HousingPANIC is here.
Use this thread to post articles (use tinyurl and hit the highlights), talk about random topics, and have a good chat
August 29, 2007
BUBBLETALK - New thread to talk about the mortgage meltdown and housing collapse
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378 comments:
«Oldest ‹Older 201 – 378 of 378ha ha ha ha ha
silly renters, bailout is here. this from the LA Times:
In the House, Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, announced plans for a Sept. 5 hearing on the credit crisis and ticked off an ambitious legislative agenda to address the problems, including expanding the roles of government-sponsored mortgage loan facilitators, Fannie Mae and Freddie Mac, and imposing new rules on companies that issue mortgages and those that package them for sale as securities.
In the Senate, Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee and a Democratic presidential contender, got Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry M. Paulson Jr. to come to his office and explain what they were doing to ease the credit freeze-up.
Separately, Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, demanded the resignation of St. Louis Federal Reserve Bank President William Poole for Poole's comment last week that the Fed would only cut rates before its September policymaking meeting in the face of "calamity."
"It was reckless and irresponsible of him to leave people with the impression the Fed would take no action," Conrad said. "He's got to go."
You vote for socialist Democrats this is what you get.
rochran:
Xanax. It works. Look into it.
_____
You'd know from experience? I'm sure REIC trolls DO need to be medicated these days.
This blog has gotten ugly. Lots of class warfare, "mine is bigger than yours", and professional jealousy.
Ain't it cool?
Separately, Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, demanded the resignation of St. Louis Federal Reserve Bank President William Poole for Poole's comment last week that the Fed would only cut rates before its September policymaking meeting in the face of "calamity."
"It was reckless and irresponsible of him to leave people with the impression the Fed would take no action," Conrad said. "He's got to go."
____
I agree. Any Fed governor that refuses to pour more gasoline on the bonfire has to go! We can't have that!
So I guess Conrad didn't like Paul Volker very much. Oh that's right, Volker was leaving his post as Fed chairman as Conrad was entering the Senate.
Excuse me, but not everyone is fortunate enough to do consulting work. It takes a lot of business connections before you can even get starteed. So please spare me the condescending remarks, you elitist pig!
August 22, 2007 2:14 PM
-------------------------------
Excuse YOU?
Buddy, anyone can do consulting. Talk to a recruiter or two, post your resume on dice.com and do a and you'll get jobs.
Jeez spare the 'woe be me, I have no business connections so I can't make money' bullshit.
Maybe you can go back to blaming the Jews for all your misery in life.
August 22, 2007 11:01 AM
----------------------
You mean like Ron Paul?
idiot
greetings renting fools. how is that 5% MM fund doing? Had you stayed in an index fund you'd be up 6% YTD already and it's only August.
Keep throwing your money away on rent and not even beating inflation with your investments.
losers
Barry Ritholz has an interesting piece on the Truth In Lending Act - how 2/28 l;enders might see their mortgage contracts voided for failure to give "clear and conspicuous" disclosure to borrowers of the key provisions. It doesn't magic the debt away, but reduces the lender to an unsecured creditor, having to get in line with the other hungry beasts:
http://bigpicture.typepad.com/
Anyone got a link to the crazy senator on Cramer's show?
Conversations with Countrywide
I stopped at the San Francisco Civic Center Countrywide office this morning a few minutes before it opened. I got out my camera and started taking pictures through the front window into the lobby.
A thirty-ish Countrywide employee on her way into the office approached hostilely.
Hostile Countrywide employee: “May I help you?”
Me: “No thanks, just taking pictures.”
Hostile Countrywide employee: “Of WHAT?”
Me: “That ‘No Cash in Office’ sign. It’s kind of funny, you know, ‘cause they’re going bankrupt.”
Hostile Countrywide employee: “It’s not going bankrupt. I work here.”
Me: “Sorry to hear that.”
In retrospect, it would have been even funnier if I’d used the line suggested by co-blogger Negocios Loucos: “I’m with CB Commercial and we’re going to be leasing this place out. Just taking a few pictures.”
If there's any justice in the world, Mozilla will be toast soon....
______________________________
The law firm of Schatz Nobel Izard P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Central District of California on behalf of all persons who purchased the common stock of Countrywide Financial Corp. ("Countrywide") (NYSE:CFC) between October 24, 2006, through August 9, 2007, inclusive (the "Class Period"). The Complaint charges that Countrywide and certain of its officers and directors violated federal securities laws by making false and misleading statements regarding the changing quality of the Company's mortgage loan portfolio. As late as April of 2007, Countrywide stated that credit rating agency Moody's upgraded the rating of the Company's banking segment and announced that its home loans segment was also under review for possible upgrade. Then, on June 12, 2007, the Company boasted of its position as the number one mortgage originator in the United States. These reassuring announcements served to conceal the alarming growth of loan delinquencies and the increasing likelihood of impairment charges, with resulting adverse impacts on the quality of the Company's collateralized debt obligations (CDO's), earnings and profits. On July 24, 2007, Countrywide announced over $417 million in impairment charges and implementation of a $292.9 million loan loss provision. On the news, the price of Countrywide Financial stock tumbled 10.4%, closing at $30.50 per share. On August 9, 2007, within four days of reassuring statements that purported the reliability and availability of liquidity to meet short-term needs, the Company adopted a new risk disclosure, warning of short-term liquidity issues. As a result, on that day, the price of Countrywide Financial stock fell again, losing $1.00 or 3.4%, to close at $27.86 per share.
Ironically, if the Fed were to cut rates by 25 or 50 basis points any time in the next 6-12 months in an effort to help borrowers subject to rate increases on their ARMS, it would result in further price declines in resales and new homes because long-term rates would move higher. Why? Because if the bond market senses that inflation is about to take off, and the Fed is ignoring it (lowering rates rather than keeping them at 5.25%, or even raising them) in favor of helping holders of exploding ARMS, 10-year and 30-year bond yields will spike to account for the expected rise in inflation over the coming years.
The Fed is powerless to help. There is nothing they can do to help one class of people that won't have at least an equal adverse effect on another class of people. Lowering rates is just prolonging the agony of the inevitable.
Most programmers are impotent and incapable of getting an errection even with Viagra. The curry Rajs from India smell so bad that we have created a seperate air-tight room where only Indian code monkeys work. This is the only pest free room in the building! Even the cockroaches head for the hills after smelling this. Our IT contractors make 6 x as much as the cube zombies on salary. Working on a salary like our friend rcochran is the same as admitting that you're a moronic imbecile jackass.
Anon at 7:13
Good point. And to add to what you are saying foreign investors will start bailing on dollar denominated assets because of inflation and the weakening dollar that will follow from a rate cut. As it has been pointed out here on this blog before it is mainly foreigners (asian countries in particular) that have been buying MBS that have kept the market afloat(until just recently).
It's a no win situation for the Fed. Housing panic has arrived. Boomshakalaka!
There's nothin' Bernanke, Paulson, or Dubya can do.
Have a nice day, punters!
http://tinyurl.com/2gfgs9
man you guys are nuts. the stock market correced 10% and now it's heading higher again. real estate price rose like crazy then fell a little and now are rising again.
you all need to get a life and fast
man you guys are nuts. the stock market correced 10% and now it's heading higher again. real estate price rose like crazy then fell a little and now are rising again.
you all need to get a life and fast
____
Oh, you're right. I think you should put all of your savings into the mortgage bank and homebuilder stocks right now, and tell us how stupid we are after you've made a killing.
Our IT contractors make 6 x as much as the cube zombies on salary.
_____
Oh, by the way, I've been a contractor at various times in my career and now I make the same has the highest paid ones, plus I have benefits, which they don't.
Your 6x factor is not even close to reality...maybe in comparing an India programmer to an American contractor, but not in comparing a senior level engineer to a contractor.
Get your facts straight, bozo.
Mortgage industry job cuts surpass 38,000
Companies stop 'on a dime'; 24,000 positions eliminated so far this month
CHARLOTTE, N.C - At the North Carolina offices of mortgage lender HomeBanc Corp., Archie Clark is the only employee left. In a few days, he’ll be gone, too.
“It’s pretty much a ghost town over there,” Clark said. “Somebody went in and took the furniture from the lobby. I don’t know who did that. I put some of the other stuff in the back and locked it up.”
When Clark finishes helping movers from the company’s Atlanta headquarters collect computers and other property, he’ll join the more than 24,000 workers nationwide who have lost jobs in the financial services industry since the beginning of the month — with more than half coming since last Friday. With few exceptions, the cuts are the direct result of woes in the nation’s housing market.
More layoffs are announced daily. On Wednesday, Lehman Brothers Holdings closed its “subprime” mortgage business, laying off 1,200 workers at 23 offices; Scottsdale, Ariz.-based 1st National Bank Holding Co. closed its wholesale mortgage unit and cut 541 jobs, and Accredited Home Lenders Holding Co. added 1,600 positions to the heap. The night before, banking giant HSBC said it would close a main financing office and cut 600 jobs.
Since the start of the year, more than 38,000 workers have lost their jobs at mortgage lending institutions, according to recent company layoff announcements and data complied by global outplacement firm Challenger, Gray & Christmas. Meanwhile, construction companies have announced nearly 20,000 job cuts this year, while the National Association of Realtors expects membership rolls to decline this year for the first time in a decade.
It’s an employment collapse that threatens to rival the massive layoffs in the airline industry that followed the Sept. 11, 2001, terrorist attacks, when some 100,000 employees lost their jobs.
“It’s far from over,” said Bart Narter, a senior analyst with Celent, a Boston-based financial research and consulting firm. “The subprime lending collapse will continue to ripple through the financial sector.”
For five years, the nation’s housing market was booming and mortgage companies grew quickly, at times offering lucrative jobs to people with little experience. But as home values declined and interest rates rose in the past year, rising delinquencies and defaults — especially in subprime mortgages targeted at borrowers with risky credit — have pounded lenders who couldn’t keep pace.
“These kind of mortgage lenders just sprung up like mushrooms and grew like men,” said John A. Challenger, chief executive at Challenger, Gray & Christmas. “They staffed up and now you have a bust.”
America’s largest mortgage lender, Countrywide Financial Corp., began an undisclosed number of layoffs this week. Last week, Arizona mortgage lender First Magnus Financial Corp. shut down its operations and laid off nearly 6,000 workers. On Monday, Capital One Financial Corp. said it would shutter Greenpoint Mortgage, its wholesale mortgage banking business, and lay off 1,900 employees.
“It’s only been weeks,” Challenger said. “These companies are acting remarkably quickly, stopping on a dime.”
Andy Roach didn’t foresee the turmoil when he joined Greenpoint in March. As late as June, the 25-year industry veteran thought the business of making “Alternative A” mortgage loans — geared for those with slightly better credit than subprime borrowers — was on a solid track.
But in July, he said, spooked investors stopped buying the securities the company sold by repackaging the loans. A little more than a month later, Capital One announced that Roach and about 1,900 of his colleagues across the country were out of a job.
“It was evident that it was serious,” said Roach, 46, a regional manager in the Chicago suburb of Downers Grove. “When you can’t sell the loans, when there’s no market for those loans, it put us in a bad, bad situation.”
Clark, 33, headed information technology operations for three HomeBanc offices in the Raleigh area. He had a feeling earlier this month that trouble was lurking, as the company began cutting back on perks and made some initial layoffs. On Aug. 9, HomeBanc filed for bankruptcy protection. They kept him on through the end of the month to collect equipment and “just go in and check on things.”
“It was pretty much a free for all in the office, people taking paper, stuff HomeBanc wouldn’t need,” he said. “I don’t feel like HomeBanc did anything. It was a perfect storm of a bad housing market.”
Two of Clark’s friends have already landed jobs with Countrywide. Another found work with an affiliate of First Magnus, and was almost immediately laid off again. Roach plans to open his own lending business, focusing on commercial business loans and originating home loans himself.
“The mortgage business isn’t dead — there’s just going to be less people in it,” Roach said.
CFC investigated by Firm Re: 401k stocks improperly invested in CFC by CFC.
C'mawn people! This is just SOOOOO Enron.
Schatz Nobel Izard, P.C. Announces Investigation of Countrywide Financial Corporation 401(k) Savings and Investment Plan
Aug 22, 2007 14:25:06 (ET)
HARTFORD, Conn., Aug 22, 2007 (PrimeNewswire via COMTEX) -- The law firm of Schatz Nobel Izard, P.C., which is one of the leading firms in the country representing employees who lost money investing in company stock in their 401(k) retirement plans, is investigating potential claims against Countrywide Financial Corp. ("Countrywide" or the "Company") (CFC, Trade ). The investigation concerns whether the Countrywide Financial Corporation 401(k) Savings and Investment Plan imprudently invested in the Countrywide Financial Corporation common stock fund and whether Countrywide properly disclosed information about that fund.
Fed rate cut? Don't bank on it
Investors betting a Fed rate cut is a lock could end up getting badly burned.
By Chris Isidore, CNNMoney.com senior writer
August 22 2007: 2:11 PM EDT
NEW YORK (CNNMoney.com) -- Investors who are counting on the Federal Reserve to cut interest rates sometime in the next month may end up badly disappointed.
The credit crunch of the past month has convinced many on Wall Street that a cut in the central bank's key short-term interest rate is basically a lock.
Many economists argue that Fed Chairman Ben Bernanke would like to leave rates on hold at the central bank's next meeting, unless there are further signs of economic weakness.
Stocks jumped Friday after the Fed announced a surprise cut in the little used discount rate that the central bank charges on loans made directly to banks - and again on Tuesday on bets the Fed will cut its other key rate, the fed funds rate, by the central bank's next meeting on Sept. 18, if not beforehand. The fed funds rate is the more important rate since it affects many consumer loans.
But a number of economists believe that the Fed will hold rates steady next month.
"The Fed would like to do everything possible under the sun but make a cut in the fed funds rate," said Bernard Baumohl, an economist and author of the textbook "The Secrets of Economic Indicators."
The Fed had raised rates 17 times over two years to get the fed funds rate to 5.25 percent in an effort to keep the economy from overheating and letting prices get out of hand.
But the easy credit available during the 15 months that the funds rate stood at only 1 percent helped spark a housing boom and rapid growth in risky mortgage products.
Mortgage meltdown contagion
A host of economic readings are due between now and Sept. 18, including the August jobs report, a survey of manufacturing executives, sales by major retail chains and a number of key inflation readings.
Baumohl said that before the Fed will move to cut rates, it will need to see some new signs of weakness in consumer spending or employment. He does not believe the turmoil in the credit markets alone will be enough to convince Fed Chairman Ben Bernanke and other Fed governors to cut rates.
"He very much believes the main job of the Fed is to control prices and inflationary expectations," said Baumohl "He wants to be viewed as a chairman vigilant in not letting prices get out of control. It all depends on what economic indicators point to from this point on. Assuming nothing else changes, I do not see the Fed cutting rates, even on the 18th."
Still, some economists believe the turmoil in the credit markets poses a severe enough threat to the economy that the Fed could move to cut rates even without further signs of economic weakness. But even some economists with that view concede the Fed would prefer to stay put, given the opportunity to do so.
"I think Bernanke still feels this is a financial markets issue, this is not an issue for the overall economy, and that financial market illiquidity should be addressed by opening the discount rate liquidity window, not with by cutting the fed funds rate," said David Wyss, chief economist with Standard & Poor's.
