The real question now is whether these arrogant parasites are going to be allowed to confuse illegal naked short selling, i.e. failing to deliver the share sold at T+3, with legal short selling, which is where borrowed shares are delivered. This letter isn't an appeal for legal short selling, it is an appeal for confusing illegal delivery failure as a trading strategy, with legitimate short selling. The question is whether there is anyone these days who is so stupid that they don't know the difference. Obviously, Chanos and Baker believe we are all idiots, and that we can't make the distinction. This is particularly unctuous now, as even the mainstream understands it. For crying out loud, even Cramer has seen the writing on the wall and is pretending that he has been part of Patrick's movement for years. Bob O'Brien's Sanity Check - The hedge fund industry howls with outrage over the new SEC temporary rule..."It's not a big problem"...is now...it could ruin the markets if curtailed...hmmm
Paulson: Housing Correction in 'Months'
The Treasury Secretary thinks it will take just months, not years, for house prices to stabilize and most excesses to be washed away Paulson: Housing Correction in 'Months' - BusinessWeek
safe_as_apartments, it would help if the CBO released more info - like their estimates based on various house price declines. That would help us evaluate their estimate. This could easily be $100 billion or more in certain circumstances.
"at the end of March 2008, a book of business with a value of about $5.2 trillion. The riskiest loans, known as alt-A and subprime mortgages, accounted for about 15 percent of that portfolio."
That's $780 billion in subprime and Alt-A exposure. Look out below!!!!
Thanks for covering this CR, this bill will shape real estate finance and possibly US government operations for years to come..
Remember this isn't the cost to fix the whole housing mess. It's the cost to fix Fannie and Freddie's part, less than half, and a relatively healthy part (larger downs, less in bubble markets, etc.) And some of the cost has or will be offloaded onto F&F shareholders and the mortgage insurers. 25 billion looks low to me but this will be small in comparison to the entire 1 trillion mess.
The GSEs are Paulson's white knight toxic waste site where all the already deeply underwater loans buried in L3 at his friends' institutions will likely end up. That means not only do the GSEs have an ualready nmanagable load of toxic trash they need to be ready to be the bagholder of only resort.
$25b is laughable when you consider the grand plan.
barely, if the feds are bailing out F&F it's likely there will be additional supervision restricting them from buying questionable assets. The populace will go postal if they pay directly for Wall Street scams and the pols know that.
UPS said soaring fuel costs and the sluggish U.S. economy sent second quarter profit skidding by 21 percent, to $873 million. On a per-share basis, earnings fell 18.3 percent, to 85 cents a share.
The slide came despite a 6.7 percent gain in revenue, to $13 billion.
Per-share profit was two cents better than the lower end of UPS' guidance, but nearly 20 cents lower than the $1.04 of second quarter 2007. Year-ago net profit was $1.1 billion.
I have found a broad stroke reason for subprime and all the retardation including, an inability of government to have clarity; this includes the obvious day-to-day output of Bush, Paulson, Bernanke, The Senate, Congress, FTC, SEC, DOJ, FBI, etc, etc...
Cluttering can be symptomatic of deeper mental and emotional problems. Problem clutterers are more likely to have depression, mania, OCD or ADHD. Any of these disorders can be comorbid with compulsive hoarding.[4] Others attribute cluttering to the human desire to hunt and gather, while still others describe it as a consequence of over-consumption.[5][6] Some members of CLA describe the inability to let go of objects as a consequence of spiritual emptiness.[2]
Cluttering is not lethal like alcoholism, addiction, or depression, but it can have devastating consequences. Many clutterers have been evicted from their apartments, lost custody of their children, or have literally gone to jail for violations of building, health and fire codes.[7]
If the taxpayers could buy out this liability for a mere $25 billion, we should do it today. Will some soverign investment fund take the risk? Find a sucker quick!
What I don't understand is why all of these high profile CEO's still get paid big bucks when it looks like the rest of us are going to pay for their poor decisions
"The populace will go postal if they pay directly for Wall Street scams and the pols know that."
LMFAO!!
Yeah right, as long as the spin doctors like Hannity and Rush can keep them focused on trivial matters and their local McDonalds is open - they could care less.
Why oh why oh WHY is are our worthless elected officials not calling for any bailout package to begin with the forceful extraction of the salaries, bonuses and benefits paid out to all executives of any company to be bailed out?
You can't have your cake and eat it to. If you want government protection, then you are no longer independant enough to expect that your assets can be protected in the event of a bailout. Any bailout, if there is one, needs to begin with funds directly from the clowns who created the mess.
CBO applied a probability distribution of the possible future direction of home prices, including the potential for stabilization, modest growth, and much deeper declines. Using historical and industry estimates of the expected losses on the different types of credit risk that the GSEs face in their current portfolios, CBO estimated the firms possible credit losses under thousands of possible future market conditions for housing prices. That analysis suggested that there was more than a 50 percent chance that the GSEs future losses would not exceed those already recognized, but there was almost a 5 percent chance that the added losses would total more than $100 billion. Given that distribution of possible future losses, CBO then evaluated how much assistance might need to be provided to the GSEs to allow them to continue operating in the capital markets. CBOs estimate of $25 billion in federal costs over the 20092010 period reflects the agencys assessment of the probability-weighted average of how large those injections might need to be, including zero as a potential outcome, along with the views of other analysts.
as a point of reference, last week JP Morgan estimated cum losses on the GSE guarantee books using loan-level data from FHLMC and assuming a 25% OFHEO home price decline (and that mortgage insurers pay all claims). here are their estimates, by vintage:
"barely, if the feds are bailing out F&F it's likely there will be additional supervision restricting them from buying questionable assets"
I strongly disagree. It will be sold as a great investment - promises of markups on assets just down the road. There are a TON of upside down loans scheduled to reset over the next 2 years and you can bet they will all get gobbled up by the GSEs if they get balance sheet relief with Treasury capital and guarantees.
Japan's lost decade will be looked upon with envy.
The CBO analysis is a probability-weighted average method; the cost could be zero, the cost could dwarf $25 billion.
Screw error bands. Tell me the NTE cap. What? You don't know? They are willing to hold forth the possibility of $0 but they can't place an upper bound?
Regardless this is no doubt one of those famous static analyses. The credit market repercussions of a bailout of any amount would dwarf a paltry $25b. The loss of tax revenue wouldn't be measured in tens of billions.
Well with Russia talking about putting bombers in Cuba as a response to our missile program, we could get a whole new bucket of crud to worry about. The GSEs could be the new Britany Spears.
Perhaps the populace is suffering from information clutter, like the post on clutter above.
Words, words, words...none of them going much of anywhere until they reach some sort of critical mass and overwhelm a person.
Everything is so bad -- economically, emotionally -- and getting worse. We need to protect that quiet, reasonable part of us and have the wisdom to know that there are simply some things we cannot control, affect or change.
My search for truth each day is so cluttered, I've started reading only the first sentences of paragraphs and the bottom line, and I still can't keep up.
I had to let the war go. It's so horrific, and people are dying who didn't do anything wrong, but I can't make anything better. It's all broken.
Now I have to let this insane robbery in the marketplace go. I've protected myself and taken a lot of steps, but I know I'm going to lose. If I can keep my sanity and slip through it somehow, little by little, and keep myself and those I love alive, it's all I ask.
"Regardless this is no doubt one of those famous static analyses."
And they're probably using some historic repayment of mortgage debt model. You know, when people put 20% of their own funds down, and underwriting was done by Tanta.
I strongly disagree. It will be sold as a great investment - promises of markups on assets just down the road. There are a TON of upside down loans scheduled to reset over the next 2 years and you can bet they will all get gobbled up by the GSEs if they get balance sheet relief with Treasury capital and guarantees.
I think it will be hard to sell that to a frightened population. But in any case, if F&F go south after a bailout the population will be out for blood. They flipped the House in 1994 largely over petty scandals like franking. This would be an order of magnitude worse.
Anemic is the word, why last summer running the yen down like we have today would have been good for over 1% in all three indices...do pumpmonkeys get RSI?
Fragmentation and dis-connection are the fuel for this chaos and all people can do is find more clutter and more distractions. Perhaps it is time just to tune out media and play with clay or paint?
Fragmentation and dis-connection are the fuel for this chaos and all people can do is find more clutter and more distractions. Perhaps it is time just to tune out media and play with clay or paint?
I find the clutter all a bit of a head f*ck. I think before this is over we'll have a lot of insane people who never want to read another word about financial matters ever again.
OZYMANDIAS
I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shatter'd visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamp'd on these lifeless things,
The hand that mock'd them and the heart that fed.
And on the pedestal these words appear:
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.
crispy&cole writes:
"The populace will go postal if they pay directly for Wall Street scams and the pols know that."
LMFAO!!
Yeah right, as long as the spin doctors like Hannity and Rush can keep them focused on trivial matters and their local McDonalds is open - they could care less.
crispy&cole | 07.22.08 - 12:45 pm | #
All social engineering is preceded by verbal engineering.
Watch as words gain new meaning.
This is going to endup getting spun into an easily digestable story for the public and the textbooks.
How did the American dream crash and die? Someone smart will endup coming out of nowhere to write this morality play.
The battle now is for the existing order. They will lose. Whoever comes after them will frame the window that we will be looking out of for the next 75 years.
Ok, I will be the first to posit that Fannie and Freddie end up costing the Taxpayer $250 billion.
If this has another two years to the bottom, then you might as well say the USA is bk too.
Nothing like a total crisis of confidence to destroy an economy.
Who is going to fill all of that dead retail with the consumer pulling back?
Who is going to buy a house with the price falling by the day?
Who is going to buy a rental property with the rent dropping like a stone, faster than house prices?
We built a huge bubble economy predicated on unsustainable gains from houses, after we built a similar economy on wall street based on dot bombs.
We never learn.
Now, the real world is going to make our lives much more miserable, because while that house is worth crap, the gas to get to work and food on the table cost soooo much more.
What a bunch of maroons, the current administration.
As for the economic establishment, the losses of the stock market will cause them to rethink their entire lives. Retirement? Based on an index fund? HA!
km4,
But it is my fault. I can admit it. Of course, it is more fun to blame people for our woes than to take blame, so I'm kind of a wet blanket, but it really is my fault. Now you don't have to worry about blaming others. You can focus your anger on me. I am like the Dark Knight. I'm not a hero.
TED KOPPEL
(Off Camera) Well, it's a, I think you'll agree, this is a much bigger project than any that's been talked about. Indeed, I understand that more money is expected to be spent on this than was spent on the entire Marshall Plan for the rebuilding of Europe after World War II.
ANDREW NATSIOS
No, no. This doesn't even compare remotely with the size of the Marshall Plan.
TED KOPPEL
(Off Camera) The Marshall Plan was $97 billion.
ANDREW NATSIOS This is 1.7 billion.
TED KOPPEL
(Off Camera) All right, this is the first. I mean, when you talk about 1.7, you're not suggesting that the rebuilding of Iraq is gonna be done for $1.7 billion?
ANDREW NATSIOS
Well, in terms of the American taxpayers contribution, I do, this is it for the US. The rest of the rebuilding of Iraq will be done by other countries who have already made pledges, Britain, Germany, Norway, Japan, Canada, and Iraqi oil revenues, eventually in several years, when it's up and running and there's a new government that's been democratically elected, will finish the job with their own revenues. They're going to get in $20 billion a year in oil revenues. But the American part of this will be 1.7 billion. We have no plans for any further-on funding for this.
Hanky Panky wants Congress to bailout hedge funds.
"That way, problems at one institution - be it a mortgage finance company, a hedge fund or a brokerage firm such as Bear Stearns - doesn't threaten to upend the entire sector."
I'm not trying to bring you or anyone down, but I think as people try to escape this God awful Bush era and all the negativity, corruption and collusion and the failure of society to deal with these stresses -- we have as a collective group fallen into a catch-22 where in the search for clarity, all we find is more distractions, and the process becomes destructive and just adds to the problem. This fragmentation will increase like entropy, expanding into more chaos, small fragments which have less meaning.
IMHO, it may be time to turn off this machine that connects us to the lies of Big Brother and the awful distortions from this Bush Coup!
Re: "Internet addicts suffer from emotional problems such as depression and anxiety-related disorders and often use the fantasy world of the Internet to psychologically escape unpleasant feelings or stressful situations."
Anyone a graphics wiz? Wisdom Seeker pointed out on the Philly Fed coincident indicator thread that the color legends changed from the first map to the second reducing the impact of the color shift to red...anyone care to reinterpret that map with the original color scale?
Tim writes:
Hanky Panky wants Congress to bailout hedge funds.
"That way, problems at one institution - be it a mortgage finance company, a hedge fund or a brokerage firm such as Bear Stearns - doesn't threaten to upend the entire sector."
