American Express Co. plans to announce today what is believed to be the first program designed to allow consumers to put their monthly mortgage payments on plastic -- and to earn credit-card rewards for doing so.
The recovery will "play out quicker than in the past," according to Lowman, "because [the fall] happened faster than in the past."
Oh. Okay. Sure. So, after falling off a cliff I'll be in much better shape to climb a mountain than after walking down a hill and being ready to walk up another hill. Is anyone keeping a stupid comments hall of fame?
"American Express Co. plans to announce today what is believed to be the first program designed to allow consumers to put their monthly mortgage payments on plastic -- and to earn credit-card rewards for doing so."
The AMEX thing bugged me. At first I couldn't grasp the concept. In part because I've been doing it for years. By charging and always paying off I get a discount, cashback and lower rates. I've been "charging" my property taxes (Discover) for many years. At first it was a $5 surcharge and even now it is the equivalent of a very low few percent loan that was less than the cashback bonus accrued.
FHB is having problems making his mortgage payment at 7% interest. Amex will bail him out at 18% minus rewards (about 0.01%).
What happens when he reaches his credit limit?
Good point, ac, to note that this is the peak selling/buying period and the pundit's commentary doesn't dwell on that aspect.
Another longer chewing bite might be that the longer house prices remain bloated and unaffordable, the more jobs are shifted to more competitive markets (with less bloated house prices) (eg. Delphi) with the resulting decreasing affordablity...in those already pricey housing markets.
Hmmmmm, credit crunch is definitly on the horizon. Time for some more TLT puts and some fixed loans. Crapital One just sent me 5yrs/6.9% fixed for 30k- I may take them up on it....
nothing like cheap capital to make the world go round- cept when it turns expensive and you have some to loan....
The WSJ had an interesting article yesterday on the move to 7-9 year car loans. Many borrowers are now on average $3K underwater on their 5 - 6 year loans so of course the dealers refi them to a 7- 9 year and roll in the $3K outstanding on the prior loan. Part of the same phenomonon as in housing. One wonders when it will end.
U B a hoot Stag.
Of course I'd vote for you in a second for NAR chief --jus lookit those numbers: 14,000 trillion square inches! (Somewhat seriously [oh no!] this helps me picture US GDP in dollars ~square inches of US geography.)
risk capital - I don't have the WSJ subscription... you want to provide the copyright safe 'Cliff Notes' version for us? I'm curious if they are going to subtract the 800K-1MM jobs they 'added' to the tally last fall.
If so CRs jobs chart is going to go all ziggy zaggy on us.
A lesser-known employment snapshot, based on a quarterly census of state unemployment insurance records, shows the economy created about 19,000 private-sector jobs in the third quarter of 2006, the most recent data available. That contrasts with the 500,000 indicated in the monthly figures for that period. It also shows the number of construction jobs dropped by 77,000, in contrast with the increase of 19,000 jobs shown in the monthly surveys.
``Japanese companies are expected to remain hesitant about expanding investment until they see more solid signs of an economic recovery in the U.S,'' said Azusa Kato, an economist at BNP Paribas Securities Japan Ltd. in Tokyo.
Exports to the European Union rose 9.7 percent to 1 trillion yen ($8.2 billion) in April, slowing from a 14 percent increase in March.
Not that I'm a huge fan of the WSJ, ac, but " lesser known employment snapshot" might be for a good reason. Those are very different numbers...and the BLS has been known to revise a stat or two in the past.
I'm thinking that the MEW has this bulk, this momentum that will carry the economy and create longer lags than we are accustomed to. People will spend the house for several quarters after the cash out. And so the jobs don't fall off a cliff...yet. It's not exactly the trickle down we were all waiting for after the tax cuts for the rich (that gush has gone to more lucrative markets), it's the desperate little dribbles coming from people who are running on borrowed time and their last plug at the house ATM.
With stratospheric housing prices pushing an unprecedented flow of college graduates out of the state, a prominent think tank says California faces a worrisome shortage in future decades: A lack of highly skilled workers to buttress the states quality of life.
Much of the worry is prompted by the new exodus of college graduates. Historically, college graduates have flocked to California from elsewhere in the United States. But according to PPICs analysis of Census data, since 2000, more college graduates have been leaving California for other states than are arriving.
Its safe to say that certainly we havent seen this kind of flow out of the state in the past, said Hans Johnson, a PPIC demographer who co-authored the report. Probably whats happening now is unique in Californias history.
(RTTNews) - Wednesday, IndyMac Bancorp Inc. (IMB) announced that its wholly owned subsidiary, IndyMac Bank F.S.B has priced a non-cumulative perpetual stock offering with a dividend of 8.5%. The offering is expected to close on May 30, 2007, subject to certain conditions.
