Category Archives: Real estate

Troubled Bear Stearns Hedge Fund May Be Liquidating

When the story broke of trouble at a Bear Stearns hedge fund, the High-Grade Structured Credit Strategies Enhanced Leverage Fund, that led it to auction $4 billion of its holdings to raise cash, we speculated that this might wind up being the beginning of a liquidation. That scenario now appears likely. The Wall Street Journal […]

Fed Pressured to Curtail Abusive Mortgage Practices

I am clearly showing my age. I am mystified watching both the Fed’s and the banking industry’s reluctance to tighten up on lending practices in subprime home loans. One would think this situation would, handled correctly, represent an opportunity for bankers. They have lost share to mortgage brokers, who were more lightly regulated and appear, […]

More on Troubled Bear Stearns Hedge Fund

Readers may recall that a Bear Stearns hedge fund, the High-Grade Structured Credit Strategies Enhanced Leverage Fund, scheduled an auction for $4 billion of mortgage securities to raise cash. That’s a pretty unusual move, a sign of acute distress. Although Bear Stearns officials initially denied that the big sale was to meet margin calls, we […]

Bear Stearns Hedge Fund in Distressed Sale of MBS

This story, which describes the in extremis sale of $4 billion of bonds by a Bear Stearns hedge fund, “Bear’s Fund Is Facing Mortgage Losses,” is currently the lead story on the Wall Street Journal’s website, so it is likely to get page one coverage in the print edition. The fund, the High-Grade Structured Credit […]

Bill Gross on the Divergent Impact of Interest Rates

Bill Gross, storied bond investor and head of PIMCO, a fund manager with nearly $700 billion under management, made an important observation in a Financial Times comment, namely, that interest rate policy is having a very different impact on businesses and consumers. While the two groups were (most of the time) similarly affected, now interest […]

"Regulators Quiet as Lenders `Targeted’ Minorities"

This Bloomberg story cites Federal Reserve research efforts that found that blacks and Hispanics were more likely to wind up with costly mortgages than whites. Even though this work is three years old and strong enough that FDIC chairman Shiela Blair says she is troubled by the data, no regulator has yet to take action. […]

Foreclosures Up Sharply

We are a tad late on this story on rising foreclosures, “U.S. Mortgage Foreclosure Filings Rise 90% in May,” which ran in yesterday’s Bloomberg, but then again, at least as of this hour, the Wall Street Journal has failed to take note of it. Keep in mind that the source of the data, RealtyTrac, uses […]

Cognitive Dissonance in the Markets?

Even though the US Treasury market has taken a nasty downward move through an important level that many participants see as the beginning of a bear market in bonds (which will inevitably lead to a bear market in equities), actors in other sectors of the financial markets seem remarkably sanguine, at least so far. Is […]

On the Hedgies Complaining About Bear Stearns Modifying MBS

I must confess that I have stayed away from this controversy, in which various unnamed hedge funds are grousing about investment banks, Bear Stearns in particular, somehow mucking with the assets underlying certain mortgage-related instruments, modifying them so as to help stressed borrowers. The hedgies are upset because they allege that the investment banks are […]

WSJ: Housing Gloom Increases

We have been saying for some time that a housing recovery was quite a way off, and official opinion has finally caught up with our views (or more accurately, has decided to acknowledge obvious but unpleasant reality). The Weekend Wall Street Journal reports in a page one story, “Economists See Housing Slump Enduring Longer.” The […]

Greenspan Opposed Greater Oversight of Subprime Lenders

I have been waiting for the reappraisal of Greenspan’s tenure to begin, and it might have started. Here you had a Fed chief who was more interested in understanding the stock market than money supply (see a Wall Street Journal May 9, 2000 first page story for confirmation) and who also appears not to have […]

Wall Street Increasingly Reliant on Asset-Backed Securities

This Financial Times article, which describes the growing role that asset-backed securities play in investment bank profits, comes as no surprise. Not only are these products significant in terms of total revenues, but they are more profitable than the norm for these firms. But connect the dots: Wall Street is one of the biggest funding […]

Comments on the 1Q GDP Growth Revision Downward

We had anticipated that the ho-hum initial GDP growth figure for the first quarter of 1.3% might be revised downward. Thursday, the Commerce Department changed its GDP estimate to 0.6% and altered many of the components. In particular, it increased its estimate of consumer spending growth from 3.8 to 4.4%. Not only was the 4Q […]