TB1000

Dell / Perot: Insider Trading in M&A Is Alive and Well

I just hope jspenguinmafia doesn't work for the SEC.

Picking Goldman's Brain for Long / Short Strategies

@CaptainJack - since most of the mortgages were made in the past 5 years they are definitely non-recourse. You can look to a few of the hotel operators for an example of this. Sunstone recently walked away from a W in San Diego with no recourse.

A Tale of Seven Cities... and Some Condos

Condos in midtown Atlanta are being sold for 50% of their original marketed price. In addition, there are many developments that are severely undersold/leased, especially the office market in Buckhead.

The Atlanta market is a big disaster waiting to happen.

Asset-Backed Securities Faring Best in Structured Finance

Of course asset-backed securities perform better: there is a credible threat for losing real property.

With credit cards there is no personal recourse outside of hits to FICO scores. What is a bank going to do? Ask back for the drinks bought at bars on the weekends? Or how about that plane trip someone took to get away for the weekend? Or maybe that spa day bought for a significant other?

PennyMac REIT IPO Overview

I wonder how MTM rules will be affected by these newly formed REITs. One of the changes to 157 was the insertion of the word "relevant" in regards to finding inputs to use as a comparison. Based on the number of Mortgage REIT IPOs that have been filed, and the billions of dollars (although still small by comparison to the total amount of RMBS/CMBS outstanding) being raised to purchase distressed assets, will there now be enough "relevant inputs" to more accurately mark these securities to?

Real Estate Problems: Bailouts Are Again Option One

The largest issue for CRE isn't vacancies, it's liquidity. Most REITs have a large portion of their debt maturities coming due in the next 3-4 years and are finding it difficult to get financing. Furthermore, the financing they can get will provide them with proceeds less than the balance of the mortgage. How do you fill that gap? Equity.

U.S. Real Estate Industry Whines About New Appraising Rules

Here's the blame trail (in no particular order)
1. Sellers
2. Buyers
3. Realtors
4. Appraisers
5. Title companies
6. Municipalities
7. Loan officers / Mortgage brokers
8. Wholesale lenders
9. Banks
10. Investors
11. Ratings agencies
12. Federal Government
13. Insurance companies
14. Home furnishings/goods suppliers/services

Liar Loan Securitizations: A Surprising Twist

I'm not sure I would trust any business who doesn't know the difference between "your" and "you're" (see the sign on the window in the picture). A large part of the subprime problem was that the loan officers had very little to no education and were pushing an initial interest rate and payment. The blind led the blind for far too long.

A Novel Solution to the Commercial Real Estate Problem

Are they recommending the REITs go to market with a follow-on offering or raising equity via another method?

REITs Are Not Right for PPIP Players

So it's the inverse of an equity REIT that gets the benefit of adding back depreciation expense to net income to get to CAD (after other additions/subtractions but depreciation is usually the largest adjustment)?

REITs Are Not Right for PPIP Players

If structured as a REIT, and without any taxable REIT subsidiary, the REITs should not have to worry about taxable income as they don't pay income tax. Correct?

Vornado's Private Equity Fund: Non-Traditional, Smart Solution for Tough Times

"As a publicly traded entity, Vornado's management has a duty to its existing shareholders, which includes the duty not to dilute them."

I disagree. Their goal is to create shareholder value through all necessary and legal means.

If the company needed to do a large equity raise in order to survive then they increased shareholder value. While the equity raise dilutes existing shareholders (and many do participate in the offering) it gives the company survival capital so the shareholder's aren't pushed down to zero (see GGP).

Furthermore, most of the equity offerings have performed fairly well since their offerings, which again drives shareholder value.

Dilution isn't necessarily a bad thing.

9 REITs That Had to Be Destroyed in Order to Survive

Weak analysis. It would be more beneficial to show their current dividend yields and where their stocks are trading relative to NAV. I'm pretty confident that after that quick analysis you'll find that several of those stocks are attractive buys right now.

Alt-A Mortgages: The New Subprime Meltdown?

The Option ARM wasn't an Alt-A product but many did include an option for a low teaser rate with triggers on them to start amortizing once the PIK interest got to a certain level or with very short lives on the low teaser rate, which was only one of the payment options (of course one that was probably very popular with most of the people taking those out).

Alt-A Mortgages: The New Subprime Meltdown?

Resetting ARMs shouldn't be much of a problem right now as LIBOR has dropped to near historical lows. The problem in 2006/2007 was that LIBOR spiked several % points so when the ARMs reset, the payments were drastically higher and unaffordable for many.

While immediate interest rate risk is somewhat taken off the table, it doesn't mean that the overall effects of the economy (layoffs, wage decreases, etc) won't negatively affect the ability of a homeowner to continue to pay their mortgage or have the means to refinance into a solid fixed rate.