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  • Fri, Dec 19 2008
  • 4:08 PM » Home Builders Wants Mortgage Rates at 2.9 Percent
    Published Fri, Dec 19 2008 4:08 PM by www.thetruthaboutmortgage.com
    The chief executive of the National Association of Home Builders reportedly wants a government program launched to lower interest rates on home loans to 2.9 percent, along with an expanded homebuyer tax credit. With these two initiatives in place, NAHB boss Jerry Howard believes the glut of unsold housing inventory could be off the market in [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 2:50 PM » Q3 2008: Mortgage Equity Extraction Strongly Negative
    Published Fri, Dec 19 2008 2:50 PM by Calculated Risk Blog
    Here are the Kennedy-Greenspan estimates (NSA - not seasonally adjusted) of home equity extraction for Q3 2008, provided by Jim Kennedy based on the mortgage system presented in "," Alan Greenspan and James Kennedy, Federal Reserve Board FEDS working paper no. 2005-41. Click on graph for larger image in new window. For Q3 2008, Dr. Kennedy has calculated Net Equity Extraction as minus $64.1 billion, or negative 2.4% of Disposable Personal Income (DPI). This graph shows the net equity extraction, or mortgage equity withdrawal (MEW), results, both in billions of dollars quarterly (not annual rate), and as a percent of personal disposable income. Dr. Kennedy provides several other measures of equity extraction. The second graph shows what Dr. Kennedy calls "active MEW" (Mortgage Equity Withdrawal). This is defined as "Gross cash out" plus the change in the balance of "Home equity loans". This measure is also slightly negative. The Fed's Flow of Funds report shows the amount of mortgages outstanding is declining, and this is partially because of debt cancellation per foreclosure sales, and partially due to homeowners paying down their mortgages (as opposed to borrowing more). Note: most homeowners pay down their principal a little each month (unless they have an IO or Neg AM loan), so with no new borrowing, equity extraction would always be negative. But this suggests that the Home ATM is closed, and MEW is no longer supporting consumption.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 11:25 AM » Record low mortgage rates toss housing market a lifeline
    Published Fri, Dec 19 2008 11:25 AM by Reuters
    NEW YORK (Reuters) - With the $500 of monthly savings Jim Hennessy just gained by cutting the rate on his $417,000 mortgage in San Diego, he plans on rebuilding his beaten-up retirement savings and maybe even taking a cruise.
  • 10:39 AM » Nothing But Trouble In Store For Investors In This Retail REIT
    Published Fri, Dec 19 2008 10:39 AM by feeds.foxbusiness.com
    BOSTON -- When a stock gets badly beaten down, but has some attractive assets and a big yield, investors have to decide if they want to stick around waiting for a bounce-back. What they often miss out on is the potential for today's big loser to become tomorrow's bankruptcy case and total loss. Simply put, most investors have a hard time believing they could have picked anything that was destined to go to zero, and a tougher time swallowing their pride and recognizing their mistake. And that's why investors stick around with issues like General Growth Properties, a former highflier that has just enough going for it to give a faint sense of hope, but enough going against it to foresee those prayers being crushed. That's why General Growth Properties (GGP) is the Stupid Investment of the Week. Stupid Investment of the Week highlights the conditions and characteristics that make an investment less than ideal for average investors, and is written in the hope that spotlighting flawed thinking in one case will help investors avoid similar missteps elsewhere. Typically, to be included in this column there must be a case for buying the investment in question. In this kind of market, however, buying is off the table for many people, and their bigger choice involves whether to continue or end a buy-and-hold play they made long before the market ever soured. If an investor would not buy an issue again today, there's a good question why it should be held onto in hopes for a return to glory, or at least break-even. In the case of General Growth Properties, about the only good news the company has had recently is that the firm's lenders extended the repayment deadline on $900 million in past-due debt to mid-February. Had that agreement not been reached, the company would have been forced to file for bankruptcy protection. Temporary breathing room is one thing, hope for a comeback is something altogether different. General Growth stock is down more than 95%...
