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When they say 'prime home equity loans', is it correct to assume they mean exactly that and not 'prime mortgages'?
Thank goodness the overtan man diversified his holdings by fortuitously selling about $150m worth of stock in the past six months.
He did say that "management remains optimistic about the long-term future growth prospects and profitability of the Company as industry consolidation continues.", so I guess it was a close run thing.
wally, they mean prime second lien mortgages.
Tangelo: Not your father's simple fruit.
"Impairment on credit-sensitive retained interests."
Tanta-what financial vehicles are they referring to?
Angie making a distress call for fed rate cuts, necessary because his firm's portfolio looks like it's ready to implode with housing prices. He took unreasonable risks and the fed has to bail him out. Good plan.
CFC may need a new symbol - RIP.
rcryan,
He's simply:
1. Intelligently diversifying his portfolio.
2. taking advantage of historically low capital gains rates that may soon be increased.
Well, that's my recommended position if they hire me for litigation support.
I, Personally , am crying like a baby
free money, free money
I want the free money back...
Where's my loan, my loan, I want my loan
waaaah uhuhuhuhuh waaaawaaaaaa
mmmmmw waaaaaaaaaaaaaa
uh uh uh
"Board Authorizes $0.15 Dividend". needed to stop the rats from jumping ship. i'll never forget last Dec when New Cent reported an unexpected huge loss with EPD's they gave out a $2.00/sh dividend which ALMOST caused me to cover my shorts.
did anyone ever verify someones post here about that 13,000 puts on CFC last wk that expired A FEW DAYS AGO?
that headline is a bit misleading...
The question is why CFC loan production continued to jump in the face of escalating prime delinquencies. This kind of "last-resort" credit provision is keeping real estate markets, like San Diego's, from clearing in the face of excess supply.
The answer, according to CFC's guidance, is that they are taking the patient off life support: expect lower production going forward.
Sorry, San Diego.
Angie making a distress call
Don't mess with me this early. That article about Allison Transmissions is tempting enough.
Tanta-what financial vehicles are they referring to?
I believe these are on-balance-sheet securitizations of CFC-originated prime HELs.
really? oh my
that headline is a bit misleading...
Today's investor word is "meiosis."
get ready boys; i can't see how the todays mkt will withstand a hit from CFC and BZH not to mention Alliso
I've got my popcorn ready.
Whoa.
INO Equities Stocks Indexes - U.S $ INDEX (NYBOT:DX) Price Chart and Quote
10 yr down, dollar down, gold up=look out
"Impairment on credit-sensitive retained interests" - IIRC, this could also refer to the 'equity tranche' (or 'toxic waste') of off-balance sheet securitizations. (On Tanta's diagrams may be shown as O/C - overcollateralization)
Originators often/usually keep the lowest tranche; if the portfolio performs well, they keep the excess. If it performs badly, they lose it all.
In general, they should not be booking much expected gains from this portion - it's designed to cut very close to the bone. BUT: if experience has been good for years and they needed to make income targets, the aggressive accountants could easily book some as income.
If very aggressive, this type of activity could be prime fodder for shareholder lawsuits; I have to think there will be at least one company in the industry (no idea who) that will be found to have overdone it.
what is 'meiosis', the name of Mozilo's skin disease?
They are not talking about HELs. They are talking about Prime second liens. In the world of ABS, HELs are not HELOCs - HELs are Subprime loans and include 1st and 2nd lien.
The "retained interests" are likely the residual classes of securitizations that they issued. Many times, the issuer of an ABS retains the residual classes. The residual class basically collects any of the excess cash after everyone (administrator, bond holder, oc buildup, etc.) gets paid.
Gravatar what is 'meiosis', the name of Mozilo's skin disease?
That's quite an understatement.
"what is 'meiosis', the name of Mozilo's skin disease?"
True, too much tanning does induce out-of-control meiosis.
For Tanta, CR and CR Fans
Investment Outlook
Bill Gross
July 2007
Looking for Contagion in All the Wrong Places
link: PIMCO - Investment Outlook-July 2007 "Looking for Contagion in All the Wrong Places"
What is the dollar value of their REOs (from their report not from the web-site that tracks it)?
