Bits Bucket And Craigslist Finds For November 5, 2007
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Nice piece from Bloomberg, points out that Paulson was “nonchalant” when middle class faced foreclosure, but it was a “crisis” for Paulson when Goldman and other Ibanks faced subprime losses.
Nov. 5 (Bloomberg) — Treasury Secretary Henry Paulson says the U.S. is examining the subprime mortgage crisis to ensure that “yesterday’s excesses” aren’t repeated. He could be talking about himself and his former firm, Goldman Sachs Group Inc.
Paulson, 61, doesn’t mention that Goldman still has on the market some $13 billion of almost $37 billion in bonds backed by subprime loans or second mortgages that it created while he was chief executive officer. Those bonds have an average delinquency rate of almost 22 percent, higher than the average of other subprime bonds from the period, according to data compiled by Bloomberg.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5IcbvTr6oaM&refer=home
Just this morning, the cheerleaders over at CNBC were saying that, unlike Merrill and Citigroup, Goldman was well insulated from the subprime crisis.
Hmmmmn, who should I believe?
So the article that Spike kindly posted said that Goldman made some money hedging that offset their losses. Does that mean that they still have to report them and they’re just putting it off? If every single investment house carries huge amounts of subprime debt, should we expect every one of them to eventually report it and fire their CEO?
Wish we’d see some of the CEOs doing a perp walk. Instead, they get fired and their golden parachutes open up. We need to get the lobby money out of Washington, period.
Do the perp walk for what? I’m not being sarcastic, I just don’t know what they did that was illegal. Yes, they are disgusting for hiding losses just long enough to get their bonuses, but is that illegal?
I for one, think some of problems would be solved if “deferred interest” and similar tactics were outlawed. No business should be allowed to book future monies as profits now. (Wish I could do that with MY checking account.) If they stopped doing that, then everyone would have seen those I/O and neg-ams for the trash they really were, instead of rating them AA.
Oh, and make banks season their debt before selling it.
I for one, think some of problems would be solved if “deferred interest” and similar tactics were outlawed.
This will never happen as long as corporations continue to have a louder voice in Washington than citizens.
No business should be allowed to book future monies as profits now.
Recognizing income at the time it is earned, as opposed to the time cash flow is recognized, is sound. It may not make sense intuitively, but it is a more sound financial practice and better allows evaluation of the health of a company.
Without that principal, company books would look like government accounting, which is a total mess and much more difficult to get meaningful metrics.
“Recognizing income at the time it is earned, as opposed to the time cash flow is recognized, is sound.”
That assumes they will collect it. Once it becomes doubtful, revenue recognition should cease (or at least offset by increases in loss provisions that make sense.)
“Oh, and make banks season their debt before selling it.”
My sense is that the market will take care of this. There is plenty of skepticism out there regarding what truly is a AAA rated bond. Today, one of the only ways I see forward is for the banks to keep a certain percentage of each tranche on their books, and covenant not to resell, insure, etc., as a sign of faith in the paper.
Recognizing income at the time it is earned, as opposed to the time cash flow is recognized, is sound.
Maybe if you have a business with 30 or 60 days account payable cycle. But these guy were marking down income that was FIVE YEARS away, at least. Heck, that’s enough time to load up on bonuses and open a golden parachute.
OK, no booking of future income beyond the maturation date of any stock option issued to executives within the prior 2 years.
Make it a little harder to use future income to get paid today.
Maybe if you have a business with 30 or 60 days account payable cycle. But these guy were marking down income that was FIVE YEARS away, at least. Heck, that’s enough time to load up on bonuses and open a golden parachute.
And how, pray tell, would someone “book” a 5 year forward contract that one sells?
That assumes they will collect it. Once it becomes doubtful, revenue recognition should cease (or at least offset by increases in loss provisions that make sense.)
This is already standard accountaing (GAAP) practice. If you have receivables (generated by some recognized revenue), you offset them by an amount (based on previous experience) that is expected to be “bad debt” (an expense). So the revenue occurs, then some time at the end of a period you would recognize some portion of outstanding receivables as bad debt. It’s obviously not perfect and is susceptible to misrepresentation but accrual accounting provides a more complete look at a company than if they operated on a cash basis.
But these guy were marking down income that was FIVE YEARS away
Not sure what you mean by this. I am also not sure exactly how the option loans are accounted for, but I would imagine all the interest would be booked as revenue, the unpaid portion then added to principle as an additional receivable. In that case, I guess you could have some revenue that doesn’t get corresponding cash collections for years (and it’s amortized for the remaining life of the loan so it comes in small chunks), but still the underlying principles don’t change. Book revenue, estimate bad debts and book that as an expense. Disallowing that practice would have huge ramifications in accounting that would make things worse in my opinion.
On the other hand, it is certainly the case that the banks didn’t correctly estimate the amount (%) of bad debt. In that case, one might wonder if it was intentional (fraud?) or just incompetence. Additionally, it would probably be beneficial for a company to provide more information in regard to bad debts and how it is calculated, especially for companies which make loans as a major component of their business.
if this is about last quarter it’s classic
Goldman runs several hedge funds that invest in mortgages. they took clients’ money into these funds and used the firm’s money to short the same investments.
this is why their earnings were so stellar last quarter
Hedge Hogs!
It depends on how they read GAAP.
As usual, CNBC is full of it! They are forgetting that the “profit” came from the level 3 assets i.e. marked to model.
From the Asia Times Online on 11/2/07
“Goldman Sachs has disclosed its Level 3 assets, two quarters before it would be compelled to do so in the period ending February 29, 2008. Their total was $72 billion, which at first sight looks reasonable because it is only 8% of total assets. However the problem becomes more serious when you realize that $72 billion is twice Goldman’s capital of $36 billion. In an extreme situation therefore, Goldman’s entire existence rests on the value of its Level 3 assets.”
Their total was $72 billion, which at first sight looks reasonable because it is only 8% of total assets. However the problem becomes more serious when you realize that $72 billion is twice Goldman’s capital of $36 billion.
Can you say “too big to fail” or maybe “too well connected in Washington DC” to not get a bailout? I knew you could…
Level 3 Assets
Priced at:
Mark to “Reasonable Stab”……source Citigroup
CNBC was also saying how powerful Goldman is. Charlie Gasparino wrote a book about Dick Grasso. Grasso used to call Paulson “The Snake”. How is that? Gasparino stated that Goldman has taken over the New York Stock Exchange and Treasury. It was awesome. Did anybody else see it? I almost fell out of my chair. Even our cats were shocked to hear him speaking so freely and honestly.
Goldman Sachs has disclosed its Level 3 assets, two quarters before it would be compelled to do so in the period ending February 29, 2008. Their total was $72 billion, which at first sight looks reasonable because it is only 8% of total assets. However the problem becomes more serious when you realize that $72 billion is twice Goldman’s capital of $36 billion. In an extreme situation therefore, Goldman’s entire existence rests on the value of its Level 3 assets.
-Asian Times
Citi to write down 11 billion more…
LONDON (MarketWatch) — U.S. stock futures Monday dropped sharply, with financial turbulence back in the news as Citigroup said it would have to write down up to $11 billion more of risky securities than it previously estimated, leading CEO Charles Prince to step down.
S&P 500 futures dropped 13.6 points at 1,504.00 and Nasdaq 100 futures declined 17.25 points at 2,206.25. Dow industrial futures declined 112 points.
http://www.marketwatch.com/News/Story/Story.aspx?column=Indications
Asia & Europe getting hammered - an interesting day indeed…
leading CEO Charles Prince to step down.
