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  • Mon, Sep 15 2008
  • 5:10 PM » Mortgage and Title Insurers Suffer from Housing Woes
    Published Mon, Sep 15 2008 5:10 PM by Seeking Alpha
    submits: Continued housing market weakness and the uncertain long-term future of Fannie Mae (FNM) and Freddie Mac (FRE) is putting yet more pressure on the beleaguered mortgage and title insurance industries. A new report from Standard & Poor’s graphically illustrates the declining fortunes of title insurers. Unlike most other insurers who receive regular premiums over the life of the policy, title insurers generally receive one payment and reserve against estimated future losses at that time. If those losses are higher than the title insurers anticipated, their profitability will erode, S& P says.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 4:46 PM » Pimco, Vanguard Are Biggest Bond Fund Losers in Lehman Collapse
    Published Mon, Sep 15 2008 4:46 PM by feeds.feedburner.com
    It's payback time for betting on moral hazards as . Pimco Advisors LP, Vanguard Group Inc. and Franklin Advisers Inc. are among the investment companies that will face losses of at least $86 billion stemming from the collapse of Lehman Brothers Holdings Inc., the biggest bankruptcy in history. Mutual fund companies' filings show they hold more than $143 billion of bonds, led by Newport Beach, California-based Pacific Investment Management Co., manager of the world's biggest bond fund, and Valley Forge, Pennsylvania-based Vanguard, according to data compiled by Bloomberg as of June 30. While bond investors will recover different amounts based on their ranking in Lehman's capital structure, models of credit default swaps assume lenders will recoup 40 percent of their loans overall in a bankruptcy. Investors may receive less than that, based on prices for Lehman's senior bonds of as little as 35 cents on the dollar from market reporting system Trace. Pimco holds Lehman bonds in at least 12 of its funds, including the $134 billion Total Return Fund. Bill Gross, manager of the fund and co-chief investment officer of Pimco, was buying Lehman bonds as recently as June, Bloomberg data show. John Woerth, head of public relations at Vanguard, said the company holds Lehman bonds among the $450 billion of fixed income it manages. New York-based Lehman, which filed for protection from creditors today, owes its 10 largest unsecured creditors more than $157 billion, according to the Chapter 11 filing today in U.S. Bankruptcy Court in New York. The largest single creditor is Aozora Bank Ltd. in Tokyo, with $463 million in a bank loan. Other top creditors include Mizuho Corporate Bank Ltd., owed $382 million, and a Citigroup Inc. unit based in Hong Kong, owed an estimated $275 million, according to the filing. Lehman listed total debts of $613 billion and $639 billion of assets in the filing. Axa SA, Europe's second-biggest insurer, and unnamed affiliates, own...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 4:45 PM » Is Alt-A the New Subprime?, Part 1
    Published Mon, Sep 15 2008 4:45 PM by www.minyanville.com
    This week we look at the housing market in some detail. When can we expect it to turn around? Part of the problem is that a new wave of foreclosures is coming due and this time it’s not subprime. And that means more problems for the large financial companies. Also as predicted here consumer spending is taking a hit since consumers are finding it increasingly difficult to get credit and a deteriorating labor market is dragging down total spending. There are some very interesting details in the data that was released this week and we take a quick peek ...
    Click Here to Read the Full Article

    Source: www.minyanville.com
  • 4:44 PM » A Disasterous Rate Cut ?
    Published Mon, Sep 15 2008 4:44 PM by The Big Picture
    Why on earth the FOMC would want to undo any of the work by Treasury with a rate cut? The whole idea of letting Lehman die is to reintroduce the concept of risk and eliminate some of the Moral Hazard fostered by prior bailouts. The current market bet is that a 25 or even 50 basis cut may occur at tomorrow's . That would be ill advised. We have survived the initial impact caused by the collapse of Lehman Brothers (LEH). AIG is certainly in trouble, as are Wachovia (WB) and Washington Mutual (WM) and others. The Fed would be well served, with rates now at 2%, to keep some powder try for the latter innings of this crisis. Unless we are looking to emulate Japan's 15 year recession, a /pushing on a string policy would not be advantageous.