Owing to strong demand from investors, the offering was oversubscribed. Hence, the company increased the offering size to $500 million.
Scott Keys, Indymac's Chief Financial Officer, said, 'The additional capital will provide flexibility for the operations of Indymac Bank and the Company, and has the advantage of qualifying as Tier 1 capital for regulatory purposes.'
He further added, 'Based on our balance sheet as of March 31, 2007 and assuming the offering at that date, Indymac Bank's Tier 1 capital would have increased by 23 percent from $2.1 billion to $2.6 billion and its Tier 1 capital ratio would have increased from 7.41 percent to 8.99 percent.'
Underwriters for the offering included the joint book-running managers Morgan Stanley & Co. (also sole structuring adviser) and Goldman Sachs & Co., and Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Lehman Brothers Inc. and RBC Dain Rauscher Inc., who acted as co-managers.
IMB is currently trading at $35.16, up 7 cents.
So Indy-Mac effectively borrows $500 million at 8.5% interest. What kind of business model is this? Borrow at 8.5%, loan at 7%. Hey, great news, let's move much higher.
Underwriters for the offering included the joint book-running managers Morgan Stanley & Co. (also sole structuring adviser) and Goldman Sachs & Co., and Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Lehman Brothers Inc.
Salvation is at hand:
American Express Co. plans to announce today what is believed to be the first program designed to allow consumers to put their monthly mortgage payments on plastic -- and to earn credit-card rewards for doing so.
AmEx Plans Mortgage Rewards - MarketWatch
http://www.marketwatch.com/news/story/subprime-mortgage-stocks-jump-signs/story.aspx?guid={DA7A128C-690B-4CF3-B764-6177CFF88E53}&siteid=yahoomy
Subprime mortgage stocks jump on signs the worst may be over...
exactly: Liquidity has returned to the 2ndary market, the rate of increase in delinquencies is down.
party time.
why doesn't this make anay sense ?
what is the truth ?
"the rate of increase in delinquencies is down."
As numbers get larger the rate of increase always goes down, but I guess that doesn't matter.
BTW we are at the peak of the house selling season - a time when delinquencies should be at low for the year.
The recovery will "play out quicker than in the past," according to Lowman, "because [the fall] happened faster than in the past."
Oh. Okay. Sure. So, after falling off a cliff I'll be in much better shape to climb a mountain than after walking down a hill and being ready to walk up another hill. Is anyone keeping a stupid comments hall of fame?
"American Express Co. plans to announce today what is believed to be the first program designed to allow consumers to put their monthly mortgage payments on plastic -- and to earn credit-card rewards for doing so."
Fly your way to bankruptcy -- first class!
The recovery will "play out quicker than in the past," according to Lowman, "because [the fall] happened faster than in the past."
Except the fall hasn't really begun. Inventories still way to high and prices should decline another 30% to 50%.
The AMEX thing bugged me. At first I couldn't grasp the concept. In part because I've been doing it for years. By charging and always paying off I get a discount, cashback and lower rates. I've been "charging" my property taxes (Discover) for many years. At first it was a $5 surcharge and even now it is the equivalent of a very low few percent loan that was less than the cashback bonus accrued.
FHB is having problems making his mortgage payment at 7% interest. Amex will bail him out at 18% minus rewards (about 0.01%).
What happens when he reaches his credit limit?
Good point, ac, to note that this is the peak selling/buying period and the pundit's commentary doesn't dwell on that aspect.
Another longer chewing bite might be that the longer house prices remain bloated and unaffordable, the more jobs are shifted to more competitive markets (with less bloated house prices) (eg. Delphi) with the resulting decreasing affordablity...in those already pricey housing markets.
BTW, real interest rates have risen steeply in the past 3 months. Just what the housing market needs, eh?
5 year rate up almost 40 bps:
U.S. Treasury - Daily Treasury Yield Curve
^^^ BTWII
Hmmmmm, credit crunch is definitly on the horizon. Time for some more TLT puts and some fixed loans. Crapital One just sent me 5yrs/6.9% fixed for 30k- I may take them up on it....
nothing like cheap capital to make the world go round- cept when it turns expensive and you have some to loan....
Yal,
I always look forward to your finds on BO and BU...care to share any gems reflecting that fresh liquidity in the secondary market?
The WSJ had an interesting article yesterday on the move to 7-9 year car loans. Many borrowers are now on average $3K underwater on their 5 - 6 year loans so of course the dealers refi them to a 7- 9 year and roll in the $3K outstanding on the prior loan. Part of the same phenomonon as in housing. One wonders when it will end.
I was in Seattle today and saw a flyer for a condo. $279,000 buys you 673 square feet (no view).
That's $415 per square foot or $3 per square inch.
I'm ready to be the next Chief Economist at the NAR. Here's my sales pitch, for what it is worth.
