Monday, February 08, 2010

Dow breaks 10k --- again...

Like I said the Dow breaking 10k isn't a meaningful indicator, but it caused most media outlets to focus on the markets again. The markets are again within 2% of key support levels. Much of today's action seems to be focused on weaker economies that are teetering - Greece, Portugal and Spain. These countries might not be in much trouble, but the market thinks they are and that's all that matters right now. There is great irony in the fact that PBS is talking about Spain's wonderful high-speed train system right now while the country crashes and burns under a weight of debt.

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I can't really tell you how startling this is....

"U.S. prime jumbo loan performance continued to weaken in January as serious delinquencies rose for the 32nd consecutive month, according to Fitch Ratings in the latest edition of Performance Metrics.

Overall, prime jumbo RMBS 60+ days delinquencies rose to 9.6% for January (up from 9.2% for December 2009)."

To put a little color around these numbers - prime borrowers were considered the best risk for banks. They have stellar credit ratings and strong income to support their borrowings. Prime jumbos are loans above $417k to the best borrowers. So almost 10% of large loans to the best borrowers are behind are their payments. This is a shocking trend.

Cheers!

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