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Tag Archives: everything bubble

Delinquency Rates of Student-Housing CMBS Spike

The once hot asset class of high-end student housing runs into reality. “Student housing” is no longer the spartan cramped dorm room. It’s a global asset class. Part of this subcategory of multifamily apartment properties has gone up-scale, and the mortgages to fund these properties, just like the mortgages that fund regular apartment buildings, are packaged into commercial mortgage backed securities (CMBS) – including by the Government Sponsored Enterprises, such as Fannie Mae – and...

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Contagion from Liquidity Crunch at Junk-Bond Funds to Trigger “Material Second Round Effects”: EU Securities Regulator

The costs of dodging negative interest rates. By Nick Corbishley, for WOLF STREET: In the event of a market shock, 40% of European funds focused on junk-rated bonds — ironically named “high-yield” funds — would not have enough liquid assets on hand to meet investor withdrawals, even if the withdrawals in one week amount to only 10% of the fund’s net asset value, the European Securities and Markets Authority (ESMA) warned this week, raising yet more concerns about the risks associated...

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Fed Sheds $20 Billion in Assets in August, Relentlessly Sloughs Off MBS, Adds Some Treasuries, Shifts to Short-Term T-Bills

QE Unwind continues via the sharp drop in Fed’s MBS holdings. In August, the Fed shed Mortgage Backed Securities (MBS) at a rate that exceeded its self-imposed “cap” of $20 billion for the fourth month in a row, but added some Treasury securities, with a new emphasis on short-term Treasury bills. Total assets on the Fed’s balance sheet fell by $20 billion, to $3.76 trillion, as of the balance sheet for the week ended September 4, released this afternoon. This brought the balance sheet...

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Here’s What I’m Worried About. And It’s Not a Recession

A rout in the hyper-inflated bond market can blow up everything at this point. This is the transcript from my podcast last Sunday, THE WOLF STREET REPORT: The locker room at my swim club has become the litmus test. When a complex topic, after years of being absent or ignored, suddenly crops up in conversation, and not just sporadically but all the time, it means that there is some kind of peaking going on. This suddenly hot topic now is a “coming recession.” Just about everyone is...

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THE WOLF STREET REPORT: Here’s What I’m Worried About, and It’s Not a Recession

A rout in the hyper-inflated bond market can blow up everything at this point. (13 minutes) Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate “beer money.” I appreciate it immensely. Click on the beer mug to find out how: Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

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Suddenly Leveraged Loan Issuance Gets Rough

Fifth deal croaked in August. Moody’s has a cow over Ancestry.com’s deal. Deals had to be sweetened to find buyers. Retail investors bail out. Despite the Fed’s warnings over the years about leveraged loans – including in its Financial Stability Report and in the minutes of its July meeting – the leveraged loan market has only gotten bigger and riskier and has ballooned to $1.3 trillion globally by a narrow definition, or to $3.2 trillion by a broader definition. But first signs are...

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Repo Market Problems & Ballooning Inventories of Treasuries at Primary Dealers Make it into the Fed’s Minutes. My Fancy-Schmancy “Fed Hawk-o-Meter” Jumps

Fed Warns about “Elevated” Asset Prices and High Business Leverage. My fancy-schmancy Fed Hawk-o-Meter, which analyzes the minutes of the Fed’s meetings for tell-tale signs of how the Fed sees the economy, jumped 5 points for the meeting on July 30-31, indicating that a further rate cut – even a cut of just a quarter percentage point – was not set in stone during the meeting: The Fed Hawk-o-Meter counts how often “strong,” “strongly,” and “stronger” appear in the minutes to describe...

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THE WOLF STREET REPORT: How Negative Interest Rates Screw Up the Economy

Now they’re clamoring for the NIRP absurdity in the US. How will this end? (11 minutes) Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate “beer money.” I appreciate it immensely. Click on the beer mug to find out how: Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

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US National Debt Spiked $363 billion in Two Weeks, $1 Trillion in 12 months. But Who Bought This Pile of Treasury Securities?

Nope, the Fed dumped. But there was huge demand elsewhere. The US Gross National Debt has jumped by $363 billion in the two weeks since President Trump signed the law that suspended the debt ceiling. This surge pushed the total debt to $22.39 trillion. That’s up by $1.01 trillion from 12 months ago. And these are the good times. Watch this debt balloon during an economic downturn! Whoopee!  Note the technical term at the top right of the chart: The question, “Who the heck is buying...

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Fuel for the Next Mortgage Bust?

Cash-out refi hype is back full-blast. And for the first time since early 2006, people are doing it in large numbers. This is the transcript from my podcast last Sunday, THE WOLF STREET REPORT: For a moment this morning, I thought I was back in 2005 or early 2006, when I listened to a dazzling radio show, hyping cash-out refinancing of your mortgage. The show was funded by a shadow-bank specializing in mortgage lending. They were promoting their efficient service, that didn’t involve...

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