BofA Sees Residential Investments Feeding Greener Shoots

Economic growth in the second half of the year is expected to come in “substantially” above previous consensus, according to economic commentary this week from Bank of America/Merril Lynch analysts. Lori Helwing, an economist at BofA/Merrill Lynch, says the analysts there now expect a 2.1% slip in real gross domestic product (GDP) in 2009, 30 bps improved from the old -2.4% estimate. The US economics team also expects 2.6% growth in real GDP in 2010, up significantly from the old 1.8% estimate. The revised projections come as the analysts see... more»

Fitch Takes Action on Older Subprime Mortgage Securitizations

Fitch Ratings took action on thousands of classes of subprime residential mortgage-backed securities (RMBS) issued prior to 2005, including many downgrades of some classes further into triple-C and single-D junk territory and affirmations of other triple-A classes. The actions come as part of Fitch’s ongoing adjustments for deteriorating subprime performance. They indicate RMBS originated before the height of the housing bubble have yet to reach the full extent of default-related losses. Fitch said it expects losses as a percentage of the original pool... more»