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

    Source: Seeking Alpha
  • 5:41 AM » Is the High Home Ownership Rate Hurting Michigan?
    Published Sun, Sep 14 2008 5:41 AM by Seeking Alpha
    submits: From a : Homeownership impedes the economy’s readjustment by tying people down. From a social point of view, it’s beneficial that homeownership encourages commitment to a given town or city. But, from an economic point of view, it’s good for people to be able to leave places where there’s less work and move to places where there’s more. Homeowners are much less likely to move than renters, especially during a downturn, when they aren’t willing (or can’t afford) to sell at market prices. As a result, they often stay in towns even after the jobs leave. And reluctance to move not only keeps unemployment high in struggling areas but makes it hard for businesses elsewhere to attract the workers they need to grow.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 5:10 AM » How Long Until Housing Prices Stabilize?
    Published Sun, Sep 14 2008 5:10 AM by Seeking Alpha
    submits: Most economists agree that the key to ending the current downturn is for home prices to stop falling. When exactly that'll happen is the great unknown. Mark Zandi of Moody's Economy.com and Robert Shiller of Yale University and housing derivatives fame think it will take until at least 2010.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 3:20 AM » Last Gasp of a Doomed Currency
    Published Sun, Sep 14 2008 3:20 AM by Seeking Alpha
    submits: In the latest example of financial market madness, the recent government “bailout” of Freddie Mac (FRE) and Fannie Mae (FNM) has perversely resulted in a sharp rise in the value of the U.S. dollar. If the markets were functioning rationally, the transference of staggering new liabilities to the U.S. Treasury would have been immediately seen as catastrophic for the dollar. Instead the markets have ignored the obviously negative long-term implications and have remained fixated on the more immediate effects. However, rather than solving the problems, the government’s actions merely confirm my worst fears, and increase the chances for a hyper-inflationary outcome.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 2:49 AM » More on the Fannie/Freddie Heist
    Published Sun, Sep 14 2008 2:49 AM by Seeking Alpha
    submits: It's alarming to think the feds can swing this big baseball bat called 'our tax dollars' so freely. With a seemingly open checkbook, the Treasury effectively took the reins of the GSEs, guaranteeing home mortgages with US taxpayer money. It's not as if our country could afford this. The national debt just doubled overnight, what with the guarantee of nearly 6 trillion in home mortgages. Now, I've heard the fear-mongering -.from Paulson, Bernanke and others - that a much more serious problem would have occurred without some intervention. How do they know this? Have we been in this mess before? I believe free markets should be left alone to settle, and if there are failures along the way, so be it. This entire mess will not be fixed with the stroke of a pen.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • Sat, Sep 13 2008
  • 8:33 AM » Some Housing Schadenfreude
    Published Sat, Sep 13 2008 8:33 AM by Seeking Alpha
    submits: I was in the Calgary airport a few weeks ago on my way to the west coast when I wandered into a bookstore and picked up Garth Turner's book , a critique of the current Canadian housing market. A little ironic, I thought, given that the bookstore looked out onto the open rolling hills at the edge of one of Canada's hottest real estate markets, unencumbered by any natural barriers which might put a halt to the ever-expanding building. Turner is a Member of the Canadian Parliament and noted author and commentator on financial issues. This is a timely book, given that the real estate market may already be peaking in Canada.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 12:08 AM » Foreclosure Filings Up in August, But Pace Slowing
    Published Sat, Sep 13 2008 12:08 AM by www.thetruthaboutmortgage.com
    Foreclosure activity increased 12 percent last month from July and 27 percent from the same period a year ago, but the annual rate of increase has slowed significantly, according to RealtyTrac. Defaults notices, auction sales notices, and bank repossessions were reported on 303,879 properties during the month, the highest total in any month since the company [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • Fri, Sep 12 2008
  • 9:34 PM » Paulson: No Federal Money for Lehman
    Published Fri, Sep 12 2008 9:34 PM by feeds.feedburner.com
    Looking to cut off speculation that any sale of floundering Lehman Brothers Holdings Corp. (LEH: 3.65 -13.51%) might need to involve federal dollars, Treasury secretary Henry Paulson on Friday was reportedly adamant that any effort to sell the Wall Street investment bank not use government funds. HW reported on the latest round of troubles and potential [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 5:04 PM » Mortgage REIT Insider: Agencies Gain on GSE Bailout
    Published Fri, Sep 12 2008 5:04 PM by feeds.feedburner.com
    The bull market may be back for the agency mREITs. Credit Suisse bumped Annaly Capital (NLY: 15.95 +0.06%) and Anworth Mortgage (ANH: 7.47 +1.22%) to outperform, citing the removal of “GSE overhang,” and removal of supply/demand imbalances in the MBS market. Bose George over at Keefe Bruyette also chimed in earlier this week, reiterating his [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 4:13 PM » Foreclosures Actually Dropped (If You Don't Count Five States)
    Published Fri, Sep 12 2008 4:13 PM by Seeking Alpha
    submits: – RealtyTrac, the leading online marketplace for foreclosure properties, today released its August 2008 U.S. Foreclosure Market Report, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 303,879 U.S. properties during the month, a 12% increase from the previous month and a 27% increase from August 2007.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 3:29 PM » No Sale: A Bad Agent, or a Lousy Market?
