HousingPANIC - The Housing Bubble Blog with an Attitude Problem, 2005 - 2008: BUBBLETALK - Newest thread to talk about the global housing crash and mortgage meltdown

August 06, 2007

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

What's on your mind? Post housing bubble / housing crash article highlights, use tinyurl, let me know what I missed, and have a good chat

273 comments:

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Anonymous said...: Weyerhaeuser profit chopped by weak housing market:

Weyerhaeuser, one of the world's largest lumber and paper producers, said today its second-quarter profit dropped sharply due hefty charges and weakness in the housing construction markets.

Excluding charges and gains, the company earned $104 million, or 48 cents per share, in the latest quarter, compared with $273 million, or $1.09 per share, in the year-earlier period.; August 03, 2007 5:33 PM
Anonymous said...: A run on the hedge funds?

If I had money in a hedge fund with subprime exposure, I would want to get out prior to the fund freezing redemptions.

The press shows that happening here and there, but I would expect it to really pick up at some point.; August 03, 2007 7:13 PM
Anonymous said...: Cramer sceaming about hedge funds,bernanke, housing collapse on cnbc at 2:45 today. Unreal.
Sarcastically yells: "Just go buy some WAMU"..........DOPES.; August 03, 2007 7:50 PM
Anonymous said...: Cramer just went on CNBC & completely lost it. Unbelievable. This makes his comments earlier in the week look benign. You've got to post the video clip. Erin Burnett was like "what do I do???? He's gone postal!"
wow; August 03, 2007 8:26 PM
Anonymous said...: Government to bail out mortgage companies? NOT WITH MY TAX DOLLARS, THANK YOU VERY MUCH! Jerks! Check out this article just posted a few minutes ago on Marketwatch:

http://tinyurl.com/34ff2v; August 03, 2007 8:39 PM
Anonymous said...: "Congress is very focused on this issue," Doug Duvall, a spokesman at Freddie Mac, said. "There's a squeeze in the market right now and lenders are tightening their standards. But having a little more prudent underwriting isn't a bad thing. It's important to keep people in their homes and to make sure they buy homes they can afford."

It's a wicked Catch-22:

For some, in order to keep them in their home, the value of their home must remain artificially inflated through fraudulent appraisals in order to be eligible to refinance out of their toxic loan that has or is about to explode from an I/O ARM into a full-amortizing loan at a much higher rate. For others - potential home buyers - in order to "make sure they buy homes they can afford," the prices of existing and new unsold homes on the market in bubble areas must fall dramatically.

Therein lies the problem, in a nutshell: it's not possible to have it both ways. Either people can buy homes they can afford because the prices drop 20-50% in short-order, or people get to stay in their overpriced homes by refinancing their exploding ARM's through more fraudulent appraisals in spite of mounting evidence that homes are not worth anywhere near what they sold for 1-5 years ago in bubble markets.

I suspect that Freddie Mac will be able to accomplish one of those two goals, but only after another 18-24 months when prices have fallen enough to make homes affordable again to the average American.; August 03, 2007 9:22 PM
Anonymous said...: Column: Hedge funds managers seen behind recent bout of late-day stock moves
The Associated PressPublished: August 3, 2007

NEW YORK: If you're baffled by Wall Street's performance this past week, consider the increasing influence hedge funds have in manipulating the market.

Investors spent another anxiety-ridden week watching last-minute triple-digit swings in the Dow Jones industrials, driven in part by worries about credit drying up and further subprime mortgage losses. But, while it looks like the market gyrates solely on fears about credit issues, market watchers say it is more complicated than that.

The Dow's 104-point drop in the final 15 minutes of Friday's session clearly had its roots in fundamental issues — comments from Bear Stearns Cos. executives that reignited fears of a widening credit crunch. But that drop, the 150 point sprint higher in the last 20 minutes of trading on Wednesday and a similar 100-point advance on Tuesday, might also have technical reasons behind them.

Hedge fund managers have been making bets on how far down or up the market will move in a given day by making sophisticated "short" and "call" investments. But the market hasn't always cooperated — going in the opposite direction from what hedge funds have expected and leaving them to scramble at the day's end to cover positions by buying or selling stocks.

"This is how hedge funds and the big proprietary trading desks on Wall Street make their money," said Peter Cohen, president of Massachusetts-based consulting and venture capital firm Peter S. Cohen & Associates. "For the individual investors, they are completely out of the loop and along for the ride."

This catalyst for this new breed of volatility has been the market's increasing anxiety amid a continuum of dour headlines about faltering subprime debt and the erosion of leveraged buyouts. But it makes for an almost perfect trading environment for hedge fund managers who thrive on volatility.

Most of the activity can be seen in exchange-traded funds, especially those that track the Standard & Poor's 500 index. Hedge funds and mutual funds also rely on electronic trading systems that automatically execute trades based on algorithms, and that was also seen as a reason for the late-day surges.

Analysts believe this kind of a pattern is bad for the market — and should be discounted. Hedge funds now account for half the daily volume on the New York Stock Exchange, with average volume this week running about 2 billion shares.

"This is all noise, you have a bunch of lemmings that run left and right and up and down," said Roland Manarin, a portfolio manager who runs Manarin Investment Counsel. "It is when an absolute panic is going on that investors should get a second mortgage and diversify among stock investments. You just can't follow along with everyone else."

There was plenty of news to rattle hedge funds this past week. On Wednesday, American Home Mortgage Investment Corp. collapsed from exposure to loans made to investors with shaky credit; and mortgage insurers Radiant Group Inc. and MGIC Investment plunged because of wrong-way bets on securities tied to subprime loans.

With the collapse of two hedge funds managed by Bear Stearns still fresh, the market was also unnerved by rumors that hedge fund Caxton Associates LLC, a $12.5 billion (€9.13 billion) fund run by Bruce Kovern, was said to be facing margin calls from a number of brokerages because of steep losses.

"These kinds of things create an environment for people to generate profits on a short-term basis, working off of fear and greed," said David Grenier, president of Cutler Capital Management, which operates three hedge funds that focus more on a buy-and-hold strategy than on trading short term. "This kind of market allows some hedge funds to test their strategies with index funds, and the guys sitting with exotic strategies are more willing to wheel and deal in this kind of volatility."

Economists have predicted that the implosion of a few more hedge funds could create a panic on Wall Street, similar to Long-Term Capital Management's failure in 1998. For those trying to make money in the current market, shorting stocks ahead of such a shock could unlock millions of dollars in profits

It might be one of the reasons that Caxton acted quickly to offset what it called unfounded rumors in a letter to investors. The hedge fund said it has posted losses of about 3 percent in its flagship Caxton Global Investments fund last month, but is still up for the year.

But, in the meantime, the market rumors and unpredictable swings are causing some fatigue for portfolio managers and floor traders. "I don't know how long this can go on before some of these traders hit the breaking point," said Peter Dunay, an investment strategist with New York-based Leeb Capital Management.; August 04, 2007 12:29 AM
Anonymous said...: I'm poised to buy California, Florida and Las Vegas as soon as this bubble completely pops.; August 04, 2007 1:26 AM
Anonymous said...: >>>depresso said...

