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Obama Wins, New Treasury Secretary, Making Your Own Success

November 5, 2008 By Bill Rice 2 Comments
obama

Obama Wins Historic Election, Now What? No question this was a historic election on many counts. However, the big question looms: We are beyond the campaign promises, now what do we really get? This was a campaign filled with a boat-load of promises, walking into a fist full of problems. I hope the "Hope" American's elected delivers the hope we expected--we will certainly get change. Handicapping the New Treasury Secretary We have already jumped into the Cabinet guessing game. Dealbreaker is looking … [Read more...]

Small Bank Bailouts, The Great Recession, JP Morgan Loan Modifications, Global ZIRP, PMI Losses, GM No Bailout Merger

November 3, 2008 By Bill Rice Leave a Comment
small bank

Small Bank Bailouts Financial market calamity was narrowly averted today as Farmers National Bank of Emlenton is expected to get a much needed capital injection from the US government. William Marsh, CEO led with this, "they were giving out free stuff"-type quote in the WSJ: "It seemed like the consensus in the industry was...go out and get this," said William Marsh, president and chief executive of Farmers National Bank of Emlenton, in Emlenton, Pa. Mr. Marsh said his bank is healthy and viable … [Read more...]

Weekend Notes: The Loan Modification Edition

November 1, 2008 By Bill Rice Leave a Comment
home loan modifications

Loan Modification Plans The US government and JP Morgan Chase race to massive loan modification plans. Naked Capitalism reviews the JP Morgan plan with skepticism: So despite the use of mortgage counsellors, borrowers are NOT being assessed on an individual basis. I hate to sound like a perennial skeptic, but I doubt that these programs will be terribly successful (although pushing foreclosures off even two or three quarters will probably make the bank's financials look better, and they presumably … [Read more...]

GDP, Mortgage Bonds, Zero Interest Policy, Renters for Obama, Stop Being Bearish

October 30, 2008 By Bill Rice Leave a Comment
googlesoupline-093x093

GDP Swings Low, Sweet ... Well it is official, we're contracting. Consumers are hoarding their cash (taking queues from the banking sector). Unlike the recession of 2001 consumers will not be borrowing their way through hard time--try to find a home equity line of credit these days. They're calling it a recession: “This is the first of a run of negative G.D.P. numbers,” said Ian Shepherdson of High Frequency Economics. “The economy is in recession.” He predicted that the economy would shrink … [Read more...]

Fed Lowers Rate 0.5% to 1%, But is There More?

October 29, 2008 By Bill Rice Leave a Comment
fomc meeting

Aaron Task presents a great Fed premonition. The Fed might not be done. In fact, it seems pretty clear they are locked into a recessionary outlook and few ideas for a short-term recovery. Recent policy actions, including today’s rate reduction, coordinated interest rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth. Nevertheless, downside … [Read more...]

Mortgage Rates, Misery Index, Foreclosures, Case Shiller, OPEC, Credit Default Swaps

October 29, 2008 By Bill Rice Leave a Comment
misery-index_thumb

Mortgage Rates Rise as US Market Soars We get a big, even historic, upward bounce in the US stock market. Meanwhile mortgage rates are taking a negative bounce. The interesting part is that one of the stated US government bailout objectives was to preserve or even increase mortgage affordability. However, these same interventions into markets are causing precisely the opposite (possibly short-term) effect: With so much government debt guarantees in the bond market yield spreads between mortgage bonds … [Read more...]

Yields Spread Mortgage Rates Rise, Homebuilders Housing Fix, Soros on Denmark Mortgage Market, Your $700 Billion at Work

October 28, 2008 By Bill Rice Leave a Comment
halloween

Yields Spread and Mortgage Rates Rise Fannie, Freddie, and Ginnie mortgage bonds continue to pull away from US Treasuries. The difference between yields on Washington-based Fannie's current-coupon 30-year fixed-rate bonds and 10-year U.S. Treasuries rose about 21 basis points to 224 basis points as of 4:30 p.m. in New York, data compiled by Bloomberg show. That's up from 162 basis points, or 1.62 percentage point, on Oct. 20. "It is the deleveraging,'' Mohamed El-Erian, the co-chief executive officer … [Read more...]

Asian Markets Down, Where is the Bottom, Rethinking Capitalism, and JP Morgan Will Not Lend

October 27, 2008 By Bill Rice Leave a Comment
capitalism

Asian Markets Take Another Dip Asian markets continue to tumble on real fears of global recession. Compounded by the already tightly intertwined system of banking and commercial equity positions. Much of these riskier equity positions, unlike US Banks are counted toward their regulatory capital requirements. This latest Asian market plunge is signalling another dangerous day on Wall Street. How many bullets can the market dodge? If we do get a real free fall what do you do? By the way don't overlook … [Read more...]

OPEC, Pending Market Crash, Credit Cards, AIG Collapse, Keynesian?, Todd Carpenter for NAR Social Media

October 24, 2008 By Bill Rice Leave a Comment
Todd Carpenter for NAR Social Media

OPEC Orders Cut in Production Just in case you had any doubt that we need immediate energy independence or have a Middle East that has the least bit of concern for the global economy--OPEC orders a cut in oil production. Is Russia the answer? Futures Off 6.5%, Watch for a Big Ride Today Asian and European markets tumbled overnight, 10 percent and 6 percent respectively and futures are showing 6.5 percent decline. The Big Picture wonders if we will trigger NYSE circuit breakers today. Credit Cards, … [Read more...]

Congress Gathering More Information on Mortgage Crisis

October 23, 2008 By Bill Rice Leave a Comment

Not sure all this testimony is going to make Congress any smarter, but it might keep them busy so they don't mess anything up worse: Former Federal Reserve Chairman Alan Greenspan's prepared statement FDIC Chairman Sheila Bair's prepared statement (Still amazes me that the most innovative, practical solutions are coming out of the FDIC) US Treasury Interim Secretary for Financial Stability Neel Kashkari's prepared statement … [Read more...]