I love Mervyn's for my kids clothes (ages 1-4). They are not too concerned about style yet. It's cheap and durable. That's just too bad. I always wondered how they could make money selling items for so little.
I thought all the cheap credit going to people from the previous thread was supposed to help retailers like Mervyns?
Personally they reminded of Bradlee's or Boscov's or any of those other inexpensive retailers that don't seem to be doing too well nowadays... is Kohl's next or something?
The writing has been on this money losing operation for years. I used to walk in the store, pickup some baby clothes that said 50% off (regularly $12), just to have them ring it up and charge me $3 each. It was hilarious. Went on for about two years. It has also always been a ghost town in their stores.
And I don't think they are in many big malls. They tend to anchor the little strip malls.
Goldman Sachs Group Inc.'s most senior financial-institutions banker, Ken Wilson, is temporarily leaving the firm to advise Treasury Secretary Henry Paulson on how to resolve the country's banking crisis, according to people familiar with the matter. Banker Leaves Goldman Sachs To Aid Paulson - WSJ.com
Good point argento about John Snow. He has always been a Jack Welsh wannabe. Never really made any good moves at CSX - except to leave with a huge pile of cash. Has Cerberus done anything right?
A private investment group including Sun Capital Partners Inc, Cerberus Capital Management, Lubert-Adler and Klaff Partners LP bought Mervyn's from Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz) in 2004.
CIT Group Inc (CIT.N: Quote, Profile, Research, Stock Buzz) stopped providing financing to the retailer in the spring, the paper reported.
Mervyn's and CIT could not immediately be reached for comment.
He reiterated his optimism that Congress will enact the plan, including potentially unlimited government investment in the firms that account for almost half the $12 trillion U.S. home-loan market.
``It sounds like a deal is going to get done,'' Robert Davis, executive vice president of the American Bankers Association in Washington
Re: Mervyns' credit approval for $40 million in orders has been withdrawn by CIT Group Inc.
CIT has been hit hard by the subprime mortgage crisis fallout, which forced the lender to sell assets and borrow $7.3 billion to repay debt and provide financing. The company posted a first-quarter loss, hurt by its home and consumer lending divisions, and cut its dividend 60 percent.
CIT Group Inc (CIT.N: Quote, Profile, Research) may be
caught in a Catch 22 situation as improvement in its credit
spreads may depend on the commercial lender showing it has
economical access to the unsecured debt market.
CIT's credit default swaps barely budged after the company
said on Tuesday it would sell $10 billion of mortgage assets in
a deal that removes problem loans from its balance sheet.
CIT Group Inc. said Tuesday it will sell its home lending business to Lone Star Funds for $1.5 billion in cash, plus $4.4 billion of assumed debt, in a move to exit the troubled mortgage arena and focus on its commercial finance operations.
The company also is selling its $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance Inc. at a loss, for about $300 million. CIT expects to see combined cash proceeds from both deals of about $1.8 billion.
Student Loan Xpress, a college student lender in Carmel Valley, said it is shutting down operations and laying off 124 employees.
SLX, which got its start in the early 1990s, has been hurt by tightened credit markets and a change in the regulations covering the student loan business.
Among the ideas: Using taxpayer money to shore up the capital of loss-ridden Fannie Mae and Freddie Mac, setting up new agencies to buy and refinance mortgages in default, even taking over failing financial institutions.
Systemic Crisis: Can't prevent shit, belly up, credit problem, no reversing trend, bail out not right, wipe out shareholders, replace corrupt mang, bond holders get screwed, reckless.. severe crisis; what are you going to do, you dumbass? Cash is king, stck mkt down 20%. Very deep.Great depression..
WILLIAM GREIDER: Look, the bailout of Fannie Mae that they're proposing says, somewhat generously I think, we'll put $300 billion on the table to buy the shares of stockholders in Fannie Mae and Freddie Mac. And just us saying that should give them a lot of confidence. Well, yeah, wouldn't it, if you've just had the federal government promise to buy your shares if you don't want to hold them anymore.
BILL MOYERS: Maybe that's why all the foreign investors rushed in yesterday to buy Fannie Mae and Freddie Mac-
WILLIAM GREIDER: It might have some connection, yes.
BILL MOYERS: -if they know the taxpayers are going to put the money in, they've got a pretty good-
WILLIAM GREIDER: They've got what you might call a no-lose proposition.
Maybe the explanation for Friday's jump in financial shares?