Of course Congress should bail out the hedge funds. It would be unfair to leave them out of the fun.
Stray Kitty,
It is more complicated than this, but you can simplify the market into a vast interchange of conflicting viewpoints. I realized several months ago that for every purchase of a stock, there is also a seller. (simplified, I know)
Apparently, these two have opposite views on the direction of the stock in the future.
Trying to know whether it's going up or down is impossible. Nobody can know. The best are right more often than wrong, but never 100% correct.
I bailed on the details a few months ago. I decided the 50 day moving average on PRHYX is a good indicator of whether the market is going up or down short term. (corporate and interbank paper being the current crux of the matter.) It has been correct, but late, for the last year. This imperfect analog lets me focus on my job and not wondering about the direction of the markets. daily or hourly.
And I'm 80% cash/mmkt so I have less reason to stare at the charts and read the news.
Sell in May and go away was never more true, for me.
RE...according to your link Natsios was also manager of the "Big Dig" in Boston...HAHAHA...that is all anyone needs to know. That was one of the biggest SNAFU's in history...a project that massively exceeded its budget and took way longer than originally projected and was rife with corruption.
what happened in the last hour to create that rocket?
That is called hedge funds using Fed manipulation as rocket fuel to distort the dis-connected stock market from fundamental reality, and then take it as high as possible before it crashes. Same thing happened after bear Stearns bailout!
Paulson specificly highlighted the international components of the bailout. he doesn't give a hoot about house prices. he has said as much. He only cares that the Treasury's customers - the cenytral banks - are protected. Check out the issue calander and the projected deficit spend. if Bretton Woods II was about vendor financing, Bretton Woods III is about too big to fail. It worked for Bear Stearns, it worked for LEH, it is working for the primary dealers and money center banks so the logical extension is why not the USA.
I don't really have a problem with a bailout but I have no confidence that this congress and president can remake Freddie and Fannie into a sensibly restrained government entity.
Hitting the reset button and carrying on as usual with slightly higher reserve requirements make absolutely no sense to me.
Assured Guaranty's share price dropped 50% on the news and the company said that some transactions it is currently negotiating are now in jeopardy because of the Moody's review. Assured Guaranty's reinsurance business, called AG Re, is in negotiations to reinsure "large portfolios" of mainly municipal risk that may end up being canceled, the company said, but Schozer said the company hoped to limit that problem. "We have had a number of discussions with investors," Schozer said. "There is an immediate period where people jump back" on the fear that "where there is smoke, there is fire, he said. Eventually, "people realize there is smoke but no fire."
energyecon writes:
Anyone a graphics wiz? Wisdom Seeker pointed out on the Philly Fed coincident indicator thread that the color legends changed from the first map to the second reducing the impact of the color shift to red...anyone care to reinterpret that map with the original color scale?
energyecon, I commented at the end of that thread. There's no deception or reducing of inpact here. The new graph just contains more info.
NEW YORK (CNNMoney.com) -- Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.
Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money. Concerns rising that Fannie and Freddie could need bailout - Apr. 21, 2008
It would make sense that PRHYX would be in a crash mode, because yields are going down in relation to decreased sales, decreased EPS, decreased yield enhancements from Treasuries, bonds, currencies, commodities and anything with fundamental value -- which has to be represented by REALISTIC payouts in the FORM of a DIVIDEND!
That might explain why cash is king and any market runup is total bullshit and manipulation -- because, unless your a really fast daytrader -- you come empty and have nothing but cashburn! Dividend yields are dropping like banks, and although I'm NO Dr. EVIL, you can frigg'n bet your ass that this High-Yield PRHYX is a great indicator of the economy, versus the stock market!!!
Jesus Christ on a popsicle stick! If I see one more of these oh-so-earnest "stray kitty" we're-all-DOOOOMED posts, I'm gonna go out and buy some UYG. Blech....
Lets see we have Washington Mutual after the close and also Boston Properties at time undisclosed today...for some marginally on topic market chatter...its really interesting to watch all this unfold in a "I can't not look at the accident as I drive by" kind of way...
According to an analysis by Atlanta-based industry consultancy PKF Hospitality Research, a 10 percent decline in the number of seats flown to US airports would result in a 3.9 percent drop in demand for lodging - compared to a 3.3 percent plunge in bookings in 2001. Over a year, that could translate into about 40 million fewer rooms occupied for one night, or a loss of $4.3 billion in revenue for the industry.
Is this 25 billion to cover the Fannie paper that is "stated income, stated assets" dressed up as full doc?
For the last few years anytime a borrower had a high fico score, brokers could go through Desktop Underwriting and click on "full doc" as documentation. Then make up the income and assets and wait for the response. A very high percentage of the times, it got approved without need for verification. Let me repeat: the automated system did NOT request for verifications afterwards.
This was done all the time by the broker community. If they requested verification, then the brokers would go to the stated income plans anyway where pricing was a little worse. Hey, why not give it a try with Fannie first? See if you can beat the system. It was very similar to "fast and easy" from countrywide. That too wound up with Fannie.
The amount of garbage that Fannie owns is amazing. Obviously, this is now starting to show. "Full doc" my ass. The brokers made a mockery of the system.
I have decided what I want to do today, i.e, I'm going to become a CFP and help the little peeps that are being ground into dust by the bullies... but then again, lunch time is here.
And once again a stock (Wachovia in this instance) rises on horrible and very real losses. Almost all the Companies who have issued horrible results this morning and last night are rising it appears at first glance this morning. I'm dumbstruck but then so is the entire Country at this point (deaf, dumb and blind ignorant masses is what we've become). We are truly the Soviet Union circa 1987 or Bullsh*t Nation if you prefer.
Nothing matters is the message, nothing. Cheney was right "Deficit's don't matter", nothing matters, reality is what they tell us it is no more, no less. How do you like living in a world where nothing matters and it's all a collective fraud? We are all bubble boys and girls now, don't burst our bubble! La, la, la, la, we can't hear you.
This type of non-reality group think in America has lead to the slaughter of innocent people with more to come, much more if we don't stop. First we all become willing accomplices or trained in seemingly innocent acts of non-reality group think and then the scapegoats are found when reality inevitably intrudes on our idiot's parade. We're already well down the road of innocent slaughter for our sins, just ask the hundreds of thousands of Iraqi's how our non-reality group think works whom we've destroyed, mauled and/or killed for their oil, which they clearly now owe us for "liberating" them - an idiot's logic on full display.
The height of absurdity has been reached in our Country of Morons and Thieves. Wachovia lost $9 billion, $9 freakin billion in just a few months time at one stinkin bank and the stock rises the very morning of the report?
The American mind reels and collectively once again chooses a path of non-reality
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I'm dumbstruck but then so is the entire Country at this point (deaf, dumb and blind ignorant masses is what we've become).
JMS yes the scope and scale of American ignorance is simply astounding and many will find out the hard way how the GOP under Bush has wrecked America so Americans had better get a new "Dream" and fast.
Holy Moly, I know he works for the Bush administration, so you have to consider the source but Paulson must have taken to smoking crack:
"Treasury Secretary Henry Paulson said America's housing market could turn a corner and begin recovering within months, but it will take longer to resolve all housing-related problems."
Within months? LOL...sure, the Fs are, well, sort of F'd now and this is going to turn the corner in months? Who's going to write these mortgages? Securitize them? Suddenly, with the economy very weak, people are going to have 20% down? Credit is going to become miraculously available? Pass the pipe there Paulson. Perhaps you're getting the rocks from GWB and lately the Democrats because they're thinking the US Treasury can spend its way out of the problem of massive over-spending.
Re: he CFP designation, on the other hand, is more of a generalist designation that provides the best preparation for comprehensive personal and estate planning. For example, the CFP curriculum would require a candidate to know what a callable bond is.
Shit, I can do that, WTF, why not, maybe I can explain to someone that is suffering from on-going attributes related to cluttering, what I think is going on with yields and how that may impact your callable bond? Oui?
JMS, since when do stock prices have anything to do with macroeconomic reality? When news is bad stocks can rise IF the consensus is the worst is behind the company, or steps are being made to correct the issues. So the question is, do you believe that Wachovia's stock price is too low? If you do you will buy. And, btw, I'd be happy to sell it to you if I thought the opposite. So now you have more people thinking that it's getting close to it's low and buying in. Is it? I don't think so, but hey, I'm only a schmuck not a money manager. It could be this is the worst of their write-downs. Maybe.
But thinking that the stock market is reflective of economic realities is a bit disjoint. A lot of people thought it was a good deal when the DOW was in the 13000's. But certainly individual stocks were a good deal. They are now. You just have to find them.
"Obviously, it will go on beyond months with some of the issues in the housing market, but I believe we can get to the point within months where we turn the corner on housing," Paulson said in a televised interview with Fox Business Network.
Paulson spoke shortly before the Congressional Budget Office estimated that the cost of rescuing Fannie and Freddie could be $25 billion.
I hate to point one finger, but the right-wing religious groups that cluster and then clutter up reality with the dissociative confluence of pretending that spiritualism is in someway a link to political rhetoric and social agenda warfare. The Bush Coup took this group of impassioned sheep and drugged them with patriotic illusions and then gave them sweet wine to get drunk on, while the trojans swarmed from uder the belly of this fuc-ing facade. Not that the left-wing has it together, by offering the drug of hope in exchange for a fast vote, for more of the same with a different book cover! These people are traitors that are fueled by American apathy!
Why not just let them fail? It isn't like Americans own the bonds anymore and they aren't guaranteed by the federal government. China should have known the bonds were dangerous when they bought them.
China should have known the bonds were dangerous when they bought them.
Because then they would be chapped and hook up with Russia who would also be chapped along with Iran who just plain doest give much of a rats ass about us and oil would then stop getting exported to us and then we might get pissed and launch a nuke and then they would launch a couple back and the whole damn this would be such a screwed up mess. It's easier to just print money me thinks.
I see a lot of focus on Bush for this mess. But didn't the repeal of Glass Steagall under Clinton contribute? Not that blaming anyone is going to do jack all to get us out of this mess. Just sayin.
I'm a Democrat who voted for Clinton and never Bush, BTW.
Somehow on topic, here's part of Langone on Squawk Box (unfortunately not talking about FoK -- friend of Kenny. I was calling him Frankie earlier, not sure why).
According to Kenny, if you want to kill him with a stake through the heart, you should use metal and not wood, because wood breaks. This is the "sticks and stones" gambit. Kill Kenny... Kill Kenny... why does that sound familiar?
Why is it that every one of these type stories - that trumpet the dangers of Freddie, Fannie - here the FHA - or even ones like Countrywide and IndyMac etc never bother to talk about the details. All we hear is how much risk there is - how poorly they are supposedly doing - how likely they are to fail and/or need rescue. Yet - none of these predictions are supported by the real facts.
The strength of Fannie, Freddie, FHA and even IndyMac and Countrywide are in the underlying assets - the loans themselves. So just how are these loan portfolios doing?Even a nominal effort at research yields the broad facts.
Fannie Mae has appx $5 trillion in mortgages - appx 1/2 of all mortgages in the US - some are claiming they don't have enough capital - but once again these claims are the result of "fair value" accounting of their assets - which means pricing them at liquidation value - irregardless of the real value. Yet the delinquency rate on the FNMA portfolio - the 90 day late rate - is just 1.15% as of March 2008 ... the foreclosure rate is usually a bit less than half of the delinquency rate. So on ALL FNMA Loans almost 99% are not delinquent
A tiny fraction of all FNMA loans are subprime - and just over 10% are ALT-A .... A total of 93% of all new business in Q1 2008 was fixed rate loans - and a total of 89% of all mortgages in their portfolio are fixed rate loans. Estimated average Loan to Value is 62% (38% down payment/equity). Estimated average FICO score - 721 (generally considered in the very good to excellent range)
Fannie Mae Delinquency Rates Q1 2008 (only appx 50% will actually end up foreclosed):
In Q1 2008 just 1.15% of all loans were 90+ days delinquent - appx 50% of these will end up foreclosures. Majority of delinquencies are in CA, AZ, FL and NV ...
90+ day delinq rates on ALT-A was 2.96% in Q1 200 vs 2.15% in Q1 2007 .... 90+ day delinq rates on Subprime was 7.42% in Q1 200 vs 5.76% in Q1 2007
Many of these higher risk loans were originated in 2007 and prior - with our tightened standards newly acquired loans will have lower credit risk. The delinquency rate overall is just over 1% - just under 99% of all FNMA loans are NOT delinquent - are performing as agreed
AZ, CA, FL, and NV accounted for 17% of foreclosures in Q1 2008 vs 4% in Q1 2007 ... The Midwest accounted for 36% of foreclosures in Q1 2008 vs 44% of the foreclosures in Q1 2007 ... ALT-A loans accounted for 29% of foreclosures in Q1 2008 vs 17% of the foreclosures in Q1 2007
Total foreclosed homes rate was 0.1% of all mortgages in Q1 2008 and Q1 2007 ... AGAIN out of ALL Fannie Mae loans 99.9% are not foreclosed on ....
