Reggie Middleton’s BoomBustBlog.com offers a wealth of information about finance, especially housing market / mortgage market related finance, mortgage securitization, and their impact on the big banks.
Reggie was interviewed on CNBC today, it’s about 4 minutes and worth watching. Reggie has made some excellent calls. His blog posts are usually long and somewhat technical / wonky, but if you get the lingo there’s a ton of valuable info available. In the video interview, note how Reggie’s opening statement is essentially that “nothing has changed, the same issues that caused the banks to fall in 2008 are the same issues that are present right now.” [This writer agrees completely.] The CNBC interviewer counters with “we’ve already gone way through, we’re all the way through this transition”, as if to imply the recession is over and good times are here again.
I highly recommend the following piece on Reggie’s blog where he lays out the case that the big banks are in fact on very thin ice. Reggie presents a very important take on the foreclosure mess: its actual impact on the banks’ financial condition.
Here’s a teaser:
- This is the part that everybody seems to be overlooking…
- All you really need to do is find the banks that accepted a lot of broker business, factor in the expense of the class action suit litigation that is popping up in nearly every state (try Googling it, you will be amazed as big firms and store front lawyers alike are throwing their hats in the ring), and you will see the easiest way out of a potentially tough bind for investors is the put back. Where does this land? Squarely on the balance sheet of the banks – who, BTW have the money to attract even more predatory lawyers. A forensic review of high LTV loans between 2003 and 2007 should find that at the very least 30% were aggressively valued, with a more realistic number coming in at about 60%. Ask anyone who was in in the business at that time, I doubt they will disagree.
Reggie thinks JPM is in serious trouble. Reggie is also short JPM.