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  • Wed, Sep 24 2008
  • 2:00 PM » Record Decline for Existing Home Sales
    Published Wed, Sep 24 2008 2:00 PM by Seeking Alpha
    submits: The NAR [National Association of Realtors] reported that sales of existing homes fell modestly in August, however, home prices were down 9.5 percent from year ago levels - the sharpest decline since record keeping began in 1968. click to enlarge
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 12:45 PM » S&P Cuts WaMu, Cites Breakup Concerns
    Published Wed, Sep 24 2008 12:45 PM by feeds.feedburner.com
    Woes are clearly mounting for troubled thrift Washington Mutual (WM: 3.1198 -2.51%), which saw Standard and Poor’s Ratings Services cut its ratings on the Seattle-based thrift further into junk territory on Wednesday, following an earlier ratings cut by rival agency Moody’s Investors Service earlier this week. S&P said it had lowered its counterparty credit rating on [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 12:41 PM » U.S. CMBS Delinquencies Rise on Retail Weakness
    Published Wed, Sep 24 2008 12:41 PM by Seeking Alpha
    submits: Early signs of expected retail property weakness caused U.S. CMBS delinquencies to tick up one basis point in August 2008 to 0.44% from 0.43%, according to the latest Fitch Ratings loan delinquency index. The continued slow rise in delinquencies follows Fitch’s expectations that certain property types, led by retail, will experience higher delinquencies during the remainder of 2008.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 12:03 PM » FBI Investigating GSEs, AIG, Lehman
    Published Wed, Sep 24 2008 12:03 PM by www.thetruthaboutmortgage.com
    The FBI is investigating Fannie Mae, Freddie Mac, AIG, and Lehman Brothers for potential fraud, according to the AP. While the government agency didn’t disclose the names of the companies it was investigating, a source close to the situation noted that it made sense to look at those companies considering their recent collapse. Specifically, it is believed [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 11:53 AM » Curing the Credit Crisis: A Better Alternative Plan
    Published Wed, Sep 24 2008 11:53 AM by Seeking Alpha
    Avery Goodman submits: Once again, the index ETFs (Dow (DIA) and S&P (SPY)) fell yesterday, showing the extreme skepticism that investors have about the wisdom of the bailout plan being presented to Congress by the Bush Administration. Federal Reserve Chairman Ben Bernanke went “off script”, during his testimony before Congress. He admitted that he and Secretary of the Treasury, Hank Paulson, want to buy toxic mortgage paper at full price (see ). However, he failed to mention that much of the toxic paper consists of subprime mortgages with default rates at high as 41.6%. Is it sensible to pay full price for such worthless assets? It is not likely that the U.S. taxpayer has any chance of, whatsoever, of recouping such a price, if it is paid for such investments. Bernanke’s slip, however, helped us a lot. At least, we now know that what the Bush Administration really wants is more crony capitalism. To get it in place, they are engaging in fear mongering in Congress, pressuring the people’s representatives to pass a hastily drawn, poorly thought-out bill with few if any safeguards, and even fewer chances of success. They want to avoid judicial review because, if it exists, they will be unable to reward friends and punish enemies in the course of allocating the big giveaway. This is the Bush administration’s answer to the credit crisis.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 11:03 AM » Wall Street’s Special Offer – But You Must Act Now!
