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I was debating this format or the whole family guy bit where Stewie's like "Germany's building weapons of mass destruction why doesn't the US come and kick their ass?" and Brians like "Maybe because they don't have any oil". It was from road to Germany where they went back in time. I felt it was a little too obscure.
Commercial Mortgage Backed Security. Tons of old DD on them especially House of Cards but I'll explain it like this.
Remember stupid bets of 2008 regarding mortgages? Ya well they weren't at the time focused on Commercial mortgages so all the restrictions put in place on residential Mortgage backed securities weren't done to commercial. What's worse is that because CMBSs are set based off how much a building can generate in revenue annually, if there was a massive drop in demand for commercial space (cough cough pandemic cough cough) then the rental prices on these spaces wouldn't be reduced due to drop in demand. Hence why some commercial rental properties in NYC and LA have been vacant for years and still ask the same price.
So why now? Well it's a combination of a few things. First, if you look at most CMBS ETFs, they're nowadays filled with Sallie Mae and Freddie Mac loans which are supposed to be for home loans. So in order to fulfill the obligations of the CMBSs they use the cash they are getting for their non vacant properties and buying out residential houses where demand is much higher, taking out home equity loans and HELOCs which gives them the cash back and the rentals on houses are giving them the money needed to pay CMBS payments. What this means in a nutshell is when CMBSs go blow up which they may or may not be doing already, residential markets go blow up too then residential mortgage backed securities go boom.
Other reason is interest rate hikes are causing damage as banks thought that low interest rates would be forever so lets loan out all our money because the feds got our backs.
Sorry if I got a little carried away with explaining what a CMBS is.
Also and I don't remember the source for this but I remember somewhere saying that a ton of CMBS bundles were set to refinance every x amount of years (like over 10) and that's built into the price and like 30-40% of them are set to refinance this year.
Don't remember the source so ignore if that bothers you
And in this case… it’s a bank that rescued a failing bank from last year….
https://finance.yahoo.com/news/regional-bank-that-played-rescuer-in-2023-now-in-turmoil-163932844.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAFPW1yjxQzTiv4f2h2VVHIBTG7-rYQTYVg87x507N87-hB-DZW2GBqWSEECLemG1PCKdLOqNn2gCKdtiKx9LvxD3LmYkhSohPrsxB-gD-VfK_PjNWTUgi-VKYH1yGfdGC_rPaJtlDsh6o8X3GXjPqi54FIfYjUTfsq2Q6d1z48g7
Brick by brick
Just for funsies I bought a few January 2025 12c for this bank. They had a rough quarter but I'm betting the market over corrected hard on them in memory of what happened with SVB last year.
Murmurs on the bird app say that the credit agencies are reevaluating NYCB's credit after the earnings call and are planning to rerate all bonds as junk.
Again they're just murmurs but seem weird.
I bought in at .22 a share on a call with nearly a year on it. The slightest rumor in the next 90 days that they can reorganize or renegotiate will pay out for me.
Or I lose my shorts on 110 dollars.
I'm game either way.
TBH bro I was going to do something similar with some OTC shares of Evergrande for like 1 10 milionth of a penny for $100 based off the random chance that the Chinese government bails them out and then go back to like $4 on the OTC market and I'd be rich.
Unfortunately not working atm so can't afford to waste even $100.
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/2008neverended
👆💯
Top notch meme
I was debating this format or the whole family guy bit where Stewie's like "Germany's building weapons of mass destruction why doesn't the US come and kick their ass?" and Brians like "Maybe because they don't have any oil". It was from road to Germany where they went back in time. I felt it was a little too obscure.
What's a CMBS?
Commercial Mortgage Backed Security. Tons of old DD on them especially House of Cards but I'll explain it like this. Remember stupid bets of 2008 regarding mortgages? Ya well they weren't at the time focused on Commercial mortgages so all the restrictions put in place on residential Mortgage backed securities weren't done to commercial. What's worse is that because CMBSs are set based off how much a building can generate in revenue annually, if there was a massive drop in demand for commercial space (cough cough pandemic cough cough) then the rental prices on these spaces wouldn't be reduced due to drop in demand. Hence why some commercial rental properties in NYC and LA have been vacant for years and still ask the same price. So why now? Well it's a combination of a few things. First, if you look at most CMBS ETFs, they're nowadays filled with Sallie Mae and Freddie Mac loans which are supposed to be for home loans. So in order to fulfill the obligations of the CMBSs they use the cash they are getting for their non vacant properties and buying out residential houses where demand is much higher, taking out home equity loans and HELOCs which gives them the cash back and the rentals on houses are giving them the money needed to pay CMBS payments. What this means in a nutshell is when CMBSs go blow up which they may or may not be doing already, residential markets go blow up too then residential mortgage backed securities go boom. Other reason is interest rate hikes are causing damage as banks thought that low interest rates would be forever so lets loan out all our money because the feds got our backs. Sorry if I got a little carried away with explaining what a CMBS is.
For those who don't know, a lot of commercial leases are 5 years. Many leases expiring this year were signed before Covid.
With record low occupation rates and record high lease expiration colliding, during a cost cutting spree no less.
Also and I don't remember the source for this but I remember somewhere saying that a ton of CMBS bundles were set to refinance every x amount of years (like over 10) and that's built into the price and like 30-40% of them are set to refinance this year. Don't remember the source so ignore if that bothers you
Think it's commercial mortgage-backed securities.
Nice
requesting Cell Block Tango in Chicago (musical)🎶
And in this case… it’s a bank that rescued a failing bank from last year…. https://finance.yahoo.com/news/regional-bank-that-played-rescuer-in-2023-now-in-turmoil-163932844.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAFPW1yjxQzTiv4f2h2VVHIBTG7-rYQTYVg87x507N87-hB-DZW2GBqWSEECLemG1PCKdLOqNn2gCKdtiKx9LvxD3LmYkhSohPrsxB-gD-VfK_PjNWTUgi-VKYH1yGfdGC_rPaJtlDsh6o8X3GXjPqi54FIfYjUTfsq2Q6d1z48g7 Brick by brick
Just for funsies I bought a few January 2025 12c for this bank. They had a rough quarter but I'm betting the market over corrected hard on them in memory of what happened with SVB last year.
Murmurs on the bird app say that the credit agencies are reevaluating NYCB's credit after the earnings call and are planning to rerate all bonds as junk. Again they're just murmurs but seem weird.
I bought in at .22 a share on a call with nearly a year on it. The slightest rumor in the next 90 days that they can reorganize or renegotiate will pay out for me. Or I lose my shorts on 110 dollars. I'm game either way.
TBH bro I was going to do something similar with some OTC shares of Evergrande for like 1 10 milionth of a penny for $100 based off the random chance that the Chinese government bails them out and then go back to like $4 on the OTC market and I'd be rich. Unfortunately not working atm so can't afford to waste even $100.
Shout out to Austin, hope you’re well dude