At the end of Q1 2008 Fannie Mae had $2.723 trillion in mortgages on their books and $2.625 trillion in mortgage guarantees on their books - total appx $5.35 trillion .... up from 2007 which saw $2.65 trillion in loans and $2.55 trillion in guarantees for a total of $5.2 trillion ... Fannie Mae has $4.53 billion - out of $5.35 trillion in total loans in foreclosed homes on their books a total actual foreclsoure rate of 0.085% of current book ... and they will recover appx 60 - 65% of that $4.53 billion as these properties are sold - leaving a net loss of appx $1.812 billion - or appx 0.034% of the total $5.35 trillion current book. Total "non-accruing" (delinquent) loans are appx $8.723 billion - which makes the delinquency vs foreclosed rate on the $4.53 billion equal to appx 51.9%
Yep that portfolio is in terrible shape ....
Net interest income for Q1 2008 was $1.69 billion ... net guarantee income Q1 200 8 was $1.752 billion ... Total income/loss before taxes was a loss of $5.113 billion for Q1 2008 however $4.377 billion of this was a "paper" mark to market "fair value" accounting loss - and there was another $3.073 billion provision for credit losses in Q1 2008 in this $5.113 billion Q1 loss ... The $5.113 billion Q1 2008 loss provided a tax benefit of $2.928 billion - which reduced the net loss to $2.186 billion after taxes
According to one report:
"As of March 31, 2008, Fannie Mae had $42.7 billion in core capital, which represented a $5.1 billion surplus over the requirements of its regulator ... If we add together their statutory surplus, current loss reserve and estimated revenues, total claims paying resources for FNM are $56-92 billion ... If we tax effect these numbers, we see that FNM can sustain losses of $85-141 billion over 3-5 years. What is happening is that Fannie and Freddie are required, by accounting rule, to record paper losses because the immediate trading value of the assets on their books -- and in this case assets means mortgage loans that it holds--are going down. It probably has no intention of selling those now, so that is a somewhat theoretical problem. But that's what the accounting rules require, and as a result, it must record a "loss" for those on its quarterly income statement. That loss is then deducted from the value of shareholder equity on its balance sheet, thereby reducing the "capital" it has to serve as a cushion against further losses. That's basically what all the fuss is about."
Total losses in Q1 2008 = $2.186 billion (or which $4.377 billion was a paper mark to market loss which will come back as profit as the financial markets stabilize) ... and total reserves and surplus etc $56-$92 billion ...
Yep - they are in terrible shape all right .... a) steady and increasing revenue; b)increasing market share with limited competition; c) loss reserves sufficient to handle years of losses at current levels; d)billions in unencumbered loans they can borrow
against; e)improving loan credit quality on new loans; f)very small exposure to riskier subprime and ALT-A loans; g)far below "market" delinquency and foreclosure rates
FHA's numbers are even better than Fannie's in most metrics - the loans in their portfolios have some of the lowest default rates of all loans according to MBA's numbers. Yet we constantly hear how terrible these institutions are doing - and never with a review of the real details - the status of the assets.... Why is that? What are all these commentators afraid of?
The numbers above show how strong or weak Fannie Mae is - the loans are their assets - and Fannie Mae loans are doing just fine
Currently Smoking Cannabis writes:
I see a lot of focus on Bush for this mess. But didn't the repeal of Glass Steagall under Clinton contribute? Not that blaming anyone is going to do jack all to get us out of this mess. Just sayin.
The Gramm Leach Bliley act passed both house by overwhelming majorities. Whatever Clinton's view of it didn't matter it was veto proof.
Good ole Paul Volker warned of its dangers in vain.
In other words, we can save Fannie and Freddie for the equivalent cost of two months in Iraq. Can you conceive of what else we could do if we had not spent the past 63 months there?
ASG: But we've learned that numbers and reality mean nothing anymore. What matters is what "they" want us to perceive regarding the value of any asset. And "they" are really good at it.
In Q1 2008 just 1.15% of all loans were 90+ days delinquent - appx 50% of these will end up foreclosures. Majority of delinquencies are in CA, AZ, FL and NV ...
90+ day delinq rates on ALT-A was 2.96% in Q1 200 vs 2.15% in Q1 2007
90+ day delinq rates on Subprime was 7.42% in Q1 200 vs 5.76% in Q1 2007
Many of these higher risk loans were originated in 2007 and prior - with tightened standards newly acquired loans have lower credit risk. And the are doing effectively no sunprime and little ALT-A now.
The delinquency rate overall is just over 1% - just under 99% of all FNMA loans are NOT delinquent - are performing as agreed and there is almost zero evidence the quality is likely to change in any way but for the better.
Yet people still continue to make uneducted and uniformed proclamations of massive failure and losses.
Net interest income for Q1 2008 was $1.69 billion ... net guarntee income Q1 200 8 was $1.752 billion - Total income/loss before taxes was a loss of $5.113 billion for Q1 2008 however $4.377 billion of this was a "paper" mark to market "fair value" accounting loss - and there was another $3.073 billion provision for credit losses in Q1 2008 in this $5.113 billion Q1 loss.
$3.45 billion in interest and guarantee income in Q1 2008 alone ... and if not for the "fair value" write downs - which mark the portfolio to fire sale liquidation values regardless of the portfolio quality - after tax benefit they would have had a considerable profit in Q1 2008
well, as it relates to the $48B, i don't know, because i don't know what percentage of defaults in that number have MI coverage.
however, i do know that the GSEs have maximum combined MI exposure of ~$170B (the covered portion of the UPB of loans with MI). if you wanted to assume that the insurers couldn't pay any part of those claims--which is extremely unlikely because even if an insurer goes down, the GSEs have a claim on its capital--and say 20% of insured loans default (which is quite high), the total loss in the event that all MI companies fail and pay no part of their claims would be $34B between the GSEs (170*0.2).
Re: "Where am I?"
"In the Village."
"What do you want?"
"Information."
"Whose side are you on?"
"That would be telling . We want information. Information! INFORMATION!"
"You won't get it."
"By hook or by crook, we will."
"Who are you?"
"The new Number Two." (This occasionally varies see below.)
"Who is Number One?"
"You are Number Six."
"I am not a number I am a free man!"
(Laughter from Number Two.)
Sec Treasury Paulson should by now be familiar with what regulatory agencies are in the Treasury Department and what his responsibilities are to these agencies.
Congress with there legislative powers and oversight of the financial Institutions should have an idea of what their responsibilities in administering their oversight.
These elected officials know all about the savings and loan crisis in the 80's, John McCain was part of the Keating five. Yet these money grabbing self serving God like egos sat there and watched this crisis unfold since at least 2002. Economist Roubini warned the Congress in 2002 of what was to come.
The Congress has stated it was the subprime, then it was the variable rate mortgages, it was the predatory lenders, it was the mortgage borrowers that did not understand what they signed.
These Congressional halfwits have to understand that THE BANKS DESIGNED THE PAPER WORK AND THE RULES. Congress since 1980 has not passed any federal consumer banking regulations. THE BANKS FOR 35 YEARS have operated with absolute impunity.
There are 4 million foreclosures slated by 2008 year end, 6 Million by 2009 year end.
Paulson and the Congress not only were surprised by what has happened, but they have been debating for 5 months on how to save Freddie and Fannie, the Banks, Wall street, Brokers,
Federal Reserve and any wealthy and powerful political friends.
WHO IS TRYING TO SAVE THE AMERICAN WHO LOST HIS FINANCIAL REAREND BECAUSE THE CONGRESS AND PEEWEE PAULSON AND THE BANKS WERE
BLATANTLY NEGLECTING THEIR PUBLIC DUTY AND SWORN OATH OF OFFICE.
These wealthy and powerful are only concerned at this point about shoring up those institutions that they benefit from. Enough is enough. What happened to the MILLIONS of dollars that the FREDDIE and FANNIE Gods were taking home? Who stands for the loss?
All these people in our country that made money should be stripped of their assets so that the sale proceeds of those assets are repaid to the injured parties which are WE THE PEOPLE. This stealing has to stop. The only change we need in this country is the way Congress does business.
MLB
"Bailout" of GSE's? What is it, is the federal government assuming their debt, or can they still get away with leaving the question unanswered?
When are the rating agencies willing to use some standards for the federal government which are normally used everywhere else.
If the Feds are assuming the GSE's debt, the overall debt level of the US
increases by 50% and should bring down the rating to AA- or A+ with all the consequences for treasuries and the dollar, not to mention the credibility of the remainining superpower. The CBO estimate of $25 billion would then just be the equivalent of a rounding error
AGA..... interesting and refreshing to actually throw some numbers into the discussion.
As far as the MI's go, I think you just throw in their entire claims paying ability. Someone said it was roughly $20 billion.
Regarding Bacon's numbers, :25% OFHEO home price decline (and that mortgage insurers pay all claims). here are their estimates, by vintage:
2008: 1.18%"
If that means that today's business by F&F that is mostly conforming and at roughly traditional underwriting standards are going to go down another 25% from today and will cost a net 1.18%, then things will be very ugly. That means that today's fees won't cover the losses on today's business. Any reasonable survival scenario involves F&F making money at today's prices/rates/underwriting and then backfilling the known problem vintages.
And no I am not Tanta - although IO would hope this site would do the kind of research I point out
If I as a layman can get and review this info in a few hours on the net why can't legit people and sources in the business?
More importantly why AREN'T the professionals reviewing, commentating on, and questioning the real facts?
The same exact stupidity is being repeated about the FHA - whose financials - despite low and no down loans - look even better than FNMA
If I did the math correctly:
FNMA had 43,167 foreclosed (REO) homes in inventory as of end of Q1 2008 .... total value of these homes was reported to be $4.53 billion
Doing the math would show the average per property value of foreclosed homes in Fannie Mae inventory to be $104,941 ...
And for 2007 there were 26,294 homes in inventory with value of $2.241 billion for an average value of $85,228
This, along with fact that the largest share of foreclosures was from the Midwest, shows more clearly than just about anything else that Fannie Mae took the risks no one else would - in the worst parts of the country - as they were directed to do by the government and legislators - and yet still have a very low loss ratio
Even IndyMac was similarly NOT in big trouble on the ACTUAL performance of their loan portfolio
A review of detailed info from their last financials shows the bottom line is pretty clear .... there was nothing wrong with their loan portfolio ... their default and foreclosure rates were even with the industry standard - with just 2.24% of their loans foreclosed
And their losses were just 0.12% of their loan portfolio ... far, far below the 1.5% loss they have priced in the portfolio
Worse - they have credit protection (effectively insurance) - on 7.5% of the loan portfolio
The math:
$11.9 billion in loans in their portfolio ...
$ 892.5 million is the total loss they have covered at 7.5% of portfolio
To get to an $892.5 million loss on the $11.9 billion in loans they would have to see 25% of all loans foreclose and they would have to lose 30% on every one of them ...
The bank would not have taken a loss, with the credit enhancements/protection they had in place until they exceeded that $892.5 million in losses
Thru 3/31/08 they had a loss of 0.12% (12 basis points) on their loans - which amounts to $14.28 million loss on $11.9 BILLION in loans
Their current loss ratio is 0.12% and their current foreclosure rate is 2.24% - before they would suffer a loss in excess of their "insurance" these would have had to increase to 7.5% and 25%
And keep in mind that the loans in their portfolio are generally seasoned - 28 months average age - these vintage loans have already traditionally seen the majority of their defaults
Yet despite all that IndyMac was forced to write down the value of the company to - if I read it right - what amounted to $4.54 per share - while the real market value was $15.56/share
This company employed thousands - it was an ongoing viable business - its "losses" were largely "paper" ones - its loan portfolio was performing very well - within industry standards ... yet thanks to Schumer and the ridiculous "mark to market" rules this company is out of business - and individual depositors will lose $1 billion and the taxpayer will lose $4 - $5 billion
When all it would have taken was a little forebearance .... continuing to work the already well underway plan with Feds - what was an otherwise viable business - which was shut down for a "liquidity" crisis - that was based largely on "paper" losses
Paulson testimony that he wants a line of credit on the American treasury (even though he claimed he believed he wouldn't need it):
Paulson: "First, as a liquidity backstop, the plan includes an 18-month temporary increase in Treasury's existing authority to make credit available for the GSEs. Given the difficulty in determining the appropriate size of the credit line we are not proposing a particular dollar amount. Flexibility is the best means of increasing market confidence in the GSEs, and also the best means of minimizing taxpayer risk."
