@Deal Junkie - The idea is to buy the loans at steep discounts and force payments by rejiggering the terms of the loans, or resell them for a profit. In case of a foreclosure, buyers are hoping to take control of the underlying real estate.
And sell it in this boom market we're having? Feh.
Just kidding. You really hit the nail on the head there CR. Wayyy to go.
Meanwhile I'll try and decipher to myself what this announcement is really all about. Having just come from the docs with some TMI, albeit only routine, things done to me, I'm still a little dreamy - but even in this state I can sense - there's something else here. Any ideas ?
Everything is telling you the financial system is broken,'' Simon, whose Newport Beach, California-based unit of Allianz SE manages the world's largest bond fund, said in a telephone interview today.Everybody's in de-levering mode.''
Obviously, a portfolio of this magnitude will not be picked up by a single buyer. I envision a consortium of buyers . . . including O-Joe, Sebastian, Si.V., all led by Toonces, the Cat Who Could Call Himself A Hedgefund.
O-Joe thought yesterday's stick save (or was it the one the day before yesterday) represented a valid re-test of the low, even though it was a good 40 handles higher than the Jan lows on an intra-day basis.
Tomorrow will be very interesting if the unemployment number is below expectations.
Thank god someone knows the proper usage of "whom"...object of the preposition. Now if people would just stop it with the "irregardless"...
I'm looking for that sub 11500 on the dow. Looks like it's now within sight. Of course when that happens, you'll hear from our resident bulls. If they have the strength from all the crying.
Traders are putting their phones down and backing slowly away from their desks,'' O'Donnell said today in a telephone interview. ``Relatively little'' agency mortgage-backed securities are being traded, Pimco's Simon said.
"It is nowhere near what we are seeing in the housing market but credit card delinquencies are starting to tick up especially in areas where foreclosures are heavy," Rosengren said while answering questions following a speech to a local business group.
Re: Dr. William Poole, president and CEO of the Federal Reserve Bank of St. Louis, will speak on "Finance: Engine of Growth, Engine of Instability" at 6:30 p.m. Thursday, March 6, in Brookens Auditorium at the University of Illinois at Springfield. Brookens Auditorium is located on the lower level of Brookens Library on the UIS campus.
At the conclusion of his formal remarks, Dr. Poole will also take questions from the audience. The program and a reception immediately following are free and open to the public.
The Citigroup division will decrease its total holdings mainly by making fewer loans that can't be sold, CitiMortgage Inc. President Bill Beckmann said in a telephone interview today. The assets will drop as existing loans are repaid, he said.
Based on what I read, it sounds as though the squirrely markets in GSE bonds, muni bonds, the sagging dollar etc. is driving a lot of money into commodities, creating an upsurge there...(we wont' call it a bubble...) That's what OPEC seemed to be saying, blaming the upsurge in petroleum on the "mismanaged" U.S. economy rather than on a supply shortage.
From one of the regulars at the houing bubble blog:
"Been getting emails all morning from investors repricing fixed and arm loans. Some arm programs are off by 3 to 4 points from just two days ago. Fixed product is up 50-60bps in two days (while the 10 year has been dropping). This is gonna get interesting if agency paper is considered toxic by the market. Every bank in the nation holds agency paper; are they all gonna write down their holdings this quarter. Negative feedback loop on steroids imho."
agency spread blow out + tips spread widening + long yields in a l.t. head and shoulders + dollar hitting new lows every day + commodities strong in the face of recession + no more SWF rescue chatter
People also need to learn the proper definition of penultimate.
Contrary to popular belief, it is not the ultimate ultimate.
Right; that would be the antepenultimate... (bada bing)
This news flow plus the ^IRX is really starting to smell like an emergency rate cut. It will be interesting to see where the Fed Funds futures options settled.
Okay, everyone has had their fun. By letting their portfolio "age out" I suspect they are thinking what's left will be of higher quality. I think the opposite. They'll be stuck with the more marginal loans as the best borrowers refinance out of the dead pool. By aging out they also provide cover to the fiction that the pool is worth par. What i don't see is any sort of a plan on how to deal with the bad loans already in the pool and likely to become non performing over the next 4 years.
everyone is right about the newspeak. good calls on "operational efficiencies" being firings but my favorite was "appropriate alignment of incentives." What? Use bigger whips on the remaining employees?
