A Quick Scan Of Data Can Be An Eye-Opener
For a Thanksgiving respite, I’ll point out this blog is nearing its tenth year anniversary. A trio of posts that month in 2004.
“Saturday, December 11, 2004″
“Subprime Lending Surges”
“Pricing bubbles often end in a parabolic rise, which we probably saw last year. It is no surprise that what is holding up the market now is lending to so-called subprime borrowers. I view this as bad news for this market as these folks will be in financial trouble even faster. Consider that the risk to mortgage lenders increases, suggesting some desperation for borrowers. ‘Overall, new originations of subprime mortgages totaled an estimated $375 billion through the end of September, a figure that marked a 63 percent year-to-date rise. Putting that number into perspective, one out of every six new residential mortgages made this year has gone to a credit-impaired’..borrower.”
“Wednesday, December 22, 2004″
“Most Influential List Revealing’”
“The website Builder Online recently published an editors list of people of whom ‘when these individuals speak, do other people listen? More important, do they act? Each of the professionals who made the cut left no doubts.’”
“I think it is telling that number one is Fed Chair Allan Greenspan who ‘can continue the current housing boom or grind it to a halt’. And number two is Franklin Raines, who as CEO of Fannie Mae, signed off on financials that must be restated negatively to the tune of nine billion dollars. And who was forced out of that position today.”
“It would seem the editors saw the most influence from a central banker and a disgraced bureaucrat, not very comforting picks for the industry.”
“Sunday, December 05, 2004″
“Fannie Mae Weakens Financially”
“A quick scan of Fannie Mae quarterly financial data can be an eye-opener. Of course, the most recent quarter isn’t available due to the accounting problem, but lets use what is available; the four quarters from June 30, 2004 and back. Compared to the quarter ending September 30th, 2003, Net Income has declined 58%. And if the Securities and Exchange Commission rules against the mortgage giant on accounting for derivatives, the firm will have to post a 9 billion dollar charge. Investors have also upped the shares “short”; that is betting the stock price will fall, some 2.28 million shares in the past month.”