IAmFacingForeclosure.com has been purchased by Aaron Krowne - owner of ml-implode.com

July 26, 2007 2:47 AM <<<

oh that's nice. he has enough money to buy another dot com addy but he doesn't have enough money to cover his legal bills....i get it now....

folks if all of you would just send me a dollar, i would be rich....; August 04, 2007 2:35 AM
Anonymous said...: The Mexicans will be pissed when all the mortgage LOs and AEs want thier jobs back at the drive-through window.; August 04, 2007 3:14 AM
Anonymous said...: Read The Art of War. The Chinese are at war with America but George Bush cannot even read!

The Chinese are now in control of the US economy.; August 04, 2007 3:16 AM
Anonymous said...: It is time that Institutional investors pick up th pace - it is a mad rush out the door today. It is time to unwind that carry trade position.

http://yahoo.reuters.com/news/
articlehybrid.aspx?storyID=
urn:newsml:reuters.com:
20070803:MTFH41836_2007
-08-03_15-07-34_L0363599&type
=comktNews&rpc=44

Institutional investors have been slowly unwinding carry trades for the past two months, dumping their short positions in Japanese yen and Swiss francs, data from State Street showed on Friday.

The U.S. financial services company said that flows into yen among its custodial clients were still modest, less than they have been on 61 percent of occasions over the past decade or so.

But this is in sharp contrast from the beginning of June, when flows into yen were less than on 92 percent of occasions.

"The move in Swiss franc positioning has been equally dramatic," it said.

The yen and Swiss franc are key funding currencies in the carry trade, which sees investors borrowing in such low-yield currencies to invest in assets in higher-yielding currencies.

State Street said the unwinding was not surprising.

"Short yen has been the most persistent negative position (298 business days and counting) of any of the 30 currencies tracked for thirteen years," it said.

It also warned that shifts in currencies could become even more volatile.

"When the dash for the exits is on, the trade can become pretty crowded, exacerbating price movements," it said in a note.

State Street tracks movements to and from various assets in $13.04 trillion it holds for its institutional investors clients.; August 04, 2007 4:46 AM
Anonymous said...: Dollar falls vs yen as U.S. stocks extend drop

http://www.reuters.com/article/
hotStocksNews/idUST36000320070803

The dollar was down versus the Japanese yen on Friday as U.S. stocks weakened on worsening credit market sentiment.

"It's a sell U.S. day today," said Brian Dolan, director of currency research at Forex.com in Bedminster, New Jersey.

The dollar fell to 118.43 yen, and last traded at 118.44 yen. The euro was 0.7 percent higher and traded above $1.3800.; August 04, 2007 4:50 AM
Anonymous said...: Did I mention the Chinese are newbie children when it comes to investing with the big boy capitalists who've been at it for a couple hundred years?

Their new investment arm has chalked up $500Million in losses betting on Blackstone.
HA
HA
HA

They also abruptly stopped buying securities in May, just like a panicky chickensh*t novice would. (and some DOPES, DOLTS and 1000 Word Douches on HP)

LOSERS

http://tinyurl.com/ywj8ll; August 04, 2007 5:03 AM
Anonymous said...: The housing slump: How deep is the pain?

http://money.cnn.com/2007/08/01/
real_estate/subprime_fever_
catching/index.htm?cnn=yes

A grim forecast has economists wondering how far the collapse will spread to the rest of the economy

The outlook for the housing market looks bleaker than ever. Foreclosures are skyrocketing. Home prices continue to fall. And forecasts for a recovery keep getting pushed back.

Meanwhile the collapse of the subprime lending market has spread to the financial markets, sparking fears that tighter credit will have a broader impact on consumers and the economy.; August 04, 2007 5:03 AM
Anonymous said...: UNITED AIRLINES, DELTA AIR LINES, AND MICROSOFT ALL REPORT STRONG PROFITS. GM AND FORD MAKE BIG MONEY.

96,000 JOBS CREATED LAST MONTH

SOME CRASH!!!!

DOPES!; August 04, 2007 5:38 AM
Anonymous said...: Oh master, great Mr. Bernanke "Give me back my Bubble" and I will be your humble servent.

For the speculators the "doors of fear" are still seal tight.

For the home owners it is still a time of denial. Home owners are still drunk from the pleasure of their fruits, and know no fear yet.

Why, the problem is most speculators who have brought in the past seven years don't share the same fear that MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms are feeling today.

These speculators are without fear because if Mr. Bernanke lower interest rate then it play time again, if Mr. Bernanke do not lower interest rate then like Jim Crammer suggested these speculators can give back the keys to the MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms.

These speculators are laughing in the faces of MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms who were stupid enough to give them the free money in the first place.

MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms are afraid because they just got cut off from the Bernanke's dime and soon the BOJ liquidity pump.

For the MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms - Do we have Armageddon? Sure, look at them they are like junkies.

Like junkies - MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms would like a "pick me upper" after suffering from the withdraw of not being able to indulge on the forbidden fruit that they have eaten for the past seven years.

Like junkies - MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms are saying just one more time as the pleasure of greed cloud their sense of reasonings. Remember it is not until after they have fore filled their lust for the passion of the fresh can the burning in their blood be cooled then their sense of reasonings can come back.

Like junkies - MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms know that it is wrong to ask but they are saying come on Mr. Bernanke it does not have be as long as another seven years this time.

Like junkies - MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms are on their knees begging for another dime. They are saying let all indulge on the forbidden fruit one more time. Don't worry, just lower it some, and everything will be fine.

But weren't these MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms foretold about the danger of greed.

Now that the "doors of fear" begin to crack open are these MBS investors, mortgage lenders, hedge fund mangers, and brokerage beginning to remember that contract that they signed with fear seven years ago for the exchange of some pleasures of greed.

Perhaps these MBS investors, mortgage lenders, hedge fund mangers, and brokerage firms are hoping that Mr. Bernanke are more stupid then them. They want Mr. Bernanke to make the mistake of lowering interest rate so that they are not the ones holding the bag.

If Mr. Bernanke does lower interest rate then it back to making lair loans as usual, but this time they will plan an exit strategy leaving the Dollar to free fall.; August 04, 2007 7:06 AM
Anonymous said...: I was impressed when I saw cereberus complete the chrysler buyout but Boots is stalled "atleast for a month". 15 Billion of liquidity gone in smoke - http://www.ft.com/cms/s/b12425f0-41f4-11dc-8328-0000779fd2ac.html; August 04, 2007 12:27 PM
Anonymous said...: There is a glut of liquidity being pumped into the global economies by BOJ.

Once this excess global liquidity have been laundered into the system by hedge funds through financial tools that take advantage of the understanding of how the BOJ manipulate exchange rate this excess global liquidity will become permanent.

Part of it would have then been funneled into the overheated property market, jeopardizing the Federal Reserve efforts to slow down mortgage demand.

Banks are itching to cut home-loan rates, which have risen since the Federal Reserve began its monetary tightening.

Banks are hurting to maintain the type of profits they have seen in the past, so they are manipulating the media by spreading the news that if the Federal Reserve do not lower interest rate then they will fold soon. This is no different then what took place between the mid 1990.

But if the Federal Reserve cut lending rates prematurely, credit growth may pick up speed again. Inflation may not be tamed without raising interest rates. The Federal Reserve understands this.

The Federal Reserve knows a solution - the only way the Federal Reserve can control both inflation and the exchange rate for any length of time is if the government is willing to take a hit on the federal budget.

Since the Federal Reserve do not control the federal budget what can they do.