    Published Fri, Sep 12 2008 3:29 PM by WSJ
    Real estate agents, as well as sellers, can get into a blue funk these days about the real estate market. That's understandable, but not forgivable. June Fletcher offers tips on how to tell whether your agent is suffering from market malaise.
  • 2:32 PM » American Banker: Chase WaMu Merger Talks Serious
    Published Fri, Sep 12 2008 2:32 PM by www.thetruthaboutmortgage.com
    JP Morgan Chase is in “advanced talks” to purchase struggling thrift Washington Mutual, according to a report published today in the American Banker. The publication said talks are “ongoing at the highest levels,” but stressed that no deal had been reached, and things could still fall through. Washington Mutual has seen its share price fall more than [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 1:22 PM » Take this weekend off, Hank
    Published Fri, Sep 12 2008 1:22 PM by The Big Picture
    Today's MSM article worth reviewing is a pair of opinion pieces from across the pond: The first is the delightfully titled : "I do not know what plans Hank Paulson, the US Treasury secretary, has for the weekend. Bird-watching, perhaps. Whatever they are, may I suggest that he sticks to them? Mr Paulson is a keen ornithologist but he is also an energetic intervener in financial markets and, when he has worked on weekends recently, the US taxpayer has paid dearly. In March, it was a line of funding to steer Bear Stearns, the investment bank, into the hands of JPMorgan Chase. On Sunday, it was the bail-out of Fannie Mae and Freddie Mac, the quasi-public mortgage lenders, which could cost the US government $200bn (€143bn, £114bn) or more. It is only Thursday and, already, others seem to be preparing to interrupt his days of rest again." The entire article is similarly snarky. The next bit of Brit opinion worthy of your attention is the Times' : "Their failure has been so obvious, that even the most capitalist administration ever, in the world's most capitalist country, had decided to wipe out the private owners of its biggest and most important financial companies and replace them with state-appointed bureaucrats. The reasons for these failures - related, ironically, to the dogmatic belief among regulators, politicians and financiers that “the market is always right” - have been much discussed. Much less widely considered have been the consequences of this justifiable disillusionment with market forces. Even more than the mind-boggling $5,500 billion size of the two US mortgage companies, it was the political significance of their nationalisation that marked it out as an historic turning point. This was, after all, the biggest expropriation of private property undertaken by a government outside the former communist world, yet there was absolutely no protest, nor even discussion, about the terms imposed by the US Treasury. Viewed from across the...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 1:21 PM » Paulson: Congress Has No Authority Here
    Published Fri, Sep 12 2008 1:21 PM by The Big Picture
    "As with any contract, the parties to the agreement may modify the covenants by mutual agreement only.'' - > Hank Paulson's God Complex just got bigger. The Director of Government Bailouts, and head of the Socialism Departmant at Treasury has informed Congress to back off his turf. "All your legislation belongs to us!" Now, last I checked, it was Congress that had the power of authorization disbursements, and that Treasury does not have the authority to spend 5.3 trillion dollars. Comrade Paulson does not seem to understand the way the different branches of government work in the United states, and is apparently unfamiliar with a little parchment called the Constitution. Perhaps