    Published Wed, Sep 24 2008 11:03 AM by Seeking Alpha
    submits: This is a special limited offer, so you must act now! For just seven easy payments of $100 billion each, you can be the proud owner of possibly worthless investments currently held by many Wall Street companies. But you must act now! This offer is available for a limited time only! If you act today, you will receive a bonus gift: The continuation of a dysfunctional financial system where executives and other insiders make tens of millions, or hundreds of millions of dollars while destroying the investments of average Americans. But that's not all! You will also receive a corrupt federal government where payoffs grease the wheels of both Wall Street and Washington. So don't delay. Call the number on your TV screen and send your first $100 billion payment today! Hurry, you must act now to take advantage of this special Wall Street offer! JUST HAND OVER THE $700 BILLION Congress and the American people are being told that they must hand over $700 billion bailout immediately with no strings attached. Don't worry, the current administration will take care of passing out the money in a way that benefits the American people. After all, the administration has done an outstanding job of distributing hundreds of billions of taxpayer dollars to war profiteers since the invasion and occupation of Iraq. So, they have a lot of practice in taking care of cronies and raising the national debt to truly frightening levels. What's another few hundred billion among friends? After all, it's not like it will be wasted. We can not only assist our friends on Wall Street, we can also help destroy those bad programs like Social Security and other government activities that help average Americans. People need to stand on their own two feet and not look to the government for help ... unless you're well-connected and very wealthy. So, Congress, don't go asking uncomfortable questions. Just hand over the $700 billion. The current administration is due to go out...
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 11:02 AM » Buffett's Goldman Steal: Lessons Learned
    Published Wed, Sep 24 2008 11:02 AM by Seeking Alpha
    submits: Warren Buffett has secured another great deal during this major financial turbulence by investing $5 billion in Goldman (GS) preferred shares, which have 10% dividend yield. On top of that, Berkshire (BRK.A) also will get warrants granting it the right to buy $5 billion of Goldman common stock at $115 a share, which is 8% below the 4 p.m. closing share price Tuesday of $125.05. At Goldman's roughly $50 billion market value, based on that closing price, exercising those warrants would give Berkshire about a 10% stake in Goldman. So, what are the important lessons that we could learn from Buffett:
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 11:01 AM » This Financial Crisis Too Shall Pass
    Published Wed, Sep 24 2008 11:01 AM by Seeking Alpha
    submits: In the last two weeks, we have seen the federal government take over Fannie Mae (FNM) and Freddie Mac (FRE) in a move to save the companies from completely going under. We've seen headhunting vultures perched outside of the Lehman Brothers Manhattan offices hours after the iconic firm declared bankruptcy.AIG (AIG) , a major global insurer, pleaded with the Federal Reserve for liquidity assistance. Meanwhile, Merrill Lynch (MER) was taken over by the Bank of America (BAC) powerhouse (who will soon indeed become the bank of America). And finally, the only two remaining powerhouse investment banks, Goldman (GS) and Morgan (MS), hung their investment banking hats up and then became traditional bank holding companies. A bloody September indeed. The street reaction: on a sunny Monday morning, investors pulled out enough funds from the market to tank the indices over 500 points in one day, or down nearly 5%. The trading days that followed didn't provide much support. The only other thing that could tank the market in this fashion is the day two enormous planes flew into two skyscrapers, permanently affecting the Manhattan skyline (dramatic enough for you?).
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 11:00 AM » CEO Clawback Provisions in the Bailout?
    Published Wed, Sep 24 2008 11:00 AM by The Big Picture
    With Congress recognizing the public's dismay over this massive taxpayer giveaway, we are starting to see some serious questions about the folks who drove the financial ship of state aground. Hence, its time to take a closer look at pay and severance packages for CEOs at investment houses, banks and mortgage lenders, who perversely stand to benefit from the public's largesse. Here's a quick overview: • Lehman Brothers Chairman and CEO Richard Fuld Jr. made $34 million in 2007. Lehman (OTC:LEHMQ) filed for Chapter 11 Bankruptcy protection earlier this month. Fuld also sold nearly a half-billion –$490 million – from selling LEH stock; • Goldman Sachs (NYSE:GS)paid its Chairman and CEO Lloyd Blankfein $70 million last year. Co-Chief Operating Officers Gary Cohn and Jon Winkereid were paid $72.5 million and $71 million, respectively. • Bears Sterns (BSC JPM)former chairman Jimmy Cayne, rescued by a $29 billion Fed shotgun wedding to JPM, received $60 million when he was replaced; • American International Group (AIG) chief executive Martin Sullivan got a $14 million compensation package in 2007. He was ousted in June. The insurance giant (NYSE:AIG) is on the receiving end of an $85 billion federal bailout. Robert Willumstad was handed $7 million for his three months at the helm. (Edward Liddy took over as AIG’s chief executive earlier this month). • Morgan Stanley (MS) Chairman John Mack earned $1.6 million + stock. Chief Financial Officer Colin Kelleher got a $21 million paycheck in 2007. Morgan Stanley also received an expedited approval to become a banking holding company in 48 hours -- that's record time. • Countrywide Financial' s (CWF BAC) founder & CEO Angelo Mozilo, which has been at the forefront of the subprime fiasco, cashed in $122 million in stock options in 2007; His total take is estimated at over $400 million dollars; • Stanley Neal, who steered Merrill Lynch (NYSE:MER) into financial collapse before being taken over by Bank of America...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 10:59 AM » FBI investigating companies at heart of meltdown
    Published Wed, Sep 24 2008 10:59 AM by Washington Post
    WASHINGTON -- The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.
