# Here's the latest mortgage industry graph.... **URL:** \ **Category:** Lounge\ **Created:** [July 11, 2007, 9:31pm UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601 "2007-07-11T21:31:40Z")\ **Posts on this page:** 8\ **Page:** 2
**Author:** ![tacitus](https://avatars.discourse-cdn.com/v4/letter/t/6a8cbe/32.png) [@tacitus](https://pheromonetalk.com/u/tacitus)\ **Post date:** [August 13, 2007, 10:42pm UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601/21 "2007-08-13T22:42:00Z")
Oh, boy… Jesse Livermore… ya know, every kid in high school ought to be assigned Reminiscences… as part of their study of politics and government… Ya know, what really poked me in the eye was a little revelation this afternoon, when it was disclosed that the Fed’s open market operations desk had, as the money news likes to call it, liquified the market to the tune of 40 Billion dollars… right, we all know that, you and me and the guy behind the tree heard that the Fed chipped in the 40 Bil… What I didn’t know until today (assuming this story has its facts straight) was that Ye Fed had gone in and made direct purchases of $40 billion of junk debt… now that’s breathtaking and scary as living hell, because the Fed almost NEVER intervenes directly… and for the Fed TO intervene directly basically means that the problems are VASTLY worse, the corruption more systematic, the politics more loaded with payoffs and bribery in every form, than anyone could have imagined… Jim Grant isn’t always right, but he may be right about this one thing, that these orgies of corruption that finally explode often (not always, mind you) happen right on the cusp of a DEPRESSION… which I’m not predicting… **we may make it through this thing without too much lasting damage** , BUT… if it f_cks up… it’s going to f_ck up on a world class scale… "In the case of last Friday’s “injection” the Fed did something a little unusual. Ordinarily the bonds it offers to buy or sell are good old U.S. Treasuries; the Fed has lots of them lying around. _But because the current breakdown in the credit markets is caused by bonds backed by \*subprime mortgages ([http://www.msnbc.msn.com/id/20218020/](http://www.msnbc.msn.com/id/20218020/))_, \*\*those are the bonds the Fed specifically went shopping for (some $38 billion worth, to be exact). \*\*\* \*\* Until the Fed stepped in, there were virtually no buyers for these things, because investors have all but given up trying to figure out what — if anything — they’re worth. Until it’s clear how many more [mortgage](http://www.msnbc.msn.com/id/20218020/#) holders are going to default on their loans, it hard to know where things will shake out. But, based on recent sales, it turns out these bonds may be worth as little as a third of what they were supposed to be worth. _The Fed may have put out the fire for now. But the larger worry is that the banks, investment funds and hedge funds that are holding billions more of these bonds may now have to book those losses. And since the hedge funds holding these bonds are not regulated by the Fed, it’s anyone’s guess just who is holding them and how much damage was done by the collapse in their value_. " ---
**Author:** ![PheroQuirk](https://avatars.discourse-cdn.com/v4/letter/p/9e8a1a/32.png) [@PheroQuirk](https://pheromonetalk.com/u/PheroQuirk)\ **Post date:** [August 14, 2007, 10:54pm UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601/22 "2007-08-14T22:54:02Z")
subprime crisis? nice weather for divorce lawyers **as far back as 1977 the economist Gary Becker showed that couples experiencing any unexpected, drastic rise in net worth are at risk of divorce.** [Buy Low, Divorce High - New York Times](http://www.nytimes.com/2007/08/12/fashion/12divorce.html?ex=1344571200&en=dea67455b5406521&ei=5090&partner=rssuserland&emc=rss) FOR years, Michele Kleier, a real estate broker on the Upper East Side, knew why one of her most persistent clients was calling even before picking up the phone. [Skip to next paragraph](http://www.nytimes.com/2007/08/12/fashion/12divorce.html?ex=1344571200&en=dea67455b5406521&ei=5090&partner=rssuserland&emc=rss#secondParagraph) [Enlarge This Image](javascript:pop\_me\_up2(‘[The New York Times \> Fashion & Style \> Image \>](http://www.nytimes.com/imagepages/2007/08/12/fashion/12divorce.2.ready.html)’, ‘12divorce\_2\_ready’, ‘width=720,height=600,scrollbars=yes,toolbars=no,resizable=yes’)) ![](https://us1.discourse-cdn.com/flex016/uploads/pheromonetalk/original/2X/c/caceb30ff5fc907d2aac5201fb57d168de7b606e.jpeg) ](javascript:pop\_me\_up2(‘[The New York