But Wyss argues that a Fed cut is nevertheless justified, even without other signs of weakness.
"Even if he's right, and this is a microeconomic issue and not a macroeconomic issue, I think the Fed is better served being out ahead of the problem than waiting for it to occur," said Wyss.
But several economists said there are big risks for the economy, and even for the financial markets, if the Fed blindly follows market expectations and cuts rates despite fresh signs of economic strength. One problem could be a continued slide in the value of the dollar, which could spark inflation by making some imports more expensive. It also could lead to a sell-off in the Treasury bond market on expectations of a jump in inflation.
"If the Fed does cut, it will be inviting serious inflation pressure that could send the long-bond yield skyward," said Rich Yamarone, director of economic research at Argus Research. "That could cause serious problems for mortgage rates, that would trigger the resets [of adjustable-rate mortgages], and then you've got the calamity you're looking for."
Major U.S. stock indexes have essentially hung onto the gains they posted on Friday. Art Hogan, the chief market strategist for Jefferies & Co., said he's worried that the stocks will sell off if they don't get the rate cut investors are now expecting.
"I think the market is making what may turn out to be an irrational assumption, that the Fed has decided to do something they haven't been inclined to do yet," said Hogan. "Investors are hell-bent to believe they're going to cut and they're trading like it's already happened."
Wyss and the other economists said that if the Fed is leaning toward leaving rates unchanged, Bernanke and other Fed policymakers have plenty of time to signal to the markets that there is no rate cut in the works.
"This opinion [of a rate cut in the works] can change on a dime, and it will," said Wyss. "Two weeks ago the markets were convinced the Fed wouldn't move until March. It can change back just as quickly. The lesson from the problems we saw under [1970's Fed chairman Arthur] Burns is you want the markets to know ahead of time. Greenspan was very good at telegraphing it and Ben learned Morse Code from him."
But Hogan and others said there there is likely to be another sell-off in stocks if and when investors become convinced they aren't getting a hike.
"Back in March 2006, the market became convinced the Fed was done raising rates when it reached 5 percent. It got ugly when they realized they were going to 5.25 at the next meeting. We could see that again."
Anon 12:48
Never mind. Issue clear to me. Best of luck.
This is the funniest damn thing anyone has posted here in a long long time. How stupid do you have to be to go to work at at First Fungus or Countrywide in a climate like this. And now he's gonna do commercial loans? That sector died long long before Res did. Look around at the empty buildings.
Go back to Walmart for a job or bartending, or whatever you did before you thought you could do this. I'm not making fun of labor in the least. I'm making fun of the milk farmer who can't spell 'morgige' thinking he can do this job. You're dumbass shouldn't be in my good mortgage business, nor any other that requires thought beyond the end of your tool.
August 22, 2007 10:26 PM
Two of Clark’s friends have already landed jobs with Countrywide. Another found work with an affiliate of First Magnus, and was almost immediately laid off again. Roach plans to open his own lending business, focusing on commercial business loans and originating home loans himself.
Here's one possible explanation for a lot of the angst and rageful jealousy we are seeing on this blog lately...
http://tinyurl.com/2dst77
Bank of America Helps Rival Countrywide.
http://thegreatloanblog.blogspot.com/
And now BofA steps in and becomes CFC's bagholder...
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Bank of America to Invest $2 Billion in Countrywide Financial: WSJ
Bank of America plans to invest $2 billion in Countrywide Financial, the mortgage lender that has faced a liquidity crunch this month, the Wall Street Journal said on Wednesday.
The second-largest bank will buy preferred stock that yields 7.25% and can be converted into Countrywide common stock at $18 per share, the newspaper said, citing unnamed people familiar with the situation.
Bank of America spokesman Scott Silvestri and Countrywide spokesman Rick Simon did not immediately return calls seeking comment.
Countrywide's market value was about $12.6 billion as of Wednesday's close. Countrywide's shares Countrywide Financial Corp rose $3.73, or 17.1%, to $25.55 in after-hours electronic
trading. Bank of America shares rose 69 cents to $52.34 after-hours.
Calabasas, California-based Countrywide, the largest U.S. mortgage lender, surprised investors last week when it tapped an entire $11.5 billion credit line because it was having difficulty selling short-term debt.
In January, before the mortgage and credit crisis surfaced, Charlotte, North Carolina-based Bank of America was the subject of speculation it might buy or enter a joint venture with Countrywide.
Referring to the mortgage sector, Bank of America Chief Executive Kenneth Lewis said at the time, "we like the product but don't like the business," and that "we're not particularly interested in the wholesale and correspondent business."
Bank of America probably could not acquire Countrywide outright for a while. The bank's pending acquisition of LaSalle Bank from ABN AMRO would push it up against a federal cap on deposits and buying the operator of Countrywide Bank would probably push it over.
Sadly, this article says exactly what happened. Lenders advertised and promoted fixed rate loans that would be fixed for a period (say 5 years), but the only thing fixed was the starting point for the rate to go up. And it went up the second month of the loan and every month thereafter. I see major class action lawsuits coming big time. Folks should have read the documents more closely but good folks are just too trusting and were taken advantage of.
CNNMoney.com
Mortgage meltdown: Here come the judgments
Tuesday August 21, 6:11 am ET
By Les Christie, CNNMoney.com staff writer
Earlier this year, a Wisconsin couple won a judgment against Chevy Chase Bank that said the bank deceived them over the terms of their mortgage.
The judge ordered Chevy Chase to rescind the loan and certified the lawsuit as class-action, which could potentially release thousands of other borrowers who felt misled.
According to their attorney, Bryan and Susan Andrews believed they were getting a loan with a fixed 1.95 percent annual interest rate for the first five years. What they got was an option adjustable-rate mortgage (ARM); the 1.95 percent rate only applied for the first month and rose every month afterwards.
"The second month, the interest rate was about 5 percent," said their attorney Kevin Demet. "After a year it was about 7 percent and now it's in the 8s."
The bank said it clearly spelled out the loan terms, but the judge found that Chevy Chase violated the Truth in Lending Act (TILA), which mandates that mortgage documents must be clear and understandable. Chevy Chase is appealing the judgment, and did not respond for comment for this article.
The Andrews' victory is just an early skirmish in what could be a prolonged battle between borrowers and lenders in the mortgage meltdown mess.
"It's a three-part business cycle now," said Don Lampe, a partner with the law firm Womble Carlyle, whose specialty is mortgage matters. "Boom, bust and recrimination. We're moving into the recrimination phase."
"Most claims will be against mortgage brokers for putting them into loans where they shouldn't have been," said Dan Mulligan, a California-based real estate attorney.
One reason that borrowers often did not understand the terms of their mortgages according to Jo Carillo, a property law professor with the University of California, Hastings College of Law, was the novelty of many of these loans.
"Many originators had no experience explaining them," she said. "It appears to be hard to explain the true costs."
According to Carillo, some bad advice from mortgage originators may have been made in good faith. Caught up in red-hot housing markets, overly exuberant brokers and loan officers told clients not to worry about concerns like their ARMs resetting; they could always refinance and, anyway, interest rates were bound to fall.
Even savvy borrowers, said Lampe, "assumed that rising prices would enable them to refinance."
With credit much tighter today, the refinance option is off the table for many. And, as prices have fallen in many places, it's more difficult to sell a home for the amount owed.
"They can't refinance it, they can't sell it, and they can't afford it," said Paul Hancock, a Florida attorney specializing in mortgage brokering and real estate law.
Aside from bad advice, out-and-out lying also seems to have added to the mess. Borrowers often exaggerated income in order to qualify for larger loans. According to Michael Seng, a professor with the John Marshall School of Law Fair Housing Legal Support Center, mortgage brokers were behind much of this.
"We're running into stated-income loans where brokers got borrowers to sign blank forms that the brokers filled in; they often did not accurately reflect the borrowers' incomes," he said.
Richard Hagar, a veteran real estate appraiser and expert witness, also blames appraisers. According to him, many of them puffed up home values to make deals work. "We saw some really Mickey-Mouse things," he said, "A $200,000 house would come in at $300,000. When appraisers puff up values, they can be sued; I heartily recommend it."
Class action suits are often the only way for borrowers to gain a remedy, according to Seng. "If [individuals] can't make the mortgage payment, they can't pay a lawyer."
But a ruling earlier this year by an appeals court in Boston casts doubt on whether class-action suits will be allowed in mortgage rescission cases, whose remedy is that borrowers turn back their mortgages and get back their fees and expenses. They then have to find a new loan.
The court ruled that rescission didn't apply in class-actions because it is a strictly personal matter. Furthermore, Congress limited TILA violation judgments to a maximum of $500,000, a mere fraction of the kinds of sums a class action suit would generate.
How the cases will play out is in doubt but there's one thing for sure: There'll be a lot of work for attorneys over the next few months.
Lose an arm and a leg:Get an option arm today!
http://www.thegreatloanblog.blogspot.com/
From Marketwatch:
U.S. banking giants borrow $2 bln from Fed
Citi, rivals borrow at higher rates to try to cut stigma of discount window
http://tinyurl.com/2ftjvm
"The Fed was playing DJ here, luring people out onto the dance floor"
Hey DJ Ben, I suggest you play the Subhumans' "The Day The Country Died" next...
Although timid the nimble yen carry traders are getting out of the safety of US Treasury and repurchasing currencies with higher interest rate yields like the kiwi.
In an environment flush with excess global liquidity nimble investors realize that the first to make it to the market place gets the best deals with the highest return.
Once the pace picks up the aggressive big hedge funds will take all the deals away.
http://www.stuff.co.nz/stuff/
4175324a6023.html
Longer term, Japanese investors were reportedly looking to invest offshore, helping to underpin the NZ dollar against the yen.
Against the yen, the kiwi was buying 80.64 at 8am, from 79.09 at 5pm yesterday.
The NZ dollar was also at A86.92c against the Australian dollar from A86.47c at yesterday's local close, and at 0.5174 euro from 0.5132. The trade weighted index was 67.87 at 8am, from 67.12.
OMG, a great aunt I was barely acquainted with, just left me $600,000. What should I do with it?
This is so ironic, for the last 4 years I've pared my expenses to the bone to pay off all my debt. I was just drinking in the joy of sleeping soundly ...
Now what? What should I do with it?
HEY! It's BEN here, I talked to Alan yesterday and asked him for some advise... He said that I should just keep pumping behind the scenes, and that the trickle down effect will raise wages to support housing under $400K.
He also told me to quietly let the banks who came to the discount window seeking loans using that CDO trash as collateral; default on their discount loans and keep all the CDO trash as a Federal Reserve Assets. Doing this he said will basicly monitise all the CDO junk. It will also let the banks buy more CDO trash from the Hedge Funds, Pension Funds, Etc. to bail them out (NEEDED because these same funds owe the banks and the banks don't want to take the hit from more funds failing) This will also put a stop to all the lawsuits being initiated by the States over the CDO ratings con game. In the end, the Fed will own all the CDO trash; having monitised all of it behind the scenes.
BIG BONUS! The credit crisis will be over -- and all the extra money floating around will push the stock market higher and bring back consumer confidence!!!
The shorts are going to take it in the SHORTS!!!
It would have been cheaper for them to raise the money selling 1 months CDs at 1.00% then to borrow it at 5.75%
Then any raising that kind of money will require each American to put $6.66 in the bank.
$6.66 that like less then price of admission to the movies.
http://money.cnn.com//news/
newsfeeds/articles/djf500/
200708222143DOWJONESDJONLINE000835
_FORTUNE5.htm
The decision by four money center banks to tap the Federal Reserve for $2 billion to pry open the lending spigots of the U.S. financial system was seen in some quarters Wednesday as a turning point in the four-week old credit crisis.
It was. But unfortunately the point turned from denial to full-fledged fear.
Citibank Inc. (C) kicked off the borrowing binge, tapping the Fed's discount window for $500 million, and was quickly followed by J.P. Morgan Chase (JPM) , Bank of America Corp. (BAC) and Wachovia Corp. (WB) , in for another $500 million each.
That this was coordinated by the Fed was pretty much proven by Citi's canned statement to the press, which stated that "Citi is pleased to inject liquidity into the financial system during times of markets stress and to support creditworthy clients."
Sorry to break the news to NYC real estate but you're Tokyo in the late 80's. Unfortunately the harder the come the harder they fall. The titanic is unsinkable, John Gotti is the teflon don, more recently Mission Accomplished, get the picture?
It's yen carry trade time again.
Asia markets open up across the board.
http://finance.yahoo.com/
intlindices?e=asia
Weaker Dollar, Weaker Yen, Stronger Kiwi, and Higher GOLD Price sounds like yen carry trade speculators and hedge funds are making another run.
Thanks BOJ for flooding the world with excess global liquidity.
http://www.reuters.com/article/
marketsNews/
idUKT23481320070823?rpc=44
Japanese government bond futures plunged on Thursday due to a slide in U.S. Treasuries and caution before the Bank of Japan's monetary policy decision later in the session.
U.S. Treasuries fell on Wednesday
The Nikkei rose 2.44 percent or 387.44 points to 16,288.08 as of 0051 GMT as weaker yen boosts exporters
BOJ and a legacy of failures.
Players waiting for the next stage know that they will lose out on the best deals.
Swap contracts on the overnight call rate show just a 10 percent chance of a BOJ rise this week and roughly a 50 percent chance of a move in September or October.
http://asia.news.yahoo.com/
070822/3/36rpo.html
Japanese government bonds fell on Wednesday, pushing futures away from an 18-month peak, as players squared positions ahead of the Bank of Japan's policy decision and remarks from BOJ Governor Toshihiko Fukui.
The recent upheaval in overseas credit and money markets has pushed back expectations for a BOJ interest rate hike, with many expecting the central bank to hold rates at 0.5 percent when it ends its two-day meeting on Thursday.
Foreign investors sold two-year JGBs to raise cash while others unwound curve steepening trades or sought carry income in longer-dated bonds, traders said.
Omens suggest B of A can't save Countrywide.
http://wcvarones.blogspot.com/2007/08/omens.html
I thought Keith and the HP crowd would appreciate this:
Suzanne Researched This: Part 2
The Economist this week in an engagingly-headlined article, “Not-so-desperate-housewives”, cites currency traders’ estimates that the metaphorical “Mr and Mrs Watanabe” now account for around 30 per cent of the forex market in Tokyo by value and volume of transactions - double the share of a year ago - while the overall size of the retail market has more than doubled to about $15bn a day.
One reason for the recent yen surge was margin trading, with brokers offering leverage of as much as 200 times the down-payment (though the average is more like 20 to 40 times), notes the Economist.
http://ftalphaville.ft.com/blog/
2007/08/22/6723/
that-yen-carry-trade-and-
mrs-watanabes-new-gig/
Since no one can agree about what will happen in the markets I have consulted the tarot. It hath been foretold:
The Three Fates spread is an exceptionally popular way to gain insight into the emerging arc of the past, present, and future.
The left card represents an important element of the past. Regina di Dischi (Queen of Discs), when reversed: The dark essence of earth behaving as water, such as ice: A cold but generous host, driven by an overwhelming need for to accumulate and maintain opulence. A person so preoccupied with wealth and security that they can never stop to enjoy either. One who reflects the weaknesses of others, breeding suspicion and mistrust.