The Federal Reserve can increase the ratio of deposits that lenders have to keep with the central bank. This is risky but it was done in the mid 1990.

Preemption of bank deposits by the Federal Reserve acts as a tax on the banking system and erodes its competitiveness.

When liquidity in the system becomes tight, a different limitation kicks in: Banks aren't able to borrow from the Federal Reserve even if they are willing to pay the asking rate because of a shortage of collateral.

That's because they have to set aside a certain amount of their deposits in "statutory liquidity", or government securities that don't qualify as collateral.

Who is really to blame, yes BOJ. Since BOJ will not raise interest rate to cut global excess liquidity?

Soon central banks around the world that can not continuing raising interest rate will be left with very little option but to increase the ratio of deposits that lenders have to keep with the central banks.; August 04, 2007 9:45 PM
gregoryw said...: OK seriously I hope the FBI is watching these broker forums.

http://forum.brokeroutpost.com/loans/forum/2/149093.htm

"OK... First let me say this, I have no issue with appraiser's charging $350 to $450 for an appraisal. But I do have an issue with the appraiser when he/she charges my customer who is on a fixed income, living alone and disabled a $350 fee and then not even come close to the,,, Yes "ESTIMATED VALUE" that I came to him with. I mean we are talkin about a $27,000 difference in the Value that I was under the impression was gonna be. Obviously I was way off. And that's fine, I have no issues with that at all. I am by no means an appraiser, home inspector, nothing to do with anything like that. BUT,,, When I tell the appraiser "I need this value to be XXX amount to make this loan work to my clients benefit. But please let me know right away if you are going to run into issues with this estimate, I know that I could be off due to my lack of resources in this area." Secondly when I called this appraiser to be sure that he received my fax I again reiterated my need for this particular value. He tells me "No Problem, When I inspect the property and look at the comparables to his home I will let you know if I see an issue in getting that value. But if I do run into a problem I will send back $200 and just charge him a trip fee of $150." My reply was "Thank You, I appreciate it."

Well here I am with an appraisal that is $27,000 less than what I expected and an appraiser saying that "The value is what it is and I put in a lot of time on this appraisal. I cant help the fact that his home just didn't hit that mark." Hahahaha.... As I chuckle to myself on the phone, he asks me if I have any other properties in his area that he could do for our company. So I ask him "Well what are we going to do about this appraisal and the fee. You knew that I was unable to make this work for anything less than what I estimated. Yet you still put all the work into it like its all good..." "Are you seriously going to keep the entire appraisal fee??"

After all is said and NOT DONE... My client is out $350 and a loan, all in one swing of the bat."

That is so illegal.; August 04, 2007 10:12 PM
Anonymous said...: Keep an eye on this survey the Fed will.

http://www.federalreserve.gov/
boarddocs/SnLoanSurvey/

Senior Loan Officer Opinion Survey on

Bank Lending Practices

Survey of approximately sixty large domestic banks and twenty-four U.S. branches and agencies of foreign banks. The Federal Reserve generally conducts the survey quarterly, timing it so that results are available for the January, May, August, and November meetings of the Federal Open Market Committee. The Federal Reserve occasionally conducts one or two additional surveys during the year. Questions cover changes in the standards and terms of the banks' lending and the state of business and household demand for loans. The survey often includes questions on one or two other topics of current interest.; August 04, 2007 11:33 PM
Anonymous said...: Actually in some states AZ among them it is illegal for you to 'put pressure' on the appraiser! I was recently involved in the exact same scenario you purport. The difference is the appraiser complained to my regulatory agency. I had to answer as to what we would do in the future to insure that no appraiesr was ever pressured in that way again. I asked many times for the definition of 'pressure' and I was told it was whatever the appraiser perceived it to be.

Appraisers are the worst. It boils down to this; no value, no loan. They started this mess. They whore out at $350 a pop. I hope that 90% of them fail. I hope it goes baqck to no appraisal will be accepted unless the highest and best use of the property is 'rental income'.; August 04, 2007 11:51 PM
Anonymous said...: Whenever I hear the words ‘excess liquidity’, I begin to worry. It usually means that I somehow end up having to pay more interest on my loans, or getting less interest for my deposits — because the economy and the banking system have trouble dealing with all that extra cash sloshing around in the system.

That is apparently why the Reserve Bank of India stepped in a couple of days ago and hiked the amount of cash banks will have to keep locked up with it. The banking regulator doesn’t want too many rupees being injected into the economy at this point of time, which will have the potential of pushing the inflation rate up.

Good on them, I say. As a consumer, I am all for moderate inflation rates. Especially since the private sector has long buried the concept of an inflation index-linked ‘dearness allowance’, which was supposed to automatically prevent your real disposable income from eroding.

http://www.hindustantimes.com/
StoryPage/StoryPage.aspx?id=
7a78eeb1-6649-495c-bf77-
2636c51825dc&ParentID=f1535784-
6489-4649-b69c-cb9147feeb52&&
Headline=Random+Access+%7c+
How+do+I+grab+some+of+this+
%e2%80%98excess%e2%80%99+
liquidity%3f; August 04, 2007 11:58 PM
Anonymous said...: Taming liquidity growth

The People's Bank of China raised the reserve requirement ratio by 0.5 percentage points to 12 percent for the country's big lenders on Monday.

The move, like previous ones, is expected to help the central bank to absorb liquidity in the market by about 150 billion yuan ($20 billion). This amount of reduction in liquidity is not very huge in comparison with the country's lending growth. China's commercial banks lent up to 2.5 trillion yuan ($329 billion) in the first half of the year, approaching 80 percent of last year's total.

http://www.chinadaily.com.cn/
opinion/2007-08/01/
content_5447058.htm; August 05, 2007 12:05 AM
Anonymous said...: Now the world is flush with a glut of excess global liquidity thanks to BOJ.

That liquidity could had been stopped if only the Federal Reserve would have increased the ratio of deposits that lenders have to keep with the central bank, then the liquidity of yen carry trade would not have created a foot hold in the US creating all these lair loans.

People failed to see the obvious, but did those up on top in management not know what was going on.

It does not matter in the end the little guys play the price, and the rich go out and play.

http://www.nytimes.com/2007/08/04/
nyregion/04layoffs.html

Workers Say They Feel Blindsided by Lender’s Failure

Among the 1,400 or so people who lost their jobs here Friday, there were undoubtedly some who understood the macro and micro factors that led American Home Mortgage Investment Corporation, one of the largest and fastest-growing mortgage companies in the country, to crash in a heap this week, even as it was hiring employees by the dozen.

“There are people here who worked here since the beginning,” Ms. Jackson said. “They felt like this was their family.”

Shawn Nuzzo, 31, a loan sales coordinator, said he sensed a shift in the market late last year.

“Basically, the guy who puts no money down has a big incentive to walk away when interest rates go up,” Mr. Nuzzo said. “That started happening, and we made some adjustments. But obviously it was too little, too late.”; August 05, 2007 1:21 AM
burn baby burn said...: check it out Zillow Discussions and take the battle to the trolls.
www.zillow.com/forum/site/Index.htm
If we do not fight the trolls there we will have to fight them here.; August 05, 2007 3:20 AM
Roccman said...: Some excerpts from a fairly long article...game over.

