Housing Doom Housing Bubble Blog

Hedge fund woes have spread to Australia:  According to this morning’s Sydney Morning Herald:  [Hat tip to our friend in NZ!]

A SYDNEY-based hedge fund manager that manages $US2.5 billion has put a limit on withdrawals from two of its funds that invest in risky debt products known as collateralised debt obligations, expressing fears the funds would otherwise not survive.

Limits on withdrawals on the two Basis Capital Funds Management funds were imposed after the funds fell during June, by 14 per cent for the BasisYield Alpha Fund, and 9 per cent for the Basis Pac-Rim Opportunity Fund.

[A Basic Capital]  newsletter specifically singled out credit ratings agencies’ moves to downgrade their ratings for risky debts, which are being repriced in the wake of large losses stemming from US "subprime" lending to householders.

My personal favorite quote:

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It’s Op-Ed Friday, and Friday the 13th. How lucky today will be for housing is uncertain, but it is certain that we’d love to see your links, thoughts, stories, and ideas.

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We used to take a lot of heat for our pessimistic moniker, but not any more. In fact our "doomish" name is looking a little tame these days.  Check out this headline from the New York Sun, National Housing Horror Gets Gorier:

Although some real estate markets, such as New York City’s, are percolating, it’s clear that the national housing horror show is far from over. If anything, it’s getting gorier.

As one worried trader, who asked not to be identified, put it: "The stock market’s in for more hell from housing; the subprime mortgage debacle seems like it’s still in its early stages."

The article highlighted some of the current concerns.

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