And another one’s down, and another one’s down, another one bites the dust…
And silly me, I thought rate cuts were supposed to help the markets. I hope HeliBen learns his lesson.
people like HeliBen learn from their academic books, not from real life; he will continue his stupid rate cut policies until he is evicted from office. The US needs a new Volcker and they need him fast, before HeliBen destroys the dollar beyond repair.
Indicators show growth slowing, so rates are being lowered. I don’t agree with it either, but I can see what he is doing based on his explanations. It is easy to call this from outside, but having the bravery to see the economy slumping and react to that by cranking up rates might be harder for the people given this responsibility. Note also to believe your specific point and logic one must buy into your view of money, markets, and inflation and I for one find your speculation as appetizing as a new McMansion on a distant farmer’s field.
The cuts did help the markets. Imagine the destruction if he did not cut.
Help?
All I see is a falling dollar that will not be saved. Too bad for us savers! Good thing the US mostly exports and doesn’t import much - oh, wait… that’s right - we produce nothing and important everything, so a weak dollar will destroy us. But it will let the Big Boyz on Wall Street keep on spinning that wheel and playing musical chairs with bad debt for a while longer, so all is well.
They have another interesting article on the unavailability of Jumbo’s and drop in rate of mortgage’s being writtehttp://www.marketwatch.com/news/story/scarcity-cost-jumbo-mortgages-portend/story.aspx?guid=%7B923EE799%2D2A5C%2D416D%2DBEAC%2DE4874C21098F%7Dn:
The link from AZ-IT doesn’t work, but here it is:
Linky
Thanks ET-Chicago,
Have to work on that!
There are some excellent statistics in that article:
Crawford said Alt-A loans are being written at about a third of the pace of six months ago, and subprime originations have plunged 90%.
In California, where jumbo loans play a bigger role than in any other region, the market hasn’t come back.
According to preliminary data from DataQuick Information Systems, the number of jumbo loans written between mid-September and mid-October fell by 43% in four major California counties that relied heavily on jumbo mortgages.
Are the standard JUMBO loans still available - the ones where you have to show/prove income and put down 20%? I know the crap loans are history but waht about the more conservative types?
You have to pay more:
Last week, the average rate for a 30-year fixed jumbo loan was 7.04%, while conventional loans were at 6.31%. The usual spread between the two loans is around a quarter percentage point, McBride said. In August, the spread was a full percentage point, so there’s been some progress.
In California, where jumbo loans play a bigger role than in any other region, the market hasn’t come back.
And that is that. None of the US markets will be able to get credit after the damage California is about to do to the financial system.
Now a thought, 40% of the Chinese company profits are them playing in their own stock market. As soon as we cause a bad quarter for them… there will be a 90 day delay and then watch their stock market play out.
In other words, this has a long way to go…
Got popcorn?
Neil
Neil! Just let me know when it’s time to start unloading my Chinese stocks! They’ve been the best performers in my portfolio
My top 5 holdings by performance and the % up (all held about 2 years here)
SNP CHINA PETROLEUM 257.66%
FHKCX FIDELITY CHINA REGION 135.16%
FLATX FIDELITY LATIN AMERICA 88.00%
FNORX FIDELITY NORDIC 68.26%
FICDX FIDELITY CANADA 57.16%
(SNP is traded on the NYSE; the rest are index funds. I had this feeling about Canada. Of course a big chunk of all these gains is the weak dollar)
Neil,
Think the Chinese will be providing this for foreign tourists at the 2008 Summer Olympics?
http://images.jupiterimages.com/common/detail/45/15/23501545.jpg
…munch, munch, munch
(SNP is traded on the NYSE; the rest are index funds. I had this feeling about Canada. Of course a big chunk of all these gains is the weak dollar)
Not in China. Yuan is linked to dollar. Dollar drops so does Yuan.
“Yuan is linked to dollar.” For the moment. How fast can this link be broken?
Down on this news?
It will be interesting to see if the market reacts like this is really, truely the end of it, or just an indication that nobody knows where the end it.
I can’t wait to see what happens when everyone figures out that it isn’t just the sub-primes that are screwed.
Choice quote from Jumbo article:
If Goldman is right, the typical home-owning household in California has about $200,000 less in home equity than it thought it had. Instead of living in a home that’s worth $589,000, it’s probably worth $380,000.”
Yep, that ought to make everyone happy!
It’s OK by me because I never count any imagined value in my home in my “net worth” when I calculate it once a year or so just for grins. There’s no line item in my spreadsheet for my primary residence. Let it go down to 0! I’d save big $$$ in property taxes.
Exactly Polly. My sense is that it will take an earthshaking upheaval in the financial markets to bring the sunny optimistic fools out of their delusion.
Gentlemen and Woman,
Another story from NoVA….
We placed a bid on this place Address: 12850 FLEETWOOD DRIVE: NOKESVILLE, VA 20181. REO original owner in 06 purchased in June of 06 (Was brand new in June of 06) the bank has held it for about 8 months now, not a single bid on this 10 acre, 4000+ sqft + 2100 sqft unfinished basement home. The original owner paid 800k+, had some down payment because the note was for something like 620k, bank was asking 715.00..The comps killed this place a really nice home (in immaculate condition) on 24 acres with 3-4 useful outbuildings just had sold for 750.00k….Also this house is on a flag lot (with perhaps a 1000 ft gravel driveway) and you could tell the owner had stretched, no deck, no landscaping to speak of (a few straggly trees) the refrigerator was missing, some light fixtures missing, the kitchen island countertop was damaged (and oddly enouh seemed a few inches to short) when we looked at it there was crap in every toilet and they would not flush, the upstairs carpet was stained (dyed?) a varied and wonderful set of colors and the basement had a standing pool of water.
We offered 256,400. They called back on Saturday, and said the offer was too low and that if we would up it somewhat higher, they did not want to carry the house through winter (it did not look winterized to me)….My original max had been 350k, I was going to counter with that having the strange feeling they would take it…But then I had a moment of clarity…..Why am I caring so much about this property? There are MANY other REOs in this price range that are much nicer…My wife took a deep breath, thanked the gentlemen for their time and kindly told them that if in six months we were still in the market and the property was still available we would revisit it, but in all likelihood the offer would be lower.
-Lost in Nova
In Prince William County and all the citys within its boundry the real eastate market will crumble even further.
Yes, I was reading some article about Prince William and its struggles with illegal immigration and foreclosures left behind by departing workers.
Huge hispanic population in PWC, especially in Manassas, and it’s been that way for years.
PWC has been plowed under into boring, hopeless, shoot-yourself-after-the-kids-go-to-sleep bedroom communities. The cancer has grown year after year, the arteries have all clogged, and the air ain’t too good either no more. PWC is the asphalt nation.
Lost inNova
I just zillowed that address and it said it was recently sold (7/16/07) for 641,375.
Either way, the description you gave would frighten even the heartiest of buyers.
Yea, I saw that on the prop card, the RE Agent said it had been on the market for 241 days…Which is the correct value?
“Which is the correct value?”
Well, you know the answer to that! What you’re willing to pay!
But in all seriousness, if it’s on the property card, unless the state is really slow on updating, I’d believe the property card.
I dunno, something feels off about it….take a deep breath and tell your wife that you both,probably, dodged a bullet.
Could it be that is the date that the bank actually took ownership? (ie does 641K correspond to the outstanding balance?)
