Sub Prime Anecdotal

My commute  always includes the Path ride from New Jersey into the World Trade Center station in downtown NYC. Typically at the top of the exit stairs there are shills(advertisers) passing out leaflets/flyers to those entering and leaving the station. The last two days there have been two young ladies passing out red cards during both the morning and evening rush hours. The normal pattern is for commuters to take a handout, glance at it and drop it a few feet farther on. The sidewalk is normally littered with discards.

Last night I managed to get a seat on the train (barely beat a pregnant lady out for the last spot-only a little hip action). A woman standing in front of me caught my eye. She was carefully reading one of the red handouts. Several more people boarded the train and I noticed that they were also carrying and reading the red cards. By reading over a shoulder I determined that the cards were offering loans at a discount-second mortgages or whatever-the fact that people were reading them carefully brought home just how deep the problem probably is. Anecdotal I know but…


2 Responses to “Sub Prime Anecdotal”

  1. 1 Mitch October 18, 2007 at 12:58 am

    Hi SOG,

    First of all, thank you for a magnificent blog. It is refreshing to hear from someone well-entrenched at the front, rather than the ‘objective’ analysis by peripheral participants.

    As such, I’ll be direct as well. Although I found your anecdote regarding 2nd mortgage peddlers insightful, incisive, and interesting, I was surprised you didn’t mention the spike in volume on CXA (SPDR Lehman California Municipal ETF) today, given your recent focus on Muni Bond ETFs.

    The 55,400 shares of CXA that traded today would seem to me statiscally significant, notwithstanding the short history of the product. I am of course comparing it to the other recent/year-to-date volumes of trading in the first week of launch. Of course, nothing can compare to the 55K / 112K volume of RWX…

    However, unlike RWX, which saw a huge number of small odd-lots indicating stick assets, I could not deduce whether the volume in CXA was sticky assets or market makers. Once again, the limited trading history of the ETF and yesterday’s ‘strange’ trades make it hard to compare, but nevertheless it’s an interesting drama in the muni world. Wouldn’t you agree?

  1. 1 Army Men Sarges War » Sub Prime Anecdotal Trackback on November 14, 2007 at 3:09 pm

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