November 18, 2007

BUBBLETALK - Open thread to talk about the housing crash and mortgage meltdown

Post article highlights (use for the link), random thoughts and word from the street here...

Yup, right on schedule, it's getting ugly out there (no matter what realtors on commission tell you)


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westwest888 said...

OK HP - call to action. 7% of people eligible to vote participated in the last presidential primary election.

We've got to make sure Ron Paul has the nomination for the GOP - he's the only sensible candidate. Doesn't matter if you hate republicans, or the President, or whoever. You're going to have to choose between two people and you can influence who those are.


Believe it or not, most primaries are OPEN PRIMARIES so you can vote for a republican and a democrat. Most of them will occur in February 2008. And 2% of people voting for Ron Paul can get him the nomination.

Anonymous said...

I luv u Keith

RiperDurian said...

He's got my vote.

After being a decline to state/Democrat my entire voting life I am now a Republican so that I may vote for the good doctor.

Anonymous said...

I'm a renter, newly relocated to NOVA, and sitting on the fence watching. I viisted a builder in late Sept about their townhomes selling for $550k. This weekend, a followup visit to the same builder on the same home, and the price has been cut to $490k. Wow, $60k discount in one month. At this rate, next summer will be 'normal' housing prices! LOL

PrinceHarry said...

Sunday, October 28, 2007

Impending Credit Market Supercriticality?

Last week some $75 million of "fed funds" (that is, interbank overnight credit) was transacted at a rate of 15%, and "a bunch" went through in the low to mid 7s....No, I didn't mistype that.

Yes, "EFF" (effective fedfunds) was right where "it should be" according to The Fed - across all transactions.

Now let's think about this one for a minute here folks.

"Someone" transacted a $75 million overnight loan that they needed to meet reserve requirements at an absolutely outrageous interest rate - about what you pay for credit card money. A bunch of "someone else's" transacted a bunch at 7-7.5%. They had the discount window available to them at 50 bips of penalty to EFF, which is a direct overnight loan from The Fed, but didn't use it.

There is only one possible explanation for this particular behavior - The Fed would not take the alleged "collateral" these institutions tried to put up, and the market didn't think it was worth much either, even on an overnight basis, and as such "the market" priced the interest rate similar to how Guido would for your "short-term" loan!

This raises the spectre of something truly terrifying in the credit markets - The Fed may be inches away from losing control over the FF Rate entirely! Indeed, for those transactions, they already have!

Welcome to the upcoming Financial Armageddon!


bradinsb said...

Yep very ugly houses here (Modesto,Ca) have gone from $450,000 new home in 2005. Today i saw new ones for $199,000.
I bet its not done yet im guessing around $125,000-$150,000 when its all done. A Realtor right down the road has the exact home (forclosed) for $359,000.

Stuck in So Pa said...

With all the desparate FB's out there, the Nigerian scam artists are hitting the emails big time.
I have gotten just about every conceivable variation of the classic money laundering flim flam in the last couple of weeks, and I don't have a toxic (or any) loan, and owe nobody, so I don't know how I got on the target lists?! Some of these repackaged old cons are quite innovative.
I wonder how many underwater suckers are jumping on the bait!

westwest888 said...

Ron Paul man of the people. Approachable and never forgets who he's working for (pictured right).

Anonymous said...

ABX in PANIC mode in October and crashing worse than July!!

Get long financials as a contrarian?! YEAH, RIGHT!!

Anonymous said...

I'm telling ya, the site has been shut down...

What the ????

Anonymous said...

This site is gone. Does anyone know anything?

getyourselfconnected said...

I think we will not see a bottom in any market anywhere when a site like this exists:

Stange site name. Call me crazy but soliciting to borrow money on the internet at rates well over 15% does not seem like a way to prosper to me!

Anonymous said...


We are starting a new for men only club called, the 'I'm over 40 and I've S**T my pants'

O.k ladies you too!


Anonymous said...

Are speculators and hedge fund managers the convenient whipping boy.

Pols Take Aim at Hedge Funds With Tax Bill

Listen to the comments:

Nobody has clean hands in this, and can anybody on Wall Street spell, much less define, fiduciary? But to make the leap to martyr status for the borrowers who lied on no doc loans, et al,and/or are math illiterate and cannot calculate that a mortgage consuming 50% of take home pay has no safety margin, or its corrollary, that house prices only go up is the stuff that Congress, who, under the threat of discrimination, virtually compelled lenders to make high risk loans is way too P.C.

Wow Johnathan put the pom poms down-Gordon Gekko and his hedge funds buddies don't need your help, they've had the fed, congress and the white house looking out for them. Yeah they got stuck but it's not their money. They got their 2/ free to boot! Not to worry Wall Street will just juice the book a little and everthing will be cool. They'll still be partying in the Hamptons while all those idiots who actually thought they deserved a home...will be cleaning someone else's.

While I beleive that hedge fund income should be treated as any other capital gain, the real problem with too many of these investment groups is the coordinated short selling that panics many small 401K investors into selling at the wrong time. These greedy bastards then scoop up stocks at rediculously low prices and then promote them up with additional purchases. The logical solution is to tax the hell out of their ill gotten gains or better yet, pass a law to put them in jail.

while i understand where your coming from, i disagree on your statement that your profits shouldn't be taxed. The rich have too long been hoarding money, while poverty-stricken people are dying of hunger. Right now, the rich have gotten a lot of tax break, and the poor haven't. It should be the other way around

While I agree with much of your story, don't you think you've got a bit of a conflict of interest here? Why should hedge fund managers receive unique tax breaks on their salaries? Their salaries should be taxed just like anyone else's.

SEC said...

How do you like this for desperation?,2933,306137,00.html

Anonymous said...

If Excess Global Liquidity is not going into US housing market then where can it go.

How about Vietnam

Real estate experts believe that the fact that Hanoi continuously organised land and house auctions in the last time was one of the reasons behind the skyrocketing land price.

People believe that the ‘land fever’ will flare up in big cities of the country.

Currently, price increases have been seen in a lot of projects in HCM City.

The land price in the areas nearby the Thu Thiem new urban area has reached a peak of VND50mil/sq m ($3,125).

Meanwhile, land in the An Phu-An Khanh new urban area is being traded at VND50mil/sq m, increasing by VND2-5mil over the previous month’s level.

The price of land plots in disadvantageous positions has also jumped from VND18-22mil/sq m to VND25-28mil/sq m. The apartments of Trung Son Company’s project, which were sold at VND18-24mil/sq m in September, are now trading for over VND30mil/sq m ($1,875).

Anonymous said...

The problem with Excess Global Liquidity is that it has to find a place to expand.

It can pop up anywhere and everywhere without government intervention.

The HCM City real estate sector is now witnessing a ‘virtual fever’, as described by Head of the HCM City Economics Institute Tran Du Lich, meaning that the price fever is not being caused by supply and demand imbalance but by speculation.

Anonymous said...

How do smaller countries cope with Excess Global Liquidity.

Oil, gold, food, construction material prices escalate

Prices of petrol, food, gold, fertilizers and construction materials have all gone up recently in southern Vietnam.

Dang Vinh Sang, CEO of Ho Chi Minh City-based Saigon Petro said his firm imported petrol from Singapore at $90 a barrel on Thursday. Due to the government cap on fuel prices plus import tax, Vietnamese enterprises are losing up to VND900 for one liter sold, he added.

As the price hike has been occurring only this week, “we are able to bear it” but if it continues into next month, Mr. Sang said companies would have no alternative but to seek government permission to raise prices.

Meanwhile, the world oil has risen over US$90 per barrel and is likely to reach US$100.

Anonymous said...

I was watching NFL games and noticed that USMINT.GOV was running commercials to buy coins.

WTF am I being paranoid or is this a sign of bad things to come.

Go Giants!!!!

Anonymous said...

Third quarter 2007:

17.9 million U.S. homes stood empty

128.2 million total homes

Thus 17.9 / 128.2 = 13.96% of homes are vacant

(1 in 7 homes in the U.S. is vacant)

Anonymous said...

If Federal Reserve lower Interest rate to much and destroy the differential that allow "YEN CARRY TRADE" to exist will Petro-Dollar come back in play.

At what point will "YEN CARRY TRADE" cease to be effected as the source of Excess Global Liquidity.

Can Petro-Dollar replace "YEN CARRY TRADE" as the liquidity pump to allow the Federal Reserve to continue lowering interest rate to reduce current credit crunch situation and allow speculator and hedge funds to borrow short and invest long (save SIV).

If the bet of weakening the US Dollar to prime up Petro-Dollar to replace "YEN CARRY TRADE" as the source of liquidity should fail will the World go back into a 1970 INFLATIONARY spiral or will Nationalism and high Tariffs come back to play before then.

Is the old Petro-Dollar strong enough the replace the "YEN CARRY TRADE" with all of its leveraging power.

Petro-Dollar leverage comes from higher Crude oil price.

"YEN CARRY TRADE" leverage comes from the currency differential controlled by the collaboration of US Federal Reserve and BOJ when they set interest rate.

Remember Speculators and Hedge Funds are like squirrels gathering the easiest NUTs that the foxes allow them to.

Is the new commodity CDO or Collateralised Commodity Obligations the new game in town.

The Indian economy, along with the world economy, is slowing down. But Indian stock markets, along with those the world over, are shooting up to record levels. Why? Because a trillion-dollar tidal wave is sweeping world markets, lifting all bourses regardless of immediate prospects.

Developing and OPEC countries are accumulating gargantuan foreign exchange surpluses. According to the World Economic Outlook of the IMF, emerging-market countries will have record current account surpluses of $690 billion in 2007, plus net private capital inflows of $495 billion. So, their forex reserves will shoot up more than a trillion dollars in 2007, followed by an estimated $800 billion in 2008. The world has never seen anything like it.

Anonymous said...

Why does Nationalism lead to higher tariff.

A currency depreciation is essentially an across-the-board discount on all of the products a country exports, because it make all of those products cheaper in terms of foreign currency.

What's more, it simultaneously increase the price of products that are imported from other countries. So it provides a two edged trade advantage - it makes the country's products cheaper to foreign customers, and it makes foreign products more expensive to domestic customers.

It has the same effect as putting a tax on foreign products while simultaneously subsidizing domestic producers.

In the years before World War II, countries of Europe managed to ensnare themselves in the vicious circle of competitive depreciation that led to trade protectionism and helped set the stage for violent conflict.

Knowing this information ask yourself why Paulson is asking India to stop the Iran-India pipeline.

Currently many countries buy oil (sold in US Dollar) from Iran, so why is an oil pipeline so important to a secretary of the US Treasury.

How can the world impose greater discipline on Iran and still buy oil from them in US Dollar, because all current method of delivering the crude oil effectively from Iran to other countries is currently done by sea control by the United States.

If Iran has a method to sell and deliver crude oil to other countries with out US involvement then it will be the beginning of the end of the US Dollar as the Reserve Currency of the World.

This is bigger then any Iran Nuclear threat or perhaps the real Iran Nuclear threat.

U.S. Treasury Secretary Henry Paulson will soon urge Indian officials not to move forward with a planned pipeline project that would bring Iranian natural gas to India, a senior Treasury official said on Thursday.

"We're hoping that India won't move forward on this," U.S. Treasury Undersecretary for International Affairs David McCormick told a news briefing ahead of Paulson's four-day trip to India.

"We think at a time when the world should be imposing greater discipline on its interactions with (Iranian) companies and financial institutions and the Iranian government more broadly, that this is not the right path forward."

Anonymous said...

The real estate salespeople can't understand why there isn't serious buyers willing to pay what they deem a deal .Did the realtors forget that they told buyers ,"real estate always goes up and you can refinance ?"

There are not very many buyers in this market . Don't the realtors remember that they already got everybody and their brother to buy a piece of real estate ,maybe two or three pieces of real estate .Now the realtors are going to have to wait for high school kids to be able to buy .

Anonymous said...

Is it a smart move for Iran to solely depend on China UN Resolution veto power before the completion of the India-Iran pipeline.

Would it not be a smarter move for Iran to offer better commercial terms to European oil companies until after the completion of the India-Iran pipeline.

Confronted by mounting U.S. and U.N. pressure, Iran has been steadily shifting its trade from West to East and, with the benefit of record high oil prices, is likely to be able to withstand the new U.S. sanctions, according to U.S., European and Iranian analysts.

China, a permanent member of the Security Council that can veto any U.N. resolution, is expected to overtake Germany as Iran's biggest trading partner this year.

Germany and other European countries had consistently been Iran's largest trading partners for more than a decade, according to the Iran Investment Monthly.

The U.S. Treasury said that more than 40 banks, mostly in Europe, have curbed business with Iran as a result of U.S. pressure, but smaller banks, Islamic financial institutions and Asian banks are likely to step in and replace the Western financial institutions through which Iran has long sold oil on the international market.

Oil traders said that Iran does an increasing portion of its petroleum sales in euros and yen, instead of U.S. dollars, and often through third parties, to help its customers circumvent U.S. financial sanctions.

European oil companies are holding off on exploration and production deals in Iran. Royal Dutch Shell, Total of France and Italy's ENI have held talks or reached preliminary agreements for new oil and gas projects in Iran in recent years.

But now they say they are unlikely to move ahead, in large part because of the commercial terms Iran is offering.

Germany and France have been slowly reducing banking exposure and government credit guarantees for exports to Iran, thus shrinking potential for losses in the event of a confrontation with Tehran.

Germany issued about US$2 billion of credit guarantees for trade with Iran in 2005, helping companies do business that might otherwise be too risky.

