Didn't I read something a few weeks back that they were hiring a ton of employees from American Home Mortgage and taking over a large number of retail sites???? Not sure if I am remembering correctly?
"Were it not for the increases in foreclosure starts in those four states, we would have seen a nationwide drop in the rate of foreclosure filings. Thirty-four states had decreases in their rates of new foreclosure and the increases were very modest in the states with increases, other than those four," Duncan said.
California has 17% of the subprime ARMs in the country and more than 19% of the foreclosure starts on subprime ARMs. California, Florida, Nevada and Arizona have more than one-third of the country's subprime ARMs and more than one-third of the foreclosure starts on subprime ARMs.
"According to the MBA report, the delinquency rate for subprime loans was 14.82% in the second quarter, up from 13.77% in the first quarter. But while in the second quarter of 2002 there were 1.19 million subprime loans outstanding, today there are about 5.9 million, Shepherdson said."
I dont think their margins are larger, I think it solely has to do with finding buyers....
Elvis said: To be corrected to "a reduction of roughly 50% of our workforce" in about 3 weeks.
Now now, they do have a retail branch division. It will take them six months to hit 50%, nine to get to 100%. Well... ok, 90% for "clean up". Indymac is not set up for a downturn at all.
My wife is unhappy with me for making her pull money out of Indymac. I sent my dad a few web pages on Indymac. He was more positive: "Thank you, I have moved my money."
I expect the healthier banks to start layoffs, en mass, soon. Soon Being within weeks. At first a trickle... then a flood. Its sad, I have friends in banking. Some VP's, some branch managers. But what can I do?
"Their margins are larger from writing GSE compliant mortgages"
This may be true. With so many smaller lenders have been forced out of business over the past several months they can charge higher rates on conforming loans and get away with it.
I wouldn't worry , they are still in big trouble. They have to deal with declining loan production and some still unknown losses on REO's over the next several years.
Roubini's blog again referred to REI as being only 5% of the economy. I keep feeling that this misses all the brokers, mortgage brokers, ibs, appraisers, furniture etc. involved with existing sales and refis (not new home production). Real estate oriented payrolls just feel like more than 5% of the economy, esp. considering these folks are well paid. Also consider the multiplier. Given our hollowed-out services only economy, FIRE + Construction is about 25% of GDP (http://www.bea.gov) I'd be surprised if 1/2 of that wasn't Housing related or CRE related, with a big multiplier.
I like what they're doing, but it's not far enough. They should just cut the dividend altogether. No one in their right mind would own this stock now for their current dividend. If you own it, you're hoping it survives until the market stops crashing.
That being said....
I sold some puts when they dropped to something like 18. I had better shorting opportunities. In hindsight, maybe I should have held on.
They're following the same path as every other BK. First, cut dividends, then layoffs, then eliminate dividend altogether, then announce that the company is going to survive the day before announcing they're stopping all business activities and letting everyone go.
"Their margins are larger from writing GSE compliant mortgages"
If it's true, it will not continue being true once everybody goes this way this assuming that jumbo mkt doesn't recover. Through competition margins should erode.
The Street liked IndyMac's announcement, as the stock recovered nicely. I wonder whether the rest of the RE related complex, such as builders, will be rewarded for cutting their dividends. I lightened up some on puts today,to have some powder dry for after a Fed cut. This will be interesting. The market will clearly be disapointed now if the cut is < 0.50.
the 2 bit stock is here: reduce our quarterly dividend payout to $0.25 per share
Charlie is right: No one in their right mind would own this stock now for their current dividend. this is a delicate matter that didn't need this kind of attention.
Mark bangs this out of the park:
Apparently the deposits are a bit on the thin side.
Indymac management has (IMHO) been very strongly focused on share price and has shown considerable skill in resisting price erosion, mostly by playing the market through stock buybacks (using borrowed money), acquisition rumors and other forms of 'buzz,' avoiding margin calls, etc. On a fundamental basis IMB should not have been a difficult short for the past year but in practice they have proven one of the tougher nuts to crack and even though they are breaking down YTD a short could (and can) still get squeezed very hard and very fast. I've made some money on this one and believe I'll make some more but it hasn't been easy.
Zinc, you're a moron if you don't take it. My bet is that you will pay 7.5 with a "no cost refi" or higher, however. Think about it. You're going to pay those 3rd party charges one way or another. Also, when everyone in the industry is charging higher interest because that's what investors are demanding and that what they have to charge to keep their income to a sustainable level, why would they give a lower rate? Do their investors feel benevolent? Maybe they feel some remorse over giving you an ARM last time?
