Now look at when Ownit, Sebring and the rest started going under.
12/05/2006 - Sebring
12/07/2006 - Ownit
12/20/2006 - HMIC
12/08/06 - MLN said it was still funding loans in a press release (mysteriously), now MLN no longer funding loans as of last week.
Ameriquest being sold?
First Franklin sold.
ECC Capital Corp being sold to Bear Stearns.
Option One on the block.
Sure seems like the loan production needs to go somewhere. I saw something regarding NCC (I think, let me look some more, it was from a different computer) tightening its guildelines.
All the bad loans going into fewer and fewer companies... snowball.
On another subject, ADP has released its estimate of private employment for December, showing a 40k job loss. My guess is that this reflects a slower pace of retail hiring than assumed in the seasonals. A combination of tepid sales, gift card giving and moving hiring forward to accomodate earlier sales efforts all played a part. We'll see Friday, I guess.
k harris, yes, but the ADP report hasn't been a very reliable predictor for the BLS jobs report. Of course the "market" expects 115K on Friday, so this would be shock.
I have a slightly off-topic question for the financial experts who frequent this blog: I am trying to understand the dynamics of the rash of impairment charges we've seen from home builders recently. In particular, I'd like to know if they are required to test their inventories on a quarterly or yearly basis.
I've noted that after announcing their huge impairments, Hovnanian went on to provide future guidance that assumed they would have to take no more charges this fiscal year. That seems to me to be extremely suspicious given the current trends in the housing market.
Anyway, I was wondering if Hovnanian was relying on the fact that they wouldn't have to adjust their inventories for another year.
The past year (half year, actually) is the only period during which ADP has actually published its data on a monthly basis. Everything else is during the period of creating the model. The good fit is manufactured.
The bad fit this year is partly the result of revisions. ADP had a bad - really bad - beginning, and then started hitting the number pretty closely for about 3 months. However, ADP asserted in its early press releases for the series that it was a good predictor of BLS revisions. If ADP private hiring was higher than BLS private hiring in a given month, the idea was that BLS would probably revise upward. Most of the BLS revision in the last half of the year have made ADP look worse, not better.
So our host is absolutely right. ADP has not been a good predictor of BLS private hiring. The average miss between ADP and BLS for the 3 months to November is 91k.
umber2son,
All Assets must be valued at every reporting date, quarterly for SEC companies.
There are ways of moving Assets from a company's Balance Sheet. It requires unrelated parties investing with the company in question in a venture not central to the company's own business. Believe it or not, investing in raw land could meet the test for a home-builder. Alternatively, a company could purchase options to buy land. Similar to stock options, the loss is often 100%, but is 100% of the option price, which is generally a small percentage of the cost of the asset (Land).
I don't want to write an endless post. If you Google "Variable Interest Entities" you'll find more info on the Ventures I referred to above.
American MBA obviously have a better reputation and a more extended alumni network in the USA. Try to pick a school with a strong global brand name. Teaching methods vary from school to school: some emphasize teaching theory while others prefer the distance case method. Check out this site for good online MBA options Welcome to IITM - The pioneers in Online MBA Education from USA
I can't wait for the EHS report (and I guess the PHS index this thursday) to see if this is real or just a symptom of the subprimes going under.
If you look at subprime versus the ABX index (click on ABX-HE-BBB- 06-2):
Apache Tomcat/5.0.28 - Error report
End of November it tanked..
Now look at when Ownit, Sebring and the rest started going under.
12/05/2006 - Sebring
12/07/2006 - Ownit
12/20/2006 - HMIC
12/08/06 - MLN said it was still funding loans in a press release (mysteriously), now MLN no longer funding loans as of last week.
Ameriquest being sold?
First Franklin sold.
ECC Capital Corp being sold to Bear Stearns.
Option One on the block.
Sure seems like the loan production needs to go somewhere. I saw something regarding NCC (I think, let me look some more, it was from a different computer) tightening its guildelines.
All the bad loans going into fewer and fewer companies... snowball.