we can get Ron Paul to explain how these things work to our friend from the People's Republic of Goldman. Bill King: "Hank is trying to euchre the market into believing that if Congress tries to change the law, the executive branch would then sue Congress for breach of contract. Good luck with that at the Supreme Court." Nice try, comrade, but no such luck. The issue here is authorization. I cannot write a contract to sell you home, car, etc to a third party, without your authorization. Otherwise, its fraud. The party with the legal title and ability to convey those goods or services on the one side, or indebtedness or money on the other side of the transaction requires authorization. The original Bazooka legislation did not give Treasury a blank check to do whatever they want. A decision, for example, to add Fannie and Freddie to the budget "wouldn't automatically translate into explicit government backing for the companies' combined $1.7 trillion in unsecured debt and $3.5 trillion of mortgage guarantees." To do so requires Congressional legislation to change the companies' legal status. That's where any of the changes -- like reducing the absurd pay packages for the current idiots running Fannie/Freddie -- would come in...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 1:20 PM » The End of Lehman
    Published Fri, Sep 12 2008 1:20 PM by www.portfolio.com
    After 158 years, the days of as an independent investment house are rapidly dwindling. Federal officials are pressing Lehman to sell itself before Asian markets open for trading on Sunday night. The Washington Post regulators "have been in touch with Lehman on an almost hourly basis in recent days." LEHMAN'S STRUGGLES: The C.E.O. played his last card. The hedge fund manager who raised questions . Wall Street's year of pain. The team that helped engineer the rescue of Bear Stearns—Treasury Secretary Hank Paulson, Timothy Geithner, the president of the Federal Reserve Bank of New York, Ben Bernanke, the Fed chairman, and Christopher Cox, the chairman of the Securities and Exchange Commission—have been discussing options for Lehman, reports say. Bank of America and Barclays of Britain are cited as the most likely buyers of Lehman. BofA could certainly afford Lehman, but it is a surprising suitor given that BofA is already engaged in the process of integrating another troubled financial firm, mortgage lender Countrywide Financial, and Ken Lewis, the bank's C.E.O., last talked about the investment-banking business in the same way that people politely make reference to the fact that sewage has flooded their basement. But Richard Bove, the influential bank analyst, said that an acquisition would finally give BofA a world-class investment-banking business and a powerful fixed-income trading desk. "I believe that Bank of America will win the auction for Lehman Brothers," Bove said in a note today. "There is a natural fit between the two companies." Lehman would also be a great fit for Barclays, which was foiled last year in its bid to acquire ABN Amro, but Bob Diamond, the president of the Barclays investment-banking unit, said this summer that the bank was more interested in acquiring a wealth manager. HSBC of Britain is also thought to be a possible bidder. The big Japanese banks have huge cash war chests, but having been...
    Click Here to Read the Full Article

    Source: www.portfolio.com
  • 1:19 PM » AP Source: Fidelity to settle auction-rate probe
    Published Fri, Sep 12 2008 1:19 PM by Washington Post
    NEW YORK -- Fidelity Investments was close to settling an investigation led by New York Attorney General Andrew Cuomo into the company's sales of auction-rate securities, a person close to the talks said Friday.
