March 06, 2007

BUBBLETALK: New thread to talk about the housing crash and lending meltdown

Ah, I love the smell of Napalm in the morning.

Post articles (use, talk about the housing crash / bubble / ponzi scheme, tell us what's on your mind, keep it clean.


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Anonymous said...

hey, how many vacation days has w had since the mid terms?

GreedKills said...

Believe it or not...there are people in FLA that don't even realize that their property values have crashed.

I called a friend tonight who just moved there. I asked her to ask her friend how much her house was worth. She said it appraised for 605k a year ago (probably when she got a refi) so it's got to be worth more now. (It's a 1978 3000 sf house purchased in 2003 for 360k)

I did a search for her zip code and didn't want to break the news to her that there were much nicer, newer and larger homes that were either lakefront or directly on a golfcourse fairway in gated communites that had "motivated sellers" asking 499k.

She doesn't even realize what has already happened to her.

new2Texas said...

RE GWB, not nearly enough. Wish he'd go turkey hunting with Cheney down in Kenedy County

Anonymous said...

Iran knows that if they can get oil >100 then it's game over for America. A birdie told me that the time is near for a false flag event. Did you hear Cheney say "All options are on the table" that is the code word.

anon said...

casey serin's blog appears to be down again

Who Knows? said...

Keith, Where have you been? I was going through withdrawls!!!!

FlyingMonkeyWarrior said...

The HP Bubble is leaving Middle East Vets who come home from the front homeless and un able to afford housing.
According to this article.
Vets on the Street
Hundreds of U.S. soldiers returning from Iraq and Afghanistan are ending up homeless. How could this happen?

.......The problem is mainly a lack of resources, advocates say. There are only about 15,000 beds available in VA-funded shelters or hospitals nationwide, and nearly every one is taken. In some smaller cities there simply aren't many places for a homeless veteran to go. And as affordable housing units shrink nationwide, veterans living on a disability check of, say, $700 a month, (which means a 50-percent disability rating from the VA), are hard-pressed to find a place to live. Most shelters require veterans to participate in a rehabilitation program, but a "fair amount" of veterans just go back to the streets once they leave, says Ed Quill, director of external affairs at Volunteers of America, the nonprofit housing group for veterans that helped Felty.

keith said...

just got back from a few days in barcelona. only looked in one estate agent's windows for flats - seems like you can get a dump in downtown barcelona, 2 bedroom, neighbors looking in your windows, bad construction, not attractive interior, for the low low price of $600,000

Yup, I'll take two.

Man, this ponzi scheme will be epic. Especially since even in barcelona you can rent the same damn place for a fraction of the cost of owning

the world has gone mad. I think it's the brits - they're taking their gains and moving the proceeds into every european capital, producing more gains, etc etc etc.

At one point the music ends

Anonymous said...

Let's give it to them!

YoChicago today
A fresh look at Chicago housing and neighborhoods --- City new-home sales have slowed, but no bubble on horizon

Halifax said...

Looking to buy way out-of-the-money late 2007 puts in China indices this week.

How about a thread on the China bubble? Talk about Manias [Panics and Crashes], to cite your favorite book!

Anonymous said...

those brits, our fuckin' enablers. It is their fault. Why couldn't they slump into anonymity like the rest of the other empires who have collapsed quietly like Sweden or Greece? They discovered they too can overinflate their currency and buy up the nearby real estate assets, so they can go on their drunken hooligan orgies, which they call holiday.

Remember that Ben Kingsley movie where he was the demented hitman on holiday in Portugal? That's the english for ya, worthless rotters. And to think they birthed Shakespeare.

John said...

The problem (or opportunity?) in South Florida is humongous. Vulture firms are swirling above the overbuilt, oversold high-end condo market and making a killing. I was wondering what other areas of the country have a glut of properties on the market. I'm not sure we have seen the bottom of the housing crash yet down here.

Anonymous said...

Under the heading "International Real estate fraud in the US and abroad", the secret Government document - seen by The AP - states: "The scale of Real estate agents ambitions towards attacking the US buyers and the number of US "extremists agents" prepared to participate in fraud are even greater than we had previously judged."

It warns that agents "attack planning" against buyers will increase in 2007, and adds: "We still believe that flippers will continue to seek opportunities for mass fraud against clueless buyers. These attacks are likely to involve the use of "suicide loans."

Anonymous said...

Keith, this is the last gasp of the Anglo-American Empire. When England lost Bahrain in '71, even though it was curtain call for the crown, it turned to its son, the USA, to re-claim its stake in the world of business and finance. Well... by being America's portal to the European markets, Britain did exactly that and today, they're the overseas extension of the American empire which, at this point in time , is little more than an empire of revolving credit.

Anonymous said...

Yup a lot of people are still in denial here in Northern VA/DC when it comes to pricing their houses-REIC and the media continues to convince a lot of dumb people.

Stuck in So Pa said...

We keep hearing about all of those big bonuses for the big shot execs in the British banking/lending industry.

Do they get theirs the same way they do here? You know, get the FB into more home than the FB can afford, and then immediately claim the total owed as income on the balance sheet? And of course that fat bottom line equals fat bonuses for the guys at the top!

How's the sub prime business doing in the UK? Is There one?

Anonymous said...

YES! Mr. president: It's a matter of national importance for you to go on a hunting trip with Dick Cheney!!!!!

Shakster said...

The bubble in Double Wides is coming,the double wides I tell ya.In the heat of the Mania,when you tell your cab driver you just bought a home,he will automatically ask,YouDid? how many Wheels you got on that thang?

Shakster said...

What caught my attention lately is how fast the for sale signs have sprouted up all of the sudden.This is becoming a sad event.The idgets in America will need alot of help.We may not have contributed to the problem,but we all will be contributing to a solution.

Anonymous said...

Keith said "Man, this ponzi scheme will be epic. Especially since even in barcelona you can rent the same damn place for a fraction of the cost of owning"

That math isn't working in NYC with rents here up by 20% y-o-y. See this VERY important article today's new york times.

The simple truth is that rents have stagnated for years as people bought real estate and avoided the rental. What's happening here is that purchase prices are now stable (actually rising nicely).....but rent are skyrocketing to catch up.

Many of you are right to see a disconnect between rental costs and home ownership. You're just being proven wrong on how it resolves itself. In NYC rents are simply rising to justify underlying asset values. In other areas it will be a combination of asset price deflation and rising rents. Either way, don't be fooled by the artificially low rents that have been created by housing's global bull run.

The more you spread your gospel, the more people will rent vs. buy, the higher rents will go and the more justified current valuations become.

Mr. Anonymous

Shakster said...

Housing doom has a Cathlene Reagor scoop on Eagle First mortgage being shut down by Arizona regulators for fraud.25 branches around Mesa Az closed as David Sanchez ops out instead of fight.HMMMMMMM Eagles,and Swanns?Still waiting for the Bloddy Bloodhound story.

Anonymous said...

That is pretty stunning. Freddie Mac says delinquencies are dropping but everything else I can find shows delinquencies are rising dramatically. OK Mish, what gives?

Footnote # 12

Single-family delinquencies are based on the number of mortgages 90 days or more delinquent or in foreclosure while multifamily delinquencies are based on net carrying value of mortgages 60 days or more delinquent or in foreclosure.

Includes delinquencies on mortgage loans where the lender or third party retains the largest portion of the default risk as well as Structured Securities backed by alternative collateral deals.

Excludes mortgage loans whose original contractual terms have been modified under an agreement with the borrower as long as the borrower complies with the modified contractual terms. Previously reported delinquency data is subject to change to reflect currently available information.

For example, delinquency data reported for some Structured Securities may be omitted or subsequently revised by servicers of the underlying loans, which may require revision to previously reported numbers.

For periods presented in this report, revisions to previously reported delinquency rates have not been significant nor have they significantly affected the overall trend of our Single-Family "Credit Enhanced" and "All Loans" delinquency rates.

Delinquencies on mortgage loans underlying alternative collateral deals may be categorized as delinquent on a different schedule than other mortgage loans due to variances in industry practice.

Essentially Footnote # 12 says that if Freddie Mac renegotiates the terms of the loan with someone who is delinquent then "voilla" that person is no longer delinquent. It seems to me that since about June of 2006 Freddie Mac is struggling to keep this ponzi scheme afloat.


Onepence said...

"It would be difficult to exaggerate the psychological and social impact of the anticipated replacement of the jumble of existing monetary systems--for many, the ultimate fortress of nationalist pride--by a single world currency operating largely through electronic impulses."

Anonymous said...

Jump in foreclosures could be the beginning of a trend

Sub-prime mortgage lenders are dropping like flies.

According to The Wall Street Journal, at least 20 sub-prime lenders have closed or filed for bankruptcy.

Solvent lenders are also feeling the pain. Novastar Financial, HSBC Holdings, H&R Block and Accredited Home Lending have reported huge losses on sub-prime loans.

The only mystery is why this comes as a surprise.

Prime mortgages are those that follow traditional lending standards: down payment of 20 percent and monthly payments of approximately no more than 35 percent of documented pre-tax income. Alt-A mortgages bend these standards a bit.

With sub-prime, anything goes — piggyback, interest-only, no-doc, whatever.

The Center for Responsible Lending laid out the gory details in its December 2006 report "Losing Ground: Foreclosures in the sub-prime market and their cost to homeowners" According to the report, more than 50 percent of sub-prime loans are underwritten using less than full documentation.

A subsequent review of a sample of these loans showed that 90 percent of borrowers inflated their incomes and 60 percent of the borrowers inflated their incomes by more than 50 percent.

These inflated incomes were used to shoehorn borrowers into "exploding ARMs" The CRL claims that the dominant type of sub-prime loan is a "2/28" adjustable-rate mortgage.

This loan has a fixed teaser rate for the first two years with adjustments every six month thereafter up to the fully indexed rate. It is not uncommon for the fully indexed rate to be 4 to 5 percent higher than the teaser rate.

Over the next two years, upward adjustments are expected on $600 billion of sub-prime mortgages.

Combine overstated incomes with rising payments and you have big problems. The delinquency rate on sub-prime mortgages is now above 10 percent.

With sub-prime mortgages comprising 23 percent of mortgage originations in 2006, the math is ugly and getting worse.

Eventually, the CRL projects that 19 percent of sub-prime mortgages originated during the past two years will default with 2.2 million sub-prime households losing their homes and suffering monetary losses of $164 billion.

Anonymous said...

Didn't the mortgage brokers tell their subprime borrowers that the ponzi plan was to time the sell of their property after two years when their loan reset so that they could lock in profit and not have to pay taxes.

With a simple plan like that why are so many subprime lenders in trouble?

Could it be that their subprime borrower kept taping the equity out of the property and now they are sitting on an upside down loan.

So what made the mortgage brokers think that their subprime borrowers have the discipline to follow their simple ponzi plan?

Yes, the subprime lenders could take back their properties, but if the market were to drop ever so slightly in price then the subprime lenders will need to file for bankruptcy protection themselves.

Sounds too much like what have been happening in the past few months when these subprime loans are all resetting about the same time and housing price are falling ever so slightly.

Anonymous said...

Could there be another downfall of the subprime lenders?

To combat the added expense of mortgage insurance, the mortgage industry began providing second mortgages that would allow borrowers to buy a home with less than 20 percent down without requiring mortgage insurance. The first mortgage would provide the 80 percent loan and the second mortgage lender would provide the additional 5, 10 or 20 percent. Again, due to the added risk, second mortgage lenders charge a higher rate and may have stricter underwriting guidelines.

Over the past five or more years, the mortgage insurance industry has all but disappeared as borrowers chose the more popular, and less expensive, second mortgage route.

The magic number in the mortgage industry is 80 percent. That is, mortgage lenders are comfortable loaning up to 80 percent of the value of a home. They decided long ago that the 80 percent loan-to-value [LTV] ratio is as high as they want to go without receiving added compensation for the increased risk.

The biggest obstacle to home-ownership has always been coming up with the down payment and it is not surprising that borrowers pushed lenders to provide them with the ability to buy a home with less than 20 percent down. Lenders agreed that they would loan more than the standard 80 percent of the sales price of the home if they could be assured that they would not lose money in the case of a foreclosure. Based on that premise, the mortgage insurance industry [sometimes referred to as private mortgage insurance or PMI] was created specifically to mitigate that risk.

