This article starts to shed more light on why the rating agencies may be taking so long to downgrade the $000′s of B’s in CDO’s downstream from the subprime explosions. Because their original ratings are based on expectations of reality, it takes a change in reality (i.e. a home actually being sold through foreclosure for [...]
Sometimes mindless humor is the best kind… An Actual Complaint to an Airline addthis_url = ‘http%3A%2F%2Fparanoidbull.com%2F2007%2F06%2Fan-lol-moment%2F’; addthis_title = ‘An+LOL+Moment’; addthis_pub = ”;
The Chinese Economy has been the topic of conversation of probably way too many cocktail stock talks…however, the upcoming Olympics suggest that if the government has anything to say about it, the boom won’t stop just yet. The growth and low cost-structure present margins across industries unseen domestically. Here is an overview of a few: [...]
The recent peak in the buyout boom has been funded not only with equity from the historically massive funds raised in the last few years by the behemoths at the large private equity shops but also by the credit market’s willingness to absorb the high yield bonds funding up to 80% of these acquisitions. If [...]
CDOs in `Hooker Heels’ Fool Moody’s, S&P, Gross Says From Gross’s Letter (below): “To death and taxes you can add this to your list of inevitabilities: the subprime crisis is not an isolated event and it won’t be contained by a few days of headlines in The New York Times.” Looking for Contagion in All [...]
Being a contrarian can sometimes have positive results…like believing we will have a second consecutive slower than expected hurricane season: Where are All the Hurricanes? Or that maybe we will have global cooling before global warming melts all our ice-caps: Global cooling effect Maybe I am just an optimist about the weather…or maybe I have [...]
The agencies have acted at the mortage-backed level, suggesting more action at the CDO level is only a matter of time. http://biz.yahoo.com/rb/070625/goldmansachs_subprime_downgrades.html?.v=2 That this many have been downgraded this quickly by the reactionary agencies suggests momentum may be pushing things up the credit stream faster than some anticipate…time will tell. A like-minded scenario is further [...]
One of my professors reacted in the same way to a study originally uncovered by a colleague, which only further supports the darker themes underlying the cracks in the system. For those who like clear explanations you might enjoy this read: Multiplying Mortgage Trouble addthis_url = ‘http%3A%2F%2Fparanoidbull.com%2F2007%2F06%2Fsome-like-clarity%2F’; addthis_title = ‘Some+Like+Clarity’; addthis_pub = ”;
Another week and another set of data on the underlying weakness in the housing market: Home Sales Hit Slowest Pace in 4 Years Housing sales are falling, prices are falling, and inventories are rising. This does not bode well for the holders of the CDX’s and relatives down the chain from these fundamentals. Although Bear’s [...]
It is hard to know sometimes what is the cause and what is the effect. This is similar to the problem of mistaking correlation with causation, especially when the causation seems plausible. Such is an issue that I have faced of late with respect to my overall mindset, my outlook on the markets, and my [...]