This year, the government said, the guarantees will drop to about US$715 million. France's embassy in Washington said French banks reduced their exposure to Iran from US$5.7 billion in December 2005 to US$3.8 billion a year by the end of 2006.

Anonymous said...

re all the vietnam bubble, this place is for sale on china beach , 10 million bucks comrade ?

Anonymous said...

Emerging Markets powering ahead with Child Labor. US Multinationals deeply involved. Shocking read...

Star India's 20% GDP from child labor.

nnj said...

From S&P/Case-Schiller out this morning (Tues):

"At both the national and metro area levels, the fall in home prices is showing no real signs of a slowdown or turnaround,” says Robert J. Shiller, Chief Economist at MacroMarkets LLC. “Year-over-year and monthly price returns are continuing to either move deeper into negative territory or are experiencing persistent diminishing returns. There is really no positive news in today’s report, as most of the metro areas are showing declining or vanishing returns on both an annual and monthly basis. Only two metro areas – Denver and Detroit – showed improvement in their annual returns and even those were reports of slightly less negative numbers.”

anon e. moose said...

The $915B bomb in consumers' wallets.
Americans have record credit-card debt and banks are starting to sweat an uptick in default rates, reports Fortune's Peter Gumbel. Why some fear this could be the next subprime.

area 51 said...

Hey, I thought this blog was called HousingPANIC, not AmateurEconomistPANIC.

Why don't you stick with housing news? And why do you neglect juicy housing-related headlines?

How about this?
"It's a sign of the times that, according to one survey last month, 6% of British homeowners have been using their credit cards to pay their mortgages. That's suicidal, of course, given that credit card interest rates are more than double even the heftiest mortgage. Keep your fingers crossed that it's not a trend that crosses the Atlantic."

Edgar said...

Hey Keith, You really think the gubbermint is going to prosecute the tan man? They just loaned him another $20 billion. Ha!

Blowlfy said...

I'm a renter, newly relocated to NOVA, and sitting on the fence watching.

corrected version:

I'm a dumb ass dip-shit sitting on a milk crate. I'm broke and cannot qualify to buy a home, condo or townhouse! I've been smoking too much weed to realize that I could have gotten a sub-prime teaser rate negative ARM mortgage and could have lived for free in a beautiful home for at least 4-5 months.

Too late renters! You can find some comfort that there is always more room under the causeways in South Florida.

Anonymous said...

Anyone out there have any data regarding international pullback from US markets? It seems to me we've really been dishonest with the world - our CDO and (subprime toxic) mortgage backed-securities that we hustled all over the globe has got to come back to haunt us. Oh, and of course, we sold this shit as AAA rated paper. I think this will be the next major shoe to drop - we have ruined our reputation.

Ed & Karen

Anonymous said...

Either Orangelo shut down or bought

This could be juicy!!

Inquiring minds want to know!

bob said...

You guys will just love this:

"I had wondered why, given the swift and brutal contraction of the commercial paper market in August and September, that there weren't more apparent signs of distress. Outstandings fell an eyepopping $368 billion.


Now the mystery has been unraveled. It turns out many mortgage-related ABCP issuers have gone to a lender of last resort, namely the Federal Home Loan Banks, which have extended $163 billion of loans to them."

Time to vote with bullets! The ballots are obviously not working!

getyourselfconnected said...

I liken the construction of the housing mortgage bubble to the construction of the first "Death Star" Alan Greenspan is of course the Emperor. Wall street stands in for Grand Moff Tarkin, and the NAR is Darth Vader. All is well until Bear Stearns Skywalker fires a proton subprime torpedo down and open CDO shaft, and kaboom!

Anonymous said...

did anyone see the story on KGO news (San Francisco) 10/30 about the mexican lady who has a house in South San Francisco who had starting payments of 2700 which is still ridiculous, she said she could handle that (I'll bet) but she got a letter saying her payments were going up to $8,200.00 and she doesn't know what to do she can't pay them. I say go to the grocery store and see if they have extra boxes cause I see foreclosure on the horizon. Say she get's her first notice of default probably in January. I don't know how to forward a story but I made sure people read it so they would believe me. Just go to I bet the story is there.

Anonymous said...

Do you realize the US mint has created and has been printing a new $1 coin like crazy this year.

I guess there is no inflation? LOL

Never has a $1 coin been released without the underlying paper currency decommissioned.

The is almost like life reflecting art in that after enough coins have been minted then the famous US Dollar will be done, just a piece of green paper.

Anonymous said...

The Seven Sisters need to talk to President Bush fast, otherwise they might actually need to start using gold to pay for their crude oil.

Japanese pay for Iran oil in yen

Japanese oil refiners have started paying for Iranian crude oil in yen instead of dollars. Japan’s largest oil refiner, Nippon Oil Corp., announced the change in September; Cosmo Oil Co. and Japan Energy Corp. followed suit in October.

How significant is it that more and more nations are ceasing to use the dollar to conduct international trade?

Since the 1944 Bretton Woods Agreement, the U.S. dollar has been the world’s primary reserve currency. As such, the dollar has been used by the majority of nations to pay for crude oil. The resulting massive demand for dollars has allowed the United States to accumulate trade deficits and fiscal debts without experiencing the negative economic impacts that such imbalances normally cause.

This past July, the National Iranian Oil Company (NIOC) General Manager Of Crude Oil Marketing and Exports, Ali Arshi, sent a letter to Japanese oil refineries requesting that all future crude oil shipments be paid for in yen. Three major Japanese oil refiners have already complied. Will other Asian oil refiners follow suit and move away from the U.S. dollar?

As the largest overseas holder of U.S. treasuries, Japan is a key supporter of the U.S. dollar. Yet Iran is Japan’s third-largest oil supplier. In the words of one Tokyo investment securities analyst, “What else can Japan do but accept the

[Iranian] request, once the oil producer sent its wish?”

Already, approximately 65 percent of Iran’s crude oil exports are based on the euro and another 20 percent on the yen. Iran is casting off the dollar and doing all it can to persuade the oil refineries of Japan to do the same.

Central banks in South Korea, China, Taiwan, Russia, Syria and Italy have announced plans to reduce their dollar holdings.

As nations and corporations turn their back on the greenback, the decreasing demand for America’s currency may cause its already weakening value to plunge to new depths.

Anonymous said...

Why is the India Iran pipeline so important.


Exxon, Mobil, Chevron, Texaco, Gulf Oil, Shell, British Petroleum

These non-Arabian oil companies were informally called "The Seven Sisters".

The Seven Sisters were also interlocked with eight of the largest banks in the country, and with each other: Exxon had ties to Bank of America, Chevron, and Texaco; and Mobil had ties to Exxon, Shell, and Texaco.

When six of the nation's major commercial banks held their Executive Board meetings, the directors of the top eight oil companies, with the exception of Gulf and Chevron, met with them.

They control what is shipped to the United States and how much is refined into gas and heating oil. Originally

They controlled 90% of crude exports to world markets by controlling every important pipeline in the world, such as the 753-mile TransArabian Pipeline from Qaisuma in Saudi Arabia to the Mediterranean Sea, which was owned by Exxon, Chevron, Texaco, and Mobil.

Exxon owned the 100-mile Interprovincial Pipeline in Canada and also the 143-mile pipeline in Venezuela.

The 799-mile Alaskan Pipeline was owned by British Petroleum and Exxon.

By controlling these and other vital arteries they can restrict the flow of oil, limiting supplies to refineries.

These companies also had joint ownership of major crude oil production companies throughout the middle east.

Anonymous said...

The Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline project is Good, but the Iran-Pakistan-India (IPI) gas pipeline project is Evil

Last year India joined Turkmenistan-Afghanistan-Pakistan gas pipeline, but Pakistan want to join the IPI.

This year Pakistan joined Turkmenistan-Afghanistan-Pakistan gas pipeline, but India want to join the IPI.

Have the Steven Sisters lost control of the middle east.

Last year news.

Ahead of the visit of US President George Bush, India has decided to join the US-backed Turkmenistan-Afghanistan-Pakistan pipeline to import natural gas to meet the fuel needs of its growing economy.

Officials said the pipeline from Turkmenistan would be more easier to implement than the Iran-Pakistan-India line as it already had the backing of the Asian Development Bank (ADB).

Moreover, unlike IPI, the project does not run the risk of being blacklisted for participation by US and European financers and companies.

US has been encouraging Pakistan to abandon the IPI project and consider TAP for meeting its gas needs.

edd said...

Ain't making no more land, oil,
atmosphere, ecosystems, or time.

Anonymous said...

Why is end game the yuanization of Hong Kong Dollar.

Why is Hong Kong one of the biggest hub for US Hedge Funds.

What kind of impact will the unwinding of Hong Kong Dollar have on the derivative market.

If China dump the US Dollar once the Hong Kong Dollar becomes pegged to the Yuan, what kind of impact will the yuanization of Hong Kong Dollar have on US Mortgage Backed Securities.

Hong Kong currency peg under pressure as investors pour money into booming stock market

The local stock market has also been buoyed by expectation of an interest rate cut in the U.S. this week. Property stocks have enjoyed rapid gains expecting Hong Kong banks to follow suit and lower their rate of lending, leading to cheaper mortgages.

However, demand for Hong Kong currency has lifted the interbank rate — the rate banks charge each other for loans — and that could mean local banks do not follow the U.S. cut, the South China Morning Post reported.

Some analysts have predicted that Hong Kong will eventually link its currency to the Chinese yuan, which switched its peg from the U.S. dollar to a basket of unnamed currencies in July 2005. Since then, the yuan has since appreciated from 8.3 to 7.5 to the dollar — a rate that puts it closer to the Hong Kong dollar's exchange rate with the dollar. That's fueled speculation Hong Kong and mainland China could move toward a single currency.

"The end game is ... the yuanization of Hong Kong," ING's Condon said. "Hong Kong's Basic Law requires that the Hong Kong dollar be linked to a convertible currency, and it's only a matter of time before the yuan is freely convertible."

Anonymous said...

Axel Weber reiterate ECB to raise rate on inflation concern.

European Central Bank (ECB) governor Axel Weber repeated Tuesday a warning that inflation could sweep across Germany and the eurozone, little more than a week before the ECB considers changes to its main interest rate.

"Risks remain oriented higher for eurozone price stability in the short and medium term," said Weber, who is also president of the German central bank or Bundesbank, in an address that was released in advance.

The main factors that could push consumer prices higher were food products and energy, Weber added.

"Increases in the prices of food and energy will push inflation clearly above the (ECB) limit in Germany and the eurozone by the end of the year," he warned.

The European bank has set a medium term inflation target of close to but below 2.0 percent, and on Monday, provisional figures showed it was stuck at 2.4 percent in Germany, the biggest eurozone economy.

Weber said the ECB limit would be breached this year and next, while the bank itself expects consumer prices to increase by about 2.0 percent each year.

Should inflation surge higher, "we will do whatever necessary to ensure medium term price stability, as our mandate calls for," Weber said.

Anonymous said...

Does the effective Fed Fund Rate support a rate cut.

If Federal Reverse cut Rate tomorrow what does "Strong Dollar is in US interest" mean.

10/29 Fed Funds Traded At Effective 4.84 and went as high as 5.25%

10/26 Fed Funds Traded At Effective 4.80 and went as high as 5.00%

10/25 Fed Funds Traded At Effective 4.86 and went as high as 15.00%

Anonymous said...

all i know is I thru bank deposits loan somebodY money to buy a house 10 years back and made a total of about 33 thousand gain and the guy I loaned the money to seems to be expecting more than a 120 percent gain...why would i lend there again especialy if i aM LOSING THAT 90 PERCENT PURCHAXE POWER......

Anonymous said...


Anonymous said...

Where will Excess Global Liquidity flow.

In the early Asian deals on Wednesday, the Singapore dollar trended higher against the US currency.

The Singapore dollar hit a new multi-year high of 1.4483 by about 8:25 pm Eastern Time, compared to 1.4503 late Tuesday in New York.

The Singapore currency then weakened slightly and the pair is currently worth 1.4494.

The Singapore dollar climbed to a decade high against the US dollar on speculation overseas funds will buy local assets, a Bloomberg report said.

Anonymous said...

Can Federal Reserve Chairman Ben Bernanke Stand Up to Wall Street

Remember all those stories about how the nose dive in financial markets was the first big test for Federal Reserve Chairman Ben Bernanke, the academic economist who was still developing his feel for the interplay between the central bank and Wall Street?

Well, it turns out that was only a midterm. The final exam begins today, when Bernanke will either show that he is capable of standing up to the insatiable demands of Wall Street, or that he is so spooked by the prospect of being blamed (unfairly) for triggering a financial meltdown that he puts the short-term interests of big banks and investment houses before the long-term interests of the global economy.

It's not a whole lot more complicated than that.

Anonymous said...

If we dress the US Dollar up as a Euro tomorrow, can we trick people to come back and buy the US Dollar.

westwest888 said...

Excellent post dated 04/2005.

"The recycling of money is in essence providing externalities in the form of a higher U.S. dollar than should otherwise be the case, lower U.S. interest rates than would otherwise be the case, much tighter credit spreads because foreign investors are such huge buyers of U.S. corporate bonds, and lower mortgage rates because they are also investing in U.S. mortgage-backed securities. And they obviously own a lot of Treasury and agency securities. So the U.S. has much lower interest rates generally. This process has led to artificially low interest rates, low inflation rates, and an overvalued currency, and it probably manifests itself in the domestic economy in much higher housing prices, so perhaps a housing bubble as well."

