When asked how the NCUA expects the economy to perform, and what effect it might have on corporate bonds, Office of Corporate Credit Unions official Scott Hunt said economic forecasting is not the regulator's business.
However, Hunt said until housing markets in the so-called "sand states" of California, Nevada, Arizona and Florida stabilize, mortgage backed securities owned by corporates will experience "continued pressure."
Hunt said he will know more about the state of corporate investments next month, after Clayton Holdings delivers valuation reports to many corporates. U.S. Central Chief Financial Officer Kathy Brick said her shop anticipates releasing its third quarter Clayton report around Oct. 31.
Recommended For You
California Department of Financial Instituions Commissioner William Haraf said the worst hit housing markets in his Golden State are improving, but said "more established neighborhoods" are experiencing rising delinquency rates, and pending resets on payment option and interest only loans could produce "ongoing pressure" on delinquencies, foreclosures and home prices.
Haraf said he doesn't know enough about corporate portfolios to comment on how the economy might affect them. However, he did say his "current mantra" is "hope for the best and plan for the worst", adding "there's still a great deal of uncertainty about the economy."
Haraf echoed what U.S. Federal Reserve Chairman Ben Bernanke said earlier today, adding that even if the economy has bottomed out, the recovery could be very weak.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