Stock Market Meltdown

Quote:
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." (Thanks to the Daily Reckoning)

Quote:
It doesn’t matter if the “underlying economy is strong”. (as Henry Paulson likes to say) That’s nonsense. Trillions of dollars of over-leveraged bets are quickly unraveling which has the same effect as taking a wrecking ball down Wall Street.

Quote:
And it’s not just the banks that are in for a drubbing. The insurance companies and pension funds are loaded with trillions of dollars in “toxic waste” CDOs. That shoe hasn’t even dropped yet. By the end of 2008, the economy will be on life-support and Wall Street will look like the Baghdad morgue. American biggest financials will be splayed out on a marble slab peering blankly into the ether.

Quote:
We’ve never seen an economic tsunami like this before. The dollar is falling, employment and manufacturing are weakening, new car sales are off for the seventh straight month, consumer spending is down to a paltry 1.3%, and oil is hitting new highs every day as it marches inexorably towards a $100 per barrel.

Quote:
The problems in real estate are not limited to residential housing either. The credit crunch is now affecting deals in commercial real estate, too. Low-cost, low-documentation, “covenant lite” loans are a thing of the past. Banks are finally stiffening their lending requirements even though the horse has already left the barn. Commercial mortgage-backed securities are now nearly as tainted as their evil-twin, residential mortgage-backed securities (RMBS). There’s no market for these turkeys. The banks are returning to traditional lending standards and simply don’t want to take the risk anymore.

Quote:
What passes as “trading” on Wall Street today is just the endless expansion of credit via newer and more opaque debt-instruments. It’s all a sham. America ’s hard assets are being sold off to at an unprecedented pace.

Quote:
The public doesn’t know anything about this looming disaster yet. How will people react when they drive up to their local bank and see plywood sheeting covering the windows? This will happen. There will be bank failures.

Quote:
Keep an eye on the yen. The ongoing troubles in subprime and hedge funds are pushing the yen upwards which will unwind trillions of dollars of low interest, short term loans which are fueling the rise in stock prices. If the yen strengthens, traders will be forced to sell their positions and the market will tank. It’s just that simple. The Dow Jones will be a Dead Duck.

Quote:
Economic policy is not “accidental”. The Fed’s policies were designed to create a crisis, and that crisis was intended to coincide with the activation of a nation-wide police-state.

Quote:
The goal is to maintain control of the global economic system by seizing the remaining energy resources in Eurasia and the Middle East and by integrating potential rivals into the American-led economic model under the direction of the Central Bank. All of the leading candidates—Democrat and Republican---belong to secretive organizations which ascribe to the same basic principles of global rule (new world order) and permanent US hegemony. There’s no quantifiable difference between any of them.

Quote:
We are now in the first phase of Greenspan’s Depression. The stock market is headed for the doldrums and the economy will quickly follow. Many more mortgage lenders, hedge funds and investment banks will be carried out feet first.; August 05, 2007 4:50 AM
Anonymous said...: Great article on ICH about the stock market tanking called "Stock Market Meltdown", an excerpt:

This week a third Bear Stearns fund shuttered its doors and stopped investors from withdrawing their money. Bear’s CFO, Sam Molinaro, described the chaos in the credit market as the worst he'd seen in 22 years. At the same time, American Home Mortgage Investment Corp---the 10th-largest mortgage lender in the U.S. ---said that “it can't pay its creditors, potentially becoming the first big lender outside the subprime mortgage business to go bust”. (MarketWatch)

This is big news, mainly because AHM is the first major lender OUTSIDE THE SUBPRIME MORTGAGE BUSINESS to go belly-up. The contagion has now spread through the entire mortgage industry—Alt-A, piggyback, Interest Only, ARMs, Prime, 2-28, Jumbo,—the whole range of loans is now vulnerable. That means we should expect far more than the estimated 2 million foreclosures by year-end. This is bound to wreak havoc in the secondary market where $1.7 trillion in toxic CDOs have already become the scourge of Wall Street.

Some of the country’s biggest banks are going to take a beating when AHM goes under. Bank of America is on the hook for $1.3 billion, Bear Stearns $2 billion and Barclay’s $1 billion. All told, AHM’s mortgage underwriting amounted to a whopping $9.7 billion. (Apparently, AHM could not even come up with a measly $300 million to cover existing deals on mortgages! Where’d all the money go?) This shows the downstream effects of these massive mortgage-lending meltdowns. Everybody gets hurt.

AHM’s stock plunged 90% IN ONE DAY. Jittery investors are now bailing out at the first sign of a downturn. Wall Street has become a bundle of nerves and the problems in housing have only just begun. Inventory is still building, prices are falling and defaults are steadily rising; all the necessary components for a full-blown catastrophe.

AHM warned investors on Tuesday that it had stopped buying loans from a variety of originators. 2 other mortgage lenders announced they were going out of business just hours later. The lending climate has gotten worse by the day. Up to now, the banks have had no trouble bundling mortgages off to Wall Street through collateralized debt obligations (CDOs). Now everything has changed. The banks are buried under MORE THAN $300 BILLION worth of loans that no one wants. The mortgage CDO is going the way of the Dodo. Unfortunately, it has attached itself to many of the investment banks on its way to extinction.

And it’s not just the banks that are in for a drubbing. The insurance companies and pension funds are loaded with trillions of dollars in “toxic waste” CDOs. That shoe hasn’t even dropped yet. By the end of 2008, the economy will be on life-support and Wall Street will look like the Baghdad morgue. American biggest financials will be splayed out on a marble slab peering blankly into the ether.

Think I’m kidding?

Already the big investment banks are taking on water. Merrill Lynch has fallen 22% since the start of the year. Citigroup is down 16% and Lehman Bros Holdings has dropped 22%. According to Bloomberg News: “The highest level of defaults in 10 years on subprime mortgages and a $33 billion pileup of unsold bonds and loans for funding acquisitions are driving investors away from debt of the New York-based securities firms. Concerns about credit quality may get worse because banks promised to provide $300 billion in debt for leveraged buyouts announced this year……Bear Stearns Cos., Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Goldman Sachs Group Inc., are as good as junk.”

That’s right---“junk”.

We’ve never seen an economic tsunami like this before. The dollar is falling, employment and manufacturing are weakening, new car sales are off for the seventh straight month, consumer spending is down to a paltry 1.3%, and oil is hitting new highs every day as it marches inexorably towards a $100 per barrel.

Complete article here:

http://tinyurl.com/2ck25t; August 05, 2007 6:31 AM
Anonymous said...: the median price of a home sold in the month edged up 0.3 percent compared to a year ago to $230,100. It was the first time since July 2006 that there has been a gain in that closely-watched price measure. The June price jumped 3.3 percent compared to May.

Some crash.

DOPES

The reason the median price went up is because lower-priced homes are not selling because sub-prime is dead. Of course the median is going up. Duh!; August 05, 2007 8:40 AM
Anonymous said...: There will be an ironic twist to this whole affair. Many people who were initially happy because they got easy financing in '05 and '06 will end up sad. Some whose deals fell through at the last minute will end up happy because they will eventually buy a better house for less money.; August 05, 2007 3:24 PM
Anonymous said...: Why I just bought:

First off, I am a big fan of HP. This site saved me from making a mistake at the peak of the bubble. It served as a reality check to the euphoria that I was seeing in the market. That said, we just bought a house.

