Attention people of England - get your money out of buy-to-let f*cked lender Bradford & Bingley today. Seriously, get in the queue and get it out NOW

At one point the governments of the US and UK will need to draw a line in the sand and say "no, we're not bailing you out".

Bear Stearns? Sure, no prob.

Northern Rock? One time, never again.

Wells Fargo? Probably.

IndyMac? Are you kidding me?

Bradford & Bingley? No chance.

The US has FDIC protection. The UK has anarchy. And any saver stupid enough to have more than £33,000 in Bradford & Bingley is a fool.

The crazed buy-to-let Ponzi Scheme in Great Britain is about to blow up something fierce.

Get your popcorn.

Bank denies cash-raising reports

Bradford & Bingley has denied reports that it is planning to go to the market to raise extra cash to see it through the credit crisis. Sunday papers said Citigroup had been asked to help with a rights issue to raise hundreds of millions of pounds.

But a statement from the bank said that it had a strong capital base and, "had funded its business activities through 2008 and into 2009". Bradford & Bingley is Britain's biggest buy-to-let lender.

The banks will fail. The taxpayers will bail them out. Their shareholders will be crushed. The dollar will fall. It's just the way it's gonna be.

"If the government must bail the bank out … it should basically wipe out the management and wipe out the shareholders"

- David Beim, Columbia University, March 2008

"There probably will be some bank failures"

- Federal Reserve Chairman Ben Bernanke, February 2008

"There is a strong need for urgent action. I would be very, very seriously considering the possibility of using public funds in one form or another."

-Former Treasury Secretary and current Citigroup whore Robert Rubin, March 2008

FLASH: When you're the US and you find yourself in a massive mortgage hole, why of course, you keep digging. And digging. And digging.

To watch the government stupidly, wrongly and feebly attempt to prop up home prices for housing gamblers in an election year is just plain sick. Sick, sick, sick.

The latest stupidity from DC is to force the regulator to drop Fannie and Freddie's reserve requirement drastically, from 30% down to a shocking 20%, so when the fail, and yes, they will fail, the US taxpayer will be even deeper in the hole. So now Fannie and Freddie can buy up an addition $200 billion in sh*t loans this year.

We are so f*cked HP'ers. Our government is making a bad situation even worse. The taxpayer will be on the hook for trillions. Fannie and Freddie will fail. The lenders will fail. The investment banks will fail. The banks will fail. The FHLB will fail. The Fed may even fail. And nobody cares. What's on Idol?

You know what's coming. Somehow, get yourself and your family to safe shores.

Mortgage lenders to pump $200 billion into markets

WASHINGTON (Reuters) - The two largest U.S. mortgage finance companies on Wednesday won approval to pump up to $200 billion into the distressed U.S. mortgage market, the latest step in government efforts to stabilize credit markets and save the economy from recession.

Policy-makers at the Federal Reserve, regulatory agencies and the Treasury Department have let loose a flood of measures to battle rising home foreclosures and stabilize shaky markets, but some still see the need for a more direct government hand.

The Office of Federal Housing Enterprise Oversight said it was immediately easing restrictions on Fannie Mae (FNM.N) and Freddie Mac (FRE.N) to give them a bigger role in settling queasy mortgage markets. It said they should be able to buy or guarantee about $2 trillion total in mortgages this year.

"All hands are on deck to try and prevent this U.S. situation from becoming a dire crisis," said David Watt, a currency strategist with RBC Capital Markets in Toronto. "They're doing everything they can, making policy on the fly."

People won't be able to say they weren't warned: FDIC getting ready for well over 100 bank failures in the next two years. Wow.

Watch for this list to get REALLY long...

Sure to fail (in my personal first-amendment protected opinion) will be the toxic lenders with banking operations - IndyMac, Washington Mutual and Countrywide. They got access to cash from the FHLB by using hilariously dubious toxic loans as collateral, but that Ponzi Scheme will eventually unravel.

Smaller local banks will also be failing in droves, and not because of housing, but because of the credit unwinding and the blow-up in commercial real estate.

I've had confidential updates from an insider at the FDIC letting me know one of the biggest problems out there now is smaller banks who loaned money to developers to develop new subdivisions and strip malls, and then the development went belly-up or got mothballed. That money ain't gettin paid back either.

Get ready for RTC2. Get ready for the wave of sure-to-come bank failures. And GET YOUR MONEY OUT OF THE BANKS. Only FDIC-insured limits, and not even that in banks that are obviously going to go tits-up since it'll be a pain to get access to your dough.

