Homebuilder Credit Default Swaps November Update
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On September 25 in Death Spiral Financing I posted a chart (courtesy of Prof. Fil Zucchi) of Credit Default Swaps of the homebuilders.
Homebuilder Credit Default Swaps 2007-09-25
click on chart for a sharper image
Yesterday I asked Prof. Zucchi for an update.
Here it is:
Homebuilder Credit Default Swaps 2007-11-08
click on chart for a sharper image
For more on Credit Default Swaps
Pimco: What Are Credit Default Swaps and How Do They Work?
Wikipedia: Credit Default Swaps
CBOT: CDS Example
Except for KB Homes, the cost of credit insurance (likelihood of default) is up across the board since September 25.
Standard Pacific (SPF) 1316.0-899.2 = +416.8Meritage (MTH), currently sitting at 780.0, and MDC Holdings (MDC) currently sitting at 159.3 were not listed in the first chart.
Beazer Homes (BZH)..... 1054.8-912.8 = +142.0
Hovnanian (HOV)........ 949.1-799.2 = +149.9
Lennar (LEN)............ 459.5-281.0 = +178.5
Pulte (PHM)............. 393.1-360.7 = +032.4
KB Homes (KBH).......... 342.4-351.7 = -009.3
Horton (DHI)............ 362.8-345.0 = +017.8
Centex (CTX)............ 362.0-280.0 = +082.0
Ryland (RYL)............ 287.5-205.0 = +082.5
Toll (TOL).............. 275.8-245.0 = +030.8
Back in march, Standard Pacific, Beazer Homes, Hovnanian all had CDS spreads at 200+ basis points. The market is now pricing in a sharply increasing likelihood of bankruptcies for SPF, BZH, and HOV, and smaller but still quite significant increases in default risk across the entire sector.
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com
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