August 19, 2007

Major mortgage lenders, big homebuilders or the chief ponzi scheme enablers - who goes bankrupt first?

Who goes bankrupt first:

1) Countrywide

2) IndyMac

3) Toll Brothers

4) KB Home

5) Fannie Mae

6) The US Government

Make your bets!

(I'm short CFC, FNM and IMB, should be short KBH, TOL and US$)


Anonymous said...

I will also add Beazer , K Hovnanian, Standard Pacific and Radian to the list.

Anonymous said...

I say Countrywide. The RUN on their banks was it. There's no turning that tide back. Their name is less than dirt right now in the financial community, and the drawdown of the emergency 11.5 billion credit line tells me they are done this week.

Anonymous said...

Toll Brothers

Anonymous said...

I'm as bearish as you Keith but be careful about who you short. The FED will so what they can to keep the market pumped. Without the FED, this game is over, with the FED, play the game and profit.

Watch out for the short squeeze and go long sometimes. As silly as it sounds, consuder the fact that when the FED cuts the shorts will cover and the sheeple will rush in with all that supposed fantom liquidity.

it is a ponzi scheme that will doom America.

keith said...

I agree - shorting (via put options) is fun gambling only. Like playing craps in vegas - only play with fun money

But it's sure been fun lately

Anonymous said...

This weekend marks a pivotal moment in the history of Western capitalism.

The melt-down of America's high-risk mortgage market now threatens the most serious financial crisis since global share prices collapsed back in 1987.

Yes, stocks rallied on Wall Street on Friday. And, yes, after the selling spasm of last week, that was a huge relief. But no one knows what will happen when the markets open tomorrow.

Pon Raul said...

The US will go bankrupt - so says the GAO.

Some say that we're already bankrupt.

If we're already bankrupt but don't admit it, and CFC goes belly up first publicly, then who really went bankrupt first?

shakster said...

I dunno,but First Magnus Financial announced that it will lay off 99% of it's workforce,about 6000 people,close 300 offices,and is said to be a large large company ranking second?

Anonymous said...

Indymac is the next big Mortgage entity that will go under

Khov will be the first national American homebuilder to bit the dust

After those two "shock" (but no shock to us) bankruptcies its anybody's bet as to who will go down next.

KBHomes, Lennar will go

CFC will also go

Anonymous said...

KBH goes tits up first. Its not on the direct feed to the feds tit, and they don't dance on the bottom.

The fed will drop and drop again in order to re-inflate the uninflatable.

The problem is who on earth can even trust any american bank selling MBS ever again?

Housing prices must come down, and the system cannot handle this measure.

Anonymous said...

Centex Homes will collapse, sending shockwaves across the builder world.

Anonymous said...

Looks like the silver and gold buyers/holders will be going bankrupt!!! what a bunch of dumb americans...sell gold and silver...hold us dollars!!! way to go dumbFU!@S.

Anonymous said...

Hey There Big Lender
Increase DecreaseAugust 19, 2007 (LPAC)--The idea that the global financial crisis was started by some little crooks in the subprime lending market has reached the level of urban myth, being endlessly repeated by bankers, their supposed regulators, pundits and other fools. This myth should be rejected on the basis of reason alone, but those who need more convincing should take a look at the chart of the "top subprime lenders, before the bust, as presented in today's New York Times.

The list is dominated by subsidiaries or affiliates of some of the largest financial institutions in the world, who were using the money generated from the real estate debt-farming operations to cover their own losses in the global casino. Leading the list is HSBC, a.k.a. the British Empire's Hongkong and Shanghai Bank, historically the premier bank of Dope, Inc. Also in the top twenty were units of financial giants Citigroup, J.P. Morgan Chase, Wells Fargo, Prudential, Lehman Brothers, Merrill Lynch, Bank of America, Washington Mutual, National City Bank and General Electric. "Nobody here but us chickens," joked Lyndon LaRouche, adding that this shows the duplicity of Treasury Sec. Hank Paulson's recent claims that this is just a subprime crisis.

Anonymous said...

Sheesh, thats a tough one.

I think its between IndyMac and CountryWide.

Later this year probably kb then tol -- loans gone. kb with inland empire exposure strikes me as a bad thing.

Fannie has no balance sheet. Probably was bk a long time ago.

Lost Cause said...

Countrywide Panic!

dagg said...

US Govt is already bankrupt!

Anonymous said...

Trick question -> The US Government is already there.

Anonymous said...

Countrywide is going down within weeks. They helped fuel the lending to unqualified borrowers and they will pay dearly.
Don't know how much was withdrawn on Thursday and Friday but I know it won't help the balance sheet. For lenders it's all about the balance sheet.

she bangs said...

I think mozillo will be out this week, back to laying in tanning beds all day.He has got to go to assure confidence something is being done.The crook has so much money it is unreal.He will be filthy rich as the minions crawl under bridges looking for shelter.Look for the dollar to tank and the chinamen to cash out leave us holding the bag as interest rates skyrocket and home prices fall off a cliff.I am going to put in an application at walmart today so I can get laid from all the chaos.

