Ugly.
Oh, man, so deliciously, predictably ugly.
Ugly as in Worldcom ugly.
Ugly as in Enron ugly.
Ugly as in 1929 ugly.
The subprime implosion has been so swift, so harsh and so massive, I think bankers, Fannie, Freddie and hedge funds around the world are wondering today just how bad it'll get. Bag holder China is also probably shaking in its naive Communist boots.
The money simply ain't gettin' paid back. Massive fraud was committed. Those subprime bad-credit and liars loans were made to straw buyers and thieves. The game is over. Home prices inflated with the funny money will crash. Millions more foreclosures and unwanted empty homes will pile up. The Great Unwinding is here.
Note I have CFC and LEND July puts. Wish I had 'em all!
HSBC, New Century warn of US subprime lending woes
NEW YORK, Feb 7 (Reuters) - Two of the biggest lenders to Americans with poor credit histories said on Wednesday rising subprime mortgage defaults will weigh unexpectedly on results.
HSBC Holdings, Europe's biggest bank, said it plans to set aside $10.6 billion companywide for bad debts, 20 percent more than the $8.8 billion it said analysts expected on average, because of struggles in its HSBC Finance Corp. lending business.
Meanwhile, New Century Financial Corp. projected a fourth-quarter loss, and said it expects to restate each of the previous three quarters' earnings lower because it did not set aside enough money to buy back subprime loans that went bad.
Both companies announced their forecasts after U.S. markets closed. New Century shares fell almost 16 percent in after-hours electronic trading, while HSBC's shares fell 1.9 percent in early trading in Hong Kong on Thursday morning.
New Century and HSBC Finance are respectively the second- and third-largest subprime mortgage lenders in the United States.
Want some more? See mortgage lender implode-o-meter...
February 08, 2007
The Great Unwinding subprime end game is here: New Century and HSBC blow up, Countrywide and Accredited Home Lenders are next up
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Don't know where to post this exactly, but unbelievably:
Blanche Evans has written that the prices in CA might actually go down!!!
What next: Lereah saying that perhaps NOW is not the best time to buy a house?!?!?!?
http://realtytimes.com/rtapages/20070207_californiafall.htm
Big story to be sure! Interesting comment about naive communists Keith. I used to think those clever pinkos knew what they were up to. Perhaps you're right. They're holding paper IOU's on Joe and Betty's overleveraged, overtaxed,depreciating cardboard box in ButtFudge USA.
It's not like they're going to get the rights to the means of production or any other wealth generating assets.
In the meantime, the capitalist entrepreneurs have siphoned off the real wealth, have bought as many trinkets as they can carry, and are looking for places to stuff the rest before Chairman Me Flung Poo figures out what's going on.
It gets even better. In addition to the New Century news, Bloomberg.com also has an article about how the home builders combined lost 1.47 BBBBBillion dollars on bad land purchases.
Could this be the needle that lances the housing carbuncle?
http://tinyurl.com/3bv7vl
Subprime Meltdown Summary and a few new rumors!
http://bakersfieldbubble.blogspot.com
Interesting news. Anyone know what HSBC's total exposure is to the sub-prime market? Lots of juniors folding up their tents but these two are truly big fish. So far this has been a rather slow motion implosion but seems to be accelerating a bit lately. Wonder if any of the anonobulls are starting to get a bit queasy.
JAFO
I have a loan with CountryWide and
I have been worried for quite some time now about their practices.
What types of issues can result
from CountryWide's business practices?
What are the dangers to a borrower?
Can they call the loan and / or change the terms? Or sell to another company which can do the same?
Is there anything that can be
done to mitigate the exposure?
Or can a loan prepayment be
successfully negiotiated?
A friend of mine who is an appraiser was told by his boss to get ready for the repos this spring! It is going to get ugly! Just makes you wish you sold at the height!
I heard that HSBC Finance is in a world of hurt. But just wait until the U.K. market hits the skids. The carneage is going to be monumental. The Great Depression is going to look like the good old days. Brits will be piling in here just like it was the 1880's. But they better learn Spanish! Those Brits' will be waiting on the Mexicans! Give me two tacos Nigel! Where's FDR, Jr. when you need him?
Holy Toledo! When it rains it pours. Another lender, ABN, is selling off assets to pay for "consumer defaults".
http://tinyurl.com/2sl53d
"Provisions surged last year on an increase in consumer defaults in Brazil and Taiwan..."
Maybe someone can do more research on just what percentage of their business was mortgages, if any. It's late. I'm outta here.
I love the "business speak"...
"It is clear that the level of loan-impairment provisions to be accounted for as at the end of 2006 in respect of Mortgage Services operations will be higher than is reflected in current market estimates."
Translated: "Whatever you guys think is going to happen with bad loans is going to be worse that you thought!"
I can't read that website:
http://bakersfieldbubble.blogspot.com
The background is way too busy!
There might be millions of Caseys out there!
Toll Brothers just announced.
Can hardly wait for Bob Toll's rosey comments...
Maybe he can talk about how much stock he sold last quarter?
The old "ball and chain"
hosuing will be absolutely hated before the recovery begins.
might as well throw yer money in a pile and put a match to it.
Hey, what gives?!?
Not a single post from the vermin yet this morning...
You have it exactly right about the money not getting paid back. Thing is the grifters at the top of the food chain have been booking nonexistent profits and taking bonuses based on same. It doesn't matter how much money the banks lose though, because I don't think they actually keep track of that money anyway. Uncle Ben's magic printing press is just getting started, and the banks can always conjure up more money to lend from nothing, so all is well.