    Click Here to Read the Full Article

    Source: feeds.foxbusiness.com
  • 10:39 AM » General Growth puts more high-end malls on sale
    Published Fri, Dec 19 2008 10:39 AM by Reuters
    (Reuters) - Mall giant General Growth Properties Inc has put three of its high-end shopping malls -- in Boston, New York, and Baltimore -- up for sale as it moves to pay off about $22 billion of debt within four years.
  • 9:53 AM » SunTrust: Business as Usual?
    Published Fri, Dec 19 2008 9:53 AM by Seeking Alpha
    submits: SunTrust (STI) is a major Mid-Atlantic and Southeastern regional bank. The company has $175 billion in assets with a large residential and commercial real estate involvement. There are close to 1,700 retail branches throughout 9 states. The bank has significant holdings in Coca Cola (KO), which along with SunTrust is based in Atlanta. I deal frequently with SunTrust. We have had accounts with them for several years. The company prides itself on excellent customer service. It is our experience that they do that very well. Personnel are unfailingly helpful and courteous.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:52 AM » The Blame Game Continued: Is CRA at Fault?
    Published Fri, Dec 19 2008 9:52 AM by Google News
    Is it possible that a law enacted to ensure banks serve the needs of the communities the are located in might be at the root of the current financial crisis? The idea that any one thing, be it an agency, a law, an event or a person, bears total responsibility for the situation is patently false. It is, however, important to understand what role each played in getting us here. Preferably before taking drastic measures to repair what may never have been broken or worse, break one of the few things still working. When the Community Reinvestment Act (CRA) was enacted in 1977 it was intended to curtail a practice called red-lining in which banks and other depository institutions were reluctant or refused to make loans based the borrowers address. It didn’t matter if the borrower was could repay the loan, nor did it matter whether the loan was a mortgage, home-improvement loan or small-business loan. If the borrower resided or intended the loan to be used in an area the lender did not wish to lend in, such as a low or moderate income neighborhood, small town or rural area, well then the borrower faced significant challenges in getting a loan if they could get one at all. As a result, potential borrowers in these areas relied heavily on mortgage banking companies for financing. As it was originally written, the CRA was a very general piece of legislation. So of course, scarcely a year has gone by that legislators, regulators or the financial industry have not tried tinkering with it. None of these subsequent adjustments ever required depository institutions to make loans that were unsound. “ Any loan that is made must be mindful of the sacred obligations in preserving the integrity of funds,” Robert Buchard, then executive vice president of Keycorp, a holding company based in Albany, NY told ABA Banking Journal in 1989. “These can be self-serving investments in our communities, but it isn’t a hand-out program.” How then did we reach the point where the CRA is a potential scapegoat...
  • 9:52 AM » Has the Housing Price Bubble Deflated?
    Published Fri, Dec 19 2008 9:52 AM by Seeking Alpha
    submits: Interesting set of charts from a by Columbia's real estate guru Chris Mayer showing house prices relative to 50-year trends:
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:52 AM » New Limits on Credit Card Companies: Is Hell Freezing Over?
    Published Fri, Dec 19 2008 9:52 AM by Seeking Alpha
    submits: The End of Days must be approaching; for one of the few times I can remember in the past two decades, regulators in the United States of Corporations instead of the corporation. Of course, credit card companies claim this will restrict many from the constant flow of credit. Considering this was the lobby that made bankruptcy far more expensive 2-3 years ago, it's a big change in the atmosphere. Thank you Federal Reserve for doing something for the American people for once. Now, what will be more interesting to find out is, after rules were altered in favor of corporations for a few decades, if this is a short-term stance change or the beginning of an era where the actual citizens of the country matter more than the political donors. Either way, the ethos of "light" or "self" regulation, after burning down the country, seems to be out the door. Let's see if we overreact in the other direction. Surely there is some fair middle ground, but we'll probably miss it. We shall see in a few years.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • Thu, Dec 18 2008
  • 7:49 PM » Banks lent billions to Madoff 'feeder funds'
    Published Thu, Dec 18 2008 7:49 PM by www.ft.com
    Big banks from the UK, France and Japan helped investors treble or quadruple their bets on Bernard Madoff by lending billions of dollars to 'feeder' funds, which placed their money with the alleged fraudster
  • 5:45 PM » Angelo Mozilo Email on Loan Safe Voted #1 Business Blunder in 08′
    Published Thu, Dec 18 2008 5:45 PM by loanworkout.org
    Choosing only 10 this year was next to impossible, but somehow we managed. Incidentally, we’d like to throw a special shout out to Angelo Mozilo of Countrywide for making this year’s list extra debacle-riffic. Thanks! – The Consumerist It’s nice to know that our work at Loan Safe and Loan Workout has somewhat of an effect [...]
