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  • Wed, Nov 19 2008
  • 9:47 AM » Citi to write down $3 billion in fourth quarter: Fox-Pitt
    Published Wed, Nov 19 2008 9:47 AM by Reuters
    (Reuters) - Fox-Pitt Kelton said it expects Citigroup Inc to take net write-downs of $3 billion during the fourth quarter, and widened its loss expectation on the company for the period to reflect higher credit costs and write-downs.
  • 9:47 AM » Fannie Mae slapped with NYSE notification
    Published Wed, Nov 19 2008 9:47 AM by feeds.bizjournals.com
    Fannie Mae could lose its listing on the New York Stock Exchange if it doesn’t boost its per-share price above $1. (FNM)
    Click Here to Read the Full Article

    Source: feeds.bizjournals.com
  • 9:47 AM » Citigroup liquidates fund that fell 53% in a month
    Published Wed, Nov 19 2008 9:47 AM by www.ft.com
    Citigroup is liquidating Corporate Special Opportunities after it lost 53 per cent of its value last month, marking the ninth time in recent months that the bank has had to close or rescue one of its hedge funds
  • Tue, Nov 18 2008
  • 5:20 PM » HSBC to Cease Wholesale, Correspondent Mortgage Lending
    Published Tue, Nov 18 2008 5:20 PM by www.thetruthaboutmortgage.com
    A took awhile, but it looks like HSBC has finally decided to throw in the towel, leaving very few mortgage lenders in the wholesale space. The company announced today that it would cease both wholesale and correspondent mortgage lending effective immediately, as a result of, you guessed it, “unprecedented market conditions.” HSBC will continue to process loans [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 5:20 PM » Obama SEC point man seeks more derivatives disclsoure
    Published Tue, Nov 18 2008 5:20 PM by Market Watch
    WASHINGTON (MarketWatch) - A top adviser to President-elect Barack Obama on securities regulations called Tuesday for the Securities and Exchange Commission to require more complete disclosure of "synthetic securities" and other derivatives.
  • 5:20 PM » GE to restructure lending division
    Published Tue, Nov 18 2008 5:20 PM by CNN
    Read full story for latest details.
  • 4:18 PM » Fed: Delinquency Rates Rise in Q3
    Published Tue, Nov 18 2008 4:18 PM by Calculated Risk Blog
    The Federal Reserve that delinquency rates rose in Q3 in almost all categories. The one exception was consumer credit cards (declined slightly), although charge-offs for credit cards rose in Q3. Click on graph for larger image in new window. This graph shows the delinquency rates at the commercial banks for residential real estate and commercial real estate. Commercial real estate delinquencies are rising rapidly, and are at the highest rate since Q3 '94 (as delinquency rates declined following the S&L crisis). Residential real estate delinquencies are at the highest level since the Fed started tracking the data (since Q1 '91). Although there is credit deterioration everywhere, the rise in CRE delinquencies is especially significant. The Fed defines commercial as "construction and land development loans, loans secured by multifamily residences, and loans secured by nonfarm, nonresidential real estate", and many of the problems are probably in the C&D loans.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 4:17 PM » GE says finance arm changes to save $2 billion in '09
    Published Tue, Nov 18 2008 4:17 PM by Reuters
    BOSTON (Reuters) - General Electric Co said on Tuesday it was reorganizing its finance arm, GE Capital, with an eye toward saving $2 billion next year.