    Click Here to Read the Full Article

    Source: Washington Post
  • 10:58 AM » Banking Expert: Bailout Not Necessary, Industry Can Take Losses
    Published Wed, Sep 24 2008 10:58 AM by feeds.feedburner.com
    One of the premises of the bailout bill is that the banking industry must have government help to get back on its feet. A banking industry expert, Bert Ely, who has a stellar track record in predicting crises and calling false alarms says that the banking industry can handle this mess internally and does not need subsidies. The comments from Bert come in an (the entire newsletter is wide-ranging and very much worth reading), First, IRA's recap of Ely's qualifications: To get some perspective on the evolution of the last remaining large investment banks into commercial banks, we now turn to Bert Ely, one of the leading experts on banking and finance in the Washington policy community. An accountant by training, Ely has specialized in deposit insurance and banking structure issues since 1981. In 1986, he became an early predictor of the S&L crisis and a taxpayer bailout of the FSLIC. In 1991, he was the first person to correctly predict the non crisis in commercial banking. In 1992, he predicted an eventual taxpayer bailout of the Japanese banking system. Here are the excerpts that relate to whether the banks need government intervention: The IRA: And if our internal estimates at IRA are correct about the magnitude of the losses facing the industry, then the banks may not have the resources to deal with the problems alone. What then? Ely: That is of course the trillion dollar question. I have run the numbers looking at the capacity of the industry to pay the tab. Assuming that bank insolvency losses don't get way out of line, which I don't think they will, then the industry can handle it. It's not going to be cheap, but the banks can handle it and clean up their own mess. The losses will feed back through the industry to depositors and borrowers in the form of lower rates on deposits and higher cost of loans.... The IRA: So you oppose the idea of the government putting preferred equity into solvent but troubled banks that cannot raise capital on...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:57 AM » Senator Sanders' Petition Against Paulson
    Published Wed, Sep 24 2008 10:57 AM by feeds.feedburner.com
    Inquiring minds are reading . Dear Secretary Paulson: As a representative of the Bush Administration, you have proposed a financial bailout program of $700 billion – over $2,000 for every man, woman, and child in the country. We are appalled that your proposal puts the cost of this bailout on average Americans; that it contains no provisions reversing failed deregulatory policies; that it allows executives at these failed institutions to continue to make exorbitant salaries and bonuses, and that your proposal contains no help for average Americans who themselves are facing severe economic hardships. While the Administration has quickly rallied to help Wall Street, it has ignored the needs of the declining middle class. Since President Bush has been in office the wealthiest people in this country have made out like bandits and have not had it so good since the 1920s. The top one-tenth of one percent now earn more income than the bottom 50 percent of Americans and the top one percent own more wealth than the bottom 90 percent. Incredibly, the richest 400 people in our country saw their wealth increase by $670 billion during the Bush presidency. Having mismanaged the economy for 8 years while continually insisting that, “The fundamentals of our economy are strong,” the Bush Administration, six weeks before an election, wants the middle class of this country to bail out Wall Street to the tune of one trillion dollars. Meanwhile the wealthiest people, those who have benefited most from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd. ... Click the above link to sign Senator Sanders' petition. I certainly do not agree with all of Sanders' points. However, if a bailout must take place, then I can agree with this point: " Wall Street must ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:57 AM » Tight Lending Blamed for Existing Home Sales Slip
