Housing Charts: Genesis of a Crisis

Front page WSJ article today makes for intriguing reading: U.S. Mortgage Crisis Rivals S&L Meltdown

For those of you w/o access, check out the informative  collection of charts at WSJ.com (public) on:   Home Ownership, House Price-to-Rental Ratio, Commercial Paper, Prices of Subprime Mortgage Tranches.

As this chart reveals, starting in late 2001, the price ratio of renting vs. buying broke out of a multi-decade range. Cheap money, and an apparent lack of lending standards put millions of renters into houses that, based on today’s foreclosure levels, they could not service (i.e., afford).

Hence, the massive unwind as these home owners return to renting status . . .


Ratio of OFHEO house price index to personal consumption expenditures on rent


Fascinating stuff . . .


U.S. Mortgage Crisis Rivals S&L Meltdown   
December 10, 2007; Page A1

Category: Credit, Derivatives, Finance, Real Estate

SubPrime? So what?

I have long respected and enjoyed Jim Cramer, but jeez, could he have possibly been any more wrong than this?  Its one thing to be wrong about the future, but how about getting the present correct?

So Subprime Blows Up; So What, Says Cramer (Jim gives you the scoop on why the $500 billion market is no threat to
the market, even if it fully collapses. Added: July 16, 2007)

Geez, that makes 6,800 look good.

via ZackAttack (here)

Category: Credit, Derivatives, Video

December Linkfest: Week in Preview

Category: Financial Press

More Trouble for Mortgage Securitizers?

Category: Credit, Real Estate, Taxes and Policy

December Linkfest Week in Review

Category: Financial Press

CFO Optimism Spirals Downward

Category: Corporate Management, Economy, Psychology

Friday Night Jazz: Amy Winehouse

Category: Digital Media, Friday Night Jazz, Music

History of the Dow Industrials Poster

The Dow Poster I mentioned last week — but couldn’t remember who sent it to me — turned out to be created by JP Koning. You can order a 36 X 24 wall chart from JP’s site here for $30. Makes a great gift for that broker or trader you know! Nice work, JP

Category: Markets, Technical Analysis

Fun with Wallstrip

Category: Financial Press, Web/Tech, Weblogs

NFP = 94,000

Category: Data Analysis, Economy, Employment