    Click Here to Read the Full Article

    Source: The Big Picture
  • 4:43 PM » The Terrible Lessons of Bear Stearns
    Published Mon, Sep 15 2008 4:43 PM by The Big Picture
    As Lehman Brothers (LEH) turns into a on its way to zero, as Washington Mutual (WM) works its way towards a buck, as Wachovia (WB) drops more than 80% over a year, as Fannie Mae (FNM) and Freddie Mac (FRE) become divisions of the United States of America, and are now priced in pennies -- we need to reflect upon the ongoing lessons learned from all these interventions by Treasury, Congress and the Federal Reserve. The lesson from the Bear Stearns' bailout -- $29 Billion in Federal Reserve bad paper guarantees -- are quite stark: • Go Big : Don't just risk your company, risk the entire world of Finance. Modest incompetence is insufficient -- if you merely destroy your own company, you won't get rescued. You have to threaten to bring down the entire global financial system. The fear and disruption caused by a Bear collapse is why it was saved. (AIG has the right idea on this) • If you cant Go Big, Go First : Had Lehman collapsed before Bear, then the same fear and loathing of the impact to the system might have worked to their advantage. But having been through this once before, the sting is somewhat lessened -- especially for a smaller, lets interconnected firm like LEH. (First mover advantage!) • Threaten your counter-parties : Bear Stearns had about 9 trillion in its derivatives book, of which 40% was held by JPMorgan (JPM). Some people have argued that the Bear bailout was actually a preventative rescue of JPMorgan. Its a good strategy if your goal is a bailout -- risk bringing down someone much bigger than yourself. • Risk an important part of the economy : If your book of derivatives is limited to some obscure and irrelevant portion of the economy, you will not get saved. On the other hand, if Mortgages are important, credit cards and auto loans are too. Securitized widget inventory is not. To use a dirty word, Lehman's exposure is "contained." • Balance Sheets Matter : Focus on the media, complain about short sellers, obsess about PR. These...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 4:42 PM » Banks Can Now Use Deposits to Fund Investment Banking Operations?
    Published Mon, Sep 15 2008 4:42 PM by feeds.feedburner.com
    Reader Michael M called our attention to this statement in a : The Fed also suspended rules that prohibit banks from using deposits to fund their investment banking subsidiaries. Was this the quid pro quo for Band of America buying Merrill? If so, the repercussions extend beyond BofA. This is a time when the federal authorities need to be vigilant, not lax about banks taking risk with depostors' funds. Note than many banking experts, post the S&L crisis and now, recommend the reverse, "narrow banking", which requires banks to invest depositors' funds only in the very safest assets. This is the exact opposite of the sort of regulatory measures needed to improve the health of the banking system. Expediency trumps soundness. Any reader inputs appreciated.
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 4:41 PM » Shock to the System
    Published Mon, Sep 15 2008 4:41 PM by www.portfolio.com
    O ver the past year, we've seen a number of days when the stock market fell 300 points. We've been there and done that, and we're quite used to it at this point. So were all those end-of-the world headlines overblown? Is this the worst that happens when ? Hard to see what all the fuss is about, really, let alone why the Federal Reserve felt it necessary to put up $29 billion to bail out Bear Stearns. Of course, it's not nearly as simple as that. For one thing, it's not the stock market that everybody was worried about. This is a credit crisis, and American companies (the ones which weren't bought by private equity shops, anyway) tend to have low levels of debt. Some parts of the economy are highly indebted—investment banks and homeowners, above all. Most of the companies listed on the stock market aren't, and they should be able to weather a financial storm with relative ease. On the other hand, that financial storm really does seem to be more of a heavy breeze than a major hurricane. The Standard & Poor’s financial-stock index is down by only 3.5 percent this morning—hardly a bloodbath. And the —a measure of distrustfulness among banks—is up sharply at 192 basis points, but is still below the levels we saw in the summer of 2007, and again in December, and again in March. Indeed, each spike upward in the TED spread seems to be lower than the last, which has to be a positive sign. The big unanswerable question, though, is what happens next. Hurricanes start out as a heavy breeze, and then get worse—and the preconditions for a financial hurricane are very much in place. If a real hurricane needs high ocean surface temperatures and warm humid air, a financial hurricane needs generalized nervousness and a general lack of liquidity. Once those are in place, a few failed trades are all that is necessary to precipitate a very nasty chain reaction. In normal times, failed trades are a regrettable part of doing business in financial markets—they...