    Published Wed, Sep 24 2008 10:57 AM by www.thetruthaboutmortgage.com
    Existing-home sales slipped 2.2 percent to a seasonally adjusted rate of 4.91 million units last month, down from 5.02 million in July and 10.7 percent lower than the 5.50 million-unit pace in August 2007. National Association of Realtors President Richard F. Gaylord blamed the slowdown squarely on tight lending conditions, which he claims made it more [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 10:57 AM » U.S. Government: The World's Largest Homeowner
    Published Wed, Sep 24 2008 10:57 AM by feeds.feedburner.com
    Here is yet another fax campaign. Fax Title: U.S. Government: The World's Largest Homeowner Senator If the Treasury buys $700 billion in toxic mortgages from banks, the government would be setting itself up to be the world's largest homeowner. The US government will own every house that is foreclosed on as well as those where people simply decide to walk away. Exactly what will the Government do with those houses? What will the losses be? How much would it cost to prevent foreclosures? What about walk-aways? Questions like these are why Treasury Secretary Paulson and Chairman Ben Bernanke want you to rush passage of this bill. Both want you to pass Paulson's bill before you have time to think. Senator, please stop and think about the ramifications of quickly passing this bill. If you do, you will quickly see that $700 billion is a mere down payment on problems down the road. If you are thinking, you will not let this bill pass. your name your phone number Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (both seem to work, I fax both) Sen. John Ensign (R) 202-228-2193 Jim DeMint (R) 202-228-5143 Sen. Jim Bunning (R) 202-228-1373 Sen. Chuck Grassley (R) 202-224-6020 Sen. Harry Reid (D) 202-224-7327 The Odds Of Success Improve With Every Fax! Your Fax Counts. This is a critical Juncture, please act now. Pass this email to 10 others and have them do the same. If you have not yet acted on please do so. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com to learn more about wealth management for investors seeking strong performance with low volatility.
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:43 AM » Pace of Existing Home Sales Slows in August
    Published Wed, Sep 24 2008 10:43 AM by feeds.feedburner.com
    Throwing a bit of cold water on the suggestion of some economists who had recently floated comments that an early recovery in the nation’s housing markets might yet be in the offing, the National Association of Realtors said Wednesday that existing home sales fell 2.2 percent in August on a seasonally-adjusted basis. Home sales were [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 9:03 AM » Commercial Real Estate Hits 7-Year Low
    Published Wed, Sep 24 2008 9:03 AM by Seeking Alpha
    submits: The U.S. commercial real estate market in June hit its lowest annual price appreciation since May 2001, according to the Standard & Poor's/GRA Commercial Real Estate Indices. The national composite is comprised of 10 underlying indexes, which cover both geographic, and real estate sectors, and tracks price appreciation month-by-month, and year-over-year. At the end of June, the composite index had an annual price appreciation of 1.5%. This is a far cry from the cycle's peak of 14.7% in August 2006, and the lowest growth rate since the 1.7% rate in May 2001. In May 2008, the index had been up 3.6%. The composite index was flat for the month of June.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:00 AM » Housing Collapse Caused the Current Crisis?
