Speaking Of Collapses
Asian market collapse?… Asian markets down big 4 of 5 days, Nikkei –2.5%; Hang Seng –4%. Ten year note below 4%, 1st time since 2005.
Real Estate collapse… NAR: Prices dropped in 54 of 150 metropolitan areas in Q3, and the median sales price tumbled 2% as sales dclined 14% nationwide.
YOY sales Nevada –35%; Florida –32%, Arizona -31%. Is it any wonder no one wants to touch MBS or anything related to it?
The collapse of the market for bonds backed by mortgages has spurred U.S. banks to take more than $45 billion in writedowns.
Bond market collapse? …
European covered bond market halts trading. Covered bonds are securities backed by mortgages or loans to public sector institutions.
The European Covered Bond Council recommended banks withdraw from trades for the first time in its three-year history until Nov. 26.
European banks agreed to suspend trading in the $2.8 trillion market for mortgage debt known as covered bonds to halt a slump that has closed the region's main source of financing for home lenders.
Debt insurer collapse?…
ACA Capital Holdings, 29% owned by Bear Stearns is among nine bond insurers under scrutiny by ratings companies...
after the value of the CDOs they insure fell, prompting $2.9 billion in losses.
ACA posted a $1.04 billion Q3 loss and said in a filing this week that it won't meet collateral requirements if its rating falls below A-.
ACA may have its credit rating cut, forcing banks to take on $60 billion of CDO collateralized debt obligations.
If ACA defaults, banks would then have to bring their ACA-guaranteed CDOS onto their books.
ACA, which has claims paying resources of $1.1 billion, also has insured bonds with a par value of $7.1 billion
Merrill Lynch may need to write down $3 billion of CDOs if ACA defaults on its obligations.
Real Estate collapse… NAR: Prices dropped in 54 of 150 metropolitan areas in Q3, and the median sales price tumbled 2% as sales dclined 14% nationwide.
YOY sales Nevada –35%; Florida –32%, Arizona -31%. Is it any wonder no one wants to touch MBS or anything related to it?
The collapse of the market for bonds backed by mortgages has spurred U.S. banks to take more than $45 billion in writedowns.
Bond market collapse? …
European covered bond market halts trading. Covered bonds are securities backed by mortgages or loans to public sector institutions.
The European Covered Bond Council recommended banks withdraw from trades for the first time in its three-year history until Nov. 26.
European banks agreed to suspend trading in the $2.8 trillion market for mortgage debt known as covered bonds to halt a slump that has closed the region's main source of financing for home lenders.
Debt insurer collapse?…
ACA Capital Holdings, 29% owned by Bear Stearns is among nine bond insurers under scrutiny by ratings companies...
after the value of the CDOs they insure fell, prompting $2.9 billion in losses.
ACA posted a $1.04 billion Q3 loss and said in a filing this week that it won't meet collateral requirements if its rating falls below A-.
ACA may have its credit rating cut, forcing banks to take on $60 billion of CDO collateralized debt obligations.
If ACA defaults, banks would then have to bring their ACA-guaranteed CDOS onto their books.
ACA, which has claims paying resources of $1.1 billion, also has insured bonds with a par value of $7.1 billion
Merrill Lynch may need to write down $3 billion of CDOs if ACA defaults on its obligations.
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