    Click Here to Read the Full Article

    Source: www.portfolio.com
  • 4:40 PM » Investment Bank, R.I.P.
    Published Mon, Sep 15 2008 4:40 PM by www.portfolio.com
    A nd then there were two. In just six short months (or long ones, depending on where you sit), the number of major investment banks on Wall Street has . Bear Stearns fell in March. And now, with Lehman Brothers in bankruptcy and Merrill Lynch in the arms of Bank of America, just and are left standing. Regulators have long wondered whether the market is better off with investment banks as independent firms or as divisions of larger commercial banks. That question will undoubtedly continue to be asked as a new administration is ushered into the White House in the coming months. Regardless of what Washington may ultimately decide, the market has made its choice clear this year: The independent investment-banking model is dead. "Without doubt, the investment-banking industry will never be the same," Larry Tabb, founder of the advisory firm Tabb Group wrote in a report today. "The days of the all-in-one global investment bank may be nearing an end. We are seeing a downsizing of industry capacity, and we will absolutely see a movement away from risk toward transparency and liquidity." This is not to say that the Bank of America-Merrill Lynch model will fare much better, but at least it will have size on its side during times of crisis like this one. After all, Citigroup, which became a banking colossus with the merger of Citicorp and Travelers in 1998, . But, painful as its voyage may have been in recent years, there is no evidence that Citigroup will succumb to this credit crisis the way investment banks have. What will this mean for Morgan Stanley and Goldman Sachs? They, too, have had to deal with tarnished mortgage investments and bloated balance sheets during this credit crisis. Morgan Stanley's stock has fallen by more than half in the past year, and Goldman's has dropped by 44 percent. Neither bank is finished delivering bad news to investors, but they will try mightily to cloak that bad news with a positive spin that they are still doing...
    Click Here to Read the Full Article

    Source: www.portfolio.com
  • 4:39 PM » Paulson says prepared to act to ensure stability
    Published Mon, Sep 15 2008 4:39 PM by Reuters
    WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said on Monday the U.S. financial system remained sound despite current stresses and said he was prepared to take further actions if necessary to maintain stability.
  • 4:39 PM » Hedge funds dealt another blow by Lehman failure
    Published Mon, Sep 15 2008 4:39 PM by Reuters
    LONDON (Reuters) - The bankruptcy filing of Lehman Brothers is another blow for the hedge fund industry, though the writing has been on the wall long enough for many to have reduced their exposure to the U.S. investment bank.
  • 4:39 PM » National City wins OK for $7 billion
    Published Mon, Sep 15 2008 4:39 PM by Reuters
    NEW YORK (Reuters) - National City Corp , a U.S. Midwest regional bank battered by mortgage losses, has won stockholder approval to authorize new shares to allow for a $7 billion capital infusion, the bank said on Monday.