I would exercise caution with “last sold for” prices. There are precious few “real comps” in our area as “cash back” at closing has been very widespread, which artificially inflates “comps.”
Let’s be careful out there….
JP, I think you are right. The bank took the onwership at the court auction and it is recorded in Zillow’s database.
And I wonder if the bank taking ownership is then a comp for Zillow? which would contribute to their numbers are lagging the market.
Don’t do it, Lost. Living in a place like that could make you sick, even after you cleaned it up. You’ll do a lot better.
Don’t force us to do an internetvention on you…
This is why we’re still in the early innings of this game. Too often still banks are asking buyers to bid against themselves. There are still too many “come back with your best offer” responses from banks.
Just let the place rot and look for something better.
I have an offer like that working. I’m expecting it to be accepted because I documented the state of the market heavily with the offer. The place I’m after is fine because the guy who owned it relocated to another city and tried to keep it up for resale. I do expect them to make the deal contingent on my waiving inspection, which I won’t do.
4000sq ft and 10 acres? You’re out of your mind.
My husband would love to have lots of acreage - he loves to work outdoors. People who keep animals like land, too. I wouldn’t want to clean 4000 sq ft, but if TX wants it and can afford it, why not? I also hope it has solar power.
I’d love to have alot of things but my conservative financial stewardship tells me many things, including the fact that taxes on vacant land will eat you alive. Considering vacant land can be had for as little as $500/acre, the carrying costs are the problem…. Ya know…. like that little cell phone my employer gives me because I refuse to pay for one myself.
“…taxes on vacant land will eat you alive. Considering vacant land can be had for as little as $500/acre, the carrying costs are the problem….”
Wow, your market is completely different than mine. $500 per acre?! That’s what I’m looking for. Land was $10-20k per acre pre-bubble in my neck of the woods. Then, it skyrocketed, in many cases, 1000%. On the other hand, taxes are very low on raw land around here. This is Western, WA.
Either way, it ain’t worth it. 20k/acre? That’s absurd.
Good for you! Just a bunch of asshats in loan departments thinking that they have some sort of clue about how much a house should be priced. They saw none of this coming so anything they say with regard to pricing should be immediately discarded as nonsense. Stick to your guns. My guess is you will be getting another phone call from those morons accepting your previous offer except this time I hope you lower the offer price another 40K just to drive home the point about who is in charge here.
We offered 256,400. They called back on Saturday, and said the offer was too low and that if we would up it somewhat higher, they did not want to carry the house through winter (it did not look winterized to me)
===========
What kind of bargaining style is this? Reverse psychology?
What stage of grief is “trolling for pity”?
Actually, it is a pathetic means of crying poverty. Can you imagine??? Billion dollar corporations pandering and whining about how rough things are?
They clearly don’t have any other offers. Unless you REALLY want it, no need to raise the offer. If I were truly indifferent at $256,400, I’d call him back and tell him that you’re rescinding your offer. If he’s really serious about getting a deal done, he’ll call you back.
At a minimum, they should come back to you with a number, not ask you to negotiate against yourself.
Smart move. It also shows that the oversupply of houses will take care of itself shortly. From the sounds of it, unless the bank takes actions to mitigate damage that house will only be fit to bulldoze in a year.
Hey lost -
$257K for something that had sold for $800K (Am I reading that right?). Sheesh, aren’t the bricks and sticks worth close to that much?
What sucks is that there is some idiot out there who will offer the bank 20% off of asking price and think that he got a great deal. How much can you possibly stand to lose at $350K?
“How much can you possibly stand to lose at $350K?”
With the entire global finance system in the act of rebalancing, I’d say that is a wildcard. In this particular case, personally, I’d run even though I could come close to paying cash for it. The pressure to stay ahead of the carrying costs would be too great for me.
You must not understand how far out from D.C. or even the hi-tech parts of No. Virginia this house is. Ten years ago, Nokesville might not even have been considered part of the “D.C. area.” It’s not the type of place that is going to support $600k houses for any length of time.
“We placed a bid on this place Address: 12850 FLEETWOOD DRIVE: NOKESVILLE, VA 20181″
Your game plan is to get the REO manager to accept some reasonable offer SUJECT TO INSPECTION. Once you get the offer accepted with the contiguency, you then can start the negotiations on the cost of the repairs.
What I learned from the RTC REO days, is the REO manager needs to cover his assets with a paper trail on these blow out offers. If you can present him with documentation and numbers from the inspection on all the deferred maintenance and health hazards that need repair, the REO manger then has justification to accept a very low offer. Just make sure you suggest as you walk thru the property with the home inspector all the possible repairs you need to do
Right on David. One will have to justify 50% of wish price if you’re to be successful. That means punch listing EVERY defect, assigning a cost to repair/replace/remedy defect and deducting from the wish price.
How much is the land worth without the house. As someone from California, i say buy it for the land and tear down the house.
“The original owner paid 800k+, had some down payment because the note was for something like 620k, bank was asking 715.00″
If the bank lent 620K, they only needed a fraction of that on their books - like 20% (I believe that’s the reserve ratio) to make the original loan. So, they only lent out 124K of their cash.
So, can’t the bank take a big hit and still make a profit? The bank could sell for 154, despite the 620K loan, and still make a 30K profit. Because they didn’t have to have 620 on the books, only 124K, in order to make that loan.
Am I missing something?
The guy he bought it from walked away with a check for 620+ dollars, where did that come from if the bank only lent 124?
The bank only needed to have 124K cash in their vault.
As I understand it, they can lend 5 times that amount.
So, they’re increasing the money supply as they essentially fabricate money at this stage of the game.
Not saying it’s a good or a bad thing, but I’m trying to get clear on the process.
If you really want it, offer $5,000 or $10,000 more. That’s a nominal/token concession, and perhaps it allows someone in the REO dept. to claim they “held out for more” and you still get a bargain.
The right purchase price solves a lot of ills — especially if you like the location and the house/landscape is at least improvable in the future.
Nonetheless, I admire your self-discipline.
Good to see the “Silent Bubble” in the Maryland, DC, and NoVa region coming to a crashing end. People here seem to really believe that infinite money spews from DC - in reality, DC just eats everything with taxes, but whatever. They think it is all perfect here, “everyone is moving here,” houses can cost anything because “everyone” is moving here, and so on. They are all nuts, but it is taking time for that to be proven. Nice to see some more evidence!
$915 B. Bomb….
http://finance.yahoo.com/banking-budgeting/article/103811/The-915B-Bomb-in-Consumers‘-Wallets;_ylt=Apu764Zd43M9pf422bGNqy27YWsA
Brother - this is really another show all together. A person could start an entire new blog on Credit Cards.
In the good old days, if a person got in too deep, they could take out a HELOC or even try to flip a condo and poof - credit cards are paid off. There were even financial advisers who suggested a person invest in real estate to get out of credit card debt. It will be interesting to see how the population handles debt when it must be paid off with work instead of “investing”.
My credit card debt was about $8,000 at the peak, so relatively small potatoes, but it sure seemed hopeless to me for awhile there. I’m glad I did finally snap out of my stupor. I’m even gladder that I paid it off one paycheck at a time, rather than taking what seemed like an easy fix.
I’m a much freer person today than I would have been had I purchased a house and taken out “my” equity to pay off my cards.
“It will be interesting to see how the population handles debt when it must be paid off with work instead of “investing.”
That’s if there is any work left to do. So much of our “consumer” economy, our job base, is propped up by debt.
