Browsing Tag

mortgages

News round-up: 12 Aug 2008

My Commentary: The lead story today is about UBS and it.s $5.1 billion in writedowns and what this means for the financial system going forward. When one combines the downbeat assessment by UBS management regarding Q3 and Q4 with the…

What is a credit writedown?

A credit writedown is a reduction in the value of an asset as it is carried on a company's balance sheet. As these losses must also be reflected on the income statement, credit writedowns result in massive losses.

Chart of the day: low ARM rates

This chart from the New York Times demonstrates visually what happens when the Fed lowers interest rates too much: it skews simple economic decisions like what type of mortgage product to use, often with unintended consequences. Similarly…

The fixed rate mortgage is king again

After the credit and housing bubble created by Greenspan's Fed caused people to turn away from fixed rate mortgages, a return to sanity has heralded its return to prominence. A full 70% of mortgages taken out in the first half of 2008 were…

Ron Paul on the Housing Bill

Ron Paul sounds off on the housing bill that was just passed. This bill has more problems associated with it than any bill we have seen enacted to counteract the economic downturn. The moral hazard, the lack of congressional oversight, and…

Prime looks terrible

"Prime looks terrible." Those are the words of Jaime Dimon, CEO of JP Morgan Chase regarding the future of prime mortgage loans. Wall Street analysts were ecstatic at the largely positive news in JP Morgan's earnings report even though…

Financials: catching a falling knife

Back in June, I wrote about financial investors in bank shares having lost $10 billion. Then, I predicted that losses would mount and bank shares will fall. It seems that one part of that equation is true already as bank shares have…

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