PrimeX Update: The Rout Continues

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Thu, 10/13/2011 - 11:35 | 1769693 homersimpson
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PrimeX sounds like a protein supplement or a Viagra imitation. I can see a Ron Jeremy commercial for PrimeX now..

Thu, 10/13/2011 - 11:37 | 1769709 alien-IQ
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any way you slice it...somebody's getting fucked.

Thu, 10/13/2011 - 11:54 | 1769803 Divided States ...
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Yeah its the people who will be at Occupy Wall Street 2012 and beyond

Thu, 10/13/2011 - 11:54 | 1769804 LawsofPhysics
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At least it wasn't any of my puts.

Thu, 10/13/2011 - 11:59 | 1769828 treemagnet
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Um, that would be Raj.

Thu, 10/13/2011 - 11:34 | 1769695 kito
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not sure i understand real world implications of this

Thu, 10/13/2011 - 11:37 | 1769710 Quadlet
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30 year mortgage rates up...

Thu, 10/13/2011 - 11:39 | 1769727 kito
kito's picture

how strongly does this offset bens purchases of mortgage backed bonds?

Thu, 10/13/2011 - 13:17 | 1770107 Pool Shark
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It means Jumbo Prime mortgages are beginning to see defaults.

Just like subprime...


Thu, 10/13/2011 - 15:49 | 1770829 fourchan
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contraction nation.

Sat, 12/24/2011 - 16:18 | 2009447 haibop
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it may go down again. Power4Home

Thu, 10/13/2011 - 11:39 | 1769720 Scisco
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Search the more recent threads about Primex and scan the comments. Some great explanations were given.

Thu, 10/13/2011 - 11:45 | 1769759 SignsAndWonders
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FT Alphaville did a good overview of PrimeX the other day.

Thu, 10/13/2011 - 12:21 | 1769909 Hansel
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Thread FYI:  Gary Kaminski on CNBC just said PrimeX is an $11 billion market.  It's a small market.

Thu, 10/13/2011 - 12:50 | 1770026 HelluvaEngineer
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Just the other day I found $2B in my couch cushions.

Thu, 10/13/2011 - 13:47 | 1770208 I Got Worms
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Now that made me laugh.

Fri, 10/14/2011 - 02:45 | 1772594 Hephasteus
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I was going to print 20 billion last weekend but I felt bad for the greeks with their ink shortage.

Thu, 10/13/2011 - 20:54 | 1771926 tom a taxpayer
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HelluvaEngineer - Your $2b find intrigues me. I'm a venture capitalist and former upholsterer.  If you can present a decent business model, I'm primed to invest $4B. 

Thu, 10/13/2011 - 13:07 | 1770079 Panafrican Funk...
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Presuming that number is true, that's likely the unlevered "underlying".  It's a bit like saying "Well, the market cap on SPY is only $87.5 billion".  Appears small, yet 10-20% swings in either direction can blow up multi-billion dollar firms in a hurry.   

Thu, 10/13/2011 - 13:08 | 1770082 Panafrican Funk...
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Also, PrimeX holdings are much more concentrated.

Thu, 10/13/2011 - 12:18 | 1769895 sessinpo
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Subprime blowup of 2008. Now the credit worthyness of so called prime borrowers (those with supposed better credit) about to blowup in the coming weeks or months. In other words, all standards of credit worthyness is pure BS and all will be taken down.

Thu, 10/13/2011 - 12:20 | 1769897 sessinpo
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Thu, 10/13/2011 - 11:35 | 1769696 alien-IQ
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here comes the obligatory 11:30am US dollar shanking to save the markets.

Thu, 10/13/2011 - 11:35 | 1769702 Yen Cross
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 I was on coupons ( sunday ) open.

Thu, 10/13/2011 - 11:38 | 1769715 thatthingcanfly
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OK, I give up. What the f is Prime X? The autobot leader's porn stash?

Thu, 10/13/2011 - 11:46 | 1769742 SheepDog-One
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Just think 'prime real estate, commercial, jumbo loans,' etc.

Thu, 10/13/2011 - 11:51 | 1769791 HD
HD's picture

Indeed.  Ol' Optimus enjoys nothing more than to read the new copy of PrimeX, lubricate his lug nuts then "transform" and "roll out".   There is an appalling shortage of transformable women...

Thu, 10/13/2011 - 11:55 | 1769807 jdelano
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I hear the Decpticons have a "Don't ask don't tell" policy.  

Thu, 10/13/2011 - 12:33 | 1769963 thatthingcanfly
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Arcee was kinda hot. I'da tapped it.

