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This Isn’t Good News for CMBS Holders and Erstwhile Pipelines

Andy Spero | August 15, 2009 | 0 Comment(s) |

We occasionally write about CMBS or Commercial Mortgage-backed Securities and the CMBX index. For example, last November, we wrote CMBS Is Like Lumpy MBS and That’s Not Good. We tend to get more hits on our tongue-in-cheek post, How to Trade CMBS? and find that a bit scary.

What should truly frighten both CMBS holders and banks with large commercial-mortgage loan portfolios more than our discussion of our page rankings is this article in Saturday’s edition of The Wall Street Journal: Hotels Deliver Some ‘Jingle Mail.’ The… Read the rest

How to Trade CMBS?

Andy Spero | December 4, 2008 | 0 Comment(s) |

Our site’s statistics program keeps track of the search terms used to arrive at our humble little venue, and this morning we noticed a hit from the query, “How to trade CMBS?”

That, as they say, struck us kind of funny. 

We thought: given the ongoing and (we would guess) accelerating problems in commercial real-estate such a question could come from either (1) someone completely unfamiliar with Commercial Mortgage-Backed Securities or (2) someone completely, deeply, and desperately immersed in the industry.  (As a last-ditch effort for marketing help.)

In that way, we’d imagine that… Read the rest

Increases in CMBX Spreads as Evidence of "Financial Projection in a Crisis"

Andy Spero | November 21, 2008 | 0 Comment(s) |

If It Is Much Ado About Nothing, Then It Is an Indictment of Congress.

Since we wrote CMBS Is Like Lumpy MBS and That’s Not Good on Wednesday, AAA CMBX spreads have increased another 300 basis points to a level about ten times greater than where they started the year.

That means that there has been either a large increase in the number of buyers of the insurance or a decrease in the number of sellers… Read the rest

OMG, Mr. Paulson Agreed with Us Twice in One Week!

Andy Spero | November 19, 2008 | 0 Comment(s) |

Update (01-20-09): now that Mr. Paulson’s term as Treasury Secretary has ended, we must admit that the small bit of optimism we exhibited in this post was sadly and unfortunately misplaced.  It was out-of-character for us, but we’re a hopeful pesimist.  He quickly reverted to his behavior of September and October, and for that, the markets, the nation, and the world have and will continue to suffer.

We hope that his earlier actions haven’t caused irreparable damage, but we’re doubtful.

This is a longish post that covers several aspects of the… Read the rest

CMBS Is Like Lumpy MBS and That's Not Good

Andy Spero | November 19, 2008 | 1 Comment(s) |

We’ve discussed Commercial Mortgage-Backed Securities or CMBS in a number of posts.  So, it’s worth mentioning that spreads on AAA CMBX (CDS) increased substantially on Tuesday.  At about 550 basis points, those spreads seem to be twice as high as the previous all-time high, which was reached in the late winter of this year, and are seven or eight times higher than on January 1.

It’s much harder to say where spreads on CMBS (bonds) are since they tend not to trade.  Historically, they didn’t trade much, and now… Read the rest

Idiosyncratic and Concentration Risk, Again.

Andy Spero | October 2, 2008 | 0 Comment(s) |

It is already Thursday, and we’re just getting around to writing about a few articles in Wednesday’s (October 1) edition of The Wall Street Journal.  They are worth mentioning because they are closely related to our post on Tuesday, Bigger Is Not Necessarily Better, which warns about additional concentration risk as the largest banks continue to grow larger.

One is a very small article in Deal Journal, entitled Big-Bank View: Getting Bigger! that we can’t find online and… Read the rest

Moral Hazard and Another Problem with Illiquid Assets

Andy Spero | September 26, 2008 | 0 Comment(s) |

in a Mark-to-Market Accounting Regime.

Here’s a couple of related issues that we can discuss in the context of today’s The Wall Street Journal article, Bailout Proposal Gets Hung Up Over Central Issue: Will It Work?

We’re deeply concerned about the moral hazard implications of any government bailout, and we doubt that we are the only observer to harbor such dark thoughts.  However, we also think that those implications could be realized immediately rather than, say, during the “next” downturn in some far distant time.  Thus… Read the rest

On Nedges and Sledges and Paving the Road to Hell

Andy Spero | June 23, 2008 | 0 Comment(s) |

Or when is a “hedge” not a hedge?  —when it is a nedge or a sledge or a wild*** guess, of course.

To paraphrase St. Francis de Sales, the road to hell is paved with good intentions because execution matters!  (Elsewhere he scolds perfectionism, too, and argues for a balance: do not be rash, do not over-analyze.  Realize that it is not a sin to be imperfect, but it is a sin to do wrong.)

Back on May 21, we posted Read the rest