Above the Fold

A Different Kind of Trouble in the Mortgage-Backed Securities Market

Mortgage-backed securities (MBSs) were at the epicenter of the Great Recession more than 13 years ago. These sometimes complex products allow investors to participate in the housing and commercial real estate markets by bundling tranches of real estate mortgage loans into an interest-bearing package that can be sold. And while high-quality MBSs have recovered nicely since the pandemic first hit, lower-rated commercial mortgage-backed securities (CMBSs) bonds are becoming a much harder sell for investors. 

CMBSs can include a myriad of business and real-estate types from small mom-and-pop strip malls to larger, more established retail locations that house more stable tenants. Some experts believe that CMBSs will have a higher default rate than the whole of the market, but are optimistic that the diversity of the typical CMBS and the typical rent reserves that often come with commercial loans will help keep them performing as America claws its way out of recession. Certain pools of mortgage assets, like hotels or retail, may be slightly more stable than those focused on office space as social shifts continue to gravitate to remote work. 

Three Things 

1. Get Your Image (Rights) Back From Social Media – Facebook will be allowing people to gain control over who and where their images are posted. The program is starting with its commercial partners, but is expected to include the general public. In other words, if your intellectual property (imagery for now) that was originally posted on Facebook is reposted elsewhere, you may soon have the ability to issue a takedown order or even ask for compensation. 
2. Fingerprint Unlock Coming Back to iPhone? – Apple-watchers and those of us who still don’t love the face-unlock feature on the new iPhones might get a pleasant surprise. The new iPad air now includes a small fingerprint sensor at the top of the display case — and some believe that this feature could be coming to the new iPhone 12 (or whatever they decide to call it). 
3. Gold Coins, Bitcoins and Now … Diamond Coins! – The Diamond Standard Co. will be selling $5,000 diamond coins worth $5,000 each. The 11 or 12 diamonds embedded in the coin will go through an advanced sorting, GIA grading and auditing before inclusion. Each coin will also contain an embedded chip that turns it into a digital asset, ready for what they hope will trade on what would be the first centralized diamond exchange. 

Did You Know?

And Speaking of Diamonds …

One of the largest, rarest diamonds ever discovered is set to sell via online auction at Sotheby’s. It’s a 102.38 carat, D color, flawless oval diamond expected to fetch anywhere from $11 million to $30 million. The diamond is about the size of a lollipop and was originally cut from a 271 carat rough diamond discovered in the Victor Mine in Ontario, Canada. While it’s not the most expensive diamond in the world, it could set a record for the most expensive jewel ever sold to an online bidder. 

A Moment for RBG

We at Westwood offer our deepest sympathies, thoughts and prayers to the family, friends and all those who have been positively impacted by the extraordinary life work of Supreme Court Justice Ruth Bader Ginsburg, who passed on Sept. 18.