Mortgage insurance has been around for some 50 years and is designed to protect the lender from a loss if and when a lender has to take back the property and sell it in a foreclosure. In California when a borrower fails to meet his pay back obligations under the terms of the promissory note, the lender will take back the property and sell it to the highest bidder. When the lender has loaned more than 80 percent of the value of the home there is an increased likelihood that it may not be able to sell the home for what is owed on it.

When the lender has to sell the home for less than owed on it, the mortgage insurance company will reimburse the lender for losses incurred in the forced sale. Mortgage insurance companies work similarly to other insurance companies. They collect a monthly premium from the borrowers and pay out to the lender when there is a loss.

The premium that the borrower must pay for mortgage insurance depends on the LTV ratio and type of loan. A 90 percent fixed-rate loan will require a premium that adds about one half of 1 percent to the borrower's housing payment. One complaint about mortgage insurance is that the IRS has never [until now] considered it a deductible expense. Mortgage insurance for a 95 percent LTV adjustable-rate mortgage could add as much as a full percent to the borrower's housing payment.

Some lenders offer a 90 or 95 percent LTV loan without mortgage insurance. However, the quid pro quo is that the lender increases the interest rate to pay for the added risk. For example, if the best 30-year fixed rate for a 80 percent LTV loan is at 6 percent, the rate for a 90 percent loan may be 7 percent.

Anonymous said...

The risky-lending boom of the early 21st century was a Ponzi scheme. It depended on constant growth in real estate values. You could lend anybody anything so long as their house was worth 10 percent more each year. For lenders, growth meant collateral would always be worth more than the money tied up in it.

According to Hopp and Arrowsmith, some lenders made loans worth up to 20 percent more than the assessed value of homes. These lenders believed appreciation would make up for negative equity. When the market stagnated and borrowers couldn't keep up with mortgage payments, negative equity and zero-down lenders ended up with a bunch of houses worth less than the amount of money owed on them.

When that happens, you get foreclosure auctions where only one house in 32 is worth a bid.

And lo and behold, Risky loans come home to roost

Anonymous said...

The Bankruptcy Development That Has Wall St. Worried over Hedge Fund Ponzi scheme.

Prime Brokers, once off limits, suddenly look more promising.

A recent bankruptcy court decision in the Southern District of New York may raise concern among brokerage firms who execute and clear brokerage transactions for hedge funds and similar investment vehicles.

The bankruptcy trustee of the Manhattan Investment Fund (which the court found to be a Ponzi scheme and whose principal Michael Berger pled guilty to criminal charges) obtained summary judgment against Bear Stearns requiring it to return to the bankruptcy estate all the margin payments the fund had made in the year before it imploded, totaling $141.4 million.

First, the court held that because the fund was essentially a Ponzi scheme, virtually every payment it made to a third party to keep going was deemed to be infected with the fund’s overall fraudulent intent. The margin payments were viewed as intentionally fraudulent because they enabled the hedge fund to continue trading through the Bear account, thus keeping the Ponzi scheme alive.

Second, despite the fact that Bear received the funds subject to numerous regulatory requirements and standard customer contract provisions requiring them to be used, in essence, only to satisfy the accountholder’s obligations to counterparties to its trades, the court held that Bear Stearns was not a "mere conduit" facilitating payments to others.

The case has been received with true fear on Wall Street, where servicing hedge funds is a business so lucrative that it makes the go-go years of bringing technology companies public look quaint. For one, hedge funds do billions of dollars of business in multiple parts of the bank, while many technology companies promptly evaporated after going public.

“Every prime broker has taken note,” said the head of prime brokerage at a top Wall Street firm. “It raises the bar in what we need to know about a client and escalation when there is cause for concern.”

Prime brokerage is the business of servicing hedge funds — finding and lending stock to allow hedge funds to short (a bet the price will fall), financing trades (leverage) and structuring swaps, among other things (services vary by firm). Wall Street firms earned $8 billion to $10 billion from prime brokerage activities last year.

Hedge fund relationships forged through prime brokerage relationships are critical to banks who can then deliver countless other services to hedge funds: trading over-the-counter derivatives, selling exotic stock or bond deals or structuring hedges. If prime brokerage is an increasingly commoditized product, its significance in generating business is not.

The relationship between prime brokers and hedge funds is a naturally strained one: Prime brokers want as much information as possible and hedge funds want to give them as little as possible. After all, most banks are in the same business as hedge funds (looking for investment ideas and making money from them). Most hedge funds use multiple prime brokers.

Anonymous said...
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Anonymous said...


Anonymous said...

Will the "Michael Berger" case open the doors for investors to go after the failed Hedge Funds or their prime brokerages which have been partaking in the Subprime Mortgage Ponzi Scheme?

Merrill aims to catch up with Bear Stearns in subprime mortgage market

With Derivatives showing Subprime Mortgage risk rises for a Fifth Week
ever wonder why prime brokerages are taking up so much risk to buy failing Subprime companies?

The perceived risk of owning low- rated subprime mortgage bonds rose to a record for a fifth day after Moody's Investors Service said it may cut the loan servicing ratings of five lenders.

An index of credit-default swaps linked to 20 securities rated BBB-, the lowest investment grade, and created in the second half of 2006 fell 4.6 percent to about 75 today, traders said.

The index is down 23 percent since being formed Jan. 18, meaning an investor would pay more than $1.1 million a year to protect $10 million of bonds against default, up from $389,000.

Moody's said late yesterday that it may cut the so-called servicer ratings for affiliates or units of lenders including Irvine, California-based New Century Financial Corp., the second- largest lender to subprime borrowers.

Declines in the ABX-HE-BBB- 07-1 and similar indexes accelerated this month as New Century and HSBC Holdings PLC, the biggest lender, said more of their loans were going bad than they expected.

``I do not think it is surprising we have trouble in this sector of the market; I think the surprise is the speed at which it has unfolded in the last couple of months,''

Anonymous said...

What would be even bigger news this week then Eagle First Mortgage closing its doors is if New Century Mortgage announces that they will cut off Allied Home Mortgage Capital Corporation and Premier Mortgage Funding, Inc.

Combined Allied and Premier have approximately 1100 Branches nationwide.

foxwoodlief said...

Keith is finally discovering how "cheap" homes are in the USA compared to so many other countries and you can't say they make more money either. Of course he has also discovered that the rich are "uber-rich" and the poor "have ye always."

Of course it seems most play the "house lottery" game and many have won and it seems a large portion of the affluent (especially elderly) made their money, not the old-fashioned way of hard work and savings, but through real estate.

I'm still shocked here in Phoenix that prices haven't tumbled. A home here in the Willow I saw last week for $475,000 I wouldn't pay $250,000 for sold, and I see an up-tick in sold signs and driving into the new home developments, lots of traffic and people writing contracts. Here in the land of tens of thousands of resales and spec homes? Why?

Not to say that Phoenix still isn't producing jobs (and despite the attacks, good ones) or that people are still not moving here. Still, the prices are 30% or more higher than I think justified, just not correcting fast enough.

Most of the spec homes with major discounts are an hour or more out of the city center (downtown Phoenix) in places like far-out Queen Creek or Maricopa or Buckeye. Everywhere else, even with areas with lots of for sale signs, people are not budging on price much. I'm sorry but $10,000 off a $450,000 house is not bargain, noris $100,000 off a home that is $2,000,000.

How can a home in a top city like Austin that is quality built in the best areas of town go for $400,000 and a home of lesser quality and further from the center go for over a million in Phoenix?

I am now working in North Mesa and thought homes out there (an area I spent little time living here for 20 years) and an hour from downtown would mean less expensive than say Scottsdale, the Biltmore, downtown, N. Central and the homes out there are 1/2 a mil and up! Way up!

I would be cheaper for me to let my house in Austin sit empty and pay rent here than to buy and this doesn't even reflect prices in places like California!

I will be surprised if prices don't come down at least 15% by the end of 2007 but then I figured by the end of 2006 they'd have fallen at least 20% and they haven't.

Are we all wrong?

keith said...

You know how I say it's all connected (immigration, bubble, losing our manufacturing base, the dollar, china, wal-mart, etc)

Here's another example - the implosion of subprime taking down GM

Anonymous said...

will not pay more than a hundred kay, anyway anywhere, with cash loosing purchase power daily? because i loan money to government and housing buyers! a fool and his money are soon parted?

Anonymous said...

will not pay more than a hundred kay, anyway anywhere, with cash loosing purchase power daily? because i loan money to government and housing buyers! a fool and his money are soon parted?

Anonymous said...

gotta fix? the dollar! or perhaps thats what is being done

Anonymous said...

The future market is keying in on the weakness in the US Treasury due to the subprime failure.

Weakness in US Treasury means a weaker Dollar. A weakness in the US Dollar will mean higher commodities prices.

Copper Roars To Eight-Week High As Base Metal Regains Momentum

Gold is trading at 686 this morning in Hong Kong.

Anonymous said...

Every day more money is printed for Monopoly than for the US Treasury


Anonymous said...

Collapse may signal more subprime lender bankruptcies

ResMae Mortgage Corp. may be on the cutting edge of a trend in the U.S. subprime-loan industry. It's bankrupt and selling assets for pennies on the dollar.

ResMae, which made home loans to people with bad credit, will be auctioned next week. The opening bid, by Credit Suisse Group, is $19.1 million, less than half the size of an offer received by ResMae before it went bankrupt Feb. 13.

Anonymous said...

Japanese stocks advanced, led by commodities related companies including Inpex Holdings Inc. and Mitsubishi Corp., after prices for raw materials including oil, gold and silver rose.

Crude oil for April delivery rose 0.3 percent to $61.14 a barrel in New York on Feb. 23, the highest close since Dec. 22.

Meanwhile, gold futures rose to as high as $691.90 an ounce, the highest since May 18, while silver climbed to as much as $14.66 an ounce, the best since May 12.

Anonymous said...
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Anonymous said...

Will a hint of a Federal Reserve interest rate cut send the US Dollar free falling like it did in late November 2006?

Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney. ``The Federal Reserve is undoubtedly on hold, with the next move likely to be a cut.''

The dollar fell to the lowest in almost two months against the euro on speculation reports will show a housing slump is slowing growth in the U.S. economy.

The U.S. currency declined against 14 of the 16 most-active currencies before reports this week that may show slower fourth- quarter growth than previously estimated, falling new home sales and a drop in durable goods orders. The difference in yield between the benchmark 10-year U.S. and German debt narrowed to the least in almost two years last week.

The dollar fell to $1.3190 per euro as of 10:32 a.m. in Tokyo, the weakest since Jan. 3, and compared with $1.3166 late in New York on Feb. 23.

Anonymous said...
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Anonymous said...



Hard assets said...
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Anonymous said...

so instead of buying a 87,000 dollar mcmansion in 2001 i lend 100,000 out to mcmansion buyers thru my bank, to avoid having to shakedown renters or continue keeping familys on the streets, now those mcmansions are selling for 400,000 and the bank says there is no inflation!, tho my taxes will more than triple? and i can not afford a mcmansion and it would take 15 years of 20% interest rates and savings? to break even, no more mister nice guy

Anonymous said...

Did Wells Fargo get its AAA rating before or after taking on Residential Funding Company Loans?

Wells Fargo Bank N.A. has become the only U.S. bank to have the highest possible credit rating from both S&P and Moody’s — with Standard & Poor’s Ratings Services upgrading Wells Fargo Bank N.A. to ‘‘AAA,’’ its highest possible credit rating.


Residential Funding Company, LLC ("RFC"), formerly known as Residential Funding Corporation, in its capacity as master servicer, will transfer the subservicing of the loans currently being subserviced by Mortgage Lenders Network USA, Inc. ("MLN") on behalf of RFC or its securitization trusts to Wells Fargo Home Mortgage.

The subservicing will be transferred to Wells Fargo Home Mortgage on March 1, 2007.

About Residential Capital, LLC
Residential Capital, LLC is a leading real estate finance company, focused primarily on the residential real estate market in the United States, Canada, Europe, Latin America and Australia.

The company's diversified businesses -- GMAC-RFC, GMAC Mortgage,, and Homecomings Financial -- cover the spectrum of the U.S. residential finance industry, from origination and servicing of mortgage loans through their securitization in the secondary market.

It also provides capital to other originators of mortgage loans, residential real estate developers, resort and timeshare developers and healthcare companies.

Residential Capital, LLC is an indirect wholly owned subsidiary of GMAC LLC.

Residential Funding incidentally, is a subsidiary of Residential Capital, Inc. Which in turn is a subsidiary of GMAC LLC. GMAC, via Residential Funding, was one of MLN’s warehouse lenders.