The middle card represents a deciding element of the present. 7 Spade (Futility): An opportunity to withdraw from a hopeless situation and fight another day. Disengagement from a struggle you should never have been involved in. A desperate attempt to resolve a matter without conflict. The use of cleverness or outright deception to turn the tide in your favor.
The right card represents a critical element of the future. Fante di Mazze (Page of Wands): The essence of fire behaving as earth, such as wood or coal: The surprising appearance of a new passion. An adventurer who blazes through life, acting as a catalyst that others may harness. The intense enthusiasm and childlike imagination that fuels any new venture, needing only the application of mind and material to make it a success. Inner fire that can drive away fear and replace it with fury. Can represent a person of some timidity, but whose innate passion can be easily ignited. May indicate the birth of a child.
Ha ha ha. No kidding. Me thinks the old ways are a goner, and we're in for something nobody has seen before.
Oh, by the way, I've been a contractor at various times in my career and now I make the same has the highest paid ones, plus I have benefits, which they don't.
Nobody would hire a retard such as yourself as a consultant. I know I should feel very sorry for you having an IQ under 80 and all. Go ahead and do what you do best. Take your damn skateboard and hoof it down to the local laundromat where I know you work as a sorter for dirty underwear. Benefits LMAO!
"That's why all your jobs are slowly but surely being sent to India and China and Romania where the same code can be written for 1/5 the cost."
This guy is an idiot. I am the Vice President for Information Technology at a large resort operations holding company, and just today we were discussing the vision of our IT department, including company equipment standards. Our vision committee unanimously decided to change our server standards away from Dell for all of our locations. Why? Because everyone is SICK and TIRED of having to deal with some drone from New Dehli. I will not allow a company in the door that would outsource our project, because we were previously burned on a Citrix implementation because some "team" was on another continent and knew NOTHING about our business and missed a key deadline. The days of outsourcing at least at my company are a thing of the past.
you all need to get a life and fast
August 22, 2007 9:49 PM
--------------------------------
ditto
Nobody would hire a retard such as yourself as a consultant. I know I should feel very sorry for you having an IQ under 80 and all. Go ahead and do what you do best. Take your damn skateboard and hoof it down to the local laundromat where I know you work as a sorter for dirty underwear. Benefits LMAO!
______
We were talking about contracting, not consulting. But yeah, I've been a consultant, too. Someone WAS dumb enough to hire me in that capacity. Heh heh.
Let me guess. You're heavily invested in the stock market, bought a house in 2005, and now you have a really tough time being reminded of the existence of those who are much more successful than you. This would be the only explanation for needing to launch such a sophomoric diatribe.
But please, say some more, because I find it really funny!
"Anyone can do it."
No, moron, not anyone can do it.
______
Very true. NOT anyone can do it. Over the last 20 years, I've seen increasing jealousy of people who are successful in the tech professions on the part of finance, sales and marketing types. We have passed them with our pay and our job security DESPITE outsourcing, and when they find out what we make, they usually get very pissed.
So I know we're seeing a lot of angry jealousy on the blog right now, because ours is one of the few professions that can weather economic downturns.
The banker next door to me talks really big, but his wife let on to mine that they are in enormous debt and barely able to hold it together. He played football in college and has always been used to being in the "ruling class", and he MUST BE SEEN AS HAVING MORE than everyone he meets. The truth is, he can barely maintain this illusion of superiority. He will be entering his 50s soon, and it's starting to fall apart for him.
Sad.
Kiss my tech-savvy ring, you lowbrow swarms of illogical neanderthals.
It is we who are your masters, and much moreso as time marches on.
Whose software do you think it is that picks your pockets as you try to consistently make money in the stock market (or any other market)?
Have a nice day, punters.
"That's why all your jobs are slowly but surely being sent to India and China and Romania where the same code can be written for 1/5 the cost."
_____
I can vouch for VP's response to this. I've been working with companies that have over 10 years of experience with outsourcing, and there is a recognition that outsourcing often does not work.
It is very difficult to remotely coordinate the implementation of complex system requirements. Rework costs due to miscommunications can rack up very quickly. Many companies are rethinking their outsourcing models.
I don't know any unemployed American engineers, and by now we were ALL supposed to have had our jobs outsourced.
Ha.
Housing panic will hit once the pool of buyers drastically shrinks from the return of 20% down and proof of income.
Here's a good read:
http://www.dailyscare.com/1951/financial-bankruptcy-the-us-dollar-and-the-real-economy
The right card represents a critical element of the future. Fante di Mazze (Page of Wands): The essence of fire behaving as earth, such as wood or coal: The surprising appearance of a new passion. An adventurer who blazes through life, acting as a catalyst that others may harness.
______________________________
OMG! It's Warren Buffet to the rescue!
What about this? In CNN business section today:
The mad dash for housing help
States and nonprofits rush to provide help to those victimized by subprime loans, and borrowers rush to accept.
By Jeff Cox, CNNMoney.com contributing writer
August 23 2007: 11:24 AM EDT
NEW YORK (CNNMoney.com) -- Tens of thousands of frightened homeowners looking to get out from under the crumbling walls of the subprime mortgage collapse have found refuge in a variety of programs.
When Senate Banking Committee Chairman Christopher Dodd mentioned the national Homeowner's HOPE Hotline in comments Tuesday, it triggered some 3,000 calls.
An announcement in April that the Neighborhood Assistance Corporation of America would be offering $1 billion in rescue money to beleaguered borrowers has prompted more than 50,000 inquiries, according to the organization.
And in Ohio, New York, Massachusetts, Maryland and other states, distressed mortgage holders are clamoring for whatever aide is available.
"It's exceeded our expectations," said Diane Gray, director of counseling and education at Novadebt, one of the nonprofit organizations that helps the Homeownership Preservation Foundation administer the HOPE line. "We've had to revise our forecast for 2007 several times. There's a great need for counseling."
But yeah, I've been a consultant, too. Someone WAS dumb enough to hire me in that capacity. Heh heh.
Dumb enough doesn't do it justice you brain amputated asswipe. The correct sentence should be:
I was a half circle engineer, too. When you sweep the closet you make half circles with da broom.
Don't flatter yourself dimwit, your monkey brain wouldn't register a joke if I paid you for it.
"Yea and NOBODY lied in that survey. Nope, everyone makes $300K a year on HP. Same people that complain gas is $3 and bitch about milk being $4 also make $300K a year as lawyers.
Get real."
As far as I remember, there wasn't a majority of posters with 300k / yr earnings. That's a gross exaggeration. Sure, some may have lied, but why is it so hard for you to believe that an engineer, lawyer, doctor, small business owner, IT consultant, or dual income household can earn over $100k per year? Do you really think that HP readers are only high school drop outs or Wal-Mart greeters? Please, use some logic and common sense for a change.
"Excuse me, but not everyone is fortunate enough to do consulting work. It takes a lot of business connections before you can even get starteed. So please spare me the condescending remarks, you elitist pig!"
That's such a load of crap. I have a buddy who moved from Boston to Miami without knowing anyone and started his IT consulting business down in Florida by knocking doors and doing cold calls. He gets retainers from several small businesses. He sets up and stays on call to troubleshoot all those networks. He's pulling over $120k, while working much less than 40 hours/week.
You low-techs disgust me!
I'm not even in IT; I just like to say that. lol
Mortgage mess claims new victims
Just a few years ago, mortgage salesman Terry Orlowski rode the housing boom and a six-figure income down to the car dealership and bought a new Audi A6.
Now, the soaring market and the fast car are gone. Last week he lost his job, along with 6,000 other employees of First Magnus Financial, a mortgage lender. Now driving a 1999 Dodge Grand Caravan, he plans to move back in temporarily with his ex so their two children can stay in private school.
"My first thought was this was one of the bigger companies. No one is safe," Orlowski says.
Go here to read it
IT nerdlingers are like FBs. You think your job is safe just like the FB thinks his house is worth 2005 prices. You think your future is secure just like the FB is convinced the turnaround is just around the corner.
You will be outsourced to Chindia and the FB will lose his home.
That is all.
Didn't take long.
http://iamfacingforeclosurethereturn.blogspot.com/
Or if it didn't wrap
http://tinyurl.com/2z5c3e
The bailout is under way and surprise surprise, it is having a wonderful response from homeowners. You fools scoff at the prospect of a bailout. It isn't "coming" it is already here.
Want a 5.75%, 30 year fixed with $0 down and $0 closing? No problem the federal government will give it to you.
http://money.cnn.com/2007/08/23/
real_estate/subprime_help/index.htm
?postversion=2007082311
Now driving a 1999 Dodge Grand Caravan, he plans to move back in temporarily with his ex so their two children can stay in private school.
============
The horror!! An 8 year van. Someone please send this guy some money before he commits sucide.
On CNN - Credit card credit crunch.
http://tinyurl.com/2m8s9h
August 23, 2007 8:09 PM
They still have to budget, which they won't because they were debt ratiod at the teaser rate and they still have to have eckitty which they won't because they bought at 103%, 20% ago.
The hotlines are bragging about the number of calls they have received. They are not telling you that less than 1 in 1000 will qualify. Just a guess on my part. Can anyone find a number showing how many have succeeded with these programs. The HOPE line has been in binness for over a year now....
Good article about why we are probably going back to 1997 home values.
http://www.oftwominds.com/blogaug07/RE-retrace.html?ref=patrick.net
turdly,
I saw the CEO of naca on fox earlier today. He was there with Shaniqua who claims she was "duped" (her words) into getting a bad loan.
The Fox guy asks her and the naca CEO why didn't she just walk away. He responds with some nonesense about nobody walking away and how the poor poor victim was forced into signing.
The next segment was Bill Gross saying we need a bailout ASAP otherwise the world will come to an end.
This is the new narrative. Everyone was scammed by the big bad evil mortgage lenders and hence we need a bailout. It is coming folks, if you think in an election year Dems will not bail out millions of FBs you are smoking some crazy shit.
You guyes will love this call to Dr. Laura--Tailor made for this current situation!
Sorry if this is already posted, no time to look at all the posts [but time to post this ;) ]
http://seattlebubble.com/blog/2007/08/22/suzanne-researched-this-part-2/#comments
From the Broker Forum:
This country is great. It's the only place where you can borrow money for a downpayment, get a 1st and 2nd
mortgage and call yourself a homeowner.
House of cards folks. Look at these crooks:
http://forum.brokeroutpost.com/loans/forum/1/2.htm
Is now the time for HP'rs to start buying homes or still too early?
What in the world are you talking about? Here are number of sales and average price for my zip code, 30004, Alpharetta, GA about 20 miles north of Atlanta.
08-2007 108 $477,000.00
07-2007 136 $458,000.00
06-2007 71 $440,000.00
05-2007 112 $417,000.00
08-2006 227 $392,000.00
07-2006 189 $369,000.00
06-2006 158 $380,000.00
05-2006 241 $335,000.00
Prices are up $140K since May 2006, even with fewer sales. If this is a crash, OK let the crash continue for another 20 years.
PIMPco's Bill Gross: "Write some checks, bail ‘em out"
...only if he picks up the tab.
http://www.petitiononline.com/bailout/petition.html
http://tinyurl.com/yrw72h
The markets have been roiled by the bursting U.S. real estate bubble and the virtual collapse of the U.S. housing and mortgage markets. Can anyone honestly say that it was unexpected? How could market values which accelerated so rapidly and for so long not be vulnerable to a major correction? And how could a mortgage industry that made it possible even for someone with no savings, no verifiable income and in some cases no job to obtain a so-called no document loan expect the party to last forever?
Rapid and dramatic appreciation generated greed and encouraged speculation among buyers, builders and lenders. Everyone, including foreign investors, wanted a piece of the action and downplayed the risks. Borrowers agreed to take on risky adjustable rate loans, interest only loans and bizarre “creative” loan products. There was a loan product for almost everyone, regardless of credit risk and lenders were eager to promote them, each party betting that market values would continue to rise, permitting borrowers to refinance and lenders to earn more fees.
Builders speculated as well, overbuilding as builders invariably do in boom times. The glut of homes that resulted caused market values to fall, often below what was owed to lenders, dashing refinancing plans. Meanwhile, adjustable rates readjusted upward, forcing an increasing number of homeowners to default, adding bank foreclosed properties to the existing glut, further depressing market values and compounding a growing problem.
There is nothing wrong with trying to cash in on a speculative boom if one is prepared to absorb the market and credit risks involved. However, it's obvious from the defaults, foreclosures and bankruptcies that many buyers and lenders were not. They shouldn't expect a bailout because they knew or should have known that it was inevitable that this boom, like all booms, had to end eventually. Those homeowners faced with unaffordable increases in their adjustable rate loans deserve sympathy. They gambled on market prices rising and they lost. On the other hand, those who bought homes with nothing down really had nothing invested to lose. For all but the most naïve, the bursting of the real estate bubble should not have been a surprise.
What is surprising, however, is the global reach of the mortgage meltdown. A major French bank, which only a week before had said it had little exposure to the U.S. mortgage market, suddenly discovered that, in fact, it did, freezing over $2 billion in three hedge funds because there was virtually no market for the U.S. mortgage-backed securities these funds held. Why the belated realization? Apparently because this bank and other foreign banks held more U.S. mortgage-backed securities in their complex investment portfolios than they realized and because of the turbulence, it was difficult to determine from day to day what they were actually worth. This was followed by a similar event in Germany and the nervousness quickly spread to other world financial markets, sending stock prices down in the U.S. and Europe and threatening a world-wide credit crunch. Central banks, including our own Federal Reserve, responded by infusing billions into money markets to prevent it and to calm markets fearful of its effect on economic growth.
What does all this mean to ordinary Americans? Ours is a consumer driven economy. We spend and consume more when we feel financially secure and relatively wealthy. When our homes and investment portfolios decrease sharply in value, we are less inclined to spend discretionary income or savings and put off buying. Growing numbers of defaults in mortgage and credit card payments, resulting in an increasing number of non-performing loans, increase the cost of credit for individuals and eventually for businesses, forcing businesses to curtail expansion plans and eliminate jobs. The construction and mortgage industries are already hurting. The cumulative effect on the American economy can be severe and in this interrelated global economy that effect will spread, especially to those nations heavily dependent on U.S. consumer demand for their exports.
Naturally, Congress will try to ride to the rescue, perhaps making matters worse. Already presidential candidate Hillary Clinton has proposed a $1 billion bailout fund for homeowners facing foreclosure. But wouldn't that simply encourage future speculative risk taking and pass on to taxpayers the cost of insuring against risk that the investor should bear? Senators Chris Dodd and Chuck Schumer called for Fannie Mae and Freddie Mac to ease borrowing restrictions and credit limits. But isn't that what got us into trouble in the first place?
This crisis was entirely predictable and explainable by market forces. Perhaps the best approach is to allow those market forces to sort it out. Government intervention at taxpayer expense should be limited to measures that focus on minimizing the negative impact of the credit crunch on the economy, not on measures primarily designed to bail out those who gambled and lost in a speculative market with real and quantifiable risks.
http://coronadonewsca.com/
articles/2007/08/23/opinion/
news04.txt
Come on this is not a Chicken or the Egg question.
