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CFC up almost 10% this morning. Go figure.
I got the microwave!
So you have to wonder how long it will be before the banks backing CFC start to not see them as a client anymore, but as more of a competitor. You've played Monopoly, haven't you?
That's interesting stuff. How are they going to be "the last man standing" when they become like the other banks? Doesn't seem to work to me.
Can I get a free calendar?
12 months of the tan man in provocative poses ?
Be afraid.
That's interesting stuff. How are they going to be "the last man standing" when they become like the other banks?
Oh, man. You broke the code! Now Tangelo has to kill you!
I'm calling the witness relocation program right now...
Just for your information and to better understand how close countrywide is to the brink of a melt-down.
Countrywide is the servicer of my mortgage and I have automatic mortgage payments being made automaticially from my checking account on the 10th of every month.
Well times are so bad for countrywide that they, without my concent, took payment from my account on the friday the 7th -- instead of monday the 10th.
This obviously indicates that they look to "steal" 3-days of float away from customers to allow them to survive their liquidity crunch for another day.
As a result their Banking friends in the community are now enabled to reap higher profits by charging an "overdraft" fee to potential customers who do not keep high cash balances in their checking accounts.
Loks like this could become grounds for a class action - but i guess they they don't expect to be around for tomorrow!
As Billy Joel sang -- "Say Good Bye to Hollywood" and lets us all now run for the hills...... caio
Being a banker is great, you get to do whatever you want and are accountable to no-one. You need to keep making campaign contributions though...
The theory of paranoid investing. It is your money, they are not going to let you have it.
Will
precisely why i have Vanguard automatically "issue" my mortgage pmt around the 11th of each month vs. open checkbook policy on CW's end. amazing thing is CW has misplaced this check 3x in past 2 yr which is a bite to correct and get off credit report.
i also have noticed an increased frequency of my local bank extracting fees from my acct for overdraft protection. they used to notify me when my business ran over, but stopped for an unexplainable reason last yr. just another excuse. i have to run higher balances now to prevent this. what a scam.
Anyone know what going on with their CP?
From the Q -
Asset-Backed Commercial Paper
The Company has formed two special purpose entities to finance certain of its mortgage loans held for
sale using commercial paper. These entities issue commercial paper in the form of short-term secured
liquidity notes (SLNs) with initial maturities of up to 180 days. The SLNs bear interest at prevailing
money market rates approximating LIBOR. The SLN programs capacities, based on aggregate
commitments from underlying credit enhancers, totaled $30.7 billion at June 30, 2007.
For the six months ended June 30, 2007, the average borrowings under these facilities totaled
$17.0 billion and the weighted-average interest rate of the SLNs was 5.35%. At June 30, 2007, the
weighted-average interest rate of the SLNs was 5.39% and the Company had pledged $8.3 billion in
mortgage loans held for sale to secure the SLNs.
sorry..."what is"
The Fed's weekly commercial paper report is out, and though CP outstanding is down again, it is down by an amount that is far closer to normal weekly fluctuations. The decline probably doesn't actually represent normal weekly fluctuations, but the signs are good. Non-financial CP outstanding actually rose after 2 weeks of decline, a sign that the bacteria has stopped spreading. Foreign CP outstanding is up in each of the past 2 weeks, which I take as another sign that blind risk-shedding is not as prevalent now as a couple of weeks ago.
idoc,
Forcing you to hold bigger balances may be a way to reduce fluctuations in liabilities and to simplify reserve maintenance. In a period of high interbank borrowing costs, that makes good sense. They may have acted like they wanted to collect penalties, but they may actually want the higher account balance more.
anybody know this Dressaur guy? perhaps he's O-Joe.
Dollar bull has advice for Countrywide CEO Peter Brimelow - MarketWatch
Tanta,
The problem with taking in money market deposit accounts and one-year CD deposite, in order to access mortgage lending money, is that depositors have become very shrewd. They will not put more than $100,000 FDIC limit into Countrywide. And if rates don't stay high, the hot money will move away.
So, please say, how do you make 30-year mortgage commitments funded by 1-year hot CD money?
Poor widdle CFC got caught stealing the other kids' lucnh money and runs to hide behind the FDICs skirts.
They couldn't sell their umpaired scraps of MBS to other people so they plan on selling it to themselves?
Can you see the Tan Man as George Bailey?
When fear of Countrywide's success pops up, like now, imo, this is more like the time to buy puts.
Can CW become yet another S&L?
Really, who cares.
CW's gonna be sloggin for deals, with a pile of folks who think they're the anti-jeezo, learned from their prior dealings with 'em.