Now I am not that easily frightened but giving Paulson a line of credit on the American Treasury and debt really is a scary thought.
So I guess after hearing this I began to believe that he intends to try to slip all the bad debt under cover of Fannie and Freddie infinite credit lines. I kept thinking of how the dumb critters in Congress ended up in a war after giving a politically open line of power to these guys.
ASG, in 2005, 1,500 accountants after 6 months (and more than $200 million) couldn't figure out what was going on at Fannie. You must be a very smart layman to figure out everything in just a few hours. Congratulation! Maybe you can teach us a little bit about derivatives, CDO, CDS, etc. I am sure it wouldn't take you more than a few hours to figure them all out.
Broker writes:
ASG, in 2005, 1,500 accountants after 6 months (and more than $200 million) couldn't figure out what was going on at Fannie. You must be a very smart layman to figure out everything in just a few hours. Congratulation! Maybe you can teach us a little bit about derivatives, CDO, CDS, etc. I am sure it wouldn't take you more than a few hours to figure them all out.
I provided the link to the Fannie Mae financials - it isn't hard at all to "figure" out basic data on the quality of their assets - delinquency and foeclosure rations and portfolio metrics such as credit scores, loan mix etc - as I posted - are easy enough for even a broker to understand
I even posted URL's for images of the individual section of the financial statements that the data I posted came from
It certainly isn't dfficult to look at stats on a portfolio of loans and detrmined their relative health - and the likelihood of their future health
Fannie and Freddie are being given the same basic access that the investment banks now have - which I believe they already have BTW - $2.5 billion each if I recall ....
These funds will be used to fund more mortgages - which Fannie Mae makes a lot of money on - nearly $3.5 billion in Q1 2008 alone
They are not funding subprime or any appreciable number of ALT-A products
The vast majority - 93% are fixed rate loans
The 90+ delinquency rate is again, just 1.15% of ALL current Fannie loans - 99% of all current Fannie Mae loans are NOT delinquent - are performing as agreed and there is almost zero evidence the quality is likely to change in any way but for the better - and the credit quality is improving on new loans
Yet people still continue to make uneducated and uniformed proclamations of massive failure and losses.
I'll repeat - Fannie recvd $1.69 billion on net loan interest ... and $1.752 billion net guarantee income in Q1 2008 ... and if you back out the "paper" mark to market "fair value" accounting loss - after tax benefit they would have had a considerable profit in Q1 2008
Why wouldn't they want to buy more of these high quality profitable loans?
And where is this alleged massive risk if they do? If the loans do not default, and pay as agreed and anticiapted, then where is the loss?
This is dedicated to all of you that are communicating your thoughts to Congress
Thank God for Congress
Financial Institutions brought this on themselves. Not to worry. Those politicians in Congress will save all the financial institutions, and any well connected wealthy and powerful Congressional friends.
Those Senators and Representatives will pass laws and regulations along with the billions of dollars to save those wealthy and powerful from the CRISIS caused by those low life credit mortgage borrowing home owner scumbags.
Thank God in heaven that this or any Congress had the foresight not to pass any legislation to give those low life credit mortgage borrowing scum bag home owners the right of redress in the federal system to fight their foreclosures. Congress knows that these low life credit scumbag homeowners cant afford lawyers who have in fact priced themselves so that only the rich and powerful can afford their services.
Thank God again that through the wisdom of our Congress has provided a way to identify these low life credit mortgage borrowing scumbag homeowners in the future by having the Credit Bureaus tell the wealthy and powerful for the next eight years not to give one red cent to these people.
Congress is indeed worthy of that saying When the Government lives better than its people
As I read there will be Six Million of those low life credit mortgage borrowing scumbags in foreclosure.
To them I say, you should be ashamed of yourselves for causing this foreclosure crisis.
Thank God, Congress has been on the job since the last savings and loan crisis protecting the wealthy and powerful banks. I understand for example that John McCain who is running for president was One of the Keating Five. I understand Chris Dodd, Senate Banking Chairman has a mortgage rate that you scumbags could only dream about with Countrywide, an old proud mortgage lender that has operated for years with no regulations to hinder their obsession with you low life credit mortgage borrowing home owner scumbags.
I could go on forever. Remember you low life credit scumbags, a change is coming to Washington. They are going to take all your assets in the next crisis. And if you credit scumbags threaten the wealthy and the powerful by fighting your foreclosures, they will raise prices to the point that you wont even be able to rent.
By the way, I heard a rumor from the Hill, The Rich and Famous are passing legislation that makes it illegal to live under a federally funded bridge.
Hey Buddy, can you spare a dime?
Michael LittleBig, Foreclosure epic center, where it all began: Cleveland Ohio
The real question now is whether these arrogant parasites are going to be allowed to confuse illegal naked short selling, i.e. failing to deliver the share sold at T+3, with legal short selling, which is where borrowed shares are delivered. This letter isn't an appeal for legal short selling, it is an appeal for confusing illegal delivery failure as a trading strategy, with legitimate short selling. The question is whether there is anyone these days who is so stupid that they don't know the difference. Obviously, Chanos and Baker believe we are all idiots, and that we can't make the distinction. This is particularly unctuous now, as even the mainstream understands it. For crying out loud, even Cramer has seen the writing on the wall and is pretending that he has been part of Patrick's movement for years.
Bob O'Brien's Sanity Check - The hedge fund industry howls with outrage over the new SEC temporary rule..."It's not a big problem"...is now...it could ruin the markets if curtailed...hmmm
It's important to note the the CBO analysis is a probability-weighted average method; the cost could be zero, the cost could dwarf $25 billion.
In other words, it's probably useless. Who knows the underlying distribution with any precision? Garbage in, garbage out.
Next.
Business Week
Paulson: Housing Correction in 'Months'
The Treasury Secretary thinks it will take just months, not years, for house prices to stabilize and most excesses to be washed away
Paulson: Housing Correction in 'Months' - BusinessWeek
Paulson: Housing Correction in 'Months'
From his perspective, he's absolutely correct: it will be months until he's sacked and a new buffoon will inherit the mess.
If that's all it really costs I wouldn't have so much of a problem with that. I'm not sure if I really believe it though.
safe_as_apartments, it would help if the CBO released more info - like their estimates based on various house price declines. That would help us evaluate their estimate. This could easily be $100 billion or more in certain circumstances.
Best Wishes.
"at the end of March 2008, a book of business with a value of about $5.2 trillion. The riskiest loans, known as alt-A and subprime mortgages, accounted for about 15 percent of that portfolio."
That's $780 billion in subprime and Alt-A exposure. Look out below!!!!
Thanks for covering this CR, this bill will shape real estate finance and possibly US government operations for years to come..
CR, agreed. It would be nice to assign some error bars to this estimate...I'm sure they are massive.
Multiply by 10.
What A said...
What is the probability-weighted average of rain or no-rain?
This estimate will evolve much the same way as Bubble Ben's credit loss estimate of $100 billio
Should I sell myself to China, or wait until my government does it for me?
Remember this isn't the cost to fix the whole housing mess. It's the cost to fix Fannie and Freddie's part, less than half, and a relatively healthy part (larger downs, less in bubble markets, etc.) And some of the cost has or will be offloaded onto F&F shareholders and the mortgage insurers. 25 billion looks low to me but this will be small in comparison to the entire 1 trillion mess.
The GSEs are Paulson's white knight toxic waste site where all the already deeply underwater loans buried in L3 at his friends' institutions will likely end up. That means not only do the GSEs have an ualready nmanagable load of toxic trash they need to be ready to be the bagholder of only resort.
$25b is laughable when you consider the grand plan.
As is the case with every estimated cost in this crisis, I'm betting it goes WAY beyond $25billion.
"It's important to note the the CBO analysis is a probability-weighted average method; the cost could be zero, the cost could dwarf $25 billion."
In other words, the risk component is not important, just the expected value based on bogus assumptions. The variance can go to hell.
Why does that sound familiar?
Yep, and I gots a bridge in Brooklyn I'm willing to sell cheap.
Cheers,
We are all kidney nurseries now. When's the harvest ?
Great!!! Now we don't need to send a blank check to Hank.
What was the initial CBO cost estimate of the Iraq war again?
Congressional Democrats, for instance, predicted that the Iraq war would cost roughly $93 billion, not including reconstruction.
and the Bush administration was at $50B-$60B.
barely, if the feds are bailing out F&F it's likely there will be additional supervision restricting them from buying questionable assets. The populace will go postal if they pay directly for Wall Street scams and the pols know that.
This just in:
UPS said soaring fuel costs and the sluggish U.S. economy sent second quarter profit skidding by 21 percent, to $873 million. On a per-share basis, earnings fell 18.3 percent, to 85 cents a share.
The slide came despite a 6.7 percent gain in revenue, to $13 billion.
Per-share profit was two cents better than the lower end of UPS' guidance, but nearly 20 cents lower than the $1.04 of second quarter 2007. Year-ago net profit was $1.1 billion.
Metro Atlanta Business News | ajc.com
Does Syron give back his $20 million salary and stock per year???
I have found a broad stroke reason for subprime and all the retardation including, an inability of government to have clarity; this includes the obvious day-to-day output of Bush, Paulson, Bernanke, The Senate, Congress, FTC, SEC, DOJ, FBI, etc, etc...
Cluttering can be symptomatic of deeper mental and emotional problems. Problem clutterers are more likely to have depression, mania, OCD or ADHD. Any of these disorders can be comorbid with compulsive hoarding.[4] Others attribute cluttering to the human desire to hunt and gather, while still others describe it as a consequence of over-consumption.[5][6] Some members of CLA describe the inability to let go of objects as a consequence of spiritual emptiness.[2]
Cluttering is not lethal like alcoholism, addiction, or depression, but it can have devastating consequences. Many clutterers have been evicted from their apartments, lost custody of their children, or have literally gone to jail for violations of building, health and fire codes.[7]
** We would have a far better society, if the above people would seek help ASAP: Clutterers Anonymous - Wikipedia, the free encyclopedia
"Our books are grossly inflated and no longer remotely resemble reality.
Reality is going to get a lot worse.
If our books were accurate, and reality didn't get worse, it'd run about $25B."
That's reassuring.
This is another stick save for the IB's and Big Banks.
As CR reported last week, the decline in Mac/Mae's stock price will negatively impact earnings going forward
If the taxpayers could buy out this liability for a mere $25 billion, we should do it today. Will some soverign investment fund take the risk? Find a sucker quick!
Fair,
"The populace will go postal if they pay directly for Wall Street scams and the pols know that."
The public barely keeps track of Britney news. Not 1 in 10 even know what's going on now.
Cheers,
What I don't understand is why all of these high profile CEO's still get paid big bucks when it looks like the rest of us are going to pay for their poor decisions
"The populace will go postal if they pay directly for Wall Street scams and the pols know that."
LMFAO!!
Yeah right, as long as the spin doctors like Hannity and Rush can keep them focused on trivial matters and their local McDonalds is open - they could care less.
Why oh why oh WHY is are our worthless elected officials not calling for any bailout package to begin with the forceful extraction of the salaries, bonuses and benefits paid out to all executives of any company to be bailed out?
You can't have your cake and eat it to. If you want government protection, then you are no longer independant enough to expect that your assets can be protected in the event of a bailout. Any bailout, if there is one, needs to begin with funds directly from the clowns who created the mess.
Batman getting arrested is hardly trivial.
I'll second that crispy!!
from the CBO:
CBO applied a probability distribution of the possible future direction of home prices, including the potential for stabilization, modest growth, and much deeper declines. Using historical and industry estimates of the expected losses on the different types of credit risk that the GSEs face in their current portfolios, CBO estimated the firms possible credit losses under thousands of possible future market conditions for housing prices. That analysis suggested that there was more than a 50 percent chance that the GSEs future losses would not exceed those already recognized, but there was almost a 5 percent chance that the added losses would total more than $100 billion. Given that distribution of possible future losses, CBO then evaluated how much assistance might need to be provided to the GSEs to allow them to continue operating in the capital markets. CBOs estimate of $25 billion in federal costs over the 20092010 period reflects the agencys assessment of the probability-weighted average of how large those injections might need to be, including zero as a potential outcome, along with the views of other analysts.
as a point of reference, last week JP Morgan estimated cum losses on the GSE guarantee books using loan-level data from FHLMC and assuming a 25% OFHEO home price decline (and that mortgage insurers pay all claims). here are their estimates, by vintage:
2008: 1.18%
2007: 1.57%
2006: 1.43%
2005: 1.07%
2004 and prior: 0.54%
wtd avg: 1.03% ($48B)
Bacon, any link?
sorry, no.
