Bold investors make fat returns from Dubai crisis 26 Apr 2010 Funds who bought the bonds of Dubai property developer Nakheel at deep discounts late last year have had their courage rewarded. The bonds have jumped 70 percent on hopes that Dubai will ensure they pay out at maturity. That bet looks increasingly safe.
Property tax should target China’s empty nests 22 Apr 2010 Beijing is focusing on credit to curb bubbly house prices. But Chinese homes are financed mostly by savings, not debt. A proposed annual tax might restrain speculation, by introducing a cost for keeping properties empty. It won't cure China's property ills, but it's a start.
General Growth faces unenviable crossroads 21 Apr 2010 The mall owner s minority holders have been pulled from the abyss. But now, one bankruptcy exit plan involves a large slug of pricey warrants while the other gives Simon, a big rival, a potentially costly blocking stake. Whichever stalking horse wins will bolt with some spoils.
Synthetic CDOs needed two to tango 19 Apr 2010 Goldman is in hot water over a 2007 example. Breakingviews explains how these creations helped investors with opposing views on U.S. subprime mortgages place bets and how even then, there were still those who believed subprime would recover as well as nowfamous shortsellers.
China’s property curbs score two out of three 16 Apr 2010 A new crop of tweaks and planned taxes may discourage some speculators and increase the supply of housing. But inflationfearing buyers don't believe prices can really go down. To really get this market under control Beijing has to be tough enough to persuade them they are wrong.
Housing short sales get helpful shot in the arm 6 Apr 2010 Housing busts are messy, drawnout affairs. Short sales when the borrower sells at a loss that the bank agrees to eat are among the quickest of fixes. It s encouraging they re on the rise. Hopefully, the U.S. government s latest interest will encourage many more.
Spain could face years of housing woe 25 Mar 2010 House sales perked up in January, but it's far too early to call the end of the slump. Unwanted new homes are still hitting the market, while more than 1 million stand empty. Even if the unemployment rate starts to fall soon, the market may not fully clear until 2013.
Reform of U.S. housing policy needs more than talk 23 Mar 2010 Fannie Mae and Freddie Mac are potentially the biggest drain on U.S. taxpayers of all. Yet Tuesday's hearing on their future in Congress seemed like a meeting to talk about the next meeting. Reining in the agencies is politically charged but it needs to start soon.
Private MBS market may soon crawl out of bunker 11 Mar 2010 The first big nonstandard U.S. mortgagebacked bond issue in almost two years may be in the works. It will need to be squeaky clean with oodles of investor protection, and the seller may lose money. But the kudos of reopening a key market could be worth it.
Funding crunch points down for UK house prices 10 Mar 2010 The downward turn so far this year is likely to persist. A funding gap for mortgage lenders creates a lack of finance for house buyers. Prices could fall substantially. Just how far depends on how successfully the authorities can buoy growth, inflation and earnings.
U.S. housing giants are city-sized property owners 8 Mar 2010 Fannie Mae and Freddie Mac owned some 131,000 homes at the end of last year, or the rough equivalent of the San Francisco housing market. It's the dark side of guaranteeing mortgages, and one reason why the government should work toward getting out of the business.
Mall owner’s bankruptcy exit plan looks gimmicky 25 Feb 2010 A scheme to revive General Growth by shareholder William Ackman and Brookfield is loaded with bells and whistles. Simon Property s plainold cash offer still sounds better, especially for creditors. But Ackman s contraption may achieve one thing: getting Simon to sweeten its bid.
One big dividend U.S. taxpayers could forgo 24 Feb 2010 Freddie Mac managed to get by without any public funds in the fourth quarter. But the mortgage finance giant isn t done tapping U.S. government coffers. That makes the pound of flesh being extracted from Freddie a 10 pct annual dividend look counterproductive for now.
Where do Chinese go to avoid a bubble? Hong Kong 24 Feb 2010 Hong Kong looks ripe for a housing bubble, with low rates, easy mortgages and an overheated land auction. But Hong Kong residents, who have been there before, are likely to be cautious. Much of the money is coming from Chinese investors, to whom Hong Kong looks like a bargain.
Simon’s $10 bln bid may not be enough to land GGP 16 Feb 2010 Creditors of the bankrupt mall operator are being made whole and many back the deal. But activist William Ackman owns nearly a quarter of the equity and reckons General Growth Properties is worth up to four times as much. There's little downside for him to fight for more.
Fannie/Freddie predictably late tackling bad loans 11 Feb 2010 The U.S. mortgage giants plan to buy $200 bln of seriously delinquent loans out of securities they guarantee. It's about time. The trouble is that rather than address it sooner, the two firms have wasted money putting it off until an accounting change made it look less bad.
Trillion-dollar CMO market looks vulnerable 9 Feb 2010 Investors in US collateralized mortgage obligations were badly burnt by interest rate hikes in 1994. Some of the contributory factors are once again in place. Banks and other owners of CMOs CDOlike instruments based on lowrisk US mortgage bonds could be set for a spill.
Fannie, Freddie fiction stores trouble for future 29 Jan 2010 The two U.S. mortgage giants are escaping public wrath and much in the way of accountability, despite their 12digit bailout and open spigot of taxpayer cash. Failing to address the downside of government subsidizing home ownership means the housing time bomb is still ticking.
Bonus curbs could undo London’s housing recovery 28 Jan 2010 Bankers with big bonuses usually drive up house prices in the UK capital. But this year's payouts will contain less upfront cash. Meanwhile, housing supply is likely to increase. Add it up, and London house prices look set to give up some of last year's surprising minirecovery.
Housing market still lacks a solid foundation 27 Jan 2010 Obama's bet that home ownership can be as much a part of the solution as it was the problem isn't paying off. Declining home sales and loan refinancing suggest the trillions pumped in so far haven't been enough. The market will probably need more propping up to lead any recovery.