Posted on 02/24/2007 5:42:05 AM PST by shrinkermd
Markets, RE or otherwise are wholly determined by the supply demand equation as well as the cost of capitol. You are correct in your claim that low interest rates will cause the over supply of existing as well as new homes to shrink and the result will be the beginning of a new cycle.
Personally I believe the existing home market bottomed in September last year and has already started back up.
Markets, RE or otherwise are wholly determined by the supply demand equation as well as the cost of capitol. You are correct in your claim that low interest rates will cause the over supply of existing as well as new homes to shrink and the result will be the beginning of a new cycle.
Personally I believe the existing home market bottomed in September last year and has already started back up.
More Bearish
Credit-default swap investors are more bearish than bondholders, data from Moody's Market Implied Ratings service shows. As of Feb. 28, the bonds of Goldman and Morgan Stanley were trading as if the debt were rated a step below Moody's official rating. Goldman has $171.6 billion in bonds outstanding, according to data compiled by Bloomberg. Morgan Stanley has $168.5 billion.
Last year was the best ever for the five biggest Wall Street firms, whose combined profit rose 33 percent to $132.5 billion.
Subprime mortgages, loans taken out by homebuyers with poor or limited credit histories, typically charge rates at least two or three percentage points above safer, so-called prime loans. They made up about a fifth of all new mortgages last year, according to the Washington-based Mortgage Bankers Association.
Subprime Turmoil
At least 20 lenders have shut down, scaled back or been sold this year. Countrywide Financial Corp., the biggest U.S. mortgage lender, yesterday said borrowers were at least 30 days past due at the end of last year on almost a fifth of the subprime loans that it serviced for others.
``There's been a little bit of a reappraisal of the financial sector, with a strong desire to get away from subprime exposure,'' said Scott MacDonald, director of research at Aladdin Capital Management LLC in Stamford, Connecticut, which manages $16.5 billion in assets.
Merrill equity analysts two days ago cut their recommendations on Goldman, Lehman and Bear Stearns shares as well as that of European banks Deutsche Bank and Credit Suisse Group to ``neutral'' from ``buy'' because they said earnings will probably decline next month as investors become wary.
Bloomberg---March 2nd. Your 6% figure is incorrect
Not according to a FRB Rep ( a woman, cannot recall her name) who spoke on CNBC about 10 days ago and a few others who were in the 5-7% range. That said, it is what it is and even if it is 20% and, as claimed up to 20% will default, it still only represents 4% of the overalll mortgage market (20% of 20%).
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