There has never been a better time to defer your Big Mac purchase and use the proceeds to buy a square inch of investment grade real estate.
Buy your portion of the 14,000 trillion square inches (3.5 million square miles) of American land before the next person does.
U B a hoot Stag.
Of course I'd vote for you in a second for NAR chief --jus lookit those numbers: 14,000 trillion square inches! (Somewhat seriously [oh no!] this helps me picture US GDP in dollars ~square inches of US geography.)
Stagflation Mark: the Communicator
Amazing that it takes these guys this long to understand that the crap they put out makes no sense;
Job Market's Strength May Have Been Overstated - WSJ.com
risk capital - I don't have the WSJ subscription... you want to provide the copyright safe 'Cliff Notes' version for us? I'm curious if they are going to subtract the 800K-1MM jobs they 'added' to the tally last fall.
If so CRs jobs chart is going to go all ziggy zaggy on us.
From the WSJ article:
A lesser-known employment snapshot, based on a quarterly census of state unemployment insurance records, shows the economy created about 19,000 private-sector jobs in the third quarter of 2006, the most recent data available. That contrasts with the 500,000 indicated in the monthly figures for that period. It also shows the number of construction jobs dropped by 77,000, in contrast with the increase of 19,000 jobs shown in the monthly surveys.
Japan Export Growth Slows; Shipments to U.S. Fall
Japan Export Growth Slows; Shipments to U.S. Fall (Update4) - Bloomberg.com
``Japanese companies are expected to remain hesitant about expanding investment until they see more solid signs of an economic recovery in the U.S,'' said Azusa Kato, an economist at BNP Paribas Securities Japan Ltd. in Tokyo.
Exports to the European Union rose 9.7 percent to 1 trillion yen ($8.2 billion) in April, slowing from a 14 percent increase in March.
Not that I'm a huge fan of the WSJ, ac, but " lesser known employment snapshot" might be for a good reason. Those are very different numbers...and the BLS has been known to revise a stat or two in the past.
I'm thinking that the MEW has this bulk, this momentum that will carry the economy and create longer lags than we are accustomed to. People will spend the house for several quarters after the cash out. And so the jobs don't fall off a cliff...yet. It's not exactly the trickle down we were all waiting for after the tax cuts for the rich (that gush has gone to more lucrative markets), it's the desperate little dribbles coming from people who are running on borrowed time and their last plug at the house ATM.
When the credit bubble goes 'pop' - May. 23, 2007
btw, what is BO and BU ?
the law of unitended results:
With stratospheric housing prices pushing an unprecedented flow of college graduates out of the state, a prominent think tank says California faces a worrisome shortage in future decades: A lack of highly skilled workers to buttress the states quality of life.
Much of the worry is prompted by the new exodus of college graduates. Historically, college graduates have flocked to California from elsewhere in the United States. But according to PPICs analysis of Census data, since 2000, more college graduates have been leaving California for other states than are arriving.
Its safe to say that certainly we havent seen this kind of flow out of the state in the past, said Hans Johnson, a PPIC demographer who co-authored the report. Probably whats happening now is unique in Californias history.
IndyMac Bancorp Prices $500 Mln Stock Offering
(RTTNews) - Wednesday, IndyMac Bancorp Inc. (IMB) announced that its wholly owned subsidiary, IndyMac Bank F.S.B has priced a non-cumulative perpetual stock offering with a dividend of 8.5%. The offering is expected to close on May 30, 2007, subject to certain conditions.
Owing to strong demand from investors, the offering was oversubscribed. Hence, the company increased the offering size to $500 million.
Scott Keys, Indymac's Chief Financial Officer, said, 'The additional capital will provide flexibility for the operations of Indymac Bank and the Company, and has the advantage of qualifying as Tier 1 capital for regulatory purposes.'
He further added, 'Based on our balance sheet as of March 31, 2007 and assuming the offering at that date, Indymac Bank's Tier 1 capital would have increased by 23 percent from $2.1 billion to $2.6 billion and its Tier 1 capital ratio would have increased from 7.41 percent to 8.99 percent.'
Underwriters for the offering included the joint book-running managers Morgan Stanley & Co. (also sole structuring adviser) and Goldman Sachs & Co., and Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Lehman Brothers Inc. and RBC Dain Rauscher Inc., who acted as co-managers.
IMB is currently trading at $35.16, up 7 cents.
So Indy-Mac effectively borrows $500 million at 8.5% interest. What kind of business model is this? Borrow at 8.5%, loan at 7%. Hey, great news, let's move much higher.
Underwriters for the offering included the joint book-running managers Morgan Stanley & Co. (also sole structuring adviser) and Goldman Sachs & Co., and Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Lehman Brothers Inc.
Ah, ye olde list of the "usual suspects".