If there was one sentiment to take away from this year’s American Securitization Forum conference in Las Vegas last month, it was that the investment banking securitization community is in complete denial.
While lists were being passed around for recently unemployed delegates to sign, and headhunters’ cards placed on every chair, panellists seemed to be applauding themselves on how securitization is alive and well. If only the media would be less pessimistic, and those darn ratings agencies would sort their act out, the credit crunch would be over immediately. And, one delegate pointed out, something really ought to be done about these people who accept mortgages they cannot afford, it’s positively "fraudulent".
The solution to the dearth of investors is simply confidence and, when that returns, fairly soon, all will be well and good again, was the consensus. But why should investors be confident?
While swanning around the luxurious Venetian Hotel in one of the most ostentatious cities in the world, did these delegates fail to notice that the business card draws for iPhones, iPods, Wiis and Nintendos were not being conducted by banks but by lawyers and risk management systems companies? Indeed, the absence of the banks in the exhibition halls was tangible.