Bernake caved. (or lived up to his reputation)
Just preventing the inevitable wash out. Isn't that how we reached this point in the cycle to begin with. MORAL HAZARD.
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Bernake caved. (or lived up to his reputation)
Just preventing the inevitable wash out. Isn't that how we reached this point in the cycle to begin with. MORAL HAZARD.
Tech is going to get hit hard tomorrow...earnings season will most likely see electronics and e-commerce companies pull back their estimates on consumer spending fears...good times ahead.Quote:
Originally Posted by steepconcrete
gee, I wonder what the Fed really sees.....
CA Sees Stunning jump in foreclosures
Carolyn Said, Chronicle Staff Writer
Tuesday, January 22, 2008
(01-22) 11:22 PST SAN FRANCISCO -- Foreclosures and default notices skyrocketed to record peaks in California and the Bay Area in the fourth quarter of 2007, according to a report released Tuesday. The information was a fresh reminder that the slumping real estate market is continuing to have a serious impact on homeowners, particularly those with risky subprime mortgages.
Lenders repossessed 31,676 residences in California in the October-November-December period, according to DataQuick Information Systems, a La Jolla research firm. That was a dramatic 421.2 percent increase from 6,078 in the year-ago quarter.
In the Bay Area, foreclosures rose an equally stunning 482.5 percent to 4,573 in the fourth quarter, compared with 785 a year ago. Contra Costa County, with 1,558 foreclosures, up 533.3 percent from a year ago, had the most, followed by Alameda County with 1,026 (a 514.4 percent increase) and Solano County with 704 (up 528.6 percent).
"Foreclosure activity is closely tied to a decline in home values," DataQuick President Marshall Prentice said in a statement. "With today's depreciation, an increasing number of homeowners find themselves owing more on a property than its market value, setting the stage for default if there is mortgage payment shock, a job loss or the owner needs to move."
It was the most foreclosures since DataQuick began tracking them in 1988 and more than double the previous peak of 15,418 foreclosures in the third quarter of 1996. The fewest foreclosures recorded were in the second quarter of 2005, when 637 homes were repossessed.
Mortgage default notices, sent by lenders when homeowners are several months behind on payments, also hit record highs. Default notices are the first step of the foreclosure process.
Statewide, lenders sent 81,550 default notices, up 114.6 percent from 37,994 in the fourth quarter of 2006. It was up 12.4 percent from 72,571 in the third quarter of 2007. It was the most defaults since DataQuick began tracking them in 1992.
In the Bay Area, default notices were up 136.9 percent from a year ago, with 12,704 households receiving them. Year-to-year increases in default notices ranges from 84.4 percent in San Mateo County to 199.7 percent in Sonoma County. Contra Costa had the most notices by number, with 3,805, followed by Alameda with 2,573 and Santa Clara with 2,162.
Another gloomy statistic showed that default notices are increasingly more likely to turn into foreclosures. Homeowners can resolve defaults by catching up on their payments, refinancing or selling the house for what they owe. Only 41 percent of homeowners in default were able to pursue these solutions, DataQuick said, compared to 71 percent a year ago.
DataQuick said most of the loans that went into default in the quarter were originated beween August 2005 and August 2006, during the height of subprime loan frenzy.
The median home price in California at year end was $402,000, down from $484,000 in March, DataQuick said. However, it pointed out that much of that decline is due to a change in the types of houses sold, as fewer high-end properties changed hands after mortgage lending tightened in August.
On a loan-by-loan basis, mortgages were most likely to go into default in Merced, San Joaquin and Stanislaus counties, DataQuick said. They were least likely to go into default in San Francisco, Marin and San Mateo counties.
E-mail Carolyn Said at csaid@sfchronicle.com.
Maybe this was posted but haven't leading economists correctly predicted 8 out of the last 5 recessions?
I know this may belong in the Real Estate Crash Thread, but I think it points to the immediate future of our economy over the next few decades. These people have been binging for 40 years, and now it's time for them to take whatever meager savings they have out of the market and slow the economy. Like this:
American house prices
Baby boom and bust
Jan 17th 2008 | ANN ARBOR, MICHIGAN
From The Economist print edition
The housing market has a new problem: ageing Americans
IN THE first years of the 21st century, no area of the American economy has excited more emotion than the property market. First came the excitement of soaring prices. Then spirits came crashing down with the subprime crisis, and now homeowners are agonising over how far values could fall. An even bigger story, however, may be yet to come.
