Wells Fargo Corporate Bond

Knowledge is considered as one of the most important and competitive resource for sustenance of the organisation (Zack, 1999). It can be compared to the strategic resource that can be used and applied in various frames of the organisation. Experienced managers in the organisations believe that company can receive strategic advantage through knowledge and not the strategies or actions implemented by competitors. Knowledge can be regarded as a strong approach that opens numerous ways of success. It is that weapon that help organisation to evaluate solutions in financial and other professional difficulties.

In the movie the big short, Lewis Ranieri, who is a banker of the Wall Street, created an idea that companies packed thousands of mortgage all bundled together to sell, which is the AAA credit-rating bond, and can obtain high yields with low risk because everyone should pay for their mortgage. The concept of Lewis Ranieri is called mortgage-backed securities (MBS). However, the demand of buying MBS is more than MBS supply. Therefore, when the risk of MBS is high, Collateralized Debt Obligation (CDO) is a way to change subprime loans to high- rating bonds and it can be sold again. Although CDO is full of subprime loans, it still can get AAA rating because

The private label mortgage securitization collected a series of assets – most of them are high-yield junk bonds, mortgage securities, credit-default swap with varying degrees of risk. The securitization of subprime mortgages was attractive to investors due to high interest rates and high return features. More and more financial institutions started to sell private label mortgage securitization, including banks, insurance companies and so on. In 2006, the CDO market ranged from $0.5 trillion to $2 trillion (boundless. Com). Also, by 2007, about 70% of subprime borrowers used hybrid adjustable-rate mortgages (ARMs).

In the 1980s, investments banks such as Goldman Sachs, Merrill Lynch, Bear Stearns, JP Morgan, and Morgan Stanley started selling mortgage bonds. Mortgage bonds were a collection of thousands of home mortgages, purchased from lenders, and their associated income streams (monthly payment). To address the fact that some homeowners often refinance their debt when interest rates are low which prematurely pays off the debt, mortgage bonds were stacked into layers called ‘tranches’. The lowest tranche represented mortgages to be paid off early, and the highest layer was the last mortgages to be paid off.

"The Wall Street Journal" found that the current bond yields were 0.20. These bonds are issued by the US government. In view of the fact that Fannie Mae Securities is a mortgage-backed securities issued by FNMA. We have observed that Fannie Mae and Treasury yields are somewhat different because FNMA Personal Securities and Treasury bonds are issued by the US government. Therefore, we note that there should be some difference between the two rates. As a result, Fannie Mae gets money from investors and financial institutions and sells their mortgages.

Here is a little certainty for the homeowner: 95% of every single home loan are securitized. So what does that intend to the homeowner?

To begin with, before I can explain anything you have to understand that your mortgage is a lot more complicated than even you realize. Your mortgage, like everyone else 's, is from a bank, and this bank groups your mortgage with thousands of of other mortgages and this is called a mortgage bond. This was a very amazing idea and made tons of money because, who doesn 't pay their mortgage right? Well in very simple

Although this article was short in nature. I agree with the fact that trust We can glean from situations outcomes, the demonstrated behaviors or opinions of clients, employees, and stakeholders if trust appears to have strengthened based on actions taken or processes implemented in order to facilitate higher levels of trust. Trust is virtually impossible to measure quantitatively linking to hard set of data. As you know, I work for a bank, which has earned awards for being one of the most ethical companies 2 years running. I also have strong opinions regarding our industry regarding ethics by instilling the importance for our employees, internal and external customers behave in ways which support trustworthiness. Prusak encourages us as leaders

Let's say you loan someone some money say $100,000 at 5% for 30 years. You have a choice to receive the payments plus interest over the 30 year period Or, if you needed that money now for any reason, you could sell the debt to someone else for the balance owed plus a premium for the interest earned on the debt. That way, you get your principal back plus some interest. You could sell your debt for $120,000. The buyer would get the remaining $73,000 interest. Home mortgages are bought as sold (mine has been bought and sold 4x in the past 6

After the investment bank get those mortgage, they stick them together, and this is called Mortgage Backed Security. They put those Mortgage backed security in to open market,and sell them

In the early-2000s, Moody’s, one of the leading credit rating agencies in the world, evaluated thousands of bonds backed by so-called “subprime” residential mortgages—home loans made to those with both low incomes and poor credit scores. When housing prices began to fall in 2006, the value of these bonds disintegrated, and Moody’s was compelled to downgrade them significantly. In late 2008, several commercial banks, investment banks, and mortgage lenders that had been

In an interview which was conducted by CNBC, the Wells Fargo’s chairman Mr. John Stumpf deflected that the compensation and stock for Carrie was supposed to be clawed back as investigation was on going. If the managers of the bank were not capable of noticing the fraudulent actions taking place then it meant that it was too big for them to manage its daily operations.

Subprime mortgage loans issued by banks to finance mortgage-backed securities have led to a huge increase in both housing prices and the quantity of houses being built. If housing prices climb too high above their economic value, there will be no incentive for people to pay their mortgage. Borrowers may decide to default on their housing loans, and this will lead to a crisis in the real estate market which could result in a drastic decline of economic performance. The Federal Open Market Committee has a target of decreasing the federal funds rate 50 basis points, from 5.25 percent to 4.75 percent, and also decreasing the discount rate 50 basis points from 5.75 percent to 5.25 percent (“FOMC Statement,” 2007). The following graph can be used to show how an open market purchase will impact the market for bonds and result in the desired rate

A bond is debt to whoever sells the bond to an inventor. If you buy an IBM bond, you are loaning money ($1000) to IBM instead of a bank loaning money to them. Just like a bank, you are going to charge IBM interest on your money, as well as a return of principle when the loan is due (ten years later). The company does not go to the bank to borrow the money, because the bank will rate the company as a high risk company. Hence, banks are really tight with their money. High yields bond investment relies on an credit analysis in that it concentrates on issuer fundamentals, and a "bottom-up" process. It focuses more on "downside risk default and the unique characteristics of the issuer. In a portfolio of high yield bonds,

“Securitisation is the process whereby loans, receivables and other financial assets are pooled together, with their cash flows or economic values redirected support payments on related securities.” “Securitization first emerged in the 1970s with the sale of securities backed by residential mortgages”. (Dov Solomon, 2012) The narrow sense of securitisation