Only two questions remain: How long and how far down?
“It's a blood bath,'' suggests Mark Kiesel, a big shot at Pimco. “We're talking about a two-three-year downturn that will take a whole host of characters with it, from job creation to consumer confidence. Eventually, it will take the stock market and corporate profits.”
“The investment banks, insurance companies, pension funds and asset management firms that hold some of the U.S.'s $6 trillion of mortgage-backed securities have yet to suffer the full effect of subprime loans gone bad,” said David Viniar, CFO at Goldman Sachs. “I continue to believe that we haven't seen the bottom in the subprime market. There will be more pain felt by people as that works through the system.”
“The markets seem to be waking up to the fact that the housing market is nowhere near the bottom,” says Chris Gaffney of EverBank. “Borrowers are being squeezed by the Treasury market’s recent sell-off, which has increased 30-year mortgage rates the most since 2004. The national median home price is poised for its first annual decline since the Great Depression.”
“It's not just a housing recession anymore -- it looks more and more like an economic recession,” says Nouriel Roubini, a former economist with the Clinton administration.
"We've been expecting to see housing weakness take a toll on California,” Ryan Ratcliff, an economist at UCLA, said this morning. “The fact that it hasn't has been a surprise to us. But based on the historical record, it wouldn't be wise to say we'll dodge the bullet.”
“It's a blood bath,'' suggests Mark Kiesel, a big shot at Pimco. “We're talking about a two-three-year downturn that will take a whole host of characters with it, from job creation to consumer confidence. Eventually, it will take the stock market and corporate profits.”
“The investment banks, insurance companies, pension funds and asset management firms that hold some of the U.S.'s $6 trillion of mortgage-backed securities have yet to suffer the full effect of subprime loans gone bad,” said David Viniar, CFO at Goldman Sachs. “I continue to believe that we haven't seen the bottom in the subprime market. There will be more pain felt by people as that works through the system.”
“The markets seem to be waking up to the fact that the housing market is nowhere near the bottom,” says Chris Gaffney of EverBank. “Borrowers are being squeezed by the Treasury market’s recent sell-off, which has increased 30-year mortgage rates the most since 2004. The national median home price is poised for its first annual decline since the Great Depression.”
“It's not just a housing recession anymore -- it looks more and more like an economic recession,” says Nouriel Roubini, a former economist with the Clinton administration.
"We've been expecting to see housing weakness take a toll on California,” Ryan Ratcliff, an economist at UCLA, said this morning. “The fact that it hasn't has been a surprise to us. But based on the historical record, it wouldn't be wise to say we'll dodge the bullet.”
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