A mortgage “fire sale” is coming

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Good morning. We lead off our Sunday morning roundup of
commentary with this from Tom Petruno of the L.A. Times: ‘The fire sale in mortgage securities has yet to begin. But it’s coming. The implications for the rest of financial markets aren’t clear, but when confidence is shaken in one market there usually is collateral damage.’

Lou Barnes at Inman News (his column is behind the pay wall) has similarly ominous thoughts: ‘Each day this mortgage/housing mess more resembles the S&L disaster of the ‘80s (when it’s done, I bet this one is bigger and more painful), and the regulatory boobism of that episode.’

Barnes also this week praised Fed Chairman Ben Bernanke: ‘Bernanke made his best speech by far in testimony to Congress.... He acknowledged that the subprime matter is serious, not confined to that market, and housing will get worse before better -- both revisions of near-term previous thinking.... It takes guts to make a public estimate of losses in the mortgage fiasco (‘$50 billion to $100 billion’), knowing for sure that it’s too early to be correct....’

Photo Credit: Reuters