For some reason the market doesn’t seem to want to admit that the housing market is on a continually downward trajectory and this will continue to impact the broader economy. I guess it is hard to admit that things got way out of hand and now the economy and those benefiting from the ride will [...]
Yesterday afternoon I experienced the irrationality of the markets first hand both as an onlooker and an emotional participant. As most of you have probably seen, Bank of America injected $2b of capital into Countrywide, ending a week of speculation about a possible takeover of the company only a week following Countrywide’s tapping of its [...]
On Friday, the Fed finally did an about face and openly admitted what the entire world had already figured and priced into the global securities markets by suggesting that the “subprime” crisis was not simply relegated to one basket of securities, but rather – it is part of a larger problem growing out of the [...]
This report does an excellent job walking through the economic indicators that show that the housing market has been both the weight driving the pendulum of the markets up and now down again over the last few years. Anyone with 20 minutes on their hands who wants some insight into where we are and where [...]
It has been awhile since I posted the beautiful (read: scary) charts of the ABX indices that were the start of all of this trouble: ABX Indices by Markit These reflect the reality that has been driving the crisis in the credit markets. This article does a great job walking through a summary of what [...]
The weather analogies continue as the first storm to hit land dissipated much like the huge drop in the market mid-day today. Now another storm, this time a hurricane, looms on the horizon, and I can’t help but press the weather metaphor to the breaking point. Just as forecasters struggled with fear anticipating the worst [...]
Irony can be ironic: the same day that the first tropical storm of the season made landfall in Texas, the markets have been pouring down on investors across the board. One of the greatest challenges when trying to understand the financial markets is recognizing that the “price” or “value” of a security is driven by [...]
I just returned from a trip to Cabo San Lucas, and I have to say after not a drop – the City looks different when not seen through tequila-laden eyes… And so do the rating agencies when seen through the reality of the underlying credit rather than the “mark-to-model” numbers that seemed all-so-convincing as recently [...]
When I first read this doomsday article yesterday, I thought the guy was frankly a bit extreme to say the least:MBS Monetization and US Dollar It wasn’t only that the graphics atop the page made me hesitate, but I thought that the idea underlying his argument – that “Fannie Mae will eventually become a funnel [...]
Reality reared its ugly head overnight last night as the Europeans realized that they have some trouble on their hands in the form of U.S. denominated mortgage backed securities. The equity markets took a pummelling as the beneficiaries of global liquidity (i.e. broker-dealers) faced tougher prospects for an easy out: U.S. Stocks Tumble on Credit [...]