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Ah, the smell of housing napalm in the morning...
October 28, 2007
BUBBLETALK - new thread to talk about the housing crash, mortgage meltdown, dollar debacle and realtor famine
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348 comments:
«Oldest ‹Older 201 – 348 of 348How the heck did we ever let a bunch of Realtwhores with no education sway us about the biggest investment man of us will ever make in our lives? What were we thinking?
Hey Keith,
I just made my own housing blog called Housing Fear.
www.Housingfear.blogspot.com
The Housing bubble, credit crunch, and subprime mortgage blog with an inferiority complex.
I have been addicted to your website for months and I wanted to join the fun posting some articles you and things you miss.
I hope I can earn your respect!
HANG SENG MARKET DOWN 2.7%
Tommorow will be rough, everybody
seems scared about this week.
Dow Futures down 112 points already!!
The popcorn is poppin and the jello is jigglin baby!!!
Hang Seng down 1128.08 points on opening bell.
Previous Closed at 29,465.05 and Opened at 28,336.97
http://finance.yahoo.com/q/
bc?s=%5EHSI&t=5d&l=on&z=m&q=l&c=
You think that might be a under statement.
http://www.bloomberg.com/apps/
news?pid=20601103&refer=us&sid
=aG3NEynW7ik8
Former Federal Reserve Chairman Alan Greenspan said the dollar's depreciation may reflect growing unwillingness among foreigners to buy U.S. debt.
``Obviously there is a limit to the extent that obligations to foreigners can reach,''
Aa snip from
http://activerain.com/blogs/usa_dave
"…An under or non-performing loan
is still an asset on the books
... but once a short sale is
approved, the asset is exposed for
what it is, and real loss is
incurred.
For many lenders who seek investors
... maintaining the appearance of
solvency is crucial in its quest
for financing.
Comprehensive applications with
supportive documentation are
conveniently lost. …"
[One way to keep people honest is
'registered e-mail', ala rpost.com]
Gota see this:
http://www.realestatehousewives.com/
Article from the Drudge-loan default problem increasing-now affecting cc and car loans.
http://www.ft.com/cms/s/0/7c453090-7ff7-11dc-b075-0000779fd2ac.html?nclick_check=1
I went out on an appointment today to buy distressed valuables from a mortgage broker. He said we are less than half way through the foreclosure stage and that we have a year and a half till it bottoms. Apparently banks are allowing delinquents to remain in the house longer also as they don’t want them empty. The valuables the broker had for sale were all home shopping club merch with no value. I passed.
I am being offered lots of great stuff at my price. The problem is that I can't seem to resell it at any price over what I paid.
A stockpile of Postal Service "Forever" Stamps!
Unless I am mistaken, they would have the following advantages:
1. Pegged to the value of mailing 1 oz. of first class postage, which I will assume will always go up, even in deflation, due to rising health care of employees, transportation costs, etc.
2. Easy to store
3. No fees to buy or sell (one could buy them with a rebate credit card, in fact!)
4. Has an intrinsic value to citizens in the long term
5. I assume one could re-sell them on Ebay, in addition to other means
6. I am not sure the sale would even be taxed, since it is pegged to a fixed government asset
Am I a nut in even considering this? Is this too "sticky" a situation? Will the Feds "stamp" out this opportunity, or "cancel" it? Is it worth giving it a "roll"? Is it within the "letter" of the law?
This comes obviously from the thin lips of a lying, deceitful, mendacious, cretinous renter who is bitter that he is facing the coming depression as a city dweller. There will be no food left in the garabage cans, all stores will have been looted and you will starve. You won't be able to feed yourself with dollars or gold you lamebrain dimwit! You're gonna be begging with your worthless gold coins for a loaf of bread and envying the home-owners that have a yard to plant potatoes and corn with a little room to keep some chickens. Ultimately the fate of a renter is sealed. You'll have the choice to blow your deranged head off or become an American canibal.
But of course pinheads and dipshits. This might be too much for your amputated brain. What a great choice renting really is!!!
I'll tell you something else these idiot lenders/banks are doing. They are hiring Realaturds to do drive by BPO's (Broker Price Opinion) at $50.00 a pop on forclosures. No eyeballs inside the home, no appraisal (hold your comment on appraisers), no one with REAL real estate experience analyzing these homes. These wannabe professionals are giving value to hundreds of millions of dollars of real estate. I've heard of real estate offices where some realtors drive around all day doing these BPO's at $50 bucks a pop. It's the only money they can make. The lender's/banks do not care. If they did, they would set up their own in-house appraisers who are especially trained to appraise foreclosures. Some Realtawhores are doing these BPO's and their buddy in the same office gets the listing.
It looks like things are looking good for Atlanta! Read http://tinyurl.com/2lc9hk
My favorite parts:
"'We want to get people to think about the fact that it's a good time to buy a home and all the reasons that a new home is a good investment.'"
"The campaign will take a hiatus over the holidays and re-launch in January to gear up for the spring selling season"
"'We keep saying it's a great time to buy, but the public perception is you can't get a loan,' he says. 'That's clearly not the case. The ad campaign, together with the rate cut, gives consumers a psychological and economic boost. We're finally in a position where home buyers are receptive to the message that it's a good time to buy.'"
Blowfly said...
You're gonna be begging with your worthless gold coins for a loaf of bread and envying the home-owners that have a yard to plant potatoes and corn with a little room to keep some chickens.
Got guns?
Keith,
Have you seen the news? Countrywide Loan Officers and Realtwhores are starting fires to reduce inventory and take the foreclosrues off the market. Check the locations of the fires! Malibu, Orange County, and San Diego County. Suspicious huh?
What phase of the housing slump is your city in.
If many would be home speculators are turning into landlords, and rents have peaked and are ready to go down in that city then that city is starting the second phase of the housing slump.
Many part of California are still seeing rent price going up as investors are still converting apartments into low end condo.
This takes the available rentals out of the market place.
However, as construction jobs decrease thought out the central valley, people in the central valley migrate to the bigger cities to find jobs.
This put a bigger stress on the rental market in those cities that are still hiring.
So what happens to the cities in the central valley that are to far to commute to the hiring cities, the rental price in those cities will begin to fall.
Cities like Merced, Fresno, Madera, Visalia, CA should fall in the category of second phase of the housing slump.
http://www.pressofatlanticcity.com/
news/local/atlantic/story/
7510982p-7409335c.html
You're planning to move across the country, so you put your home on the market. A month goes by, and there are no takers. Two, thee, four months pass, and the few people interested think the price is too high, even though you've priced it according to your real estate agent's suggestions. After six months, you can't wait anymore, nor can you afford paying the mortgage on the other home you bought along with the one you're trying to sell.
Many homeowners are facing this predicament - and more homeowners are renting out their homes rather than wading in the red waiting for the perfect buyer, area realtors say.
"Home rentals are on the uptick," said Georgeanna "Tracey" Newmones of Executive Realtors in Egg Harbor Township. Newmones said the trend to rent rather than sell is highest among those who bought homes or condominiums pre-construction and are committed to the deal.
Remember the main reason why it is hard to find a bargain in an Auction in the first phase of a housing slump is because speculators feels that they could wait out the housing slump by renting out the property.
Therefore, home normally get bid up.
Price begins to fall on the second phase of the housing slump, but do not rapidly fall until the third phase of a housing slump.
http://www.fresnobee.com/
305/story/163877.html
This real estate cycle is like previous downturns in that more homeowners, unable to sell their houses, are becoming reluctant landlords. But the higher foreclosure rate is adding a dynamic that wasn't as evident last time: another source of renters.
Marc Wilson, president of San Mar Properties, said single-family home rentals generally increase when sales are slow and decrease when the market picks up.
"We saw the same thing in the early '90s," he said.
Condominiums that went unsold after their conversions from apartments also contribute to the rental inventory, said Michael Goldfarb, chief financial officer of Manco Abbott, which manages apartment complexes.
He cited a complex called Hacienda 2, near Kings Canyon Road and Peach Avenue that was to be converted in phases. The latter phase got caught in the slowing market and reverted to rental units, he said.
With so many properties competing for renters, management companies are finding they have to reduce rents or wait longer for tenants.
"What was taking a week or two to rent is now taking two, three or four weeks," said Wilson. "There is so much product to choose from."
Waymon Kissler lowered the rent on a three-bedroom, two-bath house near Fig Garden Village by $150 to $1,150 after six weeks without a tenant. He's owned the house, which comes with a grape arbor in the backyard and a redwood tree in the front, for six years.
Up until now, he said "I've never had a speck of trouble renting it."
At the same time, apartment managers are working harder to fill pricier three-bedroom units, which compete with houses.
"It's harder to rent three bedrooms at the current rent rates," Goldfarb said. "They stay vacant longer, and many prospects wind up renting homes."
Sandy Moore, a real estate agent and property manager, said some homeowners are incurring substantial losses when they rent out their houses. Frequently, the rents are not enough to cover the mortgage, property taxes, insurance and association fees.
"It's not for the faint hearted," she said. "Some are forking over $600 per month."
So why does China's government-controlled Citic Securities Co. want to invest in Bear Sterns when rating companies still down grading ABS.
http://today.reuters.com/news/
articleinvesting.aspx?type=
bondsNews&storyID=2007-10-22
T212219Z_01_WNA9057_RTRIDST_0_
SANDP-CDO-RATINGS-URGENT.XML
S&P may cut 590 CDO tranches totaling $20.6 bln
Standard & Poor's said on Monday it may cut ratings on $20.6 billion of U.S. cash flow and hybrid collateralized debt obligations (CDO) following its downgrade to residential mortgage-backed securities last week.
These transactions are CDOs of asset-backed securities (ABS) collateralized by structured finance securities, including residential mortgage-backed securities (RMBS).
S&P placed the CDO ratings on review for a possible downgrade following a review of its rated cash flow and hybrid CDO transactions with exposure to RMBS securities that have experienced negative rating actions recently, including the more than 3,500 classes that were downgraded last week.
It is not a good idea to buy bonds if you not going to get paid
http://www.nytimes.com/2007/10/22/
business/22market.html?ex=
1193716800&en=f26eec2cafce5963&ei
=5040&partner=MOREOVERNEWS
Mortgage Security Bondholders Facing a Cutoff of Interest Payments
Collateralized debt obligations — made up of bonds backed by thousands of subprime home loans — are starting to shut off cash payments to investors in lower-rated bonds as credit-rating agencies downgrade the securities they own, according to analysts and industry executives.
Cutting off the cash flow, which is governed by rules and mathematical formulas that vary by security, is expected to accelerate in the months ahead.
Are you beginning to see the California rental pattern.
As people migrate out of a city to find work that city rental place begin to fall.
http://www.sacbee.com/
142/story/440318.html
Rents up slightly in capital metropolitan Sacramento region
That's according to Novato-based RealFacts, which publishes quarterly reports on rent prices across the West. Of the 24 California metro areas it surveys, Sacramento comes in a pleasant 20th for rent hikes.
Naturally, what's good for renters isn't so hot for owners of rental property. Nor are flat rents sparking much interest from investors to buy Sacramento-area complexes.
For apartment owners, it's the same problem they've faced over the past four years: There's more supply than demand.
"People would like to raise their rents, but I see a lot of people playing these concession wars," says Joe Treat, a longtime watcher of the region's apartment market while working at For Rent magazine.
A recap of last week
http://seekingalpha.com/article/
50305-paulson-media-blitz-on-
mortgage-backed-securities?
source=feed
"Transparency is important here," Paulson, 61, said in a speech in Washington.
[Mish translation: "The very last thing we want is transparency. Damn the WSJ for leaking news of the Super-SIV before we wanted them to.
"The ongoing housing correction is not ending as quickly as it might have appeared late last year," Paulson said. "It now looks like it will continue to adversely impact our economy, our capital markets and many homeowners for some time yet."
