Research Zeitgeist: Top Posts and Hot Topics
Debt and housing-related issues dominated Research Recap’s most read posts during the latest week with Lenders Slow to Address Florida Mortgage Defaults again topping the list.
Concern that credit strains are spreading beyond mortgages was evident in the second most popular post, Fitch Sees Warning Signs in Rising Credit Card Balances.
The problems outlined in Moody’s says Homebuilders at the Mercy of their Banks, likely were exacerbated by the continuing slide in the housing market documented in No Sign of Bottom in US Existing Home Sale Prices.
Also popular was A Map of the Subprime World from the Federal Reserve Bank of New York.
And indications that more downgrades of subprime-backed structured finance instruments were evident in S&P Cuts Recovery Assumptions for Subprime-Backed CDOs.
As for hot topics, after the Bank of England argued that subprime losses might actually be overstated, we’ll be watching for more signs that the tide may be turning. Lex in today’s FT is hesitant to conclude that the worst is over:
“First, subprime securities (at par value) are equivalent to only 3 per cent of European and US bank assets. On the basis of their performance in subprime, the risk that these institutions have behaved foolishly on other products appears quite high, particularly as economic conditions slow. Second, in spite of far more transparency on subprime exposures, major bank capital raisings, and generous central bank policies, interbank lending rates remain oddly high.”
It is hard to feel comfortable about banks when they do not trust each other.
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