Rumor mill is churning into overdrive . . . . . . supposed emergency FOMC conference call overnight for 50 bps cut tomorrow am after 8:30 am employment number but before equity market opens at 9:30 am.
I've been in this market for 30 years, I'm one of the senior citizens of the bond market, and I have never, ever seen such a confluence of negative events,'' said Marilyn Cohen, who manages $215 million in fixed income investments as president of Envision Capital Management in Los Angeles.Clearly the Fed has been rendered impotent on doing anything to end this credit crisis.''
I've been reading her columns in the back of Forbes since, well, when I had a full head of hair.
Obama's contributors are kissing the ass of the guy who will be president. They know what's in their best interest. Whereever there is a wheel, they will offer grease. And in this case, Obama is using them, not the other way around.
Traders are putting their phones down and backing slowly away from their desks,'' O'Donnell said today in a telephone interview. ``Relatively little'' agency mortgage-backed securities are being traded, Pimco's Simon said.
ron | Homepage | 03.06.08 - 5:00 pm
And the phones are being put down all over the financial sectors and they shall not be picked up again in our lifetime...
Marilyn Cohen has been around for 30 years and still only manages $215 million? C'mon, that's not even an odd lot for a real money manager. Why in the frack is anyone paying attention to her?
Anarchus [at 5:40 PM] writes:
Rumor mill is churning into overdrive . . . . . . supposed emergency FOMC conference call overnight for 50 bps cut tomorrow am after 8:30 am employment number but before equity market opens at 9:30 am.
bobn, in a perfect world we'd still have John Edwards to kick around, but there is still a world of difference between the two Dem candidates.
Either Hillary or McCain and you get more war and a rape and pillage corporate economy.
In any event, whomever the winner is, they're going to inherit the worst US economy since Hoover skidded out of office on a trail of his own excrescence.
I bid 60 mils on the dollar for my mortgage from CitiBank!
Anybody bid more?
Sold to the proud owner who now has to pay all those property taxes.
What a collapse.
My wife commented to me that I have become too engrossed in the collapse of our financial system. I said, well, better to watch and skip being surprised when things change.
A coworker of hers got the CFC letter killing their HELOC, and were quite cross with her when she said, "oh, my husband predicted that months ago."
Now they can't fix, nor can they flee.
Ah well, we shall muddle through.
$5,000 gold anyone? How about $500 a barrel oil? Why worry, it is only a number? My boss paid out this morning on the bet that gasoline would not cross $3.25 before the election in November.
Why bother waiting? After all, the next stop will be $4!
A very terrible reordering of the financial landscape is being carried out very swiftly, and some will win, and some will lose.
I have begun to think that Washington will be powerless to save Wall Street, but will instead choose to save Main Street and the homeowners/voters.
After all, there will always be more noveau riche desperate for recognition and political favors to grease the skids of the political system. But voters, they are much slower to forgive.
Well, it's all over now isn't it? The lesson of the Depression was to cut rates and provide liquidity and Citi is taking a massive amount of liquidity away which is going to send mortgage defaults through the roof.
Modest Marilyn sounds incredibly credible, all the more and ironically so for not having a big dawg in the hunt. All she can offer is the voice of experience.
Uncle Sam of course
I was first- woo hoo!
Who said anything about sell? If they just price to market, that ought to cause a pretty good reduction in the dollar value of the assets.
I will bid.
There are buyers out there.
Deal Junkie: Investment Firms Start to Buy Mortgage Loans
The questions is at what price?
busy day. betcha friday 'bout 4pm gonna be busier...
Nice day for the ultra bears.
SRS +9.4%
FXP +7.7%
SKF +6.9%
TWM +6.5%
EEV +6.2%
The flight to quality is on.
And there ain't much quality left.
Ben would like to buy some
Firewood dealers. All that lumber is gonna be great for powering our new wood furnace steam powered cars.
@Deal Junkie - The idea is to buy the loans at steep discounts and force payments by rejiggering the terms of the loans, or resell them for a profit. In case of a foreclosure, buyers are hoping to take control of the underlying real estate.