The credit bubble chasing real estate begins to shift from first to second gear - delicious news. I am savoring every bite. I recently told an attorney and real estate agent that I know they should shift their focus from divorce and new home sales to fraud and foreclosure sales, respectively. I am projecting both to be growth fields in the future.
Smug
I wonder if Aaron Krowne knew what he was getting into when he started Implode-o-meter? I think he'll be up to 100 by april.
Where is Accredited mentioned in this story? I hear they are doing fine...
Woo F*ckin' Hoo!
NEW Feb 25 puts paid off well.
Niiiiice.
I put in an order last night for some CFC (Countrywide) and LEND puts but they gapped up fast this morning. I'll wait until some more suckers bounce the stocks up and the puts come down in price.
Sentiment is changing.
"There's a hole in the bucket, in the bucket, in the bucket. There's a hole in the bucket, in the bucket, a hole".
I'm going to need some stock profits so's I can buy lots of foreclosure McMansions for pennies on the dollar.
And I'll need some "tip" money for the eviction deputies to clean the squatters off my property pronto.
I hope the evictions occur soon. It's so much nicer to see the squatter family destitute in the snow instead of the warm weather.
Harvest time for the bubble waiters.
This is still just the tip of the iceberg. Home many other institutions are facing the same dilemna?
HSBC and New Century are not (or at least WERE not) that big in the secondary market.
Countrywide and ABN AMRO will be fine. I would'nt start worrying till you hear about the option one's and other major sub-prime wholesalers going belly up.
This is how I interpret this picture. Bend over, and hold on tight while we shove the debt prod right up your no sunshine area. Try to have your wife hold on to you while its happening. That's right, make sure you smile to show your family and friends how happy you are.
Merrill downgraded NEW to sell today (a bit too late) and S&P downgraded Countrywide to sell too.
Even the big money is getting out. Bankruptcies are coming.
Honica said:"HSBC and New Century are not (or at least WERE not) that big in the secondary market.
Countrywide and ABN AMRO will be fine. I would'nt start worrying till you hear about the option one's and other major sub-prime wholesalers going belly up".
I just saw an article that listed all the sub-prime lenders and Countrywide was number 6. Wells Fargo was number 1 with WAMU coming in at number 10.
BTW, "Countrywide Bank"?? has a 5.40% CD rate. Anyone feeling inclined to lock up money even if they FDIC protection?
We buy China's crap trinkets and they buy our crap MBS's.
First anon, ewwwwwwww Blanche Evans!
That's the loon who was writing articles about how newspapers were in a conspiracy against Realtors, or something like that right?
Merrill downgraded NEW to sell today (a bit too late) and S&P downgraded Countrywide to sell too.
Even the big money is getting out. Bankruptcies are coming.
+++++++++++
And with advice like this coming from the big boys, how soon will it be before the stock market tanks?
laura said: "I just saw an article that listed all the sub-prime LENDERS".....
I'd like to see the top ten.... I figured Long Beach (WAMU) would be higher. I'm pretty sure the major WHOLESALERS are still making a killing.
"I'd like to see the top ten.... I figured Long Beach (WAMU) would be higher. I'm pretty sure the major WHOLESALERS are still making a killing".
I just mailed the article to my SIL yesterday. The big lenders caught my attention, but I do recall it represented 25 companies total that were subprime lenders. Can't remember the other top 10 SP lenders. It did say that WAMU is closing down 80 of their banks nation wide.
I'll see if I can find it again for you Honica.
'BTW, "Countrywide Bank"?? has a 5.40% CD rate. Anyone feeling inclined to lock up money even if they FDIC protection?'
CDs suck. You can get almost that much in a 4-week T-Bill: http://www.treasurydirect.gov/RI/OFBills. Of course the Treasury will probably eventually screw you (Chinese bagholders anyone?) as well, but at least it should outlast the banks.
"Can they call the loan and / or change the terms?"
Yes, the credit card companies changes terms all the time.
Whenever you receive those little booklets with the fine print in your statement, they almost always have changes (and in their favor)
in terms and you agree to them by default unless you cancel your card.
Should tighten lending requirements. There is too much inventory on the market and now foreclosures are on the way too. Arms resetting and if the first larger payment does not get her, the third one might make her give back her home.
The war is not helping on the balance of trade side either. The Islamicists Bush was trusting to support him blew up the northern pipelines and oilfield structures. It is a wonder he graduated, how low are the standards at Harvard? Texas Law School did not let him in. How could the grandson of a Connecticut Yankee want a Democracy in Iraq only to learn they voted for people who wanted him to leave Iraq. Now what? Constitutional crisis in Iraq; miltary junta? Abuse of power in high places.
Accredited is not doing just fine. Their stock was $60 not too long ago. Now it's $26. I guess you could consider it fine when compared to Enron or WorldCom.
Anonymous said...
I have a loan with CountryWide
Yup, your a FB!
I like the statement" HSBC will "set aside $10.5 billion" for non performing loans".
They make it sound like they are setting aside a little extra money for Christmas presents.
One of the talking heads who appears on MSNBC was lamenting what to do with bankers. The answer of course is "regulate them", but thats not an acceptable answer to devotee's of the mysterious free market system.
These type's (which there are many) would rather die than submit to government regulation. And if they keep going like they have been going then they might just get their wish.
This globalization system is toast. It has never worked throughout all known human history. It only brings suffering, disease, war etc.
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