Here's the FDIC story in the WSJ care of Calculated Risk

The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen.

FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." ...

The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement.
...
"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group.

The banks now want the taxpayers to bail them out. What message would you like to get out to the banks? Fire away, and don't be kind.

The banks, led by Rich Whitey himself, Ken Lewis at Bank of America, are appealing to Congress for the biggest financial bailout in the history of the civilized world, which will run in the hundreds of billions if not trillions.

So after they made hundreds of billions in profits and fees and commissions and bonuses these past few years getting us into this mess, they now want the taxpayers to bail them out, while they keep their ill-gotten gains.

Here's HP's simple message to the bankers.

BANKERS OF THE WORLD WHO WERE INVOLVED IN THE SUBPRIME/ALT-A/OPTION-ARM/CDO/SIV/ETC MESS, HOUSINGPANIC HAS A MESSAGE FOR YOU. GO F*CK YOURSELVES.

WE ARE ROOTING FOR YOU TO FAIL. WE ARE ROOTING FOR HOME VALUES TO GO DOWN TO REASONABLE LEVELS. WE ARE ROOTING FOR HOMEDEBTORS TO WALK WAY. AND YOU WILL NOT GET OUR MONEY, NOT WITHOUT AN EPIC BATTLE.

A ‘Moral Hazard’ for a Housing Bailout

A confidential proposal that Bank of America circulated to members of Congress this month provides a stunning glimpse of how quickly the industry has reversed its laissez-faire disdain for second-guessing by the government — now that it is in trouble.

The proposal warns that up to $739 billion in mortgages are at “moderate to high risk” of defaulting over the next five years and that millions of families could lose their homes.

To prevent that, Bank of America suggested creating a Federal Homeowner Preservation Corporation that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes and use federal loan guarantees to refinance the borrowers at lower rates.

“We believe that any intervention by the federal government will be acceptable only if it is not perceived as a bailout of the bond market,” the financial institution noted.

In practice, taxpayers would almost certainly view such a move as a bailout. If lawmakers and the Bush administration agreed to this step, it could be on a scale similar to the government’s $200 billion bailout of the savings and loan industry in the 1990s.

The arguments against a bailout are powerful. It would mostly benefit banks and Wall Street firms that earned huge fees by packaging trillions of dollars in risky mortgages, often without documenting the incomes of borrowers and often turning a blind eye to clear fraud by borrowers or mortgage brokers.

A rescue would also create a “moral hazard,” many experts contend, by encouraging banks and home buyers to take outsize risks in the future, in the expectation of another government bailout if things go wrong again.

Ending one of the classic government clusterf*cks of all time, the boobs running the UK are humiliated, nationalize failed bank Northern Rock

No matter how they try to spin this one, Gordon Brown and the keystone cops running the UK just f*cked up big-time.

I hope this serves as a lesson to the US, UK and all other countries about to experience bank failures:

LET THE MARKET CLEAN UP ITS OWN MESS AND GET THE HELL OUT OF THE WAY.

Because their government panicked, the UK taxpayers now own a bottomless pit in Northern Rock, already out over $100 billion in loans that likely won't get paid back. The Labor Party says all is fine, but it's not. Loans backed by falling real estate are turds and will become even bigger turds. Just ask the FHLB in a few months in the US.

The Northern Rock bank is to be nationalised, according to reports.

The taxpayer has leant the bank around £55bn in recent months since it first ran into trouble last year.

FLASH: UBS posts largest loss in the history of banking, and to think, we're STILL just getting started

It's nice to see the banks own up to some of their "subprime" problem. Too bad this whole mess just STARTS with subprime - it definitely doesn't end there!

Won't it be fun to see the banks own up to their Alt-A problem? And to their option-ARM problem? And to their Prime problem? And to their entire mortgage portfolio problem?

And then won't it be fun when they own up to the fact that the underlying collateral - the houses - have plummeted in value worldwide?

Trillions and trillions and trillions will eventually be lost. Banks will fail. Governments will be called on to bail everyone out. And these $13 billion write-downs will seem so tiny next year.

My question today is this: How long until hot-potato holders like UBS start suing the mortgage fraud enablers at Countrywide, First Fed, Wells Fargo, IndyMac and others, who falsified the paperwork, juiced the appraisals and created this mess in the first place?