    Published Wed, Sep 24 2008 8:00 AM by Seeking Alpha
    submits: They were all up on Capitol Hill yesterday- Treasury Secretary Hank Paulson, Fed Chairman Ben Bernanke, and SEC Chairman Christopher Cox - talking about the financial crisis and the $700 billion proposed bailout. It was like one big group therapy session. Hopefully, someone will feel better after it's all done, but it probably won't be the U.S. taxpayer.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 6:04 AM » Global Subprime Update [Housing Tracker]
    Published Wed, Sep 24 2008 6:04 AM by Seeking Alpha
    Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below. Global Subprime Normal 0 false false false MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-style-parent:""; font-size:10.0pt;"Times New Roman";}
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 5:49 AM » $10-15B In Fannie/Freddie Losses For U.S. Banks [Housing Tracker]
    Published Wed, Sep 24 2008 5:49 AM by Seeking Alpha
    Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below. Quotes of the Day Normal 0 false false false MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-style-parent:""; font-size:10.0pt;"Times New Roman";}
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 4:46 AM » Lennar's Earnings: Perception Is King
    Published Wed, Sep 24 2008 4:46 AM by Seeking Alpha
    submits: We know the homebuilders earnings in the US will stink, but we own Lennar (LEN) since the market is driving up homebuilder stocks on the ill conceived notion of a "rebound in 6 months". I continue to believe this market is simply understating the ills of a once in a lifetime bubble - just like technology stocks tooks years to bottom, and most never really came back, the real estate bubble simply was epic. But people keep clinging to hope and perception is reality - facts don't matter to this market, only thesis. In, more important than any numbers - read the CEOs comments and keep in mind this sector has been one of the best performing of late. Bulls will continue to pound into our head "you have to look through the bad news and look forward" - just like they were saying in financials last fall. We are looking at a L shaped recovery, not a V shaped, which is what the housing related stocks are yelling at us... and we're not even done going down in the L...
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 2:40 AM » The Unfortunate State of the Current Housing Market
    Published Wed, Sep 24 2008 2:40 AM by Seeking Alpha
    submits: I just finished reading the latest edition of one of my favorite publications, Grant's Interest Rate Observer, Vol. 26 No. 18, dated September 19, 2008. In a piece on the desirability of investments in certain mortgage structures, Grant's discusses the state of the current housing market.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • Tue, Sep 23 2008
  • 11:00 PM » Goldman Gets Buffett Investment, Goes Shopping
    Published Tue, Sep 23 2008 11:00 PM by feeds.feedburner.com
    Goldman Sachs Group Inc. (GS: 125.05 +3.54%), the former invesmtment bank turned into commercial bank, won a key investment from world-reknowned investor Warren Buffett on Tuesday, according to a statement released by the firm after U.S. markets closed. The deal involves an agreement to sell $5 billion of perpetual preferred stock to Buffett’s Berkshire Hathaway, Inc. [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:44 PM » Former WMC CEO Acquires “High-Touch” Special Servicer
    Published Tue, Sep 23 2008 10:44 PM by feeds.feedburner.com
    Vanitum Capital Inc., a new private equity investment outfit headed up by former WMC Mortgage CEO Amy Brandt, said on Tuesday that it had joined the ranks of investors looking to snag a slice of the growing distressed mortgage business. The company snapped up Dallas-based Acqura Loan Services, a third-party special servicing platform established last [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:13 PM » U.S. Home Prices Continue to Tumble: OFHEO
    Published Tue, Sep 23 2008 10:13 PM by feeds.feedburner.com
    As might be expected, July brought a continued decline in home prices nationwide — average prices fell 0.6 percent compared to one month earlier on a seasonally-adjusted basis, and 5.3 percent from average prices one year ago, according to data released Tuesday by the Office of Federal Housing Enterprise Oversight. (Don’t worry: we were confused [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 9:41 PM » Tech Roundup: Mortech Named Innovator of the Year by LendingTree
    Published Tue, Sep 23 2008 9:41 PM by feeds.feedburner.com
    Mortech marks LendingTree milestone: Officials at Lincoln, Neb.-based Mortech, a mortgage technology provider, were thrilled and surprised to find out that LendingTree named the company its “Innovator of the Year” at a recent partner summit in Charlotte earlier this month. Company officials told HW they had no idea the company was receiving the award, named [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 7:29 PM » Goldman Sachs to receive $5 billion Buffett investment
    Published Tue, Sep 23 2008 7:29 PM by Reuters
    NEW YORK (Reuters) - Goldman Sachs Group Inc on Tuesday said it will receive a $5 billion investment from Warren Buffett's Berkshire Hathaway Inc , a vote of confidence for the Wall Street bank from perhaps the world's best-known investor.