WaMu went from S&L to junior CW, and now CW is changing cloaks and pretending it's an old fashioned WaMu.
Funnneeee.
So, please say, how do you make 30-year mortgage commitments funded by 1-year hot CD money?
You raise the rate on the mortgage loans. That's in paragraph 3.
i was just looking at an academic paper, and this is the abstract:
In this study we provide empirical evidence demonstrating a relationship between the nature of the assets and the primary market spread. The model also provides predictions on how other pricing characteristics affect spread, since little is known about how and why spreads of asset-backed securities are influenced by loan tranche characteristics. We find that default and recovery risk characteristics represent the most important group in explaining loan spread variability. Within this group, the credit rating dummies are the most important variables to determine loan spread at issue. Nonetheless, credit rating is not a sufficient statistic for the determination of spreads. We find that the nature of the assets has a substantial impact on the spread across all samples, indicating that primary market spread with backing assets that cannot easily be replaced is significantly higher relative to issues with assets that can easily be obtained. Of the remaining characteristics, only marketability explains a significant portion of the spreads variability. In addition, variations of the specifications were estimated in order to asses the robustness of the conclusions concerning the determinants of loan spreads.
don't you love stats jokes?
This is amusing...
Compare CD rates: Find rates in your area
If a 30-day loan is rolled over 360 times before it is paid off is it really a 30-day loan? Maybe the world just got tired of getting 30-day rates for 30 year loans.
Taking a look at the S&L/Thrift peer group... specifically at employee headcount. We have the following
Mkt Cap Employees
Wamu 30 Bill 50 k
Sovereign 8 Bill 11 k
CFC 10 Bill 55 k pre layoff
Something has got to give... if they are indeed heading more toward a traditional model, there's a lot more blood to be shed.
that didn't format well. should be
Wamu is 30 billion mkt cap with 50 k employees
Sovereign is 8 billion cap, 11 k employees
CFC is 10 billion cap, 55 k employees.
this is simplistic and doesn't look at earnings or margins... but a move toward the pure thrift model implies some serious change
Good now when they go belly-up the FDIC can pay off some of their debts. Fantastic, lets shift as much as we can to the taxpayer.
Mozillo is a crook of the highest order.
Who the hell lent them another 12billion. They have chewed through about 14 billion in two-three weeks, what is another 12 billion going to do.
what reduced competition in the prime market? I thought everyone and their cousin in the mortage business, like say Countrywide, was suddenly falling allover themselves to make GSE-compliant loans.....
It looks like global money markets are breathing a sigh of relief today, loosening up 10 bps or so on average. Still very expensive, but back from the brink. I'm hearing some of the KKR - First Data deal is going to get securitized, which is taking the heat of ib balance sheets. Of course, one has to ask if one 30 bio deal was enough to put the patient in intensive care for a month, can the patient survive the remaining 270 bio looming on the sidelines? Zero chance, but the champagne and cigars will be flowing in Manhattan tonight.
More fed repo today, 16b. Most fed repo since September 6th (31.25 large)
Temporary Open Market Operations - Federal Reserve Bank of New York
21 billion
"In its second special three-month financing operation the ECB allotted EUR 75 B compared to EUR 40 B in its first operation at an average lending rate of 4.52%. The large amount lent and the low level of rates indicates that the ECB wants to relieve money markets."
Forex Street. The Foreign Exchange Market
I'm hearing some of the KKR - First Data deal is going to get securitized,
And which unwary retail investor is going to buy a piece of that trash?
Well, CW could always get creative and short a pool of 30 year tbonds against a pool of mortgages and try to live off the difference. Of course that sound even more suicidal unless the interest rates go up and you can rebuy the 30s for cheap and you get enough prepays to generate the funds to do the rebuys. Of course if rates drop you are screwed, but then it seems that no matter what happens with a term mismatch you have damage. I think Countrywide's problem is that they don't have the traditional profit centers of brick and mortar banks, and so they can't absorb the losses of their concentration in mortgages. Now if they had a nice used/new car, credit card, business banking stuff they would probably do better.
Sorry about my monthly rant- but it was quite interesting that the drone calling me didn't even understand my RESPA rights with regard to my Aug 29th notice of change of servicer. What, they expect me to Fedex them something when I am not even sure where to send the payment. Yeah right. What galls me is that I asked them not to call me unless it is past the 15th without a payment- a real reminder- not this crap robotic stuff they like to pull. Well, they were better than GMAC, at least they are going to tell me how in a letter to shut off the calls.
