Home Financing Stocks Have Taken A Hit
The Wall Street Journal has a report on the stock market that includes a look at some housing sector prices. "Look at the companies that make home loans to people with low credit scores. New Century Financial is off about 27 percent this year; Accredited Home Lenders has tumbled about 27 percent. Friedman Billings Ramsey, the investment bank to the housing boom, is off about 43 percent this year."
"Beneath the surface, the canaries have started to look peaked. General Motors and Ford Motor (which have big financing operations) both reported weak sales for April on Tuesday. Three triple-A rated financials, Fannie Mae, Freddie Mac and MBIA, not to mention erstwhile triple-A AIG, are all under various forms of regulatory scrutiny."
Fannie is down 28% from September, Freddie is off 14% since January, MBIA has lost 11% from December and AIG gave up 27% this quarter. GM, even with todays big rise, is 34% lower than year ago levels. One matter not discussed often is that there are only a handfull of triple A firms in the US, way down from the 1980's.