"...there would be a natural tendency, it would seem to me, for leaders of foreign countries to begin stockpiling assets that they might deem valuable in time of war. Just as the U.S., during an election year, refused to open the strategic oil reserve, then you would think there would be copycat countries that, if they had not already, would establish strategic oil reserves and fill them. In that event, you get precautionary demand for oil so that the oil comes out of the ground and goes right back in to the ground. The demand for oil looks very high and prices go up based upon not only commercial demand, but also actual precautionary demand and the speculative demand derived from this BWII system."

Anonymous said...


Anonymous said...

Anonymous said...
I was watching NFL games and noticed that USMINT.GOV was running commercials to buy coins.

WTF am I being paranoid or is this a sign of bad things to come.

Go Giants!!!!

October 30, 2007 3:58 AM


Slow down there Dr. Paranoid. Those ads have been around forever. I never understood who would be dumb enough to buy that shit. Then I read HP and answered my question...paranoid Ron Paul supporting loons like you.

Anonymous said...

How are everyone's CFC puts doing?
Yeah just as I thought.


Anonymous said...

To the person re Welfarism.../Gov
guarantees, etc. While I do believe
in a social safety network, because
face it, if you are in the lower 35%
in this country, where the minimum
wage was in the 2 to 3 dollar range in about 1980 and still hasn't reached $10, you literally cannot live on full time work at minimum

May I suggest you read, WHEN
David Korten, and as you do, realize the concentration of power
and wealth is worse. He used to
work for the International Money
Fund, promoting corporate agenda
in the 3rd world..

Corporate money has made the decisions we all live by.

I don't think the limits and
guarantees by the government
should be raised because I think
it's all toast. It's like the WTC
towers. Once hit, there
is no recovery, and in a short while the Financial Structures around which we have designed our lives are going to lie in rubble
and ashes. All the financial deals
of our lives are so intertwined, I
don't see how it's going to hold.
That's with still not knowing much
that is hidden, that will inevitably come out. No one will
trust anyone with their money, nor
want to risk the little they still

We could raise any limits we want,
restructure, write off..etc. It
won't save the day.

I'm not a gold bug, nor an investor, just an observor and
survivor of life, but I think the
end was written in the beginning when we went off gold, shifted lending rules, started doing creative graphic design with
accounting standards (because
accounting certainly has nothing
to do with real, provable numbers
anymore), and came up with the
concept of derivatives: and the
truth will remain...Oh, I forgot,
credit for everyone, all you want, all the time, with no
payup time in sight,ever. Let's do
credit and flipping and leveraging,
and spending, and merging, always,
shall in some strange
fairy tale...People, people, aren't
you sick of this slick society yet..It's as if America has a "combover" cover up mentality. Our lives have become a bad used car commercial, and we're stuck on the lot, listening over and over to the same schtick. Gagggggghhhhh

You can't run away from accountability and responsibility
in life. And you sure as heck
can't charge your way out of it,
because that's not real money until
you work for it, plus taxes.

PKK (grandma)

westwest888 said...

Wow, Fed made "housing correction" sound like a bad thing right in the minutes. Seems honest..

Anonymous said... calm down and take some Valium. The Fed just lowered to 4.5% to bail out the housing gamblers and banks. Of course, this makes me earn even less interest on my money. What a great time it is to be in debt, I suppose, since debt is now rewarded and saving is punished.
Ben obviously doesn't care about double digit inflation whatsoever.
And lets not mention foreign capital flight. Asia is going to bail on us.


Anonymous said...

FFR and discount rate down a quarter-point.

Bernanke is a shill.

We need another Voelker.

Anonymous said...

Oil it at 94.5 and climbing...
But the economy is doing great, according to gov't statistics.

Edgar said...

It saddens me to say this, but the U.S. gubbermint has become the enemy of the honest American. It won't surprise me in the least if the military is turned upon the U.S. public. Heavy bombardment and helicopter machine gun fire coming soon to a city near you.

bickerer said...

I don't get it. Didn't a report come out this morning saying the economy grew at 3.9% (if you believe that kind of thing).

So why the rate cut?

Anonymous said...

to all the bitter renters of the world:

Once again you lose.

mark said...

I always thought the prices of real estate in california were rediculous. I watch the show Flip that House and I saw a couple of dudes on there buy a 950 sq. Ft. house for almost 300K and sell it for around $450k. The whole idea id stupid. They did a crappy job on it too. and some moe-ron boought it. What a dork.

Anonymous said...

It is probably a good idea for GM, Ford, and Chrysler to rethink their strategy.

American like their SUV, but they also want a large SUV that can push out 29 MPG and 400 HP.

Technology like "Direct inject," Dual-charger (supercharger-turbo combination), Hydraulic Lunch Assist, and reduce unsprung weight need to be incorporated in large American SUV.

Reducing unsprung weight could mean using special material like what is used in rotating parts of the corvette LS7 engine, what is used on high performance car such as Baer 6S MonoBlock Extreme brake system or such as light weight CNC wheels like those from HRE.

American auto manufacturers should take a page out of 1970 history and learn from the Japanese.

With the weaker dollar, American Auto manufacturer should start building special Cadillac Escalade and Lincoln Navigator and sell them oversea to give Porsche, BMW, and Mercedes some real competition.

Then once the technology can be cost effective bring them into the American market.

U.S. oil for December delivery rose as high as $96.24 a barrel in electronic trade.

Oil leaped nearly 2 percent to top $96 for the first time on Thursday, extending the previous day's 5 percent surge after an unexpected sharp fall in U.S. crude stocks

The rise toward oil's inflation-adjusted peak of $101.70 from April 1980 was also supported by a drop in the U.S. dollar, which fell to record lows against the euro after the U.S. Federal Reserve cut rates by a quarter percentage point.

Anonymous said...

How many of you would like to live the life of Chicken Littles.

The Chicken Littles: At the moment these guys are, to mix my metaphors, in the catbird seat. They dominate the financial newsprint and the punditocracy, although consistency is not their strong suit.

Sometimes they say we’re heading toward high inflation, but at the same time they maintain we’re in the throes of a huge housing-price drop (which would be deflationary).

They worry about the dollar falling while they sweat over rising imports (even though falling dollars are supposed to cut imports).

They say people have too much debt (which they call “leverage”) and then worry that the “negative wealth effect” of a housing slump will cause people to stop spending as much.

They worry one day that the mortgage industry says “yes” too often (leading to more sub-prime worries) and the next that the mortgage industry says “no” too often (darkening the outlook for the homebuilding sector).

They’re stuck on a permanent loop of doom that’s built of varying and often contradictory rationales.

But don’t hate the Chicken Littles. Pity them. How’d you like to live like that?

Anonymous said...

How much retirement and pension plans money was really lost.

State Street sued over bond fund losses

Institutional money manager State Street Corp. now faces three lawsuits over its management of bond funds that were touted for their conservative investment strategies, yet posted losses over the summer because of risky holdings tied to the subprime mortgage industry.

Managers of public employee funds in at least two states that suffered losses are following the litigation closely but have yet to file their own complaints.

The latest lawsuit was filed last week in federal court in Boston by Nashua Corp., a Nashua, N.H.-based maker of paper and imaging products, against State Street's investment arm, State Street Global Advisors.

State Street also was named in similar lawsuits filed earlier in October by Prudential Retirement Insurance and Annuity Co., a manager of retirement plans, and by New York-based publisher UniSystems Inc.

Nashua lost $5.6 million by investing company pension funds in State Street's Bond Market Fund, due to the fund's "overexposure in mortgage-related securities," according to the lawsuit.

Nashua's complaint seeks class-action certification, which could allow other companies that invested in certain State Street funds to join the case.

"As a result of State Street's misconduct, hundreds of millions, if not billions, of dollars have likely been lost through retirement and pension plans that invested in the bond funds," the lawsuit says.

Anonymous said...

Why was Deutsche Bank not impacted by US Subprime Credit Crunch.

Is the German Bund a safer haven then the US Treasury.

From July to September, the German bank's net profit grew by 31 percent to 1.62 billion euros (US$2.34 billion), exceeding an estimate provided earlier this month of 1.4 billion euros.

Deutsche Bank, the biggest private German bank, posted a stronger third quarter net profit Wednesday as one-off items and retail and asset management operations helped it pull through a global banking crisis.

Euribor futures -- a gauge of euro zone interest rate expectations -- and the German Bund future fell after data showed annual euro zone HICP inflation unexpectedly spiked to 2.6 pct in October from 2.1 pct in September.

The reading is well above expectations for a more moderate gain to 2.4 pct and provides justification for the way in which European Central Bank officials have continued to express concerns about rising inflationary pressures despite the economic slowdown resulting from the recent credit crunch.

The news will keep intact expectations that euro zone interest rates will not be cut any time soon and put the possibility of a further hike back on the agenda.

Edgar said...

A total of 446,726 homes nationwide were targeted by some sort of foreclosure activity from July to September, up 100.1 percent from 223,233 properties in the year-ago period, according to Irvine-based RealtyTrac Inc.

The current figure was 33.9 percent higher than the 333,731 properties in foreclosure in the second quarter of this year.

There was one foreclosure filing for every 196 households in the nation during the most recent quarter, RealtyTrac said.

nnj said...

From Yahoo finance today.

"Now That Housing Has Soured, Renters Are Glad They Didn't Buy"

Its nice to see articles like this make their way onto popular channels like Yahoo.

Added bonus: Housing Panic is mentioned in this article! Its linked.

LauraVella said...
This comment has been removed by the author.
LauraVella said...

Keith, Housing Panic is linked in the article...check it out.,-Renters-Are-Glad-They-Didn't-Buy;_ylt=Ak4.Jd1kFgnfXMbtDFXEXSq7YWsA

Anonymous said...

SEC Charges Countrywide Executive With Insider Trading
As the Securities and Exchange Commission (SEC) conducts an informal probe into some questionable trading by Countrywide CEO Angelo Mozilo, regulators formally charged former executive Quan Zhu with insider trading at the same company.

Anonymous said...

Keith, et al:

Want to know what's going on in Washington's back yard? In Fairfax County, VA the nation's wealthiest county, even the "haves" are feeling the pain of this market. Here is the article in the local paper; it's a bit long, but worth the read

Marky Mark said...

“‘The Fed’s forecasting record is in tatters, the dollar is in tatters and inflation expectations are ticking up,’ said Nick Parsons, chief market strategist at nabCapital in London. ‘They are now in danger of losing control of every part of the yield curve from overnight out to 10-years.’”

“‘Losing control of Libor may be unfortunate, but losing control of official rates is potentially disastrous,’ he said.”

“Whether he carries part of the blame or not, former Fed chief Alan Greenspan said this month he believes central banks, including the Fed, have struggled for years to influence long-term rates central to the pivotal housing boom and bust.”

“‘Central banks have essentially lost control of markets beyond 3, 4, 5 years out,’ Greenspan said.”

“Even if you believe the leading central banks are still in charge Thomas Mayer, chief European economist at Deutsche Bank, says the dilemma they face is that ‘there is no nice, middle way.’”

“Helping debtors repay is one thing, but if inflation erodes the value of those repayments, creditors will demand a price that will lead to higher borrowing costs.”

“‘If financial markets wake up to rising inflation — then we have a problem,’ said Mayer.”

Thu Nov 1, 2007 8:59 AM BST
Reuters UK

nnj said...

Oy vey! "Realtor Ads Make A Positive Pitch"

Since sales and prices continue falling, its a great time to buy a house. Just to keep my common sense in check, if prices continue to fall, shouldn't I wait so I can spend less?

Anonymous said...

Mortgage Brokers now in a panic that their careers are coming to an end with congress moving to ban YSP.

Lets collect some Raman for Mortgage Brokers. They will need it soon.

area 51 said...

Anonymous 6:21,

I noticed the same thing....

W.C. Varones said...

WaMu to borrowers: Please, rip us off! We'll even help you get a phony appraisal!

Vectorz said...

LMAO , Realtors now being beaten to death!

Anonymous said...

Did anyone else see this? I have not seen it in on Bloomberg or Marketwatch- although, I haven't read any of the other articles in which it may have been mentioned.

From the Buffalo News...

The Federal Reserve Bank of New York, which carries out the central bank's open market operations, moved Thursday to inject $41 billion in temporary reserves into the U.S financial system. It came as part of ongoing efforts designed to ensure that the markets - which have suffered through a period of turbulence over the last few months - function smoothly. The cash infusion came in three separate operations.

A New York Fed spokesman said it was the largest single day of operations since $50.35 billion was pumped into the system on Sept. 19, 2001, following the terror strikes on New York and Washington. He declined further comment. said...

Well, some real estate agents obviously think they should be able to throw up a sign and earn a commission.

On the other hand, there are a few hard workers that are knowledgeable about short sales.

Short sales and workarounds -- and not repackaging loans with 13% ARMS -- is the answer.

On my site this month, I'm offering FREE audio files from a real estate professional about Short Sales:
Go to to check it out.

Anonymous said...

WaMu need to be stopped. They cooked their own books and now the SEC and other banking regulator need to SHUT THEM DOWN.

ZZwcck said...

Not sure if you've already noticed the story about the FHLB picking up loans from the Countrywide and WaMu, but how stupid are the people running FHLB???

I wonder who was dumb enough to buy the FHLB backed bonds.

bickerer said...


Stop the Idea spam, please!

Anonymous said...

What does six of one and half a dozen of another really mean.

Think about that deeply, before you answer BOJ.

Hedge funds bounce back from past market turmoil

Hedge funds have historically shown the ability to recover more quickly than global debt and equity markets in the 12-month period following financial turmoil, according to Credit Suisse/Tremont, which examined the effects of five crises on hedge funds and world financial markets.