With the excuse of wanting to crack down on manipulators the SEC has now imposed restrictions on short sales on the stocks of 19 major financial institutions including Fannie and Freddie. Let us be clear about this new rule: this is a clear and naked attempt by the SEC to manipulate upwards the price of equities of financial firms. The SEC should start investigation and legal action against itself for actively manipulating the stock market. And shame on the SEC for this most un-capitalist and manipulative action: when there is an upward bubble in stock prices and 95% of investors/speakers on CNBC are talking their books in that most public forum to manipulate upwards their portfolio the SEC does nothing and allows this charade to go on. But when short sellers are shorting the stocks of firms that are likely to be bust that is considered manipulation. That is a pretty pathetic action by the SEC that has artificially boosted the equity valuations of US financial firms now up 20% plus in the last part of the past week after the introduction of this manipulative rule.
In 2002, when the word "deflation" began appearing in the business news, Bernanke gave a speech about deflation.[13] In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money. Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. (He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.) Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter printing press". In a footnote to his speech, Bernanke noted that "people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation
OT: (excerpt from a commenter on Roubini's newest post):
I had a very interesting conversation today with a friend who used to be a mortgage broker (until the company he started imploded) and now works at a bank selling REO property. Now, this is a guy who made millions flipping, and when I told him two years ago that the whole house of cards was going to collapse shortly, he laughed at me.
He ain't laughing anymore.
I get on the phone with him, and he immediately tells me that his wife just got laid off from Indy Mac, so life is kind of sucking for them right now. Then he proceeds to tell me that both he and his wife (who have very close contacts at banks) have heard from reliable sources that the industry FULLY expect a massive run on savings and loans in the very near future. We're talking weeks, if not days. We are now officially on Banking System Deathwatch, ladies and gentlemen, because the next big bank that falls will be the domino that unleashes the runs on the other banks.
He said WaMu is certifiably D.O.A and will almost certainly be the next victim. He said the industry would be surprised if WaMu makes it another 30 days. Downey Savings and First Federal are the next dogs to die, according to him.
If it hadn't been so sad and scary, I would have actually enjoyed my I-told-you-so moment. But this guy is genuinely frightened now. You can hear the panic in his voice. He told me, point-blank: "It's all coming down. The whole system is crashing." He is quickly turning into an urban survivalist -- outfitting his home with solar, buying biodiesel, stocking up on food. It's truly fascinating to watch the variations in human behavior as this unfolds.
I tried to surf the web to locate a site where one could find the CAR (capital adequacy ratio) of major US banks. In vain. I spent a miserable hour or more of time hunting, hunting, hunting. One would think the FDIC would have such information available at one's fingertips, but no, they don't seem interested in giving the citizenry that information. I wonder why.
No way the bondholders of F&F will get screwed. Too many are foreign governments that could bring down the US economy by suddenly ceasing to purchase any US debt in retaliation.
Bank of America results better than expected. The first story in Bloomberg said something about better than expected loan losses but that has been changed (I wonder why.).
GillianX, My favorite quote from the Bloomberg article:
Countrywide will go down as a good, bold acquisition,''</b> said Bernie McGinn of McGinn Investment Management in Alexandria, Virginia, which holds 55,000 Bank of America shares, before results were released.If you have people scared about the prospects for their community bank, and there's a Bank of America office next door, then people are going to move their money. That's not being priced in.''
Also, I know we don't like to chat up trades on this board. But since we are talking CRE, I will again note that the largest holding in IYR (which is double shorted by SRS) is Simon Properties. Simon sez we own lots of malls. And strip malls.
Finally we get down to it on Indymac - column in LAT about customers with less than 100k withdrawing money because they just don't trust the banking system anymore:
"With the excuse of wanting to crack down on manipulators the SEC has now imposed restrictions on short sales on the stocks of 19 major financial institutions including Fannie and Freddie."
They're cracking down on shorts who haven't borrowed the shares they're shorting. These shorts are real pains-in-the-neck and should be run out of the market. Mind you, they should be cracking down for all stocks, not just the 19 financials.
I suspect the net result of cracking down on the pains-in-the-neck will be to throw sand into the gears of shorting these 19 at all. It will turn out that the time to borrow shares is long and variable.
The current U.S. economic expansion is the first in 60 years that may end before many Americans have recovered from the last slowdown. Annual family incomes adjusted for inflation have grown just 0.8 percent since the end of 2001 even as the economy expanded an average 2.7 percent a year, leaving households little cushion to absorb higher food and fuel prices.
The average family hasn't made up for lost ground,'' said James Glassman, senior economist at JPMorgan Chase & Co. in New York.We're discovering people aren't protected from inflation like they used to be.''
Median U.S. family income, adjusted for inflation, was $58,407 in 2006, according to the most recent Census Bureau data, down from $59,398 in 2000.