Times \> Fashion & Style \> Image \>](http://www.nytimes.com/imagepages/2007/08/12/fashion/12divorce.2.ready.html)’, ‘12divorce\_2\_ready’, ‘width=720,height=600,scrollbars=yes,toolbars=no,resizable=yes’))Phil Marino for The New York Times **TUG OF WAR** Susan Katz and her ex-husband have been fighting over their Roslyn Heights, N.Y., home for three years. The client, a former high-ranking fashion executive and perpetual volunteer at her children’s private schools, was checking the price she could get for her nine-room co-op in a prewar building. When the market reached a high, she told Ms. Kleier, she planned to divorce her husband, sell the apartment and live on her share of the profits. Last year, Ms. Kleier delivered the long-awaited news: Manhattan luxury apartments were at a peak. The client went through with her plan. Now the woman calls from her new condo in California, raving about the weather and the distance from her ex-husband. “She felt that she couldn’t walk out on him until she had the money to move away and buy something on her own,” Ms. Kleier said. “The real estate market allowed her to buy her freedom.” A little-noted side effect of the property boom of the past decade has been the real-estate-enabled divorce. Home values might have slid in some markets, but in the New York City region, where prices remain high, divorce professionals like therapists and lawyers, along with real estate brokers, say unhappily married couples are cashing in appreciated homes to underwrite a split. “The equity that there is in real estate is one of the impetuses why there are so many divorces,” said Nancy Chemtob, a Manhattan divorce lawyer, adding that the net worth of her clients has doubled in the past three years mainly thanks to real estate. The price of the average Manhattan apartment was $1.3 million as of June, up 7 percent from a year ago, according to the real estate brokers Brown Harris Stevens. A spouse who has not worked, like Ms. Kleier’s client, might decide that with a divorce settlement enriched by real estate, it is possible to maintain a comfortable standard of living. Or a breadwinning spouse might recognize that even after dividing community property, it will be possible to live well as a single person. “No matter what the net worth of the client,” Ms. Chemtob said, “the $3 million apartment is now the $7 million apartment, and the $7 million apartment is the $14 million apartment. Half of a lot is a lot.” That is how Sharon Sheinker thinks about the real estate equity she and her ex-husband accumulated over a 16-year marriage, which she said made the decision to legally separate easier. The former couple made enough on their first apartment in New Jersey, and then on a second home on Long Island, to build a five-bedroom house in a gated community in Dix Hills, on Long Island, four years ago, for $1.1 million. They recently signed a contract to sell the house for $1.4 million, less than the asking price of $1.579 million. But Ms. Sheinker calculates a $60,000 profit each year over the past four years. She will use her share to buy a smaller house in Dix Hills and continue to run a charity, A Gift From Alexa, in honor of her 6-year-old daughter, who is autistic. “Money is freedom,” Ms. Sheinker said. “I don’t need the mansion. We made enough money to be able to get divorced and support two households.” Economists are familiar with this phenomenon. Even though divorce rates are declining over all, as far back as 1977 the economist Gary Becker showed that couples experiencing any unexpected, drastic rise in net worth are at risk of divorce. (The same holds true for a drastic decline in net worth.) Extrapolating from survey data, Dr. Becker concluded in The Journal of Political Economy that “a greater deviation between actual and expected earnings increases the probability” of divorce. Although couples who see their incomes rise steadily generally stay together, those who make more money than they ever expected are vulnerable to divorce. They realize that they are less financially dependent on each other and that they might have chosen different spouses if they had more choices at the time, said Dr. Becker, who teaches at the [University of Chicago](http://topics.nytimes.com/top/reference/timestopics/organizations/u/university_of_chicago/index.html?inline=nyt-org). Dr. Becker, who won the [Nobel Prize](http://topics.nytimes.com/top/news/science/topics/nobel_prizes/index.html?inline=nyt-classifier) in 1992, also explored in his divorce study the economic argument for what many people today call