Homeowners Can Hedge Against Real EstateBubble
WALL STREET - (12/20/04) -- A couple of well-known economistsare offering homeowners or financial institutions a chance to hedgeagainst a fall in their local real estate markets, just likehousing giants Fannie Mae and Freddie Mac. MACRO SecuritiesDepositor LLC has filed with the Securities and Exchange Commissionto sell securities that represent either bullish or bearish bets onone or more local home markets. The company was founded by RobertShiller and Allan Weiss, who helped pioneer the system of localhousing price indexes now used by Fannie and Freddie and otherlarge mortgage companies to gauge property value changes inhundreds of markets. Their firm, Case Shiller Weiss (now a unit ofFiserv), also created the CASA automated property valuation systemthat many credit unions and banks use to estimate home valuesonline. Shiller, a Yale economist, is also author of thebest-selling 'Irrational Exuberance,' which warned about thespeculative bubble in the stock market preceding the market fall of2001-2002. The company sees their innovation spawning a newgeneration of risk-hedging mortgage securities offered toindividuals, like home equity insurance polices or mortgagesdiscounted because of the lenders hedging.