UBS Posts Record Loss After $13.7 Billion Writedowns

UBS AG posted the biggest ever loss by a bank in the fourth quarter after $13.7 billion in writedowns on securities infected by U.S. subprime mortgages.

Rising U.S. subprime-mortgage defaults have led to more than $145 billion in writedowns and loan losses at the world's biggest financial companies.

``The rot is spreading to other residential areas,'' ABN Amro Holding NV analysts Kinner Lakhani and Omar Fall said in a note to clients last week. They recommend investors ``avoid'' UBS shares and forecast as much as $10.8 billion of possible further writedowns at the bank.

You have just witnessed the biggest bank robbery in the history of humanity

Inspired by this quote from HP'er "ugh":

"Thousands of FB'ers robbed banks with a pen"

Yes. Yes they did. Along with the mortgage brokers, appraisers, realtors, builders and the bank's managers too. To the tune of hundreds and hundreds of billions if not trillions.

Here's the history of how banks were robbed in the past 200+ years:

1800's through 2000:










2001 - 2007:













2008 and beyond:

FLASH: Merrill Lynch, on the verge of failure, admits to ANOTHER $15 billion in subprime poo

Its fun to see all the investment bank idiots admitting to their subprime losses - like Chinese water torture, a drop at a time.

Just wait until they start admitting to their Alt-A liar's loan exposure, their option-ARM exposure and god forbid their prime 30-year fixed exposure.

And it's also fun to see these strong and powerful American companies running around Asia and the Arab world begging for dollars.

Actually, that's not fun. That part is really kinda sick.

Giant Write-Down Is Seen for Merrill

Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments, almost double its original estimate, prompting the firm to raise additional capital from an outside investor.

Merrill, the nation’s largest brokerage firm, is expected to disclose the huge write-down when it reports earnings next week, according to people who have been briefed on its plans. The loss far exceeds the $12 billion hit many Wall Street analysts had forecast.

To shore up its deteriorating finances, Merrill is now in discussions with investors in the United States, Asia and the Middle East, including American private equity firms, to raise about $4 billion in the coming days, these people said.

Merrill is hardly alone in seeking capital from overseas. United States financial institutions have raised more than $29 billion from foreign governments and their related investment entities, according to the market research firm Dealogic.

Feeling 1929?

I don't know where all of this ends up, but when credit dries up, when an epic financial bubble unwinds, and when the banks fail...

Is this Great Unwinding going to be truly different this time? Or have we been down this road before?

FLASH: Bank of America CEO predicts Americans might wise up and stop making payments on their depreciating homes. Uh-oh. Someone let the truth out!!

Bottom line: The banks and the mortgage CDO bagholders are screwed.

Really, really, really screwed.

Sorry, it's just the way it is.

Whose stupid idea was it to allow no-down loans in the first place?

Idiots. Frigging idiots. And they deserve to fail. They need to be taught a lesson about fiscal and lending responsibility that will last for generations.

Turn in the keys Underwater Homedebtors of America!!! Run from that debt-trap as fast as you can!!!

Oh, dear, is this gonna get ugly. And you can thank our idiot Congress and Bush for pouring fuel on the fire last week by allowing homedebtors to short sell or foreclose with no tax hit now too! Monkeys I tell ya. Monkeys.

Bank of America CEO Ken Lewis told editors of the Wall Street Journal that he's worried about borrowers with strong credit scores not making loan payments if the housing crisis worsens.

Such concerns by the head of California's largest bank could trigger a tightening of credit availability beyond the subprime customer base.

"There's been a change in social attitudes toward default," Lewis told the Wall Street Journal. "We're seeing people who are current on their credit cards but are defaulting on their mortgages. I'm astonished that people would walk away from their homes."

Apparently even borrowers with strong credit scores are finding it easier to walk away from their mortgages, especially if they put little or no money down on houses and condos purchased for investment purposes.

And then we found the rabbit hole of creative finance: The Bond Insurers go Belly Up

When the companies who insured the cards go bankrupt, the whole house of cards falls apart.

And that's where we are today.

You're going to need to do your own reading and research on this one, and if you take the time and effort, you'll be amazed what you find. Get ready to go down the rabbit hole of "creative finance". But be warned - you'll be frightened at what you find. Banks and the government bailing out bond insurers so that the banks and government themselves don't fail. Amazing.

Here's a good start. Good luck. Report back.

