So, it looks like the ratings agencies are beginning to do their job.<\/p>\n
Of course, this is at absolutely the worst possible time<\/span> for the economy, because it means that Standard & Poor\u2019s is considering downgrading a large portion of the best quality commercial mortgage backed securities<\/a> (CMBS<\/span>):<\/p>\n As much as 90 percent<\/span> of so-called super senior commercial- mortgage backed bonds sold in 2007 may be affected as the ratings firm changes how it assesses the debt, New York-based S&P said today in a report. About 25 percent of the bonds sold in 2005, and 60 percent of those sold in 2006 may be cut. <\/p><\/blockquote>\n (emphasis mine<\/span>)<\/p>\n This, among other news, is driving rates up on CMBS<\/span><\/a>, though rising rates on treasuries, despite the best efforts of the Fed to hold rates down<\/span> are a contributing factor.<\/p>\n Basically, people believe that we will be seeing higher interest rates in the near future, which drives rates up, particularly longer term rates, which is why the spread between the 2-year and the 10-year treasury have hit a new record<\/a>.<\/p>\n It’s why mortgage rates are on the rise, driving down new mortgage applications<\/a>.<\/p>\n In other banking news, the FDIC’s<\/span> problem bank list is now more than 300<\/a>, the highest number in fifteen years.<\/p>\n Meanwhile in energy<\/span> and currency, oil is up<\/a> on Saudi statements that the world economy can “handle” $75-$80\/bbl oil, and the dollar rose on concerns about bad housing data<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" So, it looks like the ratings agencies are beginning to do their job. Of course, this is at absolutely the worst possible time for the economy, because it means that Standard & Poor\u2019s is considering downgrading a large portion of the best quality commercial mortgage backed securities (CMBS): As much as 90 percent of so-called …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[973,1004,1088,985],"tags":[],"class_list":["post-191990","post","type-post","status-publish","format-standard","hentry","category-economy","category-finance","category-real-estate","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/191990"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=191990"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/191990\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=191990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=191990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=191990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}