"Although there are certain sectors that fared better than others during such periods, it is unclear whether one hedge fund strategy is more resistant to market shocks than others," concludes the report.

"However, as an asset class, hedge funds have remained less volatile and have retained positive performance throughout most crises."


During the Asian financial crisis in mid-to-late 1997, Tremont's hedge fund index returned 23.62% from July 1997 through June 1998.

Emerging markets suffered the most, down -17.6% during the same period. Other strategies such as global macro and long/short equity returned 40.5% and 26.1% respectively.

Anonymous said...

Was the roman emperor Nero a musician or an artist.

Speculative demand for Hong Kong dollars arising from 'unfounded rumors' pertaining to the local currency's peg to the US dollar prompted the Hong Kong Monetary Authority (HKMA) to take action yesterday to defend the peg, HKMA chief executive Joseph Yam said.

He reiterated that there are no plans to change the currency peg or widen the Hong Kong dollar's trading band.

The Hong Kong Monetary Authority (HKMA) said it sold a total of 6.2 bln hkd of the local currency today in four transactions to defend the Hong Kong dollar's peg to the US dollar.

The territory's de facto central bank sold 775 mln hkd and 1.55 bln hkd in two transactions on the foreign exchange market in the evening after selling a total of 3.875 bln hkd in two other deals earlier in the day.

The HKMA bought US dollars in its bid to curb the local currency's rise and keep it within the allowable range of 7.75-7.85.

Foreign exchange analysts said HKMA's latest intervention in the forex market is expected to increase the aggregate balance in the clearing accounts and reserve accounts maintained by commercial banks with HKMA at some 8.99 bln hkd by this Friday.

The Hong Kong dollar neared the top end of the trading band at 7.7504 late today compared with 7.7505 late yesterday.

HKMA sold a total of 1.55 bln hkd on Tuesday and Friday last week.

Anonymous said...

Ever seen that old commercial

Who fault was it, I know lets blame Mikey.

Mikey did it.

The recent turmoil in global financial markets - and the liquidity and credit crunch that followed - raises two questions: How did defaulting sub-prime mortgages in the American states of California, Nevada, Arizona, and Florida lead to a worldwide crisis? And why did systemic risk increase rather than decrease in recent years?

Blame should go to the phenomenon of "securitisation." In the past, banks kept loans and mortgages on their books, retaining the credit risk. For example, during the housing bust in the US in the late 1980's, many banks that were mortgage-lenders (the Savings & Loans Associations) went belly up, leading to a banking crisis, a credit crunch, and a recession in 1990-1991.

This systemic risk - a financial shock leading to severe economic contagion - was supposed to be reduced by securitisation. Financial globalisation meant that banks no longer held assets like mortgages on their books, but packaged them in asset-backed securities that were sold to investors in capital markets worldwide, thereby distributing risk more widely.

What went wrong? The problem was not just sub-prime mortgages. The same reckless lending practices - no down-payments, no verification of borrowers' incomes and assets, interest-rate-only mortgages, negative amortisation, teaser rates - occurred in more than 50 per cent of all US mortgages between 2005 and 2007. Because securitisation meant that banks were not carrying the risk and earned fees for transactions, they no longer cared about the quality of their lending.

Indeed, a chain of financial intermediaries now earn fees without bearing the credit risk. As a result, mortgage brokers maximise their income by generating larger volumes of mortgages, as do the banks that package these loans into mortgage-backed securities (MBS's). Investment banks then earn fees for re-packaging these securities in tranches of collateralised debt obligations, or CDO's (and sometimes into CDO's of CDO's).

Moreover, credit rating agencies had serious conflicts of interest, because they received fees from the managers of these instruments. Regulators sat on their hands, as the US regulatory philosophy was free-market fundamentalism. Finally, the investors who bought MBS's and CDO's were greedy and believed the misleading ratings. Nor could they do otherwise, as it was nearly impossible to price these complex, exotic, and illiquid instruments.

Anonymous said...

Are those German Bunds beginning to be more appealing

The yield advantage for holding German two-year bunds over similar-maturity U.S. Treasuries widened to the highest since April 2004.

Credit Suisse Chief Financial Officer Renato Fassbind in an interview with broadcaster CNBC on Thursday said that its exposure to collateralised debt obligations remained minimal.

Anonymous said...

Are vultures still buying run down office buildings and hotels using Commercial mortgage backed Securities(CMBS) saying Yeah baby, "make an easy dollar mortgage lenders" and "Uncle Benny" to the rescue.

TRADERS who bet against the US residential mortgage market ahead of the subprime crisis and won are now setting their sights on the commercial real estate sector.

Hedge funds and other traders that have profited from huge drops in an index tied to home mortgage loans made to people with weak credit are now aiming at sister indices based on loans for office buildings and hotels.

Anonymous said...

Will there be a scorecard for CMBS

The Litigation Scorecard. Action has been fast and furious

* October 30 - Merrill Lynch (MER) hit with shareholder lawsuit

* October 30 - Mozilo and Countrywide (CFC) hit with shareholder lawsuit

* October 25 - American Home accuses Lehman Bros. (LEH) of hitting American Home below the belt with improper margin calls in July and demanding money the company says it did not owe.

* October 24 - A couple sues New Century for illegal procedure in loan disclosure documents

* October 24 - HSBC sued by Canadian firm Aastra Technologies Ltd. over asset-backed commercial paper investments. Aastra's puck (assets) have been frozen since August.

* October 23 - American Home is accusing Bank of America (BAC) of reneging on swap agreements in a high stakes Euchre Game. American Home seeks $25 million for the reneg.

* October 19 - Luminent Mortgage Capital Inc. (LUM) is seeking a penalty kick in an international soccer match with HSBC.

* October 18 - Book publisher Unisystems Inc., on behalf of all all retirement plans that invested in State Street-managed bond funds sues State Street (STT) for being offsides in an investment gamble by investing pension plan funds meant for low-risk investments into high-risk mortgage-backed securities

* October 06 - Fremont sued by Massachusetts attorney general for predatory lending encroachment

* October 02 - In a battle between middle-heavyweights, State Street (STT) was Sued by Prudential (PRU) Over Subprime Losses

Anonymous said...

Let's paint the town GREEN - No RED

Remember the August job numbers.


Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.9 percent in the third quarter of 2007, according to advance estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.

The Bureau emphasized that the third-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3).

The third-quarter "preliminary" estimates, based on more comprehensive data, will be released on November 29,

Anonymous said...

As long as the US Dollar stays weak all GM needs to do is pound away, and go after German Auto giants like what Japan did in the 1970 in America.

General Motors Corp. saw new car registrations in Europe rise 6.3% on the year in September

GM's September registrations in Europe rose to 158,885 vehicles, fueled by a 12% increase on the year for its Chevrolet brand to 18,901 cars.

Anonymous said...

The Sun Also Raise

Unless the US Dollar goes through and experiences changes it will never come home to serve its community.

Canadian dollar skyrocketting once again against the U.S. dollar in the wee hours yesterday morning.

Anonymous said...

Do season bankers remember history better then green bankers, or did the business schools throw always all of the history books.

Weren't history a require reading for the new generation of business majors.

Did all business schools started making up their own history during the dotCOM years and taught that economic fundamentals do not apply in the new economy.

New York Attorney General Andrew M. Cuomo is suing a home-appraisal unit of First American Corp., alleging it defrauded consumers by allowing its biggest customer, Washington Mutual Inc., to exert pressure for higher property valuations to help ensure that loans went through.

The case marks one of the highest-profile government actions yet to assign blame for the mortgage crisis that is causing havoc in the financial markets.

The 31-page complaint, filed in state court in Manhattan, alleges that eAppraiseIT LLC, a unit of Santa Ana, Calif.-based First American, allowed Washington Mutual loan originators to "handpick" appraisers who brought in high valuations and permitted bank employees to pressure them to increase estimates that came in too low.

In one example, New York state said eAppraiseIT lifted its estimate of a property to $2.3 million from $1.6 million after the company was told by Washington Mutual the higher number would help the loan go through.

Anonymous said...

Anyone buy any Germany Bunds lately.

Germany Stocks DAX Index Rises

The index of 30 companies traded on the Frankfurt Stock Exchange rose.

Gains in the DAX were led by Deutsche Boerse Ag, Siemens Ag and Man Ag. About 2.16 million shares traded in the DAX.

Anonymous said...

Is Money just function of time.

Is it time to buy German Bund.

Anonymous said...

Are there no end were your Commercial Mortgage Backed Security (CMBS) can go.

Garages go sky high

You can now park your limo beside your penthouse in Manhattan

For years, freight trucks have been hoisted by industrial elevators up and down lift shafts of business buildings, but safety concerns always blocked residential apartments from doing the same.

Now 200 Eleventh Avenue, a new skyscraper overlooking the Hudson river, has clearance for 14 of the 16 apartments to have their own garage, hidden in the middle of each floor.

Residents drive into an elevator on the ground floor and are lifted to their apartment level.

No grubbing around for parking spaces, no hoisting bags and buggies.

No worries about being mugged by workers at the sinister car mainteance businesses at the end of the street or the edgy sculptors and painters who live in neighbouring Chelsea loft apartments.

Anonymous said...

Any one ever heard of the words TED Spread.

TED as in 3 months US Treasury over Eurodollar.

CME Group, the world's largest derivatives exchange, said on Thursday that average daily trading volume in October dropped 18 percent from September.

Activity in CME's biggest contract, Eurodollar futures, was down 7 percent from a year ago to about 1.9 million contracts a day, and Eurodollar options volume dropped 15 percent from a year earlier.

Eurodollar contracts are used to bet on or hedge against changes in Federal Reserve interest rate policy.

Anonymous said...

Wayback Machine still has online copies of

Here is the copy dated JULY 14 2007:

Interesting stuff.

Anonymous said...

GF is getting/hearing that slow hissing sound of her conversion condo's value dropping. She buys a conversion condo in a posh part of metro DC at the height of the bubble w/ a toxic loan. She did put 20% down and has 4 more years to go before the arm adjusts, but is not paying down principal and is not saving for the refi. Always at least a 1/2 dozen lock boxes out front, yet the place has only been a condo building for a little over a year. Unit down the hall goes for less than hers. Unit next door goes into foreclosure. Now the unit across the hall has a lock box on it, all in a 6 month time frame and all this activity is occuring w/ the place being a condo for less than 2 years. Association has lawsuits against the former owner/converter because they cut corners. GF revealed to me that the price she quoted me was w/ her upgrades and she thinks the one that undercut hers did not have any upgrades. I said in this market upgrades are just a bonus for the buyer who is will to take the risk. Place is a one bed, one bath with no parking so it will never be anything more than an investment property if she does move out. My rent for a 3 bedroom, 3 level TH w/ 2 surface spaces is less than her I/O mortgage payment (i.e. no "P" in the PITI) on the condo and w/o her parking and condo fees!!! She counters that she gets a tax break, I counter add in the fees and thats gone and your losing equity as every day goes by and I am gaining as I wait this out for at least the steepest years of decline.

Stuck in So Pa said...

Here's a great link to a good article about my favorite breed of scum, the "Zombie Collection Agency". I have never been in the situation, but I have a close friend who has. Now they are so big they trade on the NYSE!

Anonymous said...

As the 6:30 a.m. ferry was coming into downtown Seattle on the morning of Oct. 31st, we all saw that WaMu’s headquarters building’s lights were out, except for windows lit to form a picture of a Jack-o-Lantern on the side of the building.

I noticed that one of the triangular-shaped eyes appeared dimmer than the other. Apparently, WaMu does indeed have a black eye.

Anonymous said...

From the Washington Examiner...

Regarding Alexandria, Virginia...

Older Latinas, in particular, have getting pregnant at a far higher rate. Nearly half — 434.8 per 1,000 teens age 18 and 19 — got pregnant in 2005


Anonymous said...

Again from the Washington Examiner...

Check out the apt name of the business....

A Prince George’s County judge on Thursday froze the assets of a Laurel business that he ruled took about $50 million from more than 1,000 people.

Circuit Judge Thomas P. Smith ruled that POS Dream Homes was running an unregistered investment scheme disguised as a mortgage payment plan. He froze the company’s assets, placing it under the financial control of the...

Anonymous said...

saw a somewhat beautiful used sports car, that was at a price that seemed to negate about 15 years of inflation in auto prices.....

Anonymous said...

for a barely used 4 year old auto.....from a dealer

Anonymous said...

just buy the thing and next week non the matter the POS will be worth more {in your mind ahole)

Anonymous said...

Should we return back to the gold standard.

Gold jumped over 12 dollar today
to break 800 level.

Gold at 803.1

Anonymous said...

Markets players fooled by the fake robust jobs report propelled the DOW high, but the DOW sold off hard as the vultures realized the the US Dollar was not going to be tricked this time and the vultures covered their positions.

Anonymous said...

How much longer can Chevron hold the price back at the pump, before losing more profit

Chevron Corp.'s third-quarter profit plunged even further than analysts feared, driven by the second largest U.S. oil company's inability to recover its higher refining costs at the gasoline pump.

Anonymous said...

Will other gas companies follow Chevron and cut profit margin.

Crude oil may rise next week on speculation that OPEC won't increase production as fast as consumption grows this winter.

Twenty-one of 35 analysts surveyed, or 60 percent, said oil prices will rise through Nov. 9

Anonymous said...

At what point must the Federal Reserve stop defending the Fed Fund Rate by sacrificing the US Dollar.

The Federal Reserve pumped a total $41 billion to the U.S. financial system in three separate operations Thursday, amounting to the largest injection of funds since the liquidity crisis took hold this summer.