[Mish Translation: "At Goldman Sachs we knew full well how bad things were going to get. After all, there were record profits at Goldman were there not? Those running Bear Stearns on the other hand are a bunch of fools. It's a shame that fools are allowed to participate in the upcoming bailout. They don't deserve to. On the other hand, we have to thank those fools for giving us a tremendous chance to profit from the upcoming bailout. This stands a chance of being more lucrative than the S&L bailout of the 1980's. Bring it on!"]
"I have no interest in bailing out lenders or property speculators."
[Mish comment: Paulson has every intention of bailing out Citigroup. After all, if Citigroup goes down it will affect stock prices in general. Furthermore when government invites businesses to the table to dream up solutions to protect the invitees from blatantly poor loan decisions, you can rest assured there is nothing "market based" about it]
the decline in the housing market is "the most significant current risk" to the U.S. economy and called for an "aggressive plan" by mortgage lenders to head off foreclosures.
[Mish comment: This is where it get tricky. Paulson is being perfectly honest when he says "the housing market is the most significant current risk to the U.S. economy". The catch is that his "aggressive plan" has nothing to do with consumer foreclosures, but every attempt to make make sure consumers stay debt slaves forever. The goal is to not allow any debt slaves free themselves via bankruptcy]
"This is not about finger pointing," Paulson said, at the same time telling mortgage servicers that "you have an obligation to help meet this challenge." "the current plan is not working well."
[Mish translation: "This is all about finger pointing. If fingers are pointed they will point at the Fed, Goldman Sachs, Citigroup, Bear Stearns, Moody's, Fitch, and the S&P. We must at all costs stop that finger pointing from happening." The latter half of his sentence is where it gets tricky again. Paulson is completely honest when he says "the current plan is not working well." Occasional truth is enough to confuse the masses. Confusion is the goal when things are "not working well"]
Paulson called on lenders including Fannie Mae and Freddie Mac to make mortgages more easily available.
[Mish Comment: Why is the chicken press silent on this reversal of opinion? Now that jumbo mortgages have frozen up, Paulson has changed his mind on GSEs. Obviously someone is holding Jumbos in need of refinancing that Paulson is worried about. I doubt it's Bear Stearns. Who is it?]
Now children, we must be nice
to each and everyone.
I have a recipe for earthworms
chopped with gold coins, but I
won't print it unless we can
refrain from loggerheads and
discomfiture, with the inevitable
discomforture and vapors.
Oh, and to the predators of the
World, I say: suicide is highly
underrated, and is well tolerated
by the informed participant.
Maybe you can tell it's past my
bedtime. Jeeves … my nightcap
please.
Anyone notice the 800 pound gorrilla looks like King Kong now?
Keith,
The Energy Watch Group has issued a shocking new 110 page report on global peak-oil with lots of great full color charts. They present evidence which shows that global oil production will crash to 50% of today's output by 2030.
AN IDEA FOR A NEW POST. Use "Figure 5: Oil producing countries past peak" as a pic for a new thread. This pic is located on page 7 of the Executive Summary:
Executive Summary
The Full report is HERE
Last Quarter might prove to be a bad quarter for mortgage originations
http://www.earthtimes.org/
articles/show/
news_press_release,203412.shtml
A preliminary analysis of third quarter earnings data indicates residential mortgage originations fell 19.19 percent from the second quarter, according to http://www.mortgagedaily.com/ -- a dominant source of online news for the mortgage industry.
Banks got to be really hurting for money when they give out credit cards to a 4 months old baby.
But why do bond investors trust these banks.
http://www.nbc4.com/consumer/
14396677/detail.html
Parents get a bank account for the kid, and the bank does a credit check. And as soon as they do the credit check, the credit bureau captures the name and the address, and suddenly that 4-month-old is showing up on the radar of the credit world as a new credit-active person,” said Hendricks.
Four of the five solicitations offered to Zach came from Capital One. It told Zach's mom it got his name from the Equifax credit bureau, which said it got Zach's name from Chevy Chase Bank. Evan Hendricks said no one did anything wrong here. It's just the way the system works.
“The law permits the credit bureaus to compile lists and to sell them to credit card companies and the mortgage companies and elsewhere,” said Hendricks.
Besides babies, Hendricks said college students are hot prospects for companies promoting credit products.
So are people who have recently moved. Those names are sold by the post office. And believe it or not, people who have gone through bankruptcy are hot prospects because they are, financially, starting over again.
And why would baby Zach be on the hot list?
“The 4-month-old was hot because it showed a human being had become active in the credit world. And so if that's their first entry in the credit world, the other creditors want to jump on it quickly and try to get them to be a customer before others do,” said Hendricks.
But Zach's mom said she was worried someone would somehow grab her baby's credit identity. Hendricks agrees that's a growing problem.
From Pit Chicago:
Neumann Homes bancruptcy filling:
http://tinyurl.com/25rcel
Prices in Chicago down 25%- NAR is lying again...
I think it will be interesting to see how the Calif fires end up affecting foreclosure-heavy neighborhoods. Wonder if an overlay map of foreclosures and destroyed homes will reveal anything interesting when this thing is all said and done.
Just a thought.
Has anyone considered the possibility that the wild fires in San Diego county were started by underwater FBs to collect on the insurance?
(From Last Weekend’s Phoenix Thread):
“It’s breezy and 84 degrees today in Phoenix… do you have your winter coats on yet, we are still wearing shorts and swimming outside in the pool.
~~~~~~~
“BTW, going snorkeling later this morning in Maui. And it was an absolute pleasure playing golf in August. How was it in Phoenix?”
-------------------
F to both of you! It was cold, wet, and windy in Seattle this past weekend.
Is my hair turning green, or is that moss growing on it?
Seattle IS different! PLEASE don’t move to this area.
-Mammoth
Anonymous said...
Has anyone considered the possibility that the wild fires in San Diego county were started by underwater FBs to collect on the insurance?
Maybe the insurance companies will be the ones who finally mark to market?
Oh my gosh! Look at CFC's foreclosures. They went from 13,000 to 195,000!!!
Goldman Sachs calls for 35-40% price crash in California.
http://wcvarones.blogspot.com/2007/10/goldman-sachs-california-suchs.html
Neuman Homes- Illinois
Another one bites the dust...
http://www.chicagobusiness.com/cgi-bin/news.pl?id=26851
Southern Californian fires were arsons
http://www.latimes.com/news/local/
la-me-ocfire24oct24,0,5242829.
story?coll=la-home-center
The arson fire was set near Santiago and Silverado canyons in a way to maximize its spread, authorities said, and will likely take at least two weeks to contain.
The blaze started as three separate fires about a mile apart, fire officials said. Crews were able to extinguish one of the fires early Tuesday morning, holding it to about 2 acres.
However the other two fires, both burning along Via Vaquero, flared up Tuesday as the Santa Ana winds rose up shortly after daybreak.
At noon Tuesday, more than 400 combined acres had been charred, much of it in the thick underbrush of the avocado groves. The fire was about 50 percent surrounded with full containment expected by Wednesday, said Jody Hagemann, spokeswoman for the California Department of Forestry and Fire Protection.
The cause of the fire is officially listed as being under investigation, however a Riverside County sheriff's deputy told The Californian early Tuesday morning that arson was suspected.
Image that a Bill that would require any mortgage lender to verify that the borrower has a “reasonable ability to repay” based on documented income, credit history and debt level.
You would hope for bond investors sake that banks would do that on their own.
http://www.tuscaloosanews.com/
article/20071023/ZNYT01/
710230323/1001/NEWS06
House Democrats introduced legislation on Monday that would for the first time let homeowners sue Wall Street firms for relief from mortgages that the borrowers never had a realistic chance of repaying.
The measure, which is expected to generate intense opposition from the financial services industry, addresses some of the problems tied to the transformation of the mortgage lending industry from an often local business into a trillion-dollar global market for investors in search of higher returns.
The bill is part of a broader measure intended to restrict what lawmakers and consumer advocates consider deceptive and improper lending practices, many of which were common among the millions of soured subprime mortgages to people with low incomes or poor credit histories.
Critics warn that the bill could chill and perhaps freeze a huge source of capital that has helped push homeownership in the United States to its highest level.
The legislation, introduced by Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, would require any mortgage lender to verify that the borrower has a “reasonable ability to repay” based on documented income, credit history and debt level.
“The people who package mortgages and sell them into the secondary market were a major cause of the single biggest world financial crisis since the Asian crisis” of 1997-8, Mr. Frank said, “and it’s unthinkable that we would leave that undisturbed.”
Uncle Benny loves the rich and hates the poor.
http://www.latimes.com/business/
la-fi-rents18oct18,1,6946768.
story?coll=la-mininav-business
While homeowners were being stung by shrinking property values, renters across the state found themselves having to dig deeper into their pocketbooks in the third quarter, according to a report to be released today.
The average rent at larger apartment complexes in California increased 5.6% to $1,413 compared with a year earlier, according to a survey by Novato, Calif.-based research firm RealFacts.
Los Angeles and Orange counties remained the state's most expensive market for rentals
Nick Galvan, who heads the real estate and property management division at Westside Rentals, a Santa Monica-based listings service, said he had already seen higher demand lately for the 500 rental units he manages in Los Angeles County.
http://www.uaw.org/atissue/
atstory.cfm?atId=219
Billionaires up, America down
When it comes to producing billionaires, America is doing great.
The 25th anniversary of the Forbes 400 isn't party time for America.
We have a record 482 billionaires -- and record foreclosures.
We have a record 482 billionaires -- and a record 47 million people without any health insurance.
Since 2000, we have added 184 billionaires -- and 5 million more people living below the poverty line.
When the Forbes 400 began in 1982, it was dominated by oil and manufacturing fortunes. Today, says Forbes, "Wall Street is king."
Nearly half the 45 new members, says Forbes, "made their fortunes in hedge funds and private equity. Money manager John Paulson joins the list after pocketing more than $1 billion short-selling subprime credit this summer."
With the Super SIV still in play Investors bid up the Libor.
Sounds like Uncle Benny needs to sell more Dollar to keep the 3 months Libor rate below the Fed Fund Rate.
What is a speculator and hedge fund to do, maybe short the US Dollar and make easy money.
http://www.ft.com/cms/s/0/
d4bb2092-818a-11dc-9b6f-
0000779fd2ac.html
The cost of funds in the strained interbank money markets remained abnormally high on Tuesday in spite of growing expectations of an interest rate cut by the US Federal Reserve this month.
While the three-month London interbank offered rate (Libor) – an important borrowing benchmark for financial groups – in the dollar, sterling and euro markets have come down from their peaks in recent weeks, lending rates in all three are still stubbornly high compared with historical levels.
A key measure of these difficult lending conditions is the movement in the three-month overnight index swap sector. The OIS – which tracks the relationship between an expected three-month Fed funds rate and three-month Libor – is elevated at 60 basis points.
This swap has abated from a peak of 95bp prior to last month’s rate cut by the Fed. But under normal conditions the swap should trade around 8bp.
On Tuesday, in the dollar market, overnight Libor was set at 4.81 per cent, just above the Fed funds rate of 4.75 per cent. The three-month level of 5.084 per cent was above both the two-month (4.965 per cent) and four-month (5.04 per cent) levels.
But with interest rate futures pricing in the strong likelihood of a further Fed rate cut either at the end of this month or in December, dollar Libor has further room to fall before it attains normal levels, traders say.
Should you buy into the SIV Super Fund.
If it such a good produce why are the banks dumping it on to you maybe the banks have some hidden secrets and a strong incentive to sell you junk.
Knowing that high-risk, subprime mortgages are routinely blended with better credits, and sold and rated as one, why take the chance of purchasing lemons virtually indistinguishable from the quality assets.
It like buying a used car.
You fret that one of those cars might be a lemon. But which one?
http://www.theglobeandmail.com/
businessTP//servlet/story/
LAC.20071023.IBWORLD23/TPStory/
Business
These massive bank-run investment vehicles - sometimes billions of dollars in size - generate profit by exploiting the gap between short-term borrowing rates and higher long-term returns on bonds backed by assets, such as residential mortgages.
