November 07, 2007

And then all the REIC stocks collapsed... WM, CFC, IMB, WFC, KBH, HOV, TOL, FED, FNM, FRE and more

All of 'em. Goodbye. The world will be shocked by the companies that go bankrupt and fire all their employees during this Great Unwinding. CEOs and CFOs will go to jail. Shareholders and bondholders will be wiped out.

And HP'ers saw it all coming. All of it.

Renewed credit fears sent stocks sliding on Wall Street, after a major bank said it expects market conditions to worsen.

At an investor meeting in New York on Wednesday, Washington Mutual (nyse: WM - news - people ) executives said they expect the housing slump to continue well into 2008, leading to an increase in loan losses and a continued decline in mortgage lending. Shares of the bank plummeted 15.7% after the comments were reported, falling $3.80, to $20.43.


Anonymous said...

You read it here first!

WaMu is a $2 stock waitin' to happen!

Mark in San Diego said...

Just watching the market crash in real time today. . .no curbs. . .down down down. . .wait till another banks fesses up. . .down another 300 points. . .bets on when we go below 10,000 again??

Loved the front page of the Financial Times USA edition today - Fire Sale??? for Banks?

Anonymous said...

Oh, dopes took a facial today!

Anonymous said...

Bernanke needs to scare shorts in the dollar and spur a gold market selloff with a hint of a rate hike. But problem is, the markets (Dow, Nasdaq) will lose 1,000 points. We're melting that direction anyways.

Might as well take the rate hike & selloff now, bring on the washout, and then setup a Santa Claus rally.

Anonymous said...

Scary thing is AIG probably has no idea how to make sense of their own books.

Anonymous said...

"Level 3" assets...

Kindof like the showdown with the Borg at Wolf359...

Princess Mononoke said...

Wowee! The DOW closed down at 361... What a ride it was today! Stay tuned for more. Other sectors will be rudely affected indirectly by the current housing crisis.

I had a friend working in the MBS division of a large trust co. Many many large corporations like DIS, GM, etc. purchased/traded MBS within their own investment account. Every corp. has a treasury dept. Ergo they too will need to claim losses. YIKES!

JohnnyReb said...

I'm up over $1900 today. Luv the Puts!

Anonymous said...

Maria on cnbc is really worked up. Could it be the rumor mill on the floor has her ear at long last?

Grab the popcorn for Bernanke's appearance tomorrow (that is unless he resigns first).

Anonymous said...

Yikes... So what does conventional wisdom say one do with a 401K short of taking the penalty and withdrawing my funds? I have everything I can invested overseas, but the foreign market losses seem to mirror the NYSE.

Anonymous said...

Uh oh

big SIV markdown by moody's

just in time too

Anonymous said...

tea & biscuits anyone?????


f'ed said...

I hope the CEOs and CFOs go to jail. There is no way a reasonable person could think those toxic loans would help their shareholders. SOX hasn't helped at all, except to push IPOs to London. Stupid Americans think the government can solve everything with more regulation. No. Get an education. More government regulation failed again to create somethign worse than Enron, but of course Americans will solve that with even more regulations. If the government is broke, we keep growing it.

Princess Mononoke said...

Yeah, Maria on CNBC is really pushing every analyst for answers.

Most analyst are honest about the financials, but there is this one (his name escapes me) who insist the fundamentals are solid and there is no reason for panic?

Anonymous said...

Annon 9.21

"So what does conventional wisdom say one do with a 401K short of taking the penalty and withdrawing my funds?"

Buy SKF or SRS and get rich quick!

Keith for president!

FaceDown said...

Help!!! I've fallen and I can't get up.

Anonymous said...


DOPES does not dare post anymore

Anonymous said...

AIG is gonna be FUUUU*******

MrCoffee said...

Bernanke needs to take a walk. He could have taken the direction of fixing the mess that Greenspan created with the housing bubble and mortgage crisis. Instead, he gave the fools on Wall Street their interest rate cut. His idiocy has backfired with higher energy prices, and a faltering economy with high inflation will be the direct result of his irresponsibility.

