On September 25 in Death Spiral Financing I posted a chart (courtesy of Prof. Fil Zucchi) of Credit Default Swaps of the homebuilders.
Homebuilder Credit Default Swaps 2007-09-25
click on chart for a sharper image
Yesterday I asked Prof. Zucchi for an update.
Here it is:
Homebuilder Credit Default Swaps 2007-11-08
click on chart for a sharper image
For more on Credit Default Swaps
Pimco: What Are Credit Default Swaps and How Do They Work?
Wikipedia: Credit Default Swaps
CBOT: CDS Example
Except for KB Homes, the cost of credit insurance (likelihood of default) is up across the board since September 25.
Standard Pacific (SPF) 1316.0-899.2 = +416.8
Beazer Homes (BZH)..... 1054.8-912.8 = +142.0
Hovnanian (HOV)........ 949.1-799.2 = +149.9
Lennar (LEN)............ 459.5-281.0 = +178.5
Pulte (PHM)............. 393.1-360.7 = +032.4
KB Homes (KBH).......... 342.4-351.7 = -009.3
Horton (DHI)............ 362.8-345.0 = +017.8
Centex (CTX)............ 362.0-280.0 = +082.0
Ryland (RYL)............ 287.5-205.0 = +082.5
Toll (TOL).............. 275.8-245.0 = +030.8
Meritage (MTH), currently sitting at 780.0, and MDC Holdings (MDC) currently sitting at 159.3 were not listed in the first chart.
Back in march, Standard Pacific, Beazer Homes, Hovnanian all had CDS spreads at 200+ basis points. The market is now pricing in a sharply increasing likelihood of bankruptcies for SPF, BZH, and HOV, and smaller but still quite significant increases in default risk across the entire sector.
Mike Shedlock / Mish
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