Without Excess Global Liquidity pumping unlimited amount of money into risky investments subprime loans would not have existed.
Subprime loans started appearing right after the Federal Reserve started tightening and did not pop up in speculators radar until the first BOJ rate increase.
So BOJ during the period of US Federal Reserve Tightening were did that kind of Liquidity needed to support subprime loans come from if NOT from YEN CARRY TRADE?
http://www.rttnews.com/
economicnews.asp?date=
8/23/2007&item=40
BOJ's Governor Toshihiko Fukui said Friday that the U.S. subprime loan crisis has caused "increased volatility in markets globally," and unwinding of yen carry trades resulted in the Japanese currency appreciating in recent days.
Has Casey Serin returned?
http://iamfacingforeclosurethereturn.blogspot.com/
Well done BOJ, you have made GREED overcome FEAR in Asia.
And the YEN Carry Trade continues
http://thestar.com.my/news/
story.asp?file=/2007/8/24/
apworld/20070824141027&sec=apworld
Asia appears poised to escape major fallout from subprime crisis
College senior Kim Mi-jin is unfazed by global financial turmoil, sitting in a Starbucks near the old royal palace studying for an exam to be a securities consultant.
"I feel like it's a short-term factor,'' she says of U.S. subprime mortgage woes that have rattled markets from New York to New Delhi.
"There are many efforts being made in America to fix this problem and so I'm sure it will be resolved.''
If a rebound in Asian financial markets this week is anything to go by, such confidence looks increasingly warranted.
Massive efforts the past two weeks by central banks, including the U.S. Federal Reserve and the Bank of Japan, to pump liquidity into the world financial system to halt the crisis seem to be soothing investors' frayed nerves.
Wall Street has rallied much of this week, providing a boost to most Asian stock markets.
Japan's Nikkei 225 index rose three of four sessions through Thursday on Asia's largest bourse.
South Korean stocks gained four days in a row.
Beyond the markets, economists say Asia's fast growing economies are better placed than in past crises to escape damage, given stronger intra-region demand, the emergence of China and India as growth engines and increased diversity in export markets.
Economists also emphasize that Asia is in good shape in terms of its overall fiscal position, with current account surpluses and vast foreign reserves shoring up many countries' financial systems.
Macquarie's Belchere said that recent quarterly economic growth figures for Singapore, Hong Kong, South Korea and China were all stronger than expected, providing some buffer.
China, the world's fastest growing economy, expanded a stunning 11.9 percent in the three months ended June 30, its fastest rate in a dozen years.
Governments, while saying they are closely monitoring signs of any subprime impact on their economies, have expressed optimism the region is basically solid.
"This is not a financial crisis in Asia,'' Singapore Prime Minister Lee Hsien Loong said in a speech Sunday, his country's National Day.
"This is a crisis in the advanced countries which has affected us. I believe the mid- to long-term prospects are very good.''
Australian Treasurer Peter Costello said Tuesday that his country's economy would ride out any U.S. downturn.
South Korea's Vice Finance Minister Lim Young-rok sees opportunities in other markets.
"Even if the U.S. economy slows, South Korea's exports will remain robust if China, newly developing countries, Europe and Japan continue to show strong growth,'' Lim told reporters Thursday.
Analysts say the country's vulnerability to the subprime crisis itself is limited.
"Japan's direct exposure should be pretty small,'' said Hiroshi Shiraishi, economist at Lehman Brothers in Tokyo.
"We're looking at more indirect effects.''
Most damaging has been a jump in the yen against the U.S. dollar as investors hit by subprime woes - and spooked by a possible U.S. economic downturn - scramble to reduce their exposure to the risky yen carry trade.
That involves selling off Japan's low-yielding currency in favor of higher-yielding investments in other markets.
To unwind their positions, investors buy back the yen, driving up its value.
Japan's currency soared last week, at one point hitting 111.80 yen to the dollar, its highest level since June 2006.
It has since fallen back
Thank You BOJ for pumping so much Excess Global Liquidity into the Market.
http://www.bernama.com.my/
bernama/v3/
news_business.php?id=280805
Share prices on Bursa Malaysia closed higher across the board Thursday in line with the regional markets on the release of better corporate results and gains on Wall Street overnight, a dealer said.
The KLCI surged 28.23 points, or 2.248 percent, to close at 1,283.62 after opening at 1,270.95 from Wednesday's closing of 1,255.39.
Continuous buying was seen in heavyweights, especially financial counters like Maybank, Bumiputra-Commerce and Public Bank, the dealer said.
He said Second Finance Minister Nor Mohamed Yakcop's comment that the country's economy is able to withstand any fallout from the U.S. credit crisis as local fundamentals remain strong should support the local bourse further.
Advancers outnumbered decliners 771 to 173
The dealer said the Bank of Japan's decision to keep its call rate target unchanged at 0.5 percent boosted the overall sentiment as it eased the pressure of further unwinding by investors of the yen carry trade.
Bail out, Bail Out, Bail Out.
Don't people understand that a bail out will weakens the Dollar.
http://www.bloomberg.com/apps/
news?pid=20601009&sid=
aSCQN1Unnuds&refer=bond
The risk of owning Australian bank debt fell after Countrywide Financial Corp., the biggest U.S. mortgage lender, sold $2 billion of preferred stock to Bank of America Corp., boosting stability in credit markets.
The cost of default protection, via credit-default swaps, on the non-investment grade bonds of Australia's four biggest banks fell, after surging to a record on Aug. 14, on concern that the rising cost of borrowing may cut profit. The five-year contracts decline as perceptions of credit quality improve.
The sale by Countrywide, which lost almost half its value as waning demand for mortgages cut profit and short-term funding, will allow it to continue making loans. The credit quality of short-term debt sold by Australian banks will not be ``adversely affected'' by U.S. subprime losses, Standard & Poor's said today.
Thank You BOJ for Excess Global Liquidity.
Every one is giving a bail out no wonder there is no FEAR in the market place for the independent mortgage brokers.
Only GREED exist in main streets today.
http://www.washingtonpost.com/
wp-dyn/content/article/2007/08/23/
AR2007082302101.html?hpid=topnews
What Credit Crunch?
To Judge by Lenders' Teasers, It's Still Subprime Time
On AOL.com this week, the Internet-based loan company LendingTree offered "Bad credit options" and a $425,000 loan for only $1,376 a month. And Countrywide Financial, the nation's largest mortgage lender, declared, "Bad Credit? Call Today. Refinance or Tap into Your Home's Equity" in an online ad from its Full Spectrum Lending Division.
No-money-down mortgages and subprime loans that cater to people with spotty credit are quickly disappearing as lenders tighten their standards in response to a rise in foreclosures. But you wouldn't know that if you looked at the ads that some banks and loan companies have placed on the Internet and in newspapers, including this one, often right next to the very stories chronicling the meltdown in the mortgage industry. So what's with the mixed messages?
"It's been a common feature of advertising," said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America. "They offer their products not around interest rates but among monthly payments, ease of access, among 'you're more likely to get a yes with us than with others.' I don't think that has changed in this environment."
Even though dozens of lenders have shut down their mortgage operations or laid off employees, many others are trying to generate interest among potential borrowers even if the companies ultimately cannot qualify them for loans.
"It's important to point out that there are loan options available for borrowers with lower credit scores in today's market," Darren Beck, senior vice president of marketing for LendingTree.com, said in a written response to questions.
So is it wrong to market no-money-down, interest-only or other alternative mortgages to people with poor credit?
"There's nothing necessarily wrong about lending money to people with bad credit," said David Nahmias, U.S. attorney for the northern district of Georgia, who has worked on mortgage fraud cases. "
Our concern is more the independent mortgage brokers who will try either to trick people into purchasing properties they really can't afford, solicit those people to lie, let them use their identity or credit so they can perpetrate mortgage fraud."
When the cat is away the mouse will play.
Yen Carry Trade is alive and well thanks to BOJ for flooding the market with Excess Global Liquidity again.
Thanks for weakening the US Dollar again.
http://www.mortgagenewsdaily.com/
8232007_IndyMac_Jumbo_Loans.asp
IndyMac To Resume Prime Jumbo Home Loans
IndyMac Bank announced today that it will resume originating prime, single-family residential, full doc jumbo loans after they temporarily reduced the origination of these products due to the recent credit cruch in the secondary markets.
"Given our strong financial position, we are fully committed to the market for prime jumbo home loans," commented Michael W. Perry, Indymac's Chairman and CEO. "Until the secondary market recovers, we plan to retain this product in our investment portfolio at what we believe will be attractive returns."
BOJ is nothing but a “paper tiger”:
Speculators and Hedge Funds knows it.
http://biz.yahoo.com/fxcm/
070823/1187866518072.html?.v=1
Yen Carry Trade came back with a vengeance tonight as calming news from the sub-prime market and reluctance of BOJ to raise rates beyond the current 0.50% level revived demand for high yielding currencies across the board.
Yen Dives as BOJ Stays Pat and Risk Appetite Returns
"Policies will be changed flexibly not based on schedules and preconceptions, but when we can be confident" of improvement in the economy and prices, the governor said.
GREED, GREED, GREED as speculators and hedge funds take money out of US Treasury and get back into yen carry trades thus taking the dollar down.
http://quotes.ino.com/
chart/?s=NYBOT_DX&v=s
Without FEAR the market is all about GREED.
BOJ the Paper Tiger has lost all control.
As yen carry trade resume speculators and hedge funds sell US Treasury and buy back Australian Dollar weakening US Dollar again.
http://www.news.com.au/business/
story/0,23636,22300085-
31037,00.html?from=mostpop
The Australian dollar was trading at $US0.8227/29, up almost three-quarters of a cent from yesterday's close of 0.8153/58.
Mr Grace said foreign exchange traders had realised the Australian dollar had been oversold.
"The fundamentals of the Australian dollar and the Australian economy remain very solid," he said.
Mr Grace said the Australian dollar would be likely to reach the $US0.8900 level by the end of the year.
Carry traders, who sell the low-yielding Japanese yen for high interest rate currencies, stayed with the Australian dollar at noon.
The Bank of Japan decided yesterday to leave interest rates at 0.50 per cent by an eight to one vote.
As speculators and hedge funds get back into yen carry trade the lagging effect will be the build up of Excess Global Liquidity.
December means allot of time for Speculators and Hedge Funds to accumulate liquidity.
So it is time to place your bets again.
What asset class will that liquidity go back into Corporate acquisitions, more CMBS, or Asian Markets perhaps.
Looks like the US Dollar Index will see 80 again.
http://www.bloomberg.com/apps/
news?pid=20601101&sid=
ae6IonN4mzU0&refer=japan
December Is Earliest Timing for BOJ Move, Morgan Stanley Says
"FEAR and GREED" and "The Path of Less Resistance"
With BOJ meeting out of the way the biggest FEAR for Speculators and Hedge Funds is knowing that Inflation is a race of who accumulate the most from Yen Carry Trade first.
As GREED takes over Speculators and Hedge Funds greatest FEAR is knowing that "Inflation only benefits those that get in first." The fear is "Those that get in last gets nothing."
In other words Speculators and Hedge Funds know that the last person to pull out of the safety of US Treasury and get into yen carry trades gets nothing.
THIS IS A DISGRACE & DISGUSTING TO EVEN READ!!!!
Who do the tax payers bail out next??? All the losers on the stock market bubble???? Is this a free market economy or what???
50% of all resale homes in Vegas are UNOCCUPIED!!!! Same in Phoenix, in Florida and in California!!! What “homeowners” is Mr. Gross talking about??? The speculators, the liars, the fraudsters, the criminals??? They belong in jail not in a bailout. The reason why this mess exists is because home prices are SKY HIGH AND UNAFFORDABLE on current salaries, and are there because of these liar, criminal flippers and speculators!!!! Foreclosures are the means to drive prices down so that the free market can do what it does best. And that is to make homes a value proposition again so people can afford them and to go and buy them. Sheesh…. Call or email your senator or congressman.
Pimco’s Gross Urges Bush to Bail Out U.S. Homeowners (Update3)
http://www.bloomberg.com/apps/news?pid=20601087&sid=amVRExsd80cA&refer=home
Just out fake durable goods order report that nobody bought. Up 5.9% ex transportation up 3.7% total. WTF every company appears to be crashing into the ground yet durable goods order is up almost 6%. Looks like Wall Street didn't buy it though stocks went nowhere. This report 2 months ago would have caused a 300 point instant bounce. PPT out of tricks??
new home starts up 2.5% in July
some crash
DOPES
From Marketwatch:
"Sales of new home increased 2.8% in July to a seasonally adjusted annual rate of 870,000 as the inventory of homes for sale dropped for a fourth straight month, the Commerce Department estimated Friday..."
But plaese so not read our article any further because you might see that "Sales are down 10.2% compared with last July."
Even dogster.com diary entries are starting to talk about the hedge funds and all the rest...
http://www.dogster.com/dogs/609775/diary/Savannah_a_pattern_of_patterdale_terrierism/355704
Bank of China's subprime exposure rattles Asia
http://biz.yahoo.com/rb/070824/
economy_credit.html?.v=3
Paper Tiger BOJ you are doing a find job pumping Excess Global Liquidity in the World Markets
http://www.moneycontrol.com/india/
news/fii-view/yen-to-trade-between
-115-11836-calyon-cap-mkts/12/23/
299326
Yen to trade between 115-118/$: Calyon Cap Mkts
Q: What is happening now?
A: Paper Tiger BOJ did not raise rate, and BOJ gave the all clear signal to Speculators and Hedge Funds to go back into Yen Carry Trade
http://www.bloomberg.com/apps/
news?pid=20601101&sid=
asUjVZVPyKa4&refer=japan
Yen Falls Most in Three Years as Stock Rally Spurs Carry Trade
The yen fell the most in three years against the euro as stocks rallied, reviving confidence in trades that depend on borrowing in the Japanese currency to buy riskier assets.
Investors sold yen and bought the higher-yielding Australian and New Zealand dollars, which rose around 3 percent versus Japan's currency.
Q: What really happened during the stock market correction?
A: Speculators and Hedge Funds sold stocks and bonds to pay back margin calls and got into the safety of US Treasury.
http://online.wsj.com/article/
SB118787516717106524.html?mod=
googlenews_wsj
Last week, the strategy, in which investors borrow yen at Japan's rock-bottom interest rates and invest in countries where returns are higher, came apart.
As concerns over subprime mortgages in the U.S. sent markets around the world tumbling, carry traders worried that their losses would be compounded because they used borrowed money.
So they sold stocks and bonds in places like Australia and New Zealand to raise money to repay loans in Japan.
Q: So what will Speculators and Hedge Funds do now that the all clear is given?
A: Get out of the safety of short term US Treasury to go back into Yen Carry Trade
http://finance.yahoo.com/q/
bc?s=%5EIRX&t=1d&l=on&z=m&q=l&c=
Q: What will happen to the US Dollar?
A: US DOLLAR INDEX should go DOWN as Speculators and Hedge Funds pull money out of the US Treasury.
http://quotes.ino.com/chart/
?s=NYBOT_DX&v=s
Q: What will Excess Global Liquidity do to world economies?