Princess Mononoke said...

Anonymous said...
Yikes... So what does conventional wisdom say one do with a 401K short of taking the penalty and withdrawing my funds?

Unfortunately that is all you can do right now is move your money to safer ground. As you know you have very limited control. If your 401(k) MF ie; John Hancock funds has a green fund or technical fund I would go that route. Plus, move 10% to money market account.

Other than that you can only pray that your company is solid enough to make it through this economic storm. I hate to bring this up, but remember Enron (corporate corruption)? Most employees relied on their 401(k) for retirement. Then the company collapsed and everybody was given a pink slip with no money, nil. Lesson learned?

anonymous wimps posting said...

"All the REIC stocks collapsed...."

Yeah, it's about fricken time, too.

ohhhhhmy said...

"Luv the Puts!"

so what's the next industry to tumble?

Anonymous said...

Re 401K? Why the heck would anyone
trust conventional wisdom: isn't
that what got us here. Ten to one,
your gut is saying, I think I should
get my money out of there....

Anonymous said...

Fed said: get an education....

Yes, but that means weeding out
statements like: more government
needed, less government needed...

Those are ideological opinions. It
depends entirely on how things are
actually working, and which government, and what mood/agenda does the one with power have at the current time frame being considered. What works.What is PR, manipulation of data, buzz words triggering old cultural buttons.

Very little fits our old paradigms anymore, which lends to the confusion..What's really been going on is going to make us ill, I think. Government has been making
decisions for the benefit of large
scale business agendas for a long time now, and in a year, I hope someone asks, how did that work out for us? PKK

Anonymous said...


yup, uncle Ben needs to RAISE rates. F wall street. Aren't the huge bonuses they got off of creating toxic RE garbage enough? the truly good companies will be fine. If the dollar goes, we all go. there is very little wiggle room left to mess with the value of the dollar. the fed has leeched almost all value out of the dollar since its inception.

Anonymous said...

sooo ladies and gents!!!what will home pricess do next? will the real sellers wake up???

Anonymous said...

sooo ladies and gents!!!what will home pricess do next? will the real sellers wake up???

Pithia said...

The financial news are certainly bad all around us. However the stock market is trading within a very narrow range and it is 7% lower from the all time high.

Folks, we might even see new highs in the market. We havent had a good correction yet. Even though the dollar is crashing and the housing market is dropping.

Stock market corrections which act as turning points occur when the dow drops between 20- 30% within a few weeks. Only them will the people trully panic and start to second guess themselves.

There will be no widespread panic until we see the dow fall to approximately 10,000 points.

When it falls below 10,000 things will get really interesting.

I think that housing is a falling knife, due to the international crisis the dollar will rally, the stock market is anybody's guess.

Again unless we see a violent shakeout, the market is on an uptrend.

bob said...

You guys will love this - MSM is starting to get it:

"25 real estate markets poised to fall"

" Orlando

5-yr home price forecast: -34.2%

Home price/rent ratio: 23.8
15-yr average: 14.9

Note: People typically won't spend more in monthly costs to own a home than they would to rent. While prices soar from time to time, sending the ratio to exceptional heights, the relationship eventually should return to its historical average."

bob said...

"executives said they expect the housing slump to continue well into 2008"

Uh, try 2012 - and beyond.

Alex3191 said...

The Dow Jones Industrial Average fell 360.9 points, or 2.6%, to 13,300.0, with all of its 30 components ending in the red. (nov 7th - 5pm est).... maybe because all mortgage problems are "contained" and "local" :D

Anonymous said...

"In order to fulfill their duty to consumers and investors, Fannie Mae and Freddie Mac must ensure that Washington Mutual's mortgages have not been corrupted by inflated appraisals," the attorney general said in a statement.


here we go again said...

11-7 NEWS

WCI Industries (nyse: WCI) announced plans today to cut 21% of its work force to try to lower costs. The regional builder has seen its business struggle over the past few months.


