Friday, January 24, 2014

The Second Subprime Bubble Is Bursting, Gundlach Warns | Zero Hedge

The Second Subprime Bubble Is Bursting, Gundlach Warns | Zero Hedge: "Gundlach's take home message is simple:

“The housing market is softer than people think,” Gundlach said, pointing to a slowdown in mortgage refinancing, the time it’s taking to liquidate defaulted loans and shares of homebuilders that have dropped 14 percent since reaching a high in May. D.R. Horton Inc., the largest builder by revenue, fell 1.9 percent to $21.54 at 9:43 a.m. in New York trading, extending its drop since May to 22 percent.
 
The money manager has cautioned investors before about avoiding subprime. In 2012, he said investors can’t assume the “lines will head south” speaking about loss severities for loans and then last year, referred to the debt as being stubborn."



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