Well - back on 8/21/08 I posted a wordy piece to the effect that the reason housing was broken was that securitization was broken:
- Since the late '80's, loan originators could originate loans and quickly sell them to investment banks or their surrogates, which bundled loans into securities and sold the securities off to other investors.
- Since securitization does not work any more, loan originators must now keep the loans on their books.
- In order to make any money doing this, they need a return significantly above the federal discount rate to account for the newly introduced uncertainty due to inability to sell loans.
- (Mauldin agreed with me on 1.23.09)
So that, in addition to the zillion (well - 30-ish) posts I've put up over the last two years on housing, is the reason "The housing recovery may be stalling". Perhaps they've been reading my old blog posts.