Tanta, be careful. Offering "extra credit" in this environment could be construed as an ubsolicited tender offer. What I cannot believe is that CFC continues to hire. Seeing the writing on the wall I can only suspect this is the pump before the dump. Sure Mozillo has "diversified" to the tune of $400m in the last two years but he's got to hand the reigns over someday so why not leave the tough times to a successor?
What I cannot believe is that CFC continues to hire
Oh, they're just rehiring people they laid off a couple years ago the last time things got a mite shaky. Anybody who has ever worked for the Tan One for more than a few days understands that it's a revolving door. I'm one of the very few people I know who has never worked for CFC . . .
What is dollar value of their REO ?
We need to start a new tracking index called the "LTCM references in the news" index. I'm seeing LTCM pop up more and more recently.
10 yr down, dollar down, gold up=look out
Don't forget to keep an eye on that Yen. "The one ring that binds them..."
"Management has taken, and is continuing to take, a number of actions in response to changing market conditions. These include tightening of credit guidelines, particularly related to subprime and prime home equity loans; further curtailment of subprime product offerings, including the recent elimination of certain adjustable-rate products"
Countrywide Sub-prime had increased volume and market share in Q2 as many companies exited the market. They now appear to be joining their competitors in cutting back on this product line. This does not bode well for the purchase market in the near term as more potential buyers are being eliminated by the discontinuance of these loan programs.
Bond insures MBIA (MBI) and Ambac (ABK) are due to report earnings tomorrow. This should give us a bit more information about how far the credit problems are spreading.
Moin from Germany,
i hope the link works
Cramer praising Countrywide on Mad Money
Jeff Matthews would say....
I´m not making this up !
The page cannot be found Executive Interviews&clipid=1373_10346185
Here is the correct link
The page cannot be found
If you look at the report, they actually marked-to-market up some of their AAA holdings due to rising interest rates. Still playing games.
Any guesses on when Lone Star pulls the plug on ht LEND deal?
Easy money. My put portfolio is up 30% so far this week--about half a year's salary. I'm especially happy to have sold my Hov August 25 puts before the Buffett rumor and to have bought 40 of the August 20 puts after the rumor. They are now up over 120% in the last two weeks.
Sorry not to have had CFC, but positions in IMB, DSL, and FED are doing well today.
My timing systems posted a DOW sell last Thursday, with a down target of 3-5% in the next month.
The question is whether to start selling mutual funds and buying bonds in long only retirement accounts.
I would buy more of the RKH puts (Regional bank holders) but the bid ask spreads have been too big.
someguywhoknows-by the way the stock is reacting it may be soon. i own shorts here too.
Gross:
PIMCO - Investment Outlook- August 2007 "Enough is Enough"
Mozillo,
"The company has tightened its lending guidelines, and like many rivals has stopped making some of the more exotic subprime loans that have triggered greater-than-expected defaults".
They still do 100% Stated!
This is going to get FUGLY.
We warned everyone but they wouldn't listen. We still have a while before MEW filters through to the broader economy and then Katy bar the doors.
Having lived in a doormat sector of the electronics industry for the last several years, its feels odd to see $3 EPS regarded with tingling nerves.
If my present employer ever did that, options would set us up with one way tickets to the Florida Keys.
IDOC-
Cant we just buy LEND here and tender at 15?
I was getting ready to call Mark Hulbert the "David Lereah" of the stock market, but maybe he's not a complete shill:
The stock market's buying climax
Commentary: There's mounting evidence that it's losing steam
He's been bullish on the way up. You've got to give people credit for for being right, especially if they don't maintain their bullish stance on the way down.
Or maybe a better question...If Lone Star wants to extend offer to end of the month, wouldn't they be supporting it here?
Ya think maybe their bankers aren't giving out that easy money anymore?
Lurker, Thanks for the post. Bill Gross's explanation of the contagion really seems to make sense.
yeah, someone's giving up on the deal
Here is the Gross money quote:
PIMCO looks for the Fed to issue an insurance policy in the form of lower Fed Funds at some point over the next 6 months.
Now, that is an incredibly bullish call. Incredibly bullish. That is, in fact, the bull case.
