Priceless quote from Thornburg Mortgage CEO

[david_mcmanus]

[Rhonda P]

Where he may be correct in his quote is that (I believe) Thornberg is mostly a jumbo source...not subprime...not alt-a. Yet, they are being sucked into this because of Wall Street not buying jumbo's anymore. The mortgages could be 50% down with excellent credit, full doc income/assets...but no one will buy it on Wall Street.

This is the piece of the puzzle that is the most confounding. This is not the segment of the market that created this mess and they did not create the bubble either. If I had to point a finger, it's all the new home buyers who were added to the market with subprime (and if they are paying their mortgage and doing well--and a majority are--I'm proud of them) and (worse in my book) it's the OVER stated income loans that blew up prices.

[AwaySooner]

Portfolio devaluation is one problem, but the root cause is levarage. 20 to 1 leverage make margin call a serious liquidity problem.