The cost of insuring bonds issued by GMAC, the former finance arm of General Motors Corp., jumped this week on concerns about the subprime mortgage sector, where Residential Capital Corp., GMAC's mortgage finance holding company, operates.

On Thursday, GMAC was downgraded to "underweight" by Merrill Lynch & Co. analysts, who cited problems in the subprime mortgage sector.

Such mortgages make up nearly a third of finance receivables and loans at GMAC, Merrill said.

Merrill's analyst also said that GMAC is now unlikely to achieve an investment-grade rating this year, and recommended investors hold 30 percent fewer GMAC bonds in their portfolios than benchmark indexes.

Anonymous said...
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Anonymous said...

When will Moody make their decision?

Moody's might cut ratings of sub-prime mortgage lenders

New Century Financial Corp. and Ameriquest Mortgage Co., both based in Orange County, are among five sub-prime mortgage lenders that may have the ratings cut on the part of their businesses that collect home loan payments amid a rise in delinquencies, Moody's Investors Service said Wednesday.

Anonymous said...

"It's hard to imagine that we've seen the last of the negative headlines,"

By Rich Miller and Matthew Benjamin said...

``And the bust is just beginning.''

Housing Slump May Force Fed to Pare Annual U.S. Growth Estimate

By Rich Miller and Matthew Benjamin

Feb. 26 (Bloomberg) -- The U.S. may be saddled with more sluggish growth than the Federal Reserve expects as the economy struggles to shake off a lingering hangover from the housing bubble.

``We're in the midst of a classic boom-bust credit cycle in housing,'' says Andy Laperriere, managing director at International Strategy & Investment Group in Washington. ``And the bust is just beginning.''

Anonymous said...

This year could be the calm before the housing boom
You may want to move soon to get best interest rate

With a good credit rating and $100 in earnest money, you can get into a new house!

Anonymous said...

Fewer workers may mean fewer deaths

Business Writer

It turns out there may be a silver lining to the housing bust after all: fewer deaths of construction workers

Anonymous said...

Come on over to Orange County, California for some great deals.
We have the following that you'll love
1)Lots and lots of traffic.
2)Lots of service jobs.
3)Fun lovin' Christians who are waiting for the end times.
4)People drive like they are insane.
5)Third most expensive housing in the US. All for a little sunshine?
6)Corrupt local governments are not your friends.
7)Surfer dude mentality that gets tiring after 1 minutes
8)Drugs, drugs, drugs, drugs, drugs in all the high schools. The best drugs too.
9)An odd mix of people. Christians who are born again but who have no trouble cutting you off on the freeway and giving you the finger.
10)The air is some of the worst in the country. This is air?
11)Shopping as an art form. Don't have money? Don't think about it. Want to mortage your life to keep up with your neighbors? Then come here?

a.creampuff said...


I just noticed is not on your blogroll. You'd asked about missing blogs - not sure how you could overlook
Aaron Krowne's (the impolde-o-meter guy) was the first article I read on the subprime crisis.

FlyingMonkeyWarrior said...

Look Keith.
Memberships to HP. I wonder if I have to pay to Hear what your HP'er posters have to say, oh wait Your Blog Google Search and I get this all about Greg Swan. I do not know if Bill Bond is charging a fee to get to know you and your posters or this guy is just trying to capture your member base. te he.

Bill Bond, contributor to Housing Panic blog

Part 7: Meet the Bubble Blog Participants

Friday, February 16, 2007

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***********and here.

There are no hard and fast rules for blogging, or easy shortcuts to getting noticed, say authors of Weblogs with national audiences, such as Jonathan Miller of Matrix and Greg Swann of BloodhoundBlog. But ask them what keeps their growing readership coming back, and you'll hear variations on similar themes.

Miller, Swann and the authors of some of the smartest local real estate blogs from San Diego to Tampa say they shun boilerplate, general-interest material in favor of posts that draw on their specialized knowledge and insight into their market or area of expertise.


Collaborative Weblogs like BloodhoundBlog, Rain City Guide, Real Estate Tomato and ActiveRain offer readers the viewpoints of authors with specialized knowledge about different aspects of the real estate business -- lending, appraisals, or title insurance, for example -- or who have insight into a particular markets.

Swann, a Phoenix-based broker who started BloodhoundBlog with his wife, Realtor and staging consultant Cathleen Collins, made two earlier stabs at blogs connected to the couple's brokerage business, LLC, dating back to 2003. Swann said he was never very inspired by the local bent of those blogs. After following the frank discussions of industry issues on Rain City Guide, Swann and Collins decided to take a different approach with BloodhoundBlog.

On BloodhoundBlog, he said, the couple "stopped worrying about local content and clients, and stopped using (blogging) as a way to troll for business." Instead, the blog became a forum "to talk about what we were interested in real estate -- things of more interest to (real estate) professionals than our client base."

"We were very influenced by Dustin Luther," Swann said of Rain City Guide's founder. Because that blog was focused on Seattle, Swann and Collins saw room for another blog covering real estate industry issues at the national level.

Soon after BloodhoundBlog launched, "mega producer" Russell Shaw, approached the couple about contributing. After deciding they liked having other writers, the couple invited San Diego-based real estate investment broker Jeff Brown to contribute.

With writers offering their views on industry issues from multiple perspectives, "I realized we had the genesis of a really interesting blog," Swann said. Today BloodhoundBlog boasts 12 contributors, including mortgage planner Dan Green in Chicago and Santa Clarita, Calif.-based real estate marketing executive Jeff Turner. Each contributor has a picture and bio, and the blog employs links that allow readers to call up only the posts of the author they're interested in.

Swann said he would "love to have an appraiser," and that he's talking to an executive at a publicly traded real estate company about contributing to BloodhoundBlog, perhaps under a pseudonym.

"I'm interested in really good writing," Swann said of his approach to rounding up new talent. "We approached people we knew who were doing great work already. They continue to maintain their own blogs. I think it makes a nice natural split for those people; if they want to talk about local issues, they can talk to folks in their own markets" on their own blogs.

"We will continue to add writers as we think it's appropriate," Swann said. "Were a little Realtor-heavy, and that will probably be the case forever. Realtors are the bulk of our audience, probably 70 percent."

Swann, who wrote Macintosh software used in the publishing industry before becoming a broker, says he's exploring whether BloodhoundBlog might turn into a third career.

"You can make a great living in real estate, but it's probably not the last career you should have," Swann said. For now, he said, he sees BloodhoundBlog as a place others can use to launch sidelines as real estate experts.

Shaw's plans for a series of BloodhoundBlog podcasts on real estate sales techniques, for example, might make him a popular speaker on the lecture circuit, Swann said. Or if Berg wanted to write a book on real estate, her profile on BloodhoundBlog might help her land a deal, he surmises.

"Someone like Jeff Brown is made to order for HGTV," Swann continued. "They came to me last September asking if I knew anyone" who could host a show.

For now, Swann said he's not interested in selling advertising on the site.

"I'm not saying never, but not now," he said. "There are people claiming you can make a six-figure income blogging, but I would rather maintain the independence."

Although Swann was not entirely happy with his previous attempts at blogging for a local audience, that doesn't mean he's given up on the idea.

"I do think it's a great idea for people looking to generate business," Swann said. "With a Weblog, there can be a microscopic level of attention to events of local interests -- city council votes, home remodels -- not even at the city level, but at the neighborhood level, whatever your farm (market) is."

Swann said he and Collins have "great plans" for another, more local blog on distinctive homes in the Phoenix area. In the meantime, BloodhoundBlog has built a national audience that, along with links from other sites, gives it a formidable presence in search-engine rankings.

BloodhoundBlog gets 800 to 1,000 unique visitors a day, Swann said, plus an unknown number of RSS subscribers (he doesn't track them).

Swann remains the site's most prolific poster and doesn't mince words. He's constantly scolding the mass media and Internet startups jockeying for position in the online real estate business -- sometimes in the same breath.

In a post last summer, "Debunking," Swann called a reporter for the Arizona Daily Republic "dippy" for suggesting consumers could use the site as a reality check on home prices.

BloodhoundBlog has recently begun awarding a regular "Cheez-Whiz prize" to Web 2.0 sites that, like recent winner HomeHugg, Swann finds "beyond stoopid."

Tomorrow: We delve deeper into real estate blog content, discussing how some bloggers don't shy from controversy or number crunching. Also, we dig into some blog technology bells and whistles.

FlyingMonkeyWarrior said...
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Anonymous said...

"Ah, I love the smell of Napalm in the morning."

Where's the screenshot?

Anonymous said...

More MSM lies from the right-wing Bu$hco/NAR controlled NY Times. Doesn't the NY Times realize only Keith and HP are to be believed? Geez.

A Bloomberg News poll of economists forecasts a slight increase in the Tuesday report in sales of existing homes, to an annual rate of 6.24 million units in January from 6.22 million in December.


Robert MacIntosh, chief economist at the fund manager Eaton Vance considers inconsistency to be an economist’s friend in a declining market.

“Those numbers have been all over the lot lately,” he said, pointing to an improvement in sentiment among builders to an eight-month high, even as housing starts have been plunging.

“The housing market is in bad shape,” but the wide dispersal of data “tells you it might be nearing some kind of a bottom,” Mr. MacIntosh said. “When you get mixed numbers on the same sector when it has moved dramatically, it tells you it’s bottoming out.”

Anonymous said...

To the anti-Orange County poster...dude I'm not sure what your issue is with Christianity (probably molested by a priest judging from your hatred of them) but I've lived there for 10 years and have never encountered one fundamnestalist.

You need to get a fucking life man.

Anonymous said...

Gentlemen, meet your enemies.

Mammoth said...

Dear Mr. Anono out-of-work PHD,
We have all seen your posts on HP, repeating the fact that you are unable to find a job despite having a PHD. Here are some pointers for you.

1. Nobody out there, who is hiring right now, cares about your PHD. As a matter of fact, to announce to potential employers that you have one, is effectively telling them you expect to be paid $20,000 more than the other guy who is competing with you for the job.

Your likelihood of finding a job when “PHD” is written on your resume, is about the same as your getting laid when your standard pickup line is, “Hi, I have a loathsome communicable disease. Would you like to come home with me?”

2. Do you see how the posters on this blog laugh at all the FB’s who bought a house within the last 2 years because they paid too much? Guess what? You spent way too much time in school; i.e. YOU paid too much! What were you thinking?

3. Haven’t you read the memo - that much of the R & D that formerly was performed here in the US is now done overseas? You didn’t say what your PHD is in, but if you are a scientist or researcher - unless you can find a govt. laboratory that is hiring, or perhaps one of the few firms that still does some research here (think Dow or Boeing), - LOL!

4. What’s that you say - there aren’t any firms like that where you live? Then go
look for a job in an area where they are hiring, and if need be, just pick up and move. If you do not like the situation that you are in, man, then you need to take some personal responsibility and do something to change it! Doing the same thing day after day, and expecting different results, is insanity.

It does not take a PHD to figure that one out!

5. Before you call me an armchair critic, let me tell you that I worked as a printer for years and years, hated it, and decided to change my situation. So I enrolled in college and got a degree in Engineering. I beat my head against the wall and starved for a few years, ran up a huge student loan debt (which I finally paid off after 10 years), and improved my situation in life.

And while I was in college, I remember looking at all those graduate students, going for their Master’s and PHD’s, and thinking, “what a bunch of idiots - they could be out in the field pulling in an Engineer’s salary instead of spending additional fruitless years painting themselves into a corner.”

Do something to improve your lot in life - whining on this blog will not get you to your goal. Good luck!

Anonymous said...

According to reuters:

U.S. could slip into recession by year-end: Greenspan

Mammoth said...

" Barcelona you can rent the same damn place for a fraction of the cost of owning"
There is a saying:
"If it flies, floats, or fu*ks, it's cheaper to rent it than it is to buy it."

Add vacation homes to that list.

Anonymous said...
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Anonymous said...

The next big thing to effect housing prices could be fast rising sea levels - displacing coastal city residents to higher land.

scary stuff as undisclosed government reports show that the greenland ice mass may enter the sea in 10 to 15 years causing the sea to rise over 20 feet. This would wipe out most of Flordia, New York, and California housing alone!!!

Anonymous said...

oh oh someone watched an AlGore movie recently

Anonymous said...

uhm smart guy, if all the housing in fl and ca is gone that will increase prices for everyone else or did they not teach you basic supply/demand theory in your GED classes?

the pope said...

The more you spread your gospel, the more people will rent vs. buy, the higher rents will go and the more justified current valuations become.

