It ain't just subprime any more...
American Home Mortgage just went poof (down 89% today after falling by half over the last month) . This is a company that specialized in Alt-A mortgages which are typically on alternative for prime borrowers. However, these loans are also typically called "no doc", "nina" (no income, no assets), or "ninja" (no income, no job application).
The I-banks cut off their access to capital. Apparently you can't run a lending business without money. Equity holders will get 0.
The I-banks cut off their access to capital. Apparently you can't run a lending business without money. Equity holders will get 0.
posted by Fresh at
3:36 PM
11 Comments:
Turn off the war and then see what happens to the economy. This is in solid economic times. We are screwed.
I love that Matt has come around to my view; the time to act is now.
I guess man. Do you still think interest rates are going up?
I love how Mr Silver can take credit for this as "his views" :)
Paulson told me that the subprime problem was contained. If you cannot trust government officials then who can you trust. I am going home, I can't do my job anymore. I cannot even trust Paulson or Bernanke. They told me that this was contained.
Kelly told me that S&P is modeling with an expected 40% loss rate on defaulted mortgages. This includes all of the real estate fees, etc. so it probably indicates that they'll sell the house for about 20% less than they loaned out. This implies that REAL LTV's on these deals were 125%.
Tell me, Silver, is a 20% decline in home value, positive or negative inflation?
What about the corresponding job loss associated with the collapse of said market? Does that increase or decrease inflation?
And despite all this, GRMN keeps making money. Now in 2 bagger territory for the PA in the last 12 months. Apparently stock picking matters. Maybe I should get a job as an analyst. I seem to have a knack for this.
GRMN, that's a heave multiple stock, thing has doubled its mkt cap in over a year. You feeling good about that thing going foward? Is there a high short interest in the name
When I bought it was trading in at a multiple in the low 20's. P/E expansion is a wonderful thing. The conventional wisdom is that their margins are going to get squeezed due to increasing competition. I think Rob covers this at Baird and they like most of the sell side reports I have seen are cautious on the stock. Realistically, there isnt much of a barrier to entry given gps mapping systems are available on cell phones and will soon be on every other type of handheld device that its possible. The stock keeps doing well largely because that hasnt happened just yet and they keep surprising on the upside. The bulls seem to be trying to compare it to Apple and the IPod. I dont see it and think this is a classic mo story. I figured they would do well with the new product intros and increased advertising and frankly never expected the last run here. I cut my position in half in June and am debating whether to blow it out the rest. They're right down the road from you. Want to do a on sight for me? All that said, I am enjoying the run.
maybe people like me with start putting GPS units on their kids and that could help with mo stock...there seems to be a few babies that get born every year.
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