  • 4:18 PM » S&P Downgrades BofA, Cites Mortgages as Problematic
    Published Mon, Sep 15 2008 4:18 PM by feeds.feedburner.com
    Standard & Poor’s Ratings Services said Monday afternoon that it had downgraded its long-term counter party credit rating on Bank of America Corp. (BAC: 26.87 -20.36%) to ‘AA-’ from ‘AA’. The downgrade comes on a formal announcement by both firms of a deal that will send Merrill Lynch & Co. (MER: 17.76 +4.16%) into the [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 4:03 PM » Citi’s Pandit: ‘Turbulent Times’
    Published Mon, Sep 15 2008 4:03 PM by feeds.feedburner.com
    Citigroup Inc. (C: 15.55 -13.42%) CEO Vikram Pandit moved to perhaps instill some confidence in the company’s likely rattled employee base on Monday, and sent out an internal email highlighting the bank’s efforts thus far to weather the storm. It was a message to investors as much as to employees. According to Investment Dealers’ Digest, which [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 2:43 PM » Specialized Loan Servicing Gets New Owner after Terwin Default
    Published Mon, Sep 15 2008 2:43 PM by feeds.feedburner.com
    Do we have the first victim of servicing advances? Highlands Ranch, Colo.-based Specialized Loan Servicing said last week that Lexia LLC, a wholly-owned subsidiary of Tokyo-based Shinsei Bank, Ltd., had acquired an 82.35 percent equity interest in the company on Sept. 8. The bank took over the firm after a unit of former majority holder Terwin [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 12:06 PM » Residential Credit’s Servicing Ops Recognized by S&P
    Published Mon, Sep 15 2008 12:06 PM by feeds.feedburner.com
    Residential Credit Solutions, Inc. said recently that it had been named a “select servicer” by Standard & Poor’s Rating Services, one of only a few residential subprime and special servicers to be added to the rating agency’s list in the past few months. RCS was founded in December 2006, and is is a mortgage investment [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 11:49 AM » Lehman Files for Bankruptcy, BofA Snaps Up Merrill Lynch
    Published Mon, Sep 15 2008 11:49 AM by www.thetruthaboutmortgage.com
    It was a busy Sunday on Wall Street as the mortgage mess forced Lehman Brothers and Merrill Lynch down very different paths. After talks to save storied investment bank Lehman Brothers failed over the weekend, the 158-year old company was forced to file Chapter 11 bankruptcy. Just one week earlier, the company announced its biggest quarterly loss [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 9:36 AM » World's biggest banks join forces
    Published Mon, Sep 15 2008 9:36 AM by www.ft.com
    Ten of the world's biggest banks have agreed to pool $70bn in a giant liquidity fund as part of a dramatic series of private and public sector initiatives intended to mitigate the impact of the expected failure of Lehman Brothers
  • 9:35 AM » Barclays considered Lehman bid
    Published Mon, Sep 15 2008 9:35 AM by www.ft.com
    The UK bank confirmed that it had considered bidding for Lehman but 'did not proceed because it was not possible to conclude a transaction in the best interests of Barclays shareholders'
  • 9:34 AM » AIG May Capture Biggest Red Flag
    Published Mon, Sep 15 2008 9:34 AM by www.minyanville.com
    If there was ever a Monday to skip that morning coffee and run on pure adrenaline this is it.As Lehman Brothers (LEH) and Merrill Lynch (MER) jockey for top placement in this morning’s headlines American International Group (AIG) is dramatically staking a claim for the financial market’s biggest red flag.Lehman and Merrill already collapsed into the hands of bankruptcy courts and Bank of America (BAC) respectively have well-publicized and largely understood troubles. Loaded up with securities tied to US mortgage debt their capital bases have been eroded by losses and writedowns on bad assets. Although losses have been hard ...
    Click Here to Read the Full Article

    Source: www.minyanville.com
  • 9:34 AM » AIG wants $40B from Fed; Market Cap is $32B
    Published Mon, Sep 15 2008 9:34 AM by feeds.feedburner.com
    This post is an update to . We now have the number: . The American International Group is seeking a $40 billion bridge loan from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said Sunday night. Ratings agencies threatened to downgrade the insurance giant’s credit rating by Monday morning, allowing counterparties to withdraw capital from their contracts with the company. One person close to the firm said that if such an event occurred, A.I.G. may survive for only 48 hours to 72 hours. The firm had planned to move $20 billion from its regulated insurance business to its holding company and to sell assets and a stake in the company to private equity firms. But A.I.G. has ruled out the capital shift because of the time and complexity involved. J. C. Flowers & Company, a buyout firm focused on financial services firms, offered $8 billion for a stake in the business that would have given it an option to buy all of A.I.G. down the road. Kohlberg Kravis Roberts and TPG also said they would bid. But all three withdrew at the last minute, citing anxiousness over the company’s precarious financial health. A.I.G.’s extraordinary move of reaching out to the Fed for help may spur other non-investment banks to try a similar move. Companies ranging from General Electric to GMAC have been hurting badly and would desperately love the liquidity that the Fed would provide. Yet it isn’t clear whether the Fed would acquiesce to A.I.G.’s request. is only $32.6 Billion. Barring some miracle, AIG's cap will be worth far less than that at the open. $20 billion would not surprise me, especially since it is holding much of the same garbage Lehman will be forced to dump. AIG should not have turned down the private equity opportunity it did earlier today. The Fed should not provide a penny. I suspect the ratings agencies will be asked to not downgrade AIG. I also suspect the rating agencies will...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 9:34 AM » Where Were You When Lehman Brothers Failed?
