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Regionals are exposed to credit crisis

The US regional banks are certainly the next set of financial institutions in the US that are going to get hit by the credit crisis. While these banks did not have significant exposure to the CDOs and RMBSs and other types of derivative instruments that have caused the majority of writedowns to date, they do have large exposure to the housing and construction industry.

Case-Shiller shows home price plunge

The S and P/Case-Shiller Home Price Index for the U.S. housing market came out yesterday and the news was not good. MarketWatch said: Home prices in 20 major U.S. metropolitan areas have dropped a record 14.4% in the past year, Standard & Poor’s said Tuesday. The 20-city Case-Shiller home price […]

Chart of the day: OFHEO House Price Index

Chart of the day: OFHEO House Price Index

Although I prefer the S&P/Case-Shiller House Price Index to look at U.S. house prices (see residential property posts), the OFHEO index has more data, going back to 1975 (instead of 1987 as the 10-city Case-Shiller does). Ultimately, they both tell the same story: accelerating declines in house prices in the […]

Latest additions to Credit Crisis Timeline

2008 05 19 Crédit Agricole boosts risk controls after writedowns hit €3.3bn2008 05 19 Subprime Losses Top $379 Billion on Balance-Sheet Marks: Table2008 05 19 Banks Keep $35 Billion Markdown Off Income Statements2008 05 19 AIG to raise roughly $20 billion in capital2008 05 20 Credit Crisis Will Extend Into […]

UBS warns on non-US property losses

Surprise, surprise. Consider this a holiday surprise as many are out in the U.S. for Memorial Day and in the UK for the Bank Holiday. Multiple sources were reporting that UBS warned in its 985-page capital raising prospectus late on Friday that it anticipates potential further losses in its non-U.S. […]

Ed’s Forum: Memorial Day Makeover

Dear Readers, In honor of Memorial Day and the Bank Holiday in the UK, I have given my blog a bit of a makeover. The look and feel is quite different. Hopefully, you find it easier on the eyes and better for navigation. The title has changed from “Ed’s Forum” […]

UK house prices are falling

From today’s Guardian Newspaper: House prices carry on falling Larry Elliott The Guardian, Monday May 26 2008 House prices in England and Wales fell for the eighth successive month in May as potential purchasers continued to shun the property market during the traditional spring buying season, according to a survey […]

Warren goes to Germany

Warren Buffett is in Germany looking for large acquisitions of German companies. He’s been forced to go global as his size and the US’s competitive position has limited his options in the US. I caught a German-language article from Der Spiegel regarding his activities in Germany. While the article wasn’t […]

UK commercial property market falling as well

The Telegraph notes today that Vulture Funds are circling the London Commercial Real Estate (CRE) market. Prices have fallen, but funds are waiting for the other shoe to drop before stepping in. I imagine this will mean credit losses for financial companies in both residential and commercial property markets before […]

Debt financing gone

Another side effect of the credit crunch is the lack of availability of cheap debt financing for businesses. Companies have two alternatives: they can hold off on needed financing until the credit markets are more inviting or they can raise money through alternative means like convertible bonds and rights issues […]