These two massive GSE's staged for a monumental meltdown are sucking the air out of the proverbial (mortgage market news) room. Lots of good coverage and analysis: Associated Press: Fannie Mae, Freddie Mac shares plummet Shares of mortgage finance companies Fannie Mae and Freddie Mac continued their plunge Wednesday as investors are increasingly convinced that the stocks will drop to zero if the government bails out the troubled companies. Marketwatch.com: Freddie, Fannie tumble in early Wednesday … [Read more...]
Stagflation, Another Bank Failure, Fannie Mae/Freddie Mac Bailout, 10-year Treasury, Lehman, Inflation Hits Stocks
August 19, 2008 By Leave a Comment
Angry Bear: Have we hit stagflation? Rdan over at the Angry Bear Blog makes his case: Is when Unemployment is 5% or more and when Inflation is 5% or more at the same time. June 2008 - July 2008 (Un-5.6% and Inf-5.31%, 2 months so far) BloggingStocks: Wachovia or Washington Mutual next to fail? Economists are rallying to predict the next victim of the mortgage market anchor that has been sinking banks on a regular schedule over the last year. Who is next? Here is some of the latest handicapping: According … [Read more...]
Cheap Shot on Richard Syron, Inflated Appraisals, Economy in Danger of Equilibrium, Economic Recovery, Inflation Illusions
August 18, 2008 By Leave a Comment
RealClearMarkets.com: NY Times Cheap Shot on Freddie Mac's Richard Syron? I am really enjoying my recent discovery of RealClearMarkets.com. Beyond a great flow of market news it also has some clear features that I find helpful in my analysis, like Unconventional Wisdom a parallel reading of two sides of current issues. Here is a great compare and contrast of the Freddie Mac Warning Memo: The chief executive of the mortgage giant Freddie Mac rejected internal warnings that could have protected the … [Read more...]
Greenspan on Housing Market, US Inflation Jumps, Foreclosures Rapidly Rising Too
August 14, 2008 By Leave a Comment
WSJ: Greenspan Reflects on the Bottom of the Housing Market, Fannie/Freddie Bailout, and Immigration? Former Federal Reserve Chairman, Alan Greenspan tries again to call the bottom of the housing market in an interview timed around the release of the paperback version (equipped with a new chapter defending his record) of his recent book. He give sound rationale and methodology on how to guesstimate the bottom, using housing supply and spread between owing and renting. However, he gets a little bizarre … [Read more...]
Banks Stocks, Falling Home Prices, Countrywide Option ARMs, Foreclosures in CA, and Nehemiah Mounts Web Campaign
August 13, 2008 By Leave a Comment
WSJ: Bank Stocks Drop Anew Amid Worry Over Falling Home Prices Bank balance sheets may hold even more unpredictable losses in the REO portfolios as repeat home sales continue to slow and housing prices continue to drop. The true market losses are hard to estimate as there is little relevant historical data around this type of distressed transaction. In addition, many of these transactions are sitting idle with little velocity--adding to the overall risk. The discounting is starting in bank stocks: The … [Read more...]
Investors Short Banks, Fed Stuck in Neutral, Mortgage Rates Crimp Home Buyers, Banks Tighten Credit
August 12, 2008 By Leave a Comment
Bloomberg: Michael Price, shorts Citigroup and Wachovia Price, 57, is selling short both stocks even after Citigroup, the biggest U.S. bank by assets, tumbled 33 percent this year and Wachovia, the fourth-largest, lost 52 percent. In a short sale, investors borrow shares and sell them on the expectation they can be purchased at a lower price before paying back the loan. Citigroup has reported $55.1 billion in writedowns and credit losses tied to the collapse of U.S. credit markets, while Wachovia … [Read more...]
August 4, 2008
August 4, 2008 By Leave a Comment
The effects of a steadily weakening economy is now pulling prime, or good credit, mortgages into a potential second wave of home mortgage defaults. The combination of slower than expected economic growth, continued drops in home prices, growing unemployment rate that lifted to a four year high in July. NY Times-Housing Lenders Fear Bigger Wave of Loan Defaults The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building. Homeowners … [Read more...]
August 1, 2008
August 4, 2008 By Leave a Comment
Wall Street Journal-Ahead of the Tape Economists expect to see the jobless rate tick higher to 5.6% and payrolls shrink by 65,000 jobs, the seventh consecutive month of losses. What isn't so clear is how much pain will reach beyond the sectors most brutalized during this downturn: manufacturing, construction and retail. That threesome has shed 658,200 jobs so far this year. All other private sectors combined have added 94,200 jobs. It is an echo of the bifurcation in corporate profits, where sectors … [Read more...]