    Click Here to Read the Full Article

    Source: loanworkout.org
  • 5:29 PM » Hedge fund graveyard: 693 and counting
    Published Thu, Dec 18 2008 5:29 PM by CNN
    A record number of hedge funds went bust during the third quarter, a report showed Thursday, as shaky markets and tight credit drove investors away from risky investments.
  • 5:29 PM » Fed’s Rate Moves Fail to Spur Home Buying
    Published Thu, Dec 18 2008 5:29 PM by The Big Picture
    Refinancing seems to be the only game in town! The Federal Reserve’s efforts to make homes more affordable have yet to bolster buying and instead are fueling a surge in refinancing, according to data compiled by the Mortgage Bankers Association. As the CHART OF THE DAY shows, the association’s index of mortgage applications for home purchases has fallen this year. A similar refinancing gauge has more than doubled in the past month. Last week’s figures came out today. Source: David Wilson Bloomberg, Dec. 17 2008 http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akA4WNP2pWio
    Click Here to Read the Full Article

    Source: The Big Picture
  • 5:29 PM » Mortgage Related Exec Compensation
    Published Thu, Dec 18 2008 5:29 PM by The Big Picture
    Courtesy of > Source: LOUISE STORY NYT, December 17, 2008 http://www.nytimes.com/2008/12/18/business/18pay.html
    Click Here to Read the Full Article

    Source: The Big Picture
  • 4:12 PM » Treasury sued by Fox Business Network over rescue plan info
    Published Thu, Dec 18 2008 4:12 PM by Market Watch
    WASHINGTON (MarketWatch) -- FOX Business Network said Thursday it has filed a lawsuit against the U.S. Treasury Department for being slow to provide information on the $700 billion financial rescue plan. The television network, a unit of News Corp. , said in a release that Treasury has not responded to two Freedom of Information Act requests, one on Nov. 25 and one on Dec. 1, regarding the use of funds for Citigroup Inc. (C), American International Group Inc.
  • 4:12 PM » Loan Modification Process: It's Still Not Making Sense
    Published Thu, Dec 18 2008 4:12 PM by CNBC
    Posted By: The fact is, modification programs won't work unless the principal on the loan is written down, giving the homeowner at least some financial stake in the house. But we all know how willing lenders are to write down principal. Topics: | | Sectors: | Companies: | MEDIA:
  • 2:53 PM » DataQuick: Almost 50% of Home Sales are Foreclosure Resales in California Bay Area
    Published Thu, Dec 18 2008 2:53 PM by Calculated Risk Blog
    NOTE from CR: be careful with median prices. This doesn't mean prices have fallen to an eight year low - this means that a combination of price declines and a significant change in mix (to lower priced homes) has happened. The Case-Shiller repeat sales index is a better measure of actual price declines. From DataQuick: Bay Area home sales decelerated in November but beat the year-ago mark for the third consecutive month. The allure of discounted foreclosures continued to drive sales in affordable inland markets, which helped push the median sale price down to its lowest point since former President Bill Clinton was in the White House. The median price paid for all new and resale houses and condos combined in the nine-county Bay Area fell to $350,000 last month. That was down 6.7 percent from $375,000 in October and down a record 44.4 percent from $629,000 in November 2007, according to MDA DataQuick, a San Diego-based real estate information service. The November median sale price - the point where half of the homes sold for more and half for less - stood at its lowest since it was $350,000 in September 2000. It was 47.4 percent below the peak median of $665,000 reached last year in June, July and August. ... A total of 5,756 new and resale houses and condos closed escrow in the region last month. That was down 24.4 percent from 7,613 sales in October but up 12.3 percent from 5,127 sales in November 2007. Last month's tally was still the second-lowest for a November since at least 1988, when DataQuick's statistics begin. ... Last month 47.6 percent of all homes that resold in the Bay Area had been foreclosed on at some point in the prior 12 months, up from 44.0 percent in October and 10.1 percent a year ago. ... In November, use of FHA, government-insured mortgages allowing a down payment of as little as 3 percent rose to 20.6 percent of Bay Area home purchase loans. That's a record in DataQuick's statistics and up from less than 1.0 percent a year...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 1:03 PM » War College IMF, warns military must prep for unrest; economic riots