Here is where:

Denver, older second most desirable neighborhood in town. Close to public transportation, parks, and downtown.

Here is why:
Getting married, wanted our own home to start a family. Long term buyers (10 years).

All the stats show Denver is overvalued and is due for a price correction. Estimates are 5-10% overvalued. This is mostly concentrated in the overbuilt burbs, not the older neighborhoods. Case-Shiller shows Denver depreciated over 2% YOY in may 07. This neighborhood was flat to slightly positive 0.5%.

We can afford to buy the house with 20% down and still save a few grand after the mortgage (30 year fixed).

Least expensive house by over 150k on the block.

Negotiating power on pricing and terms.

Modeled out the required annual appreciation required over 5 years to make buying equal the rent and save approach. House needed to appreciate at 3.5% to match the wealth generated by savings. This is unlikely.

Essentially, buying a house was a consumption decision. We think it will give us pleasure and are willing to forgo other things like newer cars and other toys.

So, the question to HP is, do you think this was a rational or irrational decision?; August 05, 2007 3:39 PM
Anonymous said...: Here comes the cavalry:

http://tinyurl.com/26jzdc

"Securities and Exchange Commission chief Chris Cox said the SEC is coming up with new, more flexible accounting rule interpretations that companies and others could use to avoid declaring their mortgage securities in default."; August 05, 2007 4:10 PM
Anonymous said...: Sounds like you can afford the payments, which is more than many house debters can say.