  • 5:55 PM » CEOs of troubled companies took home big bucks last year
    Published Tue, Sep 23 2008 5:55 PM by feeds.bizjournals.com
    As Congress considers a $700 billion bailout for Wall Street and the banking sector, there are calls to restrict the pay and severance packages for CEOs at investment houses, banks and mortgage lenders poised to be benefit from the plan put forward by Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke. (GS) (MS) (MER) (BAC) (JPM) (WB) (WAMU)
    Click Here to Read the Full Article

    Source: feeds.bizjournals.com
  • 5:54 PM » Quotes from hearing on financial crisis
    Published Tue, Sep 23 2008 5:54 PM by Washington Post
    -- Some quotes from Tuesday's Senate Banking Committee hearing on the Bush administration's $700 billion plan to bail out the financial industry.
    Click Here to Read the Full Article

    Source: Washington Post
  • 5:54 PM » One of many possible futures
    Published Tue, Sep 23 2008 5:54 PM by themessthatgreenspanmade.blogspot.com
    Caroline Baum knocks one way, way out of the park today with one of our many possible futures, this one set nine years hence with President Obama and Treasury Secretary Geithner still grappling with the aftermath of the financial crisis of 2008. Just delicious ... and more on root cause to boot! ``The root cause of the stress in the capital markets is the real estate correction and what's going on in terms of the price declines in real estate ,'' then-Treasury Secretary Hank Paulson had told the American public on Sept. 18, 2008. What better way to get at the root than a root canal? In the waning days of the Bush administration, the president signed the Homeowners' Price Support Act (HPSA), including a freeze on both foreclosures and home prices. The results were textbook predictable. Like all price floors, this one created a surplus -- of homes for sale at an above-equilibrium price. The law exacerbated the glut of homes, which was the reason prices were falling in the first place. Those who wanted to sell their homes below the regulated price had to do it on the black market, throwing in perks to attract buyers. It wasn't too long before the federal government extended TARP's reach to include the troubled assets of U.S. automakers. ``These illiquid assets are clogging up our nation's highways, not to mention our environment,'' Treasury Secretary Tim Geithner said six months after Paulson, his predecessor, declared the financial system in need of drain-cleaning. There's much more - a new government guarantee on "stocks for the long run", a Beijing-based IMF, "fixing" long-term interest rates in the U.S. at four percent, securitizing Treasuries, and a dearth of financial engineering talent in 2017... It would be much funnier if it weren't so possible.
    Click Here to Read the Full Article

    Source: themessthatgreenspanmade.blogspot.com
  • 5:54 PM » Dodd identifies the root cause of financial crisis
    Published Tue, Sep 23 2008 5:54 PM by themessthatgreenspanmade.blogspot.com
    They are all up on Capitol Hill at the moment - Treasury Secretary Hank Paulson, Fed Chairman Ben Bernanke, and SEC Chairman Christopher Cox - talking about the financial crisis and the $700 billion proposed bailout. It's going to be like one big group therapy session. Hopefully, someone will feel better after it's all done, but it probably won't be the U.S. taxpayer. You can watch it live on if you're looking for something to do to pass the time. Senator Chris Dodd (D-Conn.), who chairs the Senate Banking Committee, spoke first and, right off the bat, you know that we are all just sooooo screwed in this whole affair. In yet another example of how the entire country is in denial regarding the unsustainable nature of the current system of seemingly endless money and credit expansion (well, actually, credit expansion seems to be stopping rather abruptly lately), Senator Dodd said just a few moments ago: As I and many members of this committee have argued in the past 17 months, since I became chairman of this committee, the root cause of our economic crisis is in the collapse of the housing market triggered by what Secretary Paulson himself has called bad lending practices. The root cause of the collapse of the housing market doesn't seem to get much attention these days - it should. It's kind of like the history of the Great Depression that, according to most economists, begins in 1929 when the stock market collapsed and conveniently omits the nearly decade-long expansion of money and credit that preceded it. Most people would like to think that the history of the financial crisis begins when we were all wealthy beyond our wildest dreams due to rising home prices and that, somehow, we can just revert back to that time. But, it actually begins long before that - back when this particular asset bubble began to inflate. Sadly, with this kind of thinking, we'll get nothing but Band-Aids from here on out.