    Published Thu, Dec 18 2008 1:03 PM by ml-implode.com
    "A new report by the U.S. Army War College talks about the possibility of Pentagon resources and troops being used should the economic crisis lead to civil unrest, such as protests against businesses and government or runs on beleaguered banks"
    Click Here to Read the Full Article

    Source: ml-implode.com
  • 11:45 AM » Citigroup says increasing its lending
    Published Thu, Dec 18 2008 11:45 AM by Reuters
    NEW YORK (Reuters) - Citigroup Inc has boosted its lending after receiving government money and has set up a committee of senior executives to make sure it is using those funds properly, according to an internal memo obtained by Reuters.
  • 11:30 AM » Fed Loans Guided by Raters Grading Subprime Debt AAA
    Published Thu, Dec 18 2008 11:30 AM by ml-implode.com
    And another glaring absurdity finally gets some media attention: Federal Reserve Chairman Ben S. Bernanke is basing hundreds of billions in emergency lending on credit ratings from companies that gave AAA grades to toxic securities. The Fed has purchased $308.5 billion in commercial paper and lent $631.8 billion under eight credit programs, most of which require appraisals of short-term debt and loan collateral by “major nationally recognized statistical ratings organizations.” That, in effect, means Moody’s Investors Service, Standard & Poor’s and Fitch Ratings. It is foolhardy to rely on the three New York-based companies, said Keith Allman, chief executive officer of Enstruct Corp., which trains investors in financial modeling and asset valuation. The major raters issued top marks to $3.2 trillion in subprime mortgage-backed securities at the root of the financial crisis. “They’re outsourcing the credit assessment to a group of people whose recent performance has been unbelievably bad,” said Allman, the New York-based author of three books on structured finance and a former vice president in Citigroup Inc.’s securitized markets unit. “If their goal is to not take a loss on these assets, they should be hiring independent analysts.”
    Click Here to Read the Full Article

    Source: ml-implode.com
  • 11:30 AM » U.S.credit card rule changes approved by regulator
    Published Thu, Dec 18 2008 11:30 AM by Washington Post
    WASHINGTON (Reuters) - Rules aimed at preventing credit card holders from being hit by unfair and deceptive practices such as surprise fees and interest rate hikes were approved on Thursday by a U.S. banking regulator.
    Click Here to Read the Full Article

    Source: Washington Post
  • 10:12 AM » Many California Sellers Sold Properties at a Loss This Year
    Published Thu, Dec 18 2008 10:12 AM by www.thetruthaboutmortgage.com
    Annual home sales are expected to rise 12 percent in California this year and another 12.5 percent in 2009, but much of the increase can be attributed to distressed sales, according to the “State of the California Housing Market 2008-2009” report released this week by CAR. Nearly one in five (19.8 percent) sellers sold their homes [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 9:09 AM » Multi-Family Real Estate: Fannie and Freddie's Next Headache?
    Published Thu, Dec 18 2008 9:09 AM by Seeking Alpha
    Three weeks ago, we multi-family REITs will continue to do well relative to the beaten down REIT sector, or join other REITs in the dumps? What will happen to Fannie Mae (FNM) and Freddie Mac (FRE) if there is major deterioration in this market? The GSEs are among the main sources of liquidity for this market. From Investors Real Estate Trust : (IRET) In the coming 12 months, the majority of maturing debt is secured by multi-family assets. Our multi-family markets are performing as well as at any point in the last decade. Additionally, the multi-family loan market is still functioning with numerous lenders and, of course, the recently nationalized lenders, Freddie Mac and Fannie Mae.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:09 AM » Commercial Real Estate Offering 8%-9% Cap Rates, Anyone Interested?
