ivantohelpyou

Here's a nice pairing of articles from the New York Times. The first is about the collapse of the latest boom market, and another about the start of what might be the next boom market.

Just as the technology boom of the late 1990s turned twenty-something programmers into dot-com billionaires, and leveraged buyouts a decade earlier turned Wall Street bankers into Masters of the Universe, the explosive growth in subprime lending turned mortgage bankers and brokers into multimillionaires seemingly overnight.
...
Weakening home prices and rising default rates have rocked the subprime business.

Mortgage Crisis Spirals, and Casualties Mount
By JULIE CRESWELL and VIKAS BAJAJ
March 5, 2007

Party's over. Where's the next one? How about insuring coastal areas?

As most big insurers are cutting back coverage in Florida and other coastal states after a string of catastrophic hurricanes, Mr. Buchmueller has started a company offering policies that hardly anyone else wants to sell — and at as little as half the going rates.

...[And] recent start-ups have been structured to yield high profits as quickly as possible.

In Florida, a Company Finds a New Way to Sell Hurricane Insurance

By JOSEPH B. TREASTER

Published: March 6, 2007

Buchmueller only insures homes worth over $1 million, cherry-picking homes in the market that should hold up better in a storm. Shouldn't be long before others follow the lead.

Labels: finance, insurance, mortgage, wall street