I don't buy it. Its a zero sum game, but on a similar note, why do people feel the need to warn others of crashes or corrections?

Anonymous said...

yo mammoth,

Amen brother. I too am sick and tired of hearing about this crap. Unless you want to be a professor, getting a PhD is stupid economically speaking. If I were hiring for a position and a resume with a PhD came to me, it would go straight in the trash.

FlyingMonkeyWarrior said...
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sinis said...

Hey, don't laugh too much about mobile homes. The dealers/sellers are demanding 30% down cash.

Anonymous said...

The premium in salary a PhD commands is trivial comapared to the benefit that individual brings to the company.

Don't be sore, you could have done a few extra years in academia to get an advanced degree too.

Katherine who? said...

For a good comic strip, possibly about the "rolodex of realtors" and her NAR press releases, try to use this:

Anonymous said...

“Denver City Council President Michael Hancock Hancock is considering a ’second chance’ program in which an investor group would buy foreclosed properties in bulk, rent them back, and eventually sell them to those who have been foreclosed on.”

“Some worry, however, that such a plan would only set folks up for another fall. ‘Homeownership has been sold to many people as the equivalent of a Powerball ticket,’ says Jacky Morales-Ferrand, who directs the city’s housing development division. ‘But the truth is that not everyone can afford a home when the roof needs to be fixed or the plumbing breaks. Most of us won’t win that Powerball ticket.’”

“Some expect things to turn around eventually. That’s not likely to be soon enough for Garcia, who has yet to receive an offer. ‘”I feel bad,’ he says. ‘Everyone thinks they want to get a house to get money for the family. But I need to have a life, too.’”

Anonymous said...

For those interested in auctions within the United States, there's a website called Proxibid which will allow you to connect to whatever sale is going on and see live bidding.

Anonymous said...
This comment has been removed by a blog administrator.
Shakster said...

sinis said...
Hey, don't laugh too much about mobile homes. The dealers/sellers are demanding 30% down cash.
Ah CRAP! I knew it wouldn't last.
---------------------------------To the PHD guy,the government will take you,they believe you.
To Anon with the Ice melting phobia
I am relly looking forward to all the available land in Greenland when Global warming kicks in full force.The gain in land mass from Antartica to Greenland totally offsets the loss of coastal areas around the world.The losses in California will be slight,due to the abrubt coastline,and the mean elevation is 1000 ft.Texas will get hit a little,and Florida just has to trainload in some soil,it,s all good man.Men and women of the world are tired of shopping,and have become bored.The Earth is just being a gracious host and giving us a new game to play,along with solving our lack of land problem.Prices will continue down.

Anonymous said...

Mammoth said...

"...And while I was in college, I remember looking at all those graduate students, going for their Master’s and PHD’s, and thinking, “what a bunch of idiots - they could be out in the field pulling in an Engineer’s salary instead of spending additional fruitless years painting themselves into a corner.”

Do something to improve your lot in life - whining on this blog will not get you to your goal. Good luck!"
Hey, you're exactly right about the worth of an engineering Ph.D. in North America now. But I love the work. I enjoy the education, and I treat it as an education, not vocational training like the foreign students do (and that's all they do).

What am I going to do when I graduate? Fuck if I know. But I'm sure as shit going back to Nortel Hell. Bunch of code monkeys pretending they're engineers. I'm happy to see their jobs shipped off.

For me? Maybe India, maybe China. Why not? There's nothing here. Maybe Doctors Without Borders. They need logistics people. I like my life streamlined as it is. Why change?

Sam said...

Looks like the spring-selling season will become a spring buying one:

Spring-Selling Season Coming?

Anonymous said...

Ahhh, the power of poor public education and lack of economic literacy are so, so apparent in the trolls and the minimizers. I love how some state that prices have not declined. Well even if they have not declined in nominal terms, with the understated rate of inflation and the fed increasing the money supply combined with a dollar that has depreciated steadily in the last five years, you have a REAL DECLINE even in places where nominal preces have stayed flat or edged up a tad. Get it folks--nominal is not real. What matters is REAL prices. Of course this will elude many non-HPrs but hey we can only inform you we can't educate you. Guess the fact that Greenspan announced recession is a coincidence.........

Anonymous said...

The latest Mortgage concerns centre on the Alt-A market, in which consumers with slightly better credit than the weakest subprime borrowers can obtain loans with loose terms - such as no proof of income. Late payments and defaults on such loans are running at four times the historical rate.

"The delinquency numbers for the 2006 Alt-A originations are materially worse than a lot of people would have expected," said Charles Sorrentino, mortgage analyst at Merrill Lynch.

Anonymous said...

Trash, like other things, rolls downhill: Alt-A loans are closer to junk than trash, but high loan-to-value-ratio Alt-A loans are still trash.

By next week there will be few buyers of Alt-A risk, and that market may lock up just like subprime.

A sudden withdrawal of mortgage credit is a new hazard to vulnerable housing markets

Anonymous said...

Another blow to the ALT-A business.

Mortgage finance company Freddie Mac will no longer buy investments that include a controversial type of mortgage that critics say has contributed to an increase in delinquencies and foreclosures.

Freddie Mac is dropping "2-28" adjustable-rate mortgages that have been popular among borrowers with damaged credit.

GreedKills said...

Coldwell Banker office sued over referrals.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

To: All Apex Mortgage Employees and Loan Officers

From: Roy Williams, President

Subject: Loans in the State of Georgia

The purpose of this letter is to notify you that EFFECTIVE IMMEDIATELY Apex Mortgage will not make, assist in, or broker any loans secured by property in the State of Georgia.

We hope to broker loans in Georgia in the near future, and will notify you of our decision to do so.

In this regard, keep in mind that Apex Mortgage has a policy that prohibits a loan officer or employee from making any loan in violation of state licensing laws. Loan officers or employees who violate this prohibition will be terminated immediately.


Roy Williams


Anonymous said...


is it just me or are all the lenders out there running for the hills in the Sub prime Market! Everyday I get the dreaded "Guideline Change" E-mails. All my regular's are either spinning out totally or changing the min FICO requirements, min loan amount going up- ETC. I'm dying here!

They sure didn't have any problems with it last year before all the pundits of gloom and doom starting screaming the sky is falling!

Are the rest of you having the same issues?
What is everyone think on this?


Lenders aren’t changing because of Pundits of Gloom and Doom.

The changes are the result of non performing loans. Wall will not buy certain loans or will only buy them at a discount. Many lenders are playing a dangerous game trying to gain or protect market share by offering loans that they know they will sell at a loss, like stated 80/20

Some companies like mine and Fremont chose to eliminate money losing programs. Others will try to gain market share and it may work for some, but don't be surprised to see some major players take some big hits.


Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Green Welling LLP Files Class Action Suit Against New Century Financial Corporation

Anonymous said...

From Pitsa

You got to read this, very interesting:

Anonymous said...

Today 30 years fixed rate mortgage is at 39 years low and houses sells are still slow.

Realtors kept pitching the low interest rate, but forget that just because
interest rate are low it doesn't mean lenders are going to lend everyone money.

With lenders tightening standards on the subprime mortgages they offer to high-risk borrowers, home sales will have to take a hit.

Anonymous said...

Looked at a house an realtor said i had an attitude and can't afford to buy a house cuz i said his listed house is a overpriced junkbox. I laughed at him and left.

FlyingMonkeyWarrior said...

What will a war do to the RE values in Brownsville Texas?
For pics and complete story:
Nissan pickup truck fitted with armor and bullet-proof glass was stopped by the Mexican army in Matamoros, just south of the U.S. border at Brownsville, Texas.

The weapons seized included 18 M-16 assault rifles, including at least one equipped with an M-203 40mm grenade launcher, several M-4 carbines, 17 handguns of various calibers, over 200 magazines for different weapons, and more than 8,000 rounds of ammunition, assault vests and other military accessories.

Mammoth said...

Looks like the Mammoth struck a nerve with yesterday’s post on PhD’s.
To Anon 2/26, 2007 7:44 PM:
-Right On!
To Anon 2/26, 2007 10:50 PM who wrote, “The premium in salary a PhD commands is trivial comapared to the benefit that individual brings to the company. Don't be sore, you could have done a few extra years in academia to get an advanced degree too.”
- Typical PhD…too arrogant and/or spaced out to even bother fixing your spelling. Brings back memories of a PhD who I once watched pour a can of motor oil into his car’s radiator. All academic learning and no practical experience, let alone common sense.

Sore? You mean sour grapes? Not at all. No regrets about not spending an additional four years imprisoned within the walls of academia, missing out on four year’s worth of an Engineer’s salary while racking up another $40,000 in student loan debt. BTW, those first four years after graduation provided more of an education (i.e. real-world work environment) than the time I spent in college.
To Anon 2/27, 2007 2:02 AM:
- You just nailed it. While a US PhD may not have squat value here, it will be a badge of honor for you if you work for a foreign firm in Asia. You will be able to command a top-rate salary and live like a king there.

However…have you spent any time in a third world country yet? It is not for everyone…
Not to single anybody out here, but yesterday’s original post was aimed at the out-of-work PhD who has been whining here on HP for the past 6-8 months. But he is probably off whining on another blog and hasn’t read these posts. Or perhaps he finally actually landed himself a job interview? Let’s hope so!

O.k., back to housing…


gringo star said...

chinese stock exchange down 10% yesterday, dow jones et al. down as well....maybe this is the beginning of the end

Anonymous said...

from Bloomberg:

If credit tightens and flippers are done, then what?

Anonymous said...

A PhD is not really training.

It's a pedigree, a ticket through the glass ceiling, an invitation the the CEO's Easter party that the non intellectual elite are barred from.

It's also a few more years of bangin' ungrad pus#y, priceless!!!

Anonymous said...

A PhD is training/education, but so much more to...

It's a pedigree, a ticket through the glass ceiling, an invitation to the CEO's Easter party that the non intellectual elite are barred from.

It's also a few more years of bangin' undergrad pus#y, priceless!!!

Anonymous said...

February 27, 2007 1:26 PM


Funny. I believe you may have been honest. An "over priced junkbox" how typical. I hope you had the last laugh; it appears you did.

JW said...

My own daughter was a recent victim of she and her husband's poor judgement to utilize this type of mortgage. Now, they are facing foreclosure.

Anonymous said...

If housing only goes up, wouldn't it be wise to sit and wait and cash out in the future? For those that are pro housing, I would like to see it explained to these folks.

Anonymous said...

The nerve that was struck about PhD's is similar to the whole FB, Bitter/enter fight.

Blogs are a great way to equalize the playing field, anybody can post a comment and add to the discussion, but ... there are certain gloaters, winners, "the envied in real life" - the non FB owner, the Rich renter, the PhD - these are the real deal Mammoth, no charlatans.

We may make spelling errors, but usually don't mess up the radiator. Double negatives are a big "no no", written, spoken, or blogged.

Anonymous said...

Somewhere I hit a nerve about Orange County, California. Another poster on this blog said that in ten years he/she never met a fundamentalist. Hmmm...he/she must be living in a cave. Because you see, Christian Fundamentalists rule Orange County, California. Megachurches everywhere. And surfers tend to be members. And they do wish for the end times. Because one Israel takes back the promised land, according to scripture, Jesus will return.

As for getting a life, my life would be better if I did not have to hear about how because I am not thinking positively in the light of "God", I am not wealthy. You see, it is about positive thinking. The mantra, thinking abundance and you will be rich. The mantra of Orange County.

What the fuck does this have to do with housing prices in Orange County?

Religious intolerance. Hate crimes. Traffic. Congestion. Anger surfers. Sexy Coto housewives. Megachurch traffic. TBN (look it up) and the Crouch family. Shopping, shopping, shopping. Emptyheaded egocentric surfer youth. Christian soilders. The mega-mall mentality. Calvary Chapel and the Jesus Freaks.

Orange County, California. The land of sunshine, Jesus Freaks, some orange groves, corrupt politics, a place where you are poor because you are not thinking straight. That is, positively. The land of Mexican bashing. If you are black in South County, look behind your back. Seriously.

Anonymous said...

I want to vomit. Just look all those analysts now saying at CNBC that they warned that this was coming, blah, blah, blah... Last week they were selling a rosy picture. That Kramer is one of them, Pukeblow is another.
These people make a ton of money but are always looking on the rearview mirror. And there are still disinformation agents saying that this is just a small correction and that everything will be ok by the end of the year, with S&P at 16%. Man, who hires these people:

Blowfly said...

