US mortgage carnage

[Kimosabi]

100 major U.S. lenders have "imploded"

http://ml-implode.com/

Luckily the subprime mortgage meltdown is contained.

Bears Stearns Hedge Fund gets wiped out by Subprime Exposure - Investors lucky to get 9 cents in the dollar

“Investors said the funds’ investments in the subprime market had wiped out the value of their capital in its USUS$638m enhanced fund, and left only 9 cents in the dollar in its USUS$925m high-grade fund. This leaves only USUS$83m of the USUS$1.56bn originally invested in the funds,” reports William Hutchings at FinancialNews.com

http://www.dailyreckoning.com.au/metals-vs-mortgages/2007/07/19/

 

[Uncle Festivus]

Still largely contained.......or spreading?

S&P 5 star rating. I wonder what they give the dud fund's?

SAN FRANCISCO (MarketWatch) -- Basis Capital, a firm with more than $2 billion in assets that was named Australian hedge fund of the year in 2006, has become the latest to be hit by turmoil in the subprime mortgage market.
The Basis Yield Alpha Fund (Master) has failed to meet margin calls and some of its lenders have declared the fund in default and are trying to seize its assets, Zenith Investment Partners, a research firm, wrote in a report on Thursday. Zenith's report cited a notice that Basis Capital sent to investors on Wednesday.
Basis warned that if its lenders seize assets of the Basis Yield fund and sell at "distressed sale prices," the net asset value of the fund could be halved compared to its May 31 level, Zenith's report said.

http://www.marketwatch.com/news/sto...x?guid={CB19FA67-ACAB-4DAE-A024-8E40B23811A0}

 

[wayneL]

Kinda ironic innit?

Hedge funds... are unhedged.

 

[Uncle Festivus]

A cameo appearance in Harry Potter... who'd have thought it?

Lord Voldemort (Ben Bernanke) is a fictional character and the main villain in the Harry Potter book series written by J. K. Rowling. Throughout the series, he is consistently depicted as a dark wizard bent on securing unmatched power and immortality. He also harbours a genocidal hatred of non-magical humans. His name is so feared that many wizards refuse to say it and instead refer to him only as "You-Know-Who" or "He-Who-Must-Not-Be-Named." Even his followers do not use his name and simply call him "The Dark Lord".

"He" speaketh from the Hill. Just glad I'm not one of these 'bumps'.

WASHINGTON (MarketWatch) -- Federal Reserve Chairman Ben Bernanke said Thursday that there will be "significant losses" associated with subprime mortgages but that these losses should be regarded as "bumps" along the road of market innovation.

The Fed chief repeated that the problems in the subprime-mortgage market haven't caused a systemwide credit crunch.

In addition, Bernanke told members of the Senate Banking Committee that the pain and suffering felt from foreclosures and delinquencies will "likely get worse before they get better."

 

[Kimosabi]

http://www.youtube.com/watch?v=xTBrJNipytg

Ron Paul gives Ben Bernanke some man-love in U.S. House Financial Services Committee, 18th July 2007

Notice how Ben Bernanke doesn't deny that the US Federal Reserve creates money out of "THIN AIR".

 

[wayneL]

http://www.youtube.com/watch?v=xTBrJNipytg

Ron Paul gives Ben Bernanke some man-love in U.S. House Financial Services Committee, 18th July 2007

Notice how Ben Bernanke doesn't deny that the US Federal Reserve creates money out of "THIN AIR".

God Bless Ron Paul,

I hope he wears a bullet proof vest.

 

[Kimosabi]

God Bless Ron Paul,

I hope he wears a bullet proof vest.

Doesn't matter, he's let the cat out of the bag.

Some of his supporters are now starting campaigns to run for the US Congress and Senate on the Ron Paul platform.

The game is up and the US Fed knows it, which is why they are trying to replace the US Dollar with the Amero.

It doesn't matter what they do once it becomes common knowledge that banks create money out of thin air. Check out the Magambo Guru video, its great, I show it to as many people I can.

 

[Uncle Festivus]

This reminds of the movie 'Marathon Man' with Dustan Hoffman & the drilling scene - Szell keeps asking 'Is it safe?'. Is it safe to buy again or will there be more teeth pulling without anesthetic.