Danny said...

I agree with you. But short on the US $?? I'm not sure on that one.

I am shorting IYR though.

Anonymous said...

Home Depot

Anonymous said...

Someone is suffering from housing panic!

Anonymous said...

I think Mozillo and Cramer should be locked in the same cell

Anonymous said...

I think most of this country will go bankrupt soon when the Yen Carry Trade collapses.

God Bless

Anonymous said...

Is it me or the tension is so thick in the air that we can cut it with a knife? I know you can feel it, too...c'mon, be honest.

Like Damon Wayan would say while doing that hilarious gay character on Living Color: "IMB? Shoooorrrtedddd it!!!"

k.w. - southern ca. said...

Housing prices *will* come down, but it will be very, very painful for the US.

By October we will see the housing price drops and foreclosures excellerate that much faster across the nation.

For those who think location will insulate you from the problems coming, you will be very shocked.

A massive housing correction is fully underway, and it's unfortunate it took a major collapse (due to over-speculation) for people to finally realize that housing prices are not in-line with salaries.

RJ said...

Anon said:
The list is dominated by subsidiaries or affiliates of some of the largest financial institutions in the world, who were using the money generated from the real estate debt-farming operations to cover their own losses in the global casino.


You are right on target. The Bank of International Settlements places the over the counter derivatives market at approx. $450 trillion (notional value). According to the U.S. Office of the Comptroller of the Currency, our five biggest banks (JP Morgan, BofA, Citibank, Wachovia and HSBC)have derivatives exposures totalling 97.1% of the entire exposure of the U.S. banking system. Not one has the capital to cover its net credit risk.

And the U.S. government is already bankrupt. Of course, we won't default. But the effect will be the same. Worthless money.

bow to me, I own you americans said...

How about we sick ron jeremy on godzilla?

Cramer and godzilla could role in the hay together and make sexytime until the market recovers.

BofA is toast cause all the illegals it loaned money to are going back to the shantytowns in mexico to plant corn and sugar for export to hugo chavez.If you can swing a hammer your hired.

How about opening a brothel in vegas? Sex for pennies on the dollar sounds good to me.

oneclickplus said...

The US Government is ALREADY bankrupt. There is just nowhere to file.

Anonymous said...


Anonymous said...

Mozilo has played the fed like a violin. By countrywide tapping the 11 billion in credit from 40 other lenders, now CFC has 40 major lenders in their court against the Fed.
It explains why the fed screwed over all the options holders on Friday to save CFC stock price.
Mozilo is laughing at this all as he starts selling more stock this week.

area 51 said...

CFC Lays Off Alt-A Loan Originators

Anonymous said...

I think CFC is going to be bought by someone. I don't think bankruptcy is in the cards. I would like to see orange man go down as much as the next guy, but I am afraid that CFC is just too important to the government feel good lobby. Think Wells or B of A, they would love to sink their teeth in to some of the still performing paper that CFC has on the books. A Wells of B of A would have the cash to reorganize orange mans mortgage business in to something quite profitable, especially with their servicing business.

If I had to pick one, it would be K Hov. They build crap, sell crap, and gave crappy loans - across the board. Beazer probably is already dead, just hasn't realized it yet. KB and Lennar probably will survive, they have a lot of cash to tide them over. Toll, I am not quite sure on them. They do have a lot of cash from the hey day, so they may be beaten up pretty bad, but may survive.

Anonymous said...

And the winner is...

Countrywide Begins Staff Layoffs
August 20, 2007; Page A6

Countrywide Financial Corp., reducing costs as part of its effort to weather a credit crunch, has begun laying off employees involved in originating loans, according to an internal email.

The layoffs occurred in the company's Full Spectrum Lending unit, which handles many home mortgages in a category known as Alt-A, or mortgages between prime and subprime that often involve borrowers who don't document their income. Such borrowers typically don't qualify for a conforming mortgage, the type that can be sold to government-sponsored mortgage investors Fannie Mae and Freddie Mac.

The email, sent to employees Friday by a senior official of Full Spectrum, discussed layoffs made that day but didn't specify the number. The company as a whole employs about 61,000 people. It had a sales force of about 6,800 in Full Spectrum out of a total loan-origination sales force of about 18,000 as of June 30, according to a Securities and Exchange Commission filing.

Less than two weeks ago, Countrywide said it was hiring more loan officers from rivals forced to close down. But the company now is expected to reduce sharply its lending and costs because investor anxiety over rising defaults has made it almost impossible for lenders to sell many types of loans now deemed too risky. That is likely to lead to a steep drop in earnings, at least in the short term, analysts say.

Friday, Countrywide's stock rose 13% to $21.43 in New York Stock Exchange composite trading. But the stock was still down 23% from a week before amid worry about the company's ability to cope with a cutoff of its access to commercial paper and certain other kinds of short-term borrowing long relied upon by many mortgage lenders. Countrywide, the biggest U.S. home-mortgage lender in terms of loan volume, announced Thursday that it borrowed $11.5 billion under a line of credit from 40 banks.