The size of the injection may come as a surprise, coming just a day after the central bank delivered its second consecutive rate cut. Wednesday's 25 basis point cut -- which brings the target rate to 4.5% -- follows a half percentage-point drop in September, which was intended in part to help ease stubbornly high lending rates in the interbank market.

Anonymous said...

Jesus Christ the US dollar is now worth only Canadian $0.93

That has never happened in the last 100 years

Anonymous said...

Gosh, for how long have I said it's all about the derivatives markets???

Citi down, Goldman down, MER down, WM down, B of A down, all on the same reason: rumors off mass writeoffs coming for CDO holdings. See, here it is in a nutshell soon they all have to find some auditor, presumably high on coke & pot & glue, to approve their books. This means approving the marked value of the pretty cdos, which are based on real estate prices, which are falling. Thereby the resale market for the cdos has frozen. So, the geniuses they are, with one of their own, Paulsen, in charge of the Treasury, have floated a SIV bailout, where they establish a market by selling the frozen cdos to each other at face value, establishing a market. BUT THAT'S A SHAM MARKET. It also has yet to work. So, with each passing day the deadline for SarbOx compliance grows closer and the financials selloff more.

Oh wait, what's this? Citi holding a special board meeting this weekend...

Anonymous said...

IF the euro's value is in line with fundamentals, then shouldn't German Bund be the new safe haven

New International Monetary Fund chief Dominique Strauss-Kahn on Friday maintained the official IMF line that the dollar is overvalued and the euro's value is in line with fundamentals.

"When you look at the mid-term external balances, with the high (U.S.) deficit, which is falling, the view we have ... is that the dollar is still overvalued and so it is no surprise to see a declining dollar. It is in line with what the fund is saying," Strauss-Kahn told reporters.

At his first news conference since taking the reins of the IMF on Thursday, Strauss-Kahn also said the fund did not expect the slowdown of the U.S. economy to lead to a recession.

"We don't see a reason for a recession in the U.S. nor in any other economy," he said, adding that emerging economies were performing strongly.

Anonymous said...

All in one bill HR3915

What is the worst of two evils to support a bill that helps flippers get out of foreclosure or one that take profits away from mortgage brokers.

NCRC CEO John Taylor says a few words about Rep. Barney Franks House Bill 3915, an anti-predatory lending bill and why it is so important.

Why are mortgage brokers so against this new HR3915 bill that they want to sign a petition against it.

One of the big provisions of HR3915 is to outlaw Yield Spread Premium (YSP) on residential mortgage loans.

It is not that mortgage brokers do not want to save the flippers, it is just that if it is the mortgage brokers profit verse the flippers profit then just who's profit the mortgage brokers want to save first.

The yield spread premium (YSP) is the cash rebate paid to a mortgage broker based on selling an interest rate above the wholesale par rate that the borrower qualifies for.

For example, If a mortgage broker offers a borrower a loan of $100,000 at an interest rate of 6.25%, and the par rate is 6%, the broker may earn a YSP equal to 1.0% of the loan amount. This $1,000.00 fee is paid by the lender directly to the broker as a "rebate."

The mortgage broker earns "one point" directly from the lender "POC" (Paid outside Closing).

Although the borrower is not charged the fee directly, the borrower does pay the fee indirectly by accepting a higher interest rate in exchange for lower fees.

In the U.S., mortgage brokers are required to disclose YSP as a fee "POC" (Paid Outside Closing) on page 2 of the HUD1 Settlement statement, inside the margin, away from the column marked "Paid from Borrower's funds at Settlement."

YSPs as a financial instrument are not controversial. What is controversial is how they are applied, and how and when brokers and lenders have to disclose their existence and their amount to the borrower.

Anonymous said...

Are we now entering the stage of anger and is the blame game beginning to start.

This game would have gone on longer and deeper if society dubiously kept playing into the game.

The only reason that the game has stopped is because Wall Street giants, knowing something about finance and mass psychology, realized that we were nearing the tipping point and had to pull out if they were interested in retaining any profits.

Like any well thought out Ponzi Scheme, those that got in early enough in the game made out like bandits and those that came in during the 11th hour are left holding the bag.

Under the guise of financial prudence society was bamboozled into believing that somehow debt equaled wealth in the absurd calculus of pseudo-prosperity.

You don’t own a leased Mercedes.

You don’t own a mortgaged home.

You don’t own that plasma screen that you bought on credit.

Try missing a few payments and you’ll quickly find out who owns those things.

Welcome to the next chapter of the credit game, facing reality.

bob said...

Citigroup is having an emergency board meeting this weekend. I think they are in some deep sh*t, and so is the rest of the financial sector.

"The board may also consider the future of Chief Executive Charles Prince, according to people close to the company.

Robert Rubin, the former Treasury secretary who is the chairman of Citigroup's executive committee, is being considered as a possible interim replacement, but he has balked at taking on the responsibility,

Yeah, who could turn down a plum assignment as captain of the Titanic at 11:50pm on April 14th 1912?

Anonymous said...

Is it only Human Nature

Reconciling Loss

A magnificent housing boom has graced the landscape for more then 8 years.

You enjoyed seeing it, watching your net worth grow in the early years hoping that it can continue. You enjoyed playing with the home equity like a little child, and relaxed under the shade of the housing boom.

But today it was cut down, chopped up, and taken away. You will miss it, it is a great loss, and you are sad to lose it.

What choices do you have in reconciling this loss? Here are some alternatives:

* Devalue it — You could tell yourself that I really never really enjoyed the equity, a house is a place to live, Easy credit can ruined my early retirement, Adjustable mortgage can go up and create hardship. If you convince yourself it had little value, then its absence is less of a loss.

* Memorialize it — I could linger over old news articles of the housing boom, recall memories of lenders calling you to take an low interest adjustable loan, keep old real estate agency calling card and other artifacts from it, and work to retain the fond memories of it.

* Substitute — You could learn to like another investment like Yen Carry Trade, find a new investment like currency trading, or find a new pastime.

* Deny — You could tell yourself the housing boom will return, or housing boom will make a come back, or it isn't really gone. This requires ignoring overwhelming evidence.

* Blame — You could blame the hedge funds manager, lenders, speculators, government, society, big business, or progress for destroying the housing boom. You might get angry at these people, because they were unjust and deserve the blame for your loss. You may decide to hate them to dispose of your grief. You could blame a scapegoat. If you blame yourself, you might feel shame.

* Agonize — You could delay, protest, negotiate, or try to reduce the loss in some way, prolonging the time before you come to terms with the loss and accept it.

* Accept — You decide to accept the evidence and reconcile yourself to the unavoidable fact that the housing boom is gone, never to return. You accept the irrevocable loss.

Several emotions are related to loss:

* Sadness directly recognizes a loss.

* Anger blames others for our loss.

* Hate attempts to dispose of our grief by assigning it to the Other.

* Shame blames ourselves for the loss.

* Depression gets stuck dwelling in the loss.

getyourselfconnected said...

I think we are at the moment where the banks and the FED finally see how deep the problems run. The best analogy I have is from the film "Jaws":

"You're gonna need a bigger boat."
"Thats a thirty footer!"
"Thirty-Five, 3 tons of him." -Crew of the Orca upon seeing the great white shark for the first time in the film "JAWS".

Anonymous said...

Many economists will fail to see that INFLATION is like a well cut diamond it has many facets.

Is it true that prices for consumers likely wouldn't change because cuts in supply can be replaced by imports.

What impact will the weaker US Dollar have on those imports, and how will the weaker US Dollar impact the price for the consumers.

California farmers scramble to sustain crops after water cuts

A few years ago, the math seemed simple enough for Bruce Allbright: Plant several hundred acres of pistachio trees, add water when needed, then pick the money from the trees.

Now, drought and water restrictions are exacting a high price on Allbright and other California farmers who must make tough decisions about what to plant or fallow, harvest or plow under, prune or chop down.

In recent years, a number of farmers have shifted from annually planted fruits and vegetables to more profitable permanent crops such as nuts and grapes.

With less water, many are struggling to keep the plants alive.

Anonymous said...

Chairman Bernanke Meets With Rev. Jesse Jackson, Sr. and John Taylor to Discuss Foreclosure Prevention

Rev. Jackson and Mr. Taylor asked the Chairman to take a more proactive role in encouraging lenders to get in front of the pending foreclosure crisis. They emphasized the disproportionate application of irresponsible subprime loans to people of color and asked the Federal Reserve to look into the pattern and practice of fair lending violations, especially steering.

"Chairman Bernanke displayed a strong sensitivity to our concern that many low-income and minority homeowners are in jeopardy. He showed a depth of understanding of the challenges inherent in addressing these problems," said NCRC President & CEO John Taylor.

Anonymous said...

Is there a reason why Hong Kong lowered interest rate so that the Hong Kong Dollar can stay pegged to the US Dollar

Thirteen domestic banks may incur NT$4 billion of loss from exposure to SIV (structured investment vehicles) totaling NT$21.8 billion, due to the ripple effect of the U.S. subprime housing-loan storm, said the Financial Supervisory Commission (FSC) on Thursday.

Of the 13 banks, Bank SinoPac reported the largest exposure of NT$11.3 billion, for which it has made NT$2.3 billion of provision for possible loss.

Susan Chang, vice chairperson and spokesman of the FSC, stressed that the exposure level, based on the figure on Oct. 25, is still manageable for domestic banks, adding that those banks have made provisions totaling NT$4 billion for possible loss. The FSC is still collecting statistics concerning exposure and possible loss to SIV among domestic insurance firms and fund managers.

SIVs are financial instruments, in the form of either long-term securities or short-term commercial papers, issued by companies set up by leading international banks, such as Citibank, HSBC, and Standard Charter, backed by their assets of quality housing loans with AA or AAA grading, a market which has also been affected seriously by the subprime mortgage storm.

Meanwhile, Susan Chang pointed out that as of the end of September, of 39 domestic banks, 21 domestic banks had had U.S. subprime loan-related exposure totaling NT$56.3 billion, up from the initial statistics of 16 banks and NT$40.4 billion of exposure, with aggregate loss estimated at NT$3 billion. She noted that the exposure is also manageable, especially compared with US$10 billion of exposure of Chinese banks.

Anonymous said...

What kind of separation package will Charles Prince get.

Citigroup Inc. Chief Executive Charles Prince plans to resign, the Wall Street Journal said on Friday, citing people familiar with the situation.

Prince plans to offer his resignation at a board meeting on Sunday, the newspaper said, citing the people.

Anonymous said...

What does KICKBACK mean to you.

Can you take those bad CDO, so that next quarter Market Players will believe everything have return back to normal.

Are market players really a mark.

Market bellwether Merrill “Lynched” is spearheading first half efforts in the category of increasingly unlikely profit-taking efforts.

In today’s early show, the financial giant’s credibility has come under scrutiny.

Investors have sent shares spiraling lower to two-year lows on a WSJ story which points to Merrill parking troubled assets with hedge funds based on an analyst note from last week.

According to the article, structured debt specialist Janet Tavakoli wrote that Merrill asked hedge funds to take on its CDOs for a year as to keep the financial debris off its own books in return for a financial kickback.

Anonymous said...

Ben Should Either Take a Lesson
From Paul Volcker or Take a Hike!

This is not the first time we've seen a situation like this. Back in the 1970s, the price of real stuff was soaring and the dollar was getting clobbered.

Then Paul Volcker stepped in as Federal Reserve Chairman in 1979. He was faced with a tough task, and he had only one legitimate solution. But he had the guts to take action!

Mr. Volcker enacted a policy of tough love. He pushed interest rates sharply higher. By January 1981, the Fed Funds rate had risen to a whopping 20%!

That kind of shock forced the U.S. economy straight into a recession. What Volcker understood, and what most people fail to realize, is that a recession is not necessarily a bad thing; it's the market's way of cleansing an economy.

In the end, Volcker's gutsy, decisive action was just what the doctor ordered. It broke the back of inflation, and saved the dollar from ruin.

Anonymous said...

179 major U.S. lending operations have "imploded"

Tom said...

WOW! Look who is finally posting again. This was one of the best blogs out there but then it died for about 15 months. He seems to be back!

Anonymous said...

Many Builders have a tremendous amount of construction loans, what banks will be caught holding the bag when some go bankrupt?

Anonymous said...

California is in a recession!!!

Housing is killing us and the numbers will soon support this statement.

This top ten world economy will drag U.S. down by itself.

State of California is having budget shortfalls already.

Stuck in So Pa said...

I just got back from a farm auction this morning, haven't been to one in ages. First thing I noticed when I pulled onto the field was all the big trucks with commercial salvage/scrap signs on their doors. I asked around and found out that scrap dealers are now a staple at farm auctions, and wind up buying the majority of used equipment for its scrap value. That old combine, plow, or cultivator is now worth more by the pound, than what it will produce by the bushel! Not good news for the already suffering farmer trying to pick up some good used equipment.

I asked one salvage company employee what the going prices were, and he had no idea. He said that mostly they just buy it, dismantle it, and pile it up at the yard in mountains, waiting for the commodity prices to go even higher. It's a shame that farmers now have to go up against greedy salvage companies. No matter how much money you make, you can't buy food that isn't there!

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

Housing prices will only become "normal" when the P/E ratio makes sense for enough people to start making a dent in all the empty houses we have sitting across this country.

Anonymous said...
I'm a renter, newly relocated to NOVA, and sitting on the fence watching. I viisted a builder in late Sept about their townhomes selling for $550k. This weekend, a followup visit to the same builder on the same home, and the price has been cut to $490k. Wow, $60k discount in one month. At this rate, next summer will be 'normal' housing prices! LOL

Anonymous said...