A: Well what normally happens when too much money is chasing to few goods. Speculators and Hedge Funds will pour the money into things like stocks, oil, and gold driving up Inflation.
http://www.kitco.com/charts/
livegold.html
As Speculators and Hedge Funds gets back into Yen Carry Trade, World markets will be flooded with Excess Global Liquidity again.
With too much money chasing the same amount of goods, price like Stock, Oil, and Gold will be driven up.
http://money.cnn.com/2007/08/24/
markets/oil.reut/
?postversion=2007082412
Oil closes above $71 as economic fears fade
U.S. light crude for October delivery closed up $1.26 to $71.09 a barrel.
U.S. gasoline was up more than 2 percent at $1.9725 a gallon on the New York Mercantile Exchange.
"Gasoline is pushing up crude here," said Phil Flynn, analyst at Alaron Trading. "I also think gasoline had been oversold lately."
Solid economic numbers may have pushed gasoline prices higher.
What happens when BOJ pumps Excess Global Liquidity into the market.
Oh, my people are so poor, that why interest rate must be kept at 0.5%
Remember GREED make people lose control and want even more.
Why should Speculators pay taxes, let the US tax payers pay it for them when Subprime borrowers get bailed out.
http://news.yahoo.com/s/nm/
20070824/od_uk_nm/
oukoe_uk_japan_forex
Tokyo housewife hid 1.7 million pounds in forex gains
1,700,000 Pounds = 3,422,609 USD
A financially savvy Tokyo housewife who made 400 million yen (1.7 million pounds) trading in foreign exchange markets was fined on Friday for evading tax, a court official said.
Yukiko Ikebe, 60, got a suspended jail sentence and was fined 34 million yen, after she used relatives' names to make her gains look smaller and avoid paying tax, NHK said.
"She felt it was unfair to have to pay tax on her gains, when she made losses some years," NHK quoted the judge as saying. "She spent the money on kimonos and jewellery."
Forex trading has become more popular in recent years in Japan, where low interest rates have led retail investors to seek new sources of profit.
Shocking move by FED.
http://thegreatloanblog.blogspot.com/
http://tinyurl.com/3aqaod
NEW YORK (Fortune) -- In a clear sign that the credit crunch is still affecting the nation's largest financial institutions, the Federal Reserve agreed this week to bend key banking regulations to help out Citigroup (Charts, Fortune 500) and Bank of America (Charts, Fortune 500), according to documents posted Friday on the Fed's web site.
...
The regulations in question effectively limit a bank's funding exposure to an affiliate to 10% of the bank's capital. But the Fed has allowed Citibank and Bank of America to blow through that level. Citigroup and Bank of America are able to lend up to $25 billion apiece under this exemption, according to the Fed. If Citibank used the full amount, "that represents about 30% of Citibank's total regulatory capital, which is no small exemption," says Charlie Peabody, banks analyst at Portales Partners.
So if the markets movement was not due to Yen Carry Trade then what?
Look like Yen Carry Trade is coming back with a vengeance because Speculators and Hedge Funds have used last market correction to establish the fact that BOJ is a paper tiger and Mr. Bernanke is a DOVE.
Remember the two rules of economic "FEAR and GREED" and "the Path of Less Resistance"
With no FEAR the path of less resistance is GREED
Speculators and Hedge Funds are rushing out of three-month T-bill to get back into Yen Carry Trade
With no FEAR from Central Banks Speculators and Hedge Funds will aggressive pull out of the safety of the US Treasury next week and flood the markets with more liquidity again.
http://www.iht.com/articles/ap/
2007/08/22/business/
NA-FIN-MKT-US-Closing-Stocks.php
Wall Street advances as investors sell safe government bonds.
http://finance.yahoo.com/q/
bc?s=%5EIRX&t=5d&l=on&z=m&q=l&c=
The three-month T-bill rallied on Friday sending its yield up to 4.13%.
On Monday, the three-month T - bill was at its 52 weeks low with the yield at 2.40%.
http://quotes.ino.com/chart/
?s=NYBOT_DX&v=s
US Dollar Index Last trade at 80.663 Down -0.449 (-0.55%)
http://www.rttnews.com/FOREX/
Currency_mkt.asp?date=08/24/
2007&item=134
Kiwi Moves Higher Versus U.S. Dollar
The kiwi continued to gain against the greenback in on Friday in New York and found a 10-day high. The New Zealand currency rose throughout the day and reached as high as 0.7220 at 4:30 p.m. ET. The pair moved at 0.7213 at 5 p.m.
http://www.bellinghamherald.com/
322/story/163727.html
Oil, gold prices jump
Major commodities markets moved higher Friday, with energy and metals prices supported by newly positive data on home sales and factory orders.
Oil prices jumped above $70 a barrel. Gold prices rose solidly, underpinned by a weaker U.S. dollar, while agriculture futures finished in mixed range.
Los Angeles Times' Peter Viles analysis of California housing market
http://www.cnn.com/video/#/video/
business/2007/08/23/
intv.us.property.market.viles.cnn
The WASH POST: Why we need a Housing Bail Out
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/23/AR2007082301834.html
What about Personal Responsibility?
awfully quiet today losers. crying in your beer I take it seeing how markets are flying and home sales are soaring
as nelson would say
HA HA
PIMCO’s William Gross is now calling for a fiscal policy bailout for the U.S. housing market debacle rather than a monetary policy bailout (see “Where’s Waldo? Where’s W?”).
On the surface, Gross’s arguments seem to make sense – on the surface. Gross argues that even a cut in the federal funds rate of several hundred basis points might not lower reset rates on adjustable-rate mortgages enough to prevent the massive looming foreclosures.
In addition, Gross argues that such an injection of Fed-created credit could be the catalyst for a run on the dollar, which, in turn, would probably prevent 15-year or 30-year fixed rate mortgage yields from falling enough, if at all, to prevent massive foreclosures.
Moreover, Gross argues that a large cut in the federal funds rate would perpetuate Greenspan’s moral hazard policy and would encourage further leveraging in the global financial markets.
So as an alternative, Gross recommends that some federal government agency, either an existing one such as the Federal Housing Administration (FHA) or a newly-created alphabet soup, bailout those current home“owners” who otherwise are soon-to-be renters.
I believe that Gross makes some valid points about the implications of a Greenspan-magnitude cut in the fed funds rate. But I do not believe that a fiscal policy bailout of prospective defaulting mortgagees would be “free,” economically speaking.
Let’s assume that the FHA guarantees the refinancing of the approximately $683 billion of subprime and Alt-A mortgages that are scheduled to reset in the six quarters ended 2008:Q4 (dollar amount according to Merrill Lynch).
An FHA guarantee is a full-faith-and-credit guarantee of the federal government. So, the market for these new FHA-guaranteed mortgages would overlap with the one for U.S. Treasury securities. That is, FHA-guaranteed mortgages and U.S .Treasury securities are close substitutes.
Thus, all else the same, U.S. Treasury security interest rates would rise as investors shift out of Treasuries into FHA-guaranteed mortgages.
But because the FHA would be guaranteeing massive amounts of subprime and Alt-A mortgages, market participants would anticipate higher defaults on these mortgages going forward, which, in turn, would cause market participants to expect higher Treasury borrowing requirements going forward to make buyers of these FHA-guaranteed mortgages whole after defaults.
So, interest rates on Treasury debt would rise not only because of the substitution effect, but because a greater future supply of Treasury debt would be anticipated.
In fact, the interest rates on all other fixed-income securities would rise because FHA-guaranteed mortgages are, to varying degrees, substitutes for other fixed-income instruments.
So, the current federal deficit would rise because of higher interest costs on the public debt. In addition, expected future federal deficits would rise because of higher anticipated defaults on FHA-guaranteed mortgages.
Private borrowers would cut back on their borrowing and spending because of the higher interest rates they now have to pay in order to obtain funding. Other private – and perhaps public – spending, then, would be “crowded out” by the increase in FHA guarantees on mortgages. The cost of funds to private equity syndicates would increase, so the dollar volume of “deals” would decline from what it otherwise would have been.
This would reduce the amount of shares being bought from households, which, in turn, would reduce an important source of household deficit spending. (For a discussion of the impact on household spending of private equity buyouts and corporations’ stock buybacks, see "Wall Street and Main Street Are Joined at the Hip"). Again, other spending would be crowded out by the increase in FHA guarantees of mortgages.
http://www.financialsense.com/
editorials/kasriel/2007/0824.html
I just wanted to jump into the outsourcing will not/does not work thread.
I think that you guys are confusing offshoring with outsourcing(surprising for an executive level employee).
Offshoring may not deliver the benefits that were oringally promised but outsourcing and, in particular, outtasking are currently and will continue to be growth areas in IT.
Successful companies identify core vs. non core competencies, assign risk scores to the activities and provide EXPERIENCED financial/technical people to manage the outtaskers.
Companies that attempt to bring everything in house will never be able to compete, because they cannot continually hire new staff talent to support individual technologies. They can't continue to train existing employees to expert levels (it isn't the companies core business).
Time to market and first mover advantage can aand are driven by nimble IT organizations that are aligned with the BUSINESS goals of the organization.
Oh well, sorry for the rant, but everything is not coming back in house and will never come fully back in house in organizations with vision.
If an organization has sufficient mass, there is a possibility of bringing in the talent to support the business, but even then you cannot ensure that the requisite skillsets will be available where and when they are needed.
Best of luck to all.
Carry on.
You dopey Democrats stop trying to bail out your flipper buddies.
Hitlary Clinton
Upchuck Schumer
Chris Dudd
Democrat dopes trying to waste taxpayer money on flipper welfare.
INVESTORS loved yen carry trade.
Central bankers worried about yen carry trade.
And though analysts could never measure its true size, most agreed it was a prime source of the cheap money that washed through global markets in recent years. But with those markets in turmoil, all of them are asking whether the yen carry trade is seeing its last days.
Over the past 10 years, the yen carry trade - the practice of borrowing Japanese yen at almost zero interest and using that cash to finance higher-return investments mostly outside Japan - became a favorite speculative tool of global hedge funds and small Japanese investors alike.
As the popularity of the carry trade grew, central bankers fretted that the availability of cheap yen was artificially lowering the price of risk.
In Japan, the debate over the future of the carry trade is partly a quarrel over whether traditionally cautious Japanese investors have developed an enduring appetite for risk.
To many observers, the Japanese - especially older Japanese with substantial savings - remain averse to taking chances with their investments. That view explains, in part, why there was a rush to convert investments back into yen last week: the currency is seen as a safe haven in times of volatile markets, and Japanese investors were with the pack that was fleeing the carry trade.
Recent surveys conducted by the Japanese Government and the Bank of Japan also show that consumers here generally continue to be wary about their economic prospects. But others contend that all the talk about the carry trade obscures a shift in attitudes among Japanese investors, who are increasingly eager to seek out foreign investments - even risky ones - to diversify their holdings and increase returns.
http://www.smh.com.au/news/business/back-to-cash-as-investors-quit-the-carry-trade/2007/08/24/1187462526643.html?page=2
BOJ the paper tiger has crossed the point of no return on Thursday, August 23, 2007
http://www.dailyfx.com/export/
sites/dailyfx/story-images/2007/
08/fxcmtr/general/carry_0824.gif
This week, the Dynamic Carry Trade Basket was up by nearly 583 pips in value and accumulated more than $150 on interest payments.
With the US Dollar in the low 80, Speculators and Hedge Funds will have to take out more margin call to achieve the same level of return that they expect in the past.
GREED has taken over for the Speculators and Hedge Funds.
The biggest FEAR for them now, is not being able sell their three-months US Treasury bill fast enough and get back into a yen carry trade position before the next person get the jump on them.
The selling of the US Treasury will cause the US Dollar to get weaker; therefore, a late start would cost more for the same margin call.
http://www.ft.com/cms/s/0/
e9bb56a2-5227-11dc-a7ab-
0000779fd2ac.html
Gloom lifts from carry trades
Currency markets this week appeared to return to the trading patterns seen before the violent turbulence of the previous two weeks.
Carry trades were re-established as volatility eased and yield-hungry investors emerged after a fortnight of extreme caution.
Calmer conditions prevailed this week as carefully timed comments and actions from central banks helped ease nerves. The catalyst for the yen’s move lower was returning stability in the equity markets.
Further ammunition for the carry trade was provided by the Bank of Japan’s decision to leave interest rates at 0.5 per cent – the lowest in the industrial world.
US Dollar fall on Speculators and Hedge Funds selling of short term US Treasury bill in favor of gains made in Yen Carry Trade.
http://www.dailyfx.com/story/
currency/eur_news/
Carry_Trade_Leaves_Dollar_in_
1187983522175.html?engine=
rss&keyword=article
Carry Trade Leaves Dollar in the Dust, Dow Rallies to Further Sink the Yen
The US Dollar posted its strongest losses on the week, as a sharp return to carry trades led the safe-haven currency lower against risk-friendly counterparts.
Standard & Poor's Ratings Services said over the weekend that its ratings and outlook on Bank of China Ltd (BOC) were not affected by the bank's disclosure of its exposure to US subprime mortgage-backed instruments.
Standard & Poor's does not expect potential losses to materially erode the bank's capital base, given the bank's adequate profitability and capitalization, according to the credit rating agency.
http://www.chinadaily.com.cn/
bizchina/2007-08/25/
content_6056265.htm
Treasurys Fall As Safe Haven Bid Wanes
shorter-term U.S. Treasury bond prices fell Friday, with the yield curve flattening sharply, as the government bond market's safe-haven appeal faded amid stronger data.
At 5 p.m. EDT, the 10-year Treasury note was up 63 cents per $1,000 in face value, or 2/32 point, from its level at 5 p.m. Thursday. Its yield, which moves in the opposite direction, fell to 4.62 percent from 4.63 percent.
The 30-year bond rose 21/32 point. Its yield fell to 4.89 percent from 4.93 percent.
The 2-year note fell 5/32 point. Its yield rose to 4.30 percent from 4.21 percent.
Yields on 3-month Treasury bills were 4.23 percent as the discount rate rose 0.29 percentage point to 4.12 percent.
http://www.philly.com/philly/
wires/ap/business/
20070824_ap_
treasurysfallassafehavenbidwanes.
html
Q: So where is the money going?
A: Anywhere but US Treasury and US Dollar.
Energy, Metals Prices Advance
Major commodities markets moved higher Friday, with energy and metals prices supported by newly positive data on home sales and factory orders.
Oil prices jumped above $70 a barrel. Gold prices rose solidly, underpinned by a weaker U.S. dollar.
http://www.theledger.com/article/
20070824/APF/708240727
I work in IT and have not seen outsourcing or offshoring success anywhere that there was competent management before. The service level ALWAYS goes down due to turnover. Nobody wants to be a temp and the first thing they do is go looking for another job.
What was that about a recession?
Record Low Unemployment in West Creates Tough Working Conditions for Business Owners
HELENA, Mont. (AP) -- The owner of a fast food joint in Montana's booming oil patch found himself outsourcing the drive-thru window to a Texas telemarketing firm, not because it's cheaper but because he can't find workers.
Record low unemployment across parts of the West has created tough working conditions for business owners, who in places are being forced to boost wages or be creative to fill their jobs.
John Francis, who owns the McDonald's in Sidney, Mont., said he tried advertising in the local newspaper and even offered up to $10 an hour to compete with higher-paying oil field jobs. Yet the only calls were from other business owners upset they would have to raise wages, too. Of course, Francis' current employees also wanted a pay hike.