When the debt goes poof so will those jobs.
why arent any of the political candidates pushing for pro-consumer banking reforms. What the banks are doing is worse than crack dealers. And they are doing it all legally. If you think credit cards are bad, look at private student loans. They can raise rates at any time for any reason, and student loans are not dischargeable in bankruptcy.
The credit card problem and (future) sub prime problems could be solved with some restrictions of the maximum interest rates allowable. i.e. an anti usuary loaw. If the max allowable rate is say 15%, the banks will say they cant make loans to poor people. If you cant make money lending to someone at 15%, you shouldnt lend to them, because they wont be able to pay it back. Also need limits to the fees for late payment, over draft, NSF, etc etc.
I can hear it now. Let the market function. its a private contract between the bank and the borrower. Well there are some things that the ordinary people are not very good at negotiating over. Give the banks a choice, follow the restrictions on interest rates, fees, etc… or else collect the money on your own with no help from the states court system, county property liens, etc… etc…
“why arent any of the political candidates pushing for pro-consumer banking reforms.”
its all really pretty simple. the ‘candidates’ with a couple of exceptions are having to raise a boatload of money to pay for the tv advertisements. they receive that money from the big corporations and banks. therefore the ‘candidates’ do not promote or vote for policies that conflict with the interests of Big Bank,Big Oil, Big Military, Big Agri,Big Pharma. Change is gonna come once we have campaign finance reform in my estimation.
“Big Money-Wobbled by Wealth”
from today’s NYTIMES
http://tinyurl.com/37eu4f
Exactly. It all comes back to campaign finance reform. If Texas can outlaw corporate donations to campaigns, the rest of the US should be able to. That would be a start.
RE: why arent any of the political candidates pushing for pro-consumer banking reforms. What the banks are doing is worse than crack dealers
I 100% agree David. The ursury interest rates and bogus late payment fee rip-off’s are a complete travesty.
However, with a brain dead electorate who insists on re-electing incumbents, it’s as the saying goes-you get the government you deserve.
Bingo hd74man.
It’s the old saying “you get what you paid for” or you get what you voted for or didn’t vote.
David,
the Draconian bankruptcy “reform” bill passed in 2001, was described by former Sen. Metzenbaum as the most probusiness, anti-consumer legislation ever passed in the Senate. 36 dem senators lined up to give bush and friends what he wanted. Hillary was proud to put her name to it. (Even though her old man vetoed the bill in 2000). So, what’s she gonna do, call attention to her pandering to the credit card companies? I think not. That’s her money supply you’re talking about.
http://www.commondreams.org/headlines01/0316-03.htm
So if banks get 60 cents on the dollar for foreclosed mortgage debt, what do they get for unsecured debt? Is this potential 900 billion 2.5 times worse?
The number I remember from long ago is 5 cents on the dollar. Don’t know what the modern # is.
Get ready for the NEW higher fees at Citibank. No more free atms. you want to withdraw your money free…well stand in a long line and see a teller…with our NEW UPDATED shortened hours.
And don’t forget, DON’T drive to our bank, we have limited parking and if you park next door an the McDonalds you could be subject to a $208 tow!…..yes right here in Beautiful Sunnyside queens they have tow trucks who look for you to park “illegally” while doing your business at Citibank!
Why do you still have an account with Shitibank? Get thou to ING Direct. Free ATMs, baby, and 3%+ on savings accounts over the last five years … AND CD’s without that obnoxious show-up-on-the-correct-date-with-the-passbook nonsense.
I’m forced to use sheetibank, we have subways in NYC, and i literally pass by the bank twice a day when i work…… no other bank is within 5 blocks and its a chase and a wamu
Credit cards are worse than crack or meth. I know what the hell of credit card debt is like. And I didn’t even get to do the fun stuff with them, since my debt went for stuff like car repairs and groceries during some difficult times.
A huge rise in credit card debt and default is absolutely inevitable and predictable in light of the mortgage meltdown. And it’s going to be ugly.
Being Ben Bernanke (triple-bbb rated)
Can’t be all that fun anymore, i’d guess…
What will happen to the market when he steps down?
What do you fashion?
Nov. 5 (Bloomberg) — Gisele Bundchen wants to remain the world’s richest model and is insisting that she be paid in almost any currency but the U.S. dollar.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aeNqAOY4dNJE&refer=home
Hot non-Dollar denominated chicks really know how to feather their nest…
…with shrewd agents. You think these ladies actually do any thinking?
Her twin sister manages…
She’s got her NY condo up for sale too, for $12M.
Too bad she’s got such lousy taste in men.
Her sister is her manager, according to the article. Nice to see young women who are bright as well as beautiful.
… at least those smart enough to hire chauffeurs.
Lol, no kidding!
Yeah, but she’ll “invest” in some chic restaurant, and end up losing her oh-so-fine ass. Seems the clackers never learn.
A new home price analysis report for Greater Boston prepared by the National Association of REALTORS® concludes that “a rise in home sales and a strengthening in home prices appears imminent.” The NAR report cautions, however, that any near-term increase in home prices will vary depending upon mortgage rates and the sustainability of mortgage debt levels over the next year. Prices could climb as much as 10.8 percent if the debt level returns to the historic average level or as little as 2.3 percent if the debt level returns to the average but with less attractive mortgage rates.
….so if you want to make 10% on your money in 2008, please come to Boston for the spring-time…
WTF..Starting the better buy now fear, already. We really need a class action against these snake-oil salesmen.
The MAR/NARtions are right on cue. NAR and MAR (Mass Association of Realtors) start pumping out this BS in the fall and early winter every year. You can set your watch by it.
Nov. 29 2006 –Price drops and declining sales in the Massachusetts housing market moderated in October, two housing reports showed yesterday, suggesting that the months-long slump in the real estate market may be nearing its end.
The median price for a single-family home fell 2 percent in October to $341,000 compared to the same month in 2005, according to data compiled by the Massachusetts Association of Realtors.
Their delusion is that somehow they can prime the pump for the spring by unleashing a flurry of optimistic, groundless lies and propaganda. Suggesting Mass real estate prices will increase 10% is recklessly criminal.
The price declines in Mass are happening, but they seem downright orderly compared to what’s happening in Fl and Ca. Two properties I’ve been watching in Dartmouth have dropped asking price by 15-20% in the last month. I think they are still overpriced, by at least 10%, but it’s progress.
On the other hand, I have had the damndest time getting an electrician, plumber, or contractor for my multi. They are all flat-out (their words, not mine). Many people opting for remodels vs moveups I think.
What, is this a November variation on Linus waiting for the Great Pumpkin every year?
I saw this on another site with out a link to the actually press release. I was massively confused. What is the historic average debt level? For that matter, what happens if the mortgage debt level is below average?
I guess best said as “What the heck are you talking about NAR?”
I would want to measure it against income for the area, but I’d guess NAR is measuring it against the alleged value of the real estate. If I’m right, the debt can go back to historic levels and WAY above just by the value of the houses falling.
Everyone raise their hand who thinks something concrete and fundamental changed in the economy since Dec 2006 when the estimate was made of 20% defaults on sub-prime mortgages!
OK, who thinks that people just realized over the implosion of more than 100 companies that this might, possibly, maybe could (in the very very almost-too-worst-case to even mention)… cost them a lot of money.
Annual Fed Ski Trip (Ben, Al and Hank)
http://www.stockmania.com/index.php?showimage=85
Nice…
Here’s what a double black diamond slope looks like.
http://www.summitpost.org/images/original/8119.jpg
(Eichorn Pinnacle in Yosemite)
I can picture the Fed Ski trippers shredding the slopes.