The new law will not give the regulator either the mandate or the capacity of a bank regulator, said Thomas H. Stanton, an authority on the companies who has written several books on them. The new law creates a cumbersome regulatory process to implement many parts of the bill, he said, adding, Im afraid we will need to revisit the issue of the proper regulatory framework for the companies.
[ ]
Hank Paulson is running the Treasury the way he ran Goldman, said L. William Seidman, the top regulator during the bailout of the savings and loan industry in the 1980s and early 1990s. Hes doing everything he can to meet next quarters numbers. I might do the same thing in his position. But it postpones a lot of bigger problems to the future, when he will be gone.
The Mervyns near me closed but was replaced by a Kohls. Kohls seems exactly the same kind of store as Mervyns, same stuff, same advertising.
It wouldn't surprise me if there was some tax advantage or some other monetary advantage to closing and reopening like that.
World Bank, IMF, Italy, France, Germany, Southeast Asia, Portions of Britain all have ex-GS people in a high level cabinet position or in dictator "type" positions.
It's a shame really...but considering the current state of world affairs not surprising.
To add to the anecdote mill, I was at an outlet mall about 30 miles outside of Boston this weekend. I suppose gas prices aren't doing any favors to the outlet mall business model.
It was kind of eerie, actually. It's an outdoor mall, with a long colonnade. Two hours before closing, and you could look down the length of it (I'd guess it's about a quarter mile) and see not a single person. I've never seen anything like it.
I don't know how the economy can move forward if we focus all our efforts on preserving the waste and disease in the system so the status quo can maintain power.
Furthermore I don't see how a creaky old quasi-socialist economy is going to compete with the likes of China and other emerging economies. That could have much worse long term consequences for Americans than a short-term recession.
Sometimes you have to take out the trash and go through chemotherapy to get better. Even if it's not fun.
Andrew Foland writes:
To add to the anecdote mill, I was at an outlet mall about 30 miles outside of Boston this weekend... you could look down the length of it (I'd guess it's about a quarter mile) and see not a single person.
Shopper's World? My grandfather owned some of the cranberry bogs before it was built the first time. Framingham-Natick is so over retailed I don't understand how it went on this long.
ac,
If we just defer infrastructure repair and maintenance for another 10-15 years, we could keep the price of RE up long enough for inflation to catch up. There won't be any nominal dollar loss, so no one will know what really happened.
You didn't ask me, but it's all about the Financials. I use the XLF to gauge them, and it's already passed it's Fibonacci 0.382 retracement of the May-July down move @ $21.02; now it's headed for the 0.50 Fib price of $22.34 which should coincide with its 50 dma of $22.63 at the moment. So I'll wait for the $22.30ish area to buy SKF.
it is the financials, but more support must come in to keep us here. look for other sectors performing well, to keep us trading around 1270.
Energy cannot dip, for us to stay here. alt-e won't do it. so i'm scanning hard to see what else can help. i'd give it a week or so.
Who here seriously believes WaMu can make it till Jan 2009 ? I just don't know how long the FDIC can keep a zombie like that on life support. Unwinding that PoS should require 1 year or more so perhaps Jan 2009 they'll still be on ice, chillin'.
Shopper's World is "real" retail now, not outlet. We were at Wrentham Village.
Odd you mention cranberry bogs, though, as the reason we were there in the first place is that we were coming back from visiting Edaville (where the guy built a little amusement park around the train track he'd built to help get his cranberries out.)
Mervyn's (pronounced mayor veen here in san diego) is always deserted. Quality is poor and prices bad. If it folds it will die. It can't compete with all the other discount retailers.
When I was at Treasury in 1st Clinton admin, I maintained a huge quattro pro spreadsheet on the captial adequacy ratios - it was CLOSELY guarded, only resident on my PC in those days (Treasury was (is?) pretty backward in IT...
If Mervyns goes belly up that will be the sixth bankrupt national company I've worked for.
Go work for a major Bank like say, BofA& be kind enough to tell us & we'll short the h#$%! out of them. Sound good? You make money & we all make money:)
July 17 (Bloomberg) -- CIT Group Inc., the century-old commercial lender that raised $7 billion since March, posted its fifth straight quarterly loss after the sale of its mortgage units cost the company $2.1 billion.
The second-quarter loss of $2.07 billion before preferred dividends, or $7.88 a share, compares with a loss of $127 million, or 70 cents, in the same period a year earlier, the New York-based company said in a statement today. Four analysts who included the sale of the mortgage unit expected, on average, a $6.91 per-share loss. The company said it has enough money to meet its obligations through the end of 2009.
Commercial borrowers who were at least 60 days behind on payments rose to 2.43 percent, compared with 1.7 percent in the first quarter, the company said. Such figures are beginning to attract the attention of investors, who are focusing on potential losses after becoming more certain the company will survive, said David Chiaverini, an analyst at BMO Capital Markets in New York.