Out with the old, in with the new. These companies need to slash payroll, become skeletons to survive because of their liability. How can the do this? Outsource their servicing/reo portfolios.
New companies are springing up overnight, lean ones without those liabilites who can live well and get rich off the pennies per loan they get. And who's running them?
I'm with Ben, Zinc. You have to refinance while the company is still in business and willing to refi to you. Tighter lending practices may bite you in the ass in a few months.
Ben, Is it a Jumbo and is your credit OK? If it's not a Jumbo and you're current/good credit, I would wait for the Fed to lower... Provided that you are eligible for a GSE loan.
FFDIC,
If you are looking for names to short,just drive -by your neighborhood. The stupid Regional banks have a Big sign in front of the large Condo developments that they are financing.
Option One mortgage is still running radio ads claiming 3.82% on a 30 year fixed (!)
They claim it is some sort of mortgage accelerator program, my guess is that it is a 30 year I/O with a balloon payment at the end. Maybe with some fine print saying that if you make extra payments on the principal (yeah ... right) then you can pay it off before the balloon hits you like a runaway freight train.
Point is, the scams are still out there, and there are plenty of desparate folks looking for any way out.
Dh, no one cares.
BTW, hope you killed it and made a ton !
on another note.
Is it a big deal that e mini s&p has traded 1.6 million contracts today?
with the oi changing hands by the end of the day?
E-mini's have tremendous liquidity and should correlate with stock volume. That is, volume increases when thing are happening, for better or for worse in the markets. I am doing a futures spread--long S&P 500, Short Russell 2000. When the market shoots up or falls down very fast at the opening, this is almost always the market catching up with the futures. One nice thing about having a futures account is that you can put in a trade after hours, if some important announcement or event should occur. Index futures are highly leveraged. For a little less than $4,000 one E-mini futures contract controls about $60,000 worth of index.
"Apparently the deposits are a bit on the thin side" - Mark
Yep. I moved a CD out of there a few months ago and into Advanta bank in Utah. I have a CD at another bank maturing in a few days - how can I know who is safe? I've been using Bankrate.com's ratings, but I'm sure I could be doing more. Any help is appreciated.
For a little less than $4,000 one E-mini futures contract controls about $60,000 worth of index.
Umm, shouldn't that read; "For a little less than $4,000 one E-mini futures contract is exposed to about $60,000 worth of index risk/reward?"
Sounds too good. I'd triple check the fine print and regular print and look at why they're being so nice. ( If you find out their motivation I'm sure we're dying to know.) Then I'd sign,...and still wonder,...
You are definitely correct that there is both risk and reward. For a little less than $4,000 in margin, you have a contract for $60,000 in stock. So if the index dropped or gained 10%, you would gain or lose $6,000. Futures can be long or short, so you can play both sides. Clearly, a huge drop like in Oct 1987 would cause huge gains and losses for anyone with unhedged futures positions. Of course, if you had a $1 million large cap stock account, you could sell 16 or 17 E-mini futures against it as a hedge, rather than selling off your account and taking a capital gains hit. You might do this if conditions got very scarey in the market. You could also use options for the same purpose.
"the mortgage and housing markets are very difficult, and the private secondary markets have significantly worsened"
Translated: Our former investors and banks in China, Japan, and Europe have now told us for the umpteenth time that they will never, ever buy our crappy sure-to-fail paper again.
Clearly, a huge drop like in Oct 1987 would cause huge gains and losses for anyone with unhedged futures positions. Of course, if you had a $1 million large cap stock account, you could sell 16 or 17 E-mini futures against it as a hedge, rather than selling off your account and taking a capital gains hit. You might do this if conditions got very scarey in the market. You could also use options for the same purpose.
Bill | 09.07.07 - 3:33 pm |
this drives the point that the volume on sp500/e500m needs to be taken in context with the cash market...
low volume in cash, high volume in Futures could be deadly
We know there are large vanilla holder's of equities that simply won't/can't sell there position in total(per stk)
that leaves them only a few choices if they want to underweight there big cap exposure...
underweight lg cap/overweight sml cap
underweight lg/portfolio insure(fut/opt)
To be corrected to "a reduction of roughly 50% of our workforce" in about 3 weeks.
