Remember When the ABX and CMBX Were In Vogue?

Posted on October 27th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

You don’t hear much about the ABX and CMBX indices any longer. The last ruckus over these came about six months ago when the spinners tried to tell us that they really did not portray the true value of the market bla bla bla. Well, it looks as though Markit was accurate after all.

To be honest, I haven’t looked at the ABX and CMBX in about a month.  I used to post ABX prices regularly because they seemed to be a leading indicator to credit market disruptions. So I went back and reviewed this weekend in order to see what impact that the $700bb TARP bailout had on the values.

One would assume that if Treasury was really planing on overpaying for distressed assets, then perhaps the ABX and CMBC would have gotten a bounce. They have bounced many times over the past year and a half for much less.

What I found was what I would expect…that ABX indices are at all time lows and CMBX spreads all all-time wide levels. This surely does not look like a market about to be bought. This looks like a market continuing its downward trajectory as all asset are being repriced lower during the deleverging process. -Best, Mr Mortgage

ABX AAA rated Second Half 2007 below. They are at all-time lows at just 41 cents.

ABX BBB rated Second Half 2007 below. They are near all-time lows at just 5.5 cents.

CMBX A rated, at all time wide levels at 700. This is one of the highest grades.

CMBX BB rated, at all time wide levels at 3405. This is the lowest rated.

More Mr Mortgage

3 Responses to “Remember When the ABX and CMBX Were In Vogue?”

  1. g

  2. A report came out today, New Home sales are UP month over month.

    I find it curious that Mr. Mortgage did not give us his take on this story – normally he is johnny on the spot as he was last friday.

    Putting that aside, as Mr. Mortgage explained to us last friday, year over year sales figures mean nothing, month over month are much more relevant in this market.

    Using Mr. Mortgage’s logic, the increase in Month over Month sales indicates this story is GOOD NEWS, right Mr. Mortgage?

    My own personal take is that this is not good news as year over year sales are way down. Thus, I see nothing good here. Yet by Mr. Mortgage’s logic, if he is consistent, he will say since month over month sales are up, this is good news. Anyone want to take bets on whether he will say that?

  3. Sorry, I cant provide a link to the story about sales being up, heres the text:

    September new home sales rise by 2.7 percent
    Monday October 27, 10:24 am ET
    By Martin Crutsinger, AP Economics Writer
    New home sales post unexpected increase as prices fall to lowest level in 4 years

    WASHINGTON (AP) — Sales of new homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years, the Commerce Department reported Monday.
    Sales of new single-family homes rose by 2.7 percent last month to a seasonally adjusted annual rate of 464,000 homes, Commerce said. Economists had expected sales would drop from the August level.

    The median price of a new home sold in September declined by 9.1 percent from a year ago to $218,400, the lowest price level since September 2004, a period when home prices were rising rapidly as the country experienced a five-year housing boom.

    The surprising increase in September sales still left them 33.1 percent below the level of a year ago as the country is battered by the worst slump in housing in decades.

    The report on a rise in new home sales followed news last week that sales of existing homes rose in September by 5.5 percent, the largest monthly gain in more than five years.

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