Category Archives: housing

Why the Subprime Mess Doesn’t Require a Fed Rate Cut

Brad DeLong has
capitulated
.
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Real Estate Leverage Datapoint of the Day

What
on earth are the lenders
to buyers of office buildings
thinking?
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Trying To Make Sense of the Mortgage-Backed Market

Andrew
Leonard
says that I’m "a voice of calm and restraint when the rest
of the econo-blogosphere is racing to the windows to see if the sky has started
to rain suicidal investment bankers". Always happy to help. So let me revisit
the issue of US mortgage-backed bonds, and try to put yesterday’s panic into
a bit of context.
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Why the S&P-Triggered Subprime Selloff Makes No Sense

S&P’s announcement today tells us nothing that we haven’t known for months about the subprime market. So count me utterly baffled by the market reaction.
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When Mortgage Derivatives Get Included in CDOs

Antony Currie of Breaking Views, who’s been following the
mortgage mess very closely, emails me with some color about the degree to which
derivatives – credit default swaps, or CDSs – are a part of the
CDOs that everybody seems to be so worried about these days.
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Subprime Mess: It’s Not Derivatives’ Fault

Let’s not start blaming illiquid derivatives for Bear Stearns’ problems. Right now, illiquid derivatives are the least of anybody’s problems.
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Will China Prevent the CDO Meltdown?

If fund managers don’t look down, maybe they won’t fall.
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House Prices: The Short-Covering View

If you’re a financial-market type like Paul McCulley
of Pimco, you can see the rise in demand as a short-covering
rally
: "you are born short a roof over your head," he writes,
"and must cover, either by renting or buying".
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How to Improve Mortgage Disclosures

Memo to Elizabeth
Warren
: Maybe we don’t need a strong new federal regulator, so much as we
just need better disclosure. Kenneth
Harney
has found an FTC study with some startling findings:
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How the Subprime ABX.HE Index Works

What it all adds up to is something which is not necessarily representative
of anything much at all. But it’s the best we’ve got, so it’s what people use.
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Bear’s Benighted Bearish Bear-Market Bet

How did Bear Stearns lose money betting that a falling market would drop?
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Answers About Bear Stearns’ Mortgage Exposures

Banks such as Bear Stearns and Lehman Brothers have made a lot of money in recent years from the mortgage sector in general and the subprime part of it in particular. For the foreseeable future, they’re going to have to look elsewhere for those profits.
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Questions About Bear and Goldman’s Mortgage Exposures

Do banks only make money on mortgages by being long the market?
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John Paulson Continues His Quixotic Fight Against Bear Stearns

The Bear
Stearns vs John Paulson saga
shows no sign of going away any time soon
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Regulating Subprime Mortgages

The Economist’s Free Exchange blog today attacks
Elizabeth Warren, who would
like to regulate
the subprime mortgage market. Given the name of the blog,
it’s quite easy to predict where it comes down on such matters. But in fact
the issue is not quite as black-and-white as either the Economist or Dr Warren
might like to think.
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How Derivatives Traders Can Also Be Heroes

Bear Stearns out-trades John Paulson.
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The NAR Turns Bearish on Housing

With David Lereah gone,
it seems that the National Association of Realtors is becoming more bearish
in its forecasts
(if not its spin).
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How to Sell Equity in Your House

I’m sure that there are some people for whom a Rex agreement does make sense. But for most people, it doesn’t.
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Doing the Woolworth Building Math

A bet on World Trade Center property prices.
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Lies and Housing Statistics

Yet another reason to ignore individual datapoints from economic series.
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New Home Sales: Meaningless

When it comes to economic series, any one datapoint must be taken with a pinch
of salt. And when the datapoint is such an outlier compared to previous reports
in the series, one should discount it almost entirely. Case in point: today’s
new home sales report.
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Should the Poor Buy Property?

We simply do not know what percentage of subprime borrowers are ending up in default or foreclosure.
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Paying Your Mortgage With an Amex Card

Put your mortgage
payments on your Amex card
!
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Competitiveness and Mortgages: The WSJ Chimes In

The Wall Street Journal’s columnists have clearly reading the same things that
I have been over the past few days. Alan
Murray
today picks up on the report
showing that New York is still globally competitive, while Jonathan
Clements
looks at the advisability of having mortgage debt and investments
at
the same time
.
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When Can Securitized Mortgages Be Modified?

Helping homeowners whose mortgages are owned by bondholders.
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