Anonymous 4:22 PM you stupid fucking moron renter dip-shit. "A PhD is not really training". Let Blowfly tell you all about what a PhD really is to remove any remaing fog and obfuscation from your fricking imbecile ghetto brain. A PhD is a synonym for Pimpin'hoes Degree.

Anonymous said...

PHD - Piled Higher and Deeper

Anonymous said...

I dated a PhD student from Haaaavaaahhh. She is now 30 and broke, still living with a roommate. I on the other hand have a lowly BA, and make $120K a year.

Anonymous said...

Ahhh, the power of poor public education and lack of economic literacy are so, so apparent in the trolls and the minimizers. I love how some state that prices have not declined. Well even if they have not declined in nominal terms, with the understated rate of inflation and the fed increasing the money supply combined with a dollar that has depreciated steadily in the last five years, you have a REAL DECLINE even in places where nominal preces have stayed flat or edged up a tad. Get it folks--nominal is not real. What matters is REAL prices. Of course this will elude many non-HPrs but hey we can only inform you we can't educate you. Guess the fact that Greenspan announced recession is a coincidence.........

How much is your REAL rent? Oh wait I forgot. In HP land rent never goes up, even in a time of hyperinflation.

Anonymous said...

AL GORE: $30,000 Utility Bill

What a fucking hypocritical asswipe telling me I'm killing the world while he lives in a 20 bedroom palace and spends $30K a year heating and cooling it.

Anonymous said...


You go Greenspan! Nice call. Start that avalance off. LOL.

I bet Fleckenstien has one hand on the keyboard and one hand between his legs, going to town.

Anonymous said...

uh oh.

now the New Zealand exchange is selling off...

GreedKills said... ridicule someone with a PhD is a cheapshot.

Shouldn't we be focusing on those that have diploma mill degrees instead?

Anonymous said...

Dumb dumb dumb. Education is another PONZI scheme. You can do the same job today with your BA/BS as you could 40 years ago with your HS diploma. Spend, spend, spend on education. And someday you can be part of the elite - just kidding. They just want you to spend.

Anonymous said...


Education is not a Ponzi Scheme

It is something "I" get to lord over "YOU"


Anonymous said...

I pleasured myself to the crash.

jt said...
This comment has been removed by a blog administrator.
Anonymous said...

1:23am. I think you are probably not lying and wow you are one sick puppy.

Dr. Pangloss said...

Hey, i have a worthless Ph.D. . . . in economics from a top-tier school no less! good god!!! have pity on me!

i was an indentured servant for 3 yrs. to a committee of tenured professors who spent all their time soliciting for grant money so i and my indentured peers could do completely worthless and irrelevant "research" that did the dept. and me about as much good as if i had spent my time kayaking off half moon bay in preparation for a career as a brain surgeon. i won't dare share the topic of my dissertation; it's totally embarrassing and ridiculous.

economics at the top-tier schools (or any school, for that matter) is a pathetic joke; as worthless as buttons on a rock.

in fact, if i had my way as a dictator, i would abolish economics as a discipline, close down every econ dept in the country, and exile economists to the middle east to advise al qaeda and the taliban . . . and perhaps the chinese.

economics is worse than a pseudo-discipline such as sociology, b/c people think econ is legitimate and parrot some of the most ridiculous notions such as "free trade", "globalization", "deficits don't matter", "the Fed has it all under control", "tax cuts lead to increased investment, productivity, and higher wages for workers", and all manner of claptrap.

what did i do with my worthless Ph.D.? i spent 2-3 yrs in post-doc obscurity, worked for 3 consulting firms over 3-4 yrs, and then started my own investment partnership 17 yrs. ago and never looked back. virtually nothing i learned assists me in making money investing. most econ Ph.D.'s i know are not teaching and wasted their early to mid-20s (as i did) learning econometrics (LOL!!!!) and applying tests of heteroskedacticity and autocorrelation to some world that doesn't and never did exist, and never will.

and everyone talks about how alan greenscam is a brilliant economist and forecaster. LOL!!!! talk about hilarious! the guy was among the least accurate forecasters you could ever hope not to be!!! he received his Ph.D. in absentia in his 50s and as a political favor, not b/c he earned it via a dissertation. greenscam is a fraud!

if anyone reading this has a bright younger relative or a friend with a bright son or daughter considering grad econ degree of any kind, PLEASE, dissuade them at every turn!!!! they'd be better off learning how to install and repair computers or repair autos, trucks, or aircraft!!!

as bad as econ is law!!!! good god almighty!!! PLEASE, no more lawyers!!! 3 yrs of law school and 10 yrs. trying to bill 80 hrs./wk. to make some bloodsucker rich so you can do the same for some other poor sap when you reach your 50s.

now, let's get on with this bear market, housing bust, and depression!!! watch china implode into social unrest, hard landing, banking and financial markets crises, and growing anti-western sentiment, with US and japanese firms pulling their money out of china/asia and putting money in US treasuries, causing the US$ to firm and commodities prices to crater.

let's get it on!!!!

Anonymous said...

You lord over me. Not quite, I am paid 6 figures with no college degree - oh that smarts, don't it? A PhD today = a BS in 60s, a BS today = a HS diploma in 60s. Your offspring will have to get 3 PhDs in this educational arms race - save your pennies poppa. You let the elites burden your lives with endless hurdles to be their McServents. Meanwhile, we lowly underlings create wealth from an early age of 22. I guess one thing they don't teach in school - how to think critically about the world around you. Most millionares never cared too much about book-smarts. The world is full of idiots with college degrees thinking they are special. I wonder how Thomas Edison, Abraham Licoln, Bill Gates, and the Wright Brothers ever did anything without the offical saction of the educational establishment.

Anonymous said...

Fremont Investment & Loan delays Reporting. Doesn't sound good.

The Santa Monica, California-based parent of Fremont Investment & Loan had planned to release results and hold a conference call to discuss them on Wednesday morning. It said it intends to file documentation with the U.S. Securities and Exchange Commission explaining the delays.

Fremont did not give reasons in its press statement for the delays. Spokeswoman Linda Bandov said Fremont will disclose the reasons on Thursday.

Subprime lenders are struggling with rising delinquencies and defaults, as slowing home price appreciation makes it more difficult to refinance. Lending margins have narrowed, and investors are forcing many lenders to buy back soured loans at a loss.

Anonymous said...

Is there a connection between China 10% stock market drop, Dow 400% drop, and HSBC subprime lossess?

HSBC Holdings Plc, Europe's largest bank, has also reported larger-than-expected subprime losses.

Sandy Derickson, head of HSBC's US retail operations, has also stepped down, the Financial Times has reported.

The surprise moves are being viewed by onlookers as a decisive step by the bank's international management to take a tighter grip on the North American unit and its problems.

HSBC's subprime mortgage business in the US has been on the ropes since the collapse in the market for such home loans, which was triggered by rising interest rates and declining house prices in some parts of the US.

According to a statement from HSBC, Douglas Flint, group finance director of HSBC Holdings plc, has now become non-executive chairman of HSBC Finance Corporation.


Anonymous said...


If today market drop is any indication, then perhap we are seeing the true unfolding of the SUBPRIME market.

Arguably the biggest story from last week was that Hong Kong Shanghai Bank (HSBC) one of the world’s largest banks, has taken a $10.6 billion hit on U.S. consumer loans, specifically in the subprime arena.

(Forget for a moment, what happened to smaller concerns like New Century Financial or NovaStar.)

These problems are not only bad in and of themselves, but in their potential effects on the global economic system.

That’s because the bank has ties to China through its original namesake, and to Britain and the United States, through the acquisition of Britain’s Midland bank and America’s Household International.

The danger arises because the world’s two big economic bubbles are U.S. consumer spending and Chinese capital spending. HSBC’s recent problems were tied to the former.

At the risk of a slight digression, one knows that the U. S. consumer lending market is on its last legs when lenders like Bank of America considers illegal immigrants a hot market for its loan products, because everything better has already been mined.

This seems like a case of trying to suck the last bit of juice from an already oversqueezed lemon, an extreme application of the well known law of diminishing returns. HSBC, through Household International, was on the horns of the same dilemma.

And some think that Chinese capital spending may be in similar straits. Columnist Jim Jubak is a case in point. In his article “Time is Running Out on China’s Economic Boom,” he rightly points out that “the current spate of growth has been built on non-renewable human, environmental, and capital resources,” which is to say that it is soon likely to regress to the global mean as Japan’s economic miracle did in the 1980s. And such a regression, while normal for the United States, would represent a hard landing for China.

The collapse of the Credit Anstalt Bank, with its ripple effect on Germany, probably was more responsible than events stateside, for the length and severity of the Global Depression of the 1930s.

Anonymous said...

The first signs of stress are just starting to show. HSBC Holdings PLC -- one of Europe's largest banks -- last week fired the head of its U.S. unit. Earlier this month, HSBC set aside a surprisingly large $10.6-billion (U.S.) for bad loans, particularly in the subprime market, where its Household subsidiary is a major player.

Other major subprime players, including California-based New Century Financial Corp., NovaStar Financial Inc. and Fieldstone Investment Corp., are all facing a similar deterioration of market conditions. Nearly 13 per cent of subprime loans are now in default, versus a modest 1.4 per cent for all mortgages. And many more borrowers are poised to fall behind on payments as $1.5-trillion worth of floating-rate mortgages ratchet up this year.

Anonymous said...

Stocks plunge, bonds surge

"Only time will tell if this is a correction or more. But I feel we had gotten the point of feeling that risk was nonexistent and maybe people have finally gotten a wake-up call. I feel this must have something to do with the subprime mortgage market and some major banks like HSBC and Citi and JPMorgan Chase have some pretty substantial exposure and I'm not sure that anyone has gotten their hands around this. I would not be surprised it a hedge fund or two got into trouble."

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Hurry, Hurry, get you redhots.

US Dollar tanking again.

Anonymous said...

Dollar hit by global stock losses, US economic fears

The US dollar lost ground against other major world currencies including the euro on Tuesday as world stock markets fell heavily, amid fears over Chinese and US economic growth.

Sharp falls on the Shanghai stock exchange triggered declines in Europe and across the Americas, particularly on Wall Street, a day after former US Federal Reserve chairman Alan Greenspan warned about US economic growth, traders said.

The euro surged to 1.3243 dollars at 2200 GMT, up from 1.3185 dollars late Monday in New York, marking its highest level against the dollar since January 3.

The dollar meanwhile fell sharply to 117.91 yen from 120.59 yen on Monday, as the main blue-chip US stock index, the Dow Jones Industrial Average, plunged over three percent to close down at 12,216.24 points.

The dollar struck its lowest point against the yen since January 8.

Anonymous said...

Financial stocks were battered on Tuesday, with Goldman Sachs tumbling more than 8 per cent on concerns about the US mortgage market and the impact of a possible slowdown in China.

Investors are also nervous about the effect rising defaults on subprime mortgages will have on the Wall Street banks' lucrative business securitising the loans.

Lehman Brothers stock dropped nearly 5 per cent to $74.19 for a fall of almost10 per cent in the past three trading sessions. Bear Stearns was down 4 per cent at $152.31, 8 per cent lower than Thursday's close.

Lehman and Bear Stearns are seen as the most exposed to the loss of securitisation revenues from subprime mortgages and losses from any retained portions of subprime securitisations on their balance sheets. Brad Hintz, analyst at Sanford Bernstein, estimates a worst case earnings reduction of 4 per cent and 5 per cent respectively.

A number of Wall Street banks have acquired subprime mortgage lenders recently to ensure a continued supply of loans for securitisation, increasing their potential exposure to problems in the market.

Merrill Lynch, which paid $1.3bn for First Franklin, a subprime lender, in September, saw its shares fall nearly 4 per cent to $83.43 on Tuesday, giving it a drop of almost 9 per cent since Thursday's close.

Among the Wall Street banks, Goldman Sachs was hardest hit, although the fall in its stock of about 10.4 per cent since Thursday was in line with that of Morgan Stanley, which was down 5.6 per cent on Tuesday.

Goldman has a larger exposure to China than other Wall Street banks partly because of its 5 per cent stake in Industrial and Commercial Bank of China.

Anonymous said...

BankUnited Financial (bkuna), best known for ARM loans in Florida, apparently has had it with critics. Here's what Raymond James analyst John Pandle, who rates the stock an underperform, told his clients today:

"BankUnited is hosting and analyst/investor meeting today and tomorrow. However, we were not invited to attend and executive management continues to ignore our phone calls and e-mail messages seeking information about several areas where we have fundamental concerns, including rapidly deteriorating asset quality, an acceleration of negative amortization growth on option ARM loans, lower loan sale gains, and subsiding margin expansion.