America should be bracing itself for the end of the “generational housing bubble”, according to a new study by Dowell Myers and SungHo Ryu of the University of Southern California. As the country's 78m baby-boomers retire, the report argues, the housing market will change dramatically.
For three decades baby-boomers have helped push prices up: they settled down, then bought bigger houses and second homes. But as the first of them celebrate their 65th birthdays in 2011, this may change. The old sell more homes than they buy, according to data covering 1995-2000 (see chart). The ratio of old to working-age people is expected to grow by 67% over the next two decades. Will the younger generation be able to buy all the homes on the market?
Young adults make up the bulk of new demand, with most purchasing homes when they reach their early 30s. The flood of elderly people selling their homes, Mr Myers suggests, may lead to a drawn-out buyers' market. Prices may fall further as younger people, perceiving a downturn, delay purchasing.
This phenomenon will unfold differently across the country. Some states will begin the sell-off later than others. In 15 southern and western states—including the retirement magnets of Florida and Arizona—the elderly do not become net sellers until their 70s. Expensive states such as California and the cold states of the midwest and north-east are likely to lose them more quickly. The mismatch between buyers and sellers may be most acute in the rustbelt, where numbers of young people and immigrants are rising slowly, if at all, says William Frey of the Brookings Institution, a think-tank.
Of course, there may be other outcomes. Suburbs, which swelled with the baby-boomers, may begin to decline. If the building industry contracts, home prices may remain more stable. Or developers may switch to serving the old, building more compact housing near amenities. Towns may make new efforts to attract immigrants, who already accounted for 40% of the growth in homeownership between 2000 and 2006. Among these unknowns, one thing is more certain: the housing market is about to enter a long period of transition. The youngest baby-boomers will not turn 65 until 2029.
http://www.economist.com/images/20080119/CFN640.gif
In Private, Bernanke Tells Horror Stories
http://www.usnews.com/blogs/washingt...r-stories.html
Is that the same thing as yes? I'm a investment jong but, seems like if I can get more of what ever it is I have for less then do it, is that right.Quote:
Originally Posted by 4matic
I won't pull from retirement for another 35 to 40 years. So I would like to think that this sort of thing is irrelevant over the long hall. Home heating oil, milk and gas is a bitch but it will end soon or later.
He is saying that now is as good as time as ever to start investing. Since you are an investment jong, you would be wise to just invest as much as you can and do it regularly, every paycheck, over the next 40-50 years. Put the money in some broad ETFs and just wait. Don't do any brain damage trying to pick the bottom or the top, because you will be wrong more than you are right.Quote:
Originally Posted by Tuckerman
Quote:
Originally Posted by mcsquared
+1 with slight modification
.
So explain to me why Apple was worth 200 a month ago and 130 today. That has to be a buying op.
This must be why. :rolleyes: :rolleyes: :rolleyes: :DQuote:
Originally Posted by Benny Profane
Apple quarterly profits soar to record 1.58 billion dollars
http://tech.yahoo.com/news/afp/techn...gscompanyapple
Think this article "nails it"!!!
http://www.236.com/news/2008/01/22/t...ked_1_3700.php
Buy on the rumor, sell on the news. Future earnings growth for Apple must not look so bright. No one can afford to eat and listen to an iPod or talk on an iPhone.Quote:
Originally Posted by Benny Profane
Ha! You won't find too many in gov't that tell the truth. I mean, look at Greenspan. Everyone thought he was a genius. Turns out he was just an old man that was riding the coattails of a binge debt spending U.S. consumer economy. I'd love to hear Greenspans revisionist take (spin) on things now. Seeds sewn many years ago are blooming. They'll be nice in ripe by summer.Quote:
Originally Posted by timvwcom
wow 300 plus day
600 point turn...
Shit is wacky, thats for sure. Its like the bears come in early and the bulls stroll in after a late lunch.
Support was 11,300. The fact that we rallied away hard without a strong test of that price is positive. A move above 12,500 would turn back to neutral overall. Imo..