I live and work in So.Cal. I work in excavating and grading. Other than very small jobs we are out of work. Several other companies have cut their workforce dramatically or closed their doors!
Equipment sales reps and dealers have told us, nothings moving.

This is Only the Begining!


Anonymous said...

here is something to think about.
85% of the population don't know or care about what is going on with the economy.

In fact a large number of investors don't do any due diligence. For example the flipper down the street who just spruced up a house, that has now sat vacant for the last 2 months.

the 1929 depression was fortunate to have a credible crash, but it was followed by 7 slow years of a thousand cuts, and even some market rallies.

The new deal provided all kinds of government sponsored jobs.
right now 20% of the workforce is employed by some form of govt.

Sure you can batten down the hatches, but aslo if you are doing ok , continue what you are doing and don't buy into the doom and gloom.

It's a recession, until you lose your job, then it's a depression.

Tyrone said...

This is a long video, but it's classic Schiff vs. Mike Norman.

Great lines from the video:
"Do we unleash 'the Peter'?", "We now unleash 'the Peter'".

Ruprecht said...

There were some shows on TV where they showed different doomsday scenarios; Asteroid destroying the earth, global warming etc. One of the scenarios was that the machines take over, wipe out most of humanity, keep a few for slaves or pets.

The main advantage the machines had, is that they could make decisions faster and smarter, and they wouldn't repeat mistakes, as humans seem to do.

The bubble we're in now is the same as any other bubble in history, so obviously humans aren't able to learn and adapt.

Maybe the reason for our inability to make sound decisions is because of our short time here on earth; " I want what is good for me right now, the future be dammed, I might not be here. Let some-one else deal with the consequences"

You can be sure the machines are going to be made to be around for a long time, and would plan for a long, long future.

Anonymous said...


David Lereah's book "Are you missing the housing boom" now being sold for 0.01 cent on Amazon!

LauraVella said...

An article on a bay area credit union that goes under due to mortgage loan defaults.

FlyingMonkeyWarrior said...

Time To Protect Yourself

Author: Jim Sinclair
Posted On: Friday, November 02, 2007, 6:35:00 PM EST

If you have not started to protect yourself do so on Monday please.

I am quite concerned for all of you as inertia usually prevents people from protecting themselves. I always wondered how a certain ethnic and religious persuasion could remain in Germany as Hitler was clearly coming into power. I would have been out.

Even then, many of those who remained in Germany saved a great deal of their fortunes by certifying their investment shares in international companies, then burning the paper certificates.

What I am getting at is that the signs of an international financial accident are in those incidents that have recently happened.

There is no hiding place as this is a product of the greed and avarice of the new geek kids on the block who have killed themselves, their industry and hurt everyone everywhere. I am sure that in years to come derivative traders will be seen as pariahs and criminals deserving of prison - not as the multi-millionaires they are today.


1. What you cannot withdraw and is in cash put into short term treasury instruments. For those able, I prefer Swiss and Canadian dollar Federal T bills.
2. Convert your investment shares into paper certificates. Do not lose them!
3. Reduce personal debt for peace of mind.
4. If you have coins stored at a coin dealer take delivery of them and request prompt service.
5. If you have accounts at Internet financial entities close them and transfer the accounts to a smaller firm that can confirm in writing that they have no over the counter derivative exposure. Be sure to ask for certificates for your share investments and take delivery of them.
6. Reduce - if not eliminate - your margined position even if that means selling down to rid yourself of debt on your securities or gold assets. The swings in gold now are going to become so violent that most people will not be able to tolerate it when debt is attached to their positions.

This is a time to be conservative, not adventurous. Gold is going to range trade wildly, but it is as I see it targeted here and now for $1,050.


Rachel said...

There have been severe mortgage meltdowns in the past few months. Getting leads are becoming expensive and hard to come by. I am in the mortgage broker business and several of our brokers have complained that it has become costly to use services, such as that of Lending Tree. We know first hand at that alternative sources of leads are necessary to become successful in the mortgage business. You can't be dependent on one lead generation company.

Fortunately here in Texas we have not seen a drastic change in homes sales like Florida and California.

FlyingMonkeyWarrior said...

Totally off topic Keith, and thank you for indulging me.__________

@ All,

I am sitting here Sunday morning, feeling trapped and really angry.

MRSA, the deadly communicable and nearly un-treatable bacteria disease, is in my 16 year old sons school, and has been there for a month!

Richard at Rocclnd is right about the 'Governments' useless eater theory.

I am living it!

MRSA kills and or disfigures and is more contagious than a cold virus.

The antibiotic of last resort is also very damaging to the body, if vancomycin even works on you.

MRSA will live on (School) surfaces for up to 90 days, and if it gets into your lungs or blood you mostly die.

To kill MRSA on surfaces, antimicrobial must sit for three minutes, wiping/spraying MRSA infected surface is not enough.

MRSA can and has colonized in the sinus cavity of 1% of the population, waiting to infect the carrier or others in close contact with the colonized carrier.

90,000 infectious cases this year; 180,000 cases next year; 360,000 cases in 2009, 720,000 cases in 2010, etc.

Government Policy as Follows:

School Nurse makes the decision as to let the infected student into school(in this case the student is attending Edgewater High School and has been there for a month, whilst infected)!

Infected student's identity is protected.

Oozing MRSA wound must be covered with a loose bandage.

The Government School is not required to notify the parents of the students attending the Government school.

The Government School is not required to notify the Epidemiology Department (disease control) of the State Health Department.

The Government School is not required to notify the student population of the infected school.

The Government School is not required to disinfect school grounds.

Gloves should be worn when doing laundry (what about book bags, and shoes?).

Students should wash hands.

Rummor: From someone connected to inside the Staff at this school: Staff is sworn to secrecy at threat of Government School job loss.


IMO, The Government figures even if one or some of the children die, then they have spent no money and have averted a public panic, imo.

Bird Flu ain't nothin, MRSA is here, coming to a government school near you.

Ruprecht said...

This excellent article was found by MLI

For the executives of WAMU who would like their end of year bonuses, rather than write off the unpaid ARM mortgages, (where the principal is actually increasing daily) they can show them as future interest income, put off the defaults into 2008, thus increasing the parameters required for their bonuses.

Here's a case in point of " I want what is good for me right now. Let some-one else deal with the consequences"

FlyingMonkeyWarrior said...

The Tequila Model of Exponential Growth

By: Richard Daughty, The Mogambo Guru - The Daily Reckoning

Fortunately, the day was saved, because I got a perfect example, a horrifying example, a terrifying example, a terrifyingly, horrifyingly perfect example of exponential growth from JMR Paul Harder, who reports that he has looked into the number of deaths attributed to Methicillin-resistant Staphlococcus aureus in the USA, and finds that "MRSA deaths are increasing EXPONENTIALLY!!!"

Note the use of all capitals, and the three exclamation points, which seems entirely apropos since MRSA has evolved from ordinary staph germ into a deadly microscopic murderer that can't be killed with antibiotics, and practically nothing can stop it from killing you by, for example, eating your flesh.

He admits that the data is murky, but "as best as I can gather" he says, the trend is:

2007 90,000 +
2006 13,000
2005 3807
2004 1629
2003 955
2002 487
2001 229
2000 201
1999 155

Now, that is exactly what exponential growth looks like! Perfect!

It gets truly ugly when he says that the extrapolation is that there will be "46,000,000 deaths in 2011", which does not have any exclamation points at all, which I cannot explain because in my Mighty Mogambo Mind (MMM) there are several! Like that one right there!! Or the two right there!!! Now three!!!!

Gaaaah! It's happening! It's getting worse more and more quickly, and then one day the shaking and violent upheavals in the system will finally shake it all apart!!!! Exclamation points everywhere!!!!!

Anonymous said...

I have to quit reading this blog I am getting too depressed. . .

But I am addicted.

Anonymous said...

Who should get your sympathy

Two years ago, economists, Realtors and others carried on a lively and unresolved debate about whether skyrocketing housing prices constituted a bubble -- a bubble that was destined to burst.

Today, in Stanislaus, San Joaquin and Merced counties, to say the bubble has burst is an understatement. Plummeting prices, a major slowdown in home sales and widespread predictions that things will get worse before they get better suggest that this is something far more serious than a routine market correction.

Last weekend's special report, Housing in Turmoil, described the forces that combined to create the boom and identified the many people who are feeling the ramifications of the bust. In some respects, it's convenient -- and comforting -- to divide them based on how much sympathy they seem to deserve:

Speculators get no sympathy, especially those who live out of town. People who "flip" houses are taking a gamble, placing a bet; they don't care about a neighborhood or truly invest in the well-being of their community.

People in mortgage-related occupations who have lost their jobs get at least a little sympathy; no one wants to be out of work. But reading of extravagant bonuses and parties provided during the good times textures our empathy.

Anonymous said...

Will the World decouples from US economic engine.

Questions have been raised about the propriety of some measures supported by central bankers, particularly in rich countries. One such is the $75-billion hyper fund to be set up by a number of major US banks, which will ‘bail out’ distressed sup-prime assets.

The criticism advanced against the hyper fund is that it is subject to moral hazard — encouraging future risk-taking lenders to expect a similar rescue operation. Ultimately, the hyper fund will also have backing by Government. This means US tax-payers’ money will be used to salvage risky lenders who pursued profits.

This measure has been primarily the brainchild of the Secretary of the Treasury, but the Fed has no less a role than the Treasury. It may be recalled that such bail-outs had been frowned on by US economists and policy-makers in the aftermath of the Asian crisis in the 1990s, especially advising developing countries to stay off the slippery path. But when central bankers themselves lead bail-outs, what are we to say?

A continuing challenge for central bankers is their having to handle the problem of hedge funds and private equity players. There are large pods of private funds owned by high net-worth individuals and financial institutions. They are, however, opaque in an extreme sense.

The US regulatory system does not seem to be too willing to regulate hedge funds

In the struggle between financial stability and growth, the central bankers of the world continue to have a vital role to play. Recent encounters with near-collapse of the system in some countries may have taught them many weighty lessons. Let it not be said, however, that central bankers of countries such as India, who are not exposed to the sub-prime episode, cock a snook at the performance of their peers in countries so exposed.

One lives and learns in the school of others’ experience. If one does not so learn, one is condemned to repeat those follies. The sub-prime mess has been a testing ground — a school — for central bankers of the world. Hopefully, they have emerged stronger from the ordeal of fire.

Anonymous said...

Why don't China have a one Currency policy and change the Hong Kong Dollar to th Yuan so that the Yuan can remain Peg to the US Dollar.

On Oct. 26 and again on Oct. 31, the Hong Kong dollar tested the upper end of its trading range, which allows the currency to fluctuate between 7.75 and 7.85 to the U.S. dollar with 7.80 as the midpoint. The 24-year-old linked exchange rate came under pressure, though it didn't break down. And chances are it won't, at least not in the foreseeable future.

To be sure, keeping the peg won't be a free lunch.

If the U.S. Federal Reserve further pares the cost of money to deal with the impact on the economy of the housing-market collapse, Hong Kong will be in an unenviable situation: To save the peg, it will have to pump more liquidity into the banking system, stoking an asset-market frenzy that the city has borrowed from China. Prudence suggests the opposite course: Hong Kong should abandon its dollar fixation and raise domestic rates.

What happens in case the U.S. dollar tanks and the Hong Kong currency, tied to it, loses its international purchasing power? Hong Kong may have found a clever solution to that, too.
Just as silver lost the race to gold in late 19th century as a store of value, the Hong Kong dollar may one day bow out to the weightier yuan, already a limited legal tender in the city.

``May the best currency win,'' says Stephen Jen, Morgan Stanley's global head of currency research in London.

The city's mini-constitution, the Basic Law, insists that the Hong Kong dollar ``shall continue to circulate.'' But what if no one feels like using it as money? That's the real question surrounding the future of the Hong Kong dollar. The peg may survive, the currency might not.

Anonymous said...

So MRSA is getting prevalent in our schools, right at the time that property tax income is down.

Everyone knows that the majority of property taxes goes to schools. For anyone that pays property taxes, which is pretty much everyone- either directly or indirectly, demand to know what is being done with your money about it. Contact your county or school district supervisor.
Too bad that a large amount of money that could be used to tackle this problem is going to Iraq.

Where incidentally a drug resistant bacteria is now affecting veterans

Real estate links said...

I still think that investment in real-estate is the best option. If you buy the property at right price & do not pay inflated price just because you like the property, there is a very high chance that you will get a fair return on your investment.
In case if the price go down, then the best bet is to hold on to the property a bit. Price are sure to bounce back

Ruprecht said...

There's plenty of money to be made in real estate;

Professional flippers still make money, they just buy at a price they know they can make money on.
Unprofessional flippers work at $8 an hour day jobs and buy 3 or more properties at the peak using no document ARM's that reset in 2 years.

Lost Cause said...

It took Argentina about 10 years to lose its middle class. If you are watching carefully, the US is doing everything that Argentina did. Both very right wing, heavy use of debt, phoney war, etc.

Anonymous said...

Link to Marketwatch about what advice/assistance parents can give their children about buying a home for the first time...

How about not thinking of buying a home until you have been gainfully employed for a number of years, have saved up enough of your own money to put down 20% and, finally, not buying until fundamentals return.

high school drop-out & 6% commission said...

'In case if the price go down, then the best bet is to hold on to the property a bit. Price are sure to bounce back'

in 15 years.

Anonymous said...

If Yield Spread Premium go away will brokers and the National Association of Mortgage Brokers disappear?