They've settled investor concerns about whether they'll be around,'' Chiaverini said.Delinquencies and chargeoffs become the new risks.''
CIT, which marked its 100th anniversary in February, fell 87 percent in the 12 months through yesterday in New York trading amid concern the company faced bankruptcy. The stock rose $1.24, or 17 percent, to $8.47 at 4:14 p.m. in New York Stock Exchange composite trading.
July 17 (Reuters) -Debt protection costs on CIT Group Inc (CIT.N: Quote, Profile, Research) also dropped by 60 basis points to 780 basis points, according to Phoenix Partners Group, as it stock rose more than 7 percent.
The commercial lender, which has been hit hard by the credit crunch and has struggled to raise funds to pay back billions of dollars of maturing debt, said measures it has taken, such as selling assets and borrowing on a secured basis, should allow it to meet its liquidity needs through the end of 2009.
1 ST!!!
Well, THAT weren't much fun...
When I told my wife about this news, she made a comment that Mervyn's is like Montgomery Wards, as if they tried to clone it.
So they may meet the same fate after all....
I can't wait to see the Bernanke-Paulson bailout plan for Mervyn's.
more jobs gone.
That's weird. Mervyn's is sort of on the low end, those type retailers have done fairly well of late.
NOOOO!!!!!! NOT MERVYNS!!!1!!
Oh, wait... I have no idea who Mervyn's is...
More mall space = more square footage for another "Blues Brothers" chase scene/sequel. And it may be time to bring back the Blues.
I love Mervyn's for my kids clothes (ages 1-4). They are not too concerned about style yet. It's cheap and durable. That's just too bad. I always wondered how they could make money selling items for so little.
I thought this was about Mervyn King & the BoE going BK.
Nevermind
president Bush said one of the best ways to fight the terrorists is to go shopping
looks like thats getting harder to do
does that mean the enemy is winning?
That was Shepard Smith of Fox News who said to "fight terrorism by going to the mall and buying something."
And to think during WWII, the populace was asked to conserve and buy war bonds.
OT: Could GS make it any more obvious that they run America?
I thought all the cheap credit going to people from the previous thread was supposed to help retailers like Mervyns?
Personally they reminded of Bradlee's or Boscov's or any of those other inexpensive retailers that don't seem to be doing too well nowadays... is Kohl's next or something?
"That's weird. Mervyn's is sort of on the low end, those type retailers have done fairly well of late."
Debt is the killer in this market. Another bonehead play by Cerberus!
mock, the enemy is whining. That's what Phil Gramm says, at least. He'll probably take all his toys to Dubai in protest. Good ridance says I.
Does anyone find it funny (in a sad way) that Cerberus is run by John Snow, who was Paulson's predecessor at Treasury.
So pathetic, these guys are.
Hey I just went shopping at Mervyn's tonight.
They didn't look like vendors had cut them off - no empty shelves or anything.
Open, Open, Open...
They didn't look like vendors had cut them off - no empty shelves or anything.
Too much supply in the near term, no demand in the long term.
If Mervyns goes belly up that will be the sixth bankrupt national company I've worked for.
Man can I pick winners.
Yes, we need a bailou tplan, before the mkt opens!!
The writing has been on this money losing operation for years. I used to walk in the store, pickup some baby clothes that said 50% off (regularly $12), just to have them ring it up and charge me $3 each. It was hilarious. Went on for about two years. It has also always been a ghost town in their stores.
And I don't think they are in many big malls. They tend to anchor the little strip malls.
Doesn't Target own Mervyns?
Goldman Sachs Group Inc.'s most senior financial-institutions banker, Ken Wilson, is temporarily leaving the firm to advise Treasury Secretary Henry Paulson on how to resolve the country's banking crisis, according to people familiar with the matter.
Banker Leaves Goldman Sachs To Aid Paulson - WSJ.com
Good point argento about John Snow. He has always been a Jack Welsh wannabe. Never really made any good moves at CSX - except to leave with a huge pile of cash. Has Cerberus done anything right?
What is good for Goldman Sachs is bad for the country (and for most Americans). Can't we ban these guys from govt service?
tranches of lunacy
do you think gramm will go to dubai or paraguay?
A private investment group including Sun Capital Partners Inc, Cerberus Capital Management, Lubert-Adler and Klaff Partners LP bought Mervyn's from Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz) in 2004.
CIT Group Inc (CIT.N: Quote, Profile, Research, Stock Buzz) stopped providing financing to the retailer in the spring, the paper reported.
Mervyn's and CIT could not immediately be reached for comment.