I can picture the slopes shredding the Fed ski trippers.
containment is spreading:
Phillip Inman
Saturday November 3, 2007
The Guardian
The City was swept by rumours yesterday that another British bank was in trouble after Northern Rock indicated it was not the only bank borrowing from the Bank of England’s rescue fund.
Northern Rock has borrowed only £18bn of the £23bn lent by the Bank of England from its emergency loan fund, leading to speculation that other British banks need £5bn of extra funds to cope with the global credit crunch.
http://business.guardian.co.uk/banking/story/0,,2204473,00.html
sinking currency, sinking country:
The euro, worth 83 cents in the early George W. Bush years, is at $1.45.
The British pound is back up over $2, the highest level since the Carter era. The Canadian dollar, which used to be worth 65 cents, is worth more than the U.S. dollar for the first time in half a century.
Oil is over $90 a barrel. Gold, down to $260 an ounce not so long ago, has hit $800.
http://news.yahoo.com/s/uc/20071102/cm_uc_crpbux/op_334275
Even the BBC is harping about the US housing meltdown.
http://news.bbc.co.uk/2/hi/business/7070935.stm
Foreclosure wave sweeps America
Thousands of abandoned houses in Cleveland have been vandalized
A wave of foreclosures and evictions is about to sweep the United States in the wake of the sub-prime mortgage lending crisis.
This could destabilize the US housing market and may also lead to further turmoil in financial institutions, who collectively own $1 trillion (£480.6bn) worth of sub-prime debt.
Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US “rust belt”.
It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes.
the British and Canadians love this stuff. They think it won’t happen to them. I say this with love having my family comprised 90% of both. Watch.
Actually, i think it’s more the case that it has happened to them - and it’s nice to see it happen to somebody else for change.
Subprime capital of the U.S. in Cleveland?
I think not. The Brits don’t want to say it - the subprime capital of the U.S. is very likely South Florida, where of course there is heavy British “investment” and more trying to come in.
Txchick is right on this…the tremors in the Brit property market are still pretty faint. But Canada’s bubble is still rising…and the confidence of the rising loonie is probably adding to it. But especially in Canada, affordability ratios are totally whacked.
It’s just a question of time and patience.
someone posted this yesterday, it shows subprime percent of all mortgages by county:
http://www.nytimes.com/interactive/2007/11/03/weekinreview/20071103_SUBPRIME_GRAPHIC.html#
Brits also heavily invested in the South of France, which I predict is due for a crash…
Wow, they don’t pull any punches, do they?…..gotta love those Brits!
Definitely watch the brits-per that yahoo article listed above 6% are using their credit cards for their mortgage payment. Methinks it’s not just to get frequent flyer miles.
The BBC?
I look in on channel 25 in New York every now in then. They have this guy Leon Charney who is a prominent commentator on Jewish affairs, and normally interviews Israeli officials. What was he talking about yesterday when I happened to see it? The mortgage crisis, with the author of “Stolen Without A Gun” or some such book on Wall Street.
Later, on the same station, they had the news from Ireland. What where they talking about? A financial crisis and layoffs at the Waterford Crystal company. Why? Because they get a lot of their sales in the United States, in dollars, and both the sales and the dollars are plunging.
A few weeks ago I a couple of minutes of French news (my daughter is a french student). Most of it was Greek to me, but I did hear “subprime United States.” And the guy did not have a happy look on his face.
on the other side, the BBC still has these silly home improvement and emigration programmes, where young couples from London do a fixer-upper in the country (or some investment on the Spanish Costa, Eastern Europe or whatever) and retire for life with the gains from a few months of work. The housing pyramid game is still in full swing in Europe, and it will take years before the sheeple wake up to reality.
In Netherlands same story, many TV shows are still chanting the RE-only-goes-up mantra; inventory of homes for sale keeps climbing, just like asking prices … Subprime, housing bubble? Nah, that’s the US, can’t happen in Europe.
last night’s bbc world news interviewed dean baker. he laid it right out on the line: “this is just the tip of the iceberg … it’s not just subprime … housing will decline substantially for years … expect 2-6 TRILLION in losses … these ceos trashed their companies and walk away with multimillions.”
it was as unvarnished an analysis as i’ve yet heard on the msm. and i think that hear “the coming to britain real soon” is just around the corner.
of course they’ll blame it all on u.s. — but i think the bubble’s likely to burst real soon in britain (and elsewhere) real soon.
if it hasn’t already.
“A financial crisis and layoffs at the Waterford Crystal company. Why? Because they get a lot of their sales in the United States, in dollars, and both the sales and the dollars are plunging.”
Not a surprise. I saw Waterford goblets for sale for the first time last week at TJ Maxx (@ $9.99, marked down from $30), a bad sign for Waterford (but good for crystal junkies).
I live near Cleveland & have to read the BBC to find out what’s going on around here. Pitiful.
Hey, even here in Baltimore, part of the “Maryland is perfect and everyone is rich” crowd, we have an ever increasing mountain of nearly free, trashed houses. The containment is spreading - saw my first foreclosure in Columbia on Realtor.com the other day - fun, fun, fun!
“The road of excess leads to the palace of wisdom.”
William Blake
“Experience keeps a dear school, but fools will learn in no other.”
Benjamin Franklin
“It is a mistake to think you can solve any major problems just with potatoes.”
Douglas Adams
“There are three ways of losing money: Racing is the quickest, women the most pleasant, and farming the most certain.”
Lord Amherst
I don’t get it. An explanation, please?
You can eat them, you can burn them, and you can bean someone in the head with them. Very useful!
–
World’s First Trillion Dollar Mkt Cap Company
Is Chinese, of course. It is PetroChina. Its mkt cap is bigger than the GDP of India and total mkt cap of all Russian companies. Five of world’s ten largest companies by mkt cap are Chinese. I smell a gigantic bubble. The bubble is truly global and when it bursts, likely in 2008, is would be something to watch. The American financial companies, the biggest source of credit, are ground zero for the global bubble burst.
Americans can learn a thing or two from Communist China. Jim Rogers claims that China is the best capitalist nation on earth. The only question is: Which country is more corrupt, or crooked, America or China or India? The first two are big supporters of Pakistan and Musharraf. The American President is telling the Turkish Prime Minister not to go after the terrorists (PKT) in Turkey that are being supplied by Iraqi Kurds.
Jas
I am very surprised that all of this is not more of a drag on the market.
still long JAVA? I thought 6 was feelin toppy…
JDSU? still think breakout is on the way? seems 14-16 is a tight range.
Dumped Sunw awhile back. JDSU, I’ve been trying to hold for a year now. It’s very frustrating. Market dependent.
Dumped Sunw awhile back
I knew you’d come around, Txchick. That company may have been a good short term trade, but it is not a buy and hold… when tech spending slows again, and it will, Dell and HP will burn them.
Since when is Dell a tech company? They package and ship products using components that others design. HP used to be a tech company, but there is not much of that left. Sun is very solidly in the technology sector and delivers whole classes of products that it created and for which Dell and HP have no equivalents. There is a huge difference between actual innovation which takes time and investment and skills and still might not work versus mere business acumen which is important in the role it plays, but can never amount to anything more than turning the same cranks ever harder and faster.
I agree Chic….This is not a wall of worry it is a mountain of worry…I am about as nervous as I was in 1981 & 1992….
The Street is regarding this as a normal market correction, the pain has not pierced through the investment crowd. The TV schills are still saying China will do fine, Europe will do fine, etc.
