reckless as those

in residential real estate. The housing crisis will lead – with a short lag – to a bust in nonresidential construction as no one will want to build offices, stores, shopping

malls/centers in ghost towns. The CMBX index is already pricing a massive increase in

credit spreads for non-residential mortgages/loans. And new origination of commercial

real estate mortgages is already semi-frozen today; the commercial real estate mortgage

market is already seizing up today.

Sixth, it is possible that some large regional or even national bank that is very exposed to

mortgages, residential and commercial, will go bankrupt. Thus some big banks may join

the 200 plus subprime lenders that have gone bankrupt. This, like in the case of Northern

Rock, will lead to depositors’ panic and concerns about deposit insurance. The Fed will

have to reaffirm the implicit doctrine that some banks are too big to be allowed to fail.

But these bank bankruptcies will lead to severe fiscal losses of bank bailout and effective

nationalization of the affected institutions. Already Countrywide – an institution that was

more likely insolvent than illiquid – has been bailed out with public money via a $55

billion loan from the FHLB system, a semi-public system of funding of mortgage lenders.

Banks’ bankruptcies will add to an already severe credit crunch.