And sell it in this boom market we're having? Feh.
I don't understand why they would sell, RE is such a good deal and always goes up, my RE broker told me its a great long term investment!
The reason the Visa IPO is coming to market in this harsh climate? Easy, the banks need the cash:
The real reason Wall Street is selling Visa David Weidner's Writing on the Wall - MarketWatch
I wonder if the OCC is delaying moving on some of the banks until this cash is distributed.
Sell to whom?
The FHA?
No selling. They are going to keep them.
Talk about adding to the credit crunch!
Citibank can trade the mortgages for Ambac stock.
It's a win-win!!!
Sell to whom?
CNBC says they intend to let them "run off".
-- Hiding Out
Wow, that press release is a thing of beauty. Love the Newspeak use of "strengthen". Also:
Operational Efficiencies Expected to Produce $200 Million in Annual Expense Savings
Define "operational efficiencies"?
I can't stop smiling.
10 CPR prepayment speeds, should be enough to run down a good portion..
read 'newly unemployed'
Define "operational efficiencies"?
Lay everyone off. Turn the lights off. Closed the doors.
With all the overhead trimmed, they achieve 100% efficiency.
Citibank can trade the mortgages for Ambac stock.
Remember some dudes in Pheonix [2006?] were out bidding each others houses so that they could take out more heloc?
also Citi: Staffing levels to reflect market, economic realities
Where's O-Joe today? Last night he was suggesting that we bears are in trouble because markets haven't pushed below their January lows.
Well, now I guess someone is in trouble, but it ain't us bears.
What happens when O-Joe and his fellow optimists are fully invested (long stocks)? Who will be the buyers in the face of plummeting earnings?
energyecon --
You got it in one.
I just love the euphemisms these folks use for lots of people losing their jobs.
Sell to whom?
Shurely shome misteak. Isn't that:
Sell to who ?
Just kidding. You really hit the nail on the head there CR. Wayyy to go.
Meanwhile I'll try and decipher to myself what this announcement is really all about. Having just come from the docs with some TMI, albeit only routine, things done to me, I'm still a little dreamy - but even in this state I can sense - there's something else here. Any ideas ?
-K
Look at this
Everything is telling you the financial system is broken,'' Simon, whose Newport Beach, California-based unit of Allianz SE manages the world's largest bond fund, said in a telephone interview today.Everybody's in de-levering mode.''
at Agency Mortgage-Bond Spreads Rise; Markets `Utterly Unhinged' - Bloomberg.com
Things are really getting interesting. What is coming after this financial system? War ecomony?
Obviously, a portfolio of this magnitude will not be picked up by a single buyer. I envision a consortium of buyers . . . including O-Joe, Sebastian, Si.V., all led by Toonces, the Cat Who Could Call Himself A Hedgefund.
O-Joe thought yesterday's stick save (or was it the one the day before yesterday) represented a valid re-test of the low, even though it was a good 40 handles higher than the Jan lows on an intra-day basis.
Tomorrow will be very interesting if the unemployment number is below expectations.
Define "operational efficiencies"?
Nemo
Layoffs in Q2 - 1600 people
Damn it all, like George Costanza I thought of a better formulation after posting:
Toonces, The Cat Who Could Drive An Investment Vehicle
Today would be a good day for cliff diving. Cmbx and abx fell more than they ever have.
Just the title of the press release is a hoot:
"Citi Strengthens U.S. Residential Mortgage Business"
No matter how I interpret that, it's just tragically funny.
US corporate bond spreads approach widest on record
Thank god someone knows the proper usage of "whom"...object of the preposition. Now if people would just stop it with the "irregardless"...
I'm looking for that sub 11500 on the dow. Looks like it's now within sight. Of course when that happens, you'll hear from our resident bulls. If they have the strength from all the crying.
HELP!!!
Hmmm...
What EXACTLY are they selling?
Cheers,
3 CEOs made $460 million - House panel - Mar. 6, 2008
O'Neal, Mozillo and Prince are to be criticized.
But not Robert Rubin?
Without Rubin none of this would have ever occurred.
Worst criminal in America? Bob Rubin!! No one else is even close.
Bob Rubin, public enemy number 1!!!!