It is inconceivable numbers that banks and investment houses are playing with. Citi and Bank of A and Merrill et al will be doing similar write downs. There are Billions in additional losses.
UCPIX….you thinkin thats gonna have a run here at year end?
Im also curious if anyone thinks QID has some room to move higher, betting against the wisdom of safety in the TECH?
I am very bearish on the US stock market, but I am not sure about UCPIX at this time. It appears to be rotation and shuffling. UCPIX is not set up to do well in rotation cycles.
It is important to remember that the Federal Reserve has a real interest in keeping the stock market higher. Whether it is real wealth or artificial wealth the Federal Reserve has to try to keep a buyers interest in US treasuries and if the stock market tanks, it will take the US Treasury market with it.
The S&P500 PE ratio is 50% greater than in 1987 and is higher now than in Nov, 1999. The average PE is over 20 and average growth is 0.2%.
“What me worry?” Alfred E. Neumann
Hoz where are you seeing that data? The latest data I saw from S&P (Q2) showed P/E running in the 17’s.
http://www2.standardandpoors.com/spf/xls/index/SP500EPSEST.XLS
I use Mr. Schiller’s method to calculate PE. It is based on a 10 year moving average to remove cyclic moves. As a result it gives exceptional results for market tops and bottoms. e.g. In Feb 2003, using Mr. Schiller’s methods the PE was 6 where the Standard and Poors was showing 16, a pretty sound reason for buying in 2003. Currently the PE is the highest it has ever been using Mr. Schiller’s method.
Interesting - and makes sense as a good way to do it. Would this data posted online perchance?
“It is important to remember that the Federal Reserve has a real interest in keeping the stock market higher.”
Hoz, please explain why stock market down results in Treasuries down. Is it going to make interest rates go up to have people close out leveraged positions in the market? I would have guessed the opposite.
That’s what’s so frustrating. I have having to sell puts, cover, rebuy, reshort but you have to do that until these trendlines break for real and the fast money starts getting out.
I stepped off SKF just a bit early…
however, some interesting longs are coming back to my buy price. CLNE is the one Im most interested in. Im also looking at SOV….its still hitting 52 week lows on a weekly basis….if it hits 10, the bailout begins with a check from CHINA.
I am still short the financials - I think they have just started their down move. This is the beginning, not the end, of the move.
What is Citi worth when it cuts its dividend or BAC cuts or WFC cuts etc?
I wish I could search this blog and find my post on a Saturday night in April or May saying that brokers were the place to be on the short/put side based on the mark to model thing going awry. Maybe Peter Weiner would hire me then
I remember it clearly. I’ve been telling my husband about the smart people on this blog and about the woman who predicted the IB problems.
There is evidently some form of economic dark matter that keeps the U.S. stock market afloat in the face of an overwhelming weight of bad news. Over the long run, this is very bad for U.S. Inc., as hiding bad news off balance sheet is not a sustainable strategy (witness the demise of Enron as a case in point).
Loved the ADRs at 80, now at 250. A very nice trade indeed.
Being an Indian and residing in US for last 10 years, all I can say that you cannot compare between corrupt apples. All are corrups in different ways.
Aint that the truth. At least here for the most part the powers that be want the unwashed masses alive and purchasing so that they can get richer and richer off them. In other countries the elitists would kill anyone complaining about the status quo without a second thought.
There’s worse things than being robbed blind by corrupt government and financial institutions.
I completely agree with you. All I said those are different kind of corruptions, but corrupt are they all.
Ash Monday
http://www.financialsense.com/fsu/editorials/ash/2007/1103.html
o/t
Venus and the crescent Moon are very near to one another in the pre-dawn California sky…
Striking!
Venus and the crescent Moon are very near to one another in the pre-dawn California sky…
Probably more than just the California sky, btw.
But there’s no way for me to find out without leaving my bed.
My partner and I saw it this morning in Florida. Quite attractive.
This is from yesterday, but I didn’t see it then so I am posting it here.
“When people talk about a cycle in prices, they imply that prices go up for a while, eventually get too high and then fall back some. It might be true in some areas of the business world, but it doesn’t apply to California home prices… ‘That’s why prices will always go up here - because it’s California….There is no price cycle.’””
They should try to tell this to my sister-in-law. She and her husband lost about 15% on a home they bought in Sacramento in the early 90’s, and they weren’t the only ones…
HELP…would you buy gold from the US Mint? I want to place an order on Eagles, but they say “collector”. Any input quickly would be appreciated (our dealer is closed)
Is it time to buy gold? At $800? Sounds like too much.
I never have, but why not? I think the US Mint is as good as any coin or bullion dealer. Having said that, my Eagles do NOT say Collector. Make sure you are buying standard American Eagles, which have a face value of $50 (Hardee-har-har!)
http://www.apmex.com is where I purchase physical. There are lots of other legit dealers online as well.
NO
I was told years ago when buying some silver Eagles, the the mint sells them to authorized dealers who do the retail. I think somewhere on their website is a list of all the dealers who can buy directly from the mint.
I would only buy from the US Mint if I’m buying a proof coin or collector coin.
If you want to buy precious metals close to spot price, skip the US Mint and go to a dealer. They charge 4 or 5% commission. It’s small considering where gold will go in a couple of years. The dealers gotta eat too. Pay cash.
Re: Leighsong
Try Blanchard Coins or American Gold Exchange (google them). I buy buillon coins from both, and their markup from spot price is relatively small. No issues with either one. Good luck!!
Thanks everyone!
The most important thing to consider about all privately held Gold Bullion out there is…
It’s all bought and paid for, in full.
100%
You may remember I posted in the summer that Craig Hall, uber-developer in Dallas, proclaimed the market over. Well ….
http://www.minyanville.com/articles/MBI-abk/index/a/14739
The commercial market will get pummeled if the U.S. enters a recession….
Hey New York HBBers. We are getting together this Friday at a pub in the city.
If you’re interested, email me at
kanapali@gmail.com
For those that are influenced by reports suggesting the Federal Reserve is pumping billions into the markets. Obviously, last weeks 41.5B was all rollover. This week rollovers will occur for minor amounts today, Tuesday and Wednesday with $27B due on Thursday. I am assuming the Federal Reserve will roll all of todays through Wednesdays into 1-3 day loans with all comming due on Thursady so they can roll another large chunk. Then the MSM will be able to report the injection of “another 41B”.
There is no new cash going into the system. Total Federal Reserve Credit is unchanged, it has been between $40 and 45 B since August. In the mean time total bank loans outstanding are $6T.
quite a difference with Europe … why would these two central banks follow such very different policies? Also, US M3 numbers are still increasing at high speed, what is causing it?
“Obviously, last weeks 41.5B was all rollover” — Actually virtually all the reports I’ve read omit the fact that what was rolled over was actually less than what matured. Those reports were a gross distortion.
More Citi news from Bloomberg, losses of 11 billion just this month…
Nov. 5 (Bloomberg) — The risk of Citigroup Inc. defaulting on its debt rose to a record after the biggest U.S. bank by assets said that subprime mortgages and related securities lost as much as $11 billion of their value in the past month.
Credit-default swaps on the New York-based lender opened 8 basis points higher at 80 basis points, according to prices from Lehman Brothers Holdings Inc. The contracts, which rise as perceptions of credit quality worsen, have increased from as little as 10 basis points in June and last traded at 73 basis points at 9:30 a.m. in New York.
