The Banks Are Getting Killed
As we all know, the housing market is driving everything in this bust. And the financials, as the source of all the financing for the housing market, have borne the brunt of the pain and have led the entire stock…
WSJ: Construction Loans Could Be Next Big Headache
The Wall Street Journal had an interesting article today (“Small Banks Reckoning Day Is Coming” (subscription required), Wednesday July 2, C2) on rising delinquencies on construction loans made to builders by regional banks. This chart of soaring delinquency rates on these loans…
Same Story At KB Homes
The new home market continues to be brutal as we saw yesterday with Lennar and today with KB Homes (KBH Earnings Release). I created the same chart for KB Homes of new home deliveries and backlog going back to 2003:…
House Of Pain At Lennar
Homebuilder Lennar (LEN) reported 2nd quarter earnings today and they were not pretty (LEN Earnings Release). I put together a chart of Lennar’s new homes delivered and backlog going back 5 years which pretty much tells the story: LEN New Homes…
Some Signs Of Improvement In Sacramento Home Market
DataQuick yesterday released April Sales numbers for the Sacramento region and they were somewhat encouraging. The most encouraging number is sales volume which was up 10% for the 8-county region compared to last year. Even though prices are still going…
Fannie Mae’s Thin Margin
“The new capital will enable Fannie Mae to maintain a strong, conservative balance sheet….” – Fannie Mae 1st Quarter Earnings Release The Heard On The Street column in today’s WSJ, “Will $6 Billion Do For Fannie?” (subscription required), caught my attention. Fannie announced…
Trader Of The Year: John Paulson Made Billions Shorting Subprime Mortgages
Trader Monthly recently named John Paulson trader of the year for 2007. Duh!!!! Funds run by Paulson, a hedge fund manager, were up $15 billion in 2007 and he is estimated to have made beteween $3-$4 billion himself. How’d he…
Why Homeowners Can’t Cut Their Losses
“Even a small loss evokes a sense of frustration. There’s something magical about ‘at least breaking even’.” – David Laibson, Behaviorial Economist, quoted in “Be It Ever So Illogical: Homeowners Who Won’t Cut the Price” , The New York Times, March 26 Read…
Reverse Wealth Effect Saps Consumer Spending
Data from DataQuick show that Sacramentans extracted $2 billion less (-34%) from their homes in 2007 – via refinancings, home equity loans, outright sales – than they did in 2006. For the state of California, it was $25 billion less (-21%) (Sac and…
Commercial Real Estate Is Next
Financials are dragging the market down again this morning and I think it has to do with a story in this morning’s Wall Street Journal which is the most highly read on WSJ.com: “Wall Street Gears for Its New Pain:…