Did you want to house debt, or did you feel obligated to do so?

~~~

Anonymous said...
Why I just bought:

First off, I am a big fan of HP. This site saved me from making a mistake at the peak of the bubble. It served as a reality check to the euphoria that I was seeing in the market. That said, we just bought a house.

Here is where:

Denver, older second most desirable neighborhood in town. Close to public transportation, parks, and downtown.

Here is why:
Getting married, wanted our own home to start a family. Long term buyers (10 years).

All the stats show Denver is overvalued and is due for a price correction. Estimates are 5-10% overvalued. This is mostly concentrated in the overbuilt burbs, not the older neighborhoods. Case-Shiller shows Denver depreciated over 2% YOY in may 07. This neighborhood was flat to slightly positive 0.5%.

We can afford to buy the house with 20% down and still save a few grand after the mortgage (30 year fixed).

Least expensive house by over 150k on the block.

Negotiating power on pricing and terms.

Modeled out the required annual appreciation required over 5 years to make buying equal the rent and save approach. House needed to appreciate at 3.5% to match the wealth generated by savings. This is unlikely.

Essentially, buying a house was a consumption decision. We think it will give us pleasure and are willing to forgo other things like newer cars and other toys.

So, the question to HP is, do you think this was a rational or irrational decision?; August 05, 2007 5:57 PM
Anonymous said...: The problem with housing in this century is rental rates are too high, making it practically impossible for our citizens to save for their future home. The politicians need to step up and do something about this problem. Propose to have them setup a committee to have state local governments reduce and regulate, and even penalize apartment communities for overcharging residents.; August 05, 2007 7:51 PM
Anonymous said...: Anonymous said...
The problem with housing in this century is rental rates are too high, making it practically impossible for our citizens to save for their future home. The politicians need to step up and do something about this problem. Propose to have them setup a committee to have state local governments reduce and regulate, and even penalize apartment communities for overcharging residents.

August 05, 2007 7:51 PM

==============================

Please kill yourself.; August 05, 2007 9:19 PM
burn baby burn said...: Please kill yourself.

After you; August 05, 2007 9:22 PM
Anonymous said...: communist scum should be shot; August 05, 2007 9:27 PM
Anonymous said...: Face it. Risk-taking doesn't come with guarantees. That means no one should count on the Federal Reserve to bail us out of the current credit slump so fast.

As stock and bond markets swoon over worries about weakening debt, more investors seem to be thinking that the Fed soon will come to the rescue by lowering interest rates.

Investors may be getting ahead of themselves. There's a new sheriff in town: Ben Bernanke. As long as the credit fallout doesn't look like it is spilling over into a full-fledged economic collapse, his central bank might not be quick to meddle.

After boosting its overnight lending rate 17 times over two years beginning in June 2004 to slow the economy sufficiently to hinder inflation, the Fed has left the rate unchanged since last summer at 5.25 percent.

Investors have been anxiously awaiting the central bank's next move -- and hoping it's a rate cut, given what's happening in credit markets. Once-plentiful liquidity is drying up now that the implosion in subprime mortgages has caused lenders all around to raise interest rates or ask for other protections to guard them against risk.

The deteriorating credit conditions have led to major hedge-fund losses. Two Bear Stearns funds filed for bankruptcy-court protection Tuesday after seeing their assets plunge in value. In addition, dozens of mortgage lenders have gone out of business.

Debt investors, in turn, are fleeing risk, dumping junk bonds and other lower-quality securities and turning to the safer haven of government bonds. Stocks have been battered by a punishing decline from new highs, with the Dow Jones industrial average tumbling more than 600 points since its record close above 14,000 on July 19.

With financial markets on edge, there is growing optimism that the Fed will ride in like the cavalry to the rescue. In the federal funds futures market -- where speculators bet on future Fed actions -- there is now a 95 percent probability for a rate cut by the end of the year, up from about 32 percent a week ago, according to Merrill Lynch.

Clearly, they are using history as their guide. As Goldman Sachs notes in a recent report, there have been two examples of "financial stress" spurring the Fed to ease rates in the last 20 years. The first came in 1987 after the October stock market crash, during which major market indexes plummeted more than 20 percent in a single day.

The next was in 1998, after Russia's debt default in August of that year prompted investors to reassess their risk appetite. Credit spreads widened over the next weeks, which raised fears about an oncoming recession. That led to the failure of well-regarded hedge fund Long-Term Capital Management, which spurred worries about stress on the financial system.

But Alan Greenspan led the Fed back then. Today's chairman is Bernanke, who isn't expected to "play the game of riding to the rescue of the markets like Greenspan did," said Milton Ezrati, senior economic and market strategist at money management firm Lord, Abbett & Co. "He will be more judicious in cutting rates."

The Fed likely won't ease unless there is evidence that the credit crisis is causing consumer spending and employment to significantly weaken. So far, that hasn't happened.

http://www.c-n.com/apps/pbcs.dll/
article?AID=/20070805/BIZ01/
708050377/1019; August 05, 2007 11:52 PM
Anonymous said...: Trump's way ahead! He's building condo's in Mexico for the boomers. "AT 30% less (?) then the cost of one here!"
Apparently AARP recommended Mexico as the 4th best place to retire for the boomers, as the worthless dollar will go much further there.

Too tired to think of anything clever to say, just reporting.; August 05, 2007 11:58 PM
Anonymous said...: Ideally the best time to buy a house is in the late stage of a housing slump to the beginning stage of a housing recovery phase of a housing cycle.

Unless you have a great deal of understanding of the market in your area and can predict the federal reserve every move it is hard to time the exact stage of the housing market cycle in your local area.

Not all area are in the same stage at the same time. In the East like Florida some cities are in the middle stage of the housing slump, while in the West like California some cities are just beginning to see the housing slump.

The housing phases are a little easier to see. There are three housing phases. Recovery, Boom, and Slump. As we can all see Nationally we are in a housing slump.

But not everyone can afford to wait to buy at the ideal time for personal reasons.

Therefore, buying a house to live in is a personal choice.

Do you feel secure in your job?
What provision have you made if a sudden event were to happen? Do you have the resource to get yourself out without taping into your equities? In the worst case scenario you might not have any equities left in your house.

If the house price in Denver go down 20% to 30% would you still like the house you brought or would you wished you would have waited to buy something better?

If you had to relocate in a few year due to personal reason or job opportunity can you with stand a housing price collapse if it does happen in your neighborhood?

As long as you used sounded financial decision in your process then the only person that can answer the following question is you.

So, the question to HP is, do you think this was a rational or irrational decision?

Denver, congratulation on your purchase and good luck with your future.; August 06, 2007 12:35 AM
roosh said...: Bear Stearns presidents resigns Sunday

http://tinyurl.com/34kxkn; August 06, 2007 12:40 AM
Anonymous said...: BOJ is just pumping too much excess liquidity into the market.

http://www.theage.com.au/news/
business/dire-market-may-not-
sway-rba/2007/08/05/
1186252543080.html

Dire market may not sway RBA

THE Reserve Bank is expected to ignore market turbulence and raise interest rates this week, with economists fearing a pre-election spending spree in the coming months will only heighten pressure on inflation.

The sharemarket is set to tumble when it opens today, following more steep falls on Wall Street on Friday. Futures markets are indicating the S&P/ASX 200 may drop as much as 2 per cent, extending last week's slide on worries about mortgage defaults in the US prompting a wider credit squeeze.

Just two out of 24 economists surveyed by Reuters believe rates will stay on hold. Most believe higher than expected inflation numbers and borrowing in June will force the bank to raise rates by 25 basis points at tomorrow's meeting. The outcome will be revealed on Wednesday at 9.30am. Until the release of the June-quarter consumer price index, financial markets and most economists had expected rates to remain unchanged. But an underlying reading of 0.9 per cent in the quarter (expectations were for 0.7 per cent increase), shifted views.; August 06, 2007 12:50 AM
Anonymous said...: (1 US dollar = 117.65 yen)

http://www.forbes.com/markets/
feeds/afx/2007/08/05/
afx3988726.html

Tokyo shares open sharply down on Wall Street plunge, firmer yen

Tokyo shares opened sharply lower Monday, as Wall Street's plunge on Friday revived fears about potential global fallout from the US subprime mortgage woes.

Foreign investors led the selling, fuelling concerns that hedge funds have begun unwinding big big blocks of shares in global markets.; August 06, 2007 3:47 AM
Anonymous said...: The head of Australia's biggest bank says problems in the US sub-prime housing mortgage sector will continue to play havoc with America's financial system, but Australia should be largely immune.

Rising defaults on sub-prime loans helped spark sharp falls on Wall Street last week, as companies and investment funds linked to the sector were punished by the market.

The sub-prime loan market provides finance for borrowers with credit history problems in exchange for higher interest rates.

