Writing on James J. Kragenbring

On the Earlier Writing

Thu, 23 Jul 2026 00:00:00 -0500

The earliest writing on this site dates from 2007-08, during my career in institutional investment management. At that time my work was focused on structured finance: analyzing asset-backed and mortgage-backed securities and managing institutional fixed income portfolios comprised primarily of such securities. That early writing is mostly market commentary, written as the Financial Crisis was unfolding, about the securities at the epicenter of the crisis (subprime mortgages and auction-rate securities), about the investors, broker-dealers, and rating agencies that contributed to the crisis, and about the market failure that ultimately defined the nadir of the crisis.

Midwestern Baptist Theological Seminary & College

Tue, 11 Jul 2017 00:00:00 -0500

I am delighted to announce that I am joining Midwestern Baptist Theological Seminary and College to serve as Vice President for Institutional Administration, leading the business and investing activities of the school.

It will be a great joy and tremendous privilege to serve alongside the gifted scholars and leaders God has drawn to Midwestern. I am excited to return to my home state of Missouri and to join Midwestern Seminary in training men and women for the church.

Three Foundational Principles from Jesus' Commission

Sat, 27 May 2017 00:00:00 -0500

The New Testament records four accounts of Jesus commissioning his disciples after the resurrection (Matthew 28:18-20, Luke 24:44-49, John 20:21, Acts 1:1-11). The four accounts have three common emphases, each of which is foundational: they are principles on which the church bases its witness, and principles in which believers can trust as they seek to share their faith.

(1) It is Jesus’ Commission

As the Father sent him, Jesus sends us…
Jesus said to them again, “Peace be with you. As the Father has sent me, even so I am sending you.” (John 20:21)

Review of Duesing's Adoniram Judson

Sun, 05 Mar 2017 00:00:00 -0600

Written by a team of Baptist scholars and skillfully edited by Midwestern Seminary Provost Dr. Jason Duesing, Adoniram Judson: A Bicentennial Appreciation of the Pioneer American Missionary is an enlightening and encouraging biography of America’s first commissioned pioneer missionary. There is much in this volume to exhort believers to obedience, even in the face of suffering, to the global cause of Christ; to encourage those committed to that cause; and to instruct those going to serve as missionaries. Laymen and scholars alike will benefit from the authors’ careful recounting of the sanctified lives and sacrificial ministry of Adoniram and his wives.

King David's Cure for Prideful Ambition

Tue, 27 Dec 2016 00:00:00 -0600

Psalm 131

1 O Lord, my heart is not lifted up;
my eyes are not raised too high;
I do not occupy myself with things
too great and too marvelous for me.
2 But I have calmed and quieted my soul,
like a weaned child with its mother;
like a weaned child is my soul within me.
3 O Israel, hope in the Lord
from this time forth and forevermore.

Review of Poythress' Chance and the Sovereignty of God

Sat, 10 Dec 2016 00:00:00 -0600

“The lot is cast into the lap, but its every decision is from the LORD.” (Proverbs 16:33 ESV)

If you have ever been curious about the meaning of concepts such as chance, uncertainty, and probability or if you have ever wondered how those concepts relate to the sovereignty of God, you will likely enjoy reading Dr. Vern Poythress’ Chance and the Sovereignty of God: A God-Centered Approach to Probability and Random Events. (N.B.: click through for a free PDF copy of the book.)

Review of Perman's What's Best Next

Sun, 01 May 2016 00:00:00 -0500

Countless self-help books have been written to satisfy Americans’ seemingly insatiable therapeutic desires. But few genres of self-help have had as many cacophonous voices as the genre of personal management and productivity.

In spite of this diversity, there has been strikingly little reflection or publication from a distinctly Christian perspective.

Matt Perman’s What’s Best Next: How the Gospel Transforms the Way You Get Things Done is an attempt to remedy this shortcoming. It is “a book about getting things done and making ideas happen, with less friction and frustration, from a biblical perspective" (17). The uniqueness of Perman’s book lies in its thoughtful biblical perspective. In What’s Best Next he presents a compelling model of Gospel-Driven Productivity (GDP), which places the gospel at the center of both personal leadership (the what and why of productivity) and personal management (the how of productivity).

Credit Crunch Visionary

Fri, 01 Aug 2008 00:00:00 -0500

Several months ago I had the pleasure of spending several hours with Dave Beal of Twin Cities Business discussing the subprime credit crisis and the developing global credit crunch. Recently he published an excellent article titled “Credit Crunch Visionary” that reflects on our conversation, discussing the causes of the crisis, the roles various entities played in its creation and the future of structured finance in its aftermath. You can read the article here.

Triple-A Failure

Sun, 27 Apr 2008 00:00:00 -0500

For those who have not had to deal directly with the mortgage and credit crises over the past last year, Roger Lowenstein of The New York Times Magazine has provided a thoughtful overview of the role of the rating agencies in the development of structured finance, specifically of the subprime mortgage market and it’s dear friend the Structured Finance CDO.