Ambac, MBIA Outlook Lowered by S&P, ACA Cut to CCC
``The hits keep coming,'' said Gregory Peters, head of credit strategy at Morgan Stanley in New York. ``It's been our view that these guys are in a much more difficult predicament than investors or the companies themselves believed.''

``Everyone got greedy and thought they were smart enough to write structured product insurance like it was the same as insuring municipal bonds,'' said Rob Haines, an analyst with CreditSights Inc. in New York.

Analyst warns Merrill's write-downs may mount
"We believe Merrill, like its peers, has entered hedging contracts with ACA [Capital Holdings]," Trone said. "Should ACA falter, Merrill would end up with more subprime exposures as those hedging contracts terminate. This will in turn lead to more write-downs."

US$ & Monoline Bond Insurers
The main theme of the banking debacle in 2008 will be the extension far beyond subprimes into PRIME mortgages, as fully detailed in the article last week. The impact fallout from the bond insurers might hit home soon, as Wall Street will be forced to bring countless more wrecked billion$ in mortgage bonds onto balance sheets.

European Central Bank's helicopter drops €348,000,000,000 down to the panicked banks in a single day. All through Europe, it's now raining Euros!!!

And we trust these pretty colored little pieces of paper why?


E.C.B. Makes $500 Billion Infusion

FRANKFURT — The European Central Bank on Tuesday pumped 348 billion euros ($500 billion) into the financial system, easing conditions in credit markets grappling with a global lending squeeze linked to the United States housing downturn and traditional year-end demands for cash.

When you're a bank about to fail, who do you call? The Lender of Last Resort of course

Lender of Last Resort:

An institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky or near collapse.

In the U.S. the Federal Reserve acts as the lender of last resort to institutions that do not have any other means of borrowing and whose failure to obtain credit would dramatically affect the economy.

HousingPANIC Stupid Question of the Day

Where the f*ck were the auditors (again)?

Everything's fine

Everything's fine

Everything's fine

OH CRAP!! $10 BILLION WRITE-OFF AND MORE TO COME!

I mean come on, did they just find out? I mean, we've known FOR YEARS!

Incompetent corrupt monkeys HP'ers. We have incompetent and corrupt monkeys running the show in America today. And nobody's looking out for you.

DOPES!!!

Here's the CNBC video of Jim Cramer who looks like he might need an intervention later tonight as he holds that cold steel in his hands and a bottle of jack.

HP still thinks the Fed hates America and is trying to bail out the bankers and housing gamblers who did some really stupid things these past few years. But traders like Cramer think the Fed should have cut 1/2 or more and they're paying the price today.

So HP hates the Fed and Cramer hates the Fed. What does that tell you?

Head to the bunker HP'ers. The fuse has been lit.

FLASH: Right on schedule, toxic-loan king WaMu melts down, on verge of failure, announces massive write-off, office closures and layoffs

HP'ers knew this toxic lender was on its way to insolvency for some time, along with Countrywide, IndyMac, First Fed and many more. They called them "liar's loans" for a reason folks. The mortgage fraud self-enrichment paper promoted and endorsed by the on-their-way-to-jail bank execs at WaMu and more just simply ain't gettin' paid back. And now they and their shareholders, near-junk bond holders and account holders will pay the price.

Memo to WaMu account holders and bond holders - GET YOUR MONEY OUT OF THIS BANK AS FAST AS YOU CAN. WAMU IS THE US's NORTHERN ROCK. And we're still just getting started.

(yes, I'm still short WaMu via July 08 puts. I don't see how it survives)

Mortgage Crisis Forces Big Cuts at WaMu - Mortgage Problems Force WaMu to Close Offices, Slash Over 3,100 Jobs and Drop Subprime Loans

Washington Mutual Inc., the nation's largest savings and loan, said Monday problems in the mortgage and credit markets are forcing it to close offices, slash over 3,100 jobs, and set aside far more than expected for loan losses in its fourth quarter. The company also said it was slashing its dividend 73 percent.

Washington politicians thought intervening in the Terri Schiavo affair would be good politics too. Housing Gambler Bailout is the new Terri Schiavo.

This will blow up in their face something hard, something fierce and something memorable. I can't wait to see the polling data, media coverage, lawsuits, investor rejection and unintended consequences.

The 99% of Americans not given a free lunch, the 99% of Americans who did not commit mortgage fraud, who did not "buy" a home they couldn't afford, and who did think signed contracts meant something in the United States, those 99% are going to be ABSOLUTELY F*CKING PISSED OFF today when Bush and Paulson waddle out to announce a Housing Gambler Bailout Plan.