Paulson Says Fannie-Freddie Plan Critical to Confidence in U.S.
Paulson Says Fannie-Freddie Plan Critical to Confidence in U.S. - Bloomberg.com
He reiterated his optimism that Congress will enact the plan, including potentially unlimited government investment in the firms that account for almost half the $12 trillion U.S. home-loan market.
``It sounds like a deal is going to get done,'' Robert Davis, executive vice president of the American Bankers Association in Washington
rumor> checking:
Mervyns' credit approval for $40 million in orders has been withdrawn by CIT Group Inc.
I'm an addict..so what?
CIT Pulls Mervyns Credit Approval
Page Not Found WWD.com
Re: Mervyns' credit approval for $40 million in orders has been withdrawn by CIT Group Inc.
CIT has been hit hard by the subprime mortgage crisis fallout, which forced the lender to sell assets and borrow $7.3 billion to repay debt and provide financing. The company posted a first-quarter loss, hurt by its home and consumer lending divisions, and cut its dividend 60 percent.
US CREDIT-CIT caught as wide spreads restrict debt sales
US CREDIT-CIT caught as wide spreads restrict debt sales
| Business News
| Regulatory News
| Reuters
CIT Group Inc (CIT.N: Quote, Profile, Research) may be
caught in a Catch 22 situation as improvement in its credit
spreads may depend on the commercial lender showing it has
economical access to the unsecured debt market.
CIT's credit default swaps barely budged after the company
said on Tuesday it would sell $10 billion of mortgage assets in
a deal that removes problem loans from its balance sheet.
** CIT Group exits home lending businesses
CIT Group exits home lending businesses - U.S. business- msnbc.com
CIT Group Inc. said Tuesday it will sell its home lending business to Lone Star Funds for $1.5 billion in cash, plus $4.4 billion of assumed debt, in a move to exit the troubled mortgage arena and focus on its commercial finance operations.
The company also is selling its $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance Inc. at a loss, for about $300 million. CIT expects to see combined cash proceeds from both deals of about $1.8 billion.
*** CIT Group Shutters Student Loan Xpress, Lays Off 124 Staff
CIT Group Shutters Student Loan Xpress, Lays Off 124 Staff | Education & Training > Student Expenses & Financing from AllBusiness.com
Student Loan Xpress, a college student lender in Carmel Valley, said it is shutting down operations and laying off 124 employees.
SLX, which got its start in the early 1990s, has been hurt by tightened credit markets and a change in the regulations covering the student loan business.
Bernanke, Paulson Pressed to Seek Big-Government Bank Bailout
Bernanke, Paulson Pressed to Seek Big-Government Bank Bailout - Bloomberg.com
Among the ideas: Using taxpayer money to shore up the capital of loss-ridden Fannie Mae and Freddie Mac, setting up new agencies to buy and refinance mortgages in default, even taking over failing financial institutions.
YouTube - Nouriel Roubini on Bloomberg TV
Systemic Crisis: Can't prevent shit, belly up, credit problem, no reversing trend, bail out not right, wipe out shareholders, replace corrupt mang, bond holders get screwed, reckless.. severe crisis; what are you going to do, you dumbass? Cash is king, stck mkt down 20%. Very deep.Great depression..
http://www.rgemonitor.com/roubini-monitor/253053/the-coming-systemic-bust-of-the-us-banking-system-dead-stocks-rallying/
OT:
William Greider being interviewed by Bill Moyers:
WILLIAM GREIDER: Look, the bailout of Fannie Mae that they're proposing says, somewhat generously I think, we'll put $300 billion on the table to buy the shares of stockholders in Fannie Mae and Freddie Mac. And just us saying that should give them a lot of confidence. Well, yeah, wouldn't it, if you've just had the federal government promise to buy your shares if you don't want to hold them anymore.
BILL MOYERS: Maybe that's why all the foreign investors rushed in yesterday to buy Fannie Mae and Freddie Mac-
WILLIAM GREIDER: It might have some connection, yes.
BILL MOYERS: -if they know the taxpayers are going to put the money in, they've got a pretty good-
WILLIAM GREIDER: They've got what you might call a no-lose proposition.
Maybe the explanation for Friday's jump in financial shares?
A further explanation from Roubini:
With the excuse of wanting to crack down on manipulators the SEC has now imposed restrictions on short sales on the stocks of 19 major financial institutions including Fannie and Freddie. Let us be clear about this new rule: this is a clear and naked attempt by the SEC to manipulate upwards the price of equities of financial firms. The SEC should start investigation and legal action against itself for actively manipulating the stock market. And shame on the SEC for this most un-capitalist and manipulative action: when there is an upward bubble in stock prices and 95% of investors/speakers on CNBC are talking their books in that most public forum to manipulate upwards their portfolio the SEC does nothing and allows this charade to go on. But when short sellers are shorting the stocks of firms that are likely to be bust that is considered manipulation. That is a pretty pathetic action by the SEC that has artificially boosted the equity valuations of US financial firms now up 20% plus in the last part of the past week after the introduction of this manipulative rule.
