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  • Wed, Oct 15 2008
  • 8:54 AM » Mortgage applications rose 5.1% last week: MBA
    Published Wed, Oct 15 2008 8:54 AM by Market Watch
    Mortgage applications filed last week increase a seasonally adjusted 5.1% compared with the week before, reflecting an increase in refinancing activity, but activity remains keenly tuned to volatility in interest rates, the Mortgage Bankers Association says.
  • 8:53 AM » JPMorgan Reports Profit but Revenue Disappoints
    Published Wed, Oct 15 2008 8:53 AM by CNBC
  • 8:52 AM » Bleak Numbers Stoke Fears of Recession in Europe
    Published Wed, Oct 15 2008 8:52 AM by
    If there is a bright spot amid the chaos in the financial markets, it is that it helps to settle a debate among economists about the outlook for the European economy, The New York Times’s David Jolly writes. Even before the credit crisis exploded back into the headlines last month with the collapse of Lehman Brothers, [...]
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  • 8:52 AM » Hong Kong Backs Bank Deposits for 2 Years
    Published Wed, Oct 15 2008 8:52 AM by
    Hong Kong’s financial regulators announced on Tuesday that they would provide government backing for all of the territory’s $773 billion in bank deposits through 2010. Government assistance for banks in Europe and the United States has put pressure on Asian regulators to follow suit, even though Asian banks tend to be better capitalized, The New York [...]
    Click Here to Read the Full Article

  • 8:52 AM » Wells Fargo Asks Court to Void Citi’s Wachovia Deal
    Published Wed, Oct 15 2008 8:52 AM by
    Wells Fargo, which has agreed to buy Wachovia, asked a federal court to void Citigroup’s earlier agreement to buy parts of the big North Carolina lender. In a complaint filed Tuesday with the U.S. district court in Manhattan, Wells Fargo said the earlier agreement is unenforceable under the government’s $700 billion banking industry bailout because it [...]
    Click Here to Read the Full Article

  • 8:36 AM » European central banks pump $250bn liquidity
    Published Wed, Oct 15 2008 8:36 AM by
    European central banks have matched heavy demand for dollar liquidity by pumping more than $250bn into financial markets in the latest move to restore their proper functioning
  • 8:36 AM » Profit Falls at JPMorgan as Loan Losses Increase
    Published Wed, Oct 15 2008 8:36 AM by
    JPMorgan Chase reported third-quarter profit of $527 million, suffering a steep decline amid the turbulent markets but avoiding a loss.
    Click Here to Read the Full Article

  • Tue, Oct 14 2008
  • 4:50 PM » $250 Billion for Banks: Up in Smoke?
    Published Tue, Oct 14 2008 4:50 PM by Seeking Alpha
    submits: Today's L.A. Times has possibly the most awesome accidental (I think) juxtaposition of a newspaper front page headline and cover picture in recent memory. Click on it for a larger version.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 4:50 PM » FDIC Gives Indymac Pay Option ARM Borrowers Till Next Friday to Seek Mortgage Relief
    Published Tue, Oct 14 2008 4:50 PM by
    Paul Kielsel, an attorney and fellow blogger in Los Angeles, Ca. is reporting that the the FDIC is giving Indymac borrowers who have negative ammortization mortgages AKA Pay Option ARM’s till Friday October 24th to seek a loan modification or to take legal action against Indymac. Paul Kiesel: According to the FDIC, Option ARM borrowers have 90 [...]
    Click Here to Read the Full Article

