Brent Forsland

How to Trade Using Game Theory

The 6% mortgage is back? We haven't seen 6% mortgage rates since 2007??? 30YR Treasuries have more then doubled in the trailing 9??? 30YR treasury yields were virtually unchanged between December of 08' and August. Your article is predicated on misinformation and is misleading

Housing Prices Are Rebounding

You are only looking at the effect and not the cause. Are fundamentals of the economy driving the "bottom"? The answer is no. Unemployment, with the second highest historical correlation (inverse) to homes vales is one thing economists agree on. Its going up! The largest driver, mortgage rates, is something you are ignoring. There couldn't be a more direct correlation to home prices and mortgage rates are at historic lows. This is solely due to the fed injecting itself into this market. Their budget to buy mortgages expires in March which means rates are going up. There is a foreclosure moratoria that will end soon too. You can be sure banks underwriting standards are not getting looser any time soon. I can't deny the appearance of a bottom but if you look at the fundamentals its clear what's driving it and these drivers are artificial and temporary.

Private Label RMBS: Opportunity of a Lifetime?

Good walk-through of the cashflow structure of this deal but you whole rich/cheap analysis of this bond is predicated on some bad information. This security may have traded near 20 cents on the dollar but this would trade closer to 30 the buck today. Reuters is not a good source for this type of non-agency pricing information. Try re-runing your analysis at this level and you'll be less bullish

Housing: Strong Recovery Ahead

Maybe housing numbers are backward looking but unemployment numbers and foreclosure aren't and they are reaching new highs almost every month; Not to mention interest rates are artifically low right now due to heavy buying from the Fed. They have already started to wind this down and will continue to further meaning rates will rise. I'm not sure how you can look at these 3 factors and see any chance for a recovery in home prices in the near term

Is the Fed Losing the Mortgage Rate Battle?

Th fed is not losing the battle it is withdrawling troops. The feds mortgage purchases have declined steadily over the last several months. Looks for lower volume on their purchases and a rise in interest rates over the coming months; Another headwind for a housing recovery which is further off then most people think.

Unsustainability, High Beta, and Liquidity Risk Pervade Capital Markets

I think your confused. If CIT goes belly up the small business you refer to would be effected if they were lenders to CIT. CIT lending to them would not adversely effect them as you would lead us to believe.

Why Housing Hasn't Bottomed Yet

Prices may stop falling, but don't expect any significant recovery until you see a turn around in economic indicators such as unemployment. Also, the fed has been keeping mortgage rates artifically low, when they stop buying and rates move up this will be a major headwind for housing prices

Home Prices Up in a Dozen Cities

With the exception of Boston, most of these are obscure places; Hardly representative of the national picture. Further, none of these data sets show an increase over a substantial enough period of time to declare a bottom or a trend.

The U.S. Housing Market's Very Sobering News

I'm bearish on housing as well. However, I noticed this is the second article in which you have used the CS graph of upcoming resets. I urge you to take this graph with a grain of salt. This is a misleading graph. The majority of the Option Arms that will be reseting have already defaulted. These people had no equity in their homes to begin with. When there equity went negative most stopped paying. Bottom line is the wave of resets and presumably defaults that are to come have already happened to a large extent. The risk is already priced into the bonds and the write downs have already been taken. This is old news. Good old fashion supply and demand are the risk we face going forward

Deep Property Depreciation Ahead

I agree that renting is a better option at present and that there is still potential for price depreciation. But looking to the historical index trend lines for a mean reversion fails to take into account inflation which would make this somewhat less dismal.

Why Is Canadian Housing and Banking Stronger than the U.S.?

Canadian banks never got involved in the prolific and irresponsible lending practices that were the standard of the United States banking industry throughout this decade. The lack of foreclosures and write downs as a result is the reason for the relative strength in these sectors you are seeing in our neighbors to the North.

Why Is Canadian Housing and Banking Stronger than the U.S.?

Canadian banks got involved in the prolific and irresponsible lending practices that were the standard of the United States banking industry throughout this decade. The lack of foreclosures and write downs as a result is the reason for the relative strength in these sectors you are seeing in our neighbors to the North.

Expect the Treasury Bubble to Continue to Inflate

GE..a bailout target. You are way off base. GE capital does have considerable exposure mtges and other loans that are in default. It was particularly hurt this past quarter by its mortgage lending business, which suffered a $173 million loss. However to even consider the parent of this conglomerate as a bailout is nuts. Even its losses GE Capital still earned $1.1 billion in the quarter. Even though this was down 58% from a year ago GE projects that its finance arm willcarve out a profit of between $2 billion and $2.5 billion this year. GE never took on the exposure in the credit default swaps market that put AIG at such risks and in is a completely diffrent boat.Tough year? Yes Bailout target? Not even close

Housing: Another Time Bomb on the Horizon

What is not addressed in this chart is that a large portion of these AltA and Option Arm bonds that are due to reset in 2010 and 2011 are already in experiencing high default levels. By the time these resets occur the much of the defaults will have already been absorbed and the remaining problem securities will have priced in the risk long ago.