They're like virtual banks, but off the balance sheet.
The trouble is that the quality of the assets is virtually unknown to many of the players involved thanks to complex packaging and the veneer of safety provided by credit-rating agencies.
Planning to purchase those new tires for your car, maybe you should not wait to long.
Uncle Benny weak Dollar policy is going to make you poor.
http://www.macroworldinvestor.com/m/
m.w?lp=GetStory&id=276680691
RUBBER PRICES CLOSE HIGHER ON RISING CRUDE OIL PRICES
Malaysian rubber prices closed higher today following the rising crude oil prices, fuelling anticipation that the prices of competing synthetic rubber may increase, a dealer said
The dealer said strong demand from local as well as overseas buyers also pushed the commodity's prices up
"The prices may increase further due to growing demand from China as well as South Africa," he said
He felt that the rubber market may be short of supply as output may fall due to the wet season in certain parts of the country and continued strong buying interest
When companies know that it is getting harder to hide their lost in SIV, why don't they come clean earlier on?
Chief Executive Stan O'Neal needs to talk to his staffs and tell them that the market just don't like surprise these day.
No more Secrets, come clean now and the market might be forgiving.
http://online.wsj.com/article/
SB119319811534969583.html?mod
=googlenews_wsj
Merrill Lynch & Co. is expected to announce its third-quarter losses are more than $2 billion more than first projected, ratcheting up the pressure on Chief Executive Stan O'Neal to demonstrate he has a grip on the firm's risk level.
Merrill announced on Oct. 5 that it expected to write down $5 billion for the quarter that ended in September, the biggest such loss of any Wall Street firm, based mainly on an over-exposure to risky mortgage-related securities.
But the actual write-down is expected to come in far above that initial estimate, with outsiders putting the level at $7 billion or higher. The result will be pressure on Mr. O'Neal, who ousted two top bond executives three weeks ago when the extent of the losses became apparent, to make further changes.
Come desperate time, comes desperate measure.
It most likely a fake listing to force treasury rate down but keep an eye on Countrywide's REO listing.
Probably the same tactic that Merrill Lynch is using.
http://countrywide-foreclosures.
blogspot.com/2007/10/
countrywide-financial-reos-off-
charts.html
There were 195,433 properties published for sale (click on state links above to see the properties) by Countrywide Financial all through last night and this morning (probably up until noon time I'm guessing).
Countrywide no longer has all these properties on their site as being offered for sale and the number of REO's currently listed are back to the 13k range.
This huge number of listed properties is too huge to figure out what is going on.
I truly thought those numbers were going to stay published on their site. I cannot say what Countrywide's intentions were for publishing 195,433 properties.
Perhaps it was a mistake? I have no clue.
California wildfires present an unprecedented opportunity for the comeback of the SOCA real estate market. Yes renter suckers, it's going to get expensive living in San Diego county. Hello 25% jump in rents, hello FIRST, LAST and DOUBLE SECURITY!
I've read that forclosures are skyrocketing in Atlanta where I live. Builders are offering 6 months "free" type incentives to try and get new buyers.
There are losses out there, but it seems like a good time to jump in and get some steals.
.
I am a resident of Rancho Bernardo Ca. since 1972
Never thought I would see this here
and,
Direct blame should be put on the environmentalist tree huggin assholes for the devastation of the fire in So Cal!
They directly would not let old growth (fuel) be cleared, no brush clearing, no additional firebreaks!
Thanks you know-it-alls!
Its common sense, of which you have none!
NOW, that brush you wouldn't let us clear away, is definitely gone, with one Hell of alot of homes and your precious forests are all up in smoke!!!!
Something you assholes know nothing about has cost untold billions!
In the estimate of 650 sq miles!
WE DO NOT WANT TO HEAR A WORD OUT OF ANY OF YOU!!!!!!!!
WE, can deal with this without your help!
We will make it through as we Americans always have!!!!!!!!
.
Moved into my new TH in NoVA. Nothing great, 2 bed + den, 1 full bath, 1 bath w/ shower stall, 2 powder rooms, finished basement, deck no garage. Rent is 1850/month. Location gives me several commuter options to avoid traffic. If you take the rental rate & extend it out to its P/E price it comes to something in the 250k range. County tax assessments put it just over 400k last year, this year is pegged at 380k, a 20k drop!!! I pulled the sales sheets for a couple of THs in the neighborhood that are up for sale. One at 425k & another one at 429k!!! The 429k is a FSBO. Both have come on the market in the last month or so. The units were built in the 1980's and really do not have any of the modern amenities. So basically in the off season, these people want a 05 peak/06 plateau price for a 20+ year old TH . The FSBO one really is odd being that FSBO units are "suppose" to be priced lower as there is a 3-6% discount built in due to the absence of an agent. Denial still reigns in NOVA!! And I'm just going to rent until they beg me to take the place off their hands for a P/E price or less!!
I truly thought those numbers were going to stay published on their site. I cannot say what Countrywide's intentions were for publishing 195,433 properties. Perhaps it was a mistake? I have no clue.
_________________________________
Hmm....Perhaps it was a disgruntled Countrywide employee who was tired of all the lying....
As posted on Exurban Nation:
Just this morning in Calgary a real estate guru from Phoenix was on the radio touting the great "bargains" that can be found in Arizona. Especially for Canadians with the high loonie.
The part that made me cringe was when they said that "property values have nowhere to go but up" since they have hit bottom in Phoenix. The guy's website also made me a bit queasy:
http://maricopa-county-mls.com/canada.htm
They also got the link wrong to their main site:
http://gw7.net/
Looks like a classy operation.
found today in the Miami Herald online under the headline:
Home prices fall in Broward, are flat in Dade
"In Miami-Dade, home prices were mostly flat at $372,300, and condo prices actually rose 2 percent to $275,000."
That is freaking unbelievable!!!!
I might be forced to move from my rental condo. I'm looking at rentals, but checking the For Sale market, too. It appears on Zillow that prices in the town where I work in Prince Georges County, MD (outside DC)went from around $125k to the low three hundreds - a 150% increase, in under five years. Maddeningly, the charts are on a plateau. Typically these are 1920's bungalows, earlier Victorians, and large numbers of nondescript, teensy brick or - ooh! - stone single story jobs. Nice-sized lots, but sump pumps appear to be common.
This place is not known for being "posh", shall we say, but I'd be willing to live there at or near pre-bubble prices. But will it ever happen?
This is near the University and an office park is opening up in within walking distance (but it is across from a Metro stop, so people have options). Is the reversion to the mean like waiting for the Great Pumpkin?
Anyone else see Dylan Ratigan's interview with the four Bush advisers this morning? Ratigan asked about the decline in the dollar and received the following reply:
"Only the president and the Treasurer talk about the dollar."
Talk about a duck.
In the age of Chinese industrial revolution and India modernization, how much up side do Asians' markets have.
Will speculators and hedge funds take advantage today big banks and brokerage firms over brought US Treasury positions to short the YEN positions.
Will the Japanese housewives or Mrs Watanabe make a comeback and start purchasing New Zealand Treasury and drive up the Nikkei and Gold futures.
With Nikkei going up will market players come back and buy over sold Hang Seng and BSE SENSEX stocks.
http://www.brisbanetimes.com.au/
news/planning/the-chinese-
revolution/2007/10/22/
1192940985748.html
"We are in the initial stages of this economic phenomenon where global economies are being driven by China and India. Australian resource stocks are coming off 30 years of under-performance and we are only four years into strong performance. This is a structural change. It is still in its infancy.
"The natural inclination is to say these stocks have done well, and now it is perhaps time to sell them. But they are only up in line with their profit growth. It is not as if we are paying a new price for them. We think this is a 20-year event. It is like the industrialization of Japan, which was a 25-year event and also led to a boom in resources."
"Is it a bubble when stocks are still on 11 times earnings? The tech boom was a bubble - you had stocks on 100 times earnings or with no earnings at all. But this is different. It is not at all speculative. I don't see what will interrupt this. It is the biggest investment event in 20 years. When iron ore prices go up again this year, people will realise that this is real."
According to the Australian Bureau of Agricultural and Resource Economics, the Chinese economy is expected to grow by 11.3 per cent this year and 10.6 per cent next year. This follows figures of 10.2 per cent in 2005 and 11.1 per cent last year.
The important thing is not that Asians are pulling out of the U.S. Treasuries; the important thing is where will these old money go.
If not the Mortgage Back Securities tied to CDO or SIV, where will that old money.
Currently with Yen Carry Trade being the biggest liquidity pumps, old money will have to follow the new money.
New money are going into foreign equities.
http://www.larouchepub.com/pr/
2007/071021asians_dollar.html
Asians Pulling Out of the Dollar at Record Rates as Crash Proceeds
Chinese and Japanese sales of U.S. Treasuries grew in August "at a pace unprecedented in the last five years, as the US subprime mortgage crisis triggered the biggest sell-off of dollar assets since Russia's 1998 default," as reported in the China Daily.
China cut its holdings of U.S. treasuries by 2.2% or $9 billion, to $400 billion, while Japan dumped 4% of its total holdings to $586 billion, the most since March 2000. Taiwan's ownership of U.S. government bonds fell sharply by 8.9% to $52 billion.
According to latest statistics, $400 billion of U.S. treasuries only account for 28% of China's $1.43 trillion foreign reserves now, a sharp contrast to years ago when most of China's foreign reserves found their way into U.S. treasuries.
While the driving force is clearly the recognition that the crash is on, analysts covered by China Daily attributed the spark for the rapid exit from the dollar to the low exchange rate caused by subprime mortgage fallout, and the Federal Reserve's decision to lower the interest rate by 50 basic points.
The dollar has devalued by some 7% this year against the euro. Suspicions that the Federal Reserve would cut the interest rate again further contributed to pressure for China and other countries to reduce holdings of U.S. assets.
With growth in China and India does that mean all Asians stocks are a good buy.
Off course not, Asians Banks exposed to US Subprime loans can be very expensive relative to its earning potential.
But if Federal Reserve cut interest rate in an environment of global growth due to Yen Carry Trade then expect the US Dollar to continue to weaken.
Not good news for foreigners holding US Treasury if their currency is peg to the US Dollar.
http://www.taiwanheadlines.gov.tw/
ct.asp?xItem=92315&CtNode=39
Subprime storm damages Taiwanese financial firms further for SIV investment
The effect of the U.S. subprime housing-loan storm has extended from the CDO (collateralized debt obligation) to the SIV (structured investment vehicle) market, inflicting further damages on some Taiwanese financial institutions.
Credit Suisse estimated total exposure of domestic financial institutions to the U.S. SIV market at NT$15.6 billion, with SinoPac Financial Holding accounting for NT$11.4 billion, or 73%, and the remainder belonging to Chinatrust Financial Holding, Yuan Financial Holding, and First Financial Holding. All will have to make provisions for potential loss from the exposures.
SIV is based on good assets boasting AA and higher credit ratings, appropriated by U.S. financial institutions. The market has been suffering liquidity problem recently, due to the effect of the subprime mortgage storm.
Chang Li-chuan, Sinopac spokesman, noted that the company already made provision of US$6 million for the potential loss from the exposure in August and September and will increase the amount by year end. Insiders assessed the company's loss at NT$2.1 billion, for a loss rate of 18%.
The investment loss has prompted foreign investors to downgrade financial stocks, selling off lots of such stocks in the recent one month, notably those of Shin Kong, Fubon, and SinoPac.
Will new tax law drive down home speculations.
Investing in a vacation home would become a little less profitable under a tax change that may become law soon.
http://www.tennessean.com/apps/
pbcs.dll/article?AID=/20071024/
BUSINESS01/710240412/1003
The immediate effect will be small, but the action serves as an important reminder for homeowners: Tax breaks can be taken away.
The House voted to close a loophole (and that's the word everyone uses for it) that has allowed some vacation-home owners to sell their beach houses without paying capital gains tax.
