Archive for February, 2008
Friday, February 29th, 2008
The WSJ and the NYT each have articles running tomorrow highlighting the ease with which borrowers are walking away from their mortgages. Both are highlighting the services of YouWalkAway.com, which for a $1000 fee will help borrowers do exactly that.As house prices fall, more homeowners find themselves upside down, ...
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Thursday, February 28th, 2008
Can Americans be trusted to save for their own retirement? A data point released today suggests not. But first a quick primer on the two basic types of retirement plans: defined BENEFIT plans and defined CONTRIBUTION plans.The basic difference between the two is who bears investment risk. ...
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Thursday, February 28th, 2008
Yesterday Barney Frank, chairman of the House Financial Services Committee and therefore a very powerful Democratic voice on the economy, was quoted as saying the government"is not helping enough people. We're not going to get out of this [credit] crunch until we stop this cascade of foreclosures."Where to start? ...
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Wednesday, February 27th, 2008
Fannie Mae reported earnings this morning. They're not pretty:The mortgage-lending giant reported net loss of $3.56 billion, or $3.80 a share, compared to year-earlier net income of $604 million, or 49 cents a share. The company recorded negative revenue, including derivative and investment losses, of $2.25 billion. Year-earlier revenue ...
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Monday, February 25th, 2008
Over the weekend, the New York Times reported that Bank of America is floating ideas for a much larger housing bailout than has been imagined heretofore. So far, the Bush administration should be congratulated for exercising restraint, for refusing to funnel more taxpayer dollars towards housing in a quixotic effort ...
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Thursday, February 21st, 2008
Received a fascinating e-mail from a former hedge-fund colleague that I want to share with all of you (with his permission of course!). Before I get to it, some introductory words:Morgenson's article in the NYT earlier this week kicked up a bit of controversy in the blogosphere. She ...
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Tuesday, February 19th, 2008
I don't think it takes an econ major to appreciate the humor here. (Hat tip to CR for this one. )...................Read other popular posts on OptionARMageddon:Is anyone immune?Credit Default Swaps, yet another shoe.....Time to call CongressCredit Woes may WidenIs Microsoft Overpaying for Yahoo?Baltimore Sun Op-Ed: Why Fan and ...
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Tuesday, February 19th, 2008
To date, three banks I can think of have remained largely unscathed by credit-related writedowns. Goldman Sachs, JP Morgan and Credit Suisse, while Lehman's writedowns have been small relative to others. My hunch, and it's nothing more than a hunch, is that none of these companies will escape ...
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Tuesday, February 19th, 2008
Following up on last week's post about trouble in the leveraged loan market, the WSJ is reporting tomorrow that the big banks may be forced to take $15 billion worth of writedowns on their leveraged loan portfolios.In case you need a refresher on leveraged loans, see that link above.Briefly, leveraged ...
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Sunday, February 17th, 2008
For a hilarious AND informative primer on the subprime debt bomb, check out this slideshow. Hat tip: JB....................Read other popular posts on OptionARMageddon:Time to call CongressProject Lifeline: A Lifeline for banks, not borrowersCredit Woes may WidenIs Microsoft Overpaying for Yahoo?Baltimore Sun Op-Ed: Why Fan and Fred could cost taxpayers ...
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Saturday, February 16th, 2008
.....that will drop, that is. A fascinating and very readable piece by Gretchen Morgenson in today's NYT gives the lowdown on systemic risks posed by credit default swaps.Credit Default Swaps are highly complex derivative securities that, in the simplest of terms, function like insurance contracts created to protect bond ...
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Friday, February 15th, 2008
Bad news cascading its way through the market this morning. But equities still seem positively resilient at this writing, with the Dow off a mere 44 points. A taste of today's news releases:The New York Federal Reserve reported early Friday that its general business conditions index tumbled to ...
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Thursday, February 14th, 2008
Folks, it's time to dig up the phone numbers for your congressman and your Senators. According to the Journal "worried bankers are...urgently shopping proposals to Congress and the Bush administration that could shift some of the risk for troubled loans to the federal government." That is, to taxpayers.One ...
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Wednesday, February 13th, 2008
There's a fantastic editorial in today's Journal regarding Warren Buffett's offer to reinsure $800 billion of municipal bonds currently backed by monoline insurers like Ambac and MBIA.The man is brilliant folks. He's been sitting on billions in cash the last few years waiting for appealing investments to materialize. ...
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Tuesday, February 12th, 2008
On the heels of yesterday's front page article in the Journal about widening credit woes, the NYT has a front page article of its own this morning noting that mortgage troubles aren't limited to so-called subprime borrowers:The credit crisis is no longer just a subprime mortgage problem. As home prices ...
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Tuesday, February 12th, 2008
According to Reuters, 6 major mortgage lenders--Countrywide, Bank of America, Washington Mutual, Citigroup, Wells Fargo and JP Morgan Chase--will announce a new mortgage workout scheme tomorrow.Under the latest plan, dubbed Project Lifeline, the lenders promise to seek contact with homeowners who are 90 or more days overdue on their mortgages. ...
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Monday, February 11th, 2008
On Page One of this morning's Journal is an article that throws another bucket of ice water on hopes that the Fed's interest rates cuts are going to rescue the financial sector.Subprime mortgages weren't the only risky fixed-income products the big banks packaged and peddled, just the ones that blew ...
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Sunday, February 10th, 2008
CreditSights' weekly housing monitor highlighted the continuing plight of the U.S. homebuilders. Perhaps the most interesting statistic:Earnings releases from the major builders read like an obituary as losses for the 7 major builders with November/December quarter ends aggregated $4.9 billion as impairments and tax deferral allowances ripped through their ...
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Thursday, February 7th, 2008
Big U.S. banks are getting what they deserve, according to master investor Warren Buffett, who pontificated in Toronto recently:“It’s sort of a little poetic justice, in that the people that brewed this toxic Kool-Aid found themselves drinking a lot of it in the end”Yet he sounds an optimistic tune about ...
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Thursday, February 7th, 2008
An interesting article from Bloomberg a few days ago noted that the "CDO market is almost frozen." This is a $2.0 trillion market grinding to a halt, creating additional headaches for the bulge bracket investment banks that packaged and often held a sizable chunk of this paper. Perhaps the ...
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Tuesday, February 5th, 2008
The housing bubble wasn't isolated to the U.S. The same lax lending standards, the same mania, the same fraud happened across the pond as well. Hat tip to CR.
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Tuesday, February 5th, 2008
The Service Sector is feeling more than a little bit under the weather: NEW YORK -- Service sector activity contracted sharply in January for the first time since March 2003. On Tuesday, the Institute for Supply Management reported that its January nonmanufacturing index moved to a reading of 41.9, from ...
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Saturday, February 2nd, 2008
Mish has a piece that claims as much. I have some background covering internet stocks from my time as a hedge fund analyst. Thought I'd add my commentary on the deal.
[Incidentally, I owned YHOO shares...precisely because a MSFT deal seemed imminent.]
Two questions: Was this the right move ...
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