As for selling KKR sewage, good luck. I don't think that much is going to be moved off the books before the end of the quarter- which is, um, in seventeen days... Next quarters earnings are going to be very interesting, with some huge loss provisions necessary for those pier loans, and those expected profits from selling them never were booked;-}
Xmas Bonus time in the deal shops is going to be bery bery bad.
Someday this war's gonna end...
" I'm hearing some of the KKR - First Data deal is going to get securitized,
And which unwary retail investor is going to buy a piece of that trash?"
They probably can find buyer for the higher tranches for reasonable price (100%??) and just keep the lower tranches themselves. The alternative is to sell the loan and take a 10-15% loss. It is a no brainer for the IB which has these loans will try to securitize them.. The key is whether they need to keep more than 10-15% of the lower tranches to get the deal to go through.
Yes, there is reduced competition... but the total market is vastly reduced, too. The 'reduced' term may be true of the number of competitors, but the toughness may increase... like starving people fighting for a piece of bread.
You don't understand the question. I'm not talking about a term match.
I'm talking about access to capital in times of hot money deposits.
You take in the 1-year CD deposits of 100 people. You loan it out as a mortgage for 30 years. A year later, 89 of those 100 people ask for their principal back. Where do you get it?
You're going to sell the mortgage paper...to whom?
Countrywide Obtains Extra $12 Billion in Financing - WSJ.com Who funded CFC's new and existing lines of Credit? I wonder? MBS's from CFC's lending arm pass thru to CFC's Bank then to the Fed's discount window and back out to "new and existing credit" Pretty neat - wish I could do that.
OT: BofA is offering a money market account from the "Defenders of Wildlife" at 5.57% or 5.71% APY for 50k+.
Click on the link then click the arrow beside "More savings options" and then you can select the MMA.
https://www5.bankofamerica.com/myexpression_banking/productInfo.do?affinity=12181&segment_id=CHAR
I wonder why such a high yeild for a MMA at BofA
You take in the 1-year CD deposits of 100 people. You loan it out as a mortgage for 30 years. A year later, 89 of those 100 people ask for their principal back. Where do you get it?
Well, if you make it an amortizing loan--for a change--you have principal back on a year's worth of loan payments.
On a big enough portfolio, you have large curtailments or entire prepayments (refis), which also return principal.
Or you fund part of the loan with deposits and part from borrowing from the Federal Home Loan Bank.
Or you hedge with Treasury contracts.
I don't think anyone is suggesting that CFC is going to become a "pure" thrift with all mortgage loans held on the books and 100% funded by deposits.
CFC will probably hold ARMs and sell fixed to the GSEs.
Actually, it sounds like a fair chunk of the paper will get moved. As for who's buying? Certainly not me, but J6P is certainly loading up via his pension fund, etc, and I would imagine a good piece is ending up in what's left of hedge fund land. I'd compare today to having a massive hangover, where for a brief moment you think you're starting not to feel like death, but that's only because it's early and you're still drunk, and the worst is only just beginning.
Countrywide Foreclosures (REO) Blog
News flash: CFC stock goes up because they're getting into the property management business. They always forget to mention all these cool houses they own.
One good thing about all this is that the bullfools who rule on Wall Street are giving the non-fools plenty of time to get out. We need to be grateful to them.
You take in the 1-year CD deposits of 100 people. You loan it out as a mortgage for 30 years. A year later, 89 of those 100 people ask for their principal back. Where do you get it?
Don't you remember?
Step 1, take deposits and make 30 year mortgages.
Step 3. profit.
Gnomes (South Park) - Wikipedia, the free encyclopedia
oops, a better link
you can Youtube the video too.
http://en.wikipedia.org/wiki/Image:Gnomes_plan.png
Did they include this graph in their report? http://bp3.blogger.com/_A2btxwmKXXg/Rugsln7jnLI/AAAAAAAAAtc/wgdFWn-5BAU/s1600-h/Foreclosures_All_States.jpg
Those are the CFC REOs as of yesterday. Total asking price is $2.58 Billion.
Re: CFC's plans going forward
Is this process not unlike a mammal trying to evolve into a dinosaur?
CFC's 5 Point plan going forward:
1. Pretend your to big to fail when you step up to the discount window.
That's about all I can come up with.
Is the $12 billion that CFC just secured delaying the inevitable?
I can't believe the stock jumped almost 14% today.
they, without my concent, took payment from my account on the friday the 7th -- instead of monday the 10th.
This disgusting little trick has been around for years, used by other than CFC, in that famous wiseguy test-bed community, Ann Arbor, MI. One reason I try to avoid auto-payment arrangements.