  • 4:50 PM » Wells Fargo asks judge to void Citi-Wachovia pact
    Published Tue, Oct 14 2008 4:50 PM by Reuters
    NEW YORK (Reuters) - Wells Fargo & Co , which has agreed to buy Wachovia Corp , asked a federal court to void Citigroup Inc's earlier agreement to buy parts of the big North Carolina lender.
  • 4:03 PM » Roubini Sees Worst Recession in 40 Years
    Published Tue, Oct 14 2008 4:03 PM by Calculated Risk Blog
    Click image for video. Roubini Sees Worst Recession in 40 Years (Source: Bloomberg) From Bloomberg: Roubini Sees Worst Recession in 40 Years, Rally's End Nouriel Roubini, the professor who predicted the financial crisis in 2006, said the U.S. will suffer its worst recession in 40 years, causing the rally in the stock market to ``sputter.'' ``There are significant downside risks still to the
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 4:02 PM » Derivatives: The Great Unwind
    Published Tue, Oct 14 2008 4:02 PM by
    Another guest post from MG who went from Wharton to Wall St. to real estate to Blown Mortgage. . Other than the shares of bank stocks, you have to wonder why. The worldwide central bank bailout is not intended for the equity investor, or general public, or business, or you, or me. It’s intended for banks, ostensibly to spur lending, but more likely to keep them afloat through next week’s Great Derivatives Unwind. This has got to be a big part of the motivation of the CBs to provide unlimited lending to banks. Distracted by worldwide stock market crashes, attention shifted away from Lehman’s derivatives’ payouts scheduled for October 21. Recovery value has been set at 8.625 cents per $1.00, which means that sellers of credit protection must pay 91.375 cents to the buyers (according to , the company that holds auctions). More than 350 banks and investors signed up to settle credit-default swaps tied to Lehman. The list of participants in the auction includes Newport Beach, California-based Pacific Investment Management Co. PIMCO, manager of the world’s largest bond fund, Chicago-based hedge fund manager Citadel Investment Group LLC and AIG, the New York-based insurer taken over by the government, according to the International Swaps and Derivatives Association in New York. According to JPMorgan, the largest foreign bank holders of Lehman’s derivatives are Deutsche Bank, Barclays, Societe Generale, UBS, Credit Suisse and Credit Agricole. Overall, as of June 30, 2008, the top ten US banks in terms of derivatives exposure were: JPMorgan Chase, Bank of America, Citibank, Wachovia, HSBC USA, Wells Fargo, Bank of New York, State Street Bank, SunTrust Bank, and PNC Bank, according to the Comptroller of the Currency Administrator of National Banks’ for the second quarter of 2008. Lots of other good information too, if you like this sort of thing, as I do. And this is just the beginning. Few losses are expected from the failed GSEs. Fannie Mae’s senior debt settled at 91.51 and...
    Click Here to Read the Full Article

  • 4:01 PM » Moody's Makes a Bad Situation Worse
    Published Tue, Oct 14 2008 4:01 PM by Seeking Alpha
    submits: You will have your own favorite villain of the ongoing financial-and-now-economic crisis. Greedy Wall Street bankers? Not a bad choice. Shady mortgages brokers? No argument there. Unscrupulous speculators? Sure! All of ‘em helped make the mess. But for my money, one group stands out as the low-downdest skunk of all: the rating agencies. Not only did they play a central role in pumping the market full of doomed mortgage paper in the first place; since then, they’ve helped make a bad situation worse with their ham-handed, irrational ratings downgrades. If it weren’t for the rating agencies, a lot of the most severe pain of the credit mess might have been avoided. The rating agencies have already demonstrated that, as regards subprime mortgage credit, they don’t know what they’re talking about. Even so, they continue to provide misguided, incompetent analysis. Only this time, rather than underestimate the extent of credit problems, they’re overestimating it.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 4:00 PM » FDIC Moves to Increase Deposit Insurance Coverage for Servicers
    Published Tue, Oct 14 2008 4:00 PM by
    The FDIC said late Friday that it had adopted an interim final rule designed to simplify the deposit insurance rules for accounts held at FDIC-insured institutions by mortgage servicers. In essence, the change will prevent mortgage servicers from withdrawing their deposits at banks — a timely change, given the importance of maintaining deposit coverage. Under [...]
    Click Here to Read the Full Article

  • 4:00 PM » Capital Injection into Banks: Beyond the Top Guns, Others to Look At
    Published Tue, Oct 14 2008 4:00 PM by Seeking Alpha
    submits: The U.S. government's capital injection into our country's banking system via the government's purchase of preferred shares of publicly traded bank holding companies will prove to be a significant event in the historical timeline of the current financial crisis. It will mark the point at which our financial system was saved from certain self inflicted destruction by a government unwilling to usher in a prolonged dark era in the economic development of the United States. The government's initial $250 billion dollar investment in the countries largest banks will be significant in that it will dramatically strengthen the balance sheets of the companies that hold the vast majority of the banking systems assets and deposits. Nevertheless, Treasury officials should move quickly to boost the capital levels at the country's regional and foreign subsidiary banks as they are likely more challenged by liquidity issues then their larger money center peers. In looking at the country's largest banks and thrifts by total assets as of 6/30/08 (the most recent date that the data is available from the FDIC) we can see that the country's 100 largest bank holding companies had over 9.8 trillion dollars in assets at their bank subsidiaries. In the second chart you will see the remaining banks after the various subsidiary companies are accounted for and consolidated into their parent companies and finally I will turn to a discussion of the country's regional banks that are included in the FDIC's list of the top 100 banks and thrifts in the U.S. Top 100 Banks & Thrifts As of 6/30/2008 100 Total Banks Institution Name Ticker Total Assets($000) JPMorgan Chase Bank JPM 1,378,468,000 Bank of America BAC 1,327,429,079 Citibank C 1,228,445,000 Wachovia Bank WB 670,639,000 Wells Fargo Bank WFC 503,327,000 U.S. Bank USB 242,307,928 HSBC Bank USA HBC 177,466,246 SunTrust Bank STI 171,500,853 FIA Card Services BAC 165,349,652 National City Bank NCC 151...
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 4:00 PM » Reverse Mortgage Climb Expected To Continue
    Published Tue, Oct 14 2008 4:00 PM by
    U.S. reverse mortgage loan creation rose 4.2 percent to a record level in fiscal 2008 and growth is expected to accelerate next year due to an impending increase in the federally insured loan limit, a trade group said on Tuesday.
    Click Here to Read the Full Article