"barely, if the feds are bailing out F&F it's likely there will be additional supervision restricting them from buying questionable assets"
I strongly disagree. It will be sold as a great investment - promises of markups on assets just down the road. There are a TON of upside down loans scheduled to reset over the next 2 years and you can bet they will all get gobbled up by the GSEs if they get balance sheet relief with Treasury capital and guarantees.
Japan's lost decade will be looked upon with envy.
CSC,
Who said that arresting Batman was trivial? That's earth ending.
Cheers,
"with the forceful extraction of the salaries, bonuses and benefits paid out to all executives of any company to be bailed out?"
Agree! If we nationalize these entities; we need all the money back from their compensation above governemnt pay scales.
I thought the press was bad, you guys are making me sick to my stomach!
25 billion? Jeez, I thought we'd be on the hook for some real money.
angry renter,
I agree if 15% is 780BB then they are saying that 3.2% of that 15% is all that will need saving...
pooh!
The CBO analysis is a probability-weighted average method; the cost could be zero, the cost could dwarf $25 billion.
Screw error bands. Tell me the NTE cap. What? You don't know? They are willing to hold forth the possibility of $0 but they can't place an upper bound?
Regardless this is no doubt one of those famous static analyses. The credit market repercussions of a bailout of any amount would dwarf a paltry $25b. The loss of tax revenue wouldn't be measured in tens of billions.
What do we have next to pump up this anaemic rally in the DOW?
Well with Russia talking about putting bombers in Cuba as a response to our missile program, we could get a whole new bucket of crud to worry about. The GSEs could be the new Britany Spears.
Perhaps the populace is suffering from information clutter, like the post on clutter above.
Words, words, words...none of them going much of anywhere until they reach some sort of critical mass and overwhelm a person.
Everything is so bad -- economically, emotionally -- and getting worse. We need to protect that quiet, reasonable part of us and have the wisdom to know that there are simply some things we cannot control, affect or change.
My search for truth each day is so cluttered, I've started reading only the first sentences of paragraphs and the bottom line, and I still can't keep up.
I had to let the war go. It's so horrific, and people are dying who didn't do anything wrong, but I can't make anything better. It's all broken.
Now I have to let this insane robbery in the marketplace go. I've protected myself and taken a lot of steps, but I know I'm going to lose. If I can keep my sanity and slip through it somehow, little by little, and keep myself and those I love alive, it's all I ask.
Be of good courage, everyone...
barely,
that was based on insurance being able to pick up ALL the mess....
that would be taxpayer backed insurance companies i'm sure...
Rob Dawg,
"Regardless this is no doubt one of those famous static analyses."
And they're probably using some historic repayment of mortgage debt model. You know, when people put 20% of their own funds down, and underwriting was done by Tanta.
Cheers,
Bill to rein in energy speculation clears procedural hurdle
Oil futures about to correct. This should B12 the market.
SSBN628,
That just went 'ding!' for me, here is the way to get the MI onto the taxpayer tab...upfront estimate of $0-$50 Billion, then its a 'hoocoodanode?
stray kitty: I have a feeling your words could be written by many these days.
I strongly disagree. It will be sold as a great investment - promises of markups on assets just down the road. There are a TON of upside down loans scheduled to reset over the next 2 years and you can bet they will all get gobbled up by the GSEs if they get balance sheet relief with Treasury capital and guarantees.
I think it will be hard to sell that to a frightened population. But in any case, if F&F go south after a bailout the population will be out for blood. They flipped the House in 1994 largely over petty scandals like franking. This would be an order of magnitude worse.
"the cost could be zero, the cost could dwarf $25 billion."
Leave me out of this. -- Tattoo.
stray kitty,
"We need to protect that quiet, reasonable part of us"
I'm fairly certain that part left me in a huff several decades ago.
Cheers,
Anemic is the word, why last summer running the yen down like we have today would have been good for over 1% in all three indices...do pumpmonkeys get RSI?
SSBN628, Alt-A default rates at 3.2% may be too low. Especially if the Fed is forced to start raising interest rates next year or we have a recession.
Standard & Poor's said in April the range of taxpayer exposure in a GSE bailout is $420 billion to $1.1 trillion.
Concerns rising that Fannie and Freddie could need bailout - Apr. 21, 2008
=2008042103
CBO did a bang-up job estimating the S&L costs back in the 80s...under-estimated by a lot...
With Petro purchases and prices declining, who will buy our treasuries?
Stray kitty,
Re: My search for truth each day is so cluttered
Fragmentation and dis-connection are the fuel for this chaos and all people can do is find more clutter and more distractions. Perhaps it is time just to tune out media and play with clay or paint?
Ctrl-Alt-Del,
Ctrl-Alt-Del!,
Ctrl-Alt-Del!!!!!!,
Can I please reboot now? I would like to start over
i think the great big do over is what armageddon is all about.
Immanence writes:
Stray kitty,
Re: My search for truth each day is so cluttered
Fragmentation and dis-connection are the fuel for this chaos and all people can do is find more clutter and more distractions. Perhaps it is time just to tune out media and play with clay or paint?
I find the clutter all a bit of a head f*ck. I think before this is over we'll have a lot of insane people who never want to read another word about financial matters ever again.
It's been an avalanche of postings and yet...and yet I hunger for CR's view on the latest OFHEO release...
OZYMANDIAS
I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shatter'd visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamp'd on these lifeless things,
The hand that mock'd them and the heart that fed.
And on the pedestal these words appear:
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.
--Percy Bysshe Shelley
crispy&cole writes:
"The populace will go postal if they pay directly for Wall Street scams and the pols know that."
LMFAO!!
Yeah right, as long as the spin doctors like Hannity and Rush can keep them focused on trivial matters and their local McDonalds is open - they could care less.
crispy&cole | 07.22.08 - 12:45 pm | #
All social engineering is preceded by verbal engineering.
Watch as words gain new meaning.
This is going to endup getting spun into an easily digestable story for the public and the textbooks.
How did the American dream crash and die? Someone smart will endup coming out of nowhere to write this morality play.
The battle now is for the existing order. They will lose. Whoever comes after them will frame the window that we will be looking out of for the next 75 years.
Once again the fast shrinking American middle class gets to bail out America's wanton financial crooks.
I agree with Kunstler the GOP under Bush has wrecked America so Americans had better get a new "Dream" and fast.
km4,
Really, it is all my fault. I am very sorry.
Ok, I will be the first to posit that Fannie and Freddie end up costing the Taxpayer $250 billion.
If this has another two years to the bottom, then you might as well say the USA is bk too.
Nothing like a total crisis of confidence to destroy an economy.
Who is going to fill all of that dead retail with the consumer pulling back?
Who is going to buy a house with the price falling by the day?
Who is going to buy a rental property with the rent dropping like a stone, faster than house prices?
We built a huge bubble economy predicated on unsustainable gains from houses, after we built a similar economy on wall street based on dot bombs.
We never learn.
Now, the real world is going to make our lives much more miserable, because while that house is worth crap, the gas to get to work and food on the table cost soooo much more.
What a bunch of maroons, the current administration.
As for the economic establishment, the losses of the stock market will cause them to rethink their entire lives. Retirement? Based on an index fund? HA!
Someday this war's gonna end...
Elvis weak reply so please leave the building.
Bucky's on a total rampage!
BUCKY! BUCKY! BUCKY...
km4,
But it is my fault. I can admit it. Of course, it is more fun to blame people for our woes than to take blame, so I'm kind of a wet blanket, but it really is my fault. Now you don't have to worry about blaming others. You can focus your anger on me. I am like the Dark Knight. I'm not a hero.
Welcome to the intervention dimension ac...
iceman:
What was the initial CBO cost estimate of the Iraq war again?
...
and the Bush administration was at $50B-$60B.
You guys do not remember the really juicy bits:
Nightline: Project Iraq
April 23, 2003 Wednesday
USAID: Assistance for Iraq - Nightline: Project Iraq, April 23, 2003 Transcript
TED KOPPEL
(Off Camera) Well, it's a, I think you'll agree, this is a much bigger project than any that's been talked about. Indeed, I understand that more money is expected to be spent on this than was spent on the entire Marshall Plan for the rebuilding of Europe after World War II.
ANDREW NATSIOS
No, no. This doesn't even compare remotely with the size of the Marshall Plan.
TED KOPPEL
(Off Camera) The Marshall Plan was $97 billion.
ANDREW NATSIOS
This is 1.7 billion.
TED KOPPEL
(Off Camera) All right, this is the first. I mean, when you talk about 1.7, you're not suggesting that the rebuilding of Iraq is gonna be done for $1.7 billion?
ANDREW NATSIOS
Well, in terms of the American taxpayers contribution, I do, this is it for the US. The rest of the rebuilding of Iraq will be done by other countries who have already made pledges, Britain, Germany, Norway, Japan, Canada, and Iraqi oil revenues, eventually in several years, when it's up and running and there's a new government that's been democratically elected, will finish the job with their own revenues. They're going to get in $20 billion a year in oil revenues. But the American part of this will be 1.7 billion. We have no plans for any further-on funding for this.
Hanky Panky wants Congress to bailout hedge funds.
"That way, problems at one institution - be it a mortgage finance company, a hedge fund or a brokerage firm such as Bear Stearns - doesn't threaten to upend the entire sector."
Elvis I hope you enjoy your soliloquy comment.
I'm not trying to bring you or anyone down, but I think as people try to escape this God awful Bush era and all the negativity, corruption and collusion and the failure of society to deal with these stresses -- we have as a collective group fallen into a catch-22 where in the search for clarity, all we find is more distractions, and the process becomes destructive and just adds to the problem. This fragmentation will increase like entropy, expanding into more chaos, small fragments which have less meaning.
IMHO, it may be time to turn off this machine that connects us to the lies of Big Brother and the awful distortions from this Bush Coup!
Re: "Internet addicts suffer from emotional problems such as depression and anxiety-related disorders and often use the fantasy world of the Internet to psychologically escape unpleasant feelings or stressful situations."
Anyone a graphics wiz? Wisdom Seeker pointed out on the Philly Fed coincident indicator thread that the color legends changed from the first map to the second reducing the impact of the color shift to red...anyone care to reinterpret that map with the original color scale?
km4,
I hope your enjoy your worthless finger pointing.
Tim writes:
Hanky Panky wants Congress to bailout hedge funds.
"That way, problems at one institution - be it a mortgage finance company, a hedge fund or a brokerage firm such as Bear Stearns - doesn't threaten to upend the entire sector."
Of course Congress should bail out the hedge funds. It would be unfair to leave them out of the fun.
ac,
Wow, what happened in the last hour to create that rocket?
Cheers,
"assuming a 25% OFHEO home price decline (and that mortgage insurers pay all claims)"
I'm okay with that first assumption, but the second one is actually laughable.
Stray Kitty,
It is more complicated than this, but you can simplify the market into a vast interchange of conflicting viewpoints. I realized several months ago that for every purchase of a stock, there is also a seller. (simplified, I know)
Apparently, these two have opposite views on the direction of the stock in the future.
Trying to know whether it's going up or down is impossible. Nobody can know. The best are right more often than wrong, but never 100% correct.
I bailed on the details a few months ago. I decided the 50 day moving average on PRHYX is a good indicator of whether the market is going up or down short term. (corporate and interbank paper being the current crux of the matter.) It has been correct, but late, for the last year. This imperfect analog lets me focus on my job and not wondering about the direction of the markets. daily or hourly.
And I'm 80% cash/mmkt so I have less reason to stare at the charts and read the news.
Sell in May and go away was never more true, for me.
good luck with things.
RE...according to your link Natsios was also manager of the "Big Dig" in Boston...HAHAHA...that is all anyone needs to know. That was one of the biggest SNAFU's in history...a project that massively exceeded its budget and took way longer than originally projected and was rife with corruption.
what happened in the last hour to create that rocket?
That is called hedge funds using Fed manipulation as rocket fuel to distort the dis-connected stock market from fundamental reality, and then take it as high as possible before it crashes. Same thing happened after bear Stearns bailout!
Paulson specificly highlighted the international components of the bailout. he doesn't give a hoot about house prices. he has said as much. He only cares that the Treasury's customers - the cenytral banks - are protected. Check out the issue calander and the projected deficit spend. if Bretton Woods II was about vendor financing, Bretton Woods III is about too big to fail. It worked for Bear Stearns, it worked for LEH, it is working for the primary dealers and money center banks so the logical extension is why not the USA.
but it is in your interest
Elvis you come across as a financial assclown ! Wonder why
I don't really have a problem with a bailout but I have no confidence that this congress and president can remake Freddie and Fannie into a sensibly restrained government entity.
