Friday, August 29, 2008

Read this:

BBB- is now close to $2, or 98 points. Fair guess, a BB will be around $0.25-0.50, a loss of 99.75 points.

See what LEHMAN BROS thinks in 2005 about BB mortgage bond. Enjoy:

13 comments:

Anonymous said...

In July of this year, the same analyst (he's still employed at Lehman...wtf?) said to buy Fannie and Freddie debt

From Bloomberg on 7/28/2008:
Fixed-rate mortgage bonds guaranteed by Fannie or Freddie are attracting buyers because the debt yielded about 1.50 percentage points more than Treasuries with maturities similar to their expected lives on July 25, according to Lehman Brothers Holdings Inc. data. The gap between the yields is approaching the widest point in two decades that was set in March, the data shows.

``The valuations should be attractive enough for traditional debt investors to make the shift'' to the securities, analysts at New York-based Lehman led by Vikas Shilpiekandula wrote in a report dated July 28.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aIFGZELZtWpQ&refer=home

MTGSPY said...

...and there was a guy who was upset yesterday about my short recommendation on ZION which at most got him stopped out. Sigh ... it's real fair for me huh?

Anonymous said...

Coming to a theater near you....

THE DIVIDEND SLASHER

It was a quiet suburban town filled with proud, cheery and ever-optimistic people. Folks that like to drive the latest model car. Folks that like home improvements. Folks that like that new house smell. And most importantly, folks that like to build for the future. And what better way to build for the future by investing in real estate? The town's crisp, young banker shared this noble vision. Until one day, a dark shadow crept over the bank. The banker felt that he was being watched. Bad omens happened. House payments stopped. People went crazy destroying the very home they used to live in. Mortgage brokers disappeared in the night. Real estate agents complained of overhang. A new F-word stopped conversations in their tracks. Can the young banker save the town's bank from the dividend slasher or will he be made to pay for his sins? A tale of terror mtgspy will be sure to relish.....

gler said...

Random question mtgspy. I remember you once wrote an article about timing and chance (http://mtgspy.blogspot.com/2008/04/booyah-moment.html).
How likely do you think high-end residential RE will pull through the slump? Specifically thinking of CA areas like Atherton and Los Altos Hills. So far, they've been doing pretty well (http://www.mercurynews.com/wherewelive/ci_9735111). Is it a good idea to put money there now?

gtt said...

So whaddaya think of this Korean Won crisis 'spy? Somethin to worry about if ya holdin any asian currencies?

Greenie said...

"Is it a good idea to put money there now?"

You kidding, right? Please tell me you are not seriously planning to buy a house in Palo Alto/Atherton right now.

Greenie said...

If you are wondering, I live in the neighborhood described in the article (at stones throw from Rancho San Antonio).

I rent of course - gotta do that for a while, until I can find 10000 suckers to pay $150 each as subscription to some trading video :)

PCap said...

Greenie I'd pay $150/year to listen to you talk about the market for 20 minutes/day.

Actually I'd pay $50/year to hear you and mtgspy each do a once/week 2 page report.

gtt said...

Hell yeah, me too.

gler, the bay area has lagged. it is counter to logical, rational thought to think that surrounding burbs could crater in value like they have already and not eventually result in steep declines in those "unaffected" areas.

all the smart people i know up there have sold and are renting. they know whats comin.

MTGSPY said...

"Real estate is local and locally it's ALWAYS GOING UP, now WHERE'S MY COMMISSION" :D

That's from one of the crazy RE blog I read today.

MTGSPY said...

Greenie, that's not a bad idea. Pcap, Greenie and I: we can setup MFF Forum. :D

We don't have Photoguy, but we can hire Charles to hang out in the Bar. Heheheheh.

gler said...

But my impression are that those places are mostly populated by the "mega-rich" (8-9 digits+ networth; note, I am not mega-rich). These folks can lose a million without having to cut back. Why would they ever bother selling their house(s) at a low price?

MTGSPY said...

agreed, but let's say your goal is to make money and you do have 8 digits. Would you rather make 6% return with the possibility of losing 20% of your principal or just 6% return with nothing else? :D Do the math, you'll see.

Sam Zell once said the most reliable gauge of RE prices in USA is the cash flow coming in from renting out that place, and thus I'd just parrot what he said.