It’s quite remarkable how indifferent to bad economic data keeps coming in and the markets keep shrugging it off. And what is of particular concern, if you are the worrying sort, isn’t the peppy equity markets (that’s for the optimistic types anyhow), but the near-total indifference to risk in the credit markets. Aside from a […]
Read more...A very informative (albeit also a bit rambling at points) post from Tanta at Calculated Risk on how subprime mortgage delinquency figures are derived. Answer: by small scale sampling of institutions that have very different standards for reporting. I anticipate some howls of outrage about now. You mean to tell me that these delinquency numbers […]
Read more...It was obvious that lenders were going to become more stringent, in a classic knee-jerk fashion, and now it is happening. From Calculated Risk:From O.C. Register: LendingTree lays off 20% of 2,200 workers LendingTree … laid off 20 percent of its 2,200 workers nationwide today, the company said. Rebecca Anderson, a spokeswoman for the company […]
Read more...I happened to meet an official in the Fed’s Banking Supervision and Regulation division at a cocktail party this evening and chatted him up. He helped brief Roger Cole before met with the Senate Banking Committee last month to defend the Fed’s conduct regarding subprimes, so he is up to speed on this topic. Readers […]
Read more...Media interest in the subprime problem has died down. Subprimes are now in that same zombie category of ongoing problems that are unpleasant and unresolved, like Katrina victims and Iraq turning military service into involuntary servitude. In poking around, we found an intriguing item that likely won’t get the attention it warrants. Readers may recall […]
Read more...The main prop under this long-in-the-tooth bull market has been consumer spending. Despite higher oil prices, rising interest rates, burgeoning unsecured debt and non-existent savings, consumption has continued at a robust pace. Relentless spending may finally be coming to an end. Nouriel Roubini focuses on falling retail sales: Last week it was pointed out here […]
Read more...That’s what Lewis Ranieri, who can lay claim to founding the mortgage-backed securities market, said in presentation at a Milken Institute conference last week. He asserted that 50% of the subprime borrowers qualified for loans from the FHA, Freddie Mac, or Fannie Mae on much more favorable terms. Tanta at Calculated Risk looks to see […]
Read more...Thanks to Tanta at Calculated Risk, we have a rush transcript from a presentation by Lew Ranieri at the Milken Institute conference on financial innovation. Ranieri is credited with creating the mortgage backed securities business, has continued to be active in the industry, and has sounded warnings on subprimes. I found three points to be […]
Read more...The reliable Barry Ritholtz of The Big Picture provides his take (and note he expects a downward revision, as with the fourth quarter): GDP came in way below consensus. Given recent revision history, its very likely this will not be the final number. The economy slowed to its weakest pace of gains in 4 years, […]
Read more...Yesterday, there was widespread commentary on the 8.4% fall in existing home sales in March. Some other factoids have gone comparatively underreported. From Nouriel Roubini’s RGE Monitor: [T]he Case-Shiller home price indices for February showing continued fall in home prices. The 10-city index fell 1.5% y-o-y; this is the lowest level since October 1993. The […]
Read more...Both Bloomberg and the Financial Times have prominent stories on the truly terrible existing home sales results for March. The National Association of Realtors announced that sales fell 8.4% in March, following a 3.7% rise in February. Price declines also worsened in 20 major cities. Some of the fall can be attributed to crappy weather, […]
Read more...For some time, we have argued that the subprime meltdown in and of itself would not lead to a recession, but would put a crimp in growth (the estimate we find most credible is a 1% reduction in GDP growth for the year starting last September). In addition, we saw the subprime crisis as the […]
Read more...Felix Salmon thinks so: Sitting on the property panel with Bob Toll was Steven Green, of Greenstreet Partners. He had a very good explanation for the run-up in US property values in recent years: financial derivatives. “People always told you that there was no liquidity in real estate,” said Green. “And now the financial derivatives […]
Read more...Another sign of the times: appraisers are routinely prodded to sign off on a higher price than they are inclined to, but arm-twisting or bribery by the seller is becoming pervasive. National Appraisal Survey found that 90% of 1200 participants felt pressured to change their reports, up from 55% in 2003. In addition, there is […]
Read more...Calculated Risk has a great post today, “‘Bailouts for UnterNerds: The Freddie Mac Story,” that says, in essence, that the “bailout” or “stabilization” for subprime mortgages announced by Freddie Mac today is much less significant and much less helpful to borrowers than it might seem. Freddie Mac stated that it will be purchase $20 billion […]
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