What to do?

1) Submit to your local paper's letter to the editor section

2) Contact your Congressman and Senator

3) Send a friendly little note to the White House

4) If you're a homedebtor with an ARM, stop making payments today, then call your lender and let them know you want a break too. If they don't give it to you, threaten a discrimination lawsuit.

Here's the Washington Post article where we got HP'er Darren interviewed (nice job!), and also some more MSM coverage this morning:

Bush Wins Agreement To Freeze Mortgages

Darren McKinney, 48, a renter in the District, said he has been waiting for housing prices to fall so he can buy a condo without resorting to a dubious loan. He turned down an opportunity to buy his 600-square-foot apartment for $310,000 in late 2004 because he thought it was "absurdly overpriced."

Now the government is rewarding people who made irresponsible decisions and bought homes beyond their means, he said.

"There are those of us who purposely sat on the sidelines during the course of the last three years while the senseless frenzy was going on, and we presumed the free market would be allowed to correct itself," McKinney said. "The government is now meddling in the market and looking to prop up lenders and borrowers alike, and those of us who wisely bided our time get screwed."

Sub-prime bailout helps the greedy
THE chameleons of the free market never cease to amaze. When things are good they worship at the altar of deregulation. When the market turns bad, they squeal like stuck pigs and are first in line for a government leg-up.

Subprime Mortgage Bailout - Paulson Vs the Free Market

No bailout
With nearly $400 billion in adjustable-rate subprime mortgages scheduled to experience significant increases in their interest rates next year, Treasury Secretary Hank Paulson has outlined the possible terms of an ill-advised election-year taxpayer bailout for an indeterminate number of distressed homeowners and the investors who hold the homeowners' deteriorating subprime mortgages in their asset portfolios.

Mortgage relief plan draws fire

Some say proposal to aid subprime borrowers is a bailout; others say it doesn't do enough

FLASH: Bush and Paulson to announce new comedy routine tomorrow - first joke is to pretend that housing gamblers get a 5-year freeze on toxic loans

Don't believe it.

Just like the "Super SIV", "Mission Accomplished" and Bush's "Social Security Reform", this bank-failure-avoidance-scheme is going to be just another epic failure of this incompetent and corrupt administration.

There will be lawsuits filed as early as tomorrow against such a stupid plan (just think if you took a toxic loan out the day before the window started, or a bondholder who expected contracts to be worth something), and some hilarious unintended consequences - namely EVERY SINGLE HOMEDEBTOR WITH AN ARM SHOULD STOP MAKING PAYMENTS TODAY.

Plus many of these homedebtors so graciously "helped" are going to walk away anyway - because the value of their home is plummeting so hard and so fast it's better to turn in the keys and tell the bank to F off.

Bush to outline 5-year rate freeze plan: sources

WASHINGTON (Reuters) - President George W. Bush is expected to outline on Thursday a plan to freeze mortgage rates for five years for many U.S. homeowners facing sharp increases in their monthly payments, industry sources said on Wednesday.

Final details of the plan are still being worked out after a trade group that represents large mortgage investors presented its framework for implementing a broad rate freeze to the Treasury Department late on Tuesday, the sources said.

The sources, who are familiar with details of the trade group's pitch, said the plan envisions covering subprime loans taken out between January 1, 2005, through the end of this past July, with rates that are due to reset over the coming 2-1/2 years.

An estimated 1.8 million U.S. homeowners who took out loans with low teaser rates face pricey loan resets next year alone, the Federal Reserve has said. Officials fear half a million borrowers risk losing their homes.

Think your money market funds are a nice safe places to park your cash? Wrong. Be afraid. Be very afraid.

Guess who was one of the biggest investors in toxic SIVs and CDOs?

Money market funds.

Your money is not safe in these safest of safe funds. Get it out. Now. If you need to park cash, get it into FDIC insured accounts or US t-bills that even though the dollar will devalue, unlike money market funds you won't lose your principle.

Do it today. You'll be glad you did.

GE Money Fund Breaks the Buck; Others Scramble to Cover Losses

A short-term institutional bond managed by General Electric Asset Management suffered such extreme losses from mortgage and asset-backed securities that it has offered investors the option of redeeming their holdings at 96 cents on the dollar.

Bank of America Corp. (BAC), and others, are reportedly propping up their money-market funds in a frantic effort to cushion against possible losses on debt issued by structured investment funds.