"Notably, a company representative informed us on Friday that the presentations will not be Webcast. While management's decision to exclude critics and limit access to the information presented may somehow satisfy the letter of the law as it relates to Regulation FD, it certainly violates the spirit of the law, in our view."

Anonymous said...

Massive liquidity and "extreme complacency" among investors = bad ALT-A loans

The stock market sold off sharply yesterday, surprising many by its swift reaction to the even steeper drop in China's market.

The high level of borrowing, with relatively little regard for credit risk, has worried many market observers, who have felt that any wobble in the credit markets could have widespread and sudden repercussions. Repeated indications that the sub-prime lending market is experiencing a graver downturn than originally thought have brought such a shakeout closer to the surface.

Specifically, higher than expected defaults in the so-called Alt-A markets appear to confirm fears of widespread weakness in that sector, causing a surge in 10-year treasury bond prices as investors ran to quality.

Anonymous said...

Fitch identified 249 U.S. Prime and Alt-A transactions among its $503 billion rated universe as 'Under Analysis', indicating that Fitch will be issuing a rating action within 30 days.

Of the total of 249 transactions, 237 will be reviewed because Fitch has not publicly commented on them in the past 12 months. The 12 transactions listed below are designated as 'Under Analysis' having been identified for potential rating actions by Fitch's automated algorithms.

Anonymous said...

Exchange-traded funds tracking stocks in Asia and the Pacific took a direct hit yesterday after China's markets were routed on fears over slowing economic growth.

Some of the ETFs hit hardest by the global pullback had been recent highfliers, underscoring the volatility often seen in emerging markets.

One day after Chinese stocks hit record highs, its market lost about 9% yesterday as investors took profits on speculation the country's leaders may introduce measures to slow the country's booming economy at a coming government meeting. The selling spread into other emerging markets as well as exchanges in the U.S. and Europe.

Anonymous said...

If Citigroup goes down how many other banks will Citigroup take down with it?

Nikko Cordial Corp. plunged 15 % yesturday, how much of the Nikko Cordial fraud did Citigroup knew?

After the Michael Berger" case open the doors for investors to go after the failed Hedge Funds and it Prime Brokers, why is Citigroup considering a plan to turn Nikko Cordial into a wholly owned subsidiary?

Citigroup may lift stake in Japan's Nikko Cordial to over 33 pct.

Japan's Nikko Cordial third-largest brokerage said it will file the damages suit against Junicho Arimura, former Nikko Cordial president, Hirofumi Hirano, former chairman of Nikko Principal Investments Japan Ltd., and Hajime Yamamoto, former chief financial officer of Nikko Cordial

Tuesday Nikko Cordial will sue three former senior executives for a combined 3.1 billion yen for their roles in accounting fraud committed at the firm.


Shares in Japan's Nikko Cordial Corp. plunged 15 percent on Wednesday after the Nikkei business daily said the brokerage was likely to lose its stock listing over an accounting scandal.

Anonymous said...

Ameriquest Parent in Talks to Sell

ACC Capital Holdings is in "advanced" talks with "a potential partner" about its subprime mortgage-banking operations, which include Ameriquest, a company spokesman said Tuesday.

ACC, majority-owned by billionaire Roland E. Arnall, hired investment bankers at JPMorgan Chase & Co. late last year to take offers for all or parts of the Orange, Calif., company. Its units include Ameriquest, which lends directly to consumers; Argent, a wholesale lender that works through outside mortgage bankers and brokers; and AMC Mortgage Services, which collects mortgage payments and manages borrowers' accounts.

Anonymous said...

US fund investors brace for effect of market drop

Millions of American mutual fund investors are bracing for losses in the wake of Tuesday's sharp market drop, which is likely to have hit Asian funds and small cap funds the hardest, portfolio managers, analysts, and advisers said.

"Whatever momentum we had for February has probably been erased. Many people will see the year's returns hit hard, if not erased completely,"

Anonymous said...

In 12 days, we get another dive, brought on by mounting negative economic data.

Anonymous said...

February 25, 2007

US Housing Meltdown
by Mike Hewitt

Recent data on the real estate market leaves no doubt that the housing bubble is quickly deflating. In 2006 existing home sales declined by 8.4%, the biggest drop in 17 years, and new homes sales fell by 17.3%, the largest in 16 years.

According to the National Association of Realtors, sales declined by 10.1 percent nationwide in the fourth quarter compared with the same period a year ago. The national median price slipped 2.7 percent to US$219,300 from US$225,300 the year before.

California was among the states with the biggest sales declines from October through December, behind Nevada, Florida, and Arizona. The National Association of Realtors reported that 40 states had drops in sales. Prices fell in half of the nation's major markets.

San Francisco Bay Area home sales fell in January for the 24th straight month, and prices dropped to their lowest level in a year and a half. According to DataQuick, January 2006 sales were the lowest for any January in 11 years.

The Commerce Department announced that the construction of new homes fell in January by 14.3% and that the number of vacant homes increased by 34% in 2006 to 2.1 million units, nearly double the long-term vacancy rate.

From 2000 and 2006 mortgage debt soared from US$4.8 trillion to US$9.5 trillion on a reserve of US$44 billion.

By the time the housing bubble deflates, millions of working class Americans will be left to pay off loans that are considerably higher than the current value of their home - assuming they still have one.


Americans continue having difficulties paying their mortgage obligations, with December foreclosure rates above the 100,000 mark for the 5th straight month. According to RealtyTrac, the number of homeowners entering some stage of foreclosure process in December was 109,000 ...up 35% from December 2005.

In 2006, a mere US$300 billion in ARMs reset pushed over-leveraged homeowners to or over the brink of insolvency. About US$1 trillion in Adjustable Rate Mortgages (ARM) are due to reset by late-2007. Even if the Fed does not raise rates anymore the ARM's will go up because they will adjust upward from the low introductory teaser rates.

Millions of borrowers will see dramatic increases in their monthly mortgage payments on homes that have depreciated 10% to 20% in value. The number of foreclosures will exert greater downward pressure on housing by increasing inventory. Given that nearly a third of job creation has come from the housing industry in the last 5 years we can expect an increase in unemployment.

RealtyTrac reports that home foreclosures surged 19% between December 2006 and January 2007. 130,511 American homes were in some stage of foreclosure last month, up 82.5% in two years.

The Center for Responsible Lending (CRL) estimates that 2.2 million American homeowners who took out sub-prime loans from 1998 to 2006 will likely lose their homes via foreclosure. One speaker anticipates a "humanitarian disaster worse than Katrina" from vast overuse of sub-prime lending practices.

In testimony to the Senate Banking Committee in September, Michael Calhoun, the President of the CRL, explained an example of the most typical sub-prime loan, known as a 2/28, with an "exploding ARM". Buyers can qualify for this type of loan if the original ("teaser") monthly payment is not higher than 61% of their after-tax income. At the end of two years, even without a rise in interest rates, the payment will typically rise to 96% of the purchaser's monthly income.

Nobody can afford a mortgage that high.

The Friedman Billings Ramsey Group reports that seriously delinquent mortgages (borrower is at least 90 days behind on his payments or the home is already in foreclosure) make up 10.1% of today's high-risk mortgages. That is worse than late 2001, when the economy was in recession and far above the 5.37% seen in mid-2005.


Kurt Richebacher, Editor of The Richebacher Letter predicts, "the US economy is in danger of a recession that will prove unusually long and severe. By any measure it is in far worse shape than in 2001-02 and the unravelling of the housing bubble is clearly at hand."

The U.S. housing bubble began in 2001 when Greenspan lowered interest rates to a 40-year low 1% thereby igniting a refinancing and housing boom. Alan Greenspan knew exactly what the consequences of his low interest rate policies would be. In order to mask a deteriorating economy many ill-informed and unqualified borrowers were lured into home ownership believing that their stagnant wages would be bolstered by never-ending real estate appreciation. Now, after seventeen straight interest rate hikes, the bubble has begun to collapse.

According to the Marcus & Millichap Real Estate Investment Brokerage Company, the national median rent for 2007 will be US$943.00 a month, only 60% of the median mortgage payment of US$1,566. With housing prices expected to decline further, one must ask why buy when you can rent?

Mike Hewitt

Copyright © 2006-2007 Mike Hewitt

Stuck in So Pa said...
This comment has been removed by a blog administrator.
Anonymous said...

Bernanke said, there seemed to be no reason for the drop on tuesday!


Anonymous said...

Bernanke will make everything better.

Anonymous said...

Bernanke just said our children and grandchildren will have to pay our debt. Nice.
Also, don't know who sid it, but bascially the Credit of the US of A is pretty much toast, stick a fork in it, if something is not done.
Paraphrased from CNBC live coverage.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Hmmm...Los Angeles inventory has been dropping for 6 months. Prices of MLS listings are up $10,000 in the past month.


yuccatree3 said...

Good article--

"I Wonder". . . If the Recession Has Already Started

February 28, 2007

Anonymous said...

all the buyers left get colas that include inflation in taxations, while the inflation numbers for savers, does not

Anonymous said...

because, they are the taxes

Anonymous said...

China is dumping the yen, not the UDS? Whats that about?

tarvos said...

"Exchange-traded funds tracking stocks in Asia and the Pacific took a direct hit yesterday after China's markets were routed on fears over slowing economic growth."

All they have to do is hedge the Asian exposure with another ETF, like "QID", for instance. I did.

Anonymous said...

Consumer Reports Best Cars 2007:

Honda Fit
Honda Civic
Honda Accord
Infiniti G35
Infiniti M35
Toyota RAV4
Toyota highlander
Toyota Sienna
Toyota Prius
Mazda MX-5 Miata

Not one American car on the list yet about 50% of new car buyers for some unknown reason still buy a Ford, GM or Chrysler.


Can an American car owner clue me in please?

Anonymous said...

Who is going to go next?


Anonymous said...

Central Pacific Mortgage has abruptly shut down operations, telling employees it can't afford to pay them.

A memo to the staff from president and CEO John Courson on Monday said the company would cease operations immediately.

"We do not have sufficient cash to fund the February 28th payroll. Employees should remove their personal items from the office at the end of the day," Courson wrote.

Former employees of Central Pacific Mortgage told News10 the company's problems went beyond loans going into default.

"Central Pacific Mortgage was funding more loans (on their credit line) than they could turn around and sell," said a person who used to work in the company's financial operations.

"In my opinion, the lending practices were just one of the reasons (the company) had to close the door," the former employee said.

Anonymous said...

New York Mortgage Trust Inc. Co-Chief Executive Officer David Akre said Friday that the lending downturn over the past three years contributed to the recent decision to sell off its lending businesses, and that the real estate investment trust continues to seek "strategic options," such as a sale or merger of the remaining company.

Anonymous said...

What's behind the Global Stock market Shake-out?

Suddenly, the first major crisis facing the Bernanke Fed arrived without much advance warning – a rash of defaults on sub-prime home loans that if unchecked, can drive the US economy into recession in 2007.

Shares of many US sub-prime lenders, such as New Century Financial (NEW.N), and NovaStar Financial (NFI.N), have been brutally hammered in recent weeks, as defaults mount among homeowners with poor credit histories, and where there is smoke, there is fire.

Skyrocketing property values during the US housing boom made it easy for homeowners to borrow heavily against their homes with second mortgages and home-equity loans.

But if home prices continue to slide amid a glut of unsold homes and foreclosures, many over-extended homeowners will lose their ATM machines.

Two of the biggest culprits behind the rampant speculation in global markets are the Bank of Japan (BoJ) and the Swiss National Bank (SNB), whose lending rates are so low, that an estimated $330 billion of “carry trades” in yen and Swiss francs are swirling around the global markets.

On Feb 28th, the BoJ’s Atsushi Mizuno, pointed to the side effects of keeping low interest rates near zero percent.

“It could cause distortions in global asset prices by speeding up capital outflows from Japan.”

Anonymous said...

ABX.HE (home equity) index continue to deteriorate.

The CDX family of synthetic credit indices widened significantly yesterday, including the investment grade index, which widened by approximately 30%, along with the crossover (XO) and high volatility (HVOL) indices amid yesterday's stock market fallout, according to Derivative Fitch.

Accompanying this sell off were significantly wider dealer bid-offer spreads, which in some cases may have expanded to as much as four-to-five basis points (bps) from the typical .25 to .50 bps, and very high volumes, possibly more than four times what are generally considered to be normal levels. This activity was fueled by a variety of technical, fundamental and macro-economic drivers, including a sell-off in global equity markets and the continued deterioration of the ABX.HE (home equity) index.

tarvos said...