The confidence boost from this may be part of the reason. It will be interesting to see if this goes the way of the "super" SIV package that fell apart.Quote:
Originally Posted by mcsquared
Whoever had the balls to buy Ambac call options became very rich today.
"Banks, New York Regulator Meet on Bond Insurer Rescue (Update4)
By Erik Holm and Jesse Westbrook
Jan. 23 (Bloomberg) -- New York State's insurance regulators met today with U.S. banks to discuss raising new capital for bond insurers, said a department spokesman.
Talks in New York with the unnamed banks are part of Insurance Superintendent Eric Dinallo's effort to stabilize the bond guarantors and bolster the market's finances, said agency spokesman Andrew Mais in an interview. Insurers MBIA Inc. gained 33 percent in New York trading and Ambac Financial Group Inc. soared 72 percent.
New capital may help preserve the top credit ratings for the bond guarantors such as MBIA, the industry's largest, and halt any erosion of investor confidence in the $2.4 trillion of assets they guarantee. Ambac, MBIA's biggest rival, lost its AAA grade from Fitch Ratings this month on concerns that losses tied to subprime mortgages may increase.
``The market is obviously viewing it as positive news,'' said Kathleen Shanley, an analyst with bond research firm Gimme Credit LLC in Chicago. ``Shareholders and holding company creditors should keep in mind, however, that the insurance department's primary mandate is to protect policyholders, not to boost the share price.''
Federal Reserve Bank of New York President Timothy Geithner has taken a central role among federal regulators monitoring the financial health of bond insurers since October, according to an official familiar with the matter. Geithner has been speaking frequently to bank executives who do business with the insurers and requesting government data on Wall Street's involvement, said the official, who wasn't authorized to speak publicly. New York Fed officials didn't participate in today's meeting.
Calvin Mitchell, a spokesman for the New York Fed, declined to comment.
Cash Infusion
The infusion may be as much as $15 billion, the Financial Times reported. MBIA rose $4.08 to $16.61 in New York Stock Exchange composite trading, while Ambac added $5.73 to $13.70.
News of the meeting helped spur a rally in U.S. stocks, which slid Jan. 18 after Fitch lowered the rating of Ambac. The Standard & Poor's 500 Index halted a five-day slide, rising 2.1 percent to 1,338.60 after losing as much as 3 percent earlier.
``Clearly the market likes it,'' said Gregory Peters, credit strategist at Morgan Stanley in New York. ``But it's not an easy situation to fix. The intent is good but we need the details; the details matter.''
Moody's Investors Service and Standard & Poor's are reviewing Ambac and MBIA, both based in New York state, for possible downgrades. Insured municipal bonds usually carry the debt rating of the insurer rather than the underlying debt.
Falling Values
Downgrades may force sales by investors who are required to hold only the highest-rated bonds and cut profit for banks that have already posted more than $130 billion of writedowns and credit losses tied to the falling value of mortgage securities.
Ambac and MBIA have suffered losses because of guarantees they sold for structured investments such as collateralized debt obligations backed by mortgages. The industry collectively guaranteed $127 billion of CDOs linked to mortgages that were given to borrowers with poor credit.
The securities have plunged in value as defaults by borrowers soared to a record in the third quarter of last year, according to the Mortgage Bankers Association.
A message for Ambac spokesman Peter Poillon wasn't immediately returned. An e-mail message sent to Michael Sitrick, spokesman for MBIA, wasn't immediately returned.
Paulson's Role
Treasury Secretary Henry Paulson this week said he's monitoring the situation, although he declined to characterize the role his department is playing.
``We obviously have been looking at the monoline insurers carefully for some time now and we're actively engaged in watching that sector and talking with other policy makers about that sector,'' Paulson said Jan. 22, when asked after a speech in Washington.
Ajit Jain, who heads a new bond insurer started last month by Warren Buffett's Berkshire Hathaway Inc. to compete with MBIA, Ambac and others, said in a Jan. 9 interview that Berkshire was ``looking at ways to support the existing insurers in terms of reinsurance and capital.''
Jain, who also heads up the units that sell coverage for catastrophes and other large risks, declined to comment today.