    Click Here to Read the Full Article

    Source: Washington Post
  • 1:18 PM » Moody's Cuts WaMu Senior Debt to Junk; Bank May Sell Branches, Deposits
    Published Fri, Sep 12 2008 1:18 PM by feeds.feedburner.com
    Washington Mutual, which has long looked wobbly, is moving beyond the point where it can survive in its current form (cynics might say in any form). Moody's lowered the bank's rating on its deteriorating financial condition and the difficulty of raising sufficient capital on viable terms. From : Washington Mutual Inc. was downgraded to below investment-grade status by Moody's Investors Service, after the largest U.S. savings and loan projected a $4.5 billion third-quarter increase in reserves for bad loans but said it has more than enough capital. Moody's cut the Seattle-based thrift's senior unsecured debt rating two notches to "Ba2," its second-highest "junk" grade, from "Baa3," with a "negative" outlook. It also lowered its rating for the banking unit to "Baa3" from "Baa2." "Washington Mutual's access to the debt and equity markets remains severely constrained," Craig Emrick, a Moody's senior credit officer, said in an interview.... Washington Mutual said it expected the third-quarter increase in loss reserves to decline from $5.9 billion in the second quarter, when its overall net loss was $3.33 billion. It also said it expects net charge-offs, or loans it does not expect to be paid back, to be roughly $2.7 billion in the third quarter, up from the second quarter's $2.17 billion.... Fitch Ratings on Thursday cut its credit rating to "BBB-minus," the same level as Standard & Poor's, and those agencies' lowest investment grades. The thrift expects to report full results on October 22. About $3.4 billion of the reserve increase is expected to come from residential mortgages. Credit card reserves would rise by $600 million from the second quarter as the thrift moves securitizations back onto its balance sheet, not because credit quality is deteriorating, a spokesman said... Investors remain worried about the thrift's capital even after Washington...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 1:18 PM » WaMu may have to sell branches to stay afloat
    Published Fri, Sep 12 2008 1:18 PM by feeds.feedburner.com
    In addition to Lehman Brothers, . Looking at massive losses, a credit downgrade, and a plunging stock price, the company may need to sell its main asset - the retail branches - to raise cash to survive. The company’s tanking stock price makes raising capital almost impossible, and a last-ditch effort to sell the branches might be it’s only option. Not that it was hard to see this coming, huge quarterly losses, a phony profit stream based off deferred interest from neg-am loans, and the smallest loan loss reserve of any major bank made them easy targets for a swift and stunning demise. I imagine it won’t be long before we see the lines out the door at WaMu’s across the country. Not so much of a “Woo hoo!” moment. From Bloomberg: , facing up to $19 billion in bad home loans and slammed by a 34 percent drop in its stock this week, may sell parts of a nationwide 2,300- branch network to raise capital. “The only real asset they have that’s worth anything to other banks is the deposit base, because of their branches,” said L. , chairman of the Federal Deposit Insurance Corp. from 1985 to 1991. Seattle-based WaMu can probably sell branches in New York and Chicago, said , president of Ely & Co. Inc., a bank consulting firm based in Alexandria, Virginia. , WaMu’s new chief executive officer, may have to shed branches that hold $143 billion in deposits. The biggest U.S. savings and loan is headed for its fourth straight quarterly loss. Suitors have walked away because of potential damage to their earnings and WaMu’s chief regulator, the Office of Thrift Supervision, has told it to boost risk management and compliance.
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 1:18 PM » Government Line: This Isn't as Bad as S&L Crisis
    Published Fri, Sep 12 2008 1:18 PM by Seeking Alpha
    submits: The party line inside the Bush Administration about the current financial crisis seems to be that it's not as bad as the S&L Crisis was. Check the following transcript of a this morning with his economic policy minions (speaker is White House spokesperson Tony Fratto): Q You have another major financial firm on the brink, and several other banks have failed in the last few weeks, almost one a week at this rate. Washington Mutual (WM) is in a lot of trouble. What does the White House think about this and the state of Wall Street at this period?
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 12:28 PM » Treasury: GSE Debt Guarantees Good Past 2009
    Published Fri, Sep 12 2008 12:28 PM by feeds.feedburner.com
    In a statement yesterday designed to clarify the government takeover of both Fannie Mae (FNM: 0.7299 -6.42%) and Freddie Mac (FRE: 0.4954 -16.03%), the government managed to provide tidebits of information many might have missed when the original bailout was announced. Chief among them? The fact that senior and subordinated debt holders, as well as [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:38 AM » WaMu Hit With Downgrades as it Tries to Reassure Investors
    Published Fri, Sep 12 2008 10:38 AM by feeds.feedburner.com
    In trouble? Preannounce earnings — it’s an age-old Wall Street strategy designed to shock investors out of a (usually downward) funk. Troubled thrift Washington Mutual (WM: 2.97 +4.95%) dialed up the play out of its financial playbook late Thursday, updating investors on third quarter performance in an attempt to slow investor concern over a quickly [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:36 AM » Foreclosure Filings Up in August, But Pace Slowing
    Published Fri, Sep 12 2008 10:36 AM by www.thetruthaboutmortgage.com
