Gee, Wall Street's concocted another sucker bet? Who’d have thought?

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You’ll never guess what happens next

Solar loan defaults

 From the Wall Street Journal

Surging defaults on loans used to buy residential solar panels are cascading through Wall Street, catching bond investors and private-credit funds in their wake.

Some background from WSJ,

About 50,000 U.S. homes had solar panels installed last year, up from about 14,000 in 2019, according to the Solar Energy Industries Association. Falling panel prices fueled the surge, but so did easy credit. GoodLeap and competitors like Sunnova Energy International and Mosaic funneled loans to homeowners through local dealers who sold panels door-to-door.

Glahn: “:Key takeaway: don’t buy anything sold door-to-door.

“You can read the WSJ story, but it all devolves into the ago-old story of asset-backed securities. If you’ve seen the movie Margin Call, you know how that ends.” [FWIW: The film details the massive fraud worked by Goldman Sachs, but of course, Goldman wasn’t the only bank involved in the scam, far from it — just ask Dickie Fuld, or any of his spiritual advisors and models at Enron.]

FWIW: I’ll excerpt a bit more of the WSJ article:

…. GoodLeap doesn’t keep any of the loans it makes, acting instead as a middleman that profits off fees charged for making and servicing the loans. The company is profitable and has pivoted to lending for home improvements such as heat pumps and energy-efficient windows, a GoodLeap spokesman said. The strategy helped GoodLeap avoid bankruptcy, unlike competitors who remained focused on solar. Most GoodLeap solar bonds still pay interest and are valued at 90 cents or more.

The firm finances the loans with borrowed cash, then quickly repays its debts by selling the loans to banks and private-credit firms such as Blackstone. Many buyers of the loans—though not Blackstone—paid for them with money raised by bundling them together into “asset-backed securities,” or ABS. Those are bonds guaranteed by the future payments the homeowners make on the loans. That strategy boosts returns if homeowners pay on time and worsens losses if they don’t.

The financing machine kicked into high gear when interest rates fell during the pandemic, and GoodLeap attracted tech investors such as Michael Dell, who valued its business at $12 billion. Banks such as Goldman Sachs, Citigroup and Credit Suisse sold $5.7 billion of GoodLeap solar bonds to investors, according to ABS data provider Finsight.

Credit-rating companies Fitch Ratings and KBRA gave most of the bonds investment-grade ratings based on analysis of similar deals backed by other consumer debt. When interest rates jumped in 2022, so did the cost of the solar loans.

[Remind you of the mortgage-backed securities peddled by Wall Street until 2008?]

Goldman sold $2.25 million of bonds backed by GoodLeap loans to an investment firm called the Catholic Responsible Investment Funds for nearly 100 cents on the dollar in 2022, according to analysis by The Wall Street Journal of data from Empirasign Strategies. Cumulative losses on the bonds rose to 3.65% in 2024, then nearly doubled this year to 6.3%, one of the people familiar with the matter said.

Traders recently quoted the bonds at 42 cents, according to Empirasign. A spokeswoman for Catholic Responsible Investment declined to comment.

“It was a brand new product…and people made good faith estimations, I suppose [“good faith, I suppose” — uh huh] of what default curves would look like and they happened to be worse,” said GoodLeap Chief Financial Officer John Shrewsberry.

Like other asset-backed securities, solar bonds are split into levels, or tranches, made up of pools of thousands of loans. Investors in the highest tranches get priority on payments and if defaults climb above preset thresholds, interest payments to the junior tranches stop.

Several bonds were close to breaching their thresholds earlier this year, but GoodLeap repurchased defaulted loans from the pools, preventing their triggers. By June, four bonds had defaults in excess of their thresholds, including the one owned by Catholic Responsible Investment. With no further buybacks, the interest payments halted.

Someone is about to get the deal of the decade

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88 Cedar Cliff Road in Riverside, current price $13.995 million, has found a buyer and its sale is pending. The 1928 version of this home was purchased by these owners in 2008 for $11.750 million ($17,895,000 current dollars) and completely rebuilt and expanded beautifully and expensively. It was put back on the market in April 2022 for $25.5 million, and there it has sat for 1,162 days, slowly dropping its price. It long since fell past what I would thought was a fair value, and it’s been a streaming bargain for at least the past year. Someone finally noticed.

(Readers have asked about this before, so I’ll repeat: the land between this property and the shore was carved out and donated by the previous owners and deeded to the Land Trust in perpetuity, so the view and the use of that land is protected, with no tax due. An excellent proposition).

If a price falls in Havemeyer ...

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just don’t kick me

Will anyone notice?* Any price cut in this development, these days, is unusual, but 28 North Ridge Road has been on the market for a full 30 days now at $2.8 million, so dropping it to $2.6 makes sense.

Decent-lookinghouse and location, it’s probably modular-built (the 2-story foyer is a hallmark of that type of construction) but there’s nothing at all wrong with that. Building a house in a factory, in a weather-controlled environment using computer-guided machines can make more sense than having a drunk with a hangover and a skill saw trying the same feat in a sleet storm. Besides, except for Jaguars, which come out of the factory unfinished and already falling apart, when was the last time you saw anyone assembling a new car in a customer’s driveway?