How loophole works
The tax break is not supposed to apply to a vacation home; any profit from that is supposed to be taxed as a capital gain, at a top rate of 15 percent. (That's slated to increase to 20 percent as of 2011.)
Enter the loophole: Some tax-savvy owners figured out how to make it apply to the vacation home, too. They would sell their principal residence and take that gain tax-free. Then they would move into their vacation home and make it their principal residence for at least two years. Now they could sell that home, again with a tax-free gain.
The government wants its share, starting with homes sold after Jan. 1, 2008.
So, what exactly would this mean to you
Let's say you buy the mountain cabin next year. For five years, you use it only for vacations. After five years of vacationing, you move into the cabin full time and sell two years later.
Let's be nostalgic and imagine the cabin's value increases sharply, so you actually have a capital gain to worry about. Your fraction would be 2/5, (two years as principal residence/five years ownership after January 2008).
You would be able to claim only 40 percent of the tax break, or a maximum of $200,000 in capital gain tax-free if you're married, $100,000 if you're single.
During the Beginning phase of the housing Slump, Home Builders will give out more incentives.
During the Middle phase of the housing Slump, Home Builders will lower price.
During the Ending phase of the housing Slump, Home Builders will aggressively give discount on close out homes.
Remember there are three stage to a housing cycle.
A. Boom
B. Slump
C. Recovery
and each stage has three phases.
1. Beginning
2. Middle
3. Ending
All housing market are local so use the four trends to determine what phase your town is in.
a. Migration
b. New Construction
c. Job Growth
d. Path of Progression
http://www.marketwatch.com/news/
story/centex-lowering-home-prices
-response/story.aspx?guid=
%7B895570F0-F418-4BAF-86E3-
957E27937EF7%7D
Executives Centex Corp., one of the nation's largest home builders, on Wednesday said the company is lowering prices as tighter lending standards are making it tougher for buyers to obtain loans and further weakening demand for new houses.
Actually, there is the possibility that fire personnel were responsible - several live in these areas - especially in Silverado Canyon.
ApleAnee said...
Anonymous said...
Has anyone considered the possibility that the wild fires in San Diego county were started by underwater FBs to collect on the insurance?
Maybe the insurance companies will be the ones who finally mark to market?
Is Warren Buffet correct about China's stock market run up. Yes he is.
Was Warren Buffet correct about the DotCom stock market run up when he warned in 1998.
Yes he was, but did he miss the biggest run up from that time to March 2000.
If BOJ was unwilling to stop Global Excess Liquidity in the beginning of the year and has past the point of no return, then these new money has to go somewhere.
If Central Banks can not absorb these liquidity by sell government bonds then these new money will flow to the path of less resistance.
Currently that path is in Asians Equities Markets.
http://economictimes.indiatimes.
com/Markets/Global_Markets/
Buffett_finds_Chinese_stock_
market_too_hot_to_handle/
rssarticleshow/2488209.cms
Billionaire Warren Buffett said investors should be cautious about China’s stocks after the country’s benchmark index more than doubled this year.
“We never buy stocks when we see prices soaring,” Buffett said on Wednesday in Dalian, north-eastern China, where he’s visiting a subsidiary of his Berkshire Hathaway.
“We buy stocks because we’re confident of the company’s growth. People should be cautious when they see prices rising.”
Are there any more rumor on A and H shares SWAP.
The rumor caused Hang Seng investors to push the Hang Seng Index through the 30000-point barrier last week, but Shanghai investors would have lost.
Hang Seng is doing nicely but Shanghai Composite is not today.
http://news.rednet.cn/c/2007/
10/19/1350041.htm
China has no plan to swap A, H shares
The vice chairman of the China Securities Regulatory Commission was responding to a press question about possibility of instituting share swaps between the Hong Kong Stock Exchange, itself a listed company, and its mainland counterparts in Shanghai and Shenzhen.
As long as Uncle Benny is willing to help mortgage bankers by lowering interest rate, Subprime Mortgages Will Return.
But have mortgage bankers hone their skills and do they know how to dump those toxic loans faster after learning from their recent mistake.
If so will Subprime Mortgages Return with a Vengeance.
http://www.realestatejournal.com/
buysell/mortgages/20071023-hoak.
html?mod=RSS_Real_Estate_Journal
&rejrss=frontpage
Although "subprime" has become a four-letter word in the country's collective lexicon and no one is sure when the credit crisis that was spawned by a meltdown in the risky lending sector will ease, mortgage bankers say you can count on this: Subprime shall return.
FEAR is driving flow of funds from US housing market causing the credit crunch, but GREED is pouring flow of funds into countries like China and India.
Can China absorb enough of the Excess Global Liquidity coming in from Yen Carry Trade that driving up speculation in Asians equities markets.
http://www.reuters.com/article/
marketsNews/
idUKPEK14655720071025?rpc=44
China growth slows but more tightening in store
Chinese economic growth slowed a touch in the third quarter but not by enough to dispel expectations of more interest rate rises and other policy curbs to stave off the risk of overheating.
Annual growth in gross domestic product eased to 11.5 percent in the third quarter, bang in line with forecasts, from a 12-year high of 11.9 percent in the April-June period, the National Bureau of Statistics said on Thursday.
The outcome leaves China on course to grow this year at the fastest rate since 1993, when the economy expanded 13.1 percent, and brings it closer to overtaking Germany as the world's third-largest economy.
"Industrialisation, urbanisation and China's global manufacturing power are the three engines that continue to drive very high growth," said Chen Xingdong, chief economist at BNP Paribas Peregrine in Beijing.
The Shanghai stock market was down almost 4 percent on the day, in part as investors priced in higher borrowing costs. The central bank has already raised interest rates five times this year.
With so much money coming in from Yen Carry Trade driving up Asians Equities Markets why wouldn't Inflation spread world wide.
http://www.newratings.com/
analyst_news/article_1635787.html
ECB still concerned about Eurozone inflation
Analysts at Goodbody Stockbrokers say that some members of the ECB still believe that there are inflationary pressures in the Eurozone.
In a research note published this morning, the analysts mention that member Axel Weber from Germany warned on Monday that inflation could hit 3% in Germany by the end of the year.
Graph of most recent Credit Suisse Subprime ARM Loans Reset schedule from 2007 to 2015 from the housingwire blog
A picture is worth a thousand words
http://www.housingwire.com/
wp-content/uploads/2007/10/
chap1-8.gif
joshua:
Myself and my younger brother and sister then took ownership. I have no capability to pay the monthly loan back that my mother took out on the house to buy my uncle's half, so essentially because of this housing crash, I inherited nothing but about $150,000 in debt.
Hold on a minute. Did YOU co-sign your mother's loan?
If not, what obligation exactly to the mortgage bank do YOU have? Did you sign anything?
Sure your mother left you all her assets, but an underwater house is no asset.
The bank of course has the right to take back the house, but if they want the loan paid, they'll have to call mom, who appears to be unavailable.
I have found an interesting poll. It says that eight out of ten (84%) Canadian baby boomers, aged 41-61, state they are not hesitant to consider a real estate purchase despite U.S. housing market volatility, ccording to a new online survey by Angus Reid Strategies on behalf of Mortgage Intelligence Inc. In fact, 21% of boomers surveyed anticipate making a real estate purchase in the next three years; 63% are not apprehensive about Canadian real estate, but have no plans to purchase within three years; 6% are not considering a Canadian real estate purchase because of the U.S. housing decline; and 10% do not know how they feel about Canadian real estate.
Found this humorous, from the onion:
http://tinyurl.com/3dr7k3
New home sales up 4.8%. Conveniently no mention of that on HP.
Hi there Vancouver real estate,
Interesting poll. A good illustration of the absurd thinking of many people on real estate matters.
There are plenty of reasons that have dick-all to do with the USA and its horrific problems why Canadians should be hesitant to buy right now in Canada.
Especially if the real estate is in the Vancouver area, where the prices are utterly insane.
Other good reasons are: (1) it's in Victoria; (2) it's in Calgary; (3) it's in Edmonton.
The one place I would maybe maybe maybe possibly consider is perhaps maybe maybe Toronto, but it's overpriced there, too.
The prices have risen too much, pretty much everywhere in Canada. This is mainly because of stupid low interest rates. It's also because of the loosening of credit and downpayment standards and the introduction of longer mortgages.
Sure, the subprime market here is only 5% [so far....] of the mortgages (vs 20% in the USA), but, so what, the prices are still unaffordable; the rise (and the crash when it comes) just moves at a slower pace and to less-obscene levels than in the USA, that's all.
Anyone who buys real estate in Alberta or B.C. right now is an idiot. Luckily for sellers, most of the population everywhere are idiots.
.
This is Great!!!!
From San Diego,
Some local and state polititians and local officials were told to stay away from speeches and photo ops!
NO Grandstanding!!!
The people don't want them gumming up the works or bettering their standing through this tragic fire!!
The polititians are getting a good dose of reality of how they are viewed by the public!
Ya gotta Love it!
.
Anyone see this? It's a Lawrence Yun video clip:
http://tinyurl.com/2vnrxm
Funny!
It looks like Saskatchewan will be the next "boom" province - especially if the changing oil & gas royalty structure drives business from Alberta. Prices are already soaring in Regina and Saskatoon ($300k and up to build a new house in Regina!). The housing market in Calgary is starting to slow, so a lot of people who over-leveraged themselves, assuming prices would continue to soar, after seeing their neighbors make a fortune on their houses are going to be in for a surprise.
Hi student,
Yes it is slowing down in Calgary. I don't think prices will come down fast - I think they'll come down slowly.
But yes I agree that many people who bought in Calgary in the last 12 months hoping to flip it for a good profit are going to be very unhappy. Like all the other housing bubbles, 2001-2002 was a great time to buy and 2005-2006 was a great time to sell those purchases.
The Saskatchewan stuff is fascinating, eh? Unreal! Up 60% in the last 12 months. A lot of the movement there is people cashing in their Calgary-housing-bubble chips and moving back to where they came from!
Uranium is the other part of it.
I never would've thought I'd see Saskatchewan be a place of boom or housing bubble!
New home sales up 4.8%. Conveniently no mention of that on HP.
---------------------------------
with a margin of error that is larger than the 4.8% change!
RE: "New home sales up 4.8%. Conveniently no mention of that on HP."
----------------------------------
Why no mention? Because it's meaningless. HP concerns itself with statistics (and lies) that matter. So they're up 4.8% as compared to the historically catastrophic month [which followed several other consecutive catastrophic months] that preceded it. Wow, what a gain. I guess it'll be all up up up from here on in, eh?
Here are two consecutive complete sentences from the article; it puts the 4.8% rather into proper perspective:
"The U.S. Commerce Department reported Thursday that sales of new homes rose by 4.8 per cent last month to a seasonally adjusted annual rate of 770,000 units. That level of activity was still 23.3 per cent below a year ago, indicating that housing remains in a steep downturn."
I'm glad OPEC is not having any trouble meeting the increased production quotas and that oil prices are remaining moderate. Those chumps on blogs like The Oil Drum are all idiots. Aint nothin' to oil prices a well-informed invasion won't fix.
OR
Will expensive gas just throw more fuel on the housing fire (could not resist the pun) as folks figure out that living 40+ miles from their means of support (job) is not the best plan and that now even the pooch is pooched.
Have a coke and a smile!
You can't possibly be serious with your 4.8% comment... NEW home sales DECLINED by 23.3% YOY!!!
PLEASE do some research before you post in the future...
What if the reason that we have not seen a consumer spending pullback is because the consumer both cannot pull back and/or is not aware that they need to stop piling on debt? Living paycheck to paycheck may be blinding them to what's going on.
http://economicdisconnect.blogspot.com/2007/10/for-consumer-led-recession-consumer-has.html
YEAH BABY UP 4.8% FROM ONE OF THE MOST HORRIBLE AUGUST NUMBERS IN HISTORY. MSM FORGETS TO MENTION DOWN 23% FROM SEP. 2006 WHOOPS!!!
I SMELL A TROLL!!!!