trading up, or finding a trophy spouse. Noting that 75 percent of men and more than 70 percent of women remarry within 15 years of a divorce, he found that divorced men with higher earnings have the greatest likelihood of remarrying. This implied, in his view, that men who have come into wealth have an incentive to divorce because they believe they could better their situation. “They feel, given their status now, they can find other people of a type that appeals to them more than when they got married,” he said in a telephone interview Kenneth Mueller, an East Village psychotherapist, says he has about a half-dozen clients who are real estate executives. Some, he said, have used windfall wealth from property to strengthen their marriages — like paying for counseling or adopting children. But others are emboldened to divorce and remarry. He said some men conclude that they can find a new spouse because their first wives were “not what I really wanted.” Of course, not all couples sitting on greatly appreciated homes are headed for divorce court. The likelihood of divorce depends on the strength of a marriage before the advent of unexpected wealth, according to Evelyn Lehrer, an economist who expanded on Dr. Becker’s findings in 2003. In her study “The Economics of Divorce,” published in the book “Marriage and the Economy: Theory and Evidence From Industrialized Societies,” Professor Lehrer concluded that couples who are likely to divorce after an unexpected change in assets often had weaker marriages to begin with. It is not the new wealth that causes the divorce; the money is just the catalyst. Stephanie Coontz, the author of “Marriage, a History: From Obedience to Intimacy, or How Love Conquered Marriage,” compared the current Gilded Age to an earlier one in the 1920s, when, she said, divorces spiked at a time of rapid wealth creation. In times when people accumulate wealth, she said, they often think they don’t have to abide by society’s conventional rules. “When people get a lot of wealth in a hurry, it’s more easy to act upon their impulses,” she said. “You get used to sending back a steak because you don’t like it. You send back a wife.” Real estate these days seems much on the minds of couples who are in counseling. Elyse Goldstein, an Upper East Side psychologist, said that half the couples she has seen in recent years have brought up real estate as a relationship issue, and 15 percent regarded it as a serious one. “Real estate has become a language of emotional barter in terms of registering pains, hurts and resentments,” Dr. Goldstein said. “If they can’t have love, they can have real estate. There are a lot of fights about who is going to benefit from the windfall.” SUSAN KATZ, a fashion industry sales executive, said that real estate battles with her ex-husband over their home in Roslyn Heights, on Long Island, have dragged out over three years, involving three lawyers and $350,000 in legal fees. She said that real estate was not the original cause of the divorce. But it has become the central issue as she and her ex-husband fight over what the house is worth, and how much she must pay to buy it from him. Ms. Katz finds that some women who are divorcing can’t cash in on the value of a home because they or their spouses borrowed against it. “Women think when they get divorced they can have half of the house,” she said. “Most women don’t realize how much this house is mortgaged.” And then there are cases in which couples decide a divorce settlement would ultimately be too costly because of the on-paper appreciation of their property. One New York real estate executive, who has separated from his wife and would not speak on the record because he is unsure if he will divorce, said most of his peers in the industry who are unhappily wed seem to be staying put. They don’t want to carve up the real estate portfolios they bought or built during the boom. “I know plenty of people who are enormously wealthy and just don’t want to cut it up,” he said. “They find it hard to divide the real estate ---
