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’[AV meets Naked Capitalism] The blogosphere
On Wednesday, FT Alphaville met Yves Smith, proprietor of the blog Naked Capitalism. Ms Smith is the author of the book ECONned: How unenlightened self interest undermined democracy and corrupted capitalism.
Flipping ‘eck — the size of the second home bubble
Finance writers and television shows have used flipping houses as a symbol of the pre-crisis housing bubble.
But we weren’t aware of any statistical evidence until we saw this post on Monday from Liberty Street Economics,
Wells Fargo feels the squeeze
Citigroup wasn’t the only US banking giant to report results on Monday.
Wells Fargo, America’s fourth biggest bank by assets and second biggest bank by operating income, also released its quarterly earnings statement.
Kickback and relax with the mortgage reinsurance scandal
Jeff Horwitz has a cracking story in Tuesday ‘s American Banker on a previously undisclosed report by the Inspector General of the Department for Housing and Urban Development (HUD) into allegations that US banks took lucrative kickbacks from mortgage insurers.
What price the banks’ FHFA lawsuit losses?
The lawsuits filed on Friday by the Federal Housing Finance Agency against 17 global banks involved nearly $200bn of mortgage-backed securities but the regulator refused to put a figure on the total losses it was seeking to recover.
Fannie and Freddie’s revenge — the details [updated]
– By John McDermott and Cardiff Garcia
The details of the US government’s attempted bank raid are coming in on Friday afternoon.
The Federal Housing Finance Agency has filed 17 lawsuits against banks operating in the US.
US government attempts bank raid
Friday promises to be an ugly day for US financials:
Stories in the New York Times the Wall Street Journal on Friday suggest that a grand mortgage settlement is farther away than ever and that banks — or at least one bank (guess which!) — are coming under increasing pressure to prepare for the worst.
Australian RMBS grabs Moody’s attention
Moody’s is taking another look at the way it rates Australian Residential Mortgage-Backed Securities.
We anticipate increases to Moody’s Aaa mortgage default probability and house price stress rate assumptions.
Danish covered bonds at dawn
A break in the clouds, for Denmark’s stormy covered bond market:
(Bloomberg) Denmark’s covered bonds are likely to be snapped up by U.S. buyers even after Moody’s Investors Service downgraded the securities,
‘Collective amnesia’ on mortgage reform
German financial consultant Achim Dübel doesn’t mince his words.
Last week he spoke to a group of European politicians, including representatives from the UK, Spain and Germany, to talk mortgage reform.
Back to the future with UK RMBS
Your extend and pretend datapoint du jour, right here folks.
On Monday, Moody’s released a report advocating more disclosure of loan modifications within British Residential Mortgage-Backed Securities (RMBS). The UK’s Financial Services Authority already said something similar last month,
This is really not normal ECB tightening
There’s the effect of rising European Central Bank rates on households in the periphery, and there’s the effect of two-tiered rate markets on periphery banks:
And quite often –as in these charts by Goldman analyst Dirk Schumacher– the two effects meet.
A proclamation from the Spanish Ministry of Public Works…
Just in case you were wondering…
Spain’s Ministry of Public Works has been busy, undertaking a roadshow last week with the above accompanying PowerPoint presentation, to help inform investors in the UK,
S&P sees eurozone, UK housing headwinds on swelling rates
Here’s a convenient continuation of the rising-European-rates-meets-real-estate theme.
Standard & Poor’s reckon “fresh headwinds are gaining force in Europe’s real estate markets” due to rising interest rates (or at least,
US files civil suit against Deutsche Bank’s MortgageIT [updated]
Breaking on Tuesday (flashes via Reuters):
Today 14:30 – U.S. FILES CIVIL MORTGAGE FRAUD LAWSUIT AGAINST DEUTSCHE BANK AG DBKGn.DE, MORTGAGE IT INC – COURT FILING
Today 14:30 – U.S. SAYS DEUTSCHE BANK,
Live and lend loose, or, mortgages down under
A data point for the Australian housing bubble debate.
Bank of America Merrill Lynch analysts have a great report questioning how Australian banks calculate mortgage approvals. It’s been picked up by Macro Business,
Viva, O’Vegas
As we wait for Ireland’s latest bank stress test results (due within half an hour at pixel time), a tidbit on methodology from the Irish Times:
BlackRock, the consultants hired by the Central Bank to verify the tests,
Taylor-fied of eurozone interest rate policy
*WARNING*
This is another dose of Taylor Rule-based eurozone interest rate hindsight. But it’s a dose of interest rate hindsight that comes with a bit of foresight too — given the market is positioning for a rate rise by the European Central Bank sometime this year.
The RMBS risk retention exemption, qualified
US federal agencies on Tuesday published 233 pages of proposed rules around credit risk retention for sponsors of asset-backed securities, a requirement laid down in the Dodd-Frank legislation.
Sexy lede,
Why no Canadian, Australian housing busts?
Here’s a chart to ponder from the peer review of residential mortgage practices, just published by the internationally-coordinated Financial Stability Board:
Set aside Switzerland and the Netherlands.
Irish mortgages everywhere – but not a one to collateralise with?
So. This is an interesting chart:
Those are covered bond details for AIB Mortgage Bank, part of troubled Irish bank, AIB. Focus for a second on the two overcollateralisation figures — which are basically the degree to which the bank’s covered bonds are overstuffed with assets.
Further further reading
For the commute home, we wish you a great weekend,
- Treasury + Fed = better QE.
- Gulf SWFs are adopting more active investment strategies.
- Is the dismal science really a science?
- March Madness,
Rocky Balboa
FT Alphaville was all set to work through the early morning examining the release of allegedly damning documents relating to the actions of Bank of America Merrill Lynch or its subsidiaries in the ongoing struggle to provide settlements in the foreclosure crisis.
‘Securitisation is not that evil after all’
Now there’s a title, from a new BIS working paper, to catch one’s eye.
In it, the authors tackle the issue of information asymmetry in the securitisation process — or the basic idea that the holders or creators of a security might have better information about the investment than potential buyers.
How big the BoE’s interest rate bind?
Europe’s central bank is in a tight spot when it comes to rates and mortgages.
That much we know.
The ECB can’t raise rates without causing at least a degree of pain for home owners in the periphery — where most of local leverage is based on floating rates.
Further further reading
For the commute home, or while rocking out to Paradise City, or while shielding yourself from the November Rain, or while chasing your Rocket Queen, or while exercising Patience; and because you Don’t Cry,
The end of the home ownership “dream”
Government reports don’t normally make for interesting eulogies, but this one is an exception.
The Treasury-HUD report to Congress on the future of the US housing market is out and generating qualified praise (though little surprise).
‘Banks may be the best holders of mortgage risk,’ says Deutsche
Or, why the private label mortgage securitisation market keeps failing to rise from the dead — especially as the US grapples with Fannie/Freddie reform.
Here’s the thinking, from Deutsche Bank’s Steven Abrahams:
Fitch on Spanish mortgage walkaways
Fitch seems angry.
In a Friday statement, the rating agency dealt with a recent ruling by a judge in the Spanish province of Navarra, which said that giving a mortgaged house back to a bank is sufficient to cancel mortgage debt,