As if you really needed it, here is yet more proof that some douche-bag realtors have absolutely no concept of ethics. Here is a post on a message board for fire victims / evacuees from the fire affected areas of the Lake Arrowhead community. Some "enterprising" realt-whore agent decided to use this as a sales pitch opportunity:
http://tinyurl.com/2zxko9
Read the responses to this shameful tactic here:
http://tinyurl.com/2cg8ob
RIVERSIDE CA. now has 12 home listings on mls between $119,000 and $199,000. The market is absolutely dead here. These prices are going to crash sooner than later. Supposed median is now 369,999 and falling fast.
Bryce,
I agree with your take on both Alberta and Sask. Any thoughts on if/when prices will start to come down, particularly in places like Vancouver or Toronto?
Vancouver real estate has been unbelievably overpriced for so long that it's starting to become normal to value a 1950's run down bungalow at over half a million.
GOLD TO DA MOON ALICE!!!!!!!
Reports Suggest Broader Losses From Mortgages
"Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up."
http://tinyurl.com/26y8z6
Buffett says mortgage ills might linger at least 2 more years
http://tinyurl.com/22xoyc
Are hedge funds forcing an uncle Benny Put.
Can it be the Stars are in alignment with Asian Markets firing on all cylinders.
Japanese government bonds end morning mostly lower, market players are pouring money back into the Nikkei.
With a seasonally adjusted 1.4 percent fall of Japan's industrial output in September from the previous month, it a guarantee that BOJ will not raise rate.
Even if that number is smoke and mirrors, which these days it mostly like is, is the number telling market players that speculators and hedge funds are getting ready to sell the US Treasury to buy Yen Short positions.
If so will Yen Carry Trade come back with full force with Speculators and hedge funds pushing the Yen back above 120.
Will speculators and hedge funds use the profit from the Yen play to pick up easy bargain from the DOW sending it to new records high.
The Dow made up big lost two days in a row, does this spell out that it is being artificially lower.
Hedge funds control the third of the markets these days, so can the Dow be next in play.
http://www.abcmoney.co.uk/news/
262007152453.htm
Japanese shares opened higher Friday as the release of upbeat corporate earnings late Thursday encouraged buying of blue chips in the tech, auto and other sectors.
Sony jumped in early trade after the world's second-largest consumer electronics maker said it returned to the black in the fiscal second quarter thanks to a weak yen and higher sales of digital cameras.
Does it take a whiz speculator to see a Bernanke PUT.
http://www.turkishdailynews.com.tr/
article.php?enewsid=86830
Whiz speculator shifts assets out of US dollar
Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency.
“I'm in the process of - I hope in the next few months - getting all of my assets out of U.S. dollars,” said Rogers, 65, who correctly predicted the commodities rally in 1999. “I'm that pessimistic about what's happening in the U.S.”
Rogers, delivering a presentation late Monday at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as platinum, gold, silver and palladium.
Let's connect the dots, what does higher New Zealand Dollar has to do with Yen Carry Trade.
Can shorting the Yen be the next thing in play.
http://www.rttnews.com/FOREX/
Currency_mkt.asp?date=10/25/
2007&item=85
The New Zealand Dollar is moving higher against major currencies. The kiwi is trading in New York at 87.18 to the yen, 1.87 to the euro and .7637 to the U.S. dollar, its highest level for all three since mid-October.
Is Bank of America saying it is time to cut the middle man to bring up the earnings.
If BofA does bring up their earning can BofA buy up mortgage companies at a discount that do not have the foresight to use the same strategies as BofA.
http://www.nctimes.com/articles/
2007/10/26/ap/business/
d8sgi3v80.txt
BofA to Exit Mortgage Wholesale Business
The nation's second-largest bank will stop offering home mortgages through brokers at the end of the year to focus on direct-to-consumer lending through its banking centers and loan officers.
With so much excess global liquidity coming from Yen Carry Trade driving foreign equities up, why would market players want to be MBS investors.
http://www.quote.com/qc/news/
story.aspx?symbols=BWIRE:
100&story=200710241718_BWR_
99653271
Fitch Affirms 4 & Downgrades 8 RMBS Classes from Morgan Stanley 2006-5AR
Have you ever asked a season investor what is the number one rule in investing.
Normally the season investor will say "NEVER ADD TO A LOSING POSITION" but then what does that season investor goes out and do.
Stan O’Neal does that sound familiar.
http://ftalphaville.ft.com/blog/
2007/10/26/8387/merrill-could-
take-further-hits/?source=rss
Merrill’s chief said to have floated bid to merge
Facing billions of dollars in losses from the subprime mortgage crisis, Merrill Lynch boss Stan O’Neal floated the idea of a merger with a large bank, a foray that angered Merrill’s board and could cost him his job, reports the New York Times.
Mr O’Neal broached the possibility of a merger with Wachovia, without first getting the approval of Merrill’s board, a major breach of corporate protocol at a time when directors were already concerned about the company’s performance, the story adds.
Merrill Lynch shares fell further on Thursday after several analysts downgraded the bank and suggested it might need to take further writedowns beyond the massive $8.4bn already announced.
Where would Countrywide be if it was not for the Bernanke's PUT
http://www.sbsun.com/
business/ci_7283396
Shares of struggling mortgage lender Countrywide Financial Corp. fell more than 5 percent Thursday amid investor uncertainty over the company's upcoming third-quarter financial results.
Shares slipped 76 cents, or 5.5 percent, to close at $13.07, their lowest price in at least four years. The stock sank more than 10 percent at one point to a low of $12.07.
Analysts surveyed by Thomson Financial expect the company to report a loss of $1.26 per share on revenues of $231.8 million.
Earlier this month, the company said its mortgage loan fundings fell 44 percent in September from the year-ago month. Mortgage defaults and foreclosures were also up compared with September 2006.
The company also provided a glimpse of its upcoming quarterly results, saying mortgage production volume was down 19 percent in the third quarter over the same period last year and down 27 percent from the second quarter.
If the number one rule of investing is never add to a losing position why do investors still do it over and over again.
There Excess Global Liquidity being pump in by Yen Carry Trade, that mean money have to be chasing an asset class, why not go for the "Path of Less Resistance"
Where is the Easy Money these days. HANG SENG breaking another record high today, could the flow of funds be going into foreign equities.
http://www.msnbc.msn.com/id/
21481552/
Merrill Lynch shares fell further yesterday after several analysts downgraded the bank and suggested it might need to take further writedowns beyond the massive $8.4bn announced on Wednesday.
Could it be that new home builders have more room to drop price then existing home owners or banks who can not afford to dump REO which may or may not trigger a route.
So why is home price still going up if builders are lowering price, could it be that larger existing houses in good location are becoming a bargain pushing up median price of existing houses.
Could it also be there are more existing homes then new homes out in the market, so the drop in price of new home is masked by the volume of sells by existing homes.
http://www.businessweek.com/ap/
financialnews/D8SGHCR00.htm
New home sales posted an unexpected increase in September. Analysts viewed the small gain as highly questionable given the severe credit crunch that rocked the housing industry this summer.
Where is the flow of funds going and where is the flow of funds not going.
Maybe MBS Investors need to think about that a little longer.
Excess Global Liquidity needs to go somewhere.
BOJ is locked in at the point of no return and can not raise rate.
http://www.abcmoney.co.uk/news/
262007152496.htm
Asian stockmarkets rallied Friday, with Hong Kong setting a fresh record.
Investors ignored Wall Street's lackluster performance and record-high oil prices, which are now above 91 US dollars a barrel
Is this another Smoke and Mirrors report allowing BOJ to continue pumping Excess Global Liquidity into the Asian Markets
http://www.iht.com/articles/ap/2007/
10/25/business/AS-FIN-ECO-Japan-
Consumer-Prices.php
Japan's nationwide core consumer price index fell for the eight straight month in September, shedding 0.1 percent for the month from a year earlier, the government said Friday.
Don't this suggest Yen Carry Trade is still in play.
What do they say about rumors.
Buy on the rumors sell on the news.
So if this was a short play what should an investor do.
http://abcnews.go.com/
Business/wireStory?id=3777969
Wall Street hit by write-downs, earnings
American International Group Inc led financial stocks lower on market rumors that the insurer may be facing a large securities write-down.
INFLATION, INFLATION, INFLATION
Does this mean ECB will more likely raise rate them lowering them.
Imagine ECB rates and US Fund Rate being equal, not good news for the US Dollar Index.
If the US is not in a Recession wait until after the Bernanke's Put when gas price average $4.00 a gallon.
http://news.moneycentral.msn.com/
provider/providerarticle.aspx?
Feed=FT&Date=20071026&ID=7702358
France never saw business confidence reaching the exceptional peaks witnessed in Germany.
In Germany, the Munich-based Ifo Institute's business climate index fell from 104.2 in September to 103.9 this month. That was the lowest since February 2006 but still high by historical standards and according to Hans-Werner Sinn, Ifo president, consistent with "a continuation of the upswing, although with decreased dynamism".
In line with a "slower-but-still-robust" growth outlook, the Berlin government on Thursday announced it had raised its forecast for economic growth this year, from 2.3 per cent to 2.4 per cent, but had trimmed its projection for 2008, from 2.4 per cent to 2.0 per cent.
In France, the Insee statistical office reported its business morale index had fallen slightly from 109 in September to 108 this month. That was down from a peak of 112 in April but its relative strength surprised analysts given the scale of economic "headwinds".
Isn't a rate hike by Reserve Bank of Australia a guarantee Yen Carry Trade play
Wouldn't Excess Global Liquidity flood the Asian Markets with three rate hike.
So why do market players still pouring good money into subprime junk.
http://www.brisbanetimes.com.au/
news/business/three-rate-rises-
ahead-says-anz/2007/10/25/
1192941279270.html
Three rate rises ahead, says ANZ
http://www.businessweek.com/
investor/content/oct2007/
pi20071024_195861.htm?campaign
_id=rss_topStories
S&P Downgrades Merrill Lynch after "Startling" Loss
With a Bernanke's PUT in an environment of Excess Global Liquidity it is almost a guarantee that the US Dollar Index will fall.
http://moneynews.newsmax.com/money/
archives/st/2007/10/25/
165923.cfm?s=mnn
Billionaire investor Warren Buffet has a dark outlook for the dollar and warned — like former Fed chair Alan Greenspan — that the $75 billion private bailout of the mortgage industry engineered by the major banks had some serious faults.
Also Buffett has sobering words for consumers and investors who hope that the end is near for the subprime crisis — it’s not.
"In the next six months, one year, two years, the problems in the mortgage market can cause a lot of problems with consumers and hurt buying power in the United States,” Buffett said at a press conference.
What most likely is that former US Federal Reserve Chairman Alan Greenspan does not need to pump his own gas.
With a Bernanke's PUT pushing gas price up to $4.00 gallon by February commuters who have to travel far to work will be decimated.
Will higher gas price push chances of a Recession above 50%
http://www.news.com.au/
dailytelegraph/story/
0,22049,22639702-31037,00.html
THE US economy still faces pressure from a drawn-out housing-market slowdown but will "probably not" slip into recession as a result, former US Federal Reserve Chairman Alan Greenspan said overnight.
175 major U.S. lending operations have "imploded"
http://ml-implode.com/
Boskin said, "...households have added significantly to their net worth in the last few years, not through payroll savings but through asset growth in housing and the stock market. Savings look OK as long as asset values hold up. And unless there is a large download of asset values, household balance sheets are in good shape."
Wow, except for this, I am just speechless...
Corruptionwide has financial issues to report. The stock is down only 67 percent this year.
I don't see any reason for anyone to panic. Lawrence Yun is reportuing that RE will bounce back shortly. I think he said December 3rd at 2:15pm the housing appreciation trend will start.
From the NY Post:
http://tinyurl.com/ywmf4v
There are some financial savy people on this site.
Could I get some opinions?
Fidelity's SE Asia stock is up 87%. I was told its high risk. Would or is anyone invested in this. And how do you feel about it?