Hitting the reset button and carrying on as usual with slightly higher reserve requirements make absolutely no sense to me.
i suppose i should also note that the GSEs will also have substantial offsetting g-fee income (~25bps/yr), so $48B wouldn't be a capital loss.
Assured Guaranty's share price dropped 50% on the news and the company said that some transactions it is currently negotiating are now in jeopardy because of the Moody's review. Assured Guaranty's reinsurance business, called AG Re, is in negotiations to reinsure "large portfolios" of mainly municipal risk that may end up being canceled, the company said, but Schozer said the company hoped to limit that problem. "We have had a number of discussions with investors," Schozer said. "There is an immediate period where people jump back" on the fear that "where there is smoke, there is fire, he said. Eventually, "people realize there is smoke but no fire."
That was a goddamn explosion you dumb ass.
T. ROWE PRICE HIGH YIELD FD INC Fund Chart - Yahoo! Finance
Elvis you come across as a financial assclown ! Wonder why
km4
km4,
Because I love you? And people know my love for you is misguided and, therefore, so must be my financial understandings?
energyecon writes:
Anyone a graphics wiz? Wisdom Seeker pointed out on the Philly Fed coincident indicator thread that the color legends changed from the first map to the second reducing the impact of the color shift to red...anyone care to reinterpret that map with the original color scale?
energyecon, I commented at the end of that thread. There's no deception or reducing of inpact here. The new graph just contains more info.
I second energyecon's quest for an updated graph based on Wisdom Seeker's post here:
HaloScan.com - Comments
Ignore my last comment...it was misinformation.
NEW YORK (CNNMoney.com) -- Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.
Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money.
Concerns rising that Fannie and Freddie could need bailout - Apr. 21, 2008
It would make sense that PRHYX would be in a crash mode, because yields are going down in relation to decreased sales, decreased EPS, decreased yield enhancements from Treasuries, bonds, currencies, commodities and anything with fundamental value -- which has to be represented by REALISTIC payouts in the FORM of a DIVIDEND!
That might explain why cash is king and any market runup is total bullshit and manipulation -- because, unless your a really fast daytrader -- you come empty and have nothing but cashburn! Dividend yields are dropping like banks, and although I'm NO Dr. EVIL, you can frigg'n bet your ass that this High-Yield PRHYX is a great indicator of the economy, versus the stock market!!!
Amen and yadda yadda
"Ignore my last comment...it was misinformation."
Off with your head!
TCA,
How about a side by side to evaluate then?
this is the Kitchen sink quarter at WB: Wachovia's Steel Plans to Cut Expenses, Sell Assets (Update4) - Bloomberg.com
shares rally....
Jesus Christ on a popsicle stick! If I see one more of these oh-so-earnest "stray kitty" we're-all-DOOOOMED posts, I'm gonna go out and buy some UYG. Blech....
Can't be that bad yet.....
Americans still using their homes as piggy banks, Home equity extraction via revolving lines of credit rose 11.6% in the four weeks to July over the same period the year before.
http://network.nationalpost.com/np/blogs/fpposted/archive/2008/07/22/americans-still-using-their-homes-as-piggy-banks.aspx
"Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money."
The dartboard methodology is evident from a "worst case" scenario that itself varies almost 3x from its low to high end.
Lets see we have Washington Mutual after the close and also Boston Properties at time undisclosed today...for some marginally on topic market chatter...its really interesting to watch all this unfold in a "I can't not look at the accident as I drive by" kind of way...
ac,
Wow, what happened in the last hour to create that rocket?
I don't know. Maybe it's the decision on oil and some repatriation of commodity bubble dollars.
energyecon writes:
TCA,
How about a side by side to evaluate then?
Not my area of expertise. I'm just pointing out that using the old legend would make the current map less red not more red.
DQ Foreclosure report is out
DQnews.com
"this is the Kitchen sink quarter at WB: shares rally...."
They must have a lot of kitchens. Peculiar how they only renovate one per quarter, though.
"Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money"
Now we're talkin'
What's GS gonna do when Hank gets a civi job?
BG,
Bite me, and be nice to kitty!
Mffais Rankings
SEC Info - Canyon Capital Advisors LLC - 13F-HR - For 3/31/08
TCA,
No, that is not correct - we would have more dark red - and still one dark blue.
Does anyone have video of Frank "The Spitzer" Langone on cnbc this morning defending the honor of his FoF, Angelo?
Alternatively, lets see the earlier map using the color legend from the more recent map then...
This is fun stuff, makes my day:
Rankings - US United States Top 10 Bad Moves
Mffais Rankings United States US TOP-10-BAD-MOVES
1\tAzl Davis Ny Venture Fund bought Berkshire Hathaway Inc (BRH.BE) stock, then the price went down, resulting in $-9,784,434,726 of additional loss!
LOL (Hawhahahwahahwajaahhwhaha..bahahahaha ROTFLMAO)!!!!!
Warren has $30 Billion in goodwill level 3 shit ...lol!
Uncle Billy Loves Naomi Klein
ROTF...LMAO!! Very good, oui!
patient renter: You can't have your cake and eat it to.
I think they are planning on having their cake and eating your's too.
Where's the numeric data behind those maps?
Piece of crepe: I know.. I know...
scav,
I have to think the Philly Fed site...lets see...
OT
New prediction on hotel industry
According to an analysis by Atlanta-based industry consultancy PKF Hospitality Research, a 10 percent decline in the number of seats flown to US airports would result in a 3.9 percent drop in demand for lodging - compared to a 3.3 percent plunge in bookings in 2001. Over a year, that could translate into about 40 million fewer rooms occupied for one night, or a loss of $4.3 billion in revenue for the industry.
Is this 25 billion to cover the Fannie paper that is "stated income, stated assets" dressed up as full doc?
For the last few years anytime a borrower had a high fico score, brokers could go through Desktop Underwriting and click on "full doc" as documentation. Then make up the income and assets and wait for the response. A very high percentage of the times, it got approved without need for verification. Let me repeat: the automated system did NOT request for verifications afterwards.
This was done all the time by the broker community. If they requested verification, then the brokers would go to the stated income plans anyway where pricing was a little worse. Hey, why not give it a try with Fannie first? See if you can beat the system. It was very similar to "fast and easy" from countrywide. That too wound up with Fannie.
The amount of garbage that Fannie owns is amazing. Obviously, this is now starting to show. "Full doc" my ass. The brokers made a mockery of the system.
I have decided what I want to do today, i.e, I'm going to become a CFP and help the little peeps that are being ground into dust by the bullies... but then again, lunch time is here.
Looks like its here, historical data available in a link on right margin
State Coincident Indexes
The Commodities Court Jester, Dennis Gartman has called a "bottom" in financials.
Pile in now before you get left behind Foreveeeeeeeerrrrrrrrrrrrrrrrr!!!
Someone should ask CBO what the losses are in Year 3 (2011).
Filed under: Figures don't lie but liars may figure.
And once again a stock (Wachovia in this instance) rises on horrible and very real losses. Almost all the Companies who have issued horrible results this morning and last night are rising it appears at first glance this morning. I'm dumbstruck but then so is the entire Country at this point (deaf, dumb and blind ignorant masses is what we've become). We are truly the Soviet Union circa 1987 or Bullsh*t Nation if you prefer.
Nothing matters is the message, nothing. Cheney was right "Deficit's don't matter", nothing matters, reality is what they tell us it is no more, no less. How do you like living in a world where nothing matters and it's all a collective fraud? We are all bubble boys and girls now, don't burst our bubble! La, la, la, la, we can't hear you.
This type of non-reality group think in America has lead to the slaughter of innocent people with more to come, much more if we don't stop. First we all become willing accomplices or trained in seemingly innocent acts of non-reality group think and then the scapegoats are found when reality inevitably intrudes on our idiot's parade. We're already well down the road of innocent slaughter for our sins, just ask the hundreds of thousands of Iraqi's how our non-reality group think works whom we've destroyed, mauled and/or killed for their oil, which they clearly now owe us for "liberating" them - an idiot's logic on full display.
The height of absurdity has been reached in our Country of Morons and Thieves. Wachovia lost $9 billion, $9 freakin billion in just a few months time at one stinkin bank and the stock rises the very morning of the report?
The American mind reels and collectively once again chooses a path of non-reality
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dr strangemoney writes:
I think they are planning on having their cake and eating your's too.
LOL. A whole new meaning to the toast, "To you and yours"
"and that mortgage insurers pay all claims"
How much does that add up to?
The grand new purpose for Wall Street -- The Efficient Allocation of Taxpayer Dollars
Watching this market is making me sea-sick. Pass the bucket.
JMS yes the scope and scale of American ignorance is simply astounding and many will find out the hard way how the GOP under Bush has wrecked America so Americans had better get a new "Dream" and fast.
Iraqi war went from 200B to ~1T.
I think this "estimate" would set a new bar for full_shit_estimates.
"How much does that add up to?"
111 Billion and they ain't got it.
Are there peeps out there that still think political labels make any difference? C'mon wakee wakee happy campers.
Piece Of Crepe: Have you seen how big the CFA certificates are? They're like those giant checks you see at awards shows.
Re: CFA certificates & size?
I'll have to go look
u can't have your cake and eat it to.
What?
Our entire financial system is based on the premise of having your cake and eating it too.
Holy Moly, I know he works for the Bush administration, so you have to consider the source but Paulson must have taken to smoking crack:
"Treasury Secretary Henry Paulson said America's housing market could turn a corner and begin recovering within months, but it will take longer to resolve all housing-related problems."
Within months? LOL...sure, the Fs are, well, sort of F'd now and this is going to turn the corner in months? Who's going to write these mortgages? Securitize them? Suddenly, with the economy very weak, people are going to have 20% down? Credit is going to become miraculously available? Pass the pipe there Paulson. Perhaps you're getting the rocks from GWB and lately the Democrats because they're thinking the US Treasury can spend its way out of the problem of massive over-spending.
JMS-
F@#king beautiful!
A big yes...
Re: he CFP designation, on the other hand, is more of a generalist designation that provides the best preparation for comprehensive personal and estate planning. For example, the CFP curriculum would require a candidate to know what a callable bond is.
Shit, I can do that, WTF, why not, maybe I can explain to someone that is suffering from on-going attributes related to cluttering, what I think is going on with yields and how that may impact your callable bond? Oui?
Within months?
Why not? We're used to talking in billions now, right? A few billion months from now,...
What will happen to the old Freddi Fannie paper when the Treasury issues billions of new paper?
$25 Billion! Yea right!
California foreclosures up 261% from '07 levels | L.A. Land | Los Angeles Times
JMS, since when do stock prices have anything to do with macroeconomic reality? When news is bad stocks can rise IF the consensus is the worst is behind the company, or steps are being made to correct the issues. So the question is, do you believe that Wachovia's stock price is too low? If you do you will buy. And, btw, I'd be happy to sell it to you if I thought the opposite. So now you have more people thinking that it's getting close to it's low and buying in. Is it? I don't think so, but hey, I'm only a schmuck not a money manager. It could be this is the worst of their write-downs. Maybe.
But thinking that the stock market is reflective of economic realities is a bit disjoint. A lot of people thought it was a good deal when the DOW was in the 13000's. But certainly individual stocks were a good deal. They are now. You just have to find them.
fannie paper. oh, i know.
Kona: No, no... go big or go home!
"Holy Moly, I know he works for the Bush administration, so you have to consider the source but Paulson must have taken to smoking crack:"
Treasury's new motto: You can have your coke and smoke it too.
...plus I have a feeling that CFP related homicides will be growing over the next few years...
Paulson lies again on Faux News.
"Obviously, it will go on beyond months with some of the issues in the housing market, but I believe we can get to the point within months where we turn the corner on housing," Paulson said in a televised interview with Fox Business Network.
Paulson spoke shortly before the Congressional Budget Office estimated that the cost of rescuing Fannie and Freddie could be $25 billion.
No wonder he likes snakes.
Ipod-Please find that goldilocks board again...
Maybe CBO meant that $25 Billion is going to be its overtime pay in the next 2 years.
Corn Falls Below $6 a Bushel as Commodities' Appeal Diminishes
Corn Falls Below $6 a Bushel as Commodities' Appeal Diminishes - Bloomberg.com
These guys are Cornholiod, they will be assimilated.
JMS,
I hate to point one finger, but the right-wing religious groups that cluster and then clutter up reality with the dissociative confluence of pretending that spiritualism is in someway a link to political rhetoric and social agenda warfare. The Bush Coup took this group of impassioned sheep and drugged them with patriotic illusions and then gave them sweet wine to get drunk on, while the trojans swarmed from uder the belly of this fuc-ing facade. Not that the left-wing has it together, by offering the drug of hope in exchange for a fast vote, for more of the same with a different book cover! These people are traitors that are fueled by American apathy!