  • 4:17 PM » Hank Gets No Thanks
    Published Tue, Nov 18 2008 4:17 PM by www.portfolio.com
    WASHINGTON—Federal lawmakers, frustrated and unhappy, pulled few punches in pummeling Treasury secretary Hank Paulson at a hearing today for what they believe is a failure to use the financial rescue money to benefit homeowners who are in mortgage trouble. Paulson retreated to lengthy, defensive explanations—and many platitudes—to defend the switch this week in the plan from buying up troubled assets to buying into banks to shore up capital. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, demanded to know why billions were used to prevent the collapse of giant insurer American International Group, but little has been done to help homeowners. He challenged Paulson's assertion that his options were limited by law, and zeroed in on the discrepancy between the billions spent to bail out A.I.G. versus the equivocation on spending for homeowners. Some $26 billion could be used to alleviate the mortgage crisis—"40 percent of what you invested in A.I.G.," Frank said. "You can find that money, why can't you find $24 billion for mortgage foreclosure?" "This is in the program," Frank said, referring to the measure Congress passed. "The argument that it isn't does not hold water." Afterward, Frank told reporters, "It's a mistake not to carve out the $26 billion for mortgages." During the hearing, no time was wasted in focusing on Congress's main concern this week—whether to bail out the auto industry. Paul Kanjorski, Democrat of Pennsylvania, complained about the administration's reluctance to fend off "potential collapse of our auto industry." "Do you consider the loss of the auto industry a systemic risk or don't you?" he pressed Paulson. " If we are going to build confidence, it seems we have to be little more forthcoming." Paulson conceded, "I don't think it would not be a good thing to have one of the auto companies...
    Click Here to Read the Full Article

    Source: www.portfolio.com
  • 4:17 PM » Meltdown 101: What's deflation, and why is it bad?
    Published Tue, Nov 18 2008 4:17 PM by Washington Post
    NEW YORK -- Deflation might sound like a good thing. Yet it can be even rougher on the economy than the more familiar phenomenon of inflation, because it's harder to get rid of.
    Click Here to Read the Full Article

    Source: Washington Post
  • 3:17 PM » Modified IndyMac mortgages delinquent again, processor says
    Published Tue, Nov 18 2008 3:17 PM by Market Watch
    Sheila Bair, chairman of the Federal Deposit Insurance Corp., proposed modifying 1.5 million mortgages to prevent foreclosure, but the problems often return.
  • 3:16 PM » Citigroup Report: Hedge Fund Assets Could Fall to $1 Trillion
    Published Tue, Nov 18 2008 3:16 PM by Seeking Alpha
    submits: Just about every day we get a new prediction / forecast of where the hedge fund industry is headed. Now Citigroup (C) is reporting that total hedge fund assets may fall to around $1 trillion by the middle of next year (see Bloomberg ). This figure would represent a decline of nearly 50 percent from peak levels. Of possibly even more interest in the report is how hedge funds are believed to have raised cash equivalent to around 40 percent of assets in anticipation of both known and unknown (but expected) redemption requests.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 3:15 PM » The 11 Blunders of Hank Paulson
    Published Tue, Nov 18 2008 3:15 PM by The Big Picture
    James Pethokoukis is the for U.S. News & World Report, where he writes the monthly Capital Commerce magazine column. Pethokoukis is also the assistant managing editor of the magazine’s Money & Business section. A 1989 graduate of Northwestern University where he double majored in Soviet politics and American history and a 1991 graduate of the Medill School of Journalism, Pethokoukis is a 2002 Jeopardy! champion. ~~~ Strategist Ed Yardeni says that “everything that [Hank] Paulson has done or endorsed has worsened the credit crisis and sent stocks reeling.” Like what, for instance? Like these, and I quote: (1) Paulson’s Super-SIV proposal was a distraction that went nowhere. It was the first clue that he likes half-backed schemes that are hard to implement. (2) The vaunted “Teaser Freezer” hasn’t worked. Neither has the Hope Now Alliance. Indeed, many borrowers who’ve been foreclosed never even heard about these new outreach programs to keep them in their homes. (3) Letting investment banks borrow from the Fed’s discount window just after Bear Stearns failed suggests that letting the firm go was done as a risky gesture to the principle of avoiding moral hazard, which has subsequently been thrown out the window. (4) The government’s unwillingness to provide transparent rescue plans started with the mysterious $29bn Bear Stearns portfolio acquired by the Fed. (5) After multiple assurances that Fannie and Freddie were solvent, they were seized and put into conservatorship. Stiffing owners of their preferreds opened an estimated $25bn black hole in the capital of regional banks that owned these securities. It also seized up the one market that financial firms had for raising capital. (6) Refusing to support the suspension of mark-to-market accounting was Paulson’s second biggest mistake. (7) His biggest mistake was letting Lehman go under. Fuld should have been forced out, and Lehman should have been rescued. A guy who ran GS and all the MS advisors around him should...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 3:14 PM » FHA Loan Production More Than Doubles in Fiscal Year 2008
