Wednesday, March 14, 2007

subprime vs prime reits / wsj

relatively speaking prime is outperforming subprime.......a very strong argument.....

sounds a little like "b2b is outperforming b2c"........ :-)

relativ gesehen performen prime reits sicher besser....ein sehr starkes argument.....

There are 23 residential mortgage REITs in its index, the National Association of Real Estate Investment Trusts said. And while the companies have different structures and focus on different parts of the market, they're all suffering. Share prices of other subprime lenders, not surprisingly, have fallen the fastest.



Suzanne Schiavelli, an analyst at Morgan Stanley, says the future doesn't bode well for REITs in the subprime space. "Originations are expected to be down 20% to 40% for the market and given that drop in volume and the competitiveness of the market still, it will be difficult for these companies to earn positive returns in the near term.".....


However, analysts say investors are also trashing companies that have very little subprime exposure, which partly reflects a lack of understanding of how financial companies in general, and mortgage companies specifically, are structured.

"Over the past several weeks, I think the market has been painting mortgage REITs with a broad brush," says Brian Harris, senior vice president at Moody's Investors Service. "Mortgage finance is relatively fragmented and mortgage REITs are a relatively new business model, different stresses will affect them." In other words, not all mortgage companies will respond the same way to changing market conditions. ( but non of them will react to the positive side.../ aber sicher wird keiner positiv reagieren...).........

here we go again...relatively ........my favourite word these days.....

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