This has been a public service message...
Now I am all confused. Weren't F&F the best things that ever happend to this country? Shall I believe Tanta anymore or what? Help!!!
Allen C,
EXACTLY - what is the MI piece of the puzzle that keeps the cost to taxpayers at the low, low price of only $50 billion?
Could this be the avenue to get the taxpayer to shoulder the MI burden?
Jim Cramer says he like Capital One over American Express! He did his homework and now says BUY COF!
Re: CFP related homicides
Death of a salesman?
There are worse things in life than death. Have you ever spent an evening with an insurance salesman? -- Woody Alle
Crap Tanta, The blimp is going down, post some porn or something clutterful!!!
thanks energyecon - sent my attempt at the maps to CR.
Why not just let them fail? It isn't like Americans own the bonds anymore and they aren't guaranteed by the federal government. China should have known the bonds were dangerous when they bought them.
China should have known the bonds were dangerous when they bought them.
Yeah didn't someone send them a prospectus?
Whew, steady as she goes, more air to the rear sectio
SRS below 95.
China should have known the bonds were dangerous when they bought them.
Because then they would be chapped and hook up with Russia who would also be chapped along with Iran who just plain doest give much of a rats ass about us and oil would then stop getting exported to us and then we might get pissed and launch a nuke and then they would launch a couple back and the whole damn this would be such a screwed up mess. It's easier to just print money me thinks.
Ya know we can easily afford this F&F thingy.. and have some cake and ice cream too.
Macro Man
$25 billon is for the month of July, right?
I see a lot of focus on Bush for this mess. But didn't the repeal of Glass Steagall under Clinton contribute? Not that blaming anyone is going to do jack all to get us out of this mess. Just sayin.
I'm a Democrat who voted for Clinton and never Bush, BTW.
JMS-
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Hang in there, stray kitty. Everything happens for a reason and for the greater good, even if we puny humans lack the perspective to see it.
Somehow on topic, here's part of Langone on Squawk Box (unfortunately not talking about FoK -- friend of Kenny. I was calling him Frankie earlier, not sure why).
Video - CNBC.com
According to Kenny, if you want to kill him with a stake through the heart, you should use metal and not wood, because wood breaks. This is the "sticks and stones" gambit. Kill Kenny... Kill Kenny... why does that sound familiar?
Why is it that every one of these type stories - that trumpet the dangers of Freddie, Fannie - here the FHA - or even ones like Countrywide and IndyMac etc never bother to talk about the details. All we hear is how much risk there is - how poorly they are supposedly doing - how likely they are to fail and/or need rescue. Yet - none of these predictions are supported by the real facts.
The strength of Fannie, Freddie, FHA and even IndyMac and Countrywide are in the underlying assets - the loans themselves. So just how are these loan portfolios doing?Even a nominal effort at research yields the broad facts.
Fannie Mae has appx $5 trillion in mortgages - appx 1/2 of all mortgages in the US - some are claiming they don't have enough capital - but once again these claims are the result of "fair value" accounting of their assets - which means pricing them at liquidation value - irregardless of the real value. Yet the delinquency rate on the FNMA portfolio - the 90 day late rate - is just 1.15% as of March 2008 ... the foreclosure rate is usually a bit less than half of the delinquency rate. So on ALL FNMA Loans almost 99% are not delinquent
http://tinyurl.com/FNMA-FC-RATES
FNMA Loan breakdown Q1 2008:
http://tinyurl.com/FNMA-LoanDistr
A tiny fraction of all FNMA loans are subprime - and just over 10% are ALT-A .... A total of 93% of all new business in Q1 2008 was fixed rate loans - and a total of 89% of all mortgages in their portfolio are fixed rate loans. Estimated average Loan to Value is 62% (38% down payment/equity). Estimated average FICO score - 721 (generally considered in the very good to excellent range)
Fannie Mae Delinquency Rates Q1 2008 (only appx 50% will actually end up foreclosed):
http://tinyurl.com/FNMA-Delinq
In Q1 2008 just 1.15% of all loans were 90+ days delinquent - appx 50% of these will end up foreclosures. Majority of delinquencies are in CA, AZ, FL and NV ...
90+ day delinq rates on ALT-A was 2.96% in Q1 200 vs 2.15% in Q1 2007 .... 90+ day delinq rates on Subprime was 7.42% in Q1 200 vs 5.76% in Q1 2007
Many of these higher risk loans were originated in 2007 and prior - with our tightened standards newly acquired loans will have lower credit risk. The delinquency rate overall is just over 1% - just under 99% of all FNMA loans are NOT delinquent - are performing as agreed
Fannie Mae Q1 2008 Foreclosure stats:
http://tinyurl.com/FNMA-FCstats
AZ, CA, FL, and NV accounted for 17% of foreclosures in Q1 2008 vs 4% in Q1 2007 ... The Midwest accounted for 36% of foreclosures in Q1 2008 vs 44% of the foreclosures in Q1 2007 ... ALT-A loans accounted for 29% of foreclosures in Q1 2008 vs 17% of the foreclosures in Q1 2007
Total foreclosed homes rate was 0.1% of all mortgages in Q1 2008 and Q1 2007 ... AGAIN out of ALL Fannie Mae loans 99.9% are not foreclosed on ....
At the end of Q1 2008 Fannie Mae had $2.723 trillion in mortgages on their books and $2.625 trillion in mortgage guarantees on their books - total appx $5.35 trillion .... up from 2007 which saw $2.65 trillion in loans and $2.55 trillion in guarantees for a total of $5.2 trillion ... Fannie Mae has $4.53 billion - out of $5.35 trillion in total loans in foreclosed homes on their books a total actual foreclsoure rate of 0.085% of current book ... and they will recover appx 60 - 65% of that $4.53 billion as these properties are sold - leaving a net loss of appx $1.812 billion - or appx 0.034% of the total $5.35 trillion current book. Total "non-accruing" (delinquent) loans are appx $8.723 billion - which makes the delinquency vs foreclosed rate on the $4.53 billion equal to appx 51.9%
Yep that portfolio is in terrible shape ....
Net interest income for Q1 2008 was $1.69 billion ... net guarantee income Q1 200 8 was $1.752 billion ... Total income/loss before taxes was a loss of $5.113 billion for Q1 2008 however $4.377 billion of this was a "paper" mark to market "fair value" accounting loss - and there was another $3.073 billion provision for credit losses in Q1 2008 in this $5.113 billion Q1 loss ... The $5.113 billion Q1 2008 loss provided a tax benefit of $2.928 billion - which reduced the net loss to $2.186 billion after taxes
According to one report:
"As of March 31, 2008, Fannie Mae had $42.7 billion in core capital, which represented a $5.1 billion surplus over the requirements of its regulator ... If we add together their statutory surplus, current loss reserve and estimated revenues, total claims paying resources for FNM are $56-92 billion ... If we tax effect these numbers, we see that FNM can sustain losses of $85-141 billion over 3-5 years. What is happening is that Fannie and Freddie are required, by accounting rule, to record paper losses because the immediate trading value of the assets on their books -- and in this case assets means mortgage loans that it holds--are going down. It probably has no intention of selling those now, so that is a somewhat theoretical problem. But that's what the accounting rules require, and as a result, it must record a "loss" for those on its quarterly income statement. That loss is then deducted from the value of shareholder equity on its balance sheet, thereby reducing the "capital" it has to serve as a cushion against further losses. That's basically what all the fuss is about."
Total losses in Q1 2008 = $2.186 billion (or which $4.377 billion was a paper mark to market loss which will come back as profit as the financial markets stabilize) ... and total reserves and surplus etc $56-$92 billion ...
Yep - they are in terrible shape all right .... a) steady and increasing revenue; b)increasing market share with limited competition; c) loss reserves sufficient to handle years of losses at current levels; d)billions in unencumbered loans they can borrow
against; e)improving loan credit quality on new loans; f)very small exposure to riskier subprime and ALT-A loans; g)far below "market" delinquency and foreclosure rates
FHA's numbers are even better than Fannie's in most metrics - the loans in their portfolios have some of the lowest default rates of all loans according to MBA's numbers. Yet we constantly hear how terrible these institutions are doing - and never with a review of the real details - the status of the assets.... Why is that? What are all these commentators afraid of?
The numbers above show how strong or weak Fannie Mae is - the loans are their assets - and Fannie Mae loans are doing just fine
$25B! Wow! That's a great bargain to pop up the $5T mortgage.
Let me write you a check right away, but promise that you'll never come back to me for more money on this matter, ok?
Currently Smoking Cannabis writes:
I see a lot of focus on Bush for this mess. But didn't the repeal of Glass Steagall under Clinton contribute? Not that blaming anyone is going to do jack all to get us out of this mess. Just sayin.
The Gramm Leach Bliley act passed both house by overwhelming majorities. Whatever Clinton's view of it didn't matter it was veto proof.
Good ole Paul Volker warned of its dangers in vain.
In other words, we can save Fannie and Freddie for the equivalent cost of two months in Iraq. Can you conceive of what else we could do if we had not spent the past 63 months there?
Heckuva job, Bushie!
ASG: But we've learned that numbers and reality mean nothing anymore. What matters is what "they" want us to perceive regarding the value of any asset. And "they" are really good at it.
Now, the question is, who are "they"?
The simple version ...
Just 10% of the Fannie portfolio is ALT-A or subprime, and the Fannie Mae Delinquency Rates Q1 2008:
http://tinyurl.com/FNMA-Delinq
In Q1 2008 just 1.15% of all loans were 90+ days delinquent - appx 50% of these will end up foreclosures. Majority of delinquencies are in CA, AZ, FL and NV ...
90+ day delinq rates on ALT-A was 2.96% in Q1 200 vs 2.15% in Q1 2007
90+ day delinq rates on Subprime was 7.42% in Q1 200 vs 5.76% in Q1 2007
Many of these higher risk loans were originated in 2007 and prior - with tightened standards newly acquired loans have lower credit risk. And the are doing effectively no sunprime and little ALT-A now.
The delinquency rate overall is just over 1% - just under 99% of all FNMA loans are NOT delinquent - are performing as agreed and there is almost zero evidence the quality is likely to change in any way but for the better.
Yet people still continue to make uneducted and uniformed proclamations of massive failure and losses.
Net interest income for Q1 2008 was $1.69 billion ... net guarntee income Q1 200 8 was $1.752 billion - Total income/loss before taxes was a loss of $5.113 billion for Q1 2008 however $4.377 billion of this was a "paper" mark to market "fair value" accounting loss - and there was another $3.073 billion provision for credit losses in Q1 2008 in this $5.113 billion Q1 loss.
$3.45 billion in interest and guarantee income in Q1 2008 alone ... and if not for the "fair value" write downs - which mark the portfolio to fire sale liquidation values regardless of the portfolio quality - after tax benefit they would have had a considerable profit in Q1 2008
"and that mortgage insurers pay all claims"
How much does that add up to?
well, as it relates to the $48B, i don't know, because i don't know what percentage of defaults in that number have MI coverage.
however, i do know that the GSEs have maximum combined MI exposure of ~$170B (the covered portion of the UPB of loans with MI). if you wanted to assume that the insurers couldn't pay any part of those claims--which is extremely unlikely because even if an insurer goes down, the GSEs have a claim on its capital--and say 20% of insured loans default (which is quite high), the total loss in the event that all MI companies fail and pay no part of their claims would be $34B between the GSEs (170*0.2).
ASG?? Is that you Tanta?
Now, the question is, who are "they"?
Re: "Where am I?"
"In the Village."
"What do you want?"
"Information."
"Whose side are you on?"
"That would be telling . We want information. Information! INFORMATION!"
"You won't get it."
"By hook or by crook, we will."
"Who are you?"
"The new Number Two." (This occasionally varies see below.)
"Who is Number One?"
"You are Number Six."
"I am not a number I am a free man!"
(Laughter from Number Two.)
Also see my url and this: YouTube - Peter Green's Fleetwood Mac "World Keeps Turning"
The Fall Of Capitalism 7/16/08
YouTube - GRITtv: The Fall Of Capitalism 7/16/08
Re: you should use metal and not wood, because wood breaks.
They allege that Ms McCain is preserved in oil and thought to have been a vampire for many eons...
This is how I like things, I started something and now it is finished, this is because I do not suffer from cluttering disease!
Poor Kona | 07.22.08 - 12:24 pm
Strong * Seeks Same @ 1:45
My Life: The Prisoner scared the hell out of me when I was a kid. That relentless bubble... it would ALWAYS get him.
