Analysts call wife's refusal to sell $1.5M home a liquidity crisis
A MarketWatch couple's fight over selling their $1.5 million family home arrives just as Wall Street starts pricing sentiment itself.
The term sheet runs fourteen pages and never once uses the word "memories." That omission tells you everything. On Monday a Greenwich hedge fund began buying the pencil height marks on empty-nesters' kitchen doorframes and bundling them into a tradable security.
The timing is not an accident. MarketWatch this week published a letter from a spouse who cannot bear to sell the $1.5 million home where the kids grew up, while the other half wants a $600,000 place and the difference in an index fund. Wall Street read that letter the way a wolf reads a limp. Sentiment, it turns out, is an asset class, and asset classes exist to be shorted.
The fund calls the product a Residential Attachment Obligation. It pays out when the homeowner finally lists the house, and pays nothing while they keep standing in the hallway touching the wall. Fourteen buyers took positions on day one. By the close every one of them was underwater, a phrase you may remember from 2008 (I do, nightly).
"We assumed grief had a yield curve," said the fund's head of structured products. "It does. It's inverted."
Short sellers are circling. The spread between "we raised our kids here" and "think of the compounding" has blown out to levels last seen in the dot-com bust. Nobody has yet worked out how to deliver the doorframe at settlement. Settlement is physical. Someone has to show up with a saw.
