Archive - Mar 25, 2009 - Story

As Zero Hedge has already discussed, last month's housing numbers are hardly something to cheer about. Nouriel & Co. are cautiously optimistic - not outright calling a bottom but definitely seeing a glimmer of hope.

You know the US is screwed when China is lecturing us on capitalism. 

Seriously, this guy needs a muzzle. Obama's public support for his embattled SecTreas seems misplaced after Geithner publicly expressed his openness for the Chinese and Russian proposal to strip the USD of "reserve currency status". The dollar got mauled across every single currency pair before Tim was able to issue a correction that promptly caused a reversal.

For a more anecdotal view of the unemployment numbers, it's interesting to look at the recent story on IBM. The tone of the article focuses on the "bad economy, everyone's firing" meme without really digging into the details. It's pretty clear that IBM is using the current economy to shift a significant chunk of its global business services unit (everything from management consulting to IT support) to India - a labor arb play that would never fly in more normal times.

At first opportunity (but not for a few days) I will write an extended post on the cash flow dynamics of both CRE whole loans and CMBS. There seems to be too much confusion on the topic, which is at the heart of the "is the price fair/is it not fair" argument for the toxic asset bid/offer disconnect in the PPIP. Below is a good chart I tracked down which shows the most recent prices on sub-AAA CMBX tranches, and how this flows through in terms of spreads, loss rates, loss timings, average deal losses and a market-to-base case (flat loss assumption) ratio.

At first opportunity (but not for a few days) I will write an extended post on the cash flow dynamics of both CRE whole loans and CMBS. There seems to be too much confusion on the topic, which is at the heart of the "is the price fair/is it not fair" argument for the toxic asset bid/offer disconnect in the PPIP. Below is a good chart I tracked down which shows the most recent prices on sub-AAA CMBX tranches, and how this flows through in terms of spreads, loss rates, loss timings, average deal losses and a market-to-base case (flat loss assumption) ratio.