Are we witnessing a confluence of capitalistic factors with unknown consequences?

NEW YORK (MarketWatch) -- Countrywide Financial Corp. reported a 33% drop in second-quarter net income on Tuesday and signaled that problems in the subprime mortgage market have spread to the highest-quality home loans.
"The story here is credit deterioration," Goldman Sachs analysts said in a research report Tuesday. "Countrywide continues to suffer by its disproportionate mortgage portfolio exposure to pay-option ARMs, prime home equity loans, and California," they said.
The warning pushed Countrywide shares down more than 7%, to their lowest level in almost two years. It also weighed on the broader stock market because investors have been waiting to see if credit problems in the subprime-mortgage sector would spill over into higher-rated, or "prime" home loans.
"The company incurred increased credit-related costs in the quarter, primarily related to its investments in prime home-equity loans," CEO Angelo Mozilo said in a press release detailing Countrywide's second-quarter financial results.
Mozilo said he expects the slowdown in the housing market to run until at least 2009.

http://www.marketwatch.com/news/sto...x?guid={88821AE2-27FE-4E74-A96A-0FE326B14B29}

 

[wayneL]

Are we witnessing a confluence of capitalistic factors with unknown consequences?
http://www.marketwatch.com/news/sto...x?guid={88821AE2-27FE-4E74-A96A-0FE326B14B29}

Only the exact consequences are unknown. The possible consequences we have seen before, but most are in denial about the possibility.

 

[Uncle Festivus]

WASHINGTON (MarketWatch) - U.S. sales of existing homes fell 3.8% in June to a seasonally adjusted annual rate of 5.75 million, the lowest rate since November 2002, the National Association of Realtors reported Wednesday. Sales in June were down 11.4% from June 2006. Inventories of unsold homes on the market fell by 180,000, or 4.2%, to 4.20 million, representing a 8.8-month supply at the June sales rate. The months' supply was also 8.8 months in May, the highest since 1992.

Secondary contagion?

SAN FRANCISCO (MarketWatch) -- Louisiana-Pacific Corp. on Wednesday provided further evidence of the U.S. housing slump, posting a second-quarter loss of $23 million, or 22 a share, vs. a year-ago profit of $55 million, or 52 cents a share. Revenue at the Nashville, Tenn.-based lumber company fell to $461.2 million from $636.6 million a year earlier.

 

[Uncle Festivus]

A second Australian hedge fund has been hit by the escalating subprime mortgage crisis gripping the United States.
The boutique company Absolute Capital has suspended two funds worth around $200 million that are exposed to defaults in the risky mortgages, and admits it is worried about the state of the debt market in the US.
Absolute's suspension comes a week after another fund, Basis Capital, told investors their investments were in jeopardy.
The local developments comes amid renewed fears that the US mortgage crisis will spill over into other parts of the world's biggest economy.

http://www.abc.net.au/news/stories/2007/07/26/1988601.htm?section=business

 

[Kimosabi]

A second Australian hedge fund has been hit by the escalating subprime mortgage crisis gripping the United States.
The boutique company Absolute Capital has suspended two funds worth around $200 million that are exposed to defaults in the risky mortgages, and admits it is worried about the state of the debt market in the US.
Absolute's suspension comes a week after another fund, Basis Capital, told investors their investments were in jeopardy.
The local developments comes amid renewed fears that the US mortgage crisis will spill over into other parts of the world's biggest economy.

http://www.abc.net.au/news/stories/2007/07/26/1988601.htm?section=business

Here comes the Credit Crunch Boys and Girls, better get those debts paid off and hang on for the ride of your life...

 

[robots]

hello,

isnt your point that things are going to crash when the credit crunch comes

and then go out and buy property, are you paying cash?or are you getting credit?

thankyou

robots

 

[gfresh]

Other point is.. hasn't the US property market taken a dive due to much of this.. or was it the other way around..

But still, if the same follows through here - I'd imagine as people are forced out of mortgages they could not afford anyhow, how are there going to be cashed up buyers to take up the slack? Banks are not going to give investors 80-100% drawdown on their equity anymore.. Demand goes down. Values go down.

Really don't think it would be good for anybody if it spreads further..