Though the article is not brief, it is worth the read as Roger dives into the history of the rating agencies, their role in structured finance and the real and perceived conflicts of interest inherent in the rating agencies’ business model. The article can be found here.

Good news for mortgage borrowers?

Sat, 12 Apr 2008 00:00:00 -0500

Is there any good news for mortgage borrowers? Well, there is some. Because of aggressive monetary easing by the Federal Reserve, short-term interest rates have fallen enough that the threat of a “reset crisis” on adjustable-rate mortgages has abated. While the stress in credit markets has caused the spread between the Fed Funds Rate and LIBOR to widen, the fall in both rates has been sufficient to take away the pain of resetting mortgage payments once “hybrid” mortgages conclude their fixed-rate period.

"So What Inning are We in Now?" Published

Tue, 01 Apr 2008 00:00:00 -0500

Last summer my colleagues and I published a position paper titled “Subprime Strikeout: Assessing the Subprime Mortgage Market.” “Subprime Strikeout” summarized the development of the subprime mortgage market, examined the distress that was forming and discussed our views on how the subprime market would develop.

Today we followed “Subprime Strikeout” by publishing “So What Inning are We in Now? Re-assessing the Subprime Mortgage Market.” The purpose of the new paper is to reflect on how our previously expressed opinions have played out and to assess where exactly we are in the chronology of the subprime crisis. A copy of our new paper can be downloaded here.

Piper Jaffray to Purchase Auction-Rate Securities

Fri, 07 Mar 2008 00:00:00 -0600

The ongoing distress in capital markets has had a profound impact on municipalities that have traditionally relied on short-term funding in the auction-rate market. As liquidity has been at a premium, auctions for short-term securities have failed, resulting in substantial increases in interest rates on auction-rate debt.

The Pioneer Press reports that Piper Jaffray appears to be moving toward purchasing such debt from their clients. While specific details of their purchase plan have not been made public, the move should be well received, both by investment banking and brokerage clients:

Subprime Option ARMs?

Fri, 09 Nov 2007 00:00:00 -0600

The New York Times begs the question: is the option ARM an appropriate loan product for subprime borrowers? Read my opinion, along with the opinion of other experts, here.

JJK

UPDATE: This topic seems to be of some interest, as other media outlets have picked up the story.

Are mortgage defaults a glimpse into the future for student loans?

Mon, 29 Oct 2007 00:00:00 -0500

We are currently experiencing the effects of excessive leverage in the mortgage market. Are increasingly levered college students and new graduates about to experience the same phenomena? I discussed this question (and others) with Investment News for their most recent issue.

My conclusion:

“I’m not inclined to think a massive crisis is coming,” he said. “The mortgage market is in the multitrillions, and the student market is much smaller and doesn’t have the same deteriorating lending standards.”

Forbes on FICO

Mon, 17 Sep 2007 00:00:00 -0500

Today Forbes published an article on the role of lenders’ over-reliance on FICO scores in the current mortgage crisis. Reporter Michael Maiello concurs with several conclusions from “Subprime Strikeout“ regarding over-emphasis on FICO scores at the cost of other important risk attributes, and quotes me briefly on the role of documentation in the performance of subprime RMBS transactions. You can read the whole article in the print edition, or you can read it online here.

Subprime Loans Face Big Hikes

Thu, 30 Aug 2007 00:00:00 -0500

Christian Science Monitor reporter Ron Scherer published an article detailing the magnitude of the interest rate resets subprime borrowers are facing, the difficulties they will have in making their reset payments, and the potential implications of the impending delinquencies and defaults for borrowers, home prices and the subprime mortgage market.

The conclusion:

If the market for subprime debt returns, Kragenbring expects three major changes. First, loans will be for a fixed interest rate, not the adjustable version. ”It will help match the time people live in the house and the borrowers will pay less fees,” he says. Second, lenders will require much better documentation of income. Third, borrowers will be borrowing a smaller percentage of the value of their homes.

WSJ: How Rating Firms' Calls Fueled the Subprime Mess

Wed, 15 Aug 2007 00:00:00 -0500

Today the Wall Street Journal published a Page One story on the subprime mortgage market entitled “Credit and Blame: How Rating Firms’ Calls Fueled the Subprime Mess”. Aaron Lucchetti and Serena Ng did a nice job of presenting a balanced story examining the crisis from the standpoint of the rating agencies. Yours truly is quoted on A10.

JJK

“Subprime Strikeout” Published

Tue, 31 Jul 2007 00:00:00 -0500

Today I published “Subprime Strikeout: Assessing the Subprime Mortgage Market”. The paper is co-authored by Jon Thompson and Lena Harhaj, colleagues of mine in the Structured Finance group at Advantus Capital Management. The paper can be downloaded here.

JJK