  • 1:56 PM » Where Wall St. meets Main St.
    Published Tue, Oct 14 2008 1:56 PM by CNN
    News of the financial crisis is everywhere. And while average Americans used to feel blissfully disconnected to the workings of Wall Street, it's now become clear that the fates of those on Wall Street and Main Street are closely linked.
  • 1:56 PM » Wells Fargo Sues Citi to Head Off Liability Claims
    Published Tue, Oct 14 2008 1:56 PM by CNBC
  • 1:56 PM » The Lede: Following the Markets
    Published Tue, Oct 14 2008 1:56 PM by
    Shares of most of the banks that will receive investments from the government moved higher.
    Click Here to Read the Full Article

  • 1:50 PM » Demand for Some Commercial Paper Jumps
    Published Tue, Oct 14 2008 1:50 PM by WSJ
    After being severely constricted for weeks, the commercial paper market showed tentative signs of recovery on Tuesday after global leaders aimed a number of initiatives at stabilizing financial markets.
  • 1:49 PM » Hedge Fund Giants Said to Move Funds Into Cash
    Published Tue, Oct 14 2008 1:49 PM by
    Steven Cohen, Israel Englander and John Paulson manage three of the biggest hedge funds around, and they’re considered some of the smartest traders anywhere. So what are they doing with their funds’ massive firepower? According to The Wall Street Journal, they’re stowing it away in money-market funds and other short-term securities. In Mr. Cohen’s case, his SAC [...]
    Click Here to Read the Full Article

  • 1:48 PM » Former Fed Chief Says US Now in Recession
    Published Tue, Oct 14 2008 1:48 PM by CNBC
  • 1:47 PM » Libor: The Descent Begins
    Published Tue, Oct 14 2008 1:47 PM by
    One week LIBO - Drops 50 basis points *THREE-MONTH DOLLAR LIBOR 4.64% VERSUS 4.75%, BBA SAYS *OVERNIGHT DOLLAR LIBOR 2.18% VERSUS 2.47%, BBA SAYS
    Click Here to Read the Full Article

  • 1:46 PM » Treasury’s Direct Route, a Good First Step
    Published Tue, Oct 14 2008 1:46 PM by
    The Treasury’s plan to inject equity into ailing financial institutions as part of its Troubled Asset Relief Program, or TARP, is a more direct way to bolster financial firms’ capital than simply buying dodgy assets. It’s a step in the right direction, Breakingviews says. But Neel Kashkari, TARP’s interim manager, says it plans to offer healthy [...]
    Click Here to Read the Full Article

  • 1:45 PM » U.S. pulls the trigger
    Published Tue, Oct 14 2008 1:45 PM by CNN
    The federal government on Tuesday announced an extraordinary and historic direct investment in the nation's banks - the biggest bet ever made with taxpayer dollars on the U.S. financial system.
  • 1:44 PM » Not a Typo
    Published Tue, Oct 14 2008 1:44 PM by
    Iceland’s stock market reopened following several days in which trading had been suspended. You might want to check and see if any of your well diversified IRA or 401K had any Icelandic exposure.
    Click Here to Read the Full Article

  • 1:43 PM » Volcker sees 'considerable recession'
    Published Tue, Oct 14 2008 1:43 PM by CNN
    Read full story for latest details.
  • 1:42 PM » Feels Like Socialism … But I Like It: Trump
    Published Tue, Oct 14 2008 1:42 PM by CNBC
  • 1:41 PM » Money-market tensions beginning to ease, Libor rates show
    Published Tue, Oct 14 2008 1:41 PM by Market Watch
    Decreasing short-term lending rates offer further evidence that massive government bailouts and wide-ranging debt and deposit guarantees have started to thaw frozen interbank lending markets.
  • 1:41 PM » Hong Kong Backs Its Banks
    Published Tue, Oct 14 2008 1:41 PM by
    After U.S. and European governments took steps to assist banks, Hong Kong’s financial regulators announced government backing for all of the territory’s bank deposits through 2010.
    Click Here to Read the Full Article