 

[Uncle Festivus]

Subprime could create global crisis, economist says
World is one "Bear-like' event away from liquidity freeze, Zandi warns

WASHINGTON (MarketWatch) -- The problems in the U.S. subprime mortgage market could spiral out of control into a global financial crisis, economist Mark Zandi said Thursday.
With a "high level of angst" in the financial markets about who will take the losses from more than $1 trillion in risky mortgages, we could be just one hedge-fund collapse away from a global liquidity crisis, said Zandi, chief economist for Moody's Economy.com.

 

[Kimosabi]

Subprime could create global crisis, economist says
World is one "Bear-like' event away from liquidity freeze, Zandi warns

WASHINGTON (MarketWatch) -- The problems in the U.S. subprime mortgage market could spiral out of control into a global financial crisis, economist Mark Zandi said Thursday.
With a "high level of angst" in the financial markets about who will take the losses from more than $1 trillion in risky mortgages, we could be just one hedge-fund collapse away from a global liquidity crisis, said Zandi, chief economist for Moody's Economy.com.

I think this should read: "Complete Collapse of United States Economy is going to result in Global Crisis"

Wake up Sheeples, America is Bankrupt!!!!

America only owes approx $60 - $70 Trillion worth of Debt.

Welcome to the consequences of a Debt based FIAT Monetary System controlled and manipulated by Illegal, Corrupt, Independantly Owned Central Reserve Banks...

 

[wayneL]

Marketwatch is one great big bearfest today. I'm quite stunned at the sudden honesty of the direness of the situation... though still somewhat understated by many.

 

[theasxgorilla]

Based on the technical support levels broken today in Australia and yesterday in the US it does admittedly look bad. But the PPT, amid stubborn bulls, could actually steady things tonight...no doubt, tonight will be interesting to watch, as will next week.

It wouldn't surprise me if actual futher strong capitulation is a week or so away.

ASX.G

 

[Pommiegranite]

Based on the technical support levels broken today in Australia and yesterday in the US it does admittedly look bad. But the PPT, amid stubborn bulls, could actually steady things tonight...no doubt, tonight will be interesting to watch, as will next week.

It wouldn't surprise me if actual futher strong capitulation is a week or so away.

ASX.G

But isn't this is a bit of a curveball that the charts didn't have factored in?

Economic growth above forecasts

Second quarter growth at 3.4%, rebounding from weak first-quarter gain; key inflation readings show price gain tame.

July 27 2007: 8:52 AM EDT


NEW YORK (CNNMoney.com) -- The nation's economic growth picked up in the second quarter, according to the government's first reading on the overall economy in the period.
The economy grew at an annual rate of 3.4 percent, according to Friday's Commerce Department report on gross domestic product, the broad measure of the nation's economic activity. That's up from a revised 0.6 percent growth rate in the final reading of first-quarter growth.

Economists surveyed by Briefing.com had forecast a 3.2 percent gain in GDP.
The report also contained some good news on inflation. The overall measure of prices in the economy fell to a 2.7 percent rise in the quarter from a 4.2 percent gain in the first quarter. That was lower than the forecast of a 3.4 percent percent rise.
The so-called PCE deflator, which measures prices paid by consumers, was up 4.3 percent, due greatly to record gasoline prices seen during the period. But the more closely watched core PCE deflator, which strips out food and energy, was up 1.4 percent, down from a 2.4 percent rise in the first quarter.
It was the smallest rise in that measure, a favorite of Federal Reserve policy makers, since 2003. The Fed is generally believed to want to see the core PCE in a 1 to 2 percent range.

 

[Smurf1976]

I'll say it again...

There may be a time lag, but once the Fed starts on a rate raising cycle it's pretty certain they'll go to the point of doing some serious damage to something. When the fed raises rates, something breaks.

What we don't know in advance is what will break, when it will break and what the consequences will be.

Well now we're seeing what will break and when. All that's left to find out is what the consequences will be.

IMO we get:

1. Trouble with housing
2. Trouble with bonds, mortgages etc then finally
3. Trouble in the stock market.

THEN we get:

1. Inflation.
2. More inflation.
3. Inflation here, inflation there, inflation everywhere.

THEN we get some kind of trouble due to the inflation. So they raise interest rates. Then something breaks...

All in my opinion, I'm not an advisor, don't sue me etc.