http://dukeresearchadvantage.com/charvey/2009/01/28/652/ Research that Matters Thu, 27 May 2010 07:41:08 +0000 http://wordpress.org/?v=2.9.2 hourly 1 http://dukeresearchadvantage.com/charvey/2009/01/28/652/comment-page-1/#comment-191 camharvey Sat, 31 Jan 2009 15:18:27 +0000 http://dukeresearchadvantage.com/?p=652#comment-191 The LEI is no news. All of the data that goes into the LEI is known before the LEI release. I view this particular number as noise. There is no economic indicator that points to a recovery. There is one financial indicator, the yield curve. However, I will reserve discussion on that one for a post in the next few weeks. You can make rough calculations on the amount of write down still necessary going across all assets: subprime, alt-a, prime, commercial real estate, commercial loans, etc. You need to do the same thing on securitized assets. [I would prefer not to go asset class by asset class in this comment.] I'd say another trillion - which is dangerously close to the entire capital of the U.S. financial system. As to whether the losses have been built in, the answer is yes and no. It really depends on the security. Some CMBS seem to have more built in that could possibly occur. Other assets no. In a market like this, there will be wide divergence from fundmental values mainly because of the uncertainty about what is the fundamental value! It presents great trading opportunities.<div class="comment-remix-meta"><a href="#" class="quote" onclick="quote('191','camharvey','The LEI is no news. All of the data that goes into the LEI is known before the LEI release. I view this particular number as noise. There is no economic indicator that points to a recovery. There is one financial indicator, the yield curve. However, I will reserve discussion on that one for a post in the next few weeks. \r\nYou can make rough calculations on the amount of write down still necessary going across all assets: subprime, alt-a, prime, commercial real estate, commercial loans, etc. You need to do the same thing on securitized assets. [I would prefer not to go asset class by asset class in this comment.] I\'d say another trillion - which is dangerously close to the entire capital of the U.S. financial system. As to whether the losses have been built in, the answer is yes and no. It really depends on the security. Some CMBS seem to have more built in that could possibly occur. Other assets no. In a market like this, there will be wide divergence from fundmental values mainly because of the uncertainty about what is the fundamental value! It presents great trading opportunities.'); return false;">Quote</a></div> The LEI is no news. All of the data that goes into the LEI is known before the LEI release. I view this particular number as noise. There is no economic indicator that points to a recovery. There is one financial indicator, the yield curve. However, I will reserve discussion on that one for a post in the next few weeks.
You can make rough calculations on the amount of write down still necessary going across all assets: subprime, alt-a, prime, commercial real estate, commercial loans, etc. You need to do the same thing on securitized assets. [I would prefer not to go asset class by asset class in this comment.] I’d say another trillion – which is dangerously close to the entire capital of the U.S. financial system. As to whether the losses have been built in, the answer is yes and no. It really depends on the security. Some CMBS seem to have more built in that could possibly occur. Other assets no. In a market like this, there will be wide divergence from fundmental values mainly because of the uncertainty about what is the fundamental value! It presents great trading opportunities.

Quote

]]> http://dukeresearchadvantage.com/charvey/2009/01/28/652/comment-page-1/#comment-190 Nancy Andrews Sat, 31 Jan 2009 06:03:27 +0000 http://dukeresearchadvantage.com/?p=652#comment-190 Dr. Harvey: what do you make of the Leading Economic Indicator index rising slightly in Dec? possibly good news? Second, the approx $1 Trillion in upcoming Alt-A and Option ARM resets -- what % do you believe will default, and will this next wave of foreclosures do the same thing as the first wave of sub-prime foreclosures, or have the losses already been built into current devaluations? Many thanks for your perspective, Nancy Andrews<div class="comment-remix-meta"><a href="#" class="quote" onclick="quote('190','Nancy Andrews','Dr. Harvey: what do you make of the Leading Economic Indicator index rising slightly in Dec? possibly good news? Second, the approx $1 Trillion in upcoming Alt-A and Option ARM resets -- what % do you believe will default, and will this next wave of foreclosures do the same thing as the first wave of sub-prime foreclosures, or have the losses already been built into current devaluations? Many thanks for your perspective, Nancy Andrews'); return false;">Quote</a></div> Dr. Harvey: what do you make of the Leading Economic Indicator index rising slightly in Dec? possibly good news? Second, the approx $1 Trillion in upcoming Alt-A and Option ARM resets — what % do you believe will default, and will this next wave of foreclosures do the same thing as the first wave of sub-prime foreclosures, or have the losses already been built into current devaluations? Many thanks for your perspective, Nancy Andrews

Quote

]]>