An auction of about 135 foreclosed homes in San Diego Saturday provided more sobering news for mortgage lenders. Ramsey Su, an investor and former real-estate broker who attended, calculated that the high bids for the homes averaged 67% of the prices they fetched when they were last sold, mostly in 2004 or 2005. At a similar auction in San Diego in May, the average was 73%. The auction was held by Real Estate Disposition Corp., Irvine, Calif., which promotes such sales on the Web site. REDC officials couldn't be reached to comment.

Write to James R. Hagerty at

Aaron Krowne said...

Countrywide has now almost 11,000 REOs, going for the low-low asking price of $2.2 billion!!!! ML entry.

Anonymous said...

I don't think Mozilo is a crook. He took advantage of stupid people. That deserves praise in my book.

That's why we are where we are. Stupid people who cannot control their spending urges and have to have things NOW.

The Fed has to engineer a soft crash for the housing market. Something has to take the place of the American consumer. I don't see our vast population of non producers changing their lifestyles anytime soon so we are in for a long decline marked by periods of panic where small crashes occur.

The rate cut occuring right before index options expired was done to punish people shorting the market. A stroke of genius, but patently unfair.

The housing market may just turn into a huge money pit into which the government pours money only to end up with even more lost in the final outcome.

Anonymous said...

I don't know who's going bankrupt first but I'm praying it's Fannie Mae.

We have GOT to get the government out of housing in this country. It is absolutely sick that the gov. is allowed to set a base for home prices. Especially now that we've got proof positive that PEOPLE CANNOT AFFORD THESE HOMES.

Get the government out so we can find out what prices Americans can REALLY afford.

Anonymous said...

Can Countrywide borrow from the newly slutty and loose discount window? Yes

Can IndyMac? Yes.

Can Fannie? Hell yes.

Can Toll? No

Can KBH? No

Whether or not CFC and IMB go under is how politically connected they are, since it is really just a decision by somebody at the Fed whether to help them or not.

Fannie isn't going anywhere. US Agency bonds haven't changed their bid. They're still AAA. No payments have been missed.

I have a Federal Home Loan Bank construction bond---note, NOT Fannie or Freddie----it is tax free to California, so 5.15% is more like 5.60 or 5.70% effective. Where else can you get that good a deal? (There are obscure federal agencies which have tax free-to-states bonds like Treasuries, but with higher rates than Treasuries)

Fidelity still shows market price of 100.00

stuckinthecity said...

11.5 billion credit line tells me they are done this week.

How much of that will Angilo just stuff into his briefcase? Thief.

Anonymous said...

7) Home debtors

DOPES said...


Anonymous said...

None of the above. The Fed will monetize the debts.

Anonymous said...

HP Makes Impact On Chinese Language

from Reuters:

Rapid social change, Western pop culture and the use of English have prompted Chinese authorities to add 171 terms to the national language registry, including those to denote mortgage slaves and loose marital arrangements.

Economic reforms and soaring rates of home ownership have coined a new moniker for the tribe of youth struggling to pay off home loans in traditionally debt-wary China: "fang nu," or "house slaves".

DOPES said...

Lowe's Posts Higher 2Q Profit

Anonymous said...

Countrywide has announced LAY OFFS today! Wonder, Wonder Why?

Anonymous said...

US government likely won't go bankrupt as they can print money if they have to in order to cover their obligations.

Anonymous said...

How about Beazer Homes (BZH)? Reminds me of some of the old dot-com/telecom freaks like Global Crossing, WorldCom, Adelphia, Qwest, and everyone's favorite, Enron.

Anonymous said...

An auction of about 135 foreclosed homes in San Diego Saturday provided more sobering news for mortgage lenders. Ramsey Su, an investor and former real-estate broker who attended, calculated that the high bids for the homes averaged 67% of the prices they fetched when they were last sold, mostly in 2004 or 2005. At a similar auction in San Diego in May, the average was 73%. The auction was held by Real Estate Disposition Corp., Irvine, Calif., which promotes such sales on the Web site. REDC officials couldn't be reached to comment.


Anonymous said...

Anyone who shorts FNM, tiene juevos grande.

Anonymous said...

I say IndyMac. I believe CFC will go under as well, but I think IndyMac has less of a buffer to ride out the next few months of defaults. Especially when the Alt-As begin resetting. They have a tremendous amount of exposure on that front.

Anonymous said...

Hovnanian, Toll, Centex, et all are in SERIOUS trouble. They scooped up acres of land speculating on future gains only to see it's worth drop. How can they dump it - banks are hesitant to lend on overpriced, undeveloped land, and they will soon not lend on it at all. These builders will be paying taxes and interest on depreciating assets (land), and will be unable to dump it.

Anonymous said...

Before I read the answers I wrote it is a trick question the Government is already broke and a someone wrote this already must have been David Walker