“Citigroup Inc’s problems deepened on Monday as it was unable to assure investors a potential $11 billion write-down for subprime mortgages won’t grow, and its nearly pristine credit rating was downgraded.”
This is like shooting ducks in a barrel. The CDO market has lost an average of 38% in the last three months, the highest rated CDOs have lost 23% and assuming Citi had just the highest rated CDOs they have lost over 25B.
This is before any CDO and derivative defaults. Citigroups ratings cut on their own debt has been cut to AA, its outlook is negative and the mopes on tv are recommending purchase for the dividend.
He who picks bottoms ends up with stinky fingers.
AA?
Accountability Avoidance
Or, Arthur somebody or another…
Citigroup said a lot of things this morning.
Citigroup said it did not know if they would have to take additional write downs.
Mr. Gross stated that it is a $1 Trillion dollar problem. I wish it was that small. The CLO market is in shambles, the ABC market is in shambles and the CDO market is a joke.
“Mr. Gross stated that it is a $1 Trillion dollar problem.”
That lines up with what Bloomberg quoted as a round estimate of the amount of subprime debt Wall Street securitized over the last three years. It does not reflect Alt-A or prime mortgages, not to mention securitized covenant lite loans (next year’s credit crisis…).
Good stuff
http://www.minyanville.com/articles/bernanke-fed-hobson-housing-banks-DJIA/index/a/14742
I recall Robert Toll crowing that they would “kill the shorts.” How is that working out for them these days?
Well, Dude, I think Supermodel Giselle probably topticked the Euro. We’ll see.
I agree with this.
LOL!! Thanks for reminding us of that, GS.
While I currently only hold one short position in HBs, I’ve made a very tidy sum shorting HBs over the past few years.
Perhaps a silly question to the old pro’s but I see today from the market watch overview that everything is down or a net decrease in money from the markets. Where is this money going? Overseas?
Back into thin air where it came from.
Prince Chokes on Wall Street’s Dog Food
http://www.fool.com/investing/general/2007/11/05/prince-chokes-on-wall-streets-dog-food.aspx
I’m an upbeat person, really I am. I mean, sometimes I hide behind a mask of skepticism, even cynicism when I have nothing intelligent to offer. But most of the time you’ll see me strolling in a snappy, optimistic manner down the streets and hallways of life, a smile on my lips, a whistle in my heart, or vice versa.
But lately? I don’t know. This year isn’t wrapping up very well. In fact, I’ll be honest with you. I’m scared. I feel like I’m in one of those video games I used to play when I was on a PC platform, the kind in which you have to run very fast over a lake of fire to get to a safe zone on the other side. In my mind, that area of relative comfort has a banner over it that says 2008. Everything else before that is just, well… fire and brimstone.
Is it just me? Or is the world ending?
http://stanleybing.blogs.fortune.cnn.com/2007/11/05/lord-get-me-out-of-2007/?source=yahoo_quote
I feel like a Russian citizen, circa fall 1998.
“I feel like I’m in one of those video games I used to play when I was on a PC platform, the kind in which you have to run very fast over a lake of fire to get to a safe zone on the other side.”
Just think about how San Diego fire evacuees are feeling right about now. Especially those whose homes burned down while they ran for their lives (I was fortunate enough to be in the former group, but not the latter.)
Does anyone find the following trend alarming:
Pennsylvania Firm Recalls Ground Beef Products Due to Possible E. coli O157:H7 Contamination (PDF Only) (Sat, 03 Nov 2007 07:44:37 GMT) Cargill Meat Solutions Corp., a Wyalusing, Pa., firm, is voluntarily recalling approximately 1,084,384 million pounds of ground beef products because they may be contaminated with E. coli O157:H7.
No. If you don’t like it, then stop eating cowburgers.
i prefer lambburgers, from fresh ground lamb. delicious, much less, better for you in every way….
meant, “much less FAT”
even better, grind your own — at least you’ll know what’s going into your burgers. a really good electric meat grinder is less than $100. there’s good reason for not trusting most processed foods, but especially commercially ground beef.
H&R CFO gone “effective immediately”. What kind of skeletons are going to fall out of the closet now?
========
(Bloomberg news)
Nov. 5 (Bloomberg) — H&R Block Inc., the biggest U.S. tax preparer, said Chief Financial Officer William Trubeck has stepped down from his position “effective immediately.”
Treasurer Becky Shulman is acting chief financial officer, the Kansas City, Missouri-based company said today in a statement. Trubeck, CFO for three years, will be available to consult with H&R Block through year-end.
“…Trubeck, CFO for three years, will be available to consult with H&R Block through year-end.”
Can you make “collect” calls from Federal prison?
An interesting map/article on Cleavland, OH from the BBC. It maps foreclosures city-wide. What’s really interesting is the mapping of Deutsche Bank properties — one can also view the map via Foreclosures, Black areas and Subrime Lending.
Foreclosure wave sweeps America
http://tinyurl.com/2eyxl3
“Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US “rust belt”.
It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes. “
Posted on his Blog on Friday,… way to go 22nd US Labor Secretary!
“…With their fiscal years ending in November, and their auditors requiring that assets reflect market realities, expect other big write-downs. Citigroup could be next.
In other words, there’s no reason to believe Wall Street executives have been smarter than executives in the real, non-financial economy. They’ve been paid more because they’ve been smarter at creating schemes that have only appeared to create value, while keeping investors in the dark.”
http://robertreich.blogspot.com/
“They’ve been paid more because they’ve been smarter at creating schemes that have only appeared to create value, while keeping investors in the dark.”
Technically speaking, isn’t this illegal? And isn’t the crime known as fraud?
Only if you or I commit the act… These guys practically *are* the government.
In related dismal news, the writers are now on strike. If they don’t wrap this up quickly, it’s projected to be about a $1 billion hit to the LA economy.
Who knew tv actually had writers….
Subprime Mergers Add to Writedowns
http://biz.yahoo.com/ap/071105/m_a_scorecard.html?.v=1
Drought Dries Up $$
http://online.barrons.com/article/SB119404374243280973.html?mod=yahoobarrons&ru=yahoo
Any thoughts on the implications of a former Treasury Secretary taking over the reins at C with a former GS CEO currently at the Treasury Secretary position? The investment bank CEO club seems to have a great deal of sway these days on both Wall Street and K Street…
After a shaky beginning, another miracle close at the flat line…
http://www.marketwatch.com/tools/marketsummary/
that is what you call a slow bleeder!! kinda like cutting yourself shaving. lol!!!
The “two-o-clock turnaround” was a half hour late this today. Late lunch?
“Waiter–gimme me tee martoonees–to go.”
power and money live on the same street.
Quick Take: Realtors Get Desperate
http://www.fool.com/investing/general/2007/11/05/quick-take-realtors-get-desperate.aspx
Public Awareness Campaign: Market Facts
Buying a home is a great way to build long-term wealth. There are some other important dividends, too.
To counter recent negative housing reports in the media, NAR is helping local REALTOR® associations across the country explain the real facts behind the real estate market in their area.
NAR has created a print ad that targets potential home buyers, educating them about the long-term value of housing and providing insight into local real estate markets to help buyers make informed decisions about what can be the biggest investment opportunity of their lives.
http://www.realtor.org/pac.nsf/pages/marketfacts
The noose of tighter lending standards portends larger-than-expected housing price declines.