    Click Here to Read the Full Article

    Source: themessthatgreenspanmade.blogspot.com
  • 4:36 PM » How Did We Get to This Point?
    Published Tue, Sep 23 2008 4:36 PM by Seeking Alpha
    submits: Excerpt from Raymond James Economist Dr. Scott Brown's First, let’s take a step back and think about what got us to this point. The root cause was excessive lending in the mortgage market. With a political bent, some have placed the start of the problems with the Community Reinvestment Act of 1977, which was meant to provide credit to undeserved populations, improving home ownership in inner cities and providing loans to small businesses. However, the CRA impact, while typically seen as a drag on business earnings, is tiny compared to the recent expansion of mortgage debt. Subprime mortgage lending had a small, but justified niche in the credit markets. For example, a recent MBA grad with a limited credit history and starting a family might not qualify for a prime mortgage loan, but would after a few years of working. The subprime mortgage market provided such people an opportunity for home ownership sooner rather than later. The excesses came as subprime lending expanded well beyond its scope. Mortgage originators, interested only in a fee, had little incentive to make sure that the borrower would be able to pay if, for example, adjustable-rate mortgages were to reset at higher levels. Easy credit, fueled partly by a global savings glut, and lax supervision in the industry helped create the bubble. Speculators played a part too, especially toward the end of the housing boom.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 4:20 PM » Bernanke Tosses Script, Discusses Asset Pricing
    Published Tue, Sep 23 2008 4:20 PM by feeds.feedburner.com
    You’ve got to give Federal Reserve chairman Ben Bernanke his due; the man isn’t afraid to leave the comfort of a prepared speech behind, a point he proved on Tuesday’s Congressional testimony, perhaps the most important testimony of his tenure thus far. The Fed chief ditched his prepared remarks to discuss instead critical pricing issues [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 4:07 PM » Washington Mutual reportedly on hook to find buyers
    Published Tue, Sep 23 2008 4:07 PM by Market Watch
    As the Treasury Department struggles to justify a $700 billion bailout of the nation’s financial system, troubled Washington Mutual reportedly is under the gun to avoid the same fate to find new ownership and steer clear of government intervention.
  • 4:06 PM » Senate Majority Leader Reid: "No Blank Check" for Wall Street bailout
    Published Tue, Sep 23 2008 4:06 PM by feeds.feedburner.com
    The ReviewJournal is reporting . Senate Majority Leader Harry Reid said today that Democrats in Congress will not grant President Bush "a blank check" $700 billion financial bailout bill without debate over amendments to "protect taxpayers." Reid, a Democrat from Nevada, stopped short of saying that Democrats will hold up the bill that most everyone has said is urgent to steady the economy. "We are prepared to do what is necessary, but we will not let haste abandon good judgment in the process," Reid said. "The Bush administration has called on Congress to rubber-stamp its bailout legislation without serious debate or efforts to improve it," Reid said. "That will not happen. Major Cracks In Support We are starting to see some major cracks in support for the Paulson Plan. The longer the bill is delayed the more time there is to kill it with infighting. Please phone Senator Harry Reid at 202-224-3542 and let him know there should be a discussion of alternatives. Phone Harry Reid at 202-224-3542 Please Fax Harry Reid at 202-224-7327 I just spoke with Harry Reid's office and faxes will be sorted and delivered to a legislative assistant by the end of the day. They are being swamped so a consistent message to consider alternatives is needed . Please mention the following "Open Letter" link and take whatever pieces of it you agree with, concentrating on the solutions and fax Senator Reid. Tell him you are not from Nevada but applaud someone willing to stand up for all of the USA. Mention these links but remember no one will likely open them. Take appropriate snips and fax away. http://globaleconomicanalysis.blogspot.com/2008/09/open-letter-to-congress-on-700-billion.html Also mention the Hussman Plan. An Open Letter to the U.S. Congress Regarding the Current Financial Crisis Please Start Your Fax Like This For the good of the United States of America, I am asking the Senate to stand up to justice and protect the taxpayer...