    Published Thu, Dec 18 2008 9:09 AM by Seeking Alpha
    One of the biggest changes in commercial real estate is the difference in cap rates*. Last year, REITs and developers were complaining about miniscule cap rates of 2-3% and lower. Now they’re finding significantly higher cap rates and lower values, but will buyers step up or dry up? AIMCO’s : (AIV)
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • Wed, Dec 17 2008
  • 11:49 PM » New Limits Imposed on Credit Card Companies
    Published Wed, Dec 17 2008 11:49 PM by Washington Post
    When the federal government approves new rules banning "unfair and deceptive" practices today by credit card companies, it will hand a victory to consumer groups who have long complained of lax oversight of the $970 billion industry.
    Click Here to Read the Full Article

    Source: Washington Post
  • 5:49 PM » Morgan Stanley 2008 employee compensation plunges
    Published Wed, Dec 17 2008 5:49 PM by Market Watch
    (Adds comments from chief financial officer on clawback provision from conference call beginning in the 10th paragraph and updated share price.) NEW YORK (MarketWatch) -- Employees at Morgan Stanley saw their annual compensation take a big hit. With write-downs, a plunging company stock price and weak equity markets this year, the company slashed its average pay per employee and revealed a steep decline in its bonus pool. In addition, Morgan Stanley said that, as expected, Chief Executive John Mack and other senior executives would forgo bonuses for 2008.
  • 2:42 PM » HUD: Mortgage Modification Program "a failure"
    Published Wed, Dec 17 2008 2:42 PM by Calculated Risk Blog
    From the WaPo: Secretary of Housing and Urban Development Steve Preston said the centerpiece of the federal government's effort to help struggling homeowners has been a failure and he's blaming Congress. ... The three-year program was supposed to help 400,000 borrowers avoid foreclosure. But it has attracted only 312 applications since its October launch because it is too expensive and onerous for lenders and borrowers alike, Preston said in an interview. ... One of several federal and state foreclosure prevention initiatives facing difficulties, HUD's Hope for Homeowners program has been especially hamstrung. For instance, a program launched by the Federal Deposit Insurance Corp. on behalf of IndyMac Bank customers has modified more than 3,500 mortgages in two months of operation. I don't if Congress is to blame, or if the program was implemented poorly, but it is funny that they hold up the IndyMac program (with just 3,500 mods) as being more successful. Here was Tanta on IndyMac in October: I wrote a at the end of August after Sheila Bair's plan for "affordability modifications" of the former IndyMac loans was announced, the burden of snot wisdom of which was my prediction that Bair was going to discover that it's a lot harder than she thinks to get successful mortgage modifications done on a wide scale in a very short period of time. However, I did express the hope that the Bair plan would prove remarkably successful and indicated my willingness to eat my words should it prove necessary. Looks like I'll have to stick to my usual dry toast and bananas after all. Read it all! I think more people are discovering that successful mortgage mods are hard to do.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 2:42 PM » IRS Speeds Lien Relief for Homeowners
    Published Wed, Dec 17 2008 2:42 PM by loanworkout.org
    WASHINGTON — The Internal Revenue Service today announced an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.If taxpayers are looking to refinance or sell a home and there is a federal tax lien filed, there [...]