Hmm.. if ASG if really Tanta, and not "Age, Sex, Gender," then maybe Tanta is really AnnS.
Sec Treasury Paulson should by now be familiar with what regulatory agencies are in the Treasury Department and what his responsibilities are to these agencies.
Congress with there legislative powers and oversight of the financial Institutions should have an idea of what their responsibilities in administering their oversight.
These elected officials know all about the savings and loan crisis in the 80's, John McCain was part of the Keating five. Yet these money grabbing self serving God like egos sat there and watched this crisis unfold since at least 2002. Economist Roubini warned the Congress in 2002 of what was to come.
The Congress has stated it was the subprime, then it was the variable rate mortgages, it was the predatory lenders, it was the mortgage borrowers that did not understand what they signed.
These Congressional halfwits have to understand that THE BANKS DESIGNED THE PAPER WORK AND THE RULES. Congress since 1980 has not passed any federal consumer banking regulations. THE BANKS FOR 35 YEARS have operated with absolute impunity.
There are 4 million foreclosures slated by 2008 year end, 6 Million by 2009 year end.
Paulson and the Congress not only were surprised by what has happened, but they have been debating for 5 months on how to save Freddie and Fannie, the Banks, Wall street, Brokers,
Federal Reserve and any wealthy and powerful political friends.
WHO IS TRYING TO SAVE THE AMERICAN WHO LOST HIS FINANCIAL REAREND BECAUSE THE CONGRESS AND PEEWEE PAULSON AND THE BANKS WERE
BLATANTLY NEGLECTING THEIR PUBLIC DUTY AND SWORN OATH OF OFFICE.
These wealthy and powerful are only concerned at this point about shoring up those institutions that they benefit from. Enough is enough. What happened to the MILLIONS of dollars that the FREDDIE and FANNIE Gods were taking home? Who stands for the loss?
All these people in our country that made money should be stripped of their assets so that the sale proceeds of those assets are repaid to the injured parties which are WE THE PEOPLE. This stealing has to stop. The only change we need in this country is the way Congress does business.
MLB
"Bailout" of GSE's? What is it, is the federal government assuming their debt, or can they still get away with leaving the question unanswered?
When are the rating agencies willing to use some standards for the federal government which are normally used everywhere else.
If the Feds are assuming the GSE's debt, the overall debt level of the US
increases by 50% and should bring down the rating to AA- or A+ with all the consequences for treasuries and the dollar, not to mention the credibility of the remainining superpower. The CBO estimate of $25 billion would then just be the equivalent of a rounding error
AGA..... interesting and refreshing to actually throw some numbers into the discussion.
As far as the MI's go, I think you just throw in their entire claims paying ability. Someone said it was roughly $20 billion.
Regarding Bacon's numbers, :25% OFHEO home price decline (and that mortgage insurers pay all claims). here are their estimates, by vintage:
2008: 1.18%"
If that means that today's business by F&F that is mostly conforming and at roughly traditional underwriting standards are going to go down another 25% from today and will cost a net 1.18%, then things will be very ugly. That means that today's fees won't cover the losses on today's business. Any reasonable survival scenario involves F&F making money at today's prices/rates/underwriting and then backfilling the known problem vintages.
Back to ASG, rather (sorry)....
Last I looked (its been a while) a lot of F&F capital includes intangible assets, no? And is their held mortgage book really MTM?
Zigg
I don't recall the specific writedowns - they were as noted in Fannie Q1 2008 financials as available here:
Fannie Mae
Here is a thread with more detailed comment - why websites use "blogs" vs the much more friendly and easier to read forums is beyond me ...
TrackForum - Fed to bail out Freddie Mac and Fannie Mae
And no I am not Tanta - although IO would hope this site would do the kind of research I point out
If I as a layman can get and review this info in a few hours on the net why can't legit people and sources in the business?
More importantly why AREN'T the professionals reviewing, commentating on, and questioning the real facts?
The same exact stupidity is being repeated about the FHA - whose financials - despite low and no down loans - look even better than FNMA
If I did the math correctly:
FNMA had 43,167 foreclosed (REO) homes in inventory as of end of Q1 2008 .... total value of these homes was reported to be $4.53 billion
Doing the math would show the average per property value of foreclosed homes in Fannie Mae inventory to be $104,941 ...
And for 2007 there were 26,294 homes in inventory with value of $2.241 billion for an average value of $85,228
This, along with fact that the largest share of foreclosures was from the Midwest, shows more clearly than just about anything else that Fannie Mae took the risks no one else would - in the worst parts of the country - as they were directed to do by the government and legislators - and yet still have a very low loss ratio
Even IndyMac was similarly NOT in big trouble on the ACTUAL performance of their loan portfolio
A review of detailed info from their last financials shows the bottom line is pretty clear .... there was nothing wrong with their loan portfolio ... their default and foreclosure rates were even with the industry standard - with just 2.24% of their loans foreclosed
And their losses were just 0.12% of their loan portfolio ... far, far below the 1.5% loss they have priced in the portfolio
Worse - they have credit protection (effectively insurance) - on 7.5% of the loan portfolio
The math:
$11.9 billion in loans in their portfolio ...
$ 892.5 million is the total loss they have covered at 7.5% of portfolio
To get to an $892.5 million loss on the $11.9 billion in loans they would have to see 25% of all loans foreclose and they would have to lose 30% on every one of them ...
The bank would not have taken a loss, with the credit enhancements/protection they had in place until they exceeded that $892.5 million in losses
Thru 3/31/08 they had a loss of 0.12% (12 basis points) on their loans - which amounts to $14.28 million loss on $11.9 BILLION in loans
Their current loss ratio is 0.12% and their current foreclosure rate is 2.24% - before they would suffer a loss in excess of their "insurance" these would have had to increase to 7.5% and 25%
And keep in mind that the loans in their portfolio are generally seasoned - 28 months average age - these vintage loans have already traditionally seen the majority of their defaults
Yet despite all that IndyMac was forced to write down the value of the company to - if I read it right - what amounted to $4.54 per share - while the real market value was $15.56/share
This company employed thousands - it was an ongoing viable business - its "losses" were largely "paper" ones - its loan portfolio was performing very well - within industry standards ... yet thanks to Schumer and the ridiculous "mark to market" rules this company is out of business - and individual depositors will lose $1 billion and the taxpayer will lose $4 - $5 billion
When all it would have taken was a little forebearance .... continuing to work the already well underway plan with Feds - what was an otherwise viable business - which was shut down for a "liquidity" crisis - that was based largely on "paper" losses
More info and discussion
TrackForum - Dem Senator warned by Federal Regulators
Paulson testimony that he wants a line of credit on the American treasury (even though he claimed he believed he wouldn't need it):
Paulson: "First, as a liquidity backstop, the plan includes an 18-month temporary increase in Treasury's existing authority to make credit available for the GSEs. Given the difficulty in determining the appropriate size of the credit line we are not proposing a particular dollar amount. Flexibility is the best means of increasing market confidence in the GSEs, and also the best means of minimizing taxpayer risk."
Now I am not that easily frightened but giving Paulson a line of credit on the American Treasury and debt really is a scary thought.
So I guess after hearing this I began to believe that he intends to try to slip all the bad debt under cover of Fannie and Freddie infinite credit lines. I kept thinking of how the dumb critters in Congress ended up in a war after giving a politically open line of power to these guys.
Oops, that quote came from:
HP-1080: Testimony by Secretary Henry M. Paulson, Jr.on GSE Initiativesbefore the Senate Banking Committee
ASG, in 2005, 1,500 accountants after 6 months (and more than $200 million) couldn't figure out what was going on at Fannie. You must be a very smart layman to figure out everything in just a few hours. Congratulation! Maybe you can teach us a little bit about derivatives, CDO, CDS, etc. I am sure it wouldn't take you more than a few hours to figure them all out.
The two entities behind half the mortgages in the country will only cost $25 billion to bail out? How does that make any sense at all?
$1 trillion per Roubini to bail out the mortgage system.
Inflation not included in the $25 billion cost?
Broker writes:
ASG, in 2005, 1,500 accountants after 6 months (and more than $200 million) couldn't figure out what was going on at Fannie. You must be a very smart layman to figure out everything in just a few hours. Congratulation! Maybe you can teach us a little bit about derivatives, CDO, CDS, etc. I am sure it wouldn't take you more than a few hours to figure them all out.
I provided the link to the Fannie Mae financials - it isn't hard at all to "figure" out basic data on the quality of their assets - delinquency and foeclosure rations and portfolio metrics such as credit scores, loan mix etc - as I posted - are easy enough for even a broker to understand
I even posted URL's for images of the individual section of the financial statements that the data I posted came from
It certainly isn't dfficult to look at stats on a portfolio of loans and detrmined their relative health - and the likelihood of their future health
Fannie and Freddie are being given the same basic access that the investment banks now have - which I believe they already have BTW - $2.5 billion each if I recall ....
These funds will be used to fund more mortgages - which Fannie Mae makes a lot of money on - nearly $3.5 billion in Q1 2008 alone
They are not funding subprime or any appreciable number of ALT-A products
The vast majority - 93% are fixed rate loans
The 90+ delinquency rate is again, just 1.15% of ALL current Fannie loans - 99% of all current Fannie Mae loans are NOT delinquent - are performing as agreed and there is almost zero evidence the quality is likely to change in any way but for the better - and the credit quality is improving on new loans
Yet people still continue to make uneducated and uniformed proclamations of massive failure and losses.
I'll repeat - Fannie recvd $1.69 billion on net loan interest ... and $1.752 billion net guarantee income in Q1 2008 ... and if you back out the "paper" mark to market "fair value" accounting loss - after tax benefit they would have had a considerable profit in Q1 2008
Why wouldn't they want to buy more of these high quality profitable loans?
And where is this alleged massive risk if they do? If the loans do not default, and pay as agreed and anticiapted, then where is the loss?
Thank you my dear Tanta! Next time try "SGA"! It sounds better!
Broker writes:
Thank you my dear Tanta! Next time try "SGA"! It sounds better!
Once again - not Tanta ....
And did you bother to look at the data presented - open any of the links - look for yourself?
Re: market spike in the last hour...if one accepts the market as "forward looking"....just maybe "Mr. Market" gained access to the Hubble...
old trader
"Re: market spike in the last hour...if one accepts the market as "forward looking"....just maybe "Mr. Market" gained access to the Hubble..."
The Hubble telescope looks BACK in time (because the light hitting it contains pictures of events from millions or billions of years ago).
That might explain a lot.
This is dedicated to all of you that are communicating your thoughts to Congress
Thank God for Congress
Financial Institutions brought this on themselves. Not to worry. Those politicians in Congress will save all the financial institutions, and any well connected wealthy and powerful Congressional friends.
Those Senators and Representatives will pass laws and regulations along with the billions of dollars to save those wealthy and powerful from the CRISIS caused by those low life credit mortgage borrowing home owner scumbags.
Thank God in heaven that this or any Congress had the foresight not to pass any legislation to give those low life credit mortgage borrowing scum bag home owners the right of redress in the federal system to fight their foreclosures. Congress knows that these low life credit scumbag homeowners cant afford lawyers who have in fact priced themselves so that only the rich and powerful can afford their services.
Thank God again that through the wisdom of our Congress has provided a way to identify these low life credit mortgage borrowing scumbag homeowners in the future by having the Credit Bureaus tell the wealthy and powerful for the next eight years not to give one red cent to these people.
Congress is indeed worthy of that saying When the Government lives better than its people
As I read there will be Six Million of those low life credit mortgage borrowing scumbags in foreclosure.
To them I say, you should be ashamed of yourselves for causing this foreclosure crisis.
Thank God, Congress has been on the job since the last savings and loan crisis protecting the wealthy and powerful banks. I understand for example that John McCain who is running for president was One of the Keating Five. I understand Chris Dodd, Senate Banking Chairman has a mortgage rate that you scumbags could only dream about with Countrywide, an old proud mortgage lender that has operated for years with no regulations to hinder their obsession with you low life credit mortgage borrowing home owner scumbags.
I could go on forever. Remember you low life credit scumbags, a change is coming to Washington. They are going to take all your assets in the next crisis. And if you credit scumbags threaten the wealthy and the powerful by fighting your foreclosures, they will raise prices to the point that you wont even be able to rent.
By the way, I heard a rumor from the Hill, The Rich and Famous are passing legislation that makes it illegal to live under a federally funded bridge.
Hey Buddy, can you spare a dime?
Michael LittleBig, Foreclosure epic center, where it all began: Cleveland Ohio
hilarious -- orzag in 2002: npv of GSE bailout is $2mil. orzag in 2008: $25 bil. don't ask again in 2014.
http://www.sbgo.com/Papers/fmp-v1i2.pdf