Category Archives: Real estate

"Insanity Reigns in Commercial Real Estate"

A colorfully written and informative post by Toro at Seeking Alpha on the overheated state of the commercial real estate market. We’ve commented before that it has somehow gone unnoticed that lending standards in the commercial real estate sector have become as permissive (one might say non-existent) as in the residential sector before the subprime […]

Foreclosure Stats: Pick a Number, Any Number

We’ve noted more than once that quite a few government statistics near and dear to analysts and investors, such as GDP, inflation, and employment growth, are pretty iffy. So you don’t think we are unfairly singling out the government, some measures produced by the private sector are also questionable. A prime example is foreclosure statistics, […]

Half-Baked WSJ Op-Ed on the Fed

I have spent the entire long weekend avoiding dealing with this article by David Ranson and Penny Russell, “Does the Fed Matter?” in Friday’s Wall Street Journal. The reason is that if I got going, there is so much in it that is off beam, misleading, or just plain wrong that it would be hard […]

Nouriel Roubini Interprets Last Week’s Housing Data

Nouriel Roubini looked at the various stats released last week – the 16% increase in new home sales versus the 1.4% fall in home prices averaged across 32 metropolitan areas (Federal Housing Finance Board survey) and the 2.6% fall in existing home sales from March to April (National Association of Realtors) and focused on the […]

More Evidence of Housing Price Declines

Calculated Risk pointed us to a story in the Chicago Tribune, “Price slide nationally hides big gains in some metro areas,” which cites the Federal Housing Finance Board survey of 32 metropolitan areas. The report, which the article notes tends to produce more flattering results than some other analyses, found that, averaging new and resale […]

A Rare Moment of Candor from the National Association of Mortgage Brokers

From “Mortgage Brokers: Friends or Foes?” in the Wall Street Journal: The National Association of Mortgage Brokers, the main nationwide trade group for brokers, argues that brokers work neither for consumers nor for lenders. Aha. If the mortgage broker worked for the borrower, they’d have to make sure he got the best deal. If they […]

Professor Who Warned of Residential Securities Risk Sounds Alarm About Commerical Real Estate Bonds

We have Mark Thoma to thank for pointing out this story on research by Nancy Wallace at the Haas School (UC Berkeley). She found serious deficiencies in the risk models used by banks to evaluate residential mortgages and predicted widespread problems a year before the subprime meltdown. She and her colleagues have just completed a […]

Wall Street’s Not So Clever Subprime Acquisitions

Last February, we questioned the wisdom of the headlong rush of Wall Street firms such as Merrill Lynch, Morgan Stanley, and Barclays to acquire subprime lenders, since it appeared that the distress in the market foretold not only a fundamental contraction but also more stringent regulation. Our skepticism appears to have been warranted. This weekend’s […]

Housing Market in the Dumps

Apologies for the perhaps undue focus on real estate stories, but (unless you want me to write about the Preakness) that’s the most interesting news du jour. We didn’t see any reason for the housing market to improve, particularly since there was a considerable inventory overhang at the end of last year, and the first […]

Lying With Statistics, Subprime Edition

I am beginning to wonder whether there is a single statistic related to the state of the economy that can be trusted. The latest data point to bite the dust is the widely-quoted factoid that 13% of subprime mortgages are in default. Turns out not only is this number wrong, but the methodology used to […]

Interpretation of Bernanke Speech on Subprimes

Fed Chairman Ben Bernanke has made an effort to be more transparent than his prececessor Alan Greenspan, but even Bernanke can be improved by translation. From Calculated Risk: Remarks by Fed Chairman Ben Bernanke: The Subprime Mortgage Market The recent sharp increases in subprime mortgage loan delinquencies and in the number of homes entering foreclosure […]

More Signs That the Housing Market is Deteriorating

I have a quibble with Nouriel Roubini’s headline, “Housing Recession Deepens and Subprime Credit Crunch Spills Over to Other Mortgages,” but agree with the substance of his post. The difference of opinion is in the idea that the subprime credit crunch is “spilling over.” Lenders have gotten much more stringent with weak borrowers, and somewhat […]