YouTube -
Selling Treasuries? State's increasing taxes, reduced services. High employment...? Congress and Fed budget, fiscal policy, help states?? Regulation?
In 2002, when the word "deflation" began appearing in the business news, Bernanke gave a speech about deflation.[13] In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money. Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. (He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.) Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter printing press". In a footnote to his speech, Bernanke noted that "people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation
Ben Bernanke - Wikipedia, the free encyclopedia
OT: (excerpt from a commenter on Roubini's newest post):
I had a very interesting conversation today with a friend who used to be a mortgage broker (until the company he started imploded) and now works at a bank selling REO property. Now, this is a guy who made millions flipping, and when I told him two years ago that the whole house of cards was going to collapse shortly, he laughed at me.
He ain't laughing anymore.
I get on the phone with him, and he immediately tells me that his wife just got laid off from Indy Mac, so life is kind of sucking for them right now. Then he proceeds to tell me that both he and his wife (who have very close contacts at banks) have heard from reliable sources that the industry FULLY expect a massive run on savings and loans in the very near future. We're talking weeks, if not days. We are now officially on Banking System Deathwatch, ladies and gentlemen, because the next big bank that falls will be the domino that unleashes the runs on the other banks.
He said WaMu is certifiably D.O.A and will almost certainly be the next victim. He said the industry would be surprised if WaMu makes it another 30 days. Downey Savings and First Federal are the next dogs to die, according to him.
If it hadn't been so sad and scary, I would have actually enjoyed my I-told-you-so moment. But this guy is genuinely frightened now. You can hear the panic in his voice. He told me, point-blank: "It's all coming down. The whole system is crashing." He is quickly turning into an urban survivalist -- outfitting his home with solar, buying biodiesel, stocking up on food. It's truly fascinating to watch the variations in human behavior as this unfolds.
slightly OT:
I tried to surf the web to locate a site where one could find the CAR (capital adequacy ratio) of major US banks. In vain. I spent a miserable hour or more of time hunting, hunting, hunting. One would think the FDIC would have such information available at one's fingertips, but no, they don't seem interested in giving the citizenry that information. I wonder why.
bond holders get screwed
No way the bondholders of F&F will get screwed. Too many are foreign governments that could bring down the US economy by suddenly ceasing to purchase any US debt in retaliation.
@Jim
FDIC: Statistics on Depository Institutions
CAR = Capital / Assets
The "norm" is 8%.
The FDIC does have everything you need....to calculate this info yourself....all obtainable in CSV format for Excel.
7:13am:
Two visitors online. I'll drop off so you can be the survivor.
bac up 50% in one week...
thats quite the bounce.
Bank of America results better than expected. The first story in Bloomberg said something about better than expected loan losses but that has been changed (I wonder why.).
"OT: Could GS make it any more obvious that they run America?"
No, but it's kind of nice they are giving you the heads up to take your money and run like hell.
Bank of America results better than expected.
GillianX, My favorite quote from the Bloomberg article:
Countrywide will go down as a good, bold acquisition,''</b> said Bernie McGinn of McGinn Investment Management in Alexandria, Virginia, which holds 55,000 Bank of America shares, before results were released.If you have people scared about the prospects for their community bank, and there's a Bank of America office next door, then people are going to move their money. That's not being priced in.''
You draw your own conclusions.
When discussing Cerberus it should be noted that Dan Quayle is one of the top dogs over there.
Also, I know we don't like to chat up trades on this board. But since we are talking CRE, I will again note that the largest holding in IYR (which is double shorted by SRS) is Simon Properties. Simon sez we own lots of malls. And strip malls.
All patriots should promptly invest in Simon.
Finally we get down to it on Indymac - column in LAT about customers with less than 100k withdrawing money because they just don't trust the banking system anymore:
Banks' reserves of trust getting low - Los Angeles Times
Every story written on Indymac and on subsequent bank troubles ought to include this as a central point.
I can't wait to see the Chris Dodd bailout plan for Mervyn's.
"With the excuse of wanting to crack down on manipulators the SEC has now imposed restrictions on short sales on the stocks of 19 major financial institutions including Fannie and Freddie."
They're cracking down on shorts who haven't borrowed the shares they're shorting. These shorts are real pains-in-the-neck and should be run out of the market. Mind you, they should be cracking down for all stocks, not just the 19 financials.