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    Source: feeds.feedburner.com
  • 4:05 PM » AIG suspends dividend
    Published Tue, Sep 23 2008 4:05 PM by CNN
    Read full story for latest details.
  • 4:05 PM » Before You Blame Hedge Funds, Remember That The Government Created Them
    Published Tue, Sep 23 2008 4:05 PM by ml-implode.com
    By Aaron Krowne, After the financial melee of the past few weeks and the extended distress of the past year, many vocal people who should know better are now quite sure that hedge funds are responsible for the worst of our problems. With the collapse of the lending bank HBOS in the UK -- blamed on short sellers -- that country banned short selling entirely. The US quickly followed, no doubt moving with special urgency after Goldman Sachs complained shrilly that short sellers were savaging its own stock. Nevermind that less than 3% of HBOS's float was sold short (most selling of that stock came from long-side holders of the stock, not short sellers). Nevermind that Goldman Sachs has long been one of the "ring leaders" of short selling -- with its own proprietary trading arm and prime brokering operation for hedge funds -- and further, has been fingered by some in the savaging of Bear Stearn's stock. Nevermind that small investors betting that banks have been grossly over-valued (including myself) have now been thrown under the bus -- punished for getting the story right. Apparently, we need a "demon," and those short-selling hedge funds look guilty. Plus, they don't have the kind of lobbyists the banks and GSEs have. Amidst all this chaos, few have stopped to question how we got here -- and I mean going beyond the superficial diagnosis of "rampant speculation" and "not enough regulation". I am disappointed to see that this is about as far as even a handful of Nobel laureates have penetrated with their dime store editorials. Yes, of course, speculation was a coincedent problem. Yes, of course, it was permitted to do its damage by negligent (and perhaps intentionally ineffective) regulation. But even accepting all that as proximate cause of the collapse, how did this situation develop? Few have asked. We (should) have free markets in this country, so speculation per se is not the problem. Taking a calculated financial...
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    Source: ml-implode.com
  • 4:05 PM » Chris Cox smack down at Senate Banking Committee hearing
    Published Tue, Sep 23 2008 4:05 PM by wallstfolly.typepad.com
    Like many others, we're sitting here listening to the Senate Banking Committee hearings. We have to admit, hearing Chris Cox admonished for not submitting the transcript of his remarks to the committee members the night before the hearing -- as...
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    Source: wallstfolly.typepad.com
  • 4:05 PM » Wilbur Ross is no fan of mark-to-market
    Published Tue, Sep 23 2008 4:05 PM by wallstfolly.typepad.com
    "I think it was a huge mistake -- both the general concept of it and more specifically the way that it was implemented," Ross said at the Reuters Restructuring Summit in New York on Monday. He said the main problems...
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    Source: wallstfolly.typepad.com
  • 3:59 PM » House approves bill to curb credit-card abuses
    Published Tue, Sep 23 2008 3:59 PM by Market Watch
    House lawmakers on Tuesday voted to 312 to 112 to approve credit-card legislation that would curb fees and practices that critics have called unfair to consumers.
  • 3:34 PM » Paulson: “We Must Take Decisive Action”
    Published Tue, Sep 23 2008 3:34 PM by feeds.feedburner.com
    Making his case before members of the Senate Banking Committee on Tuesday, Treasury Secretary Henry Paulson said that the U.S. government’s prior “case-by-case basis” approach to managing the current housing and credit crisis is clearly no longer sufficient, and suggested that a plan he and Congressional leaders are now hashing out will be critical to [...]
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    Source: feeds.feedburner.com
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