In many cases, the loans have been repackaged and sold on to financial institutions which have found themselves under pressure as the borrowers defaulted.

The National Australia Bank chief executive, John Stewart, said the magnitude of the problem in the US was wide. "It's very serious and it's got a lot further to go, it's about 15 per cent of the mortgage market in the US," he said.

"To give you an idea, that is about $1.3 trillion. Right now about 20 per cent of it is in arrears."

US hedge funds associated with sub-prime mortgages would feel further pain, he said, possibly for another two years.

"People will lose money, of that there is no doubt," he said.

"There is a lot of bad debts out there that have to come out some place and because not only have they sold as packages of sub-prime mortgages, they are also leveraged up with debt and sometimes leveraged up several times."

But the Australian banking system did not face the same threat.

"Similarities [are] next to nothing, there's 15 per cent of the market there, less than 1 per cent of the market here."

The Australian economy would also largely withstand any weakening in the US economy, he said.

http://canberra.yourguide.com.au/
detail.asp?class=international+
news&subclass=finance&story_id=
1032659&category=finance; August 06, 2007 3:51 AM
Anonymous said...: Asian Irony

It has to be one of the biggest ironies in global finance. Ten years ago, it was contagion from Asia imperiling the global economy. For months after Thailand devalued its currency in July 1997, U.S. officials reassured markets that Asia's woes were containable. Once the Dow Jones Industrial Average began plunging several hundred points in a day, investors knew better.

Eerily familiar noises are coming from Paulson these days. In Beijing last week, he said the U.S. economy is ``healthy'' enough to weather ongoing market declines. One hears similar reassurances from top economic officials near and far.

Yet Paulson's confidence in an economy facing the worst housing recession in 16 years and massive current-account and budget deficits isn't reassuring. It smacks of deepening denial at a time when policy makers like Guinigundo say ``the risks of contagion can't be downplayed.''

Asia has come a long way since 1997, as Asian Development Bank President Haruhiko Kuroda explained in Coolum. Banks are far more stable, currency reserves have been amassed, and governments are modernizing and integrating financial systems.

``The correction is coming about because of weakness in the U.S.,'' said Australian Treasurer Peter Costello. ``It illustrates how interconnected the world is.''

It's a breathtaking role reversal. Just as Asia downplayed the odds of its 1997 contagion oozing around the globe, the U.S. claims its problems are containable. While that's possible, the concerns of investors like Jeremy Grantham, chairman of Grantham, Mayo, Van Otterloo & Co. and Jim Rogers, chairman of Beeland Interests Inc. are worth noting.

Consternation or Cooperation

Only now are investors waking up to how global risk has been mispriced in recent years. Markets became too greedy in selling collateralized debt obligations and financing leveraged buyouts, and investors underappreciated the hazards.

Costello said APEC talked about ``what can be put in place to ensure that these imbalances don't work out in an even more radical readjustment.'' That would be reassuring if APEC had come up with something concrete. Instead, we got boilerplate -- and hollow -- calls for flexible exchange rates.

There was no demand for Japan to reduce incentives for the so-called yen-carry trade. Borrowing cheaply in Japan and investing the funds in higher-returning assets elsewhere has fueled many of today's riskiest hedge-fund trades. Yet Japan is reluctant to let the yen rise, and global policymakers continue to wimp out on demanding it.

http://www.bloomberg.com/apps/
news?pid=20601039&sid=
aWujXT4UUbUI&refer=columnist_pesek; August 06, 2007 4:10 AM
Anonymous said...: Crashisacomin said:

I noticed today, Yahoo Real Estate has all the home forclosure pictures showing on their website.

This is a first. Does it mean anything?

I guess will will find out.; August 06, 2007 4:16 AM
Anonymous said...: BOJ and excess global liquidity a gift that just keeps on giving.

http://www.investmentexecutive.com/
client/en/News/
DetailNews.asp?id=40446&IdSection
=148&cat=148&BImageCI=1

Corporations using yen carry trade as a cheap source of short-term financing, warns Merrill Lynch

Tightening of global credit conditions underestimated by most investors

Hedge funds may not be the only ones playing the carry trade as it unwinds, and investors may be surprised where it bites, says Merrill Lynch in a research note.

“The yen carry trade basically involves borrowing at low interest rates in Japanese Yen and investing in higher returning assets somewhere around the world,” Merrill explains. It notes that two groups of investors are generally associated with these sorts of trades: hedge funds, and Japanese citizens looking for higher returns on their savings.

But, it notes that there’s increasing evidence that a third group has been active in yen carry trades: corporations. “It seems as though corporations have used the yen carry trade as a cheap source of short-term financing,” it says.

“So far, it is quite difficult to pinpoint which corporations have been using such financing methods or what the impact on their financing costs would be if the Yen appreciated and/or Japanese interest rates rose,” Merrill allows.

However, it cautions, “The tightening of global credit conditions and its implications still seem to be misunderstood or underestimated by most investors.”

“We continue to expect financial market volatility to increase, and risk premia to rise accordingly, as global credit conditions tighten,” it concludes. “Credit has an insidious way of boosting growth, and its effects invariably appear in places that investors least expect. Corporate balance sheets might be one of those places.”; August 06, 2007 4:28 AM
Anonymous said...: Not looking good for the Dollar

http://quote.bloomberg.com/apps/
news?pid=20601087&sid=aHEwYFglB2Ts

The pound had its biggest weekly gain since June against the yen as rebounding credit markets prompted investors to restart so-called carry trades.

The U.K. currency extended gains versus the dollar.

Investors and economists expect the Bank of England to raise its benchmark interest rate once more from 5.75 percent this year to quell inflation, which has exceeded the bank's 2 percent target for more than a year.

The implied yield on the December interest-rate futures contract closed the week at 6.15 percent.; August 06, 2007 4:35 AM
Anonymous said...: Dollar slides as Asia stocks hit by US woes

http://business.inquirer.net/
money/breakingnews/
view_article.php?article_id=80827

Fresh concerns about the health of the US economy sent the dollar sliding, while Asian stock markets fell on Monday with financial shares hit by global credit worries.

Oil prices slid towards $74 a barrel amid heightened concerns for economic growth, but flight to safety helped gold stay near one-week highs; August 06, 2007 4:40 AM
Unknown said...: The panic is really here. For credit/liquidity it is not 1989 as real estate analysts think, but 1929.; August 06, 2007 5:59 AM
Anonymous said...: Fitch Downgrades Over $3B of Subprime MBS

More than 100 classes of subprime residential mortgage-backed securities with outstanding balances totaling over $3 billion were downgraded by Fitch Ratings on Aug. 2.

Fitch also affirmed the ratings on classes with outstanding balances of more than $20 billion. Among the downgrades were: 47 classes from 10 issues of Morgan Stanley mortgage pass-through certificates; 46 classes from nine issues of J.P. Morgan Mortgage Acquisition Corp. asset-backed mortgage pass-through certificates; 20 classes from three ACE Securities mortgage pass-through certificates; and 19 classes from three issues of Societe Generale mortgage pass-through certificates.

The rating actions were based on changes to Fitch's subprime loss forecasting assumptions, which "better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness," the rating agency said.

Fitch reported that as of the end of the day on Aug. 2, it had downgraded 291 such classes with an outstanding balance of $5 billion and affirmed the ratings on 526 classes with an outstanding balance of $46 billion.

http://mortgageservicingnews.com/
plus/; August 06, 2007 7:31 AM
Anonymous said...: Keith--
You should dedicate a thread to stupid broker statements on the broker forums. For example:
http://www.brokeruniverse.com/grapevine/thread/?thread=436492

here is the tinyurl:
http://tinyurl.com/2uasez; August 06, 2007 3:09 PM
Anonymous said...: Laidback, but fairly pointed video on Cramer - about 3 mins of his Nov 06 views on housing:

http://tinyurl.com/2emaf7; August 06, 2007 3:41 PM
Anonymous said...: Benjamin Fulford (must read):
http://tinyurl.com/275534; August 06, 2007 5:13 PM
Anonymous said...: Keith,

Check your inbox pronto.

http://tinyurl.com/28hrjt; August 06, 2007 6:50 PM
Anonymous said...: More proof that bubbles are for bathtubs:

http://tinyurl.com/2b64no

(I apolgize to anyone who has seen this before); August 06, 2007 7:15 PM
Anonymous said...: Who cares about Diana, her conclusions are already well-known and 6mos to 1yr behind the curve anyway.
Here's some real news:

While US banks and the Fed are unlikely to bail out subprime lenders, the Germans are only too happy to do so.
What does this mean for the Euro? Maybe their currency will tank and the dollar will soar.....

http://www.reuters.com/article/bondsNews/idUSWNA775520070806; August 06, 2007 8:34 PM
Anonymous said...: I laugh at all the "experts" interviwed by the media, the CFO's and CEO's who say, "In my 20 years, I've never seen...blah blah..."

Don't talk to me unless you've been at the game since at least the early 70's.; August 06, 2007 8:40 PM
Anonymous said...: AL-QUAFFER,

Why no comments on the markets today? HUH tough guy? Where's the mea culpa? You were once again wrong yet like a little girl run and hide.

Dollar up
Gold down
Dow in the stratopshere along with the nasdaq and s&p

Yet 100% silence from AL-QUAFFER

Boo-ya bitches!!; August 06, 2007 9:49 PM
Anonymous said...: Add to your list of "Little Boys Icarus"
Casey Serin
David Crisp
and now:
Warren Spector,
who made his name betting on housing like the rest of them.