Unprecedented tightening in lending standards: Fed
Banks raising standards for all types of borrowers seeking all types of loans
By Rex Nutting, MarketWatch
Last Update: 3:06 PM ET Nov 5, 2007
WASHINGTON (MarketWatch) — Major banks made it much tougher for all types of customers to get loans over the past three months, according to the Federal Reserve’s quarterly survey of bank lending officers.
This summer’s credit squeeze prompted an unprecedented tightening in lending standards at major banks. As credit standards toughened, demand for loans also fell, the Fed reported Monday, providing some fresh details on the fallout from the credit crunch.
Residential mortgages were harder to get than at any time in the 17-year history of the Fed’s survey of banks’ senior loan officers, the Fed said. The survey covers 52 domestic banks and 22 foreign banks, which together account for a majority of bank lending in the country. Read the full report.
http://www.marketwatch.com/news/story/banks-made-tougher-everyone-get/story.aspx?guid=%7BD728F5F4%2DEFC0%2D4273%2D9F89%2D7B63AD900AE5%7D
Housing bubble stages of grief:
denial
anger
bargaining
depression
Bloodbath expected to claim more victims
By Peter Thal Larsen in London
Published: November 5 2007 22:45 | Last updated: November 5 2007 22:45
When the world’s largest investment banks last month wrote off tens of billions of dollars, their shares went up as investors assumed that the worst of the bad news was out of the way.
But additional writedowns from Merrill Lynch and Citigroup have shattered that optimistic view.
http://www.ft.com/cms/s/c78dfc24-8bed-11dc-af4d-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc78dfc24-8bed-11dc-af4d-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F4cd5c262-8bd6-11dc-af4d-0000779fd2ac.html
Fears intensify for prolonged turmoil
By FT Reporters
Published: November 5 2007 21:27 | Last updated: November 5 2007 21:27
Fears are rising in the credit markets that the turbulence could last for months as big US and European banks come under pressure due to losses on US mortgage securities.
Shares in banks and insurance groups continued to tumble on Monday as analysts warned that losses from mortgage securities could force some institutions to shore up their capital bases. The turmoil has already claimed the jobs of two of the biggest names on Wall Street and prices in the US money markets on Monday suggest the climate of mistrust will last well into next year.
http://www.ft.com/cms/s/0/4cd5c262-8bd6-11dc-af4d-0000779fd2ac.html
Bond issuance plunges amid credit fears
By David Oakley in London
Published: November 5 2007 22:45 | Last updated: November 5 2007 22:45
Bond issuance by the world’s biggest banks has plunged in the past week as concerns grow over further balance sheet losses because of the credit squeeze.
There have been only 11 bank bond deals since Monday last week – a third of the number of deals priced in the previous week as some financial institutions are forced to stay on the sidelines because of the tougher market conditions, according to Dealogic. A $1bn deal from Morgan Stanley last week highlighted the problems. The bank was forced to pay an extra $5m a year in interest rate charges to attract investors, compared with a similarly structured bond priced in February.
http://www.ft.com/cms/s/f08f22c2-8bd6-11dc-af4d-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Ff08f22c2-8bd6-11dc-af4d-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
I want the bubble back. The financial news is otherwise just too depressing.
Bubbles are getting more and more expensive to inflate, due to the rapidly rising price of helium.
Monday, November 5, 2007
Price of helium keeps rising
Helium is the second-most abundant element in the universe. But here on Planet Earth the gas is getting harder to come by. A worldwide helium shortage is affecting everything from the party industry to medicine. Amy Scott reports.
http://marketplace.publicradio.org/display/web/2007/11/05/helium/
“TOKYO, Nov 6 (Reuters) - Former Federal Reserve Chairman Alan Greenspan said on Tuesday that falling U.S. home prices and high home inventories raised major concerns amid the ongoing turmoil in the subprime mortgage market. He added that the slide in the dollar was neutral for the economy, and that the currency would slide in the long run relative to East Asian currencies.
“I don’t think it’s favourable or unfavourable,” Greenspan said when asked about the falling dollar.
“What is not true is that because we have a large current account deficit, the dollar has to weaken,” said Greenspan, who was speaking to a CEO conference in Tokyo via video link from Washington.”
Greenspan just pegged the dollar to a rock in the Sea of Japan.
Paulson’s Focus on `Excesses’ Shows Goldman Gorged
By Mark Pittman
Nov. 5 (Bloomberg) — Treasury Secretary Henry Paulson says the U.S. is examining the subprime mortgage crisis to ensure that “yesterday’s excesses” aren’t repeated. He could be talking about himself and his former firm, Goldman Sachs Group Inc.
Paulson, 61, doesn’t mention that Goldman still has on the market some $13 billion of almost $37 billion in bonds backed by subprime loans or second mortgages that it created while he was chief executive officer. Those bonds have an average delinquency rate of almost 22 percent, higher than the average of other subprime bonds from the period, according to data compiled by Bloomberg.
Goldman, the most profitable investment bank, was one of 14 primary dealers of U.S. Treasuries who contributed to a three- year binge as $1 trillion of subprime mortgages were packaged and sold to investors. The value of Goldman’s outstanding subprime bonds trails Lehman Brothers Holdings Inc.’s $33 billion, out of $106.8 billion created during Paulson’s years at Goldman, and Morgan Stanley’s $28.8 billion, out of $82.5 billion.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aUXYrK3i6juc&refer=home
Weill’s Profit Machine Breaks Down on Citi Writedowns
By Bradley Keoun and Edgar Ortega
Nov. 5 (Bloomberg) — Citigroup Inc., the profit engine built by Sanford “Sandy” Weill, has seized up.
The biggest U.S. bank by assets fell 5 percent today in New York trading after saying that subprime mortgages and related securities lost as much as $11 billion of their value in the past month, a decline that may wipe out half of the firm’s profit so far this year. The New York-based company also said that Charles O. “Chuck” Prince III, Weill’s hand-picked successor, stepped down. Former Treasury Secretary Robert Rubin will become chairman, and Citigroup’s most senior executive in Europe, Win Bischoff, will be interim CEO.
…
“I don’t think that all of a sudden, because of the credit crisis, the Citigroup model is broken,” said Tim Ghriskey, co- founder of Solaris Asset Management in New York, which oversees $1 billion including Citigroup shares. “This isn’t a broken machine at all. It just needs some leadership that really understands the business.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6rVQ8rCEDzA&refer=home
Ron Paul raised an incredible $3.8 million so far today - our so-called elites must be breaking out in a cold sweat as they realize far too many free-thinking individuals are breaking free of the herd the oligarch’s media border collies are guiding into their incorporated global plantation. I just received this e-mail from the Ron Paul campaign:
November 5, 2007
Is it possible to comprehend what we’ve done today? Earth-shattering, jaw-dropping… No matter which way you phrase it, Ron Paul is for real.
Over $3,800,000 raised.
More than 35,000 total donations.
1 message - and 1 candidate - unlike any other.
Can we keep our momentum going? The most successful fundraising day ever is John Kerry’s $5.7 million. And that was on the day he accepted the Democratic nomination.
Let’s do it: https://www.ronpaul2008.com/donate
Jonathan Bydlak
Fundraising Director
Ron Paul 2008
I watched the live feed of the donations coming into the Ron Paul campaign, which also listed the names of the donors (if they checked a block on their donation saying they were OK with that). What struck me was the diversity of the donors - male, female, Muslim, Sikh, Hindu, Catholic (well, plenty of Irish & Italians), Hispanics, Nordics, Asians, WASPS, African-Americans - try watching for a few minutes. In addition to being our last best hope to defend the Constitution, Ron Paul may also be the only hope to bring people together in this country.