Credit-default swaps tied to the bonds of MBIA plunged to 825 basis points a year, down from 22 percent upfront and 500 basis points a year yesterday, according to CMA Datavision. That means the cost to protect $10 million in MBIA bonds for five years fell to $825,000 a year from $2.2 million upfront and $500,000 annually yesterday. Contracts on Ambac fell to 900 basis points from 22 percent upfront and 500 basis points a year, CMA prices show."
Uh, well, maybe, ....he seems to be the convenient whipping boy. But then, how do you explain the largest one day rate cut in history by his successor? Isn't that going to make matters worse in the long run? That's what the Euros think right now. But their just a bunch of socialist cheese eaters, right?Quote:
Originally Posted by Toadman
europe nations have typically tried to protect their currency(ies). I doubt holders of German and French equity are too happy with the ECB right now.Quote:
Originally Posted by Benny Profane
buy stock, sell calls, then go skiing.
pulse check from any of you insiders?Quote:
Originally Posted by mtnwriter
credit based recession on the way?
fed cuts haven't stimulated as planned--> banks aren't passing on savings to companies because they need to shore up their capital requirements and balance sheets. bond markets still calling for another 100bps stimulus cut by summer which will push real rates into negative territory. treasury buyers are starting to look for inflation recomp yields on the long end--> 2yr:10yr. spreads have widened. muni markets/student loan markets new offers are failing at market. everyone is actually thinking about counterparty risk for the first time in several years. CDS spreads are building in CP risk and requiring larger upfronts. crossover indices on CDS baskets have widened precipitously. things are definitely getting interesting. anyone starting to hear the flushing sound in NY and London?
anybody care to speculate on how bad this gets? 6 mo. recession with <1%GDP throughout 2009?
Magic 8 ball says, ask again in 6 months.
Is commercial paper going to die? Why even bother with it? Its not safe anymore, apparently. The rate will be high enough that firms wont issue it.
- just a random thought I had 5 minutes ago
This shit is making my head hurt.
All I know is that I am trying to refi an expiring 3.4M conduit loan on an 8.5M office building and everyone is acting like I have three heads. Local banks won't touch it. There is no CMBS market anymore. Hard money guys are quoting 15%. WTF.
From what Ive read the commercial real estate industry is fucked even more than the subprime. Have fun with 15% and elevators that dont workQuote:
Originally Posted by BucBanzai
No I didn't.Quote:
Originally Posted by Toadman
Just look at what is/has happened in the re-insurance industry. Buffet the vulture coming in to pick over the dead. (they just don't know it yet.)Quote:
Originally Posted by Brock Landers
Little bit of a market scare this morning (check the lower right corner):
http://img232.imageshack.us/img232/8393/72661672ff9.jpg
I had been waiting for another Natalie Portman movie to come out. But, you are telling me Scarlet Johanson is in this one?
Bear Stearns down 40% today....fucking A what a shitshow.
They will be single digits soon enough.
LTCM style bailout. Not good..Quote:
Originally Posted by Tap
Fed announcement and expiration next week. Saddle up!
Hop on Bear when it gets low? Is it going to tank for good?
I think someone would buy 'em up before they got to single digit, or just let them go belly up and collect the left overs.Quote:
Originally Posted by Brock Landers
Someone bought 17,500 puts yesterday on BS. Went from .34 to $7.05 or more..
An easy $10 million.
Hedge fund collusion........Quote:
Originally Posted by 4matic
I had some extra cash laying around....figured 'what the fuck...'Quote:
Originally Posted by 4matic
Yep.. A large sum of money was taken out of BS which put them under the cap requirement.Quote:
Originally Posted by CUBUCK
Why not? I love this stuff..
Transportation average is on the verge of an all time high, Nasdaq broke above its 200 day moving average with INDU and SP00 not far behind. The SOX turned plus on the year too:
http://www.quote.com/us/stocks/chart...artUi.minutes=
I'm not wildly bullish and volume is light but a strong move up from here should get 500 Dow points in a hurry.
Resurrecting this thread to ask the finance Mags to help me understand Hindenburg Omens as mentioned here: http://seekingalpha.com/article/8218...a-market-crash
I looked up Hindenburg Omen on Wikipedia, but I am still not sure I am fully grasping the idea. Anybody got an easy way to translate this, a solid metaphor or a good example? Also - are these Hindenburg Omens for real or full of shit?