    Foreclosure activity increased 12 percent last month from July and 27 percent from the same period a year ago, but the annual rate of increase has slowed significantly, according to RealtyTrac. Defaults notices, auction sales notices, and bank repossessions were reported on 303,879 properties during the month, the highest total in any month since the company [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 9:48 AM » Home Equity Line Of Credit PUT Play
    Published Fri, Sep 12 2008 9:48 AM by feeds.feedburner.com
    Minyan "KT" Writes: Mish, One of my co-workers told me he received a letter from Wells Fargo (WFC) this week that his Home equity line of credit has been effectively reduced immediately. He was upset about this and the fact that reduction was immediate. My co-worker said he would have taken the maximum loan had it not been immediate. I was perplexed. Do people like to borrow money if their collateral doesn't cover the loan? KT Philosophical Question? Inquiring minds might be wondering if that's a philosophical question of some sort with no real answer. The answer is it is a very legitimate question with answers that vary by circumstance. Let's consider a few hypothetical possibilities. Case #1 : Consider someone who has an extremely large equity position in their house. Such a person probably would not be upset in the least. Case #2 : Consider someone who has a HELOC just because it came with the mortgage loan at no cost. I had one of those at one point. It did not cost anything, and it had no annual fee. Although I have a huge equity position, it was a free option so I took it. Why not? I never used it and never intended to. If I was offered $200 to close the HELOC as did National City (NCC) (See ) I would have taken the $200 gladly. Then again, I never would have entered into the arrangement in the first place if it had a $350 exit fee as did NCC. Case #3 : Now consider the plight of someone worried about the loss of a job or someone with possible large unknown expenses (medical tests coming up), or someone worried about college education expenses or whatever. Furthermore, suppose that person did not have a lot of equity in the house. For the sake of argument, assume that person had equity ranging from $10,000 to $50,000 depending on the appraiser. Let's make one more assumption: Assume that person has a $50,000 line of credit. That line of credit, while open, for someone who just might be predisposed to walk away from the house if times got...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 9:48 AM » Willem Dafoe Lists Rubber-Clad House
    Published Fri, Sep 12 2008 9:48 AM by WSJ
    Actor Willem Dafoe is seeking $850,000 for his rubber-clad New York house.
  • 8:59 AM » Deutsche Bank swoops on $13 billion Postbank
    Published Fri, Sep 12 2008 8:59 AM by Washington Post
    FRANKFURT/BONN (Reuters) - Deutsche Bank (DBKGn.DE) swooped on rival Deutsche Postbank (DPBGn.DE) with a deal worth up to $13 billion that could give it control of Germany's biggest retail lender within three years.
    Click Here to Read the Full Article

    Source: Washington Post
  • 8:58 AM » Lehman Won't Be the Last Major Bank Failure
    Published Fri, Sep 12 2008 8:58 AM by Seeking Alpha
    submits: Bankers and financial authorities are becoming busy bees these days. After last weekend's overtime that led to a potential doubling of US public debt for the "rescue" of Freddie Mac (FRE) and Fannie Mae (FNM), this weekend will be spent on a rescue plan for Wall Street's oldest firm, Lehman Brothers (LEH). Bloomberg headlined "" and the Wall Street Journal topped its webpage with "". The WSJ opens with a meaner tone:
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:57 AM » Let Lehman Fail
    Published Fri, Sep 12 2008 8:57 AM by Seeking Alpha
    James Conrad submits: Many people are convinced that it is ok for the government to bail out failing private companies like Bear Stearns, Fannie Mae (FNM), Freddie Mac (FRE), and, now, Lehman Brothers (LEH). Hank Paulson, our Treasury Secretary, argues that we should put these debts onto the backs of innocent taxpayers because if we don’t do it, we will have “systemic risk.” Let’s drill down to the reality. There is always systemic risk whenever a large company fails. There were also systemic risks to the energy markets when Enron, a huge energy trader, went bankrupt, but we got through that. That is what Chapter 11 bankruptcy exists to do. There is nothing that differentiates Lehman Brothers from any other big company except the fact that its debt, including a lot of counter party debt arising out of various derivatives, is held, mostly, by other Wall Street players.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:56 AM » Treasury's Guarantee of Fannie/Freddie Debt Leaves Foreigners Confused
    Published Fri, Sep 12 2008 8:56 AM by Seeking Alpha
    submits: The Treasury doesn’t actually guarantee any Fannie Mae (FNM) and Freddie Mac (FRE) debt and MBS. They simply agreed to provide up to $100B for each to prevent the GSEs’ net worth from falling below zero. This support, but non-guarantee of the debt and MBS, has the foreign financial institutions confused and concerned. Treasury Undersecretary for International Affairs David McCormick phoned Japanese banks and insurance companies to explain the program. Paulson thought he could create the illusion of a Treasury guarantee without actually committing the government. Foreigners are having trouble accepting that the debt of strong GSEs can stand on its own. The foreigners appear to be also questioning Paulson on what happens after he leaves.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:55 AM » August foreclosures hit another record high
    Published Fri, Sep 12 2008 8:55 AM by CNN
    Foreclosures hit another record high in August. There were 304,000 homes in some stage of default last month, and 91,000 families lost their homes.