I would invest the lowest amount.
The advisor I talked too said CW is fine and won't go out of business. I told him they were burnt toast.
Thank you in advance.
Hi again student,
I am guessing that property prices in Vancouver will bottom out somewhere between 2013 and 2016.
I am guessing that property prices in Vancouver will begin a steady decline starting somewhere around 2010 or 2011.
Toronto? I am guessing that property prices in Toronto will start to drop in 2009 or 2010.
Vancouver may very well make it into the number-1 unaffordable place in the next Annual Demographia International Housing Affordability Survey. In the last one, it published a price-income ratio of 7.7 for Vancouver, which earned it 13th-most-unaffordable. As I understand it, that ratio is now approximately 11.0.
LA came in number-one last time with a ratio of 11.1.....
And in LA you get tax deductions for mortgage payments -- but not in Vancouver.
Vancouver is stratospherically insane.
This is a funny article from exactly two years ago about land prices in Las Vegas:
http://tinyurl.com/3ylmce
My favorite part:
" In his August housing market letter, Dennis Smith, president of Home Builders Research, reported prices from a high of $803,217 an acre paid by CK West for 31 acres in southwest Las Vegas to a low of $254,555 an acre paid by Centennial West for 37 acres in northeast Las Vegas. 'There is no reason to expect land prices to decrease,' he said."
CFC is up almost $4! It's over guys the credit crunch is over and no one is going to lose their home.
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CLASSIFIED TOP SECRET
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BLACK PSY-OPS: "Potential Dirty Bomb Event" THREAT WARNING!!!
Event:
Miami Heat vs Phoenix Suns
November 9 at American Airlines Arena in Miami,FL
Key psy-ops features of this event:
"11-9"
"American Airlines"
Televised Event, large crowd, world famous major U.S. city.
Kickoff event for GWB's WWIII?
============================
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Disclaimer: This post is a work of fiction created for entertainment purposes only. However the event does appear to contain all the right elements required of a good psy-op false-flag terrorist event.
In an election year Polls matter
http://kvoa.com/Global/
story.asp?S=7272003&nav=J7Nq
Video: Poll Shows America Does Not Support Federal Intervention in Sub-Prime Market
Public Opinion Strategies poll show 62 percent believe 'individuals should take responsibility.'
$289900 DUPLEX ***** REAR FIND *** DOWNTOWN CLERMONT
A real Watson Real Estate Headline on Craig's list.
I knew Realtwhores pulled information of their gluteus maximus, but this is
ridiculous.
url:
http://orlando.craigslist.org/rfs/459487768.html
http://www.frontlinethoughts
.com/pdf/mwo102607.pdf
Angelo pulled a big orange one out of his ass with that run up in cfc stock.
He must just laugh and laugh at how gullible the sheep are. Return to profitability next qtr, sure.
$92 Oil
$782 Gold
Credit Crunch
Housing Crash
Dollar Deflating
Mideast Turmoil
Supply Side Econmics works guys, Great Depression was an exception
Its different this time
Goldilocks in full effect
Microsoft BUY BUY BUY!!!!
Isn't it great the CREDIT CRUNCH is OVER.
But don't worry you can still count on a BERNANKE PUT, because Uncle Benny hates the POOR.
So bye, bye Miss American Pie, drove old Angelo to the Benny but the Benny was dry and them good old hedge funds were covering their shorts singin' this'll be the day the US Dollar die, this'll be the day that US Dollar die.
http://online.barrons.com/article/
SB119328783399971105.html?mod=
yahoobarrons&ru=yahoo
Skepticism Scarce in Countrywide's Rally
IN A TOUCHING DISPLAY OF FAITH-BASED investing, Countrywide Financial's debt and equity securities soared Friday despite dramatic evidence of mortgage- credit deterioration severe enough to induce the Federal Reserve to cut short-term interest rates again.
Even though the company reported a $1.2 billion loss for the third quarter as a result of $3 billion of credit-related losses, its securities exploded higher.
In the debt markets, the cost of insuring against default by the nation's largest mortgage lender plunged an astounding 100 basis points, or one percentage point, to 377.5 basis points for its credit-default swaps.
Yields on Countrywide's bonds plunged
Bank of American bails out Countrywide, and Uncle Benny bails out Bank of America.
But who will bail out millions of hard working Americans who did not participated in the housing speculation when the US Dollar index plunge sending crude oil futures over 100.
The market ignored the higher price of Crude Oil on Friday sending the DOW even higher.
The CREDIT CRUNCH is Over, but count on a BERNANKE's PUT.
Speculator and Hedge Funds are partying like its 1999.
Is it time to buy more collateralised commodity obligation (CCO) or the "new Commodity CDO"
http://biz.yahoo.com/ap/071027/
earns_countrywide_financial.
html?.v=2
To turn things around in recent weeks, Countrywide borrowed billions of dollars, including $2 billion by selling a stake in the company to Bank of America Corp.
"We continue to be bullish about the longterm prospects of both Countrywide and our industry," Chairman and Chief Executive Angelo Mozilo said during a conference call with Wall Street analysts.
Shares jumped $4.23, or 32.4 percent, to close at $17.30 on Friday after rising as high as $17.51. The stock is down 64 percent from its 52-week high of $45.26.
US Dollar Against the Wall as Euro, Aussie, and CAD Break Out
Is it the right ingredients for a major Yen Carry Trade come back sending yen back to the 120 level and flooding Excess Global Liquidity into the Asian markets.
Yes, the Dow will get a bone or two also as market players look for bargains in a under sold DOW; thanks to the BERNANKE's PUT.
http://www.netindia123.com/
showdetails.asp?id=804551&cat=
Asia&head=Japan+stocks+set+to+
open+higher+led+by+Sony
''Investors will pay close attention to moves of the yen and other Asian markets.'' Japan's corporate earnings season has begun in earnest, with Nissan Motor Co, NTT DoCoMo Inc and Advantest Corp among those announcing results later in the day.
How can Speculators and Hedge Funds make money on the BERNANKE's PUT.
Is the easy money going into the new commodity CDO or Collateralized debt obligations (CCO)
http://www.miamiherald.com/
business/story/286219.html
The U.S. dollar hit a record low against the euro on Friday and economists are not predicting a turnaround anytime soon.
The dollar has dropped against all of the 16 most-actively traded currencies this year. The U.S. Dollar Index, measuring its performance against its six major peers, has lost 8 percent in 2007 and set a record low of 76.977 today.
Any noticed that the Federal funds traded as high as 15% on Thursday.
Thursday Federal funds traded at an effective rate 4.86%.
http://www.ny.frb.org/markets/
omo/dmm/fedfundsdata.cfm
Remember most mortgages are adjustable not to U.S. interest rates but to LIBOR plus points.
Why is Warren Buffet's buying a currency tied many to commodities.
Did Hanky Panky leak out some news again.
Uncle Benny are you still eating lunch with Hanky Panky.
Should speculators and hedge funds invest in the “Commodity Super Cycle.”
With the new game in town "Commodity CDO" or Collateralized debt obligations(CCO) and Uncle Benny intent to save the rich by destroying the US Dollar - what is a speculator or hedge fund to do.
http://www.tradingroom.com.au/
apps/view_article.ac?articleId=
141771
Warren Buffett said on Thursday his Berkshire Hathaway Inc insurance and investment company has been buying the Brazilian real currency.
Buffett disclosed the stake in an interview on Fox Business Network.
Buffett once had a bet of more than $US21 billion ($A23.61 billion) against the US dollar amid concern over mounting US trade and current account deficits.
He pared most of that stake. In May, at Berkshire's annual meeting in Omaha, Nebraska, he told shareholders that Berkshire was betting on one currency, and that it would "surprise" them.
http://seekingalpha.com/article/
36488-currency-commodities-boost
-brazil-s-bovespa-index
The emergence of the “Commodity Super Cycle,” combined with a global economy expanding at an annualized 5% rate for the past four years, helped to lift Brazil’s exports to a record $137 billion in 2006, with agricultural exports accounting for roughly 37% of foreign sales. Brazil’s trade surplus expanded to $47 billion last year, up from $2.6 billion just 4 years earlier, and so far in the first four months of 2007, the trade surplus was $13 billion, or 4.3% higher than in the previous year.
Ravenous Chinese demand for Brazilian soybeans has doubled since the turn of the century. Even so, Brazil’s agricultural potential has yet to be fully exploited. It’s larger than the USA’s lower 48 states, and today grows crops on only 19% of its 790 million cultivable acres.
Is Warren Buffett thinking like a fundamentalist and trading like a technician.
Warren Buffett warned on commodities in May and then goes out and buy the Brazilian currency.
Wouldn't the fundamentalist think that if BOJ is willing to provide the Excess Global Liquidity then that flow of funds will have to go somewhere.
Shouldn't a technician be buying the US Dollar and shorting the Brazilian currency if he/she think Commodities will be falling anytime soon.
Is it the duty of the speculators and hedge funds to trade upon the "bullish side or the bearish side", or is it the duty of the speculators and hedge funds to trade "upon the winning side."
What we wish, we readily believe, and what we ourselves think, we imagine others think also.
http://seekingalpha.com/article/
10162-warren-buffett-warns-on-
commodities
"What the wise man does at the beginning the fool does at the end," he quipped. "Once a price history develops enough for other people to see it and get envious, that takes over markets. We're seeing that some areas of the commodity markets."
What happened to all the geniuses who were sooooooooo sure gold would drop back below $500/ounce before it ever saw $700 again?
Idiots.
Playing bounce' can be costly, but do hedge funds normally like the risk because the higher the risk the higher the reward
http://www.vindy.com/content/
business_tech/301468152967817.php
It's called "playing the bounce," a stock trading strategy that sounds like light entertainment, but isn't.
This time of year, some traders try to take advantage of the tendency by fund managers to dump some of their ugliest stocks. The fund managers cleanse stock portfolios before the end of the year so unsightly stocks — such as homebuilders and mortgage companies this year — don't show up in year-end reports and scare off investors. Also, by selling losers in October, mutual funds reduce taxes clients must pay, offsetting the capital gains that winning stocks would otherwise leave at tax time.
Individuals sell for tax purposes, too — usually more heavily in November and December.
All the selling creates the opportunity for the bounce strategy, in which investors buy stocks that have fallen sharply from their peaks earlier in the year.
Stocks often weaken during autumn but then frequently climb — or bounce up — as investors anticipate a fresh start just before year-end or in January. So traders rummage through the stock market's garbage amid the selling during the fall and buy stocks in the hope that they will be able to partake in a bounce and get out fast.
The idea is to pocket a quick buck, rather than to buy and risk another downturn.
For years BOJ has been warned to raise rate to 3.5% before the "POINT OF NO RETURN."
Now that the "POINT OF NO RETURN" has passed, BOJ know they can not raise interest rate without doing more damage then good.
In August, BOJ seen what could happen when "Yen Carry Trade" peaks and suddenly unwind.
People now realize that the collision of two super bubbles were really one and the same, that the Global Credit Crunch caused by the US Housing bubble was really feed by the "Yen Carry Trade"
Today, the US Treasury and Federal Reserve have but one choice to weaken the US Dollar to prevent more damage from happening as they continue to control the unwinding of "Yen Carry Trade."
But now the CREDIT CRUNCH risk has past and in absent of FEAR, human nature will again take over.
It is human nature to be GREEDY, that was why regulators should have acted prior to the CREDIT CRUNCH.
Given the means to get away with making easy profit, it is not in human nature to work with regulators but to profit from their mistake.
Yes, "Yen Carry Trade" is very risky; however, in the absence of regulators ability to provide check and balance the GREED in human nature will take advantage of the easy high reward.
http://archive.gulfnews.com/
articles/07/10/27/10162941.html
The evolution of the yen has in fact become an indicator of investor risk appetite.
The yen carry trade is back in the news following the global credit crunch.
Some Gulf investors - including institutions, meaning asset management firms or government investment arms for example, and family offices - are among those who have been using or considering this trading strategy as a way to benefit from low interest rates in Japan.