Why do mortgage brokers hate HR3915

The broker is rewarded through the Yield Spread Premium (YSP), which is paid by the wholesaler on the "back-end." This back-end payment is not disclosed on the settlement sheet and the homebuyer is in the dark.

If the YSP was disclosed on the settlement sheet the homebuyer might look at the item and say, "What's this for?" And the broker might answer: "Because I got you a mortgage at a higher rate." I'm not taking sides here but this is how the debate is being framed.

Are YSPs right or wrong? Should the payment to the broker be disclosed? One thing seems certain: YSPs are the lifeblood of some brokers.

WORLD CUP said...

welcome to XINJIANG OF China.

Anonymous said...

Should you be paying "yield spread premium" of one to three percent of your mortgage

Home closing-cost fees

What they are: Home buyers beware: Excessive fees associated with funding a mortgage and handling the transfer of a property's title can sting badly. These fees, known as closing costs, typically add up to thousands of dollars.

By law, the buyer's lender or mortgage broker must provide an estimate of the fees three days before the sale is supposed to be completed. The document, known as a "Good Faith Estimate," details the fees the buyer is expected to pay to cover the costs of services such as a pest inspection or a public notary.

How to avoid them: Especially in today's weak real estate market, buyers command greater negotiating power with the lender and the seller to cover some of these fees.

You can negotiate the loan-origination fee, which is paid to the lender and can equal 1% of the loan. If you're using a mortgage broker, you'll pay a "yield spread premium" — typically 1% to 3% of the loan value.

The loan discount is upfront money you pay to "buy down," or lower your mortgage interest rate (not recommended for a buyer who plans to live in a house for a short period). It's also negotiable. You can also dicker over the administrative fee, which is paid to the lender, and the attorneys' fees.

You might save big, too, by shopping around for your own title insurance company, or by driving a hard bargain if you're refinancing your home and using your current title insurer.

Anonymous said...

Citigroup has appointed Robert Rubin, the former Treasury Secretary, to be its chairman and Sir Win Bischoff, the group’s European head, to act as interim chief executive, as it emerged that the world’s largest bank would need to take up to $11 billion (£5.3 billion) of further writedowns relating to America’s sub-prime mortgage meltdown.

Anonymous said...

Is Yen Carry Trade the root of Excess Global Liquidity.

Bank of Japan policy makers said the U.S. subprime mortgage collapse was caused by keeping interest rates too low, signaling their intention to increase the world's lowest borrowing costs to prevent investment bubbles.

Bank of Japan Governor Toshihiko Fukui stuck to his modestly hawkish tone on Thursday, suggesting that interest rates should rise gradually even as downside economic risks heighten, partly to put a brake on excessive yen carry trades.

Anonymous said...

Why were global markets dropping, what does it have to do with "Yen Carry Trade" the provider of Excess Global Liquidity.

What will happen when dollar-yen currency options expires.

Yen Rises as Citigroup Writedown Prompts Carry Trade Reduction

The yen rose to a one-week high against the dollar after Citigroup Inc. projected as much as $11 billion in additional writedowns, prompting traders to repay loans from Japan used to buy higher-yielding assets.

Currencies from Australia, New Zealand and the European Union have been carry-trade favorites, with interest rates as much as 7.75 percentage points higher than in Japan.

Implied volatility on dollar-yen currency options expiring in one month rose to 9.6 percent from 8.9 percent on Nov. 2. Higher volatility may discourage carry trades as it exposes these bets to more currency risk.

In a carry trade, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the borrowing and lending rate.

Stuck in So Pa said...

"Anonymous November 04, 2007 11:58 PM said...
So MRSA is getting prevalent in our schools, right at the time that property tax income is down.

Everyone knows that the majority of property taxes goes to schools. For anyone that pays property taxes, which is pretty much everyone- either directly or indirectly, demand to know what is being done with your money about it. Contact your county or school district supervisor.
Too bad that a large amount of money that could be used to tackle this problem is going to Iraq.

Where incidentally a drug resistant bacteria is now affecting veterans"

Here in Taxsylvania, the tax bill that has the word "school" in it is indeed the largest, but the overwhelming majority of the money goes to the God-almighty state teacher's union's coffers, and the district administrators vastly over-paid wallets! Little, if any, goes to the reason education exists, the children.

And nobody get on me about voting in new board members.
They promise the world (reforms, fiscal responsibility, etc.) when they are running for office, but once elected they "blend" into the fold, never to be heard from again.

Public education in this country is a lost cause and total waste! God help us!

Anonymous said...

Can gas price go up to $4.00/gal by February 2008

Highest cost for gas in San Francisco was $3.69/gal for regular gas as of Saturday.

The State for the highest cost for
gas is Hawaii at $3.357/gal

Gas Prices Climb 16 Cents

Sticker shock is back at the gas pumps. The average price for gasoline climbed about 16 cents across the nation over the last two weeks.
The Lundberg Survey of 7,000 gas stations found the average price of regular gasoline on Friday was $2.96 a gallon.

The average premium price came in at $3.19.

Anonymous said...

Is there a Collar around the US Dollar.

Seems like a conservative strategy
and it could provide reasonable rate of return.

Anonymous said...

Is Jimmy Cayne next on the chopping block.

Beleaguered investment bank Bear Stearns has moved to liquidate one of the feeder hedge funds that invested in its collapsed High-Grade Enhanced Leverage (Hegel) fund in an attempt to fend off a potential investor revolt.

The situation places more pressure on Bear chairman and chief executive Jimmy Cayne, who is facing calls to quit amid severe write-downs and unfounded personal allegations.

Anonymous said...

What’s the damage? Why banks are only starting to uncover their subprime losses

Such a tsunami of red ink would undoubtedly be shocking at any time. But right now, this news is proving particularly unsettling for investors for two particular reasons. First, the numbers offer an unpleasant reminder that the pain from this summer’s credit turmoil is still far from over – contrary to what some bullish American bankers and policymakers were trying to claim a few weeks ago. “To judge from secondary market prices, losses on mortgage inventory are likely to be larger in the fourth quarter than the third quarter,” warns Tim Bond, analyst at Barclays Capital, the UK bank.

Second, the write-downs have reminded investors just how little is known about where the bodies from this summer’s credit turmoil might lie. Perhaps the most shocking thing about recent announcements is that while big banks might have now written down their mortgage holdings by more than $20bn, this does not appear to capture all the potential losses.

Mortgage-related securities have not been widely traded in recent years, and in the past couple of months activity has dried up almost completely – meaning there is no market, and thus no market value.

Some banks have tried to get around this problem in the past by developing computer models to work out what the securities “should” be worth. However, these can be very unreliable and vary wildly between different banks. Recent calculations by the Bank of England, for example, show that if tiny changes are made to the type of model typically used by banks to value mortgage-linked debt, the implied price of supposedly “safe” assets can suddenly change by as much as 35 per cent.

As a result, some analysts are now using another technique to work out their mortgage-linked losses, namely, extrapolating from prices based on derivatives indices such as the so-called ABX. For although mortgage bonds have not traded much in recent weeks, derivatives have been bought and sold – meaning that the ABX can offer a trading price.

In recent weeks, this trading price has fallen sharply (see chart), which has increased the pressure on banks to mark their books down. However, the banks have not yet made write-offs as large as the ABX might imply. Merrill Lynch analysts, for example, calculate that mid-quality ABX debt is on average now trading at 40 cents in the dollar. But these analysts say that Merrill Lynch itself has only written this type of debt down to 63 cents in the dollar – and UBS is still assuming this debt is worth 90 cents. “Simple math would imply that UBS needs an additional $8bn write-down [on its $15.4bn holdings] if the ABX pricing is correct,” Merrill says.

Anonymous said...

How did you hedge your play.

The bear spreads offer marginally better risk-reward ratio than bull spreads.

All the signals suggest that November will be a most dangerous settlement.

We are seeing high price-velocity coupled to lower derivative trading volumes.

This could cause major upheavals if unhedged traders are caught on the wrong side of a big move.

Anonymous said...

Should sellers asking price be higher then ZESTIMATE given current market conditions?

Days of inventory indicator for single-family homes was sent soaring by the severe drop in sales.

It rose 102 days sending the indicator to 285 days.

Examlpe of recent sell in San Jose, California

Sold 10/05/2007: $344,500 ZESTIMATE™: $395,456

Sold 10/31/2007: $315,000 ZESTIMATE™: $378,527

Sold 10/10/2007: $452,000 ZESTIMATE™: $489,500

Sold 10/04/2007: $485,000 ZESTIMATE™: $523,385

Sold 10/05/2007: $610,000 ZESTIMATE™: $680,951

Anonymous said...

California appraisers say they're pushed to inflate home prices

Ask any real estate appraiser: Being badgered to overstate home prices is a fact of life, they'll say.

"We get pressured every single day to inflate our values," said Dan Tosh, principal at Tosh & Associates, an appraisal firm in Brentwood. "We get people telling us we'll never work again, or they won't pay us because we won't play ball."

New York's attorney general sued a leading appraisal management firm Thursday, saying it had knuckled under to a big bank's pressure to pump up home prices. The practice might have helped fuel the current mortgage crisis and the dramatic home price appreciation of the past few years.

Many real estate experts say appraisal inflation is pervasive in an industry in which pressure to close deals is all-consuming.

"This makes things such as Enron and WorldCom look small by comparison," said Ted Faravelli, executive director of the California Association of Real Estate Appraisers and principal at San Jose's T.E. Faravelli & Associates, an appraisal firm. "It was an epidemic."

In a nationwide survey released early this year, 90 percent of 1,200 appraisers said they had felt "uncomfortable pressure" to adjust property values. Mortgage brokers were named as the most common culprits, followed by real estate agents, consumers, lenders and appraisal management companies. The increase in pressure was dramatic compared with that found in a similar survey in 2003, when 55 percent of appraisers reported feeling pressured.

"Pressure on appraisers reaches pandemic proportions," said David Hutton, senior editor at October Research Corp., the Ohio company that conducted the study. "The New York lawsuit ... may be just the tip of the iceberg."

Appraisers are hired by mortgage brokers, bankers, real estate agents and home buyers as independent experts to give an informed analysis of a home's market value. Home loans, for both sales and refinances, rely on appraisals to assure lenders that the home is enough collateral for their money.

Anonymous said...

Is this a good time to buy an Auction home in Southern California.

Nearly 600 Southern California Foreclosed Homes Totaling $198 Million Up For Auction

A souring housing market brimming over with foreclosures and falling home prices translates into sweet news for buyers in search of deals.

As property values continue their spiral downward, more owner occupant buyers are turning to foreclosed property auctions to find even greater price reductions.

America's largest foreclosed real estate auction firm, Hudson & Marshall will auction nearly 600 foreclosed homes located throughout Los Angeles and the San Bernardino Valley area on November 6-11.

Anonymous said...

What does Super model Gisele Bundchen know about the US Dollar.

Supermodel Bundchen Joins Hedge Funds Dumping Dollars

Gisele Bundchen wants to remain the world's richest model and is insisting that she be paid in almost any currency but the U.S. dollar.

Like billionaire investors Warren Buffett and Bill Gross, the Brazilian supermodel, who Forbes magazine says earns more than anyone in her industry, is at the top of a growing list of rich people who have concluded that the currency can only depreciate because Americans led by President George W. Bush are living beyond their means.

Even after the dollar lost 34 percent since 2001, the biggest investors and most accurate forecasters say it will weaken further as home sales fall and the Federal Reserve cuts interest rates. The dollar plummeted to its lowest ever last week against the euro, Canadian dollar, Chinese yuan and the cheapest in 26 years against the British pound.

W.C. Varones said...

I expect this to be the final nail in the coffin of Countrywide.

shtove said...

Just saw Maria Bartorami (?) talking on CNBC Europe about mortgage losses - a few minutes ago, so no link.

She cites Bill Gross' PIMCO figure of $250 billion, and then says that's just for defaults to date - much more to come. She uses all the bearish terms like falling knives, tip of the iceberg etc.

Does she deliver one spin for the European audience, another for the American?

on an island in Irvine said...

Now even supermodels are balking at dollars

Anonymous said...

Did anybody see the Bloomberg new article about Gisele Bundchen (the Victoria's Secret model) refusing the get paid in U.S. Dollars? That's hilarious.

coke adds life said...

Oops -- looks like folks are hitting the plastic...

The $915 Billion Bomb in Consumers' Wallets

Mammoth said...

How serious is WaMu’s problem – with the lawsuit against their ‘cherry-picking’ appraisers who tend toward the high side of pricing?

On Saturday we had dinner with a friend who is “up there” in WaMu’s upper management. When I brought up the subject, he held his index finger up to his lips and said, “Shhhh!”

He then begged me to please not bring up the subject with his wife around, saying, “We do not need any more panic in our household.”

Yikes! Methinks that WaMu has a VERY SERIOUS problem on its hands, and that we have only just heard the very beginning of it.

Time will tell.

Anonymous said...

WTF? So this is how they're going to postpone the implosion? By extending the FBers' teaser rate and actually making it even 1% cheaper for another 5 years?!


Sixpercenter said...

Sad but true. This dirtbag "The 1% mortgage solution" lives only a few miles from our nations capital.

Lets all make an inquiry!!

Anonymous said...

180 major U.S. lending operations have "imploded"

Anonymous said...

Stull, Stull & Brody Announces Class Action on Behalf of Shareholders of Merrill Lynch & Co., Inc.

The complaint charges Merrill and certain of its officers and directors with violations of the Exchange Act.

The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results.