  • 8:54 AM » WaMu Racing Toward Nowhere
    Published Fri, Sep 12 2008 8:54 AM by Seeking Alpha
    Washington Mutual (NYSE: WM) stock is being dropped like a hot potato all over Wall Street after the company dropped its CEO, Kerry Killinger, on Monday. The stock fell Wednesday for a third straight day. Having lost more than 40% of its value this week alone, Washington Mutual shares are now sitting at their 52 week low of just $2.79 per share. Compare this to the 52 week high of $39.25 to see just how far the company has fallen. Investors are looking at the huge amount of mortgage debt risk being carried by Washington Mutual, and deciding to get out while it's still possible to get out. With each decline in share price, it becomes more and more difficult for WaMu to find additional capital should the company need to post additional loss reserves.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:54 AM » FDIC Insurance Fund - It Doesn't Actually Exist
    Published Fri, Sep 12 2008 8:54 AM by Seeking Alpha
    submits: When FDIC head Shelia Bair says her agency might have to bolster the FDIC's insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there's an actual FDIC fund in need of bolstering. We were wrong. As a former FDIC chairman, Bill Isaac, the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government's general coffers for "spending . . . on missiles, school lunches, water projects, and the like."
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:54 AM » Senators Schumer and Menendez Unqualified for Office
    Published Fri, Sep 12 2008 8:54 AM by feeds.feedburner.com
    Inevitably, just when you think that it is impossible for anyone come up with anything more preposterous that what has already been proposed, someone proves you wrong. Disgustedly I am reading . U.S. Senate Banking Committee members urged Fannie Mae and Freddie Mac, the mortgage companies placed under federal control this week, to freeze foreclosures on loans in their portfolios for at least 90 days. "This action would provide immediate relief to many homeowners" and let the companies "turn these non-performing loans into performing assets to minimize losses," Senators Charles Schumer, Robert Menendez and other panel Democrats said today in a letter to the companies and the Federal Housing Finance Agency, which is overseeing them under the government conservatorship. I may be proven wrong but the economic asininity of those statements is unlikely to be topped, ever. If one could turn non-performing loans into performing assets by halting payments, why not just stop collecting mortgage payments everyone in the county? Every loan would be current and think of all the money consumers would have to buy things. Of course taxpayers would be immediately on the hook for a mere $5 trillion, but who cares about small details like that? Senators Charles Schumer, Robert Menendez, and any other fool who signed that letter is unqualified to be in Congress. It is as simple as that. I urge everyone to vote against Senators Charles Schumer and Robert Menendez the next time they are up for reelection. They are an economic disgrace to the country and unqualified for public office. 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
  • 7:36 AM » Fannie and Freddie: Mission Drift on Parade
    Published Fri, Sep 12 2008 7:36 AM by Seeking Alpha
    submits: Well, , now have market capitalizations of $834MM and $381MM respectively; around $1.2 billion in total. Now, let’s keep that in mind as we read :
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 5:45 AM » The Government's Appropriation of Leverage
    Published Fri, Sep 12 2008 5:45 AM by Seeking Alpha
    submits: Since the beginning of 2008, Chairman Henry Paulson and the United States Treasury have taken on enormous amounts of debt in order to contain the housing crisis and prevent a massive failure in the financial sector. The U.S. taxpayers first saw the effects of a "too big to fail" Treasury mentality when the government-orchestrated bailout of Bear Stearns was announced in March of 2008. More recently, the Treasury announced the takeover of the two Government Sponsored Entities (GSEs), Freddie Mac (FRE) and Fannie Mae (FNM). On September 7, Treasury Secretary Paulson seized control of the two immense finance companies in an attempt to support the U.S. housing market. The Treasury will begin by immediately taking a $1 billion equity stake in each company, and if needed can inject an additional $100 billion in preferred stock in each company. Under the announced program the Treasury will begin to buy back mortgage-backed securities later in September, and will have the authority to buy back MBS until December 31, 2009.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 3:56 AM » Nationalization of the U.S. Mortgage Problem