*Okay, that’s a fairly obscure reference, I suppose. Look up Bishop Berkeley.

Sale and a contract (different houses)

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Sale:

55 Long Meadow Road, Riverside NoPo, full asking price of $1.895 million. It was on the market for 49 days before finding a buyer, and that’s a long time in this market — it didn’t used to be – so I thought it might go at a discount, but they got their price, and good for them.

It was probably the guest cottage in the backyard that made the difference.

Under Contract:

18 Maple Drive in Old Greenwich, 14 days on market. Asking price $849,000, it’s a 2-bedroom, 1 bath, 1,274 sq. ft. 1949 home on 0.10 of an acre. Smallsh for Greenwich, but it’s a perfect low maintenance down-sizer; heat it with a couple of incandescent light bulbs, cool it by propping an ice cube-filled wet towel in front of a window fan, and don’t worry about the lawn care workers’ sudden retreat to Mexico, you can trim this one with a pair of tweezers. Did I mention that it’s convenient to transportation? Well it is.

As long as Trump cuts off the federal money that’s been subsidizing their “compassion", Chicago and Illinois taxpayers can pay any amount they care to to “welcome” their illegals — I don’t care

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at least there’s no food shortage in the Land of lincoln

Chicago mayor vows city police 'will not ever cooperate with ICE'

"Look, we are welcoming city ordinance," Johnson said. "Our local police department will not ever cooperate with ICE, whatever their constitutional authority is. That is obviously relegated to the Trump administration. All of our sister agencies, city departments have been thoroughly briefed by a corporate counsel, and I'll pass it over to her in a second about what they can and cannot do."

…. Johnson said that Chicagoans should "rise up" against ICE.

The City of Chicago has allowed in over 51,000 illegal immigrants from the southern border since August 31, 2022.

Search Labs | AI Overview

Several news reports indicate that Chicago has spent hundreds of millions of dollars on services for immigrants and asylum seekers since August 2022

. As of February, Chicago spent $638.7 million on migrant aid, according to FOX 32 Chicago. 

This money has been allocated from several sources including:

  • The American Rescue Plan Act: $94 million.

  • The City Corporate Fund: Over $268 million.

  • Cook County Asylum Seeker Grant: Over $36 million.

  • Federal Health Grant: Over $1.5 million.

  • FEMA Asylum Seeker Grants: Over $87 million.

  • State Asylum Seeker Grants: Nearly $150 million. 

The expenditures have gone towards various services, including housing, food, and healthcare. The city's 2024 budget set aside $150 million for migrant care, according to WTTW. Chicago has struggled to manage the influx of individuals, particularly as a self-described "welcoming city" with policies that impact its ability to cooperate with federal immigration authorities. Illinois is projected to spend $2.5 billion on migrants by the end of 2025, according to a report, says FOX 32 Chicago. Much of this is driven by healthcare costs. 

A fool on a Hill

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After trying to unload it since he completed it in 2019, the builder of 232 Valley Road has again reported that it’s under contract. Current ask is $3.399; he had a previous deal in 2022 when the price was $2.450, but although it went from contract to pending, it went no further. This time may be be different.

It’s not that this is a bad house, but the fact that they’d need a pogo stick to reach it from the street seems to have discouraged buyers.

That original 2019 price was $2.999 million, if you’re keeping track.

Rufus, Santiago, and even the leaders of the white-boy prison gang 211 will be rounding up their crews and sending them off to gun class any day now. Phew!

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Stephen Green:

CIVIL RIGHTS UPDATE: New concealed carry burdens heaped on law-abiding Coloradans.

A state law in effect as of July 1 layers on new education and training burdens for obtaining and renewing permits for the carrying of a concealed handgun in Colorado, this despite data suggesting permit holders are already an exceptionally responsible and law-abiding group.

House Bill 24-1174 passed along party lines in the Democrat-controlled legislature last year, and among other things significantly expands classroom training requirements to obtain a concealed handgun permit (CHP), to include a live-fire exercise and a written exam, with instructors “verified” by the Colorado Bureau of Investigation.

The bill additionally requires a “refresher” class for the renewal of a permit, which includes the exam and live-fire mandates. Nowhere does the bill cite evidence of any issues arising from previous requirements, nor of CHP holders as committing acts of gun violence.

This is on top of the fingerprint-based background check already long required by law.

The in-person course, among other things, covers firearm handling, shooting and storage, as well as state laws on self-defense and purchasing, owning, or transporting a firearm. The course can be broken up into hourly increments if necessary.

Colorado concealed carry permits are valid for five years, and a CHP holder may renew their permit up to 120 days before expiration.

Despite a growing hostility towards CHP holders by the legislature and anti-gun rights groups, Colorado continues to see an uptick in concealed carry permits.

With Democrats dominating both chambers by two-to-one margins, the question isn’t whether they’ll come up with some new infringement, but how quickly — and how annoying.