Even the "last booming areas" are now getting hit, hard.

Would someone please tell President Bush that he's America's largest looser on the record books, next to Cheney, Pelosi and Hillary, in that order.

Black Swan said...

Don't worry just buy Apple, Rimm, and Google. Boooyahhhh.

If you think today was a bad day in the market wait until NOV 15th!

Where is Ben Stein now that ahole? I mean I know he was a first in his class at Yale yet he recommends financials back in August and again a few weeks ago in October. His excuse is you will be fine long term if there is a correction. These Banks and institutions are fine and have had solid record earnings for several years. BULL$HIT. Right Ben guess what your banker buddies got to give back previously recorded interest income on those bad loans. Double whammy comming on top of the shit storm coming next week.

Anonymous said...

"In order to fulfill their duty to consumers and investors, Fannie Mae and Freddie Mac must ensure that Washington Mutual's mortgages have not been corrupted by inflated appraisals," the attorney general said in a statement.


In order to fulfill their duty to consumers and investors and keep their asses out of chapter 7 and US Penitentiary, Washington Mutual must ensure that Washington Mutual's mortgages ave not been corrupted by inflated appraisals. And if they were, they must obsequiously beg for forgiveness and deliver massive compensation to those mortgage buyers whom they ripped off.

If there were any justice, Fannie and Freddie might end up owning the leathery carcass of WaMooo.

Anonymous said...


THIS is HousingPANIC

Guess it's not just contained subprime now is it.

It' isn't just mortgage REITs and hedge funds.

It isn't alt-A.

The Borg are heading straight for the core of the REIC.

Can you imagine the feces flinging you'd have gotten in 2005 if you predicted "Washington Mutual will go insolvent"?

The Borg will soon be in sector 000

April 2009: "Trading in beleagured Fannie Mae halted after 37% loss over a month. CFO arrested, allegedly overvalued balance sheet assets, including loans purchased from CountryWide and Washington Mutual, who are currently both in bankruptcy reorganization. Last trade before halt was $5.83."

May 2009: "Bill in Congress providing foreclosure moratorium for all recently unemployed threatens solvency of GSEs. Dow Jones plunges 411 points to 8100, Wall Street howls its opposition, but with unemployment rate leaping to 8% from 5% over one year, the political tide is going out for the former Masters of the Universe."

Anonymous said...

since i owe capital one (or at least they think i owe them) about 10k on my card, i was thinking that perhaps i can do my fair share of messing with their bottom line.....ha ha ha

for way too long it was these credit card banks, screwing the people...well guess what? what goes around comes around.

area 51 said...

Here's the loss tally so far:

Citigroup $13.7 bln
Merrill Lynch $8.4 bln
Morgan Stanley $4.6 bln
UBS $3.7 bln
Deutsche Bank $3.1 bln
Credit Suisse $1.9 bln
JP Morgan $1.6 bln
Goldman Sachs $1.5 bln
Bear Stearns $0.7 bln
Lehman Bros. $0.7 bln
Total: $43.9 bln

sawed off said...

Bernanke wants to get a handle on the size of the problem, but the big banks have been hiding the weenie so well even their internal auditors can't figure it out! He can't do anything but babble until they fess up and show how the Fed bad it is.

And don't forget this is bonus quarter for Wall Street types from the mail clerk to the CEO. None of them want to out any bad news that will spoil their year-end payouts.

I think the sh_t will hit the blades come January. Bernanke and his other central bank buddies may try a preemptive move to whack gold because the psychology of $1K/oz gold is not in their favor. One more great buying opportunity awaits if they knock it down to $600 ahead of the January sh_t storm. Next year gold will top $2K and silver may hit $50. When those shiny bars appear on the cover of Time, sell.

Anonymous said...

Dow Jones is still up 1500 from last Nov. Im a firm believer in the Housing Bubble but a stock market crash this is not.....

bickerer said...