So what is a currency carry trade?
A currency carry trade is a strategy by which an investor borrows money in one currency at a low interest rate (in this case the yen) to invest in another currency at a higher interest rate (the dollar) to benefit from the difference between the two.
This is as relevant to investors in this region as it is in Europe or the US.
The particularly low level of rates in Japan has led some Japanese savers, particularly for their retirement savings, to seek more attractive returns beyond their frontiers.
The official financial data shows that the phenomenon could involve as much as 40,000 billion yen, but only one quarter can be attributed to short positions held by currency traders and hedge funds.
The remaining amount of 30,000 billion yen therefore corresponds to assets held by Japanese savers abroad.
Here's a good housing bubble video titled, housing bubble worries...
http://www.youtube.com/watch?v=XTHJdHNy_Zg
Would a Bernanke's PUT guarantee crude oil price will be going over $100
http://www.philstar.com/index.php?
Business&p=49&type=2&sec=27&aid=
2007102813
Oil on the way to $100
Last Friday, crude oil prices set an all-time nominal record high of $92.22 per barrel.
Rising crude oil demand, especially from China and India, has driven oil’s recent rally. Tight supply conditions, against this backdrop of growing demand, have heightened global inventories over the past 12 months, making markets even more anxious. Meanwhile, political tensions in the Middle East have increase investors’ worries that some output could be disrupted.
On Wednesday, a US report showed a larger-than-expected decrease of 5.3 million barrels in US crude oil inventories. And on Friday, the US announced new sanctions on Iran as it accused the latter anew of supporting terrorism. Iran is the world’s second largest holder of oil reserves.
Another reason for the rise in oil prices is the weakening of the US dollar. The easing monetary policy of the US has weakened the US dollar, which in turn has diverted investment flows into commodities and oil.
Lastly, the prevalence of financial products and other derivatives is pushing oil and other commodity prices higher. Oil and other commodities, such as gold and copper, are now becoming an investment choice among funds with the introduction of exchange traded funds like United States Oil Fund (symbol: USO) and Street Track’s Gold Shares ETF (symbol: GLD).
According to the Bank of International Settlements, the claims on real barrels of oil rose nearly six-fold from December 2004 to June 2006 largely because of the rise in the notional value of oil derivatives held by financial institutions.
Did a Bernanke's PUT get leaked out to the Golf countries.
If oil is sold in US Dollar and the US Dollar were to get weaker then shouldn't Crude Oil price go up.
If the consumers do not have a problem paying for higher gasoline price until $10.00/gallon, then
should gasoline future not be at least $4.00/gallon by year end.
http://www.azerbaijannews.net/
story/294787
Gulf countries to keep currencies pegged to U.S. dollar
Despite the dramatic devaluation of the U.S. dollar in recent years, countries in the Gulf have voted unanimously to keep their currencies pegged to it.
Saudi Arabia, Qatar, Bahrain, Oman and the United Arab Emirates, members of the Gulf Co-operation Council, agreed Saturday to stay with the dollar. All are oil producers, and their major commodity is priced in U.S. dollars.
With Canadian Dollar going higher wouldn't Canadian oil be higher also.
http://630ched.com/news/news.cfm?dir
=business&file=b102804A&n=3
The Canadian dollar could be set to blow through its all-time high this week on a combination of U.S. dollar weakness, high oil prices and a strong economy.
Is it true, even if OPEC opens up the pumps there is no way OPEC can match the speed at which speculators can drive up oil price.
http://english.daralhayat.com/
business/10-2007/
Article-20071028-e676e62b-c0a8
-10ed-0004-6136f3cd0252/story.html
There are a number of reasons behind the rapid increase in oil prices. Some people say that the reason is OPEC members' failure to take the initiative to raise production to achieve the required balance between supply and demand in international markets.
In fact, there is no actual shortfall in markets; the current anxiety is due to the fear of a surprise interruption in future supplies, for political, climatic or industrial reasons.
The commercial oil reserve, especially in western industrial industries, stands at the average levels it has reached over the last five years.
The criticisms of OPEC by the International Energy Agency can be summarized as follows: OPEC states don't want to increase production enough to enable western industrial states to compensate for what has been drawn down from the commercial reserve in past months.
For its part, OPEC criticizes the role of speculators in oil markets, since their daily investments are estimated at tens of billions of dollars, while the scope of oil transactions that they deal with on a daily basis is dozens of times bigger than OPEC's level of production, and thus, their big impact and influence on oil markets are not matched by any significant responsibility for developing the industry itself.
If the US Federal Reserve created the money to finance the housing run up from 2001-04, then who created the finance from 2005 to late 2006.
Of course loans were sold to Wall Street, but Wall Street do not create money.
Forgery of money US or any other country is against the law.
Is it not through "YEN CARRY TRADE" that Wall Street were able to get this money thanks to BOJ.
http://seekingalpha.com/article/
51163-where-was-the-bubble-houses
-rates-or-credit?source=feed
House prices normally fluctuate in response to interest rate changes due to how they are financed.
But this only explains some of the pricing run up from 2001-04. It does not explain the next phase of price increases.
To do that, we have to understand how everyone in the lending community got so drunk on securitization they simply abandoned their traditional risk metrics and repayment concerns.
The assumption appeared to be that lenders could simply sell the mortgages to Wall Street to be securitized, without worries about delinquencies, defaults and foreclosures.
It is like the squirrels who try to gather the nuts before the great winter storm.
Most people do not see the storm coming yet, but speculators and hedge funds were the first to see it.
All speculators and hedge funds are doing when to do "YEN CARRY TRADE" are gathering all of the money that the governments are providing them before the big storm.
It is the two fundamental law of economic. "FEAR AND GREED" and "THE PATH OF LESS RESISTANCE"
Just remember, before a GREAT DEPRESSION can happen there has to be a great collision of many inflationary bubbles.
The seeds of the great collision is forming step by step as it is Uncle Benny turn to weaken the US Dollar to control the unwinding of the "YEN CARRY TRADE"
In order to do so he must low interest rate without colliding into differential that has created "YEN CURRENCY TRADE"
But the GREED of speculators and hedge funds will get in the way of Uncle Benny FEAR.
So it is it time for "YEN CARRY TRADE" to re-awaken providing the EXCESS GLOBAL LIQUIDITY to drive up equities and commodities markets around.
So lower the interest rate to zero, Uncle Benny let finish this end game.
http://paper-money.blogspot.com/
2007/10/housing-decline-spillin-
over-on.html#links
Economics, or the understanding of money, is one of the fundamental skills that are essential for any citizen who is to aspire to freedom.
Once the public understands money, the manipulative power of government is greatly reduced.
Money is objects which people tend to aspire to; just as is dinner, a coat, a car or a fancy bauble.
Governments change the amount of money available according to their own purposes.
Any person who sets up to produce more money, governments label ‘forgers’, then attack those people viciously.
However, the real forgers are the governments. They produce more money at will and with that money, they buy goods for the mere price of the printed paper or an edict to their controlled banks.
The paper they issue has no intrinsic value beyond the paper upon which it is printed.
Despite myths to the contrary, there is no good reason why any person should not produce a more reliable money backed by gold or by a basket of commodities.
The only factor standing in the way of such honest money is the power of the state, a power that the state is most reluctant to yield.
The reality of inflation is that governments steal money from their citizens with absolutely no intention of repaying that money.
They can do this to a great extent because most people cannot add up and because governments can project draconian force.
So why is Kirk Kerkorian investing in a commodity play.
What does Kirk Kerkorian see that other do not.
Could it be that commodity is next in play on a weakening US Dollar.
Is it time to start gathering you nuts.
Will the next free run up be provided by Uncle Benny.
http://www.nytimes.com/2007/10/27/
business/27offer.html?ref=
business
Kerkorian to Offer $1.4 Billion for 16% of Tesoro, an Oil Refiner
Tracinda, the company controlled by Kirk Kerkorian, plans a $1.4 billion tender offer to acquire a 16 percent stake in Tesoro, a United States refiner whose profit jumped tenfold in the last four years as gasoline demand and prices climbed.
The offer is $64 each for 21.9 million shares of Tesoro, which is based in San Antonio, Tracinda said. The price is 12 percent higher than yesterday’s close. Tesoro had its biggest share gain in almost five years.
The economy has fallen on hard time Uncle Benny, you better lower interest rate to zero.
While American companies give free perks to their employees, OPEC stays on the US Dollar peg to pay for it.
http://www.sun-sentinel.com/
business/sfl-flzperks1028nboct28,
0,4823406.story
Perks like this cropped up during the high-tech heyday in the 1990s, when companies were competing for the same talent
Memorial Healthcare System's employees can get an oil change and their clothes dry-cleaned without leaving work.
General Mills workers can skip traffic and long lines when they mail packages or get jewelry repaired.
And Ernst & Young staffers need only pick up a phone to have someone plan their vacation or research nursing homes for an elderly parent.
These workplaces are part of a growing number that are embellishing their benefits packages with "concierge services" — everything from flower deliveries and car detailing to restaurant reservations and clothes alterations.
Perhaps no company pampers its employees as much as Internet search leader Google Inc.
The Mountain View, Calif.-based company offers a diverse menu of perquisites that include three free meals a day, plus other on-site conveniences like car washes, oil changes, massages, haircuts, dry cleaning, child care and medical care.
The employees have to pay for some services while Google subsidizes others.
Uncle Benny importers are not worry about a weaker US Dollar so how about lowering interest rate to zero.
http://www.pittsburghlive.com/x/
pittsburghtrib/business
/s_534960.html
As dollar grows frail, importers not worried -- yet
Now, the greenback is worth a little less than the Canadian dollar (called "loonies" because the coins are stamped with a loon). But the currency exchange rate is hardly "changing anybody's shopping habits," Peck said.
Why haven't foreign growers and manufacturers of goods bound for America simply had consumers shell out more U.S. dollars? They don't want to lose a share of this nation's big, ravenous consumer market.
"BMW, Audi and Porsche all subsidize (sales) somewhat to keep the price of their cars competitive with the rest of the market over here," said Joe Scarfone, general manager of Sewickley Car Store, which sells such luxury imports.
The three German automakers sell their cars to distributors who pay in euros, the currency both parties use. But once the vehicle reaches U.S. shores, the importer or broker or dealer usually is paying in U.S. dollars.
Foreign automakers in recent years have set up plants in the states for that reason, so they don't have to pay extra dollars to import their vehicles into this market. BMW of North America, for instance, makes many of its BMW X-5 sport utility vehicles in Spartanburg, S.C.
"So, we haven't had to raise prices much," Scarfone said. "But they can't hold the line forever. (Imported cars) will become more expensive over time, if the dollar keeps eroding."
Honestly, this is what is going on in my mind:
http://youtube.com/watch?v=t8xufsr2log
Come on Uncle Benny lower interest rate to zero there is noting to worry about.
The "Super Cycle" could last 100 years
http://business.timesonline.co.uk/
tol/business/money/investment/
article2752253.ece
ONLY a handful of managers have succeeded in gaining entry to the 200% club, and over the next few weeks we will be talking to them to glean the secrets of their success and their views on the market.
To join the elite group, managers must have delivered returns of more than 200% over the past five years according to data firm Citywire. Where they run more than one fund, their average must be more than 200%.
First up is Ian Henderson of JP Morgan Asset Management, with an average of 261%. His £1.4 billion Natural Resources fund is up an astonishing 500% over the past five years, according to Citywire, and is the best performer out of about 2,000 funds over that period. His Global Financials fund has also more than doubled investors’ money.
Henderson is a City blue-blood. His great-grandfather, Lord Faringdon, founded Henderson Administration, later Henderson Global Investors; the family also set up stockbroker Cazenove.
“It’s like coming from an acting family; it’s natural to follow the line. I was investing from a very early age,” he said.
He firmly believes that the world is only at the start of a “super cycle” that could see commodity prices trend upwards for, he says, “100 years, maybe even 150”.
