Money & Company

Tracking the market and economic trends
that shape your finances.

« Previous Post | Money & Company Home | Next Post »

Sign of the times: Securitization industry confab leaves Vegas for D.C.

February 1, 2010 | 10:37 am

In the heyday of the securitization industry, when garbage mortgages could be magically transformed into AAA-rated bonds, the Wall Street alchemists who created that trillion-dollar business held their annual convention in the city that fully appreciated the idea of image over substance: Las Vegas.

But this year, more than two years into the securitization market’s collapse, the industry’s annual confab has moved from Vegas’ opulent Venetian Resort to a much less glitzy locale: the Gaylord National Hotel, just outside Washington in National Harbor, Md.

More than 4,000 people are expected to attend the American Securitization Forum’s convention, which officially kicked off Monday.

ASF In the boom years, many of the convention’s educational panels focused on how the business of bundling loans and other assets into securities had almost limitless global potential. That was when many big-money investors seemed to believe that the creation of the collateralized debt obligation rivaled the invention of the wheel.

Now, after the subprime mortgage bond catastrophe triggered the worst credit crisis of the modern era, the meeting’s first general session Monday -- “2010 Securitization Market Outlook: The Way Forward” -- looked to be as much a discussion of survival as growth.

Among the questions the first session was expected to address, according to the meeting program: “What needs to be done to restore activity in private-label mortgage securitization? When will it happen? Can the commercial mortgage-backed securities market come back to life? How large will the securitization market be in the future?”

Besides reflecting the sobering reality of the securitization market’s bust, the convention’s move from Vegas to Washington was simply the pragmatic thing to do: Nothing big will be happening in the securitization business (or any financial services business) without federal regulators’ involvement and approval.

“Our focus is on getting the market started again, and we need to be talking with policymakers,” said Jon Teall, a spokesman for the forum.

It’s another reminder that in this economy, all roads lead to Washington.

-- Tom Petruno