12th-Let me know when you want your car back. I borrowed it and sold it last week, but i'll try to locate it if you really need it.
Anonymous rumor comment posted on my blog:
I heard from a reliable realtor that wells fargo is about to drop 12,000 homes on the tri-couty area of Sac.,Placer, and El Dorado.
a-
I suspect the net result of cracking down on the pains-in-the-neck will be to throw sand into the gears of shorting these 19 at all. It will turn out that the time to borrow shares is long and variable.
Max,
Can you contact the source of the rumor ? it does not make sense but if true it is a bombshell
trillion-dollar short monster out there
Trillion dollar bet against stocks
Why it's different this time...
U.S. Expansion May Be First in 60 Years Without Income Recovery
By Vivien Lou Chen
[snip]
The current U.S. economic expansion is the first in 60 years that may end before many Americans have recovered from the last slowdown. Annual family incomes adjusted for inflation have grown just 0.8 percent since the end of 2001 even as the economy expanded an average 2.7 percent a year, leaving households little cushion to absorb higher food and fuel prices.
The average family hasn't made up for lost ground,'' said James Glassman, senior economist at JPMorgan Chase & Co. in New York.We're discovering people aren't protected from inflation like they used to be.''
Median U.S. family income, adjusted for inflation, was $58,407 in 2006, according to the most recent Census Bureau data, down from $59,398 in 2000.
[snip]
Sorry unirealist... no dice. That comment feels of the usual doomerism that internet fantasies are spun from
"...that will be the sixth bankrupt national company I've worked for."
It'd be great if you took a job with the GOP. Or at least the Celtics and Yankees.
Wal-Mart just gets bigger...they wipe out another low to lower mid-tier retailer. 177 stores up in smoke
"Bank of America results better than expected."
LOL, isn't that soothing.
The Fannie Freddie plan is a disaster.
The new law will not give the regulator either the mandate or the capacity of a bank regulator, said Thomas H. Stanton, an authority on the companies who has written several books on them. The new law creates a cumbersome regulatory process to implement many parts of the bill, he said, adding, Im afraid we will need to revisit the issue of the proper regulatory framework for the companies.
[ ]
Hank Paulson is running the Treasury the way he ran Goldman, said L. William Seidman, the top regulator during the bailout of the savings and loan industry in the 1980s and early 1990s. Hes doing everything he can to meet next quarters numbers. I might do the same thing in his position. But it postpones a lot of bigger problems to the future, when he will be gone.
New Regulator In Rescue Plan Spurs Debate - NY Times
The Mervyns near me closed but was replaced by a Kohls. Kohls seems exactly the same kind of store as Mervyns, same stuff, same advertising.
It wouldn't surprise me if there was some tax advantage or some other monetary advantage to closing and reopening like that.
unirealist post: Originally from Daily reckoning--
Forum
Argento-
No...unfortunately GS runs the world...
World Bank, IMF, Italy, France, Germany, Southeast Asia, Portions of Britain all have ex-GS people in a high level cabinet position or in dictator "type" positions.
It's a shame really...but considering the current state of world affairs not surprising.
Ciao
MS
To add to the anecdote mill, I was at an outlet mall about 30 miles outside of Boston this weekend. I suppose gas prices aren't doing any favors to the outlet mall business model.
It was kind of eerie, actually. It's an outdoor mall, with a long colonnade. Two hours before closing, and you could look down the length of it (I'd guess it's about a quarter mile) and see not a single person. I've never seen anything like it.
The Fannie Freddie plan is a disaster.
I don't know how the economy can move forward if we focus all our efforts on preserving the waste and disease in the system so the status quo can maintain power.
Furthermore I don't see how a creaky old quasi-socialist economy is going to compete with the likes of China and other emerging economies. That could have much worse long term consequences for Americans than a short-term recession.
Sometimes you have to take out the trash and go through chemotherapy to get better. Even if it's not fun.
Andrew Foland writes:
To add to the anecdote mill, I was at an outlet mall about 30 miles outside of Boston this weekend... you could look down the length of it (I'd guess it's about a quarter mile) and see not a single person.
Shopper's World? My grandfather owned some of the cranberry bogs before it was built the first time. Framingham-Natick is so over retailed I don't understand how it went on this long.
magic 1270 , back at it fairly fast.
tenuous
ac,
If we just defer infrastructure repair and maintenance for another 10-15 years, we could keep the price of RE up long enough for inflation to catch up. There won't be any nominal dollar loss, so no one will know what really happened.
lama,
Where will people get the money to pay their exploding-reset mortgages and helocs? No inflation - deflation coming.
From previous thread...
Reason why GGP might suffer ?
Well, try this link and enter Mervyn% in the tenant name box...
