Subprime Archive

Debt problem and policy response

[Skip to the end] The ‘problem’ is lack of income to service the debt, not the debt per se. Take a look at the personal income chart, particularly the interest income component. Restoring the ability to pay restores the quality of the debt. With the deficit terrorists in charge it’s going to ...Read More

Re: Amendment of ERISA

[Skip to the end] (an email exchange) Good find! yes, this had to have contributed to the boom/bust and encouraged/sustained the rampant lender fraud that has resulted in the elevated defaults. hopefully the pension funds have learned their lessons (the hard way, unfortunately but as always seems to be the case) and ...Read More

NYT: Mortgages

[Skip to the end] (an email exchange) >    >   On Mon, Aug 4, 2008 at 7:50 AM, Russell wrote: >    >   I am more and more convinced housing is not near a bottom. >   Granted, I have no idea what the recent Housing Bill will do. But I >   think housing problems are going to cover ...Read More

February 19 recap

Might be a revealing day coming up. I’m watching for markets to begin to link higher oil prices to the potential for higher interest rates, rather than the reverse as has been the case since August. With oil up to the mid 97 range this am, the question is whether short term ...Read More

The full employment recession is spreading

Looks like the US full-employment recession is spreading: UK jobless rate falls to 5.2 percent in latest quarter The unemployment rate in the United Kingdom in the last quarter of 2007 fell to 5.2 percent, down from 5.4 percent in the previous quarter, the government said Wednesday. Average earnings, including bonuses, rose ...Read More

Summary of subprime bank losses

Spread around enough so no one went out of business, and most lost less then a quarter’s worth of earnings. And a chunk of it probably recoverable. It’s been a year and the total has to be at the low end of expectations, but could be a lot more to surface in ...Read More

ECB reiterates rate hike warning

ECB reiterates rate hike warning FRANKFURT(AFP): The European Central Bank (ECB) reiterated Thursday a strong warning about eurozone inflation, calling for price and wage moderation and suggesting it would raise interest rates if necessary. A monthly ECB bulletin said it was “absolutely essential” that long-term inflation be avoided, underscoring that the bank ...Read More

The subprime mess

On Jan 5, 2008 9:40 PM, Steve Martyak wrote: > > > > also…. > > 9/4/2006 > Cover of Business Week: How Toxic Is Your Mortgage? :. > > The option ARM is “like the neutron bomb,” says George McCarthy, a housing > economist at New York’s Ford Foundation. “It’s ...Read More

A very British bubble for Mr Brown

A very British bubble for Mr Brown Leader Sunday December 16 2007 The Observer The buzz words in the world of finance these days are ‘moral hazard’. That is economist-speak for what happens when people who have engaged in risky business and fallen foul of market forces are let off the hook. ...Read More

Strong gdp and high credit losses

CNBC just had a session on trying to reconcile high gdp with large credit losses. Seems they are now seeing the consumer clipping along at a +2.8% pace for Q4. No need to rehash my ongoing position that most if not all the losses announced in the last 6 months would have ...Read More