Funny how the US doesn't reveal that the Chinese government forced the state owned companies to buy Chinese stocks in order to create the illusion that the Shanghai Stock Exchange was up yesterday. And Bernanke said that the financial markets are working well...suuuuure. Another example how the financial markets keep peeing on the sheeple's back and saying that's raining. Thank god I get my news from outside the US, because in here everything is manipulated.

Anonymous said...

Stock Market Plunge: What's Next?; San Francisco Landslide

A massive pile of rocks and dirt left after a hillside collapsed in a popular tourist district could leave residents displaced for months, and property owners have to clean up the mess, city officials said Wednesday.

The 120 residents forced from their homes Tuesday by the Telegraph Hill landslide would have to wait at least three weeks, and possibly much longer, to return as the complicated process of removing the 75-foot wide swath of debris begins, officials said.

Telegraph Hill has been the site of several landslides in past decades, including a 1992 slide that led to the demolition of a hillside apartment building.

Owners of the affected buildings and land faced a Wednesday deadline for presenting a plan for shoring up the hillside, said Department of Building Inspection spokesman William Strawn.

All of the land involved in the slide was private property, placing responsibility for the cleanup on the owners, officials said.

Anonymous said...

This just make you want to buy a house in Madera.

Madera County water supplier thirsts for solutionBroadview Water Co. considers system to remove uranium

The annual summer warning went out earlier than usual this year from Broadview Water Co. "Don't drink the water."

Uranium in four of Broadview's eight wells overwhelmed the company's ability to meet state and federal drinking water standards before the water is released into nearly four miles of pipeline.

"You can brush your teeth with it; just don't swallow it," Broadview watermaster Dick Webb advised users that include Fresno Flats Historical Park. This year's warning came out last month

Anonymous said...

House Prices in America by Median Price and Valuation.

Anyone wonder why Madera County has a 75.7% over house price valuation problem.

Probably had nothing to do with the problem of Uranium in the drinking water.

Anonymous said...

Home builder Hovnanian Enterprises forecast a first-quarter loss in more bad news for the nation's housing sector.

The Red Bank- based company also said yesterday it expects an adjusted profit of 20 cents per share for the first quarter, above its prior guidance of 5 to 10 cents per share.

The adjusted profit estimates include about $8 million of charges related to write-offs of predevelop ment costs and land deposits dur ing the first quarter, and exclude charges related to its Fort Myers- Cape Coral operations in Florida.

On average, analysts surveyed by Thomson Financial forecast a loss of 2 cents per share for the quarter.

The company, which builds luxury homes in 17 states, will release first-quarter results after the clos ing bell March 8.

Analysts had mixed reactions to yesterday's news.

Alex Barron of JMP Securities said Hovnanian's forecast is an in dication of a painful year for home builders, who are dealing with a backlog of inventory in the market, and buyers, who are getting hit by prices and less accessibility to mortgages.

Anonymous said...

For the first time in several years, home builder WCI Communities Inc. reports quarterly loss, blames Florida housing maket

The company lost $64.6 million, or $1.52 a share, in the fourth quarter.

WCI’s losses were greater than analysts expected.

In a tough Florida market, WCI has seen fewer sales and more contract cancellations and defaults.

Write-offs for the quarter totaled $118.3 million. That includes costs for abandoned land options for projects WCI no longer plans to develop because of the market slowdown.

In the quarter, WCI saw a significant spike in cancellations for its traditional single-family and multifamily housing.

About 22 percent of contract purchasers scheduled to close in the quarter defaulted, compared to about 1 percent a year ago.

Gross orders totaled 257 units, but that was almost totally offset by 249 cancellations.

For the year, the cancellation rate in WCI’s traditional home-building division was about 40 percent.

He expects prices to continue to fall because of weakness in the Florida market.

At the end of the year, WCI had 691 traditional homes completed or under construction that were unsold. More than 600 were in Florida, Starkey said.

WCI officials withdrew their financial guidance for the year and offered no profit predictions.

Anonymous said...

HomeBanc annual loss at $6.5 million

"It is no secret that 2006 was a difficult year for residential mortgage originators as evidenced by the 17 percent decline in total mortgage originations from 2005 to 2006 as reported by the Mortgage Bankers Association in its Feb. 12, 2007 Mortgage Finance Forecast," said Kevin D. Race, HomeBanc president and CEO. "The same was true for HomeBanc with originations declining by 20 percent in 2006 from 2005.

Anonymous said...

U.S. banking regulators plan to issue guidance on the subprime mortgage market as early as Thursday afternoon

The guidance will be issued by agencies including the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

Anonymous said...

Not Good News for US Dollar

European Central Bank council member Axel Weber indicated he favors raising interest rates further after the increase the bank has already signaled for March.

``In the medium term, a more significant normalization of monetary policy is needed and we'll discuss it in coming months,'' Weber said in an interview in Frankfurt today. ``My opinion hasn't changed much.''

The ECB is poised to raise its benchmark interest rate to 3.75 percent from 3.5 percent at its next governing council meeting on March 8. Most investors are still betting the bank will increase its key rate to 4 percent by September

Anonymous said...

Fitch Ratings has downgraded Fremont General Corp.'s (NYSE:FMT) long-term Issuer Default Rating (IDR) to 'B+' from 'BB-', the long-term senior debt to 'B' from 'B+', and the Individual rating to 'D' from 'C/D'.

Fitch has also downgraded the Preferred Stock rating of Fremont General Financing I to 'CCC+' from 'B-'. Concurrent with this rating action, Fitch has placed FMT and Fremont Investment & Loan (FIL) on Rating Watch Negative.

Previously, the Rating Outlook for FMT and subsidiaries had been Negative. A complete list of rating actions follows at the end of this release.

Fitch's rating action reflects FMT's recent announcement that it will postpone the release of its fourth quarter and full-year 2006 results of operations, as well as the conference call to discuss such results. The company also announced that it will not file its 10K by March 1, 2007.

The company's unexpected announcement adds to Fitch's concerns previously noted in a recent rating action commentary and recent Credit Update.

While details have not been released, Fitch believes that more downside risk will materialize as a result of FMT's announcement pressuring FMT's financial flexibility.

In addition, the recovery prospects for FMT bondholders would likely be lower than previously estimated. The Negative Rating Watch signals that the next rating action could be negative for FMT and subsidiaries.

Fitch believes that FMT faces a difficult subprime residential mortgage market. Financial reporting delays notwithstanding, operating performance may continue to deteriorate over the next 12-18 months.


Anonymous said...

Fitch Downgrades 2 & Places 2 on Rtg Watch Negative from MASTR 2d Lien Trust 2005-1

Fitch has taken the following rating actions on MASTR Second Lien Trust 2005-1 mortgage pass-through certificates:

The downgrades affect approximately $7 million of the outstanding certificates. The Rating Watch Negative status affects $9 million of the outstanding certificates. Fitch previously took negative rating action on the above transaction in July and November 2006.


Anonymous said...

Allright! We now know the reason for the housing crash.

It was Florida's fault!

Break it up. Go home now. Nothing to see here.

Anonymous said...

Investment banks that buy mortgage-backed securities have a deeper worry than the billion-dollar estimate of fraud in lending each year. The fear is that it could be much worse.

Foreclosures and delinquencies are rising, and with it the realization that it's likely to be more than credit risk going bad. Fraud that's hidden during good times-fudged income on home equity applications or flipping schemes by shady appraiser/broker teams-comes to the crest when prices and sales stagnate. Secondary market investors are fretting just how deep the potholes may be in their large-scale securitization pools.

Evidence of that tide is already sprouting, from both market activity and the launch of IT tools to give secondary market buyers additional fraud prevention abilities beyond looking at "bid tape" data on loans they are offered.

"The capital markets want to understand more about these portfolios than they used to have to worry about," says Financial Insights credit and banking research director Christine Pratt.

Since these portfolios have become more loaded with non-conforming loans in recent years, firms in the secondary markets are starting to respond with more scrutiny and returning more questionable loans back to lenders. Several lenders in the fourth quarter reported more set-asides or heightened activity in repurchasing volume, stemming from rising early-and first-payment defaults that set off fraud alarms with investment banks. Higher-than-expected fraud losses took some blame in HSBC's bombshell February decision to shift an extra $1.76 billion in capital to cover bad debts in secondary holdings weighted with subprime and "piggy back" loans.

Anonymous said...

We have uranium in our drinking water.

It makes your teeth bright when you brush. They positively glow.

Anonymous said...

Low-End of Luxury-Home Sector Shows Some Signs of Chill

As the national housing market continues to weaken, prices of homes in the $1 million range are slumping in many parts of the country. In once-golden Sunbelt cities like Miami and Santa Barbara, Calif., as well as in major Midwestern cities like St. Louis and Chicago, prices fell in the fourth quarter of 2006 from a year earlier, in some places by as much as 7.2%.

These are some of the results of an exclusive report done for The Wall Street Journal by the National Association of Home Builders. "The million-dollar market is slowing down," says NAHB's director of research, Gopal Ahluwalia

Anonymous said...

Are interest rates going to go up, down or hold????
The pundents are all over the map....

Infidel Woman said...

CNBC Talking Head calls market trend

"Violent and Hurtful",

as stock market opens DOW down another 200 points.

Blames Tuesday’s temporary 500+ drop on computer glitch.

Market today, "not rational" as nothing has changed since Monday.

Made me LOL.

aka FMW

Anonymous said...

Man Tries to Cash $50K Check From God

Email this Story

Mar 1, 6:14 AM (ET)

HOBART, Ind. (AP) - Kevin Russell found out it's not easy trying to cash a check from God. The 21-year-old man was arrested Monday after he tried to cash a check for $50,000 at the Chase Bank in Hobart that was signed "King Savior, King of Kings, Lord of Lords, Servant," Hobart police Detective Jeff White said.

Russell was charged with one count attempted check fraud and one count intimidation, both felonies, and one count resisting law enforcement, a misdemeanor. He could face prison time.

Police were called to the bank after Russell tried to cash the check, which was written on an invalid Bank One check with no imprint, White said. Russell had several other checks with him that were signed the same way but made out in different dollar amounts, including one for $100,000.

Russell struggled with police as they tried to detain him, White said, and then threatened police as they transported him to the Hobart Police Department.

"I've heard about God giving out eternal life, but this is the first time I've heard of him giving out cash," White said.

No court date has been set for Russell. He was being held Wednesday at the Lake County Jail on a $1,000 bond.

Infidel Woman said...

Best Quote Of 2006?
By Chris Rock

"You know the world is going crazy when the best rapper is a white guy, the best golfer is a black guy,the tallest guy in the NBA is Chinese, the Swiss hold the America's Cup, France is accusing the U.S. of arrogance, Germany doesn't want to go to war, and the three most powerful men in America are named Bush, Dick, and Colon. --Comedian Chris Rock

Anonymous said...

Defector says Cuba is developing biological weapons

By Frances Robles

McClatchy Newspapers


MIAMI - The former chief of Cuba's military medical services is calling for international weapons inspections of a secret underground lab near Havana, where he says the government is creating biological warfare agents like the plague, botulism and yellow fever.

Roberto Ortega, a former army colonel who ran the military's medical services from 1984 to 1994, defected in 2003 and now lives in South Florida.

After living here quietly for four years, this week Ortega went on the Spanish language media circuit to denounce what he claims is an advanced offensive biological warfare weapons program. He spoke Tuesday night at the University of Miami's Institute for Cuban and Cuban American Studies where one angry heckler stormed out accusing him of deliberately sowing fear among Cuban exiles.

"They can develop viruses and bacteria and dangerous sicknesses that are currently unknown and difficult to diagnose," Ortega told The Miami Herald. "They don't need missiles or troops. They need four agents, like the people from al-Qaida or the Taliban, who contaminate water, air conditioning or heating systems."

He said Cuba was ready to use the biological agents "to blackmail the United States in case of an international incident" such as the threat of a U.S. invasion.

The Cuban government has denied such programs exist, but if Ortega's allegations are true Washington could face the prospect of an enemy nation 90 miles away with the capability of launching germ attacks.

Ortega said he told the CIA nearly two years ago about an underground Cuban facility southwest of Havana. The maximum security lab dubbed "Labor One" has an above-ground civilian cover and employs dozens of scientists, he said.