Now, I wouldn't do anything like think that old Grossy had some worthless stocks and bonds he wanted to unload, but I do smell a rat.
Gross is making a huge bull call. Absolutely no doubt about it. Think about it.
Anyone know when consumer credit default rates get reported? AMEX indicated that they were seeing an uptick in that area in their earnings report...
arbo-i know you're a bull but Gross isn't the first and only to call for a rate cut. yes, the bears could be wrong and if rates get cut stocks could go zooming to the moon again. my nose tells me that may not play out like it has in the past. the shift in the credit mkts we're seeing is new and serious with all indicators pointing to troubling times ahead. the question comes down to will the US consumer reflate along with the Fed? i don't think they have the capacity to.
In case anyone didn't notice, the bottom is falling out on LEND. No (published) news, either. The bid just fell off a cliff about 10 a.m. est.
Somebody knows sump'in.
I am now starting to agree with Bill Gross that a cut in interest rates might show up in the next 6-9 months. If we see the carnage that some of us expect in housing this fall, this seems like a good possibility. It may be time to start buying some long term treasuries in retirment accounts.
I dont see how interest rates can be cut with the dollar as weak as it is. Surely foreign investors and central banks will bail out of dollar assets if they conclude the "strong dollar" policy really is empty rhetoric?
IMO the modest rate cut predicted by Bill Gross is quite consistent with a weak housing market, economy and possibly stock market. This is especially true if the cut is after substantial credit market problems.
A rate cut may not help many long term bonds (especially mortgages and corporates)if foreigners reduce their purchases of US dollar securities.
I'm betting the LEND deal is falling through. Made a similar bet w/ WCI that's working out well -- collapsing margins and a rapidly decaying credit environment make these deals unfundable IMO even when the offer is 'sincere' (I suspect a number of stocks have been artificially propped up by contrived deal offers to allow insiders to distribute).
remember, Paulson & Bernanke both favor a strong dollar
We don't know if they like a weak dollar more. What if it drops another 20%? Sure makes the outstanding gov't less of a burden.
If it's already been posted elsewhere my apologies. But I thought you might want to check out Luminent Mortgage Capital's SEC filing from yesterday. It contained an open letter that really went off about the problems in the mortgage industry. In fact, CEO S. Trezevant Moore Jr. went so far as to say "In my almost 30 years in the U.S. mortgage-backed securities market, I have never before seen the intensity of confusion, uncertainty and outright fear as right now."
Complete text can be obtained here:
404 Page Not Found
Lumpeninvestor (9:24 am), The US dollar sank 1/5th the way to Loonie-par before lunch today. What in the world is going on with the currencies today?
Mike_in_FL (1:16pm), Tabernac! That issue of "Pharos" is, ahem, interesting.
... oops! em off
Now, I wouldn't do anything like think that old Grossy had some worthless stocks and bonds he wanted to unload, but I do smell a rat. - arbo
Gross have a vested interest? NO WAY!!!
[/sarcasm]
I dont see how interest rates can be cut with the dollar as weak as it is. Surely foreign investors and central banks will bail out of dollar assets if they conclude the "strong dollar" policy really is empty rhetoric? - sterlingerl
Not Asia - not if they want to maintain their de facto pegs. The dollar index means nothing if the RMB & JPY don't follow.
Watch the yen, it will tell you about all you need to know about the dollar. If the dollar falls well under 120 JPY (say starts pushing 110 or lower - then you can bet the Fed will start having dollar worries - not until.
Apparently Mozillo used the "D" word. As in "not since the Great Depression." Does this mean that they are going to stop hiring?
Countrywide Spurs Concerns with Great Depression Comment | Trading Floor Blog | SchaeffersResearch.com
freakdog- "Apparently Mozillo used the "D" word."
Not him, the CFO. That's exactly what the scaredy bulls needed to hear today.
Freakdog, you were right. Bill Gross was wrong.
Countrywide's Net Declines 33 Percent on Home Equity (Update7) - Bloomberg.com
re: all the low-dollar commentary... the buck is falling in expectation of a Fed and market rate cut, not because of the credit/housing weakness. In the short run, changes in interest-rate differential explain most currency movements.