Now booted from Bear Stearns, his name will now decorate the wall of infamy that accompanies the Late Great Housing Ponzi Scheme.

People thought he was savvy trading mortgage bonds, but *everyone* looked smart when "housing always went up!"

DOPE; August 07, 2007 12:09 AM
Anonymous said...: TRUMP MORTGAGE FLOP TIED TO CREDENTIALS FLAP
By PAUL THARP
August 6, 2007 -- As the mortgage mess widens, Donald Trump has pulled the plug on Trump Mortgage less than two years after its launch.

Plagued by bad timing and the disclosure that the firm's chief executive, E.J. Ridings, had inflated his credentials, the outfit never came close to reaching its financial goals, according to a report today in Crain's New York Business.

Instead of doing $3 billion in deals as promised, it barely reached the $1 billion level, the report said.

Trump played down his role in Trump Mortgage, saying it was just a licensing deal and he didn't have an ownership stake.

Trump is, however, licensing his name to First Meridian Mortgage, a lender that is being renamed Trump Financial.; August 07, 2007 12:19 AM
Anonymous said...: The US went below $80 for the first time since this INDEX (NYBOT:DX) was tracked.

http://quotes.ino.com/
chart/?s=NYBOT_DX&v=dmax

It last traded at 80.220.

PPP to the rescue

http://quotes.ino.com/
chart/?s=NYBOT_DX&v=s; August 07, 2007 2:01 AM
Anonymous said...: Hey Keith, a must see video from Bill Moyers which shows MSM at hard at work:

http://tinyurl.com/yrv7qg; August 07, 2007 2:54 AM
Anonymous said...: ForeclosureS.com July 2007 Report: Houses Lost up 27% Over June

SACRAMENTO, Calif.--(BUSINESS WIRE)--Mortgage defaults and foreclosures continue at an alarming rate nationwide, swallowing up home ownership dreams for tens of thousands more Americans every month.

Both pre-foreclosure filings and homes lost to foreclosure the first seven months of this year are up on all counts (per capita basis and in sheer numbers), according to the latest statistics from California-based ForeclosureS.com, which has been tracking and analyzing foreclosure and property information for 20 years.

“The numbers are dismal, but we had better get used to it because the blood-letting likely will continue for another 12 to 18 months,” says Alexis McGee, president of ForeclosureS.com and author of the upcoming book, “The ForeclosureS.com Guide to Investing: Making Huge Profits Investing in Pre-Foreclosures Without Selling Your Soul” (John Wiley, September 2007). “It’s a tough reality, but many more over-extended homeowners not even in default yet won’t be able to refinance because of tightened credit markets, and will eventually lose their homes to foreclosure,” adds McGee.

The recent blowup at American Home Mortgage is a reminder that the mortgage markets are very panicked and illiquid right now. American Home customers generally had good credit histories — an indication that the mortgage mess is no longer confined to risky subprime borrowers. Through the rest of this year and into next, a raft of adjustable-rate mortgages will begin adjusting to higher interest rates. The higher monthly payments may very well squeeze even borrowers with good credit histories, leading to a new round of mortgage defaults.

On a per-capita basis for the first seven months of 2007, 9 pre-foreclosures were filed for every 1,000 households (567,046 total filings), up more than 27 percent from nearly 7 filings per 1,000 households. That’s also up more than 83 percent from the 4.9 filings per 1,000 households for the same period a year ago, reports ForeclosureS.com, based on analysis of its nearly 3.5 million listings in more than 1,590 counties across the country.

Pre-foreclosure filings indicate homeowners that are in default on their mortgages, facing potential foreclosure, and trying to work out their financial problems. It includes notice of default filings or notice of foreclosure auction filings.; August 07, 2007 6:38 AM
Anonymous said...: With so much liquidity coming in from BOJ how can it ever run dry.

http://www.nasdaq.com/aspxcontent/
NewsStory.aspx?cpath=
20070806%5cACQDJON200708060504
DOWJONESDJONLINE000081.htm&

"At present, I believe banks and financial companies are well aware of risk and problem that excessive liquidity and herd behavior could result in... and they have the ability to control the risk," said Kim Yong-Duk

South Korea's Financial Supervisory Commission is closely watching the country's liquidity conditions and will preemptively deal with a surge in liquidity; August 07, 2007 8:23 AM
Anonymous said...: The Trump brand burns in the flames, but rises from the ashes:

http://tinyurl.com/34blp6

"August 6, 2007 -- As the mortgage mess widens, Donald Trump has pulled the plug on Trump Mortgage less than two years after its launch.

"Plagued by bad timing and the disclosure that the firm's chief executive, E.J. Ridings, had inflated his credentials, the outfit never came close to reaching its financial goals, according to a report today in Crain's New York Business.

"Instead of doing $3 billion in deals as promised, it barely reached the $1 billion level, the report said.

"Trump played down his role in Trump Mortgage, saying it was just a licensing deal and he didn't have an ownership stake.

"Trump is, however, licensing his name to First Meridian Mortgage, a lender that is being renamed Trump Financial."; August 07, 2007 9:51 AM
Anonymous said...: Housing prices defy logic, keep climbing

By Elizabeth Rhodes

Seattle Times business reporter

Economics 101 teaches that prices should drop when the supply increases dramatically, but the Seattle area's housing market keeps confounding that conventional wisdom.

Prices of King County houses and condominiums last month increased 9 percent compared to a year earlier -- even while the number of available properties grew 51 percent.

Likewise, the number of homes for sale was up 57 percent in neighboring Snohomish County and 47 percent in Pierce County, according to July numbers released Monday by the Northwest Multiple Listing Service.

This continues a trend that has persisted for several months.

Yet prices in all counties rose, also continuing a trend, though at a slower pace than the double-digit rates of a year ago.

Windermere Real Estate general manager Matt Deasy says that until recently he expected the significant increase in the number of homes for sale to halt the continuing rise in prices. "I would have said appreciation would stop," Deasy said.

But so far that hasn't happened.

Why rising inventory isn't having the anticipated effect is hard to pin down, but there are theories.

All revolve around the idea that an increase in the number of for-sale homes isn't necessarily a negative factor that would cause prices to fall.; August 07, 2007 1:26 PM
Anonymous said...: The system is like a Mobius strip - it appears to have two sides, but Wall St somehow turns it in to a single, win-win for me-me side. Bear Stearns snaps back at creditors with a bankruptcy jurisdiction law passed by congress in 2005, same year that ordinary debtors had their protections reduced.

http://tinyurl.com/2ltpqv

"Aug. 7 (Bloomberg) -- Bear Stearns Cos.' decision to liquidate two bankrupt hedge funds in the Cayman Islands instead of New York may limit creditors' and investors' ability to get their money back.

"While most of their assets are in New York, the funds filed for bankruptcy protection July 31 in a court in the Caymans, where they are incorporated. The bank also used a 2005 bankruptcy law to ask a U.S. judge in Manhattan to block all lawsuits against the funds and protect their U.S. assets during the Caymans proceedings."; August 07, 2007 2:25 PM
benevolentstranger.blogspot.com said...: slick move bear stearns...I told you all to watch out for that Cayman move before it was announced in the press...

I anticipated it on speculation but now that just confirms so thanks to the last post-er.; August 07, 2007 5:00 PM
Anonymous said...: "Trump is, however, licensing his name to First Meridian Mortgage, a lender that is being renamed Trump Financial".

I guess "Thumped" never learned his lesson from the last RE downturn.

Greed has no limits...; August 07, 2007 5:10 PM
Anonymous said...: Kunstler's CF Nation on this episode is priceless:

http://www.kunstler.com/mags_diary21.html

By now, is there anyone over twelve in the USA who has not seen Jim Cramer's tantrum recorded late Friday afternoon on CNBC as the stock market took a 280 point swan dive off the rocky cliff of Hedge Fund Island? ... I don't quite get how a financial industry based on bad loans would be helped by borrowing more money to bail out a hopelessly unwinding Ponzi loan racket of the type the industry had engineered for itself -- but maybe I'm lacking the gene for financial creativity that the Bear Stearns bonus babies were all born with. ... imagine the number of cell phone minutes racked up this weekend out in the Hamptons by players trying desperately to finagle their way out of the brutal fact that their firms and funds suddenly lay exposed to the cruel ravages of reality. A lot of catered crab tidbits and mini-quiches must have gone uneaten out along the dunes as weeping men in blazers realized that "marked to market" had come to mean the same thing as "holding a bundle of shit."; August 07, 2007 5:34 PM
Anonymous said...: I think I am going to be sick-

http://tinyurl.com/32vfkv - it's a piece about the homebuilders on msnbc.com.

some of the more memorable quotes:

"I don't want to misrepresent myself [about not having rental income]," Elizabeth said in e-mail correspondence with Beazer's outside mortgage service, dated July 14, 2006. But in the end, the couple signed the documents, and soon after they closed on the Clarksburg house."

- Yes, exactly, but then you signed it anyway.

"Homebuilders really started to push these more aggressive mortgages down the throats of potential buyers to boost sales," says G. Hunter Haas IV, who as head of mortgage research and trading for Opteum Financial Services had an insider's perspective on the proceedings."

- Yes, the homebuilders physically shoved these mortgages down people's throats. Couldn't they get a different mortgage with another company?

"Although she feels misled, Kelly concedes that she and Travis didn't carefully scrutinize the fine print spelling out their loan terms. "I wanted the house with the tree-lined streets," she says."

- Yes, exactly.; August 07, 2007 6:57 PM
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