"I don't know what the answer is," Francis said. "There's just nobody around that wants to work."
Unemployment rates have been as low as 2 percent this year in places like Montana, and nearly as low in neighboring states. Economists cite such factors as an aging work force and booming tourism economies for the tight labor market.
$10 an hour for McD's and still they can't find workers. And you boneheads are talking about recessions and depressions. And keep in mind $10 an hour in Montana goes a long way. I lived there for 2 years and for $500 a month you can rent a great apartment.
http://biz.yahoo.com/ap/070825/west
ern_workers.html?.v=4
I've always held Bill Gross in the highest regard....even when he was a youngster on Lou Rukeyser's Wall Street Week. I used to actually follow some of the advice from the guys and girls on that show...and Alison Dean, Liz Sonders, and Barbara Marcin were actually cute back then!!!
Surely, I digress.....
Anyway, I find is somewhat disconcerting that Bill Gross has dropped his panties and 'assumed the position'. Perhaps things are worse than we realize?
re: outsourcing
I am a PM for hire. I'm sorry to say folks but the trend is going offshoring/offsourcing, whatever you want to call it.
Last year I was on a project where the work 70/30 India/US. It was a logistical nightmare and the work from India was piss poor and often had to be completely redone. But we paid $20-30 an hour vs. $90 an hour for the US based resources. At that much of a discount you can afford to do the work twice, hell three times and still come out ahead.
Most CEOs only look at the bottom line. To them an IT geek in India or an IT geek in the US is one and the same. I know that isn't true, you know that isn't true but that is irrelevant.
My advice to programmers is move into non-tech IT positions like project management, functional design, etc. Those jobs for the time being are not being outsourced and probably won't be since they require a presence stateside.
Personally I am saving every penny I can so that I can retire to a small town somewhere and not give a shit about any of this. I have about 5 years to go until I have enough money to never worry about money again.
My two cents worth from experience.
Pretty cool data. If the link doesn't work it can be found on top left front page of ny times today.
http://www.nytimes.com/interactive/2007/08/25/business/20070826_HOUSING_GRAPHIC.html
Here comes the return of 20% down and proof of income folks. The buyer pool will drastically constrict and homesellers are going to freak (panic is what Bernanke is going to do.)
Got gold?
“For those with a mortgage who want to refinance…it can be done, but not if your property’s value has fallen off a cliff.”
“‘Banks haven’t stopped lending money to people, they’ve just made it more practical on both sides,’ said Casey Casperson, a senior loan officer in Palm Beach Gardens. ‘Now they’re making borrowers prove they can pay it back.’”
“During the housing boom, lenders didn’t require that of borrowers. As unbelievable as that sounds, let’s give money to people without checking to see if they have a job or looking at their pay stub, it was the way the subprime market worked.”
“What happened a few weeks ago was investors who bought those mortgages from lenders simply stopped buying. Now that no one is willing to take on the riskiest mortgages, lenders say they’ve raised their standards.”
“At Wachovia, those 5 percent down payment mortgages with no verification are gone. If you want a loan that does not require proof of income, you must put 20 percent down. And you’ll need a higher credit score than in the past for any high loan-to-value mortgage, a spokesman for SunTrust said.”
“It’s similar for borrowers with credit that’s not good — 20 percent down payments are being required.”
“Jonathan Klein, general manager of Associates Home Mortgage in Boca Raton, was recently working on a $480,000 mortgage for a home near Loxahatchee, in western Palm Beach County, a few weeks ago. The buyer was making a 25 percent down payment and the interest rate was to be 7 percent.”
“The day the loan was scheduled to close ‘was the day when the market completely collapsed,’ he said.”
“In a matter of two hours, the interest rate rose to 8 percent and the borrower had to pay 5 points, for an extra cost of $17,000 on the loan, to prevent the deal from falling through.”
Now don't take this the wrong way folks but I have been reading the post on this site and there is definitly some serious bitterness going down here.
I get this mental picture of some of these poster sitting in their basement on a case of canned hams with their laptop and a ww2 battle helmet on their head waiting for the end of times.
Now I am a realist and have to agree that there are a LOT of dumb people out there making very uninformed decisions with easy borrowed money and yes it will come back and bite most of them is the a$$.
As a custom home builder that builds approx 10 pre sold homes a year I had to deal with the frenzy of the past several years.
The ink on the contract was not dry and the suppliers/subs were faxing over price increases on material and labor as a result of supply and demand.
There are some real numbers in the increased cost of building a home during this period, and having to deal with 3 hurricanes in one year and one real MF of one in "norlins" later in this frenzy did not help the situation much.
Add to that stricter building codes (which is a good thing) that add to the cost of construction and you have a more expensive house, that my scholars, is a fact.
Then novice real estate speculators driving up the price of dirt three times the actual value and BINGO!
That being said, it does not excuse the crap that the house whores in the tract market were pulling like a "lottery" at the "Sales Centre" and price increases "because they could" by the week.
I just wanted to give your site some honest information that may be overlooked in the frenzy to convict an entire industry.
You may want to get out a smaller paint brush and use smaller strokes because not everyone in the housing industry was cutting a slice off a fat hogs ass in the last five years.
Now I have my opinion of real estate folks, bankers, the KB Homes and stock market brokers but at the end of the day you have to let the world go about their business of being stupid because there is no law preventing ignorance as proven by the fact that they keep confiscating your money to fund "publik edjewkashun"
With that said, let er rip tater chip!
This blog post brings up an interesting point.
http://tinyurl.com/35fbvl
The federal government pressured lenders to extend credit to minorities to enable them to buy homes, even when rational lending standards did not warrant it. So we have the federal government in 1999 encouraging lenders to put poor and minority borrowers into toxic subprime loans. Flash forward 8 years and now *surprise* we have politicians blaming the lenders for doing what they were told to do. Here's an excerpt from one of the articles the blog post quotes:
The easy flow of credit during the 1990s has helped to fuel a nationwide housing boom and spending spree that has kept the economy humming. But analysts say banks have lowered their lending standards, particularly to tap into the fast-growing minority markets, and have been under strong political pressure to do so despite studies showing minorities are more likely to default than whites. The result of this largess may be soaring levels of bankruptcy and default during the next recession.
"We have created a tremendous amount of risk," says Cynthia Latta, economist with DRI/McGraw-Hill in Boston. "At some point, the economy is going to turn down. There will be large numbers of defaults that will trigger a lot of political heat."
Politicians have pushed for the lower standards out of a legitimate desire to spread today's prosperity to groups that previously were on the margin, says Latta. "Banks are under a great deal of pressure to lend in these communities," she says. "It is very political. But I still have reservations about whether you're really doing anyone a favor by letting them borrow 100 percent of the cost of a home. It makes it so easy for them to get in over their heads."
U.S. Treasury debt prices were mixed on Friday, as confidence grew that an imminent Federal Reserve interest rate cut may not be necessary to deal with the worst global liquidity and credit squeeze in a decade.
The yield on 3-month T-bills, which earlier this week reached the lowest level in over two and a half years, climbed again on Friday, jumping 27 basis points to over 4.0 percent as the need for a safe haven diminished.
http://today.reuters.com/news/
articleinvesting.aspx?type=
bondsNews&storyID=2007-08-
24T204412Z_01_N24602389_
RTRIDST_0_MARKETS-BONDS-
UPDATE-5.XML
we are doomed
http://tinyurl.com/2u6745
For the seasoned speculators and hedge funds managers Yen Carry Trade was like shooting greenbacks in a barrel.
So some gambled it all and when more and more Speculators and hedge funds sell the yen, the weaker the yen gets.
A weaker yen thereby increase the liquidity which pushs up the price of gold, oil, stocks, and house.
Is msnbc right? When it worked is it that easy: using cheap yen to make big bucks outside Japan.
http://www.msnbc.msn.com/id/
20438303/site/newsweek/
Yen carry traders are mainly institutions, hedge funds and other big-time players, but in recent years Japanese retail investors have also gotten in on the game.
Some of the most popular yen carry trades have involved the purchase of New Zealand dollars or Australian bonds, emerging-market debt and various U.S. dollar-denominated investments.
http://www.iht.com/articles/2007/08/26/business/26housing.php?page=2
In an interview, Lereah, now an executive at Move Inc., which operates a real estate Web site, acknowledged he had gotten it wrong, saying he did not fully realize how loose lending standards had become and how quickly they would tighten up again this summer. But he argued that many of his critics have also been proved wrong, because they were bearish as early as 2002.
There's not much here that will surprise followers of the mortgage industry, but such a prominent and negative story may start to change Countrywide's "best in the industry" and "too big to fail" public image. Enron and WorldCom were pretty big, too, but no one shed a tear for them.
link
A friend sent this from the NYT today (Sunday 26th). Two nice graphs, a video, and a quote from David Lereah admitting he was WRONG.
http://tinyurl.com/2fwoev
I honestly didn't really believe Keith's posts about illegal immigrants being part of the housing boom. But it appears he's right about that. Arizona's illegals are now fleeing due to a new law cracking down on employers who hire them. And their houses are all going on the market.
http://tinyurl.com/2e9g94
All of these bail out plans are just moronic.
There is only one bail out that makes sense and will allow this problem to go away fast:
CHANGE THE LAW TO MAKE IT EASIER FOR INDIVIDUALS TO DISCHARGE DEBT IN BANKRUPTCY!!!
Don't give tax money to 2/28 borrowers, banks, or hedge funds. Let the people lose their houses (the hedge funds can sell them at 25-50 cents on the dollar), then they can rent, the hedge funds lose 50% of the their value and most go bankrupt, and asset and real estate prices realign with income and earnings -- And it doesn't cost one damn cent.
Plus, because people won't be buried in debt -- consumer spending will be maintained. It's win win.
Hey Keith...Check this out! The new Arizona employer sanctions law is already working! And it doesn't even go into effect until 1/1/08!
Migrants flee as new hiring law nears
http://tinyurl.com/2e9g94
"BUBBA - THE APPLACHIAN REALTOR"
http://tinyurl.com/yq5q5n
BOJ its Yen Carry Trade time all over again.
http://www.stuff.co.nz/
4178774a13.html
Mr Goff, in Manila for a meeting of Asian trade ministers, said the New Zealand economy had been remarkably resilient with the dollar at recent highs of 81 US cents
We think the state of the New Zealand economy justifies a reasonably strong dollar.
Its rise was previously fuelled by the carry trade in which investors borrow in low-yielding currencies such as the yen to place funds in high-yielders such as the New Zealand dollar.
Mr Goff said New Zealand's dairy sector and hi-tech industries that are highly competitive on quality grounds had not been affected by the strength of the currency.
Further falls posed the danger of importing inflation, Trade Minister Phil Goff said.
In recent days the currency has traded around 70 cents.
It finished just above 72 cents on Friday after hitting an 8-1/2-month low below 67 cents on Aug. 17.
The dollar fell against the euro on Friday while the yen weakened further as many investors switched back into risk-taking mode amid calmer global financial markets.
http://www.dawn.com/2007/08/26/
ebr22.htm
Analysts said a rebound in troubled stock markets encouraged traders to resume so-called carry trades, which involve selling of low-yielding currencies such as the yen for higher returns.
The US dollar posted its strongest losses on the week, as a sharp return to carry trades led the safe-haven currency lower against risk-friendly counterparts, said David Rodriguez at Forex Capital Markets.
Analysts also pointed out that both the euro and the pound have maintained their strength because expectations still stand that both European Central Bank and the Bank of England could raise interest rates again this year.
The euro surged as high as 1.3681 dollars.
Mortgage Mess Hits Home
From the Plain Dealer:
http://tinyurl.com/35mpuy
Cleveland is faced with irreversible structural economic decline and increasing underemployment. Thanks NAFTA (under Clinton) and thanks W for the "ownership society"
Drive east from downtown on Euclid and it looks like Berlin circa 1945
awfully quiet today losers. crying in your beer I take it seeing how markets are flying and home sales are soaring
as nelson would say
HA HA
_________
Good Lord, you must not look any further than the 5 seconds worth of mainstream media swill to from "your" opinions.
Sorry buddy, you're a total 'tard.
Don't count out ‘Mrs Watanabe’ just yet, for she is selling the three-months US Treasury bill and making her come back.
http://www.bloomberg.com/apps/
news?pid=20601101&sid=
ai7XAjfq7JXk&refer=japan
The yen fell for the fourth day against the dollar and euro after global stocks rebounded last week, spurring speculation investors are willing to take on riskier investments such as carry trades.
Japan's currency traded at 116.68 per dollar
As speculators and hedge funds sell the three-months US Treasury bill they are buying back the Australian dollar.
As they get out of the safety of US Treasury the US Dollar falls and no longer become the currency of choice.
http://www.theage.com.au/news/
Business/Aust-dollar-opens-stronger/
2007/08/27/1188066979810.html
The Australian dollar opened stronger today buoyed by a more positive outlook among investors.
At 0700 AEST, the Australian dollar was trading at $US0.8288/92, up from Friday's close of 0.8186/91.
During the weekend, it traded between a low of $US0.8169 and a high of 0.8272.
Bank of New Zealand currency strategist Danica Hampton said the Australian dollar continued to strengthen over the weekend after finding support late last week as investor confidence returned to the market.
While you were away - fear and loathing in the markets, seasoned speculators and hedge funds are using your fear to get a fast jump on the Asian markets.
This week will likely be the same as those left behind begin to FEAR that they are missing the run up in the markets and desperately get out of the safety of short term US Treasury before "Event Driven Hedge Funds" begin to short the US Treasury and US Dollar making it cost more for the one left behind to get out.
http://www.ticker.com/
market-update/
Sharp-Weekly-Gains-in-Asian-
Markets/23003/
Sharp Weekly Gains in Asian Markets
Asian markets rose sharply for the week even after a mild loss on the last day of the week. Shanghi and Hong Kong led the region with gains of 12%.
For the week Hong Kong led the region after soaring 12% followed by rises of 9.7% in Shanghai, 9.4% rise in Korea, 7.4% in Australia, and 6.4% in Japan. The CSI 300 index in China, for the week soared 13%.
The new funds from retail investors keep pouring in the stock market, despite a rise in bank interest rate this week. CSI 300 index is now up whopping 155%, the best performer among all world indexes.
BOJ just remember you had the chance to be in control.
Now Speculators and Hedge Funds know who you are a paper tiger.
http://www.smh.com.au/news/
Business/
NZ-dollar-gains-as-us-data-
calms-markets/2007/08/27/
1188066980411.html
The New Zealand dollar has climbed back.
By 8am (0600 AEST) the NZ dollar was buying US72.20c, the first time it had reached that level in nearly two weeks. It had climbed from around US70.90c about 7pm Friday.
Against the yen the kiwi was up to 84.03, from 82.74 at 5pm on Friday, against the Australian dollar at A87.31c today from A86.88c, and against the euro at 0.5279 from 0.5251 at Friday's close.
The trade weighted index was 69.50 at open, from 68.83.
As you hesitate, GREED is making the seasoned speculators and hedge funds richer as they sell their three-months US Treasury position.
As you hesitate, GREED has allow the seasoned speculators and hedge funds to use the proceed of the sold US Treasury to make higher gains elsewhere.
