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FREDDIE PICTURE, ROUNDUP

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check out the picture – FREDDIE MAC: Spending as if they had a good year – The Big Picture

Mortgage Market Roundup – lots of downgrades, and Garrett-Watts mentioned … thanks PJ – housingwire

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LIQUIDITY PLAN,  2005 SAFE? , HOUSINGWIRE 2, CHART, FEAR BAROMETER, 2 FROM IRA

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The Fed’s Liquidity Plan:

1. Victor Hong weighs in (thanks V) – Discount window pawn chart here …   Holy Cow! In hopes of re-inflating the market for housing-related securities, the Federal Reserve will repo-finance “AAA” ABS CDO tranches for at least 85:00, and perhaps up to 98:00 —- far more than their realizable general market values. This liquidity initiative should be termed the “Brooklyn Bridge Buy-out”. …. Why sell your super-senior tranches for so little, when you can fund them for much more? As one soon-to-default property lender once quipped, “A dollar borrowed is a dollar earned.”

2. The Fed’s Collateral Requirements: It’ll Take Anything – by Felix Salmon - portfolio.com  

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Another thought from Victor – thought 2005 vintage deals were safe? … Please note the recent downgrade of some WFMBS 2005 fixed-rate and adjustable-rate RMBS deals. …. An ugly cocktail of sub-5CPR prepayments and sharp housing depreciation threatens even seasoned Prime non-agency CMO deals, especially because of their very thin subordination.

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2 articles from housingwire – thanks PJ

1. 18 of 20 Major U.S. Housing Markets Saw Price Declines in November: Report - … jointly published by housing analysis and research firms Altos Research and Real IQ 

2. Fitch Downgrades 110 RMBS Classes from 28 Countrywide Alt-A Transactions  

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Charts you need to see – Pent Up Housing Demand in Pictures – by Michael Shedlock - globaleconomicanalysis

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fear barometer – check out the libor – treasury spread charts – LIBOR: What’s the Big Deal? – by Michael Shedlock - seeking alpha

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Slatin report – thanks to Ira Artman for submitting:

1. PUBLIC REIT CEOs Survey: How would you describe the current state of the real estate capital markets? - interesting answers – Slatin 

2. HOUSING SPOT MARKET SLIDES – A large majority – eighteen – of the 25 MSAs covered by Radar Logic’s Residential Property Index (RPX) showed declining prices - has link to report – Slatin  

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MONOLINE TROUBLES – 5 ARTICLES

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MBIA and Ambac’s Capital in Doubt - globaleconomicanalysis

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AAA moment of truth for monolines – FT  

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What Do Brittany Spears, Snow White and MBIA Have in Common? - reggiemiddleton.typepad.com  

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Ambac, Assured Guaranty Strike $29 Billion Reinsurance Deal - BusinessWire Yahoo  

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Pershing’s Ackman Says MBIA Could Go Under in 2nd-Qtr - Reuters http://www.reuters.com/article/bankingfinancial-SP/idUSN2861015120071128

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DEFLATION, PROJECTION, TOO BIG TO FAIL, WELLS WRITEDOWN, BAILOUT NOT FAIR

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Deflationary Credit Downturn is Underway – by Michael Shedlock – In the US, Credit flowing to American companies is drying up at a pace not seen in decades. This idea was discussed in Lenders Rapidly Tighten Credit. The same thing is happening in the UK there are Pleas for rate cut as interbank loans dive. - seeking alpha

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Projecting the Underlying Demand for New Housing Units: Inferences from the Past, Assumptions about the Future   – by Eric S. Belsky, Rachel Bogardus Drew, and Daniel McCue - This paper examines the challenges of projecting the long-run sustainable demand for new residential construction and presents a range of estimates for the likely demand for new housing over the period from 2005 through 2014. W07-7 JCHS Harvard    

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Too Big To Fail – thoughts on the gov’t bailing out CW, Citi, and FGIC – Accrued Interest 

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Subprime Bailout II, Wells Fargo Writedown Raises the Bar – … The Treasury proposal will paralyze the US housing market for years. Who in their right mind will lend money for home ownership ever again if the contract can become null and void the second the hoi polloi start screaming to their elected officials? - IRA Riskcenter.com free reg.  

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Arm Bailout not fair to responsible borrowers by Todd Sullivan – Value Plays

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ANDERSON FORECAST, DAVY BUI, DREAD THE THAW, JUNK PROBLEMS, TIME ON SUBPRIME, RESCAP

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Regarding Anderson Forecast – UCLA economist predicts U.S. will avoid the ‘R’ word - Forecast report notes disconnect in housing, jobs - Inman

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1. Possible Unintended Consequences of a Subprime Bailout -   Davy Bui Blog

2. Government’s Plan to Kill the Housing Market -   Davy Bui Blog

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Mortgage freeze has critics dreading thaw – … The freeze, S&P said, could leave bondholders much more exposed to losses from the mortgages that go into default. .. Globe and Mail  

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Problems with junk bonds – High-Yield Defaults to Quadruple in ‘08, Moody’s Says - Bloomberg

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Whom Will the Subprime Plan Help? - … Of the mortgages that went into foreclosure in the third quarter, 43% were adjustable-rate subprime loans, even though those make up only 6.8% of all .. - TIME  

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not good – The quick, surprising turnabout at ResCap - Star Tribune