    Click Here to Read the Full Article

    Source: loanworkout.org
  • 1:55 PM » Fannie/Freddie - Come Get Your Loan Mod & Pay For Life
    Published Wed, Dec 17 2008 1:55 PM by mrmortgage.ml-implode.com
    The Fonie & Fraudie loan mod push is on. This is an absolute disaster. I have written volumes on these terrible loan modifications and now this great experiment finally begins. The story below should make you cringe if you are a homeowner or someone looking to buy or sell. If this is widely accepted, the implications are unknowable. Coming to mind right away is permanent loss of a large portion of the US consumer base due to the massive leverage this program requires; and wide scale new loan defaults from home owners looking for relief due to macro economic worries that may not really need it. This will not end well. Home owners! Accepting this ’solution’ means: you acknowledge the full debt regardless of the value of the home waive all rights to fraudulent or predatory lending claims in the future turn your loan into a full recourse loan that could follow you for life even if you chose foreclosure down the road in most cases you remain underwater, full-leveraged, renter for the rest of your life. If widely accepted by home owners this will ruin the American consumer and make housing a dead asset class for decades. If you are in a serious negative equity position when signing these forms when most are, remember that you will: never be able to sell your home never be able to buy a new home never be able to rent your home due to owner occupant provisions be responsible for the full loan amount even if the value of your home keeps dropping for the next 10-years. The 38% debt-to-income ratio on top of all of your other debt means you will save no money and live hand to mouth to keep this underwater roof over your head. For those of you who do not care about being underwater in your home but wanted a lower payment rate, this is your green light to default. Your new terms are outlined below. In my opinion, many of those who qualify for this plan would be better served to walk away, which is precisely the reason they rolled this out. Please, please consult your financial...
    Click Here to Read the Full Article

    Source: mrmortgage.ml-implode.com
  • 1:08 PM » Bad housing policy proposals never die ...
    Published Wed, Dec 17 2008 1:08 PM by Calculated Risk Blog
    they just get recycled on the WSJ opinion page. R. Glenn Hubbard and Christopher Mayer are back again: . Here was my response to their . I found this sentence interesting: "While fundamental factors clearly played a role in driving down house prices that were at excessive levels two years ago ..." Oh yeah? Well why didn't they say that two or three years ago? Instead, Dr. Mayer in 2005 (with Charles Himmelberg and Todd Sinai) that there was " little evidence of housing bubbles in almost any of the markets we have studied ". I disagreed with Dr. Mayer in 2005, and I disagree with him today. And look at this logic: [A] 4.5% mortgage rate will raise housing demand significantly. A simple forecast can be obtained by applying the 2003-2004 homeownership rates to 2007 households. We use the 2003-2004 home ownership rates because those were the years of the lowest previous mortgage rates (the average mortgage rate was 5.8%). Oh my. Yes, rates were lower in the 2003-2004 period, but lending standards were already lax (especially in 2004). Are the authors suggesting a return to the "fog a mirror, get a loan" standards of a few years ago to raise homeownership rates? Bring back the liar loans, NINJAs, DAPs, pick-a-pay lunacy - and yes, maybe a few more people will buy homes. Of course now lenders would also have to ignore recent foreclosures too. And this brings me to a serious comment. One of the tragedies of the housing bubble was that some people were enticed to buy a home before they were really ready to be homeowners, and others to extend themselves too far. Many of these people are now soured on the wonders of homeownership, and they will not be buyers for an extended period of time. Only the passage of time will salve their wounds. There is nothing anyone can do to convince them to buy right now. I've seen this behavior before in California after previous (and much smaller) bubbles - and I believe we will see it again now. I wonder...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 11:50 AM » S.E.C.: Our Bad
    Published Wed, Dec 17 2008 11:50 AM by www.portfolio.com
    T he Securities and Exchange Commission has issued an extraordinary mea culpa, acknowledging that it missed many warning flags about Bernard Madoff, the Wall Street executive who has been accused of running a $50 billion Ponzi scheme. "The commission has learned that credible and specific allegations regarding Mr. Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of S.E.C. staff, but were never recommended to the commission for action," . "I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them." The statement by Cox is startling, coming from an official of an administration that has steadfastly refused to apologize or even explain any number of fiascoes: Iraq, Hurricane Katrina, and the economy. An honest reappraisal of failure is a refreshing change, even though it probably will not provide much solace to the investors who lost billions of dollars. Yet there is a strategic reason for Cox's admission. With virtually all of the S.E.C.'s credibility shot—after the near collapse of Bear Stearns and the financial turmoil this year—the S.E.C. chairman has only one card left to play to win any support: that of outraged victim himself. In trying to salvage the agency, to ensure that it has a major role and adequate powers in any regulatory overhaul to come, Cox has to eat humble pie in public. And the S.E.C. needs to clean house. Ultimately, the agency, as Megan Barnett recently, will have to start over and rebuild how it oversees markets and how it protects investors. The statement came hours after Madoff met with federal authorities to describe the details of his scheme, the New York Times . The S.E.C. also said that it would conduct an internal review that will include "all staff contact and relationships with the Madoff family and firm." A niece of Madoff...