As you hesitate, GREED has given opportunity to other while you sit and lose more money on your three-months US Treasury bill position.
So as Mrs Watanabe wakes up she could blame it on Japanese Prime Minister Shinzo Abe's but never the less the yen is falling.
http://www.nasdaq.com/aspxcontent
/NewsStory.aspx?cpath=
20070826%5cACQRTT200708261925
RTTRADERUSEQUITY_0023.htm&
The yen also lost ground to the British pound sterling. The yen is trading at 235.10 to the pound at 6:50 p.m. ET, having broken below short term support levels in the last hour.
The yen is trading at its lowest point against the pound since Aug. 14.
Bank of Japan deputy chief Toshiro Muto is less likely to become the next governor since the opposition won last month's election, casting doubt on the central bank's policy of gradually raising interest rates.
The number of economists predicting Muto will replace Toshihiko Fukui, whose five-year term expires in March, dropped to eight out of 15 last week from all 15 in June, according to Bloomberg News surveys.
The opposition Democratic Party of Japan's control of the Upper House allows it to block nominations for the job. That could reduce Muto's chances and increase those of someone who might break from Fukui's plans to increase borrowing costs. The DPJ disapproved of Muto's appointment as deputy governor in 2003, citing his background at the Finance Ministry.
``If the DPJ sticks to its argument, the possibility of Mr. Muto becoming the central bank chief would be low,'' said Mamoru Yamazaki, chief economist at RBS Securities Japan Ltd. in Tokyo. ``But he still has a chance; whether he can win the trust of the DPJ by March will be key.''
Muto, 64, formerly the Finance Ministry's top official, has said the bank needs to raise rates gradually as the world's second-largest economy expands, signaling he'd continue Fukui's policy if selected.
http://www.bloomberg.com/apps/
news?pid=20601101&sid=aLcm0xTFDnh0
Monday, with investor attention returning to carry trade activity as risk appetite has picked up in the wake of easing concerns about credit.
The Australian and New Zealand dollars, key beneficiaries of the carry trade prior to the global credit worries, both rose.
The Australian dollar was at 82.90 US cents from 82.87 cents late Friday in New York while the New Zealand dollar was at 72.49 US cents from 72.42.
http://www.forbes.com/
afxnewslimited/feeds/afx/2007/08/
26/afx4054884.html
Greece is being systematically burnt to the ground for purposes of development, in the process burning to death mothers and their children, tourists, etc.
"Fires are burning in more than half the country," fire department spokesman Nikos Diamandis said. "This is definitely an unprecedented disaster for Greece."
Officials suggested arson caused many of the blazes and several people have been arrested. Athens offered a reward of up to $1.36-million for information that would lead to the arrest of an arsonist.
Forest fires are common during the hot, dry summers but nothing has approached the scale of the last three days. Arson is often suspected, mostly to clear land for development. No construction is allowed in Greece in areas designated as forest land and fires are sometimes set to circumvent the law.
http://tinyurl.com/yvr8b8
OK, where is that idiot who was saying everything is peachy in NY?
Ha ha!
http://tinyurl.com/2lxsnc
HOLY SHIT!!
Existing sale were down 0.6% YOY!!! Run for the hills everyone.
And what's this then? Sales ROSE 2% in the west? The west? As in California, Las Vegas,Phoenix? That West?
Wait I thought prices were supposed to fall 99% in Phoenix and Las Vegas?
Morons.
Three of the largest most costly fires in the past couple of years have been started by Forestry personel,
One in Colorado, another in Arizona and in California!
On in Calif was a Government helicopter hitting some powerlines in the backwoods while looking (supposedly) for marijuana farms!
The one in Arizona and Colo. were started by Dept of Forestry firefighters looking for more hours of work!
The Cedar fire in San Diego started early one evening by a supposed lost hunter.
But, while the fire was still very small and very close to the air tanker base the Forestry Dept decided to call off air tanker operations for the day!
One of the most devistating disasters in So.Cal.......ever!
yeah, we have that fire problem w/greek owned properties here in chicago. we call it greek lightning.
I've got a good thread topic:
How long until Countrywide is traded on the OTC bulletin board?
OTC: CFCXB.pk
That'll be hilarious. One trade a day, gigantic bid/ask price spread. Maybe CFC stock will convert to Bank of America stock 100:1, if those chumps are lucky. Nah, it'll go to 0 and someone at BoA will just get a bonus.
I am new here so please be kind, but i need an answer to who can i turn to for a re-fi. Our house MAY have $20k in equity only, credit scores are high 500's to low 600 only (both husb and I), he is self employed, i just lost my job. We owe 2 yrs property tax. We need help - our arm goes up on our 1st Oct. 1. Any advice is truly appreciated.
Keith,
You'll probably see this, but this is some funny stuff. CEO of Century 21 says his house is worth 15% less than is 2004. Seems like he's signaling to sellers that they need to drop prices a lot to move inventory.
Of course, his story would be a lot more compelling (and realistic) if he said 30-40%, but you got to take what you can get.
http://tinyurl.com/24v23c
Having looked at more data today, I am convinced that the housing and credit fiascos are going to be of epic proportions (yes, even much moreso than so far).
Our govt will have no choice but to create vastly more dollars than have been created to date.
The Fed and its partners in crime will morph our hyper-juiced economy into an ultra-super-duper-steroid-bloated-really-really-juiced economy, taking stocks and commodities to new highs. Yes, our dollar will be sacrificed due to the political pressures in our country, and don't be surprised to see the dollar ultimately plowed under to be replaced by the Amero.
Credit will be tight for a while but it will eventually ease up as undreamt-of stores of liquidity are created from nothing.
Mitt I-will-be-a-god-some-day-cuz-my-church's-theology-says-so Romney will be our next President. The neocon powerbase will remain intact. We are half a step from full-blown fascism but will be all the way there and then some when Mitt plants his butt in the Oval Office.
All but the tiniest specks of honesty and competence are gone from our federal government and our financial institutions. The masses are anesthetized by bread and circuses and no one of consequence will be able to mount a defense against those who are marching us straight into collapse of empire.
Have a nice day.
What was that about a recession?
Record Low Unemployment in West Creates Tough Working Conditions for Business Owners
Wow! The economy is great! McDonald's in Montana cannot find $10/hour workers -- there's a shortage of high paying work with benefits.
Heck, if McDonald's raises wages to $12 an hour, perhaps they'll be able to compete in this tight job market, where they have to pay a staggering $26K per year.
With eye-poppingly huge salaries like that becoming common, it's quite obvious that we're in a historic boom without end. If everyone earns $26K a year, $1 million homes suddenly become affordable thanks to all that prosperity!
Most CEOs only look at the bottom line. To them an IT geek in India or an IT geek in the US is one and the same. I know that isn't true, you know that isn't true but that is irrelevant.
This thinking is one reason why the US is in the bush league in so many areas -- manufacturing and otherwise.
While GM and Ford decided that a factory worker in Korea was the same as a factory worker in Tennessee -- but 1/4th the price -- Toyota decided to go where the talent is. They opened up plants filled with those "expensive" US workers, and the cars they're producing in those factories are amazingly high quality products that people want to buy.
The GM and Ford shitboxes built in Mexico and Korea, meanwhile, rust away unsold on the dealer lots, or use up 1/2 their useful life of 50,000 miles in the rental fleet at Hertz.
In short, stupid CEOs will eventually be out of jobs themselves -- and plenty of smart CEOs will hire workers who do quality work. . . realizing that to get good results, they've got to pay for them.
"Closing Escrow" the movie
Those sleezy Bastards!!
The New York Times. “On its way to becoming the nation’s largest mortgage lender, the Countrywide Financial Corporation encouraged its sales force to court customers over the telephone with a seductive pitch that seldom varied. ‘I want to be sure you are getting the best loan possible,’ the sales representatives would say.”
“But providing ‘the best loan possible’ to customers wasn’t always the bank’s main goal, say some former employees.”
“One document, for instance, shows that until last September the computer system in the company’s subprime unit excluded borrowers’ cash reserves, which had the effect of steering them away from lower-cost loans to those that were more expensive to homeowners and more profitable to Countrywide.”
“Other documents from the subprime unit also show that Countrywide was willing to underwrite loans that left little disposable income for borrowers’ food, clothing and other living expenses.”
“A different manual states that loans could be written for borrowers even if, in a family of four, they had just $1,000 in disposable income after paying their mortgage bill. A loan to a single borrower could be made even if the person had just $550 left each month to live on, the manual said.”
“‘In terms of being unresponsive to what was happening, to sticking it out the longest, and continuing to justify the garbage they were selling, Countrywide was the worst lender,’ said Ira Rheingold, executive director of the National Association of Consumer Advocates. ‘And anytime states tried to pass responsible lending laws, Countrywide was fighting it tooth and nail.’”
BOJ you had your chance, but allowed the point of no return to past when you should have raised rate.
http://boards.prudentbear.com/
bbs_read.asp?mid=550424&tid=
550424&fid=1&start=1&sr=1&sb=
1&snsa=A#M550424
Don't you love the Bloomberg commentary every day?
Mon.: "Stocks fall as carry trade unravels"
Tues.: "Stocks rise as investors embrace Yen carry trade"
Wed: "Stocks fall again as risk averse investors abandon Yen carry trade"
Thurs: "Stock ramp into holiday weekend as risk taking increases as investors increase bets on Yen powered carry trades"
Fri: "Stocks crash before holiday weekend after Japanese housewives buy back yen previously sold to speculate in carry trades."
Tues: "Stocks rebound after holiday as global appetite for risk increases as speculators put on additional carry trades"
Wednesdsay: "Stocks extend gains as Japanese housewives, how improperly went long Yen got stiffed by emboldeded speculators putting on more carry trades"
EVERYTHING IS ABOUT THE FREAKING YEN CARRY TRADE!!!!
Dave Ramsky: Money has not dried up for worthy borrowers.
http://www.youtube.com/
watch?v=PFn7CMHENCY
Hedge Fund Numbers in Japan Tripled
http://www.bloomberg.com/apps/
news?pid=20601080&sid=
aMEwjnF5sDKw&refer=asia
The number of hedge funds in Japan has tripled, to 270, in five years. Assets have more than doubled, to $36 billion, in the period. Investors are seeking returns better than Japanese stocks, which have underperformed global shares over the past three years.
Japanese hedge funds will see only a limited impact from the global credit crunch that has roiled stock markets worldwide and led to the collapse of two Bear Stearns Cos. hedge funds, said Kirby Daley. He advises investors at Societe Generale SA's Fimat unit in Hong Kong.
Limited Impact
Most Japanese hedge funds have not invested in debt, said Daley. The two Bear Stearns funds that collapsed had invested in home loans to Americans with poor credit histories.
``The funds that have imploded to this point have largely been credit funds that had large short exposure, or direct exposure to subprime loan derivatives on the long side,'' Daley said. ``Japanese hedge funds tend to be equity long-short funds.''
Tuesday, August 28, 2007
OUR BUSH/CHENEY REPUBLICANS AT WORK
A Republican Senator has confirmed that he pleaded guilty earlier this month to a charge of disorderly conduct after he was arrested at an airport in the United States.
Senator Larry Craig of Idaho was arrested by a plain-clothes police officer investigating complaints of lewd conduct in the men's public toilet at the Minneapolis-St Paul International Airport, the Capitol Hill newspaper Roll Call reports.
The police report said Craig entered a bathroom stall next to the investigator, placed his bag against the front of the door and tapped his foot - a signal commonly used to try to pick up men in public toilets.
The investigator said he recognised this as "a signal used by persons wishing to engage in lewd conduct," the newspaper reported.
In a carefully worded statement, Craig made no mention of the incident that prompted his arrest or the charges brought against him.
Craig pleaded guilty to the misdemeanour of disorderly conduct on August 8 and paid more than $US500 ($607) in fines and fees. He also was given one year of probation, the newspaper reported.
ABC
***********
Simple proof the republican party is nothing but of sad bunch of church-spewing liars, con-artists and out-of-control mentally ill dry-drunks.
Nothing new here.
daOs
Speculators and Hedge Funds continues to get out of the safety of three-months US Treasury bill and into the Asian Markets.
http://www.earthtimes.org/
articles/show/98501.html
Hang Seng surges 2.86 per cent to close at record 23,577
Speculators and hedge funds are betting an inflow of funds from mainland China would further lift values.
http://finance.yahoo.com/
q/bc?s=%5EIRX&t=1y&l=on&z=
m&q=l&c=
13-WEEK TREASURY BILL (^IRX) On Aug 27: 4.38 Up 0.30 (7.35%)
Average: 4.85%
52wk Range: 2.40 - 5.045
http://www.ft.com/cms/s/0/
935a7552-54fe-11dc-890c-
0000779fd2ac.html
The Short View
So, is stocks' recovery a mere "bounce back" from plainly panicked selling, combined with a successful second-guessing of the Fed? Or is it the beginning of a sustained rally?
With a further recovery on money markets yesterday, bringing yields on short-dated Treasury bills almost back to their levels before the liquidity scare began, it is tempting to conclude the episode is over.
http://www.nasdaq.com/aspxcontent/
NewsStory.aspx?cpath=
20070827%5cACQDJON200708272203
DOWJONESDJONLINE000393.htm&
BOND REPORT: Longer-dated Treasurys End Up; 3-month Yields Maintain Uptrend
pressure continued on the shorter end of the curve, where the yield on 3- month T-bills finished at 4.43%, compared to 4.23% late Friday.
The rising yields on short-term notes suggest some of last week's credit woes might be abating, as investors move out of short-term risk-free assets.
What are Speculators and Hedge Funds buying as they continue to get out of the safety of three-months US Treasury bill?
http://biz.yahoo.com/ap/070828/
oil_prices.html?.v=1
Oil prices rose Tuesday following reports of problems at two U.S. refineries and amid expectations a midweek U.S. petroleum stocks report will show gasoline supplies fell again.
Light, sweet crude for October delivery added 13 cents to $72.10 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract rose 88 cents to $71.97 a barrel Monday in the U.S.
The refinery problems have caused some concern over gasoline tightness in the U.S., particularly after the U.S. Energy Department reported last week a surprisingly large decline in gasoline stockpiles and continued high demand beyond the traditional U.S. driving season. In this week's report, gasoline stocks are expected to fall 1.8 million barrels, according to a Dow Jones Newswires survey of analysts.
Crude stocks are expected to fall 800,000 barrels, according to the survey, and distillate stocks, which include diesel and heating oil, are expected to build 600,000 barrels. Refinery utilization rates are forecast to remain unchanged.
WOW! The credit disaster tops terraism. How could this happen on the watch of the MBA president?
Debt crisis tops terrorism as threat to U.S. growth
Economist Shift Chief Worry To Subprime Disaster
Peter Morton
Financial Post
Monday, August 27, 2007
For the first time since the Sept. 11, 2001, attacks on New York and Washington, U.S. business economists say terrorism is no longer the No. 1 threat to the economy: The subprime mortgage crisis is now the biggest worry.
A new survey by National Association of Business Economics, to be released today, found that 258 economists now feel the threat of subprime loan defaults and the "excessive indebtedness" of America is the most significant short-term threat to the economy.
