Items of interest:
Subprime: One of Those Classic Photos - I'm sure there will be better photo versions of this moment soon, but this sure felt like instant history. We have financial services CEOs Chuck Prince (Citi), Stan O'Neal (Merrill), Angelo Mozilo (Countrywide), and others all swearing to tell the truth before the House Oversight Committee as the mortgage market pile-on is underway.
Henry Waxman is a Clueless Nitwit - Infectious Greed
US Mortgage Market Needs $1 Trillion -- Why are interest rates on 30-year fixed-rate mortgages rising even as the Federal Reserve slashes interest rates and yields on Treasury bonds fall?
The answer is that the mortgage market is short of roughly $1 trillion in capital, according to Paul Miller, an analyst at Friedman, Billings, Ramsey.
The modern mortgage market works with lots of leverage, or borrowed money. Investors, including hedge funds and mortgage real estate investment trusts, buy mortgage securities, but finance a lot of their purchases with this leverage.
FBR's Miller estimates that $11 trillion of outstanding U.S. mortgage debt is supported with roughly $587 billion of equity. That's a leverage ratio of 19 to one. [...]
- How To Stop the Mortgage Crisis - Martin Feldstein, Wall Street Journal
- Jobs Report Ends US Recession Debate, Now What? - Reuters
- Leona Helmsley Remains Alive in Britain - Martin Wolf, Financial Times
- "We're in Totally Uncharted Waters" - Robert Lenzner, Forbes
- Entering the Repossession Lane, Defaults Soars on Auto Loans - Boston Globe
- Aversion to Risk Deepens Credit Woes - Floyd Norris, New York Times
- Housing Market Flush With Inventory, Sinking Prices - Chicago Tribune
- Thornburg Mortgage says can't meet $610mln margin calls - MarketWatch
- Mortgage-Backed Securities Market Rocked by Thornburg Default -
- The Year Of The Walk-Away - Housing Bubble
- Larry Summers: $400 Billion in Losses is "Substantially Optimistic"
- What if Fannie and Freddie Can’t Prop Up Housing? - Housing Wire