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Whither Credit Quality.
By most accounts, the economy seems to be improving. Confidence is increasing, and economic growth seems to be at least stabilizing, and perhaps gaining steam. But so far, that hasn't shown up in the employment statistics. At 6.1%, the official unemployment rate hardly seems to have reached crisis proportions. But beneath the statistics are some troubling trends. The proportion of people who remain unemployed for more than half a year has been rising. And an increasing ratio of people who describe themselves as "self-employed" in the Labor Department's survey might mask additional unemployed or underemployed households.
So it doesn't come as a big surprise that some economists, including Mark Zandi of Economy.com, think that mortgage credit quality may continue to erode next year even if the economy improves. But the main factor behind worsening credit quality may not be the job situation, it may be interest rates. Rising rates are likely to put a damper on house price appreciation, which has already slowed from its heady pace in recent years. And home price gains, along with lower interest rates, have helped to prop up credit quality in recent years.
Falling rates ...
- Manager confines risk to interest rates or credit quality. (Kathleen D....
- Magazine article from: The Bond Buyer Roy, Elizabeth March 18, 1996 700+ words
...thing at a time - interest rates or credit quality. As manager of...uncertain about interest rates, McClaskey has...portfolio's credit quality allocation much...events other than interest rates. In the last...
- Active account: following an eventful year, pricing power, credit quality and...
- Magazine article from: Buyside Chensvold, Christian M. May 1, 2002 700+ words
None one disputes the importance of the events of September 11, yet it is a tragic irony that the attack on the World Trade Center in the heart of America's financial center should have stimulated a sector of financial services. As it goes with the markets, events work in chains, and can have
- BOK Financial Reports Record Earnings for 14th Consecutive Year; Solid Loan...
- Press release article from: PR Newswire January 25, 2005 700+ words
...to last year. Outstanding credit quality led to a reduction in our...interest revenue and improved credit quality, earnings for the fourth...benefit modestly from rising interest rates. Credit quality remained strong throughout...
- Fund Performance: Amid Rising Interest Rates, High-Yield Portfolios Outperform.
- Magazine article from: The Bond Buyer Karchmer, Jennifer September 8, 1999 700+ words
...avoided any major breakdown in credit quality in their investments. And that credit quality is the main issue for high...of changes in perception of credit quality of the issuer, not because of interest rates." To compensate for the higher...
- American Express Reports Record First Quarter Net Income of $692 Million;...
- Press release article from: PR Newswire April 24, 2003 700+ words
...losses, reflecting further improvement in credit quality as well as the benefit of lower interest rates. "Despite a severe slowdown in the travel...decrease in total provision for losses. Credit quality remained very strong in TRS' charge and...
- Fund Performance: Rising Interest Rates Hammered Most Portfolios in 2Q.
- Magazine article from: The Bond Buyer Fine, Jacob July 9, 2004 700+ words
...term bond prices when interest rates rise. Hayes also stocked...high coupons and high credit quality -- attributes that also...to suffer as much when interest rates rose. The fund has an average credit quality of double-A plus...
- Analysts: Student Loan Law Provisions Could Hurt Underlying Credit Quality.
- Magazine article from: The Bond Buyer November 16, 1998 700+ words
...student loan interest rates could have an impact on the credit quality of the underlying...The lower interest rates on new student...impact of reduced interest rates." "If the...In terms of credit quality, whenever you...
- Decline in credit quality slows in U.S., but scene abroad still bleak, S&P...
- Magazine article from: The Bond Buyer O'Donnell, Kathie January 12, 1993 700+ words
...for domestic credit quality, but showed...in U.S. credit quality; obviously...climate." Interest rates and inflation...growth and low interest rates would give...companies' credit quality in the near...
Source: HighBeam Research, Whither Credit Quality.