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Bad News About Mortgages and Housing

Andy Spero | August 21, 2009 | 0 Comment(s) |

We tend to be pessimistic; so, perhaps the news isn’t as bad as it seems, but consider these two facts, which were both reported in today’s The Wall Street Journal:

  1. A survey by the Mortgage Bankers Association found that 13.2% of mortgages on homes with one to four units were at least one-month overdue or in the foreclosure process in the second quarter. That’s almost 50% higher than at the same time last year, and much of that increase is due to problems with prime loans, not subprime loans. (See

… Read the rest

Volatility and Losses: No End in Sight

Andy Spero | December 1, 2008 | 0 Comment(s) |

If you haven’t read it, For the Vix, 40 Looks Like It’s the New 20 in today’s The Wall Street Journal please know that is a decent column.

We particularly like the paragraph:

“Volatility may not return to its highs, but it isn’t clear when it will get back to normal, either. Volatility breeds fear, which breeds more volatility. There is still too much uncertainty about the losses lurking on bank balance sheets and about the depth and breadth of the current recession to inspire much calm.”

Now,… Read the rest

The Mortgage Crisis: Why Not Incentivize the Private Sector?

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

In today’s (November 26) edition of The Wall Street Journal, there is a Deal Journal article entitled, “Paulson Plan: ‘Truly Idiotic.’”

Although we’ve not gone that far in describing TARP et al, we’ve been harshly critical of Mr. Paulson.  In fact, we’ve mentioned that his series of actions don’t seem to constitute an actual plan, because the word “plan” implies a certain degree of, well, planning or foresight and forethought, and those prerequisites seemed absent in his Panic of ’08.

The quoted accuser in the Deal Journal article is Charles Calomiris, a… Read the rest

Should Citi Be Nationalized as a Warning to Others?

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

Note: We’ll likely expand and edit this post in the morning, but wanted to circulate the idea before bedtime.

We’re rather diligent–but not obsessed– about keeping up with financial new.1  We’ve heard many financial firms announce lay-offs and have read how at a few, like Goldman, senior managers have decided to forgo bonuses.

As we recall, most banks have announced withdrawals from subprime mortgage origination and loans, which seems like a wise move, but given the magnitude of their errors and mistakes, we’re very surprised that we haven’t read… Read the rest

Global Warming and the Mortgage Crisis

Andy Spero | November 12, 2008 | 0 Comment(s) |

Regular readers will know that we often criticize the stupid application of mathematical models, especially ones related to finance and economics; ergo, our firm’s motto, “Thought Before Calculation.”

In that light, we note that in last Friday’s The Wall Street Journal (November 7) the editors excerpted a speech that Michael Crichton gave at Cal Tech in 2003, entitled ‘Aliens Cause Global Warming.’  (For those who don’t know, Mr. Crichton passed away early last week.)

In the speech, Mr. Crichton discussed the Drake equation which attempts to illustrate the winnowing-down process of all the planets in… Read the rest

Scary Thoughts on the Lack of Size and Humor

Andy Spero | October 31, 2008 | 0 Comment(s) |

Disparate issues linked by their overwhelming smallness.

It’s been a few of weeks since our last post, and such a long gap is highly unusual as we’re rarely at a shortage for words.  We’ve been busy, but more importantly, we didn’t feel compelled to write about our normal topics of interest; despite the market volatility, little has changed in the intervening days.

In addition, the accumulated effect of seeing so many behave in such small ways over large matters was and is rather sad and depressing.  No, we’re not talking about… Read the rest

It's Time!

Andy Spero | October 12, 2008 | 0 Comment(s) |

As the IMF, the G7 and the President “endeavor to persevere,” we have of own recommendation to end the global financial crisis.

We’re Not Socialists or Statists:

We very much believe in freedom and personal responsibility; strongly prefer private enterprise to government services and bureaucracy; prefer democracy–well, republican democracy, at least–to centralization and authoritarianism (except in matters of religion); and prefer free markets and capitalism to any of their failed alternatives.  We’re not libertarian, but on economic issues, we’re not that far away.

We’re certainly not leftists.

We’ll hold our nose and… Read the rest