I'd love to buy my note from Citi...would they take $0.60 on the dollar? Or am I being too generous?
idoc,
Tomorrow can't come fast enough!!!
For sheer comedy, I'm going to Tivo the hearings with the tan man. I'm sure it will be a kabuki of the absurd.
I think O-Joe is Ron Beller.
Do you think Marcy Kaptur will get him confused with Roger Clemens' personal trainer?
albrt --
Frickin' hilarious!
Traders are putting their phones down and backing slowly away from their desks,'' O'Donnell said today in a telephone interview. ``Relatively little'' agency mortgage-backed securities are being traded, Pimco's Simon said.
Daddy-o, that abx is FUGLY
to the longs, that is....surely not to US!!!!
Thank you sir, may I have another!
Charlie Gasparino just broke this news, "Carlyle group to buy Citibank residential mortgage assets."
Unless the buyers are paying 10 cents or less on the dollar, they're paying too much.
"It is nowhere near what we are seeing in the housing market but credit card delinquencies are starting to tick up especially in areas where foreclosures are heavy," Rosengren said while answering questions following a speech to a local business group.
albrt...I'm sure Marcy thinks that a financial instrument sits somewhere between the trumpet and the tuba.
Everyday we get a little closer to getting that Glass-Steagall pen back...
Bloomberg - Agency Mortgage-Bond Spreads Rise; Markets 'UTTERLY UNHINGED'
Agency Mortgage-Bond Spreads Rise; Markets `Utterly Unhinged' - Bloomberg.com
Questions anyone???
Re: Dr. William Poole, president and CEO of the Federal Reserve Bank of St. Louis, will speak on "Finance: Engine of Growth, Engine of Instability" at 6:30 p.m. Thursday, March 6, in Brookens Auditorium at the University of Illinois at Springfield. Brookens Auditorium is located on the lower level of Brookens Library on the UIS campus.
At the conclusion of his formal remarks, Dr. Poole will also take questions from the audience. The program and a reception immediately following are free and open to the public.
??
Bonus link:
UIS Live - Technology @ University of Illinois Springfield - UIS
UIS LIVE !
Upcoming Live Webcasts from UIS:
6:30 webcast!!!!!
It doesn't sound like they're selling anything:
The Citigroup division will decrease its total holdings mainly by making fewer loans that can't be sold, CitiMortgage Inc. President Bill Beckmann said in a telephone interview today. The assets will drop as existing loans are repaid, he said.
Citigroup to Pare Mortgage Holdings by $45 Billion (Update2) - Bloomberg.com
Mortgages widened about 50 bps -today. This is the definition of "utterly unhinged."
For sheer comedy, I'm going to Tivo the hearings with the tan man. I'm sure it will be a kabuki of the absurd.
ipodius | 03.06.08 - 4:56 pm | #
In kabuki, the face paint is white.
Daddy-o, I have it on good authority that any increase in CMBX spreads is due entirely to zit-faced hedgies.
Based on what I read, it sounds as though the squirrely markets in GSE bonds, muni bonds, the sagging dollar etc. is driving a lot of money into commodities, creating an upsurge there...(we wont' call it a bubble...) That's what OPEC seemed to be saying, blaming the upsurge in petroleum on the "mismanaged" U.S. economy rather than on a supply shortage.
ipodius,
People also need to learn the proper definition of penultimate.
Contrary to popular belief, it is not the ultimate ultimate.
IBs (GS, LEH, BS) have positioned their earnings call around March Fed meeting.
MAB - grrrr...that ranks with the use of the apostrophe in its vs. it's.
Gary - that's the funniest part! The tan man all pale. He'll have more than one reason for it too.
Remember we're still dancin (Chuck Prince) lol.
More like grave dancing.
From one of the regulars at the houing bubble blog:
"Been getting emails all morning from investors repricing fixed and arm loans. Some arm programs are off by 3 to 4 points from just two days ago. Fixed product is up 50-60bps in two days (while the 10 year has been dropping). This is gonna get interesting if agency paper is considered toxic by the market. Every bank in the nation holds agency paper; are they all gonna write down their holdings this quarter. Negative feedback loop on steroids imho."