  • 1:41 PM » Dollar still under pressure
    Published Tue, Oct 14 2008 1:41 PM by CNN
    The U.S. dollar fell Tuesday as the global stock market rebound kept investors focused on higher-yielding currencies such as the euro and the pound.
  • 12:38 PM » Bailout: Don't forget the people
    Published Tue, Oct 14 2008 12:38 PM by CNN
    The United States and the rest of the world are taking extraordinary steps to help keep banks afloat.
  • 10:08 AM » Mr Mortgage - September CA Foreclosure Report
    Published Tue, Oct 14 2008 10:08 AM by
    Due to the new CA Law, BS 1137, Notices-of-Default (foreclosure starts) and Notices-of-Trustee Sale (2nd stage of foreclosure) plunged in Sept. In a nutshell, this law put a few extra steps on the banks prior to filing a NOD and NTS. Due to this, an in-depth analysis of September’s CA foreclosure activity will not be provided this month. However, you can take a look at the September charts below and a few of my previous reports (links provided below) and draw your own conclusions. It is my impression this new law just pushes out the problem a month or two. As soon as the banks are back in full compliance and pumping out NOD’s and NTS’s once again, which will likely be within a few weeks, I will be able to furnish you with more data. -Best Mr Mortgage Notice-of-Default by Month - Note the plunge in Sept due to SB 1137. As you can see before the plunge in Sept, defaults were hanging near their all-time highs despite Subprime defaults being down 25-30% throughout CA. This is proof-positive that the default crisis has jumped tracks to higher paper grades, which I can see clearly when I break these defaults down on my internal systems. Monthly Actual Foreclosures/Bank REO - Actual foreclosures are down slightly from the peak but still near all-time highs. Never discount seasonality when reviewing this. Also cancellations are increasing, which have to be added to this figure (shown below). Remember, 95% of all foreclosures are bought back by the foreclosing entity due to lack of 3rd party interest. Monthly Foreclosure Cancellations - Note the increase in Cancellations below as Foreclosures above decrease. This means that despite headline foreclosures decreasing, foreclosures in the pipeline have not really moved down as much. Related Mr Mortgage Posts Posted on September 19, 2008 1:02 PM Posted on September 15, 2008 2:32 PM Posted on September 23, 2008 2:43 PM Posted on September 22, 2008 9:42 PM
    Click Here to Read the Full Article

  • 10:08 AM » McCain: Buy mortgages
    Published Tue, Oct 14 2008 10:08 AM by CNN
    Sen. John McCain will outline new economic proposals on Tuesday at a rally in suburban Philadelphia, his campaign announced.
  • 9:37 AM » Charlie Munger: Leash and Collar Wall Street
    Published Tue, Oct 14 2008 9:37 AM by Google News
    The backlash is starting to get serious. It is one thing for the man on the street to fulminate about the excesses of financiers. And even those who try to harness that anger find themselves checked. John McCain, who has said that he is going to fix the economy by (among other things) going after "Wall Street corruption" is But it's when people in or close to the financial services start calling for reform that you know the tide is turning. In a Forbes interview, Jamie Dimon and Felix Rohatyn (storied top M&A banker for two generations, also led the restructuring of New York City's finances in its fiscal crisis) do an able job of singing from the reform hymnal. But Charles Munger, long-standing partner of Warren Buffett, calls for root and branch reform. If other prominent Main Street executives fall in with Munger, we might see the banking industry restored to its proper role, that of a support function to commerce. From (hat tip reader Steve): Even more radical is Berkshire Hathaway's vice chairman. Munger wants Wall Street balance sheets reduced by 70% and insists that the firms "be a market maker, a broker, an underwriter and a custodian of securities but not the hedge funds they have become." He wants to restrict leverage to 50% on every securities transaction except for the Treasury trading desk where "you're dealing with the safest securities around." That 50% margin level, incidentally, is the maximum that ordinary investors can obtain from their broker when they purchase common stock. Before their respective demises, Bear Stearns and Lehman Brothers were leveraged to the tune of $30 of debt for every $1 of capital. To rid Wall Street of its Las Vegas tone, Munger suggests leveling the options exchanges in Chicago and New York, and banning completely all derivatives contracts, a rather impossible vision but one that's true to his spirit. He's also furious with the accountants, in particular for letting...
  • 9:36 AM » And then, right on schedule, the government part-privatized the banks
    Published Tue, Oct 14 2008 9:36 AM by
    Right on schedule. Any questions? And now, the panic is over. And while the needed and justified dramatic drop in home prices worldwide continues, the cleanup, investigations and arrests can begin. U.S. to Buy Stakes in Nation's Largest Banks The government is set to buy preferred equity stakes in Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. -- including the soon-to-be acquired Merrill Lynch -- Citigroup Inc., Wells Fargo & Co., Bank of New York Mellon and State Street Corp., according to people familiar with the matter. Some of the big banks were unhappy about the government taking equity stakes, but acquiesced under pressure from Treasury Secretary Henry Paulson in a meeting Monday. During the financial crisis, the government has steadily increased its involvement in financial markets, culminating with a move that rivals the breadth of the government's response to the Great Depression. It intertwines the banking sector with the federal government for years to come and gives taxpayers a direct stake in the future of American finance, including any possible losses.
    Click Here to Read the Full Article

