Marta Jones Carmody Blog


FASB may push for expanded use of mark-to-market
Posted by John McClelland on March 15, 2010 in No Category
Today there was an interesting article in the Wall Street Journal regarding possible strengthening in mark-to-market rules. Banks have often been opposed to these rules because they are forced to write down values in times when they believe markets to be irrational, when investors flee a market based on fear. Conversely, banks may be holding loans at artificially high-values. Investors are tired of this, knowing that banks are holding some loans in la la land and are not moving forward in moving these loans and ult... read more
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Expansion in REIT values expected

Significant captial raised, outlook
Posted by John McClelland on March 12, 2010 in No Category
Ernst & Young recently released its Global Real Estate Investment Trust Report 2010: Against all odds. For U.S REITs, the report notes several key components that factor into their outlook. Firstly, after a horrible 2008 and a choppy 2009, REITs have been able to raise significant capital, mostly through the sale of shares. Another aspect of this sector is deleveraging, although many REITs still have significant debt. I would guess that many of these REITs will have to pay down some more of this debt befor... read more
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Fundamental Values

Price/Rent Ratio
Posted by John McClelland on March 01, 2010 in No Category
We've discussed trends in median prices and Case-Shiller as well as IHS Global Insight's view that Las Vegas is the most undervalued large metro area but fundamentally, where are Las Vegas home prices? While fundamental values are unobservable, we can use proxy indicators such as the price-to-rent ratio. One can think of this like a price/dividend ratio in stocks. As the exhibit below demonstrates, the recent price/rent ratio is far below the baseline, which we've established based on the 2001-2002 years be... read more
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S&P/Case-Shiller Update

Each Price Tier Registers an Increase
Posted by John McClelland on February 23, 2010 in No Category
The S&P/Case-Shiller home price index came out this morning. Unfortunately it is so popular that the site crashes and I have just obtained the data. We do observe seasonality in prices in Las Vegas so I like to use the seasonally adjusted indices. Interestingly, the most current observation, December 2009, registered a month-to-month increase in all price tiers. A positive change has occurred for both November and December. Was this a purely organic increase? Probably not. The tax credit has been a relevan... read more
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Some notes on Valuation

National Rankings and Trends
Posted by John McClelland on February 17, 2010 in No Category
Modern locomotives are diesel-electric hybrids where a diesel drive motor powers a generator that in turn powers electric motors at the drive wheels. Regional economies are dynamic motors that power the locomotive...the United States. While each wheel, the regional economy has its own motor, there is a drive mechanism at the top, chiefly monetary policy and with respect to Las Vegas's regional economy, national employment can be thought of as a drive engine. In Las Vegas we really seek a broad nation... read more
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