Unsurprising for the manager of a commodities fund, perhaps – except that he has been investing in the sector since starting in the City in the 1970s, and he took over the reins of the JPM Natural Resources fund, which has been running since 1965, in 1992, when commodities were deeply unfashionable. We talk to him about the outlook for the sector:
Why did you want to run a commodities fund, especially in the 1990s?
You know what the market is telling you Uncle Benny, but you are too afraid to do the right thing of getting rate back up to 5.25%.
So lower interest rate to zero, and make the markets happy.
Follow the path of BOJ, but just remember all those years of the GREAT DEPRESSION that you studied will come back to haunt you.
There can not be a GREAT DEPRESSION with the super collisions of INFLATIONARY Forces.
Now watch as you plant the seed of those INFLATIONARY Forces.
http://www.stockhouse.ca/
MediaScan/news.asp?newsid=
9451284
Treasury prices ended firmly down Friday and the yield curve steepened, with the market marching in virtual lockstep with equities in a topsy-turvy session.
Another 1,000 points day for the Hang Seng. That 1,086.75 points to be more exact.
Excess Global Liquidity is coming back in a big way.
If BOJ can not raise rate then flow of funds from "YEN CARRY TRADE" has to go somewhere.
US Dollar Index down last trade at 76.868 and Crude Oil up last trade at 93.15
http://www.marketwatch.com/news/
story/hong-kong-leads-record-run/
story.aspx?guid=%7BF6B3BF33-8C00-
491C-AC03-1BF5AD38EC68%7D
Asian markets continued to rally Monday, with indexes in Hong Kong, Seoul, Kuala Lumpur and Jakarta touching record highs while most other markets rose sharply on fund flows into the region.
The Hang Seng Index soared to a record high of 31,491.41 during the session.
South Korea's Kospi climbed to an intraday record at 2,066.23
Indonesia's Jakarta Composite rose to a record high of 2,669.52
Malaysia's KLSE Composite climbed to a record 1,411.19
Elsewhere, Australia's S&P/ASX 200 added 1.1% to 6,773.80
Singapore's Straits Times Index rose 0.8% to 3,800.41,
China's Shanghai Composite advanced 2.4% to 5,725.42
Taiwan's Weighted index climbed 1.8% to 9,807.78.
In Tokyo, the Nikkei 225 average rose 1.5% to 16,753.06
Why is Asian Market going up.
Excess Global Liquidity has to go somewhere.
Speculators are beating Hedge Funds to their short YEN position and buy Asian markets and gold future because Uncle Benny is on auto pilot.
http://www.financialexpress.com/
news/Spooking-investors/233387/
2
When risky borrowers find it easy to get credit, they are less likely to go bust, which makes them appear less risky. And when lots of investors buy illiquid assets, trading volumes increase, making the assets seem more liquid.
This trend can be self-reinforcing.
Borrowing to invest in higher-yielding or risky assets is one form of the ‘carry trade’. This was the strategy of obscure bodies known as structured investment vehicles (SIVs) and conduits.
They borrowed short-term and invested the proceeds at a higher yield, often in complex products linked to bundles of loans. The margin was their profit. Such assets offered an excess return to compensate investors for their illiquidity.
Both high yields and illiquid assets are also attractive to hedge funds, which have become the rising powers of the fund-management industry.
Because of the high fees they charge, hedge funds need to make big gross returns to deliver decent net returns to their clients.
Why are speculators and hedge funds still adding on to a losing posing.
http://www.theaustralian.news.com.
au/story/0,25197,22664579-643,00.
html
THE powerful American financial services group GMAC, half-owned by the car giant General Motors, is to spearhead a rescue bid for Britain's stricken mortgage bank Northern Rock.
GMAC is to play a pivotal role in the bid being put together by Cerberus, the secretive New York private-equity house.
Cerberus, which owns a controlling 51 per cent stake in GMAC, is one of three bidders now doing due diligence on Northern Rock’s books, alongside Virgin and JC Flowers.
Up to now GMAC’s involvement in the Cerberus proposal has been kept under wraps.
GMAC certainly has the fire-power to help finance the deal. At the end of its last financial year the group held more than $US287 billion ($A312 billion) in assets and earned net income of $US2.1 billion on net revenue of $US18.2 billion.
The business was formed 88 years ago to finance car dealer-ships, but it has since evolved into a bank, insurance company and lender for tens of billions of dollars’ worth of car, home and college loans.
Cerberus, which has built a reputation for buying distressed assets, bought its stake in GMAC last year for $US14 billion.
It has since sold some of the equity to powerful hedge funds, including Gabriel Capital, Seneca Capital and Durham Asset Management. They also have a seat on GMAC’s board and are keen to grow the business and make it less dependent on General Motors.
http://www.chron.com/disp/story.mpl/front/5244051.html
Chemist has standoff against police and then kills himself instead of letting his house foreclose.
Is it better to take a small lost now then to take a bigger lost in the future.
Is Blackstone Group trying to stick it to their foreign investors.
Did Blackstone Group get their play busted up by their foreign investors.
http://www.ft.com/cms/s/0/
f114f1e4-85bf-11dc-8170-
0000779fd2ac.html?nclick_check=1
The likelihood of the Blackstone Group abandoning an agreement to purchase a North American mortgage company is growing, despite the private equity firm's reputation for never walking away from a deal, according to people familiar with the matter.
The plan was for Blackstone and a unit of General Electric to pay $1.8bn (£880m) for the mortgage and fleet lease business of PHH, with Blackstone taking the mortgage business and GE the vehicle leasing business.
PHH is not in the subprime mortgage business, but the value of its mortgages have deteriorated since September, when PHH announced there could be a $750m shortfall in the debt financing from banks led by JPMorgan and Lehman Brothers.
If Blackstone chooses to walk away from the deal and is unable to blame the banks, it would be liable to pay $50m
Why add to a losing position when the US Dollar is going down.
Aren't Hedge Funds currently buying Collateralized debt obligations to make up their lost in US Subprime market.
Isn't Uncle Benny on auto pilot.
http://today.reuters.com/news/
articleinvesting.aspx?type=
bondsNews&storyID=2007-10-
29T050949Z_01_T354614_RTRIDST_
0_MUFG-SUBPRIME-UPDATE-2.XML
Japan's largest bank, said on Monday it would have to write down the value of its subprime-related investments by as much as 30 billion yen ($260 million), or six times more than previously announced.
The write-down, combined with losses at credit card unit Mitsubishi UFJ Nicos Co Ltd (8583.T: Quote, NEWS , Research), would likely cause the bank to fall 25 percent short of its full-year profit forecast of 800 billion yen, Japanese newspaper Mainichi Shimbun said on Sunday.
"There has been a report concerning our forecast, but nothing has been decided at present," MUFG spokesman Yusuke Fukui said.
The bank said appraisal losses related to the subprime mortgage market had likely ballooned to 20 to 30 billion yen as of the end of September, up from the 5 billion yen the group announced in August.
MUFG becomes the latest of several Tokyo financial institutions to announce greater-than-expected losses from subprime investments in the last week.
Shouldn't speculators and hedge funds reap the rewards of their risk taking.
Remember boys and girls Uncle Benny hates the poor.
http://www.chinapost.com.tw/
business/2007/10/29/128682/
Luxury%2Dgoods.htm
Luxury goods industry still a playground for private equity
The credit crunch has failed to put the squeeze on private equity's interest in luxury goods, said financiers, deal advisers and luxury goods executives at the World Luxury Congress last week.
Moreover, such is the demand among funds to enter the high margin, high growth sector they are considering a shift away from their traditional buyout strategy of acquiring control and may instead opt for minority stakes just to gain a foothold.
"Private equity is here, it is here to stay and it is going to buy up more luxury companies," KPMG Partner and UK head of consumer markets David McCorquodale told delegates.
Who does the SIV bail out really serve.
http://blog.mises.org/
archives/007363.asp
Remember that Citigroup, Bank of America Corp. and JPMorgan Chase & Co. have formed a superfund to bail out troubled structured investment vehicles (SIV). The US Treasury Department and Henry Paulson "back" this plan.
What it amounts to is another move on the part of the Wall Street-government partnership to garner market "confidence," salvage credit markets, and bail out the banks. Heck, even Greenspan has conveniently warned against "propping up" the market.
Warren Buffett opposing the bailout.
Why was Buffett in South Korea? He was visiting a company in which Berkshire Hathaway bought a large stake.
Buffett knows the dollar is toast and thus is very negative on the dollar.
He wants earnings and dividends in foreign currencies.
In the End it all points back to the reckless creation of money and the Inflation that will result from it.
http://archive.gulfnews.com/
articles/07/10/28/10163264.html
Titanic vs the Goldilocks scenario
Is the world economy a sinking ship? Or will this current storm produce a Goldilocks scenario, if so, where are the three bears offering free porridge and a bed for the world economy?
The likely fall-guys according to Delins would be "the financial innovators and the central banks that allowed the innovators to create such a destructive and infectious scenario".
"The Titanic-scenario trigger would be the realisation that the current credit crisis is an infection, and more widespread and deep than anticipated.
Banks would have to change the way they lend".
"We have to put the current status into perspective", says Delins. "This is probably a three out of five for panic; where October 1987 was a four; and 1929 was a five". As this space covered last week, buying equities at the nadir of the 1987 crash would have reaped rich returns by December of the following year.
"The Goldilocks view" says Delins, is one that would interpret current asset pricing as "normal re-adjustment, with losses being sustainable". Downward volatility rather than serious downward volatility.
"You would be overweight on emerging markets, you would probably prefer Europe to the US, and you might expect Japan to do better than it has up until now", says Delins for those who think the equity cup is half full.
Secondly, "commodities would become an opportunity, especially base metals, energy and precious metals", although the latter category gets the added endorsement of "in fact, the precious metals story works well in both the Titanic and Goldilocks scenarios", says Delins.
If the words "United States housing bubble" is in wikipedia does that mean the housing bubble exist.
http://en.wikipedia.org/wiki/
United_States_housing_bubble
The United States housing bubble is the economic bubble in many parts of the U.S. housing market that began roughly in 2001, especially in populous areas such as California, Florida, New York, the suburbs of Chicago and Detroit in the Midwest, the BosWash megalopolis, and the Southwest markets.
From NY Magazine. Interview with Pete Schiff and his description of the five threats to our economy. (sorry, tinyurl must be down, cannot access)
http://nymag.com/guides/money/2007/39952/
http://tinyurl.com/2hnsob
Great SeekingAlpha article on Countrywide.
FLASH:
Man commits suicide during standoff with police who were serving eviction notice on his forclosed house.
http://www.chron.com/disp/story.mpl/front/5244051.html
Does anyone believe that there will be a construction boom in San Diego after the wild fires? Maybe Miami needs what Miami realtors are praying for. A category 5 monster storm that will level the inventory. Oh well, we all have been told that it's different in South Beach.
Allow me to share an excerpt of a letter I received a few days ago.
“Dear …. . residents:
As many of you know we are facing very challenging times in the Florida Condominium marketplace. New building development has come to a standstill and Associations throughout the area are seeing an all time high in collection issues. As of October 22, 2007, the Association is owed $290,550 in late maintenance fees, special assessments and other charges. This is an increase of 270% over the same time last year. As a result, management and the board of directors are faced with many challenges including the current bad debt, the likelihood of future additional bad debt and fewer revenues from maintenance fees. Therefore, the 2008 budget increases the maintenance by 13% and contemplates a special assessment of $400,000.”
(I am omitting a bunch of stuff about hurricane insurance, etc. and how hard the board has worked to get the increase from 29% to 13%)
Here comes the kicker under solutions how to deal with the problem:
“More control on leasing – the Associations attorney has created an addendum that will be included with all leases that requires the owner and the renter to sign. This addendum states that if the owner becomes delinquent, the renter will be responsible for paying the maintenance fee to the Association.”
Desperate times do require desperate measures and I think the Board of Directors and the Association are going to be experiencing a lot more suffering to come.
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