    Click Here to Read the Full Article

    Source: www.portfolio.com
  • 11:50 AM » Survey Shows Fewer Inclined to Purchase a Foreclosed Home
    Published Wed, Dec 17 2008 11:50 AM by www.thetruthaboutmortgage.com
    The percentage of U.S. adults who would consider buying a foreclosed home has dropped below 50 percent, according to a survey conducted by Trulia and RealtyTrac. In a previous survey completed in April, 54 percent of adults said they would consider the purchase of a foreclosed home, but that number has since dropped to 47 percent. Not [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 11:18 AM » CalPERS Devastates Itself & Will Charge Taxpayer
    Published Wed, Dec 17 2008 11:18 AM by mrmortgage.ml-implode.com
    This story is just so tragic. This did not have to happen. This is not suppose to happen. I will leave the reading and comments up to you because I don’t think I can go much further without profanities. When reading this story, note that it makes it sound like the losses are known and it could get better. In a tumbling real estate market where everything is distressed, in reality they likely do not have their holdings marked correctly and will experience much higher losses. At least we know now why the CalSTRS and CalPERS were all over press including all of the financial television media blaming short sellers. -Best, Mr Mortgage By MICHAEL CORKERY, CRAIG KARMIN, RHONDA L. RUNDLE and JOANN S. LUBLIN STORY HIGHLIGHTS -one of its worst annual declines since its 1932 inception. - Calpers has lost almost a quarter of its assets since July 1 , the start of the current fiscal year. -has been without its top two executives for nearly half a year. Tax payer to bail out stupid, greedy moves : - Calpers is now warning California’s cities, towns and schools that they may have to cough up more money to cover the retirement and other benefits the fund provides for 1.6 million state workers. Some towns are already cutting municipal services, and at least one is partly blaming the Calpers fees. -Calpers in recent weeks said it expects to report paper losses of 103% on its housing investments in the fiscal year ended June 30. -Calpers invested not only its own money, but billions of dollars of borrowed money that must be repaid even if the investment fails. In some deals, as much as 80% of the money invested by Calpers was borrowed. -Calpers became much more aggressive than other pension funds in making nontraditional investments — real estate, foreign stocks, even forestland. -Unless Calpers’s returns bounce back by June , the fund says it expects that the rates it charges governments to participate in the pension could rise starting in 2010, leaving them with less money to spend on...
    Click Here to Read the Full Article

    Source: mrmortgage.ml-implode.com
  • 10:33 AM » Bair: Modifying Troubled Mortgages Necessary To End Crisis
    Published Wed, Dec 17 2008 10:33 AM by feeds.foxbusiness.com
    Bair: Modifying Troubled Mortgages Necessary To End Crisis
    Click Here to Read the Full Article

    Source: feeds.foxbusiness.com
  • 10:02 AM » Quantitative Easing American Style: Free Money
    Published Wed, Dec 17 2008 10:02 AM by feeds.feedburner.com
    The Treasury rally continued in spectacular fashion in conjunction with the . From the . The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Free Money The Fed is looking at the "benefits" of purchasing longer-term Treasury securities. The benefit is to banks who are front running the trade. Banks can now borrow from the Fed at the discount rate of .5% and invest somewhere out on the yield curve at a higher rate. And as long as the Fed is not going to contract credit, banks can hold to maturity and pocket "free money". The odds of Bernanke contracting credit any time soon are essentially zero. Bernanke hopes ZIRP will spur lending. But why lend in the middle of a recession with credit spreads blowing sky high and consumers walking away from mortgages, when you can borrow from the Fed at .5% and have guaranteed free money? There is infinite demand for free money. But note that only banks can get it. Citigroup is not going to get a margin call from the Fed no matter how many treasuries it buys. You or I would get one in a flash if the rates went against us. Treasury Yields click on chart for sharper image Chart courtesy of . Shorts stepping in front of banks rushing to get free money have been trampled once again. 10 year yields are now approaching a 1 handle. Remember the cries of "bond bubble" at 5%? Don't say...
