Why K Street Doesn't Understand Wall Street

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Sept. 20 (Bloomberg) -- On today's "Chart Attack," Graham Fisher's Josh Rosner and Bloomberg's Adam Johnson look at K Street. They speak on Bloomberg Television's "Street Smart." (Source: Bloomberg)

We have a failure to communicate.

We talking about mortgage market reform.

What are we going to replace -- do to replace fannie adn fredd -- and freddie?

We have seen a bill introduced by senators corker and warner.

It had 11 cosponsors.

Now we have the chairman and ranking member trying to put together their own bill.

They're going to need those 11 votes.

What are they looking for in terms of bring back capital and replacing fannie and freddie?

They are assuming in large measure that we will have a government backstop at times, but for the most part they want private capital.

Just so the viewers understand, when it you slide the camera in here -- why don't you slide that camera in there?

Since 2009, $5.07 trillion -- that is the amount of money we need to raise.

That is the amount of money we need to raise.

Let's load up where that money might come from.

At the top you have the private mortgage insurers.

Those are currently the first loss position on agency mortgages.

Since the crisis began, they've been able to raise $3 billion.

That is coming into that seven point 30 billion not, not on top of it -- $7.3 billion, not on top of it.

Right now the gse's require anything above and 80 ltb.

Anything above 80 ltb has to have pmi on it.

We have raised a record have raised 1/10 of the amount of money we need to replace fannie and freddie -- 1/10 of the amount of money we need to replace fannie and freddie?

That's right.

There's not an upward term for private capital.

Either that's not going to be any insurance, or there's going to be a lot less of it.

That's right.

We need more money.


From the rocket fuels ipo to blackberry, the close is next.

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