  • 9:36 AM » Essence of the "Rescue" Plan In Comic Form
    Published Tue, Oct 14 2008 9:36 AM by
    Yesterday I wrote . Here once again is the pertinent snip. To stimulate lending, the bailout plan will attempt to recapitalize banks. The method of recapitalization is best described as robbing Taxpayer Pete to pay Wall Street Paul. In essence, money is taken from the poor (via taxes, printing, and weakening of the dollar) and given to the wealthy so the wealthy supposedly will have enough money to lend back (at interest) to those who have just been robbed. Sinfest has captured the very essence of this robbery in comic form. . Mike "Mish" Shedlock Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Visit to learn more about wealth management for investors seeking strong performance with low volatility.
    Click Here to Read the Full Article

  • 9:36 AM » Biggest Market Gains In History
    Published Tue, Oct 14 2008 9:36 AM by
    Morgan Stanley shares are soaring today as . Mitsubishi UFJ Financial Group Inc (MUFG) completed its $9 billion investment in Morgan Stanley on Monday as U.S. government support helped nail down a critical deal many investors had feared could fall apart. Morgan Stanley shares soared more than 75 percent after Japan's largest bank bought a 21 percent stake one day earlier than expected. Last week the New York bank's stock plunged by more than half amid fears that Morgan, forced to wait five days before completing the deal, might not survive the crisis. "It's different terms, but it's done, and I think people should breathe a sigh of relief that it's done," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York. Amending the terms of a September 29 agreement, Mitsubishi bought preferred stock convertible into a 21 percent stake in Morgan for $9 billion cash. Yet the entire investment now consists only of preferred shares, the banks said. Previously, Mitsubishi had agreed to buy $3 billion of common stock at $31.25 a share, but the Japanese bank pushed for new terms after Morgan's stock plunged to $9.28. Morgan's total market value had fallen to $10.3 billion, and some customers were starting to lose confidence. The U.S. government did not invest in Morgan Stanley, as had been speculated, but federal officials were involved in the talks and assured MUFG over the weekend that its investment would be protected, a person familiar with the matter said. About $7.8 billion of MUFG's investment was in preferred shares with a conversion price of $25.25 a common share and with no maturity date. The other $1.2 billion is in preferred stock that is not convertible and also has no maturity date. Both preferred series pay a 10 percent interest rate, unchanged from the original pact. Morgan Stanley 30 Minute Chart click on chart for sharper image Add another $9 billion to US guarantees. Is this what it is going to take to...
    Click Here to Read the Full Article

  • Mon, Oct 13 2008
  • 10:20 PM » Capital Injection Dollars Announced
    Published Mon, Oct 13 2008 10:20 PM by Calculated Risk Blog
    From the NY Times: U.S. Investing $250 Billion in Banks Citigroup and JPMorgan Chase were told they would each get $25 billion; Bank of America and Wells Fargo, $20 billion each (plus an additional $5 billion for their recent acquisitions); Goldman Sachs and Morgan Stanley, $10 billion each, with Bank of New York Mellon and State Street each receiving $2 to 3 billion. Wells Fargo will get $5
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 10:19 PM » Dow Takes Record Leap
    Published Mon, Oct 13 2008 10:19 PM by WSJ
    The Dow industrials surged 936.42 points, or 11%, to 9387.61 as global plans for governments to rescue banks through direct capital injections sent the index to its biggest one-day point gain ever.
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