Private investor | Head MBS quants multi-trillion asset manager | Lecturer @Columbia • ex: Quant MS, GS | PM global macro HF
NYC
Joined August 2021
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There's nothing good about inflation, with very very few exceptions...
Inflation reduces debt in real terms. This might work short-term for govy's but investors will soon ask for higher rates as we currently witness.
But mtg holders who locked in their debt for 30 years...
Based on this up-to-date metric, home prices have been stable since mid-June at 511k (80LTV on 409k loan size).
Housing market is holding up well after the 11% correction in March. Now w mtg rates grinding higher again to 6%,we might see another leg of house price corrections.
Job openings number to be released today. Arguably more important than the payroll numbers on Friday with job vacancies the main source of continued wage pressures.
The “overpricing” of mortgages continues to persist into this year. Mortgages are about 1.25% higher than last time US rates were this high during 2018/19. It’s not OAS. My guess is non-bank originators can’t price lower w inverted curve, otherwise they need to close shop.
The phenomenon of laptop landlords who purchase single family homes out of state to rent out is gaining more traction in lower cost areas. “Owning a rental [has become] a core investment , alongside stocks and bonds.”
wsj.com/articles/everyones-a…
CoreLogic (loan level data provider for private label MBS securities) predicts house prices to go up from June 22-June 23 by 4.3%. It's not alone; Street projections are also up by ~5%. But that's the national average. Many local markets face a decline.
fortune.com/2022/08/28/odds-…
Blackstone Group’s Home Partners of America pauses the purchase of single-family homes in almost half of the 80 U.S. markets is serves. That's a strong signal when institutional investors are stepping aside.
insidemortgagefinance.com/ar…
Zava Aydemir retweeted
If we need to bail out 43 million student loan borrowers, maybe most degrees aren’t a very good investment.
This paper uses deep learning to filter fund characteristics that can consistently differentiate high
from low-performing mutual funds (net-of-fees abnormal returns). Most important predictors: fund momentum and flow.
nber.org/system/files/workin…
Even then, job openings remain very elevated. There is a possibility that stale postings mask a decline that is even larger.
This metric is probably even more important than unemployment rate or # payrolls in the context of the discussions around the “Beveridge Curve” as it’s at the core of the question whether the Fed will stop at 3.5% or continue hiking to +5%. See 🧵below.
Home builder of luxurious homes takes a 60% yoy hit in home orders. Prices of homes built by $TOL are above $1mm.
finance.yahoo.com/news/toll-…
19% of U.S. office space is vacant. The surplus of empty office space goes back beyond the pandemic thanks to federal tax breaks for developers, low interest rates etc.
wsj.com/amp/articles/america…
New apartments surpass the 400k mark. That should bring some relief to inflationary pressures but add some on house prices.
bloomberg.com/news/articles/…
“the arrival of an invention affects wage returns and probability of moving out of employment for white- and blue-collar coworkers of the inventor.”
Older, less educated workers have a harder time adapting missing out on 5% p.a. returns.
nber.org/system/files/workin…
One of the most scenic places are alpine villages. Yet almost each village suffers from the same problem: depopulation, like Corippo in Ticino, Switzerland.
A young couple came up with the idea to turn the entire village into a hotel:
youtube.com/watch?v=DpdK5Pfo…
Mortgage lenders confronted w mortgage originations at a historical low point. Refis virtually non-existent and home purchases at the lowest levels in the past 5 years w the home affordability crisis.
Not surprising that mortgage originators go broke.
bloomberg.com/news/articles/…
There’s no systemic meltdown coming this time around, because there hasn’t been the same level of lending excesses as banks were lending at much tighter credit standards. The shadow banking system - non-bank mtg originators - won't pose a thread either:
xitter.gq/theIntuitiveQ/status/1…