    Published Mon, Sep 15 2008 9:34 AM by www.minyanville.com
    There’s a thing about living through historic events those moments when we shudder with the recognition that the world just hopped the tracks and is barreling along in an altogether different direction. For my parents’ generation -- and I’m sure for many Minyans -- that feeling is sparked by the question “Where were you when JFK was shot?” More recently “Where were you on 9/11?” sends similar chills down our collective spines. I don’t wish to compare the collapse of an investment bank -- Lehman Brothers (LEH) -- or the purchase of one financial institution by another -- Merrill Lynch (MER) by Bank of ...
    Click Here to Read the Full Article

    Source: www.minyanville.com
  • 8:24 AM » Housing: Bigger Isn't Always Better
    Published Mon, Sep 15 2008 8:24 AM by Seeking Alpha
    submits: The Wilson Quarterly (WQ, Summer 2008, Vol. 32, No. 3) published an article by Witold Rybczynski about affordable homes: What's driving the high cost of houses today is not increased construction costs or higher profits...but the cost of serviced land.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 5:01 AM » Five Challenges Ahead as the Corporate Soup Lines Grow
    Published Mon, Sep 15 2008 5:01 AM by Seeking Alpha
    submits: Like rescuers rushing to help Darwin-award wannabees who ignored dire warnings to evacuate Galveston in the path of Hurricane Ike, federal officials and Wall Street execs worked feverishly Saturday in an attempt to resolve the financial crisis now facing Lehman (LEH). It is the second ‘big five’ Wall Street brokerage to succumb to the financial tsunami after Bear Stearns, which took $29 billion in federal assistance to make the JP Morgan (JPM) purchase of the company work. But this time officials are doing their level best to convince potential buyers that no bailout should be expected. It remains to be seen if officials can make this condition stick, but if no buyer steps up to the plate, the government will again have to act as buyer of last resort. Chances for a deal devoid of government-backed guarantees dimmed significantly Sunday when Barclays Bank (BCS), the last remaining bidder, increasing the chances of a Lehman bankruptcy.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 4:14 AM » The U.S. on the Precipice
    Published Mon, Sep 15 2008 4:14 AM by Seeking Alpha
    James Quinn submits: September 7, 2008, the 10 th anniversary of the Federal Reserve arranged bailout of the infamous hedge fund Long-Term Capital, is now a more infamous date. This is the day that our government chose socialism over free market capitalism. Our elected leaders increased the national debt from $9.6 trillion to $15 trillion, a 56% increase in one weekend. Hank Paulson, the U.S. Treasury Secretary, seems to have a penchant for committing U.S. taxpayer dollars on weekends. He previously arranged for the bailout of Bear Stearns (BSC) on a weekend and convinced Congress and the President on a weekend to give him a blank check regarding the future of Fannie Mae (FNM) and Freddie Mac (FRE). He spearheaded the takeover of two of the worst run financial institutions on the planet. They hold or guarantee $5.4 trillion of mortgages. James Grant, a keen financial mind, described what we are experiencing today, back in early 2007. “Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich.”