Here is a story about Ownit and its employees that just came out:
Demise of Ownit Mortgage hits home - Los Angeles Times
Forgot to post the numbers for the MBA purchase application index, notice the jump at 12/6 which corresponds with the week before..
11/8/2006\t620.9\t402.2\t1897.9
11/15/2006\t647.5\t412.9\t2022.2
11/22/2006\t623.6\t401.4\t1935.3
11/29/2006\t599.0\t406.7\t1749.6
12/6/2006\t647.6\t426.6\t1989.7
12/13/2006\t721.2\t463.8\t2304.4
12/20/2006\t647.6\t436.5\t1968.8
12/27/2006\t555.8\t390.2\t1604.6
1/3/2007\t575.6\t406.9\t1640.4
Still not definitive, but something makes you go "Hmmm"
On another subject, ADP has released its estimate of private employment for December, showing a 40k job loss. My guess is that this reflects a slower pace of retail hiring than assumed in the seasonals. A combination of tepid sales, gift card giving and moving hiring forward to accomodate earlier sales efforts all played a part. We'll see Friday, I guess.
CR,
Is it possible to break the bar graph based on refinance share of mortgage activity?
thank you very much for sharing your knowledge with us.
k harris, yes, but the ADP report hasn't been a very reliable predictor for the BLS jobs report. Of course the "market" expects 115K on Friday, so this would be shock.
Best to all.
the ADP report hasn't been a very reliable predictor for the BLS jobs report.
The correlation in the past looks to have been pretty good, with the exception of the past year.
I wonder why it's so hard to get job data right? I don't believe any report at this point after those massive BLS revisions.
ADP Employment Report
I have a slightly off-topic question for the financial experts who frequent this blog: I am trying to understand the dynamics of the rash of impairment charges we've seen from home builders recently. In particular, I'd like to know if they are required to test their inventories on a quarterly or yearly basis.
I've noted that after announcing their huge impairments, Hovnanian went on to provide future guidance that assumed they would have to take no more charges this fiscal year. That seems to me to be extremely suspicious given the current trends in the housing market.
Anyway, I was wondering if Hovnanian was relying on the fact that they wouldn't have to adjust their inventories for another year.
TIA.
ac,
The past year (half year, actually) is the only period during which ADP has actually published its data on a monthly basis. Everything else is during the period of creating the model. The good fit is manufactured.
The bad fit this year is partly the result of revisions. ADP had a bad - really bad - beginning, and then started hitting the number pretty closely for about 3 months. However, ADP asserted in its early press releases for the series that it was a good predictor of BLS revisions. If ADP private hiring was higher than BLS private hiring in a given month, the idea was that BLS would probably revise upward. Most of the BLS revision in the last half of the year have made ADP look worse, not better.
So our host is absolutely right. ADP has not been a good predictor of BLS private hiring. The average miss between ADP and BLS for the 3 months to November is 91k.
How do impairment charges occur ?
Everything else is during the period of creating the model. The good fit is manufactured.
Thanks, the impression their page gives is pretty misleading - it looks like the report has been around for a while and had a very strong correlation.
Any other sources out there?
I also see mention of this other index not looking so positive:
Hudson Employment Index Archive - Hudson United States
umber2son,
All Assets must be valued at every reporting date, quarterly for SEC companies.
There are ways of moving Assets from a company's Balance Sheet. It requires unrelated parties investing with the company in question in a venture not central to the company's own business. Believe it or not, investing in raw land could meet the test for a home-builder. Alternatively, a company could purchase options to buy land. Similar to stock options, the loss is often 100%, but is 100% of the option price, which is generally a small percentage of the cost of the asset (Land).
I don't want to write an endless post. If you Google "Variable Interest Entities" you'll find more info on the Ventures I referred to above.
That's a great help, Lama. Sincerest thanks.
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It will be interesting to see when the 4Q numbers comes out, if the MBA guys move up the list
asdf
American MBA obviously have a better reputation and a more extended alumni network in the USA. Try to pick a school with a strong global brand name. Teaching methods vary from school to school: some emphasize teaching theory while others prefer the distance case method. Check out this site for good online MBA options Welcome to IITM - The pioneers in Online MBA Education from USA