The ABX-HE-BBB- that tracks the collapse of subprime mortgage papers at the secondary market dropped another 3% this week and 13% below November.
Anything that shows up like that on the charts must scare a shit out of any investor. I think the complete collapse of subprime mortgage market is very near. I would call another 2 weeks before we’ll see scary headlines at Bloomberg and Wall Street Journal.
February 11, 2007 at 12:25 pm
i think one thing that should be noted is the relatively good performance of the bbb- 06-1 index, down 6% YTD (this index is off late ‘05 collateral vs ‘06 collateral ~06-2 and 07-1). dont throw the baby out with the bath water just yet.
February 20, 2007 at 7:58 am
Sure.
The good performance of 06-1 index is due the fact that all problematic borrowers already had a chance to refinance once more.
In late 06 refinancing with cash out was not so easy, as the collateral started to decline.
April 17, 2007 at 4:27 pm
You were right on with your forecast.