Merrill had gone heavily into Collateralized Debt Obligations ("CDOs") which generated higher yields in the short term but which would be devastating to the Company as the real estate market continued to soften and the risky loans led to losses.

According to the complaint, Defendants knew or recklessly disregarded that: (i) the Company was more exposed to CDOs containing subprime debt than it disclosed; and (ii) the Company's Class Period statements were materially false due to their failure to inform the market of the ticking time bomb in the Company's CDO portfolio due to the deteriorating subprime mortgage market, which caused Merrill's portfolio to be impaired.

Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Merrill common stock during the Class Period, which is between February 26, 2007 and October 23, 2007.

Anonymous said...

BoJ Governor Fukui, stating "interest rates need to be raised in a timely matter".

Anonymous said...

An increase in new orders helped drive the U.S. services sector to a faster-than-expected growth rate in October, but economists warned the data didn't foretell that economic growth would pick up soon.

The Institute for Supply Management said Monday that its index gauging the health of non-manufacturing industries registered 55.8, up from 54.8 in September. A reading above 50 indicates expansion, while one below 50 shows contraction.

The result was stronger than the 54 reading analysts had expected.

The services sector - such as airlines, hair salons, accountants, doctors, dentists and plumbers - has been helping to prop up the economy even as manufacturing has slowed. "Non-manufacturing business activity increased for the 55th consecutive month in October," said Anthony Nieves, chairman of ISM.

The report's components showed growth in orders and slower expansion rates in employment and prices. Nine non-manufacturing industries, including mining, retail trade, construction, real estate, rental and leasing, professional, scientific and technical services, reported increased activity in October.

Anonymous said...

Fed must be ready to take back cuts

The Federal Reserve should be ready to reverse two interest rate cuts if the U.S. economy escapes major damage from recent market turmoil, but recovery is a way off for housing and subprime mortgage markets, Fed officials said on Monday.

The Fed's two rate cuts in September and October, which lowered the key federal funds rate three-fourths of a percentage point to 4.5 percent, should buffer the economy from the impact of the turbulence that roiled financial markets over the summer, Fed Governor Frederic Mishkin said on Monday.

Still, policy-makers should be prepared to raise rates if that policy medicine proves unnecessary to prevent inflation from igniting, he added.

"In circumstances when the risk of particularly bad economic outcomes is very real, a central bank may want to buy some insurance and, so to speak, 'get ahead of the curve,"' Mishkin said at a conference on risk management in New York.

"If, in their quest to reduce macroeconomic risk, policy-makers overshoot and ease policy too much, they need to be willing to expeditiously remove at least part of that ease before inflationary pressures become a threat," he added.

Anonymous said...

In the world of central bankers, does ECB President Jean-Claude Trichet has what it take to have his name be remembered and honored next to that of Federal Reserve Chairman Paul Adolph Volcker.

ECB: Rate Hike, Rate Hike, Rate Hike

The financial markets are finally waking up to the possibility of an interest rate hike by the European Central Bank.

Inflation has become a major problem with the annualized pace of consumer price growth jumping to 2.6 percent, well above the ECB's 2 percent inflation forecast.

If the Reserve Bank of Australia raises interest rates tomorrow night, it will be further evidence that major central banks are not afraid to increase interest rates in the current market environment.

There was no Eurozone economic data released this morning, but service sector PMI, PPI and retail sales are due for release tomorrow.

We are expecting stronger inflation numbers, decent retail sales and stable service activity.

Anonymous said...

Did you now know that Paulson, al...are now nothing more than attorneys for these big financial behemoths?

For months, these people who are supposed to be out in front of this and not defending it...used the word "CONTAINED" several thousand times to soothe nerves.

That was a big help. There is going to be several hundred class action lawsuits over the next few months as all the guilty parties will start turning on each other. Do you think Paulson and Bernanke should be part of those suits?

Watch for all the pension funds going after the ratings services for marking crap with AAA when they couldnt pass for ZZZ. That'd going to be fun. Watch the class action attorneys swoop down like vultures filing against every company who did not fully and fairly disclose these losses.

Lastly, this report has told you for weeks that Citi was a financial ticking timebomb. Citigroup, over the weekend announced another $8-11 billion in losses.

Didnt these blithering idiots just tell everyone that earnings should be going back to normal this upcoming quarter? Who the heck is running this popsicle stand? And does anyone of you think this is just a Chuck Prince or a Stanley Oneal problem?

This goes a lot deeper than one person. I have news for you. This $8-11 billion is nothing. There is a lot more to come. Hold onto your hats. Hopefully, you have listened to this report by staying far away from the crooks.

Stuck in So Pa said...

OMG Kieth. If this doesn't get the dollar down faster, nothing will. Wolds richest model,Gisele B√ľndchen (thirty million in just six months,) refuses to take dollars, prefers EUROS!
This could have its own thread!

Anonymous said...

Motley Fool - Realtors Get Desperate

This reads almost exactly like something Keith would write, with only a few words needed to make it perfect - "monkeys", "corrupt", "toxic" to name a few.

Anonymous said...

Surprie Surprise (Not Arizona!!)

Indymac is taking a 200 million hit

NYTs is reporting that mortgage lenders are pumping up fees, trashing payment checks and inflating loan balances for loans in foreclosure to compensate for revenue drops on the loan origination side of the house. I remember reading here that CFC was not willing to negotiate loan restructuring under the guise that contractual obligations w/ investors prevented it, but in reality it was because CFC made more money from a foreclosure than from a modified loan!!

Looks like this dark aspect of REIC corruption is finally hitting the MSM!!!

Anonymous said...

Another day, another 100 basis points for Canada.

CAD$1.00 = US$1.08
US$1.00 = CAD$0.92

Anonymous said...

If defaulters can't afford Their reset rate, then to prevent foreclosure, why doesn't the loan company EXTEND the loan to a 40 - 50 - 60 year term but KEEP the reset rate instead lowering the rate and keeping the term length.

That seems the FAIREST way to prevent foreclosure. The Irresponsible can have their affordable monthly rate and the long term to go with it and the Responsible people don't have to pay for their mistakes or lose house equity value due to others' foreclosures.

its about time said...


Bye, bye Dick! Cheney to be IMPEACHED for documented LIES and criminal activities!

To bad it's not bush as well. It should be, but hey, its a GREAT place to start!

"To weed out slugs, you need to eliminate them one at a time."


Anonymous said...

well isn't that sweet. neverland ranch is in foreclosure. the place where the black man who made himself white used to molest little children and get away with it. my , my, the memories that place brings to my mind. oh for shame, for shame. how can this be. oh its terrible that our little buddy michael jackson lost all that money he made dancing and singing. now the cow is eating the cabbage........and i feel good.....let's do the back stroke...ha ha ha ha ha

Anonymous said...

Swiss Banks, AIG Probed by Brazil Police
By ALAN CLENDENNING Associated Press Writer

Nov 6th, 2007 | SAO PAULO, Brazil -- Police detained 19 people Tuesday for allegedly taking part in a scheme to help large Brazilian companies evade taxes by laundering money through Swiss banks UBS AG and Credit Suisse Group and the U.S.-based American International Group Inc.

The raids at 44 sites in four states were part of a clampdown by Brazilian authorities on tax evasion that last month led to raids on the local offices of U.S. network-equipment maker Cisco Systems Inc.

Two Swiss nationals were taken into custody Tuesday. One of them was a Swiss-based employee of UBS AG, Switzerland's largest bank, the company said. Authorities were seeking the arrest of another foreigner currently outside of Brazil, but did not disclose that person's nationality.

Detectives also seized over $4 million in Brazilian and U.S. currency, said Ricardo Saadi, the federal police detective in charge of the investigation.

He declined to name the banks under investigation, but federal judge Fausto Martin de Sanctis in a statement identified the financial institutions under investigation as UBS, Credit Suisse, AIG and Clariden, a unit of Credit Suisse.

"We're still gathering information and can't provide specific comment right now," said AIG spokesman Chris Winans in New York.

Messages left seeking comment with UBS and Credit Suisse were not immediately returned, though a UBS spokeswoman acknowledged before the judge identified the banks that the employee had been detained.

Saadi said the alleged scheme may have involved the movement of as much as 7 million reals ($4.1 million) a month out of Brazil for big companies seeking to avoid taxes.

The Brazilian companies, which Saadi declined to name because of secrecy laws, deposited the funds into overseas accounts via black-market money changers with accounts in Brazil and abroad. The companies used the money hidden abroad to buy merchandise in the United States and China that was then shipped to Brazil, he said.

Saadi estimated that the companies may have avoided as much as 1 billion reals ($588 million) in taxes over the last 18 months.

UBS spokeswoman Rebeca Garcia declined to identify the detained employee, but said he works for the company's wealth management and business banking division. Zurich-based UBS is trying to find out why he was detained in Sao Paulo during a business trip to Brazil, said Garcia, who declined to comment further.

Saadi said those arrested Tuesday have not been charged but can be detained for at least five days while authorities continue investigating and prosecutors evaluate the case. The 19 arrested Tuesday included the two Swiss nationals and 17 Brazilians ranging from company owners and executives to money changers, he said.

Tax evasion in Brazil has enormous economic impact that is now becoming a government priority.

"There's been capital flight out of Brazil for a long time, but the Brazilians are absolutely starting to pay attention to this," said Keith Prager, who specializes in investigations in the Latin American financial services sector for the U.S.-based Corporate Resolutions Inc.

Saadi said the investigation into the banks began after seven Credit Suisse executives were detained last year in Brazil in a money laundering probe.

The earlier investigation, known as "Operation Switzerland," focused on whether the executives illegally transferred large sums of money overseas for Brazilian clients. Saadi did not provide an update on the probe involving Credit Suisse Group.

Tuesday's detentions came three weeks after federal agents and tax authorities raided the Sao Paulo and Rio de Janeiro offices of Cisco, alleging the U.S. company benefited from a scheme to avoid duties on products shipped from tax havens to Brazil.

Four Cisco employees were detained, then released. Cisco denied it acted inappropriately, saying it does not import products directly into Brazil.

Anonymous said...




Now that my friends is a sudden drop for the US Dollar.

From 76 to 75.5 in less then several minutes.

If the Federal Reserve and Treasury are smart they better start spinning the STRONGER US DOLLAR news fast.

W.C. Varones said...

In prison, we had a term for what Bernanke and Bush are doing: the Slow Puncture.

Anonymous said...


Anonymous said...

The RBA lifted official interest rates on Wednesday morning by a quarter of a percentage point to 6.75 per cent.

The Australian dollar has reached a fresh 23-year high after the Reserve Bank of Australia (RBA) raised interest rates on Wednesday.

The domestic currency hit 93.74 US cents at 1330 AEDT - its strongest level since April 4, 1984 when it closed at 93.93 US cents.

Anonymous said...

If ECB raise rate this Thursday and make Euro stronger than the US Dollar, then will the higher Euro offset any gain in Crude Oil priced cause by weakness in the US Dollar.

Oil prices rise to record above US$98 a barrel on supply worries, Yemen oil pipeline attack

Oil prices jumped to a new trading record above US$98 a barrel Wednesday amid expectations of declining U.S. supplies and following news of an attack on a Yemeni oil pipeline.

Light, sweet crude for December delivery rose as high as US$98.03 a barrel in Asian electronic trading on the New York Mercantile

The contract Tuesday hit a high of US$97.10 before closing at $96.70 a barrel, a record settlement.

Anonymous said...

A stronger Euro means less Inflationary impact, come Thursday ECB should raise interest rate.

PPI, Retail Sales and Service PMI are to be released this morning, with not much movement expected to come from them as investors will try and hold positions ahead of Thursday's ECB Interest Rate statement.

Sentiment is that the ECB will hike rates to offset current economic trends regarding the EUR.

Today should see much of the same in regard to the EUR as investors will most likely see the EUR stay strong.

Anonymous said...

Can ECB and Fed Fund rate be at par on Thursday.

Should the Euro become the new reserve currency of the World.

US Fed: On Hold From Now On? Not According To Fed Fund Futures.

The FOMC’s most recent decision to cut rates by 25bp to 4.50 percent was widely expected by the markets, but the accompanying policy statement suggested that rates will be left steady in December as the downside risks to growth are counterbalanced by upside inflation risks.

However, the markets appear to be trying to take monetary policy into their own hands, as Fed fund futures are currently pricing in a 62 percent chance of another 25bp cut. So which will it be?

Anonymous said...

Oct. PMI Signals Expansion Of Overall Activity In Service Sector

Among the big four Euro zone nations, France had the strongest rate of expansion. The NTC/CDAF Services PMI rose to 58.5 in October from 56.8 in September, topping the consensus of 57.3.

Germany and Italy witnessed strong rebound in service sector activity from September lows. The German Services PMI increased to 55.1 in October from 53.1 logged in September The Italian NTC/ADACI Services PMI stood at 55.3 in October, rising from the 53.9 logged in September.

Services recorded the faster rate of increase, with growth outpacing that of manufacturing to the greatest extent for more than two years”, the report noted.

Anonymous said...

Malaysian Industrial Production Index Accelerates In September

Malaysia's industrial output rose at a faster pace of 3.4% in September from the previous year, compared to the 0.9% growth registered in August, the Department of Statistics said Wednesday. Economists expected an annual increase of 1.3% in September. The industrial production index, or IPI, logged 139.9 points. On a monthly basis, the IPI climbed 0.6% in September

The September annual growth in Output was driven by the major increase registered in the mining index. The report said that the mining index increased 3.9% in September. Meanwhile, the manufacturing index climbed 3.4%, and the electricity index inched up 2.5% in September.

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