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    Source: feeds.feedburner.com
  • 10:02 AM » Morgan Stanley posts loss on writedowns
    Published Wed, Dec 17 2008 10:02 AM by Reuters
    NEW YORK (Reuters) - Morgan Stanley reported a much wider-than-expected quarterly loss as the credit crisis generated more writedowns and slashed fees from investment banking and brokerage.
  • 7:41 AM » Goldman on Commercial Real Estate
    Published Wed, Dec 17 2008 7:41 AM by Seeking Alpha
    reports that global shopping center owner Developers Diversified Realty Corp. (DDR) will not be closing the sale of 13 malls to an institutional buyer this month. The buyer is reportedly private equity firm DRA, who walked away from a similar Centro deal in September when the Australian shopping mall giant wouldn’t lower the price. DDR has $930 million in debt to pay back by the end of 2009. General Growth Properties (GGP) is also furiously negotiating with its lenders to avoid bankruptcy. A $900 million bank loan collateralized by two luxury malls in Vegas was to be repaid last Friday. GGP owns 200 U.S. malls and if it were to collapse, it would be the largest real estate-related bankruptcy filing to date. The Journal relates that Citigroup (C) is the holdout, as it has another 2006 loan to GGP that it wants concessions on before it relents on its share of the $900 million one.
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    Source: Seeking Alpha
  • 7:41 AM » Calpers To Report Losses of 103% on its Residential Investments
    Published Wed, Dec 17 2008 7:41 AM by feeds.feedburner.com
    CalPERS, the California Public Employees' Retirement System announced a new milestone in pension plan incompetence today by admitting losses in . At the height of the property bubble, California's giant pension fund, Calpers, made a fateful decision: It aggressively poured money into real estate. As a result, today it's one of the biggest owners of undeveloped residential land in America. Partly because of these investments, California Public Employees' Retirement System is struggling to avoid one of its worst annual declines since its 1932 inception. Calpers has lost almost a quarter of its assets since July 1, the start of the current fiscal year. The problems come at a time of uncertainty for the nation's largest public pension fund, which has been without its top two executives for nearly half a year. Calpers is poised to appoint a new chief executive as early as this week, people familiar with the matter said. Calpers is now warning California's cities, towns and schools that they may have to cough up more money to cover the retirement and other benefits the fund provides for 1.6 million state workers. Some towns are already cutting municipal services, and at least one is partly blaming the Calpers fees. Calpers in recent weeks said it expects to report paper losses of 103% on its residential investments in the fiscal year ended June 30. That's because Calpers invested not only its own money, but billions of dollars of borrowed money that must be repaid even if the investment fails. In some deals, as much as 80% of the money invested by Calpers was borrowed. ... Rest by Subscription For some strange reason this news is not listed under the news category on the . Instead I see an article that says " CalPERS is Resilient in Market Downturns " The news in the financial markets can be alarming for our members, but it is important for you to know that the current credit crisis does not affect our ability to pay benefits. It is also...
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    Source: feeds.feedburner.com
  • 7:25 AM » SEC chief admits regulator failed to act on Madoff warnings
    Published Wed, Dec 17 2008 7:25 AM by Market Watch
    Christopher Cox, the chairman of the Securities and Exchange Commission, admitts late Tuesday that the regulator has failed to act on warnings about the activities of Bernard Madoff stretching back nearly a decade.
  • 7:25 AM » Banks say business lending has risen
    Published Wed, Dec 17 2008 7:25 AM by www.ft.com
    High street banks have denied tightening their lending to small businesses and say that any fall in the supply of credit is due to the withdrawal of foreign banks from the UK
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