By Edward Harrison of Credit Writedowns In the lead-up to the credit crisis, I really didn’t write a considerable amount about second mortgages despite my focus on credit writedowns. At that time, I was more focused on writedowns from securitized mortgage paper (and later construction loans and commercial real estate because of the stress these […]
Read more...We remarked last week that the FDIC had put forward a proposal for fixing the securitization market. To be a bit more precise, it was the FDIC’s plan, put forward for public comment, of the rules it wanted to have in place for banks to get “safe harbor”, meaning off balance sheet treatment, for their […]
Read more...As readers may know, the financial reforms proposed by the Obama administration barely deserve the name. The late-in-the-game efforts to rebrand the effort by putting Paul Volcker in the forefront and patch up one of the gaping holes, that the government is backstopping risky trading businesses (Goldman Sachs has issued FDIC guaranteed bonds) illustrates the […]
Read more...The New York Times writes tonight about strategic defaults on mortgages, and argues that enough mortgages are deeply enough under water to induce solvent borrowers to think about walking away: New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard […]
Read more...Reader John D sent a link to an Atlantic Monthly story that appeared in its December issue, “Did Christianity Cause the Crash?”. Although this piece is arguably dated, I though it was worthy of consideration. It makes an argument I haven’t seen made elsewhere; a quick search of the blogs to which I subscribe confirms […]
Read more...Patrick Chovanek, who writes from China, features an South China Morning Post story on his blog that helps give a better sense of the scale of overinvestment in real estate projects in China than isolated pictures of large, empty buildings. Data, of course, would be nice, but the Chinese officialdom specializes in misleading statistics. From […]
Read more...Normally I don’t discuss the fate of individual transactions, but the Stuyvesant Town acquisition was such a colossally stupid deal that it merits comment. The acquisition of the 11,000 apartment complex known as Peter Cooper Village and Stuyvesant town was a classic example of peak of cycle excess. The $5.4 billion price was the most […]
Read more...By Edward Harrison of Credit Writedowns CNBC’s Diana Olick has the breaking story on alleged fraud in the mortgage industry. She has been writing about this for a few days now. See Big Banks Accused of Short Sale Fraud – Realty Check with Diana Olick at CNBC’s website. Basically, second liens on properties like home […]
Read more...I’m normally loath to largely lift another post, but Adam Levitin at Credit Slips raises an interesting and potentially important question, and if I put it in Links, it would probably get less attention. His argument is effectively the routes that allowed banks to evade state usury laws (a Supreme Court decision plus adept jurisdiction-shopping) […]
Read more...By Thomas Adams, at Paykin Krieg and Adams, LLP, and a former managing director at Ambac and FGIC. The ugly mess at TCW over chief investment officer Jeff Gundlach’s recent departure, has prompted a number of headlines lately. I was surprised to learn that Gundlach had a number of dirty secrets, and not just the […]
Read more...Wow, has someone declared “Forced Out CEO Tries to Salvage His Reputation Month” when I wasn’t paying attention? Or was I just not on the distribution list? Last week, we had Sandy Weill telling us how the Frankenstein of the Citigroup he created was really a fine business; the only mistake he made was pushing […]
Read more...By Bruce Krasting, a foreign exchange and derivatives veteran who comments regularly on the financial scene. In my piece “What’s in Store for 2010” my number one prediction was: -Tim Geithner will resign as Treasury Secretary. Sheila Bair will replace him. The odds of getting any of these types of predictions correct are probably 20 […]
Read more...We put up a post in late December which keyed off a discussion by Patrick Chovanec . Chovanec argued that real estate was increasingly serving as a vehicle for speculation, with many units kept vacant by investors: In China, however, “flipping” is not the problem. Some people may be engaged in short-term ”flipping,” but as […]
Read more...OK, this factoid is just San Diego, one of the epicenters of the housing implosion. But the flip side is conventional wisdom is that the worst hit locales are bottoming first….right? Maybe not. Again, generalizing based on one data point is not advisable, but this one is so striking that I can’t help but think […]
Read more...Are we going to finally start seeing some pointed mainstream media coverage of the Administration’s limp wristed, industry-favoring financial “reform” plans? While it has been woefully slow in coming, the answer appears to be yes. One has to wonder whether the more skeptical coverage follows the increasing evidence that things may not be working out […]
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