GGP: Properties
Ma...lDirectory.aspx
@magic 1270 , back at it fairly fast.
tenuous
TS, How long do you think this rally will hold?
"I suspect the net result of cracking down on the pains-in-the-neck will be to throw sand into the gears of shorting these 19 at all."
That's ok.
Mr. Shorty by Marty Robbins
YouTube - Mr. Shorty by Marty Robbins
Anonymouse,
That was my point. They won't have ARMs. They'll have 30+ year fixed from Fannie and Freddie.
Man-moth,
You didn't ask me, but it's all about the Financials. I use the XLF to gauge them, and it's already passed it's Fibonacci 0.382 retracement of the May-July down move @ $21.02; now it's headed for the 0.50 Fib price of $22.34 which should coincide with its 50 dma of $22.63 at the moment. So I'll wait for the $22.30ish area to buy SKF.
Goldman Sachs Group Inc.'s most senior financial-institutions banker, Ken Wilson, is temporarily leaving the firm to advise Treasury Secretary...
Jeez, do you think a guy who "temporarily" left GS will give Paulson unbiased, best-for-the-country advice on how to solve the problem?
Buy GS stock. Now. Just do it.
it is the financials, but more support must come in to keep us here. look for other sectors performing well, to keep us trading around 1270.
Energy cannot dip, for us to stay here. alt-e won't do it. so i'm scanning hard to see what else can help. i'd give it a week or so.
I would never buy GS stock. I don't like giving criminals loans.
Anonymouse, TS,
Thanks for the replies. Been watching XLF like a hawk.
Who here seriously believes WaMu can make it till Jan 2009 ? I just don't know how long the FDIC can keep a zombie like that on life support. Unwinding that PoS should require 1 year or more so perhaps Jan 2009 they'll still be on ice, chillin'.
Not Mervyns. Now where will I be able to buy clothes and accessories?
I can live very well, thank you, without Mervyn's. I pity those who can't.
Interesting story, but I am still waiting for a retailer that I have actually heard of to go bust.
Ever hear of Countrywide?
Shopper's World is "real" retail now, not outlet. We were at Wrentham Village.
Odd you mention cranberry bogs, though, as the reason we were there in the first place is that we were coming back from visiting Edaville (where the guy built a little amusement park around the train track he'd built to help get his cranberries out.)
Mervyn's (pronounced mayor veen here in san diego) is always deserted. Quality is poor and prices bad. If it folds it will die. It can't compete with all the other discount retailers.
What Jim said above:
When I was at Treasury in 1st Clinton admin, I maintained a huge quattro pro spreadsheet on the captial adequacy ratios - it was CLOSELY guarded, only resident on my PC in those days (Treasury was (is?) pretty backward in IT...
If Mervyns goes belly up that will be the sixth bankrupt national company I've worked for.
Go work for a major Bank like say, BofA& be kind enough to tell us & we'll short the h#$%! out of them. Sound good? You make money & we all make money:)
July 17 (Bloomberg) -- CIT Group Inc., the century-old commercial lender that raised $7 billion since March, posted its fifth straight quarterly loss after the sale of its mortgage units cost the company $2.1 billion.
The second-quarter loss of $2.07 billion before preferred dividends, or $7.88 a share, compares with a loss of $127 million, or 70 cents, in the same period a year earlier, the New York-based company said in a statement today. Four analysts who included the sale of the mortgage unit expected, on average, a $6.91 per-share loss. The company said it has enough money to meet its obligations through the end of 2009.
Commercial borrowers who were at least 60 days behind on payments rose to 2.43 percent, compared with 1.7 percent in the first quarter, the company said. Such figures are beginning to attract the attention of investors, who are focusing on potential losses after becoming more certain the company will survive, said David Chiaverini, an analyst at BMO Capital Markets in New York.
They've settled investor concerns about whether they'll be around,'' Chiaverini said.Delinquencies and chargeoffs become the new risks.''
CIT, which marked its 100th anniversary in February, fell 87 percent in the 12 months through yesterday in New York trading amid concern the company faced bankruptcy. The stock rose $1.24, or 17 percent, to $8.47 at 4:14 p.m. in New York Stock Exchange composite trading.
July 17 (Reuters) -Debt protection costs on CIT Group Inc (CIT.N: Quote, Profile, Research) also dropped by 60 basis points to 780 basis points, according to Phoenix Partners Group, as it stock rose more than 7 percent.
The commercial lender, which has been hit hard by the credit crunch and has struggled to raise funds to pay back billions of dollars of maturing debt, said measures it has taken, such as selling assets and borrowing on a secured basis, should allow it to meet its liquidity needs through the end of 2009.