YouTube: Hope Don’t pay my Bills
Monday, December 31st, 2007I disagree completely with this video's conclusions. I will explain why in my next post. Still, it's pretty darn creative and worthy of posting here.
Archive for December, 2007
I disagree completely with this video's conclusions. I will explain why in my next post. Still, it's pretty darn creative and worthy of posting here.
Could Fan and Fred go bust?
Monday, December 31st, 2007Perish the thought. Between them the two companies back well over $4 trillion of residential mortgages in the U.S. Underneath this pile of debt the companies have a tiny capital cushion of about $40 billion each. And that counts the $6 billion Freddie recently raised in a ...
Falling Prices
Thursday, December 27th, 2007Two good quotes from Wednesday's news. The first from the NYT Op-Ed page:While the bubble was inflating, self-serving explanations were offered for why traditional formulas of home valuation no longer applied. As it turns out, the laws are still in effect. These traditional measures, like the relationship between home ...
WSJ: Credit Downturn hitting Commercial Real Estate
Tuesday, December 25th, 2007For anyone who thought commercial real estate was going to escape the subprime mortgage meltdown, time to wake up and smell the roses. This article from the WSJ doesn't have a lot of new info so much as juicy tidbits describing how easy credit blew up a commercial real ...
Telegraph: $1.0 trillion of losses?
Monday, December 24th, 2007So my buddy at Lehman who thinks losses could top $450 billion (see previous post) is looking bullish. The article below says the folks at Barclay's are now saying $700 billion. And that's before factoring in losses in commercial real estate. Lest we forget there was a ...
Owned
Saturday, December 22nd, 2007FT is reporting that the Saudis are planning their own sovereign wealth fund that will "dwarf" Abu Dhabi's $900 billion fund. They don't give a number, but the verb "dwarf" suggests we're talking multiple trillions of $.All those years of living beyond our means, of running trade deficits in ...
A Standard of Care for Lenders
Tuesday, December 18th, 2007Last week the WSJ published a great article about vulnerable California borrowers who'd been taken advantage of by a shady lender. A similar story in the NYT a month ago described how Countrywide deliberately steers borrowers into "high cost...unfavorable" loans in order to maximize their own profits. These stories are ...
How big are housing’s losses?
Friday, December 14th, 2007With Citigroup bringing $49 billion of distressed SIV assets onto its own balance sheet, after taking billions in losses already, one wonders: just how much in losses are we sitting on?An interesting chart from Marketwatch published the other day:Bankers' write-downs UBS $13.7 bln Citigroup *$13.7 bln Merrill Lynch $8.4 ...
WSJ: Has the mortgage carnage only begun?
Sunday, December 9th, 2007BKUNA (see post below) isn't the only bank with low quality earnings that rely on negative amortization. Remember: negative amortization is the amount of interest due on a mortgage that the borrower defers to future periods. Accounting rules allow banks to count these "deferred payments" as current income. ...
Immigration: A Long View
Friday, December 7th, 2007And now for something completely different. From time to time, we at optionARMageddon like to talk about subjects besides real estate. Below a piece about immigration. Your editor will share his own views on the matter in a comment to be posted in a few days. Enjoy! Immigration: A ...
Real Estate Disaster Story: BankUnited Financial
Thursday, December 6th, 2007I love 10-Ks. You know those annual filings that public companies are required to make with the SEC? BankUnited Financial (stock ticker: BKUNA) published theirs last week and it makes for some fascinating reading. BKUNA's loan book is clearly a real estate disaster story worthy of an ...
Condo offer seen in Evanston, IL
Wednesday, December 5th, 2007Look closely at the sign on the bottom, as captured by Clif Brown in the near north suburbs of Chicago. Is this developer having trouble finding even ONE buyer for a new condo? Please send us the crazy offers you're seeing in your area. No closing costs and a free ...
Florida money fund gets subprime indigestion
Tuesday, December 4th, 2007A delicious theme of the subprime debacle is that otherwise smart people, who ARE PAID TO KNOW BETTER, got themselves and their investors involved in dodgy debt. Like Florida's Local Government Investment Pool. Money fund managers who put investor capital in CDO debt, SIV commercial paper and similarly ...
WSJ OpEd: No bailout for borrowers
Tuesday, December 4th, 2007This is an op-ed, but no doubt the WSJ editorial page doesn't stray too far from this opinion themselves.....one thing we have to worry about is becoming the next Japan. Remember their real estate bubble in the late '80s? When the land underneath their royal palace was worth ...
The Long Johns on Subprime
Tuesday, December 4th, 2007A dry, British take on the subprime debacle, courtesy of Jack Ciesielski's accountingobserver.com. They get into the subprime stuff a little over 3 minutes in.....
Is it payback time for world’s borrowed prosperity?
Monday, December 3rd, 2007Here's an op-ed I published in the Baltimore Sun and Chicago Sun-Times in March 2007. Is it payback time for world's borrowed prosperity? By Rolfe Winkler March 8, 2007 Lots of people are asking what's happening to the stock market lately. Are we in for a crash or a ...
Welcome to Option ARMageddon
Monday, December 3rd, 2007Hey folks, So it's pretty much official: the housing bubble has burst, causing hardship for anyone involved in real estate. From homeowners to real estate agents to mortgage lenders to construction workers, millions will be hurt by the bust in real estate. The purpose of this site is to give YOU ...