    Published Tue, Nov 18 2008 3:14 PM by www.thetruthaboutmortgage.com
    FHA lending is popular. During fiscal year 2008, the FHA endorsed over 1.2 million single-family mortgages, up from 532,000 a year earlier, HUD said in its annual report. That figure includes 111,661 Home Equity Conversion Mortgages (reverse mortgages), with the grand total representing $177 billion in new mortgage endorsements, up from $60 billion in 2007. HUD credited the [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 3:14 PM » Seven key points on deflation
    Published Tue, Nov 18 2008 3:14 PM by themessthatgreenspanmade.blogspot.com
    A few thoughts on the subject of deflation to help you make sense of the what has unnecessarily become one of the hottest topics of discussion in recent months, excerpted from the most recent Weekend Update at the companion investment website . 1. The entire discussion of deflation is overrated and attracts far more attention than it deserves. One can discuss the advances and declines of economies and asset classes over the last two decades without once mentioning the words inflation or deflation and do just fine. More than ever before, it seems that deflation is just a word that central bankers and economists whip out as if it were some sort of a trump card that allows them to take extraordinary measures to counteract the bursting of asset bubbles. That has certainly been the case over the last 18 years in Japan and in the U.S. where extraordinary measures have been taken amid the fear of deflation, either real or imagined. Importantly, these measures were much more effective in the U.S. earlier in this decade when recovering from the bursting of a stock market bubble than in Japan during the 1990s when recovering from the bursting of bubbles in stocks and real estate. Of course, the recent recovery in the U.S. just led to an even bigger asset bubble which, in turn, is now producing the expected calls for deflation now that it has burst. In economies around the world today, it seems obvious that falling consumer prices are a natural consequence of the bursting of asset bubbles and the dramatic pullback in demand that results from slower economic growth and, in the period ahead, plunging commodity prices will play an important role as well. Falling consumer prices should not be seen as anything particularly significant, in and of themselves, as they are not the driver of present or future problems. Of course, falling asset prices are simply the result of the asset bubbles bursting. More than anything else, falling prices in general are just a symptom of the disease that...
    Click Here to Read the Full Article

    Source: themessthatgreenspanmade.blogspot.com
  • 3:14 PM » Yet another call for a new gold standard
    Published Tue, Nov 18 2008 3:14 PM by themessthatgreenspanmade.blogspot.com
    Not to be overshadowed by the recent blitz of calls for a new gold standard, Walker Todd, an economic consultant at the Federal Reserve Banks of New York and Cleveland in the Christian Science Monitor that, without one, we might be headed straight toward hyperinflation. If anyone can think of a suitable metaphor that would help to describe the recent rush of economists to once again embrace the yellow metal, please feel free to scribble it out in the comments section below. At the moment, all I can think of is a clean and sober version of professional golfer John Daly who, for years, claimed he could handle his drinking, but then keeps winding up with a new 3 AM mug shot after a drunken bar brawl, passing out, or a combination of the two. Forget Bretton Woods II – we need a gold standard Too much credit and easy money. Those were the biggest culprits behind this financial crisis. Yet, apallingly, the government's rescue attempt is built on more credit and even easier money. That's like giving a procrastinator a deadline extension. By choosing this course, Washington has steered us on to the "road to Weimar" – the road to runaway inflation. It didn't have to come to this. And it still doesn't. But the proper remedy will take tremendous political courage: Bring back the gold standard. That, more than any byzantine regulations that emerge from the Bretton Woods II conference this weekend, would provide stability and safety for nations and individuals around the world. ... Anna J. Schwartz, who co-wrote with Milton Friedman the highly influential book, "A Monetary History of the United States: 1867-1960," suggested at a 2004 gold conference at the American Institute for Economic Research that only a crisis of sufficient depth and magnitude would provoke the public to demand the stability of gold or a gold-linked currency. Such a crisis, which appeared remote at the time, may soon be upon us. ... Some critics worry that a return to gold...