Stocks in termoil, FED doesn't know which way to turn, dollar melting down, home prices in freefall. No big deal obviously.

But a tv show writers strike?!?


Anonymous said...

Yikes... So what does conventional wisdom say one do with a 401K short of taking the penalty and withdrawing my funds? I have everything I can invested overseas, but the foreign market losses seem to mirror the NYSE.

November 07, 2007 9:21 PM<<<

its late to be asking a question like that isn't it? the warnings have been going on for over two years now. perhaps you were not listening or perhaps you thought that there was no way this would be a problem for you. let us be clear here. you have a promise that is made to you in that you will get money when you retire. but let me say this. that is only a promise. no one knows what the future brings. so now the whole bogus financial system that we have had for so long in this country is dying. for too long, many of us have trusted the system and were conforted when it told us there was no problem. for too long we have allowed others to do our thinking for us in all areas of life. americans have been lulled into a false sense of security. so now the other shoe is dropping. what can you do at this late stage to save your 401k? i haven't got a clue on that. the sytems of promises that are what this whole ponzi scheme of finance is based upon is unraveling before our very eyes. we shall return to the days of hard assets and hard money and we shall be dragged kicking and screaming into the reality that only those who have hard assets will survive the coming world. but it was written so long ago on some old dusty piece of paper that is now located in the smithstonian institution that we as a country should only use gold and silver coinage as our money. so we shall return to where we began. this country was not founded on paper promises, but truth and honor and dignity and patriotism of the kind that many do not have now. we shall return there perhaps. it would be nice. for once there shall be only shades of black and white and shades of grey will be just a bad memory time.......

Anonymous said...


Anonymous said...

And do not forget hankie pankie paulson formerly of goldman sachs

Anonymous said...

they hung the tzars....royalty and power??? that they were>>>>>>>.....................................

Anonymous said...

"executives said they expect the housing slump to continue well into 2008"

Uh, try 2012 - and beyond.

One thing that gets rare mention is the effect of simple TIME in the progression of the R.E. meltdown.

As we move into 2008 and beyond, the number of properties that MUST be sold for a whole host of reasons will weight heavier and heavier on the situation.

(i.e.) a family who must dispose of the real estate holdings of deceased parents due to the inability to endure the holding costs. Those numbers, albeit fairly consistent over time, will compound on itself in a moribound market where nothing moves making 'fire sale' pricing a near certainty.

Increasing unemployment, health insurance costs, higher prices for everything due to an economic slow down coupled with hobbling inflation will make 'liquidation' of value wherever it can be found self feeding with a vengence.

There is really nothing that can break this cycle 'unless' some other bubble worth literally trillions and trillions of dollars can be found to inflate.

Right now, I can't think of one.

All this mortgage money that has been flushed down the black hole of investment 'devices' really never really existed in the first place, yet it's notional value has already been spent; big screen T.V.s, SUVS, vacations. etc.

Never has so much 'credit' (phony money) been burned down to nothing so fast in the history of mankind.

Remember too: There are many people that draw their living from investments who's return is also in precipitous decline, along with corporate profits; bank earnings losses. These too become sellers of anything of value in an attempt to close an earnings gap that becomes more urgent as timelines extend onwards.

Although R.E. values have been declining in somewhat of a steady slope so far, there's little reason to believe that a geometric steepening of the plunge is avoidable under the current set of circumstances as the market decline and exhaustion of the dollar value grows from months into years...

Princess Mononoke said...

Anonymous said...
November 08, 2007 6:28 AM

I ditto your foresight! Very nicely written.

Стивен said...

Ben Stein is a discredited nutbar.

Bizarrely, he's also the host of an "intelligent design" propaganda film.

So after advising people to buy MER right before it tanked, Ben Stein, scientist, is also advising people to buy intelligent design as science right after a Federal court declared it to be a religious belief.

He's the perfect Fox pundit, an entire package.

area 51 said...

Have to agree with Anon 6:28.
Regression to the mean in housing proces using the Case-Shiller S&P index means around 2011....