"Financial market turmoil has sifted the focus away from terrorism and towards subprime and other credit problems as the most important near-term threat to the U.S. economy," said Carl Tannenbaum, president of NABE and chief economist at La Salle Bank/ABN-AMRO.
The meltdown in the US$2-trillion subprime mortgage has led to the bankruptcy of dozens of mortgage firms and is threatening to spill over into the broader economy as more and more homeowners face foreclosure.
The U.S. Center for Responsible Lending recently estimated that 2.2 million subprime home loans made in recent years have -- or soon will -- end in foreclosure.
However, Mr. Tannenbaum said he expects the crisis will soon pass, largely because of the strength of the broader economy, the world's largest.
"These concerns appear to be somewhat transitory as the five-year outlook for housing remains positive," he said.
Mr. Tannenbaum's comments come as key numbers in the U.S. housing sector -- existing home sales --come out today for July.
Peter Morici, business economist at the University of Maryland and former chief economist at the U.S. International Trade Commission, said over the weekend he expects sales to come in at 5.7 million homes, down slightly from the 5.75 million in the previous month.
"Mortgage companies tried to keep prior commitments helping July sales, and the full bite of the credit crisis on sales, generally, will not be seen until August," he said.
Markets have been in turmoil in past weeks because of the evaporation in credit, making it difficult for mortgage companies to extend new loans.
While the U.S. Federal Reserve alone has pumped in US$35-billion in additional liquidity, as well as cutting its discount rate at which it lends money to banks by a big 50 basis points to 5.75%, markets are looking for more.
Clues may come as early as Thursday when Mr. Bernanke addresses a key economic conference in Jackson Hole, Wy. Markets are hoping the Fed chairman, facing his first major economic crisis, will indicate he is prepared to cut the Fed rate to give a boost to the economy.
In the survey, 32% of economists said the subprime and debt crisis was the largest threat to the economy, followed by 20% from terrorism. Way down on the list of worries was the current account deficit, inflation and government spending.
The single largest long-term threat to the U.S. economy, however, is rising health-care costs especially in a society growing older. About 24% of economists felt that was a major concern.
But the economists are somewhat mixed in their views of how the Fed is handling the economy.
While 72% still believe monetary policy is "about right," that has fallen from 81% in the last survey in March. The number of economists who feel monetary policy is "too restrictive" doubled to 16% this summer.
Interestingly, while most of the business economists have advanced economic degrees, many admitted they have little understanding of the murky hedge fund world.
How the Bush Administration Is Turning the USA into a Subprime Borrower
by Heather Wokusch
"Our enemies are innovative and resourceful, and so are we. They never stop thinking about new ways to harm our country and our people, and neither do we." - George W Bush
Much in the same way that US investors were "steered" into rip-off mortgage loans, the entire country has been "steered" into an economic crisis. The question is how to get out of it.
In the subprime loan scandal, unscrupulous brokers conned home buyers with poor credit histories into deals designed to profit lenders and bleed borrowers. Contract "teasers" hid ballooning monthly payments while a lack of regulation allowed the scam to continue unabated. Millions more Americans now face losing their homes.
The Bush administration similarly used promises of cakewalks and increased security to con the US public into wars with Iraq and Afghanistan. US taxpayers have spent over $450 billion on Iraq alone, while Bush/Cheney cronies continue making a killing from military contracts. Meanwhile, global security has degenerated and over 4,100 US service members have died in Iraq and Afghanistan, along with an untold number of coalition troops, contractors and civilians.
Bush's military adventurism, not to mention his administration's exorbitant tax cuts for the wealthy, gutted the surplus of $128 billion Clinton handed him in 2001 into a deficit of well over $200 billion today. And Bush has simultaneously increased the national debt by over $3 trillion (to roughly $9 trillion), effectively nailing each and every US citizen with a bill for almost $30,000.
While heavy borrowing from Asia has mopped up some stateside red ink, there's an inherent threat: China, for example, has an estimated $900 billion in US bonds and can increasingly call the shots on the US economy and foreign policy.
Just weeks ago, Beijing warned that if the Bush administration pushed for a revaluation of the Chinese currency, then Beijing would sell dollars, thereby threatening the greenback's reserve currency status. Washington backed down. It had little other option.
In other words, the US itself has become as vulnerable to its lenders as any other subprime borrower.
Overall, the US debt situation looks so dire that the non-partisan Government Accountability Office Comptroller recently warned, America is on a path toward an explosion of debt. And that indebtedness threatens our country's, our children's, and our grandchildren's futures. With the looming retirement of the baby boomers, spiraling health care costs, plummeting savings rates, and increasing reliance on foreign lenders, we face unprecedented fiscal risks."
Financial analysts say credit markets are facing a Minsky moment - the inevitable downward spiral when over-leveraged investors have to sell valued assets just to pay back their loans. Some analysts have even coined a new term, suggesting we are in a "Minsky meltdown" - the prelude to a wider market crash.
But it looks more like a "Minsky massacre," not an unavoidable economic downturn but rather a coldly-calculated hit, with the intention of transferring wealth from the lower and middle classes to an unaccountable few at the top.
Bottom line, this economic downturn isn't hurting everyone. Select brokers and lenders made a fortune off the backs of subprime borrowers, and now that the related hedge funds are collapsing, well-leveraged private equity firms can buy assets at fire-sale prices.
And as Jim Hightower recently noted, a "hands-off regulatory ideology" is complicit: "There are no less than five financial agencies at the federal level that could have protected people, yet the subprime surge was allowed to proceed .... The Federal Reserve Board, for example, has direct authority under the Home Ownership and Equity Protection Act to 'prohibit acts or practices in connection with mortgage loans that the board finds to be unfair, deceptive or ... associated with abusive lending practices, or that are otherwise not in the interest of the borrower.' The Fed simply ignored this law."
The US has been down this road before. The Savings and Loan (S&L) crisis of the late 1980s was also characterized by loose lending requirements, lax regulation, obscene profits for the few - and US taxpayers left holding the bag for $125 billion.
Ironically, the Bush family was involved in that scandal too, with Bush Jr.'s brother Neil serving on the board of the disgraced Silverado Savings and Loan, which went bust and stuck US taxpayers with a $1.3 billion debt. Regulators accused Neil of "multiple conflicts of interest" but he never did jail time - thanks at least in part to the S&L bail out engineered by his father, Bush Sr., who happened to be President at the time.
Just as in the S&L crisis, the poor and middle class have borne the brunt of the current subprime disaster, an especially nasty fact given the nation's huge wealth gap. As Inequality.org points out, "The richest one percent of U.S. households now owns 34.3 percent of the nation's private wealth, more than the combined wealth of the bottom 90 percent. The top one percent also owns 36.9 percent of all corporate stock."
It's probably no coincidence that terms associated with both corporate and developing country indebtedness are being used to discuss the US subprime meltdown (payment defaults, vulture funds, distressed debt, etc). Perhaps the US hasn't reached banana republic status yet, but the increasing wealth gap, not to mention ballooning budget deficits, low capital spending and reliance on foreign capital are disturbing signs.
Doesn't help either that the Federal Reserve stopped releasing M3 money-supply data in 2006. M3 data (covering Eurodollars, repurchase agreements and large-denomination time deposits) is critical in determining how fast the Fed is printing money, which in turn impacts inflation.
So, what further fallout from the subprime scandal can be expected? Millions more Americans will lose their homes, and as The New York Times recently reported, "for the first time since federal housing agencies began keeping statistics in 1950," the median price of homes in the US will fall.
Ratings agencies, such as Standard & Poor's and Moody's, will take some heat for their role in the scandal, but the Bush administration will focus on bailing out predatory lenders rather than helping Americans keep their homes. Congress and most presidential candidates will protect financial services campaign donors by not pursuing true reform.
Meanwhile, Asia and Europe will continue "decoupling" from increasingly volatile US markets, threatening the dollar's reserve currency status even more. Fresh off its recent war games with China and four Central Asian republics, Russia will more actively confront the US on the world stage. The Bush administration will move closer to a war with Iran.
Of course, these dire predictions don't have to materialize - we can regroup and fight back. One avenue is by urging Congress members to take action, such as changing foreclosure rules to protect homeowners and supporting Rep. Barney Frank's (D-MA) National Affordable Housing Trust Fund Act (H.R. 2895). Rep. Ron Paul's (R-TX) push to have the Fed start releasing M3 data again (H.R.4892 ) is also urgent.
At the very least, we must frame the Bush administration's war-making as a direct threat to the US economy, not to mention national security, and just like maxed out home buyers, confront our nation's culture of debt.
NY Times: Inside the Countrywide Lending Spree
By GRETCHEN MORGENSON
Published: August 26, 2007
ON its way to becoming the nation’s largest mortgage lender, the Countrywide Financial Corporation encouraged its sales force to court customers over the telephone with a seductive pitch that seldom varied. “I want to be sure you are getting the best loan possible,” the sales representatives would say.
But providing “the best loan possible” to customers wasn’t always the bank’s main goal, say some former employees. Instead, potential borrowers were often led to high-cost and sometimes unfavorable loans that resulted in richer commissions for Countrywide’s smooth-talking sales force, outsize fees to company affiliates providing services on the loans, and a roaring stock price that made Countrywide executives among the highest paid in America.
Read NY Times article here
PKK (grandma here)
What I don't hear being mentioned
is that the housing market has been
vastly, greatly overpriced...There
is no way to justify the prices.
If there had been a buying frenzy and
houses were more reasonably priced,
we might not be in the degree of
foreclosures at present, because,
bogus credentials or not, people do
pay for housing every month...
Now, continually rising payments
is another matter.
Housing has to be pegged to income;
you would think we had all become
millionaires and payment was no
problem..
I don't hear MSM commenting on the
bogus prices and price rises.
Anyway, whoever is making these
bitter comments about "renters".
If this is how you feel about those
who aren't well off, how will you
judge yourself if the entire economy collapses and you suddenly
are impoverished..you seem to see
yourself as more informed, intelligent, capable of better choices...in short above the crowd.
But you must view the thing as a
whole; it bears resemblance to a
pyramid scheme, which as you know,
can never have enough participants
to enrich the whole. So why would
you think this particular arrange-
ment would last?
Yes, a RECESSION, if not worse.
It's already underway.
http://tinyurl.com/ynjrdr
The ones who come in here and use terms like "bitter renters" and "some crash" and "where's the recession" are the ones who stand to lose it all if the economy doesn't stay juiced, i.e., if we don't keep creating "money" out of thin air to keep the EZ credit party going.
Thing is, that party has been over for some time, and just as many hedge funds have gone belly-up, so will the punters and the poseurs who troll this blog and try to mock those who see what's going on. When their home "equity" and their stocks and their lines of credit are all well into the red or dried up, they will be the angry ones (they're just getting warmed up now). They will be the ones calling the new detention centers "home".
From Yahoo finance:
http://tinyurl.com/29jkuu
Housing problems seem to dominate the news now. I'm also noticing that housing cheerleaders are pretty quiet.
"I am new here so please be kind, but i need an answer to who can i turn to for a re-fi. Our house MAY have $20k in equity only, credit scores are high 500's to low 600 only (both husb and I), he is self employed, i just lost my job. We owe 2 yrs property tax. We need help - our arm goes up on our 1st Oct. 1. Any advice is truly appreciated."
Honestly, sell it now, for as much as you can get. Then rent and wait.
Sorry the news isn't better, but if you keep that house, you will go bankrupt, lose your home and still end up renting. Best of two bad options is to do it under your own control and not the banks. Good luck.
Home prices: No relief on horizon
The S&P Case-Shiller Home Price Index says price declines are worsening, with no sign of slowing down.
NEW YORK (CNNMoney.com) -- Home prices have shown few signs of any turnaround, and a new report sees the downward slide continuing.
http://tinyurl.com/33pbzz
A penny for your thoughts . . .
Is housing really overpriced relative to interest rates?
I mean, if your monthly nut is the same for a larger mortgage with a lower interest rate as it is for a smaller mortgage with a higher interest rate, what's the difference? (assuming you lock in a fixed rate)
Is it doing me any good to delay a purchase until home values deflate, only to find that interest rates have risen?
The Dow Jones just closed down 2.1% for the day. How soon will we hit 11,000 or 10,000 or even below that? So much for the subprime housing mortgage contagion not spreading....
'Gee Panic, home prices down 4%'!
But everybody was lovin the doubling or tripling of their value!
"House Prices Suffer Worst Fall In Index History"
http://tinyurl.com/2d9bxb
An index measuring U.S. house prices suffered its worst decline since its creation 20 years ago, and there is no sign of a bottom for the market, according to a report compiled by Standard and Poor's and economist Robert Shiller.
While 72% still believe monetary policy is "about right," that has fallen from 81% in the last survey in March. The number of economists who feel monetary policy is "too restrictive" doubled to 16% this summer. Interestingly, while most of the business economists have advanced economic degrees, many admitted they have little understanding of the murky hedge fund world.
_________________________________
Good Grief! Then how can we believe anything the economists say? The blind leading the blind....
Bush's military adventurism, not to mention his administration's exorbitant tax cuts for the wealthy, gutted the surplus of $128 billion Clinton handed him in 2001 into a deficit of well over $200 billion today. And Bush has simultaneously increased the national debt by over $3 trillion (to roughly $9 trillion), effectively nailing each and every US citizen with a bill for almost $30,000.
__________________________________
Bush is the worst President this nation has ever known. Unfortunately, he may have just about finished us off with all of his and his cronies' corrupt, self-serving policies. May I suggest an excellent article in the latest issue of the Rolling Stone, entitled: "The Great Iraq Swindle"
http://tinyurl.com/2fzcta
Go Grandma !
Is it doing me any good to delay a purchase until home values deflate, only to find that interest rates have risen?
________________________________
Yep, it does a lot of good. It's easier to save money for a larger porportional down payment if the prices go lower, and you borrow less at the high interest rate. And don't forget, when the economy heats up again, you'll be able to refi that sucker down. 10 years out you will have low remaining principal and low interest payments.
"I am new here so please be kind, but i need an answer to who can i turn to for a re-fi. Our house MAY have $20k in equity only, credit scores are high 500's to low 600 only (both husb and I), he is self employed, i just lost my job. We owe 2 yrs property tax. We need help - our arm goes up on our 1st Oct. 1. Any advice is truly appreciated."
Banks use a slightly different scoring system than the "credit scores" you buy from the big three. Anyway, you will probably need at least a 680 or 690 to refinance today. I would take the others' advice and sell, before it is too late and pay off your taxes. Start clean. My wife and I rent a nice house in a great neighborhood for less than 1k a month, you can really save at that price. Especially if you figure in the lack of maintenance costs.
Your House Is Worth Less? Good
http://www.time.com/time/magazine/
article/0,9171,1655723,00.html
The yen slipped against the dollar on Wednesday as investors booked profits a day after it rallied on a stock sell-off and a report showing Federal Reserve officials' worries about strained financial markets.
http://today.reuters.com/news/
articleinvesting.aspx?type=
hotStocksNews&storyID=
2007-08-29T055941Z_01_
T197109_RTRUKOC_0_US-
MARKETS-FOREX.xml
Seth Godin worries what will happen to the value of the housing market if people could no longer count on a higher resale.
http://tinyurl.com/2jcjld
Here is my collection of 312 original fund articles: http://richard-wilson.blogspot.com
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