    Click Here to Read the Full Article

    Source: themessthatgreenspanmade.blogspot.com
  • 2:59 PM » Full text: Ben Bernanke's testimony before the House Committee on Financial Services
    Published Tue, Nov 18 2008 2:59 PM by feeds.feedburner.com
    Testimony Chairman Ben S. Bernanke Troubled Asset Relief Program and the Federal Reserve's liquidity facilitiesBefore the Committee on Financial Services, U.S. House of RepresentativesNovember 18, 2008Chairman Frank, Ranking Member Bachus, and other members of the Committee, I appreciate having this...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 2:59 PM » NAHB Market Index Hits Record Low
    Published Tue, Nov 18 2008 2:59 PM by Calculated Risk Blog
    From MarketWatch: U.S. home builders have never been as anguished about their industry as they were in early November, with their monthly market index gauge plunging five points to a record low 9, the National Association of Home Builders reported Tuesday. "We are in a crisis," said Sandy Dunn, chairman of the NAHB. This graph shows the from the National Association of Home Builders (NAHB). The builder confidence index was at a record low in November. Usually housing bottoms look like a "V"; this one will probably look more like an "L". (this refers to activity like starts and sales, but will probably also be apparent in the confidence survey). Press release from the NAHB: Builder confidence in the market for newly built single-family homes plunged in November as worsening problems in the financial markets, job market weakness and overwhelming uncertainty about the economy continued to negatively impact consumer behavior, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI sank five points to 9, the lowest level recorded since the series was created in January of 1985. “Today’s report shows that we are in a crisis situation. If there’s any hope of turning this economy around, Congress and the Administration need to focus on stabilizing housing,” said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W.Va.. “Tremendous economic uncertainties have driven consumers from the housing market, and it’s going to take some major incentives to bring them back. Beyond the work that is being done to help reduce foreclosures, Congress must immediately incorporate such incentives for qualified buyers in a new economic recovery package.” “The housing downturn has already cost America three million jobs in construction and related industries, and this downward momentum cannot be stemmed without substantive government intervention,” agreed NAHB’s new Chief Economist, David Crowe...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 2:27 PM » SoCal Home Sales Highest Level this Year
    Published Tue, Nov 18 2008 2:27 PM by Calculated Risk Blog
    From DataQuick: Southern California home sales rose unseasonably last month from September as buyers shook off gloomy financial news and took advantage of often-steep discounts. The median sale price fell to $300,000 - a 67-month low - as foreclosures once again accounted for half of all resales ... Fueled by lower prices, Southland sales have risen on a year-over-year basis for four consecutive months, breaking a 33-month streak of annual declines. ... "You could easily imagine a meaningful decline in sales last month, given the seasonal norm and the dire financial news that potential buyers had to ponder in September. But we have yet to see any big, sudden drop in the number of transactions closing escrow. It tells us there were a lot of very serious buyers in the market during late summer and early fall - buyers who consider housing a relatively good buy or investment," said John Walsh, DataQuick president. Last month's record annual sales increase reflects two things: Very weak sales a year ago on the heels of the August credit crunch and earlier subprime meltdown, and this year's big sales gains in inland markets where prices have fallen 30 percent or more. Depreciation in such areas has triggered record foreclosures, which tend to sell at a discount, attracting bargain hunters. Fifty-one percent of existing homes that closed escrow in October were foreclosed on at some point in the prior 12 months. That's up from a revised 50.0 percent in September and 16.0 percent in October 2007.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 12:24 PM » Reverse Mortgage as a Loss Mitigation Option
    Published Tue, Nov 18 2008 12:24 PM by www.thetruthaboutmortgage.com
    I mentioned back in mid-September that 684,000 homeowners aged 50 or older were either late on their mortgages or in some state of foreclosure. And while the foreclosure rate for older American homeowners isn’t as high as that of the rest of the population, it’s certainly becoming a serious issue. Enter First American Corp., with their new [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 12:23 PM » Jim Rogers has gold coins in his pocket?