Thu, 10/13/2011 - 11:58 | 1769817 thatthingcanfly
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Nevermind. I just found a Primex primer. Yeah, disturbing trend. Does this mean that the time to exchange gold for real estate is approaching more rapidly than Gonzalo Lira predicted?

Thu, 10/13/2011 - 12:15 | 1769883 SheepDog-One
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Yea sure trade gold for real estate, because rising rates are sure to add value there. ?

Thu, 10/13/2011 - 12:24 | 1769919 thatthingcanfly
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"Approaching more rapidly" does not mean "here now." The end result of this is likely to be a collapse of prime real estate values. Assuming the PMs achieve the stratospheric valuations in dollar terms that they are predicted to achieve, there will come a time when the Au - Real Estate swap makes sense. Maybe that time is coming sooner than expected.

Thu, 10/13/2011 - 15:06 | 1770576 DosZap
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that the time to exchange gold for real estate is approaching more rapidly than Gonzalo Lira predicted?

Under the current regimes, and power players,fiscal/global conditions, I can never see a time to exchange Gold for RE.

One reason,really two.

Eminent Domain, and Taxes.

Either one can SCREW you into the ground on RE like a Chance keep stake anchor.

What do you then use for survival?

Thu, 10/13/2011 - 11:58 | 1769818 fightthepower
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The Markit PrimeX is a synthetic CDS index referencing a basket of prime mortgage-backed securities. The intent of the index is to create a liquid, tradeable tool allowing investors to take positions on prime mortgage-backed securities via CDS contracts.  Its liquidity and standardization will allow investors to accurately gauge market sentiment around the asset-class, and to take short or long positions accordingly.

Thu, 10/13/2011 - 12:24 | 1769922 Missiondweller
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Thanks. I'm not familiar with this and its not on the ZH Glossary yet.

Thu, 10/13/2011 - 11:58 | 1769820 Larry Darrell
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Think back a few short years to Bernank's statements about "sub-prime" mortgage problems being contained.

And sell side people saying, "sub-prime is a mess, but prime mortgages are doing fine"


This instrument, PrimeX, was set up to follow prime mortgages.


As you can see, they are breaking containment.


That's my simple understanding of it anyway.

Thu, 10/13/2011 - 13:55 | 1770253 Smiddywesson
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PrimeX is going under?  But that means all the McMansions are upside down!

Quick, we need to bail out all the rich people! (Again)

Fri, 10/14/2011 - 02:49 | 1772600 Hephasteus
Hephasteus's picture

It's ok. Trump towers was financed with junk bonds and it's gone bankrupt 3 times. If you say financial pariah around a banker they think you said mariah carry.

Of course all the mcmansions are financed with junk bonds as well. I think they call it a mortage note. LOL

Thu, 10/13/2011 - 11:38 | 1769721 scatterbrains
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so is it that the lower Prime-x goes the higher bank earnings will be ?

Thu, 10/13/2011 - 11:40 | 1769728 traditionalfunds
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Wells was bragging last quarter that it's portfolio was doing relatively well due to high composition of prime mortgages.



Thu, 10/13/2011 - 11:43 | 1769736 SheepDog-One
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Expect everything to get more bizarre and totaly untradeable from here on out as we approach kickoff to WW3 with Iran. The retail trader has been barred from the markets, but theyll still be happy to steal your money if youre brave enough to actually place an order with an HFT robot. 

Thu, 10/13/2011 - 12:16 | 1769887 sabra1
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bunker buster bombs were recently shipped to israel, war within two weeks according to inside sources!

Thu, 10/13/2011 - 12:23 | 1769914 scatterbrains
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If true are  there any publicly traded blood bank stawks I can buy ?

Thu, 10/13/2011 - 13:48 | 1770214 I Got Worms
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Blood ETF?

Thu, 10/13/2011 - 12:46 | 1770008 itchy166
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Thu, 10/13/2011 - 11:42 | 1769743 wombats
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Is this bullish for BAC, GS?  That's all that really matters.

Thu, 10/13/2011 - 11:44 | 1769753 Aunty Christ
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Hard to tell what's really going on, considering the bid/ask spread is wide enough to let several trucks through

Thu, 10/13/2011 - 11:46 | 1769763 RobotTrader
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Meanwhile, the Riverboaters continue to pile into the absolute worst crap imaginable in a vain attempt to "make their year".

Chinese Junkers like JKS up 70% in 5 days.

What a freaking casino.

Thu, 10/13/2011 - 11:53 | 1769800 SMG
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You know if you posted this stuff BEFORE they go up and not after, people around here might appretiate you more.

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