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 2:55 AM » Why I Sold Norbord: Confessions of a Value Investor
    Published Mon, Sep 15 2008 2:55 AM by Seeking Alpha
    submits: As a value investor, I confess to swallowing a tough pill as I sold out of my entire position in Norbord () [TSE:NBD] last week, after exactly 24 months of holding these shares. When I originally bought Norbord, I was a fairly green value investor and consumed at that time with reading everything I could get my hands on about other value investors, their holdings, philosophies and disciplines. Norbord at that time was a value favorite of Irwin Michael of ABC Funds, and one through my own research that I felt offered decent value at its then valuation of $8.50 per share. The stock was a low-cost producer of OSB and had been hit hard in sympathy with lower sales linked to the declining housing market in the US despite a strong European presence.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 1:17 AM » AIG, facing liquidity crisis, seeks Fed lifeline
    Published Mon, Sep 15 2008 1:17 AM by Reuters
    NEW YORK (Reuters) - Insurer American International Group Inc, working to stave off rating downgrades and shore up the capital of its holding company, has made an unprecedented approach to the Federal Reserve seeking $40 billion in short-term financing, the New York Times said.
  • 1:16 AM » Ten banks commit to $70 billion borrowing facility
    Published Mon, Sep 15 2008 1:16 AM by Reuters
    NEW YORK (Reuters) - Ten of the world's biggest banks on Sunday committed to establish a $70 billion borrowing facility to bolster worldwide liquidity and reduce volatility in what they called an "extraordinary market environment."
  • 1:15 AM » Bank of America buys Merrill Lynch
    Published Mon, Sep 15 2008 1:15 AM by Reuters
    WASHINGTON/NEW YORK (Reuters) - Bank of America Corp has agreed to acquire Merrill Lynch & Co Inc, according to people briefed on the matter, in a deal that will give the U.S. bank the world's largest brokerage.
  • 1:14 AM » Derivatives market trades on Sunday to cut Lehman risk
    Published Mon, Sep 15 2008 1:14 AM by Reuters
    NEW YORK (Reuters) - Major players in the $455 trillion global derivatives market rushed Sunday to scale back exposure to a potential bankruptcy filing by investment bank Lehman Brothers in a rare emergency trading session.
  • 1:13 AM » Fed braces markets for likely Lehman collapse
    Published Mon, Sep 15 2008 1:13 AM by Reuters
    WASHINGTON (Reuters) - The U.S. Federal Reserve on Sunday launched a series of emergency measures to calm financial markets and ease any trading disruptions that could arise from a collapse of investment bank Lehman Brothers.
  • 1:13 AM » Oil falls below $100 as all eyes on Ike and Wall Street banks
    Published Mon, Sep 15 2008 1:13 AM by Reuters
    PERTH (Reuters) - Oil tumbled below $100 a barrel to a six-month low on early signs that Hurricane Ike may have spared key Gulf Coast infrastructure, although traders were cautious on Monday as they awaited status reports on more Texas refineries.
  • Sun, Sep 14 2008
  • 11:54 PM » Stunned here at HW
    Published Sun, Sep 14 2008 11:54 PM by feeds.feedburner.com
    Fannie, Freddie, Lehman, Merill, AIG decimated within a span of merely seven days. And two other investment banks rumored to be next in a matter of days. Wow.
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 11:38 PM » AIG on the Brink, Too
    Published Sun, Sep 14 2008 11:38 PM by feeds.feedburner.com
    Pending doom for Lehman Brothers Holdings Corp. (LEH: 3.65 -13.51%) garnered plenty of headlines Sunday and heading into Monday, but it’s another possible failure that could send larger waves through financial markets: The American International Group (AIG: 12.14 -30.83%) is said to have appealed to the Federal Reserve for a $40 billion bridge loan to [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 11:05 PM » Merrill Sells to Bank of America; Who’s Next?