    Published Tue, Nov 18 2008 12:23 PM by themessthatgreenspanmade.blogspot.com
    Apparently so - skip to the 3:30 mark. More importantly, what's up with that mustache on the guy from the Financial Times?
    Click Here to Read the Full Article

    Source: themessthatgreenspanmade.blogspot.com
  • 12:23 PM » How Should We Help Underwater Home Owers ?
    Published Tue, Nov 18 2008 12:23 PM by The Big Picture
    Martin Feldstein has another plan to fix housing. It is a variation of the I proposed earlier in the year, in that it pulls a portion of the original mortgage aside from the corpus of the existing loan. Feldstein’s solution? Replace part of the non-recourse mortgages with a new, immediately due, recourse loan: “More than 12 million homeowners now have mortgage debt that exceeds the value of their homes. These negative-equity homeowners have an incentive to default because mortgages are generally “no recourse” loans. That means creditors can take the property if the individual defaults, but cannot take other assets or income to make up the difference between the unpaid loan balance and the lower value of the house. As a result, mortgage default rates are now rising rapidly and are expected to go much higher. The no-recourse mortgage is virtually unique to the United States. That’s why falling house prices in Europe do not trigger defaults. The creditors’ ability to go beyond the house to other assets or even future salary is a deterrent.” This is a partial solution, one that fails to address several key issues — mostly price. But as currently described, it is doomed to failure. First, because most home owners — even the ones that signed on for really bad mortgages — are simply not that stupid. I cannot imagine many attorneys saying: “ Sure, replace your non-recourse mortgage that you can easily walk away from with this one that will follow you for years and years, garnish your paycheck, and be non-dischargeable in bankruptcy! Sign here, here and here , and initial here and here . Congratulations! You are a moron!” Aside from that one fatal flaw, there are several other issues with Feldstein’s proposal. The big one is it preventing houses from dropping to their natural price level. It fails to write down enough of the overpriced housing market. Current prices, as measured by price to income ratios, or rent/buy costs, are still significantly elevated relative to their historic...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 12:23 PM » FDIC chief presses for gov't action on mortgages
    Published Tue, Nov 18 2008 12:23 PM by Washington Post
    WASHINGTON -- The head of the FDIC on Tuesday pressed again for more aggressive government action to help millions of home borrowers avert foreclosure, saying federal money is needed to ensure economic recovery.
    Click Here to Read the Full Article

    Source: Washington Post
  • 8:33 AM » Home Depot Profit Falls, but Beats Street View
    Published Tue, Nov 18 2008 8:33 AM by CNBC
    Home Depot reported a 31 percent drop in quarterly profit Tuesday as consumers put off big-ticket projects amid a deepening economic crisis. Topics: | | | | | | Sectors: Companies: MEDIA:
  • 8:32 AM » Are you the next Lehman Brothers?
    Published Tue, Nov 18 2008 8:32 AM by CNN
    On the surface, this financial crisis seems pretty complicated. Wall Street firms made convoluted bets on exotic mortgage securities, and those bets failed for a complex set of reasons. But in fact, investment banks went under for reasons that were quite basic.
  • 8:31 AM » Mortgage Broker gets 3.5 years in fraud
    Published Tue, Nov 18 2008 8:31 AM by www.bizjournals.com
    Phoenix mortgage broker Rick Thomas McCullough was sentenced to three-and-a-half years in prison after pleading guilty to securities fraud related to a scam bilking four seniors out of more than $400,000.