"Everyday we get a little closer to getting that Glass-Steagall pen back...
dr strangemoney"
I don't want it back, I want it shoved deep up Sandy Weill's ass....sideways!!
He can leave little circles of orange on his cheeks. Aah, I'd love to see someone youtube a mockup.
They will sell to China. Toxic toys for toxic loans
agency spread blow out + tips spread widening + long yields in a l.t. head and shoulders + dollar hitting new lows every day + commodities strong in the face of recession + no more SWF rescue chatter
=
foreigners don't like being taken for fools
Bob Rubin, Sandy Weill . . .
bear in muind that the absolute worst elements of the Democartic party would be back in power if Hillary were to win.
If Obama loses (I am confident he will win) we are completely fucked.
McCain or Clinton means accelerating to hell in a handbasket.
Dick Cheney said "deficits don't matter."
Apparently, earnings don't matter at Wamu.
WaMu Moves to Insulate Bonuses from Loan Crisis - - CFO.com
Yeah, like that will inspire investor confidence.
its warehouse lending division will not be on its books..
Home inventory levels should start to skyrocket within the next month or two. It is now homeselling season.
This should do wonders for the market.
Spring is in the air.
Better yet, Bob Rubin shoved up Sandy Weill's ass, shoved up Alan Greenspan's ass, shoved up Bob Rubin's ass.
Kind of a perverted ouroboros.
Inform everyone you know about the Clinton ties to the worst banker trio in history. Warn EVERYONE!!
MAB --
People also need to learn the proper definition of penultimate.
Contrary to popular belief, it is not the ultimate ultimate.
Right; that would be the antepenultimate... (bada bing)
This news flow plus the ^IRX is really starting to smell like an emergency rate cut. It will be interesting to see where the Fed Funds futures options settled.
Apparently, earnings don't matter at Wamu.
Cause this is their last bonus for them. Better load up now before they go belly up later this year.
Okay, everyone has had their fun. By letting their portfolio "age out" I suspect they are thinking what's left will be of higher quality. I think the opposite. They'll be stuck with the more marginal loans as the best borrowers refinance out of the dead pool. By aging out they also provide cover to the fiction that the pool is worth par. What i don't see is any sort of a plan on how to deal with the bad loans already in the pool and likely to become non performing over the next 4 years.
everyone is right about the newspeak. good calls on "operational efficiencies" being firings but my favorite was "appropriate alignment of incentives." What? Use bigger whips on the remaining employees?
Senate passes law for tougher toy inspections: report
Guys, you're going to hell in a handbasket no matter who wins.
If the financial system goes, where will the political system be in half a day?
"If the financial system goes, where will the political system be in half a day?"
Whereever it would be, it would be more ethical than the one we have now.
MAB writes:
Dick Cheney said "deficits don't matter."
It is refreshing see a quote someone who doesn't have college degree.
The USG's Pension Benefit Guaranty Corporation has just announced it will be investing in equities...
Well, there goes the lifeline for the people who relied on PBGC...
Correction:
MAB writes:
Dick Cheney said "deficits don't matter."
It is refreshing see a quote from someone who doesn't have college degree.
steelhead | 03.06.08 - 5:37 pm | #
Rumor mill is churning into overdrive . . . . . . supposed emergency FOMC conference call overnight for 50 bps cut tomorrow am after 8:30 am employment number but before equity market opens at 9:30 am.
Or not.
DJ 10,000 or bust
What did Glass-Steagall repeal in 1999 allowed finacial institution to do that they could not do befor?
Yeah.
Good luck with that, Citi!
If Obama loses (I am confident he will win) we are completely f'ed.
Although I prefer Obama to the other 2 choices, the following from OpenSecrets.org: Money in Politics -- See Who's Giving & Who's Getting
is not very re-assuring.
Especially the top slot.
Hillary does look slightly worse, though.
Obama Top COntributors
Marilyn Cohen on Bloomberg:
I've been in this market for 30 years, I'm one of the senior citizens of the bond market, and I have never, ever seen such a confluence of negative events,'' said Marilyn Cohen, who manages $215 million in fixed income investments as president of Envision Capital Management in Los Angeles.Clearly the Fed has been rendered impotent on doing anything to end this credit crisis.''