**Author:** ![PheroQuirk](https://avatars.discourse-cdn.com/v4/letter/p/9e8a1a/32.png) [@PheroQuirk](https://pheromonetalk.com/u/PheroQuirk)\ **Post date:** [August 15, 2007, 3:49pm UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601/23 "2007-08-15T15:49:50Z")
UBS’s Stehli Calls Subprime CDOs `Largest Distressed Market’ 2007-08-14 17:54 (New York) By Jody Shenn Aug. 14 (Bloomberg) – Jim Stehli, the global head of the collateralized debt obligation business at Zurich-based UBS AG; Laurie Goodman, co-head of global fixed-income research and manager of mortgage-bond research; and Eric Wasserstrom, an equity analyst, comment on the mortgage, CDO and bond markets. They spoke on a conference call with clients today. On CDOs backed by asset-backed securities, or ABS CDOs, which are mainly backed by subprime-mortgage bonds: `You've basically just created one of the largest distressed markets in history,'' Stehli said. It totals `well over $300 billion. ``If you created a $1 billion distressed fund, you’d certainly have plenty to look at, but it’s a drop in the bucket, it really will not impact overall prices.‘’ On CDO prices: ``You have a massive supply of product that is very hard to assess in a market where, right now given what’s going on with all the other products, there certainly are plenty of alternatives in terms of investments options to look at.‘’ On the prices for BBB rated securities from mortgage-bond CDOs: ``The market’s assuming investors will never get a $1 back on their $100 dollar investment,‘’ Goodman said. On sales of new ABS CDOs: `This market is completely broken. It's unlikely you're going to see any new issuance soon because you don't basically have any underlying product to go re-securitize,'' Stehli said. `It’s easily two, three years before we can work our way through all this product and really kind of come out on the other side.‘’ On investing in ABS CDOs: `The man hours and technology around that are great. You're going to have to do a lot of modeling and assumptions,'' Stehli said. `There’s certainly no ability to lever these types of assets, so that limits the type of investor that can come back right now.‘’ On the market for collateralized loan obligations: ``Even though there’s a lot of technical pressure in the market, there is still a lot of support because people can get their heads around the fundamentals, which is just not the case in the mortgage, and ABS CDO market, right now.‘’ On the regulator for government-chartered Fannie Mae and Freddie Mac saying last week that it will continue to consider lifting limits on their portfolios: `This reminds me of when my kids ask me for money,'' Goodman said. `I say, well, let me think about it and I either never come back to them or I come back to them 15 minutes later and say `No.‘’’ On mortgage-bond issuance: Sales of new subprime mortgage bonds `is going to come to pretty much a grinding halt, and Alt A is going to be very, very, very seriously reduced,'' Goodman said. The lower supply outlook makes many types of the bonds with the highest ratings `a virtual bargain right now.‘’ On mortgage lenders: ``We don’t like them in any particular order,‘’ Wasserstrom said. On mortgage insurers benefiting from increases in market share and better pricing power: ``The problem is for the next three, four, five quarters they’re going to be suffering through the pig-in-the-python’’ scenario, as losses increase on older loans they’ve insured. –Editor: Moody ---
**Author:** ![PheroQuirk](https://avatars.discourse-cdn.com/v4/letter/p/9e8a1a/32.png) [@PheroQuirk](https://pheromonetalk.com/u/PheroQuirk)\ **Post date:** [August 15, 2007, 9:03pm UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601/24 "2007-08-15T21:03:37Z")
[CareerBuilder Monk-e-Mail](http://www.careerbuilder.com/monk-e-mail/Default.aspx?mid=22960571cbRecursionCnt=2cbsid=e7aea1e3f03446eb90c0e25e369e110a-240494590-RR-4&cbRecursionCnt=1&cbsid=8fd619216a2e42c195d808b8ee6deba5-240497599-RB-4) ---
**Author:** ![tacitus](https://avatars.discourse-cdn.com/v4/letter/t/6a8cbe/32.png) [@tacitus](https://pheromonetalk.com/u/tacitus)\ **Post date:** [August 15, 2007, 9:37pm UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601/25 "2007-08-15T21:37:31Z")
This is a hoot: from the aptly named blog: [http://www.mortgagefraud.org/](http://www.mortgagefraud.org/) "In the following press release [George S. Cardona, United States Attorney for the Central District of California [http://shots.snap.com/images/v2.17/t.gif](http://shots.snap.com/images/v2.17/t.gif) ([Department of Justice | Homepage | United States Department of Justice](http://www.usdoj.gov/usao/cac/))announced that two real estate agents, as well as two state-licensed real estate appraisers, were indicted this morning by a federal grand jury for allegedly participating in a massive mortgage fraud scam that caused more than $40 million in losses to federally insured banks. An 85-page indictment returned this morning by a federal grand jury in Los Angeles charges **Joseph Babajian** , 54, of West Los Angeles; **Kyle Grasso** , 36, of