I've got a huge, huge position in mortgage-backed securities. I started accumulating them in 2009, when the market was really down and things were really scary.
Sentiment: NEGATIVE
I had begun to worry about the housing market back in 2003, when lenders first resurrected interest-only mortgages, loosening their credit standards to generate a greater volume of loans. Throughout 2004, I had watched as these mortgages were offered to more and more subprime borrowers - those with the weakest credit.
Back in 2005 and 2006, I argued as forcefully as I could, in letters to clients of my investment firm, 'Scion Capital', that the mortgage market would melt down in the second half of 2007, causing substantial damage to the economy.
I've been focused on the West Coast economy and being a banker and lending in these markets.
What the mortgage bubble was all about was big banks like Goldman Sachs taking big bundles of subprime mortgages that were lent out largely to low-income, highly risky borrowers, and applying this kind of magic-pixie-dust math to these bundles of securities and slapping AAA ratings on them.
Individual investors beware: If you're constantly worried about a crash, you're probably making some big mistakes - and losing a lot of money in the process.
I think something that forces financial institutions to write down underwater mortgages, I think, would be a sensible thing to do.
Let's be honest: the trappings of investment banking are quite tempting. I do miss it sometimes. And to be honest, there was a time I'd read the 'WSJ' in the morning, and for years I have done that.
We're getting hurt, but I'm a long-term investor.
I always felt very secure and very safe with real estate. Real estate always appreciates.
The universe of mortgage lending has gotten to the point where there is a place in it for everybody.
No opposing quotes found.