I've been reading her columns in the back of Forbes since, well, when I had a full head of hair.
Obama's contributors are kissing the ass of the guy who will be president. They know what's in their best interest. Whereever there is a wheel, they will offer grease. And in this case, Obama is using them, not the other way around.
At the old corporate office, they used to call it "co-locating", i.e. close one center and move the ops to another.
The equipment co-located, not the people.
Traders are putting their phones down and backing slowly away from their desks,'' O'Donnell said today in a telephone interview. ``Relatively little'' agency mortgage-backed securities are being traded, Pimco's Simon said.
ron | Homepage | 03.06.08 - 5:00 pm
And the phones are being put down all over the financial sectors and they shall not be picked up again in our lifetime...
Marilyn Cohen has been around for 30 years and still only manages $215 million? C'mon, that's not even an odd lot for a real money manager. Why in the frack is anyone paying attention to her?
Anarchus [at 5:40 PM] writes:
Rumor mill is churning into overdrive . . . . . . supposed emergency FOMC conference call overnight for 50 bps cut tomorrow am after 8:30 am employment number but before equity market opens at 9:30 am.
I think I'm Turning Japaneese...
bobn, in a perfect world we'd still have John Edwards to kick around, but there is still a world of difference between the two Dem candidates.
Either Hillary or McCain and you get more war and a rape and pillage corporate economy.
In any event, whomever the winner is, they're going to inherit the worst US economy since Hoover skidded out of office on a trail of his own excrescence.
Hey-Citi holds my mortgage, I'll offer them 20 cents on the dollar for it and see what happens.
"Sell? To whom?"
I think the inflection works better that way, CR.
I bid 60 mils on the dollar for my mortgage from CitiBank!
Anybody bid more?
Sold to the proud owner who now has to pay all those property taxes.
What a collapse.
My wife commented to me that I have become too engrossed in the collapse of our financial system. I said, well, better to watch and skip being surprised when things change.
A coworker of hers got the CFC letter killing their HELOC, and were quite cross with her when she said, "oh, my husband predicted that months ago."
Now they can't fix, nor can they flee.
Ah well, we shall muddle through.
$5,000 gold anyone? How about $500 a barrel oil? Why worry, it is only a number? My boss paid out this morning on the bet that gasoline would not cross $3.25 before the election in November.
Why bother waiting? After all, the next stop will be $4!
A very terrible reordering of the financial landscape is being carried out very swiftly, and some will win, and some will lose.
I have begun to think that Washington will be powerless to save Wall Street, but will instead choose to save Main Street and the homeowners/voters.
After all, there will always be more noveau riche desperate for recognition and political favors to grease the skids of the political system. But voters, they are much slower to forgive.
The ghost of Hoover is laughing at 43.
Somday this war's gonna end...
ebay listing:
$45B Residential Mortgage Assets
Seller: Cbnk(
Time remaining 7 days
Serious bidders only. Winning bidder expected to pay immediately, Paypal preferred. Failure to complete purchase WILL result in negative feedback.
Well, it's all over now isn't it? The lesson of the Depression was to cut rates and provide liquidity and Citi is taking a massive amount of liquidity away which is going to send mortgage defaults through the roof.
SKF here I come.
Hey, how are those SWFs doing on their investments in the US banks after 3 months?
Well, at there are also the Chinese in Blackstone and Bear. Misery loves company.
AllenM writes:
I bid 60 mils on the dollar for my mortgage from CitiBank!
Anybody bid more?
I tried the same 60ยข but also offered to return the toaster.
Gary writes:
bobn, in a perfect world we'd still have John Edwards to kick around,
Edwards was my first choice. I only went with Obama after Edwards dropped out.
Rich,
You think the flight to quality has begun?
Isn't it also possible that this is the local peak since we're at the end of earnings reporting.
Some upcoming quiet time may settle the markets enough for the shorts to cover and allow a bull trap rally to occur.
Or do you think there's too much fear for any of the usual dynamics to play out? If so, was P. T. Barnum wrong?
gab:
Modest Marilyn sounds incredibly credible, all the more and ironically so for not having a big dawg in the hunt. All she can offer is the voice of experience.