    Click Here to Read the Full Article

    Source: www.bizjournals.com
  • 8:30 AM » Federal Trust, Hartford to merge
    Published Tue, Nov 18 2008 8:30 AM by www.bizjournals.com
    Federal Trust Corp. announced Nov. 14 that it is merging with The Hartford Financial Services Group Inc. (HIG)
    Click Here to Read the Full Article

    Source: www.bizjournals.com
  • 8:29 AM » Toxic Bear Stearns Mortgage Paper Performing Well
    Published Tue, Nov 18 2008 8:29 AM by Seeking Alpha
    submits: Don’t look now, but that $30 billion in toxic Bear Stearns mortgage paper the government guaranteed back in March is cash-flowing nicely, thanks very much. Speaking at the Reuters Global Finance Summit, BlackRock President Robert Kapito said that "the cash flows are coming in very close to what we had anticipated from the very beginning."
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:28 AM » O.C. Register: Feds Didn't Coerce Banks into Subprime Lending
    Published Tue, Nov 18 2008 8:28 AM by Seeking Alpha
    I know I’d like to believe that the federal government was at the heart of the subprime mess, through its social mandates, such as the Community Reinvestment Act, which require banks lend to minorities and low-income households. See! It wasn’t the lenders’ fault at all! It was the government that made ‘em do it! Highly reassuring--except for :
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:27 AM » Moody’s Ominous Alt-A Warning - Mortgage Implosion Round 2
    Published Tue, Nov 18 2008 8:27 AM by mrmortgage.ml-implode.com
    Moody’s recently put out a very chilling report that brings home just how early it is in the overall mortgage and housing implosion. Many of us have written volumes on the impending Alt-A Implosion. But, I still don’t think people understand that the Alt-A universe, larger is size than SubPrime, is presently imploding in front of our very eyes. Unlike Subprime loans that were more localized to specific regions of the bubble states or lower priced areas, Alt-A loans cut across all socio-economic boundaries and can be found littering some of the most affluent areas in the nation. For those of you who think that higher priced regions are ‘isolated’ from price declines just because they have not been beaten as badly as Subprime epicenters yet , this should be a wake up call. The ‘Alt-A Implosion’ could dwarf the Subprime Implosion when all is said and done. This is because values in higher-priced, heavy Alt-A areas should actually end up being hit harder, as Alt-A loan allowed much more leveraged and much less documentation than Subprime relying mostly on a credit score and an appraisal for loan approval. Within the Alt-A universe is where all of your stated income, no ratio, no doc, 100% piggy-backs can be found. The most notorious Alt-A loan is the Pay Option ARM. The way all of these loans were structured is producing a very linear mortgage crisis - from Subprime to Alt-A to Jumbo-Prime then Prime. Jumbo Prime is arguably a little less risky than Alt-A but includes much of the same types of loans such as the 5/1 interest Only. Much of this was also stated income, allowed high combined loan-to-values and carried low introductory teaser rates. With values down as much as they are in the Jumbo regions, I would suspect that Jumbo Prime will end up acting much more like Alt-A in the future. The coming Alt-A and Jumbo Prime Implosions puts at risk well over $1 trillion in residential mortgage loans, much of it sitting on the balance sheets of some of the nations largest banks...
    Click Here to Read the Full Article

    Source: mrmortgage.ml-implode.com
  • 8:27 AM » Should The Government Stop Dumping Money Into A Giant Hole?