But in the underground facility scientists reproduced and stockpiled deadly germs and bacterias collected in Africa, he added.

He visited the lab in 1992 when he accompanied a high-level Russian military delegation, he said.

"I saw it," Ortega said. "I lived it."

Ortega is believed to be the first defector with details of such an alleged biological warfare facility, said University of Miami Prof. Manuel Cereijo, who studies Cuba's biotechnology and terrorism issues.

Ortega said he has come forward now, because he did not see the CIA taking public action on his information. The CIA and the U.S. State Department declined to comment.

"He talks about a place I never heard about," Cereijo said. "There are many other places where there exists the capacity to develop bioweapons. That doesn't mean they are doing that. Only a person like him would know."

Cuba's advanced biotechnology industry is well known, having produced vaccines for hepatitis and meningitis B and exported them to dozens of countries around the world.

In 2002, John Bolton, then a top U.S. State Department official for arms control, said that Cuba "has at least a limited offensive biological warfare research and development effort."

In a report last year, the State Department acknowledged that analysts were divided on the issue of whether Cuba has such a program. Experts also argue that the U.S. government is unlikely to have high-level spies in Cuban feeding it information on what must be, if it exists, a highly secret program.

Ken Alibek, former deputy director of the Soviet Union's bioweapons program, said Russian scientists always suspected the Cubans were developing a biological warfare program, but said he doubts that any Soviet military delegation would have been invited to visit it.

"This kind of work was so secretive," said Alibek, who defected in the early 90s. "These kinds of programs are never shared."

"If you ask whether the Cubans are capable, I'd say easily," he told The Miami Herald in a telephone interview from Virginia. "Are they doing it? I can tell you when I was involved in the late 80s, we suspected so."


© 2007, The Miami Herald.

Visit The Miami Herald Web edition on the World Wide Web at

Distributed by McClatchy-Tribune Information Services.

Anonymous said...

Just saw an ad on CNBC for No Doc 5.99 percent fixed rate loan from Greenlight Financial.

Southern California is still digging its own grave deeper.

Sarah said...

Okay, I have sold my home, am renting a lovely house for a song and have zero debt. Is there anything else I should do to prepare for what is coming? Sorry, if this has been answered but I have only been reading this blog for a short time. Any suggestions will be deeply appreciated!

Anonymous said...

Secret email...

Big Down day on Friday, a major ****** [redacted] is making a announcement that will send shivers down the spine of Wall Street.

Anonymous said...

"It's a CSI subprime."

striker said...

Sarah, Watch these videos and spend some time on these websites, It's much much bigger than a housing bubble.
(read the war for oil)

couponcutter said...

Hey Striker, please post the link for that site which compares the Great Depression with current conditions, so readers can take a look at it and be amazed with all similarities.

Anonymous said...

Striker or anyone here, read the book "Omnivore's Dilemma", by Michael Pollan, to find out where your food comes from, how it's made, and how much oil and subsidized corn you've been eating. You will be totally amazed, guaranteed. The best book of 2006. Check the reviews at

Here's the writer's website:

Anonymous said...


why don't you try to find some old y2k preparation books. Do everything they say; buy water, food, ammo, gold, etc.

Then sit around and watch as NOTHING HAPPENS.

Or you could go on living your life in a non-paranoid manner and be much happier.

Anonymous said...

"why don't you try to find some old y2k preparation books."

Let it go, the foot soldiers of disinformation who kiss Tony Snow's butt to make a buck.

E said...

Correction: Tuesday's closing of the gold market marked the 3rd highest monthly closing in history - and it missed being 2nd highest by just a few dollars. Charts is the place to visit.

E said...
This comment has been removed by a blog administrator.
Anonymous said...

Greenlight Financial:

Can you read that fine print at the end of the commercial???????

Imagine all the crap in there.

Better yet call and speak to one of their reps. Ask them to explain the offer, and if they try to get info out of you just say you're calling on behalf of a friend and thought their offer might be good for them.

striker said...

Anonymous said...

"Okay, I have sold my home, am renting a lovely house for a song and have zero debt."

Sarah, make sure you're annual rent is around 20% of your annual gross income. For example, if you earn $60k per year as gross income, your annual rent should be close to $12,000/ year, or $1k per month. Some FPs suggest rent at 25% of gross income, but you can invest that extra 5% to lower your AGI, by using the 20% benchmark instead. That compensates for the lost of mortgage interest deduction that you had before as a homeowner.

trailer park refugee said...

The Bernake vs Greenspan wars are on.

Anonymous said...

dear USA ers (USERS?), by gov demand your T.V s will be broken in 2009, due to the replacement of analog transmissions by digital transmissions, said world news tonight, nice thing to think why a country that does not produce T>V stocks must replace its T>V stock (can you smell the kickbacks and bribes that this enforcements generated) like londons t.v TAX?

Anonymous said...

Hypocracy upon Hypocracy!!

Al Gore you F**king snakeoil salesman!
How dare you tell me how to live when you don't live what you preach!

From your ivory Mcmansion you dictate policy!

You hypocrite!

Anonymous said...

Subprime losses may extend to "A" rated bonds - UBS

Rising delinquencies may cause losses within some subprime mortgage bonds rated as high as the "A" rated classes, despite conventional wisdom that only the lowest-rated mortgage securities would be hit, according to UBS Securities data.

"People think the higher rated stuff will be protected because it's well subordinated" with lower-rated pieces, said Kevin Jackson, a mortgage strategist at RBC Capital Markets in New York. "That's the assumption people are making, but I agree there could be some problems higher up, at the margin."

Projected losses are so deep on two issues that they may exceed levels of protection included with the higher-rated classe.

Anonymous said...

814 False Statements (18 U.S.C. § 1014)

Section 1014 of Title 18, United States Code, covers the knowing making of false statements or willfully overvaluing any property or security for the purpose of influencing in any way the action of the enumerated agencies and organizations.

Venue is governed by the general rule under the various false statement and false claim statutes. See United States v. Blecker, 657 F.2d 629, 632 (4th Cir. 1981), cert. denied, 454 U.S. 1150 (1982)(false claim statute). A violation of section 1014 is indictable either in the district in which the false statement is prepared and mailed, or in which the statement is received. See United States v. Wuagneux, 683 F.2d 1343, 1356 (11th Cir. 1982), cert. denied, 464 U.S. 814 (1983).

Generally, the making of a number of false statements to a lending institution in a single document constitutes only one criminal violation under section 1014. See United States v. Sue, 586 F.2d 70, 71 (8th Cir. 1978). See also United States v. Thibadeau, 671 F.2d 75, 79 (2d Cir. 1982). However, in Bins v. United States, 331 F.2d 390 (5th Cir.), cert. denied, 379 U.S. 880 (1964), the court of appeals found duplicity in an indictment that charged the defendant in each count with making false statements on two different FHA forms. In United States v. Canas, 595 F.2d 73, 78 (5th Cir. 1979), the United States Court of Appeals for the Fifth Circuit distinguished Bins and found that an indictment can properly charge in a single count false statements made on different documents as long as the documents are necessary parts of a loan package meant to obtain a single loan.

Anonymous said...

my income is about 100K.. my wife and i went out to look for a decent house in Central NJ and all houses are still way too expensive! my broker kept saying the price is will even go up more this spring. what a joke!!!

Anonymous said...

Is China involved in the US subprime mortgage?

You brought the house for $700,000 two years nine months ago. Your loan was 2.49% for the first year, 2.99% for the second year, and 3.49% for the third year. Your 3.49% fixed rate term period will expire in another three months.

However, with the going rate at 5.63% for a 5/1 Jumbo ARM you will not be able to make your monthly payment.

Let say you put your house on sell for $1,100,000 six months ago and no want to give you that offer. So you four months ago you took it off the market and you put the house back in the market for $950,000 hoping for a Spring Bounce and to reset the days on the market clock.

But during the month there was still no buyer, then an agent approach you and said that he represent an out of town couple who want to invest in a vacation home. The agent said the couple really likes your home but they can not afford your home. However, if you were to list your house at $1,200,000 and give them a rebate of $250,000 to use as a down payment then the couple can qualify.

The agent said he will use his appraiser to appraise the house. The appraiser said the house is worth $1,450,000.

Then to be really safe he called his favorite broker who has a friend with a major ALT-A lending company. The lender said that he also has a friend that is appraiser and they will appraise it again.

Then the agent told you that your house was appraised for $1,500,000. The agent said they do this kind of loan all of the time, but he will have his lawyer look at it for free if it make you feel more safe.

You decided to do the sell; after all you still made $150,000. Even if you have to report the sell at $1,200,000 on your tax you still owe nothing because you and your spouse lived there for over two years.

Let say three months later the house foreclosure. It turns out the agent, appraisers, lender, strew buyers, and lawyer were all involved.
814 False Statements (18 U.S.C. § 1014)
Section 1014 of Title 18, United States Code, covers the knowing making of false statements or willfully overvaluing any property or security for the purpose of influencing in any way the action of the enumerated agencies and organizations.

However you read about the law and decided to pay it safe. You reported on your tax that you sold your house for $1,200,000.
So what is the big deal? Well most the time the lender do not sit on the loan, they sell it to a secondary lender who would repackage that loan as mortgage backed securities (MBS).

MBS are typically sold to investors, and sometime these investors could be companies like “Bank of China”.

When enough of these MBS sold by subprime or ALT-A companies default, “Bank of China” will not get pay. When “Bank of China” reports a big loss, their investors panic and the stock go down. But how does that involve you.

Now days all markets are tight together when the US stock market crash, US companies will have to cut jobs. May a year later a recession hit and you could get layoff.

And yes what do you care you were very careful of not getting caught and still made $150,000.

Anonymous said...

Countrywide Financial Corp., the largest U.S. home mortgage lender, said payments were at least 30 days late on 2.9 percent of prime home-equity loans serviced by the company, up from 1.6 percent a year earlier and 0.8 percent at the end of 2004, according to a newspaper report.

The Calabasas, Calif., lender said In a Securities and Exchange Commission filing that payments were late on 19 percent of subprime mortgage loans, compared with15.2 percent at the end of 2005 and 11.3 percent at the end of 2004, The Wall Street Journal said in a published report on its Web site. Subprime loans are for borrowers with weak credit records.

First American LoanPerformance, a research firm in San Francisco, also show a rising trend in late payments. The firm said payments were at least 60 days late in December on about 14 percent of subprime loans packaged into mortgage securities, up from 8.3 percent a year earlier. For Alt-A loans, a category that falls between prime and subprime, the rate increased to 2.4 percent from 1.2 percent.

Anonymous said...

Fremont General Corporation Intends to File Form 12b-25 With SEC

As previously reported by the Company, the Form 12b-25 will explain the reasons for the Company not filing today with the Securities and Exchange Commission its Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

Forward-Looking Statements

This news release may contain "forward-looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements and the Company's currently reported results are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. These statements and the Company's reported results are not guarantees of future performance and there can be no assurance that actual developments will be those anticipated by the Company. Actual results may differ materially and adversely from the Company's projected or reported results as a result of significant risks, uncertainties and assumptions that are difficult to predict, including:

* changes in the interest rate and competitive environments;

* changes in general and specific economic conditions and trends;

* changes in asset and loan valuations and the costs of originating

* changes in the volumes of loans originated, loans sold, the pricing of existing and future loans, and the values realized upon the sale of such loans;

* access to the necessary capital, liquidity and deposit resources to fund loan originations and the condition of the whole loan sale and securitization markets;

* the impact of valuation and other changes in the commercial and residential real estate markets;

* the effect of litigation, state and federal legislation and

* the variability in determining the adequate level of the Company's
allowance for loan losses, valuation and repurchase reserves;

* the impact of regulatory actions taken by the FDIC, the Department of Financial Institutions of the State of California or other regulatory bodies on the Company's ability to conduct its business;

* the impact of changes in federal and state tax laws and interpretations, including tax rate changes;

* the ability to maintain an effective system of internal and financial disclosure controls, and to identify and remediate any control
deficiencies, under the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and

* other events and factors beyond our control.

Anonymous said...

Subprime woes fuel concern for CDO holdings

The recent sharp increase in late payments and defaults on risky US mortgages has fuelled concerns on Wall Street that complex debt products backed by such risky home loans could be vulnerable to the sector's troubles. The problems have emerged in the so-called "subprime" and "ALT-A" parts of the mortgage market, in which lenders loosened underwriting standards in recent years to keep originations volumes high in a slowing housing market. Structurers of collaterised debt obligations were among the most important buyers of subprime mortgages in recent years.

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