No Bleed, Just Hemorrhage
For the past four quarters, D.R. Horton #2 U.S. homebuilder, has been the only major homebuilder to not report a net loss...
On July 26th, Horton expects to report a Q3 loss after orders plunged 40% and said it sees no sign of a housing rebound.
Housing woes will not bleed into the general economy....
Sears the biggest U.S. department-store company, said Q2 profit may decline by as much as 46% after Q2 same store sales fell 4% at Sears & Kmart Stores.
Home Depot the world's largest home improvement retailer, cut its annual profit forecast (EPS -15 to 18%) today because of the slumping U.S. housing market.
Sub Prime woes will not bleed into banking or finance...
S&P may cut credit ratings on $12 B of bonds backed by subprime mortgages because of higher-than-expected losses.
S&P sounding very un Fed & un NAR like:
"We expect that the U.S. housing market, especially the subprime sector, will continue to decline before it improves, and home prices will continue to come under stress.
Weakness in the property markets continues to exacerbate losses, with little prospect for improvement in the near term. We do not foresee the poor performance abating.
Loss rates, which are being fueled by shifting patterns in loss behavior and further evidence of lower underwriting standards and misrepresentations in the mortgage market, remain in excess of historical precedents and our initial assumptions."
Ratings on collateralized debt obligations that contain the mortgage bonds are also under review. According to Institutional Risk Analytics Christopher Whalen:
"Investors in CDOs alone stand to lose as much as $250 B. S&P's actions are going to force a lot more people to come to Jesus."
Well isn't that extra special! The Church Lady hears elephants rustling about?
Prices of some bonds backed by subprime mortgages have declined by more 50% in the past few months while their credit ratings haven't changed.
Insurers and pension funds may be among investors required to sell their bonds if they are downgraded...
potentially driving down prices of $800 billion in subprime mortgages and $1 trillion of collateralized debt obligations, which package mortgage bonds into new securities.
Nope, not a drop of blood in the street, just a 100 year flood getting ready to happen.
On July 26th, Horton expects to report a Q3 loss after orders plunged 40% and said it sees no sign of a housing rebound.
Housing woes will not bleed into the general economy....
Sears the biggest U.S. department-store company, said Q2 profit may decline by as much as 46% after Q2 same store sales fell 4% at Sears & Kmart Stores.
Home Depot the world's largest home improvement retailer, cut its annual profit forecast (EPS -15 to 18%) today because of the slumping U.S. housing market.
Sub Prime woes will not bleed into banking or finance...
S&P may cut credit ratings on $12 B of bonds backed by subprime mortgages because of higher-than-expected losses.
S&P sounding very un Fed & un NAR like:
"We expect that the U.S. housing market, especially the subprime sector, will continue to decline before it improves, and home prices will continue to come under stress.
Weakness in the property markets continues to exacerbate losses, with little prospect for improvement in the near term. We do not foresee the poor performance abating.
Loss rates, which are being fueled by shifting patterns in loss behavior and further evidence of lower underwriting standards and misrepresentations in the mortgage market, remain in excess of historical precedents and our initial assumptions."
Ratings on collateralized debt obligations that contain the mortgage bonds are also under review. According to Institutional Risk Analytics Christopher Whalen:
"Investors in CDOs alone stand to lose as much as $250 B. S&P's actions are going to force a lot more people to come to Jesus."
Well isn't that extra special! The Church Lady hears elephants rustling about?
Prices of some bonds backed by subprime mortgages have declined by more 50% in the past few months while their credit ratings haven't changed.
Insurers and pension funds may be among investors required to sell their bonds if they are downgraded...
potentially driving down prices of $800 billion in subprime mortgages and $1 trillion of collateralized debt obligations, which package mortgage bonds into new securities.
Nope, not a drop of blood in the street, just a 100 year flood getting ready to happen.
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