Practical analysis for investment professionals

mortgages


Lessons from CFOs: When Refinancing Makes Sense

A new calculation tool can help determine if it's the right time for clients to refinance. Paul Fennell explains.

Current Thinking on Housing Prices and Mortgage Markets

Global housing prices remain a popular indicator of economic activity. But overall, recovery in global housing markets seems mixed.

Mortgage REITs: Does Doubling the Leverage Make Them a Good Investment?

Having recently passed the four-year anniversary of the Lehman Brothers collapse, it’s tempting to believe that our economy and capital markets have learned from their mistakes. Nevertheless, every now and then Wall Street reminds us that it has “fallen off the wagon,” and reverted back to scary old ways of the bad old days. One of those old tricks is to add unnecessary leverage to assets that may not be safe to begin with.

The Potential European Debt Crisis You Are Not Hearing About

The European sovereign debt crisis has been occupying a disproportionate amount of investor mindshare over these past many months. Yet there is another potential debt crisis in Europe that is receiving… READ MORE ›

Book Review: Guaranteed to Fail

In the crisis that engulfed the global financial system in 2008, the collapse of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) inflicted the heaviest losses of all on U.S. taxpayers. The Congressional Budget Office has estimated that the cost of bailing out the government-sponsored enterprises (GSEs) could ultimately total $350 billion. Unlike the banks that received massive government loans, guarantees, and insurance, Fannie Mae and Freddie Mac have little prospect of ever repaying Uncle Sam. Notwithstanding this stark evidence of fundamental flaws in the structure and mission of the GSEs, the sweeping legislative response to the financial crisis — the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 — dealt with the GSEs only by calling for a study of how they could be reformed.

Notes from the Field: CFA Institute Fixed Income Conference 2011

General Tenor: Bearish. Almost all of the speakers at the conference expressed concern about the direction of the global economy. Specifically, bearishness was expressed for:

The European sovereign debt crisis
The U.S. Congress’s political gridlock and inability to resolve the U.S…. READ MORE ›

Are Structured Products and Complex Credit Assets the Phoenix of the Financial Crisis?

As the Roman epic poet Virgil wrote in the Aeneid, “Fortune favors the brave.” For investors who live by this creed, complex credit assets and structured investments — once the scourge of global financial markets — are beginning to regain… READ MORE ›



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