...and 90% in 4
And will be reduce the risk of recession to 20% no doubt.
Dear shareholders if you haven't sold our stock and shorted it you are not very bright.
That's better.
I have not given up hope that we'll have a soft landing. - Kudlow, CNBC
He did not mention the word "slope" though, lol.
Didn't I read something a few weeks back that they were hiring a ton of employees from American Home Mortgage and taking over a large number of retail sites???? Not sure if I am remembering correctly?
Wow, a reduction in the dividend and a layoff. I like this "we have largely converted our mortgage production to a GSE-eligible model".
Now, where am I going to get that jumbo loan to buy my home when they finally become affordable here in SoCal?
From MBA:
"Were it not for the increases in foreclosure starts in those four states, we would have seen a nationwide drop in the rate of foreclosure filings. Thirty-four states had decreases in their rates of new foreclosure and the increases were very modest in the states with increases, other than those four," Duncan said.
California has 17% of the subprime ARMs in the country and more than 19% of the foreclosure starts on subprime ARMs. California, Florida, Nevada and Arizona have more than one-third of the country's subprime ARMs and more than one-third of the foreclosure starts on subprime ARMs.
New foreclosures set record in latest MBA survey - MarketWatch
...we are experiencing some pricing power on new loans such that our margins are improving.
WTF? Their margins are larger from writing GSE compliant mortgages than they were when they were writing high interst, low doc, toxic paper?
pricing power on new loans
Vs Who, Craig Crackpipe and Mary Meth?
Would you buy anything that preforms like this:
"According to the MBA report, the delinquency rate for subprime loans was 14.82% in the second quarter, up from 13.77% in the first quarter. But while in the second quarter of 2002 there were 1.19 million subprime loans outstanding, today there are about 5.9 million, Shepherdson said."
I dont think their margins are larger, I think it solely has to do with finding buyers....
Elvis said:
To be corrected to "a reduction of roughly 50% of our workforce" in about 3 weeks.
Now now, they do have a retail branch division. It will take them six months to hit 50%, nine to get to 100%.
Well... ok, 90% for "clean up". Indymac is not set up for a downturn at all.
My wife is unhappy with me for making her pull money out of Indymac. I sent my dad a few web pages on Indymac. He was more positive: "Thank you, I have moved my money."
I expect the healthier banks to start layoffs, en mass, soon. Soon Being within weeks. At first a trickle... then a flood. Its sad, I have friends in banking. Some VP's, some branch managers. But what can I do?
Got popcorn?
Neil
"Their margins are larger from writing GSE compliant mortgages"
This may be true. With so many smaller lenders have been forced out of business over the past several months they can charge higher rates on conforming loans and get away with it.
I wouldn't worry , they are still in big trouble. They have to deal with declining loan production and some still unknown losses on REO's over the next several years.
"Some VP's, some branch managers"
It's banking - isn't everybody who's been there more than a year a VP?
Almost on Topic:
Roubini's blog again referred to REI as being only 5% of the economy. I keep feeling that this misses all the brokers, mortgage brokers, ibs, appraisers, furniture etc. involved with existing sales and refis (not new home production). Real estate oriented payrolls just feel like more than 5% of the economy, esp. considering these folks are well paid. Also consider the multiplier. Given our hollowed-out services only economy, FIRE + Construction is about 25% of GDP (http://www.bea.gov) I'd be surprised if 1/2 of that wasn't Housing related or CRE related, with a big multiplier.
Now, where am I going to get that jumbo loan to buy my home when they finally become affordable here in SoCal?
When they become affordable, you won't need the jumbo loan.
Yikes!!! the Dalla just dropped below the 80 mark to 79.93...Goodbye Purchasing power hello $6.00 box of ceral.
I like what they're doing, but it's not far enough. They should just cut the dividend altogether. No one in their right mind would own this stock now for their current dividend. If you own it, you're hoping it survives until the market stops crashing.
That being said....
I sold some puts when they dropped to something like 18. I had better shorting opportunities. In hindsight, maybe I should have held on.
They're following the same path as every other BK. First, cut dividends, then layoffs, then eliminate dividend altogether, then announce that the company is going to survive the day before announcing they're stopping all business activities and letting everyone go.
"Their margins are larger from writing GSE compliant mortgages"
If it's true, it will not continue being true once everybody goes this way this assuming that jumbo mkt doesn't recover. Through competition margins should erode.