Santa Monica; Lila Rizk, 40, of **Trabuco Canyon** ; and **Scott Robinson** , 44, of Dana Point. During the alleged scheme, Babajian and Grasso worked at, and were part owners of, **Prudential California Realty**. Rizk and Robinson were appraisers licensed by the State of California. All four defendants were charged with conspiracy, bank fraud, and loan fraud. Additionally, Babajian and Grasso were charged with money laundering. According to the 35-count indictment, the defendants and others previously charged in the case were involved in a wide-ranging and sophisticated conspiracy to defraud mortgage lenders by obtaining inflated mortgage loans on homes in some of California’s most expensive neighborhoods, including Beverly Hills, Bel Air, Holmby Hills and Malibu." So much for this catastrophe being confined to the low rent districts…🆒 ---
**Author:** ![PheroQuirk](https://avatars.discourse-cdn.com/v4/letter/p/9e8a1a/32.png) [@PheroQuirk](https://pheromonetalk.com/u/PheroQuirk)\ **Post date:** [August 15, 2007, 10:28pm UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601/26 "2007-08-15T22:28:54Z")
I am shocked… [https://www.youtube.com/watch?v=nM\_A4Skusro](https://www.youtube.com/watch?v=nM_A4Skusro)) 😉 ---
**Author:** ![tacitus](https://avatars.discourse-cdn.com/v4/letter/t/6a8cbe/32.png) [@tacitus](https://pheromonetalk.com/u/tacitus)\ **Post date:** [August 16, 2007, 3:30pm UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601/27 "2007-08-16T15:30:16Z")
Ummmmmm… when was the last time we heard from these people ? "Russia’s central bank injected Rbs43.1bn into the country’s banking system on Thursday as Moscow battled the first symptoms of the global liquidity crunch spreading to its markets. Market players said Russia was facing a liquidity squeeze for the first time since the global subprime crisis flared up **as foreign investors bail out of the rouble bond market in a bid to raise financing**. Foreign investors have also been fleeing Russia’s stock market. Russia’s RTS stock exchange closed down more than 3.5 per cent on Thursday. Sergei Storchak, Russia’s deputy finance minister, sought to play down the central bank intervention on Thursday. “There is nothing grave there [in the global markets environment] – it is a correction,” Russian news agencies quoted Mr Storchak as saying. Ekaterina Trofimova, senior banking analyst at Standard and Poors, and Yevgeny Gavrilenkov, chief economist at Troika Dialog, said Russia was likely to withstand the turmoil on global financial markets due to the relatively low leveraging of Russian companies and the high oil prices which have helped fuel an economic boom and filled government coffers to record levels. But other analysts cautioned it was too early to tell. “From Russia’s perspective the point is we don’t know how bad it’s going to be. It’s completely out of Russia’s control. There is clearly a big risk it’s going to get worse. In these circumstances, we are advising to get out now,” said Roland Nash, chief strategist at Moscow investment bank Renaissance Capital. “Russian financial markets have been expanding extremely rapidly over the last couple of years and there are bound to be weaknesses which will be revealed when liquidity dries up which is what is happening now.” 🙂 🙂 🙂 🙂 Errrrrrrr… if my feeble memeory serves… didn’t they, I mean, wasn’t something like this ???, you know, around 1998, implicated, or in the bath with, uuuuuuuuuhhhhhhh… Long Term Capital Management and a near total meltdown of the world financial structure ???.. or maybe that was another Long term Capital Management… it all gets so confusing… ---
**Author:** ![PheroQuirk](https://avatars.discourse-cdn.com/v4/letter/p/9e8a1a/32.png) [@PheroQuirk](https://pheromonetalk.com/u/PheroQuirk)\ **Post date:** [August 17, 2007, 12:46am UTC](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601/28 "2007-08-17T00:46:44Z")
cramer, out of his clown outfit despite appearances, Cramer does actually know his stuff and this article is well worth a read. [Was Last Week’s Housing-Market Crash Worse Than You Think? – New York Magazine](http://nymag.com/news/businessfinance/bottomline/35813/index1.html) this time round, doubt there is anything special about russia… it’s just another big emerging market with questionable governance and excessive credit growth. positioning isn’t the same as in 98 (people may be overly long but it’s an overweight e-m long, not particularly an overweight russia long). [Previous page](https://pheromonetalk.com/t/heres-the-latest-mortgage-industry-graph/4601.md?page=1)