A SPOON FULL OF SUGAR ..
Thornburg, longtime purveyors of mortgages to the Jumbo mortgage market (loans over $417K), swallowed hard today, but took the necessary medicine. They sold $20 billion in securities and it cost them 5%, some $930 million dollars.
Two observations:
- Somebody just got a heck of deal from them, buying up all those securities at a discount. If it was one of the big banks, or a bunch of them, they just got a lot of 2007 "earnings" really cheap, today.
- Thornburg were keeping a dime for every dollar so far this year, which is average and shows that "the business" is not about to dry up. In the past they were making almost 20%, which is, you know, not sustainable for the kind of value that they add. So, all told, things are back to 'normal'.
THE BIG BATH
Some economists may wring their hands about the announcement from Capital One that they are shuttering their recently acquired GreenPoint Financial mortgage unit.
They are admitting that they overpaid for the whole thing to the tune of $650 million.
The fact that they do not appear to be even trying to sell the unit says something. Not sure if that is a commentary about them, the market, or both ...
In any case, wouldn't you have liked to have 2/3 of a billion in kitty-money to play oopsey-daisy with? (I would).