Now, where am I going to get that jumbo loan to buy my home when they finally become affordable here in SoCal?
When they become "affordable" you won't need a jumbo.
Sorry for repeating the prior post almost to the word that I hadn't even seen. Two great minds........etc.
Succo:
What Future Does the Credit Crunch Bring?-Minyanville
The Street liked IndyMac's announcement, as the stock recovered nicely. I wonder whether the rest of the RE related complex, such as builders, will be rewarded for cutting their dividends. I lightened up some on puts today,to have some powder dry for after a Fed cut. This will be interesting. The market will clearly be disapointed now if the cut is < 0.50.
well the margins on gse-eligible alt-a are better than vanilla gse loans...
Indymac advertised 5.7% CDs (min 5K) and 5.75% money market accounts (min 25K) in the San Diego paper yesterday.
Apparently the deposits are a bit on the thin side.
my daddy taught me that reducing dividend payouts is the last worstest thing ya can do.
gee, maybe it will get even lower?
whats the yield? at least the shorts don't have to pay as much when the time comes each quarter...
the 2 bit stock is here:
reduce our quarterly dividend payout to $0.25 per share
Charlie is right:
No one in their right mind would own this stock now for their current dividend. this is a delicate matter that didn't need this kind of attention.
Mark bangs this out of the park:
Apparently the deposits are a bit on the thin side.
What is the consensus for mortgage rates ?
Will they decline ?
The firm that holds my adjustable is offering a no cost refi on my ARM at 6.5 30yr/fixed.
What say ye ?
Indymac management has (IMHO) been very strongly focused on share price and has shown considerable skill in resisting price erosion, mostly by playing the market through stock buybacks (using borrowed money), acquisition rumors and other forms of 'buzz,' avoiding margin calls, etc. On a fundamental basis IMB should not have been a difficult short for the past year but in practice they have proven one of the tougher nuts to crack and even though they are breaking down YTD a short could (and can) still get squeezed very hard and very fast. I've made some money on this one and believe I'll make some more but it hasn't been easy.
I don't know if anyone has posted this article yet. Its a bit long, but fantastic:
RGE - Nouriel Roubini's Global EconoMonitor
I'm sure Tanta would like it also.
Zinc, you're a moron if you don't take it. My bet is that you will pay 7.5 with a "no cost refi" or higher, however. Think about it. You're going to pay those 3rd party charges one way or another. Also, when everyone in the industry is charging higher interest because that's what investors are demanding and that what they have to charge to keep their income to a sustainable level, why would they give a lower rate? Do their investors feel benevolent? Maybe they feel some remorse over giving you an ARM last time?
Out with the old, in with the new. These companies need to slash payroll, become skeletons to survive because of their liability. How can the do this? Outsource their servicing/reo portfolios.
New companies are springing up overnight, lean ones without those liabilites who can live well and get rich off the pennies per loan they get. And who's running them?
The execs they just layed off.
Civilian participation rate in Aug stood at 65.8. After peaking at 67.1 in 2000, we are now back to 1988 levels.
United States: Labor Force Participation Rate; NSA (no alternative series; or civilian labor force basis)
Table A-1. Employment status of the civilian population by sex and age
Zinc,
Ben is right. Take it, especially if you are gonna stay.
I'm with Ben, Zinc. You have to refinance while the company is still in business and willing to refi to you. Tighter lending practices may bite you in the ass in a few months.
Zinc -
Do you think they're moving you to fixed to allow them to sell a conforming loan? Maybe they need cash and are sifting through the portfolio.
Because I think many banks would prefer the adjustable so they have less interest rate risk to manage.
Hey, How did everybody like my call
on the Volatility contraction set-up
on the Japanese yen?
Even a stopped clock gets....
I still say Rate cuts no more than
75 BP total this year due to Chinese inflation
and dollar scare.
The yield curve will remain inverted.
zinc,
Beats my 1975 rate of 8% on 30 yr fixed thru 2005. Take it and please give us the name of the firm. Thanks.
Ben, Is it a Jumbo and is your credit OK? If it's not a Jumbo and you're current/good credit, I would wait for the Fed to lower... Provided that you are eligible for a GSE loan.
FFDIC,
If you are looking for names to short,just drive -by your neighborhood. The stupid Regional banks have a Big sign in front of the large Condo developments that they are financing.
Option One mortgage is still running radio ads claiming 3.82% on a 30 year fixed (!)