    Published Tue, Nov 18 2008 8:27 AM by Calculated Risk Blog
    For those that miss all the yelling from the talking heads during the political season, the Onion panel debates if the government should stop dumping money into a hole (1 minuted 56 seconds). (hat tip jb)
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:27 AM » Bank Lending Actually Increased... Sort Of
    Published Tue, Nov 18 2008 8:27 AM by Seeking Alpha
    submits: Here is an interesting article from the WSJ that helps to convey the complexities of the credit crisis: ( From the WSJ ): "All around Washington, policy makers are scrambling to figure out how to get banks lending again. Lawmakers have criticized banks for not using new federal money to make loans and have threatened to place conditions on additional money. Regulators last week sent out a directive, encouraging banks not to hold back on lending.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • Mon, Nov 17 2008
  • 10:13 PM » Treasury to Unwind Supplementary Financing Program
    Published Mon, Nov 17 2008 10:13 PM by Calculated Risk Blog
    One of the credit indicators I was tracking was the activity in the Treasury's (SFP). This was the Treasury program to raise cash for the Fed's liquidity initiatives. Once the Fed started paying interest on reserves, the supplemental financing program wasn't needed any more to sterilize the expansion of the Fed's balance sheet. The Treasury today that the program will be unwound. The balance in the Treasury's Supplementary Financing Account will decrease in the coming weeks as outstanding supplementary financing program bills mature. This action is being taken to preserve flexibility in the conduct of debt management policy in meeting the government's financing needs. More from MarketWatch: The Treasury said the balance in its so-called supplementary financing account will decrease in coming weeks as bills in the program mature. ... The special financing program was created two months ago. The Treasury said it would issue bills separate from its regular borrowing program to help the Federal Reserve manage the impact of its efforts to pump extra money into the financial system, such as by lending money to broker-dealers. The program, which peaked at $559 billion, effectively drained cash from the financial system, offsetting some of the Fed's efforts to pump more money into markets. An offsetting mechanism was necessary for the Fed to keep its effective fed funds target rate from slipping to 0%. ... The need for the Treasury's special financing program waned after the Fed started paying interest on bank reserves, which also took money from the financial markets, analysts said. This is a minor but necessary step ...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 10:13 PM » Citigroup's Town Hall Meeting
    Published Mon, Nov 17 2008 10:13 PM by feeds.feedburner.com
    In yet another round of massive financial layoffs,. Citigroup's layoffs are the latest in a brutal round of job cuts across the financial industry. The cuts have been sparked by unprecedented losses due to bad credit investments, as well as the subsequent precipitous drop in banking and other financial-services business amid the worst economic conditions in 70 years. Combined with earlier cuts of more than 20,000 positions, the latest job cuts will equal a 20 percent reduction in the bank's workforce from peak levels reached in the fourth quarter of 2007. In October, fellow blue chip American Express Co. (AXP) announced major layoffs, unveiling plans to slash 7,000 jobs. So far this year, Goldman has said it would cut 3,200 jobs, Whirlpool dropped the ax on 5,000, Yahoo cut 1,000 positions, and Hewlett-Packard shed 24,000 jobs. Town Hall Meeting Citigroup gave a in which it compared its capital position to other companies, mapped out loan loss reserves, expense reductions, and other items. Let's take a look. Loan Loss Reserves Citigroup doubled loan loss reserves. Will that be enough to keep up with the deteriorating economy? Unemployment is going to soar and along with it writeoffs in credit cards, home equity lines of credit, commercial real estate, consumer loans, etc. Citigroup is still behind the curve in writeoffs in my estimation. Off Balance Sheet Holdings Citigroup notes that the majority of $667 billion is unlikely to come on balance sheet yet presumes none of it will. I question the idea that Citi has no credit risk. Just how good are the counterparty guarantees for Citigroup to assume it has no risk on $667 billion? Also note that per an accounting rule change, Citigroup will be allowed to hide whatever risk there is, off the balance sheet and pretend that it does not exist at all. These risks need to be brought on the balance sheet and fully disclosed. Targeted Reductions For all the brouhaha over the layoff announcement, Citigroup's third...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 6:48 PM » The Housing Crisis: What is the Smart Money Doing?