    Published Sun, Sep 14 2008 11:05 PM by feeds.feedburner.com
    Is it time to start wondering about the future of Wall Street’s independent investment banks? It’s almost unthinkable to think, but news broke Sunday evening that Merrill Lynch & Co. (MER: 17.05 -12.25%) had agreed to sell itself to Bank of America Corp. (BAC: 33.74 +2.06%) as the U.S. financial markets went through one of [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 4:41 PM » GSE Bailout Unlikely to Help with Housing Crisis
    Published Sun, Sep 14 2008 4:41 PM by Seeking Alpha
    submits: I’ve been swamped with MBA work, so I haven’t had much time to post to my blog. But with recent awe-inspiring market fireworks, I view a divergence from statistics and finance as a welcomed event. By now you’ve all heard the news: the US government took control of Fannie Mae (FNM) and Freddie Mac (FRE). Miraculously, just a few days after Bill Gross, Director at PIMCO, pleaded for a housing bailout in his , Treasury Secretary Henry Paulson colluded with Wall Street moguls to formulate a government take over. The deal was finalized over the first weekend in September.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:19 AM » Brookings Panel on Economic Activity Conference: Housing Market and Fed Activity
    Published Sun, Sep 14 2008 8:19 AM by Seeking Alpha
    submits: Dani Rodrik (2008), "The Real Exchange Rate and Economic Growth." Some notes: A. Undervaluation does two things. It shifts your employment and production toward export and import-competing tradeables-producing industries. It also gives you lousy terms of trade. Dani wants to argue that the first is good--that there are powerful wedges which make emerging-markets countries, especially, prone to have too small a share of employment and production in those export and import-competing tradeables-producing industries. But the second has to be bad for growth.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:18 AM » The Fannie/Freddie Heist
    Published Sun, Sep 14 2008 8:18 AM by Seeking Alpha
    submits: It's alarming to think the Feds can swing this big baseball bat called 'our tax dollars' so freely. With a seemingly open checkbook, Treasury effectively took the reins of the GSE's, guaranteeing home mortgages with US taxpayer money. It's not as if our country could afford this. The national debt just doubled overnight, what with the guarantee of nearly 6 trillion in home mortgages. Now, I've heard the fear-mongering...from Paulson, Bernanke and others...that a much more serious problem would have occurred without some intervention. How do they know this? Have we been in this mess before? I believe free markets should be left alone to settle, and if there are failures along the way...so be it. This entire mess will not be fixed with the stroke of a pen. More Write-offs, More Pain
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 7:31 AM » Case/Shiller Index: Are We Close to a Bottom?
    Published Sun, Sep 14 2008 7:31 AM by Seeking Alpha
    submits: Karl E. Case, one of the economists that developed the 20 MSA methodology, a widely used subset by Standard & Poor’s in the S&P/Case Shiller Home Price Index, thinks that the housing market may be near a bottom. According to , in a paper presented this week before the Brookings Institution in Washington, Mr. Case argued that the relationship between incomes and home prices has neared a level seen at the end of past housing slumps. He also noted that of the 20 metropolitan areas covered by the Case/Shiller index, nine have shown prices slightly improving in recent months.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 7:16 AM » How Much Have our Real Estate Assets Gone Down?
    Published Sun, Sep 14 2008 7:16 AM by Seeking Alpha
    submits: The ways of Wall Street are a mystery to many of those on the outside. For insiders, this is not necessarily a bad thing. They can use their superior knowledge and understanding to take advantage of those who haven't been properly schooled in what things mean and how they work. Regardless, even those who might not be able to grasp certain concepts and perspectives that have not been spelled out in clear and convincing detail can look at an eye-catching chart pattern and get the gist of what it means. In the Paper Economy blog offers up a great example.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 5:41 AM » Payback Period is Upon Us
    Published Sun, Sep 14 2008 5:41 AM by Seeking Alpha
    Mike Stathis submits: Despite attempts made by Greenspan and Bernanke, there is no way to avert the payback period that has been building for over two decades. Over this stretch, America has consumed much more than it has produced. As a result, both consumer and federal debt have ballooned to record levels. And now, the payback period is upon us. The bailout buffet won’t end with Fannie (FNM) and Freddie (FRE). There’s a lot more where that came from because the “Fed’s food court” remains open, as does that of the U.S. Treasury. In fact, the autos are in the process of being bailed out with $50 billion in “loans.” I expect the airlines to also receive some form of a bailout as well.
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    Source: Seeking Alpha
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