They claim it is some sort of mortgage accelerator program, my guess is that it is a 30 year I/O with a balloon payment at the end. Maybe with some fine print saying that if you make extra payments on the principal (yeah ... right) then you can pay it off before the balloon hits you like a runaway freight train.
Point is, the scams are still out there, and there are plenty of desparate folks looking for any way out.
Despicable.
Dh, no one cares.
BTW, hope you killed it and made a ton !
on another note.
Is it a big deal that e mini s&p has traded 1.6 million contracts today?
with the oi changing hands by the end of the day?
Foreclosure listings flood Dallas/Fort Worth home market
Foreclosure listings flood D-FW home market |
News for Dallas, Texas | Dallas Morning News
| Dallas Business News
Texas foreclosure notices surpass national average
Texas foreclosure notices surpass national average |
News for Dallas, Texas | Dallas Morning News
| Dallas Business News
Technically,
Can you explain the signifigance of the S&P E-mini volume?
E-mini's have tremendous liquidity and should correlate with stock volume. That is, volume increases when thing are happening, for better or for worse in the markets. I am doing a futures spread--long S&P 500, Short Russell 2000. When the market shoots up or falls down very fast at the opening, this is almost always the market catching up with the futures. One nice thing about having a futures account is that you can put in a trade after hours, if some important announcement or event should occur. Index futures are highly leveraged. For a little less than $4,000 one E-mini futures contract controls about $60,000 worth of index.
The firm that holds my adjustable is offering a no cost refi on my ARM at 6.5 30yr/fixed.
Great discussion and many thanks.
Comparables sold in Aug 2006 for 425 K
- one time paper equity ~ 275 + (Now?)
- real equity ~ 40000
Definately GSE conforming - no jumbo
Yes - am a moron but not in housing since a 14.25 % FHA in 1980 -
Please continue to comment if you like.
"Apparently the deposits are a bit on the thin side" - Mark
Yep. I moved a CD out of there a few months ago and into Advanta bank in Utah. I have a CD at another bank maturing in a few days - how can I know who is safe? I've been using Bankrate.com's ratings, but I'm sure I could be doing more. Any help is appreciated.
For a little less than $4,000 one E-mini futures contract controls about $60,000 worth of index.
Umm, shouldn't that read; "For a little less than $4,000 one E-mini futures contract is exposed to about $60,000 worth of index risk/reward?"
"zinc, come back zinc" (The Simpsons)
Sounds too good. I'd triple check the fine print and regular print and look at why they're being so nice. ( If you find out their motivation I'm sure we're dying to know.) Then I'd sign,...and still wonder,...
Thanks, Bill and R. Cote.
Robert:
You are definitely correct that there is both risk and reward. For a little less than $4,000 in margin, you have a contract for $60,000 in stock. So if the index dropped or gained 10%, you would gain or lose $6,000. Futures can be long or short, so you can play both sides. Clearly, a huge drop like in Oct 1987 would cause huge gains and losses for anyone with unhedged futures positions. Of course, if you had a $1 million large cap stock account, you could sell 16 or 17 E-mini futures against it as a hedge, rather than selling off your account and taking a capital gains hit. You might do this if conditions got very scarey in the market. You could also use options for the same purpose.
"the mortgage and housing markets are very difficult, and the private secondary markets have significantly worsened"
Translated: Our former investors and banks in China, Japan, and Europe have now told us for the umpteenth time that they will never, ever buy our crappy sure-to-fail paper again.
Zinc,
I have a 7.5% mortgage, that is what I refinanced to after starting with an 11% i.e., it's all a matter of perspective.
Zinc:
Who's your bank?
Clearly, a huge drop like in Oct 1987 would cause huge gains and losses for anyone with unhedged futures positions. Of course, if you had a $1 million large cap stock account, you could sell 16 or 17 E-mini futures against it as a hedge, rather than selling off your account and taking a capital gains hit. You might do this if conditions got very scarey in the market. You could also use options for the same purpose.
Bill | 09.07.07 - 3:33 pm |
this drives the point that the volume on sp500/e500m needs to be taken in context with the cash market...
low volume in cash, high volume in Futures could be deadly
We know there are large vanilla holder's of equities that simply won't/can't sell there position in total(per stk)
that leaves them only a few choices if they want to underweight there big cap exposure...
underweight lg cap/overweight sml cap
underweight lg/portfolio insure(fut/opt)