    Published Fri, Sep 12 2008 3:56 AM by Seeking Alpha
    submits: This is a topic I first . The United States has a mortgage problem in that house prices have fallen so much and the financial sector is so leveraged that the US faces systemic banking risk from a vicious circle in the mortgage sector. (I normally might have said ',' but my good reader dearieme pointed out I was misusing the term) This circle leads from house price declines to foreclosures to bank losses to bank de-leveraging and credit tightening leading to more house price declines and on it goes.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 1:36 AM » What's Happening In the Related - To - Home - Building Space
    Published Fri, Sep 12 2008 1:36 AM by Seeking Alpha
    submits: We've been talking about the strength in homebuilders of late ... but I wanted to point out the divergence between recent data for another group of stocks and their charts. The data points say "no recovery" and the executives in many cases say "no recovery," but that doesn't stop hot money from piling in, assuming a "recovery in 6 months." Maybe it's true, maybe it's not. If March 2009 marks the bottom in housing I'll come on and say "I was wrong - what an idiot I was, the American consumer is far better than I imagined." But it really doesn't matter if March 2009 will be a bottom because people are making money assuming so today - perception is reality. Remember, there is so much institutional money now, to make any real money, you need to out-anticipate the out-anticipators and buy ahead of everyone else, it appears. Well ahead. #1 Quanex Building Products (NX) -
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • Thu, Sep 11 2008
  • 9:37 PM » A Quantum Leap Toward Socialism
    Published Thu, Sep 11 2008 9:37 PM by feeds.feedburner.com
    by Michael Pento. "Unfortunately, we Americans now realize that the decision by Ben Bernanke to slash the Fed Funds rate to 2% (a three hundred twenty five basis point reduction) was just the opening act in this Republican administration’s socialism play."
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 9:37 PM » U.S. Treasury reassures Japanese investors about Fannie, Freddie
    Published Thu, Sep 11 2008 9:37 PM by Market Watch
    Seeking to head off any unloading of Fannie Mae and Freddie Mac bonds by Japanese investors, the U.S. Treasury Department is taking the unusual step of directly contacting Japanese financial institutions about the plan to rescue the mortgage giants, according to a published report.
  • 8:50 PM » Lehman’s End, Bear Stearns Style?
    Published Thu, Sep 11 2008 8:50 PM by feeds.feedburner.com
    New reports Thursday night suggested that Lehman Brothers Holdings Inc. (LEH: 4.22 -41.79%) was actively shopping itself to potential buyers, aided by both the U.S. Treasury and Federal Reserve. Which means the U.S. government may be orchestrating its second major bailout in as many weeks, after announcing a takeover of twin mortgage finance giants Fannie [...]
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 7:36 PM » Merrill Lynch shares catch Lehman bug
    Published Thu, Sep 11 2008 7:36 PM by Reuters
    NEW YORK (Reuters) - Merrill Lynch & Co Inc's shares fell nearly 17 percent on Thursday as worries over Lehman Brothers Holdings Inc's future raised questions on which investment bank may be next to face questions about its survival.
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More From MND

Mortgage Rates:
  • 30 Yr FRM 3.95%
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  • 15 Yr FRM 3.25%
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  • Jumbo 30 Year Fixed 4.15%
MBS Prices:
  • 30YR FNMA 4.5 107-05 (0-01)
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  • 30YR FNMA 5.0 108-28 (-0-01)
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  • 30YR FNMA 5.5 110-22 (-0-02)
Recent Housing Data:
  • Mortgage Apps 3.27%
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  • Refinance Index 5.05%
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  • Purchase Index 1.43%