    Published Mon, Nov 17 2008 6:48 PM by feeds.feedburner.com
    One of the terms that veterans of the stock market often use to describe buying patterns is ‘smart money.’ Smart money refers to buyers who are informed, intuitive, and quick enough to anticipate market trends before they actually occur. Conversely, the term ‘dumb’ money is the money from buyers who rush in after the boom occurs, and get stuck holding assets that are worth less than they paid for them in the first place. The relationship between smart money and dumb money is a natural part of any speculative market, and is as old as time. Ironically, a smart investor can easily become dumb money when the market turns against him. Nowhere was this more evident than in the housing market. The problem with the housing market is that while it was a speculative market for many, a large amount of buyers simply regarded it in the same way that they would regard a car. The mindset of these buyers was that housing, like food and clothing, was a fundamental need. As a result, many of these people assumed that whatever price they were able to negotiate and afford for their house must have been a reasonable one. They planned on living in their houses for an extended period of time, perhaps even the life of the loan. Sure, they might occasionally withdraw equity from the house, but only in cases of need and importance: things like college tuition, home improvement, or paying down other debt. All of these seemed reasonable, since home values would always go up in the long run, right? But even though the paradigm of rising home values is still intact over the long-term, no one had considered the possibility of a severe short-term decline in home values. Unfortunately, that is precisely what has happened over the last year and a half. Suddenly, a huge swath of people suddenly seemed like dumb money. What separates dumb money from smart money, of course, is the ability to react constructively and profitably to a negative situation. So I spoke with a veteran real estate agent (of 30 years...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 6:48 PM » Treasury sets new deadline for banks to apply
    Published Mon, Nov 17 2008 6:48 PM by Washington Post
    WASHINGTON -- The government says 3,800 banks will have until early December to apply for a share of the $700 billion financial system rescue program.
    Click Here to Read the Full Article

    Source: Washington Post
  • 6:48 PM » Fed's Hoening: Fed has done "as much as it can"
    Published Mon, Nov 17 2008 6:48 PM by Reuters
    WASHINGTON (Reuters) - Kansas City Federal Reserve President Thomas Hoenig said on Monday the U.S. central bank has done what it can to buffer the economy through a downturn, and a painful process of readjustment is likely ahead.
  • 5:13 PM » The 28-33% Mortgage Payment Rule: Confronting Reality
    Published Mon, Nov 17 2008 5:13 PM by Seeking Alpha
    submits: Back in the old days of Mortgage Lending (when loans were originated to solvent homebuyers with down payments, and at levels they could comfortable service) , the common rule was that homeowners would be limited to a mortgage that was within 25-28% of their monthly gross household income, with 31-33% being allowed for high income buyers/people with a lot of disposable income. I think that the architects of "homeowner rescue programs" should keep this rule in mind, because you can't modify, rescue, legislate, etc, someone out of a situation that is simply unaffordable.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 5:13 PM » Why Americans Go Broke
    Published Mon, Nov 17 2008 5:13 PM by Washington Post
    Stuart Vyse, the author of "Going Broke: Why American's Can't Hold On To Their Money," was online Monday, Nov. 17 at 2 p.m. ET to take your questions about the irrational behavior that leads people into debt and bankruptcy.
    Click Here to Read the Full Article

    Source: Washington Post
  • 3:23 PM » Hovnanian Wants Mortgage Rates Cut to Three Percent
    Published Mon, Nov 17 2008 3:23 PM by www.thetruthaboutmortgage.com
    One the leading U.S. homebuilders has called for the government to temporarily cut mortgage rates to make homeownership more affordable and stimulate sales. Ara Hovnanian, CEO of K. Hovnanian Homes, suggested to Bloomberg TV that interest rates should be temporarily slashed to three percent on 30-year fixed-rate mortgages in 2009. The rate would then rise to four [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
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More From MND

Mortgage Rates:
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  • 15 Yr FRM 3.69%
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  • Jumbo 30 Year Fixed 3.90%
MBS Prices:
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  • 30YR FNMA 5.0 105-13 (0-03)
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Recent Housing Data:
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  • Refinance Index -2.02%
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  • Purchase Index -2.63%