So it appears one of those "when this happens" moments we talk about on these blogs all the time is now happening in real time as Freddie and Fannie are being traded down violently again today and appear headed to zero ASAP. What happens to all the government plans if the stock's trade to zero prior to the actual bailout occurring? You have to nationalize right away, right? What's the endgame to this mess now? Isn't something even more drastic and anti-capitalistic about to have to happen here? I mean isn't some drastic action by Paulson imminent, as in happening today? At every turn during this financial crisis the Fed Gov't has gotten temporary control of the out of control train just in time to avoid market capitulation. Well here is the mother of all failures, so what do they do tonight to stem the tied and cause a bounce in the price of these two? A bailout won't work because that by it's very nature destoys the common stock holders and while it's easy to say so what to that happening, what our these companies if they trade at zero but are still publicly held corporations? Held by whom at that point? Is this not the first example of the Fed NOT being able to get out ahead of the train just in time? I'm babbling but does anybody else see the conundrum we now face here? Where do you take these two companies now and very quickly? I posted a similar comment over at Mish and apologize if you are reading this twice, but looking for thoughts as this seems like such a bizarre moment in time. Thanks.
JMS - it is a quandry. Best choice - BK. Stock goes to 0.
Bond holders get 30-35% with new paper being issued? Or, do they get 0 as if taken over by BoA?
The last point if interesting 'cause our Ruskie friends and our Olympic hosts carry a lot of this stuff and they wont be happy to see their bonds go to zero.
Or BK, a new company formed and sold to JPM for $2.00.
Was talking to a friend who lives down on the treasure coast of flaws and he was saying that con artists are changing the locks on REO and renting out the properties to victims who pay out 1st and last to the scammed, then make payments to the bank. When the bank wonders what's going on the scammed are long gone
"Isn't something even more drastic and anti-capitalistic about to have to happen here?"
We don't have a capitalistic system we have a banana republic run by a bunch of bought and paid for whores. Just follow all the market interventions, the casino is rigged and the man named Sam in the back room stamping out the chips wants his cut.
the fellow who was here yesterday measuring for my carpet installation is/was an Architectural Designer. Working for a sub Home Depot measuring for quotes.
He was laid off 6 months ago..been working for HD installs for about two now.
I am one of the participants of this survey. What Kermit didn't mention is that many clients, even if they are eager to build, are finding themselves having difficulty borrowing money to fund a construction project.
Aug. 20 (Bloomberg) -- Analysts trying to forecast U.S. earnings missed the mark by the biggest margin in at least 16 years last quarter as bank credit losses topped $500 billion and oil surged to records, according to Bloomberg data.
The CHART OF THE DAY shows analysts correctly predicted results for 6.7 percent of the companies in the Standard & Poor's 500 Index that released second-quarter earnings, the fewest since Bloomberg began tracking the data in 1992.
from what I've read the common shareholders will/are worthless and hanky-poo will buy up whatever new issue they create after pulling an R3 (ala LEH) on it...you know the whole "wheat from chaff" thing.
It could drop this much each day and never get to zero so I wouldn't wait for that too happen.
My architectural firm's work fell off a cliff in June as soon as the Fannie Freddie unwind began. Apparently they own more than just SF loans. We have laid off staff and have no new work for the fall. I hear the same from other firms here in Texas.
There is a cold wind a'blowin in the Commercial Real Estate market.
My wife is in the booze business, and her sales also tanked bigtime in July. This is a business that has never known a recession. People drink when they are happy, sad, broke, etc.
The numbers appear to represent a lag from when Fanny may/mac took a dive and when AIA numbers sank. Also, I would like to see how these numbers correlate geographically. What area's were exploding with growth compares the areas are being hit the hardest.
My wife is in the booze business, and her sales also tanked bigtime in July. This is a business that has never known a recession. People drink when they are happy, sad, broke, etc.
Yuuki Sakurai, the general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co., said his firm is also ``a little bit worried about the fate of'' Fannie and Freddie.
``The conditions don't seem to be turning into a good environment,'' Sakurai said.
What happens to the rest of these potential equity raises when the US gov't with the hand of the big four involved say screw you to the very people they are trying to steal,sorry....RAISE more capital from.
In other news, I posted about a project near my office in Seattle a few months ago. Prime downtonwn real estate, and controversial 'cause they had to tear down part of a church to build there.
Well, three months later (after the church buildings were razed) and still no sign of the builders. The weather won't be getting any better the next few months!
Architects, shmarchitects...the real issue is far greater. If you want to really cry about the future economy and wallow in gloom read Roubini's latest:
And the worst thing is that he has always been right on the button. Hundreds of small banks to go belly up, etc., etc. I need to take a break and find some kind of tranquilizer to get me through the rest of the day. LOL.
It does seem that The Ownership Society here in America is devolving into this: Zimbabwe's Central Statistics Office has reported annual inflation running at 11.2 million percent in June, the state-controlled Herald newspaper reported on Tuesday.
But independent sources put it higher - leading Zimbabwean financial institution Kingdom Bank reportedly issued a report estimating inflation at over 20 million percent.
You have to nationalize right away, right? What's the endgame to this mess now?
Have a look at the future:
Venezuelan officials, together with the National Guard, took control of the local operations of Cemex after negotiations between the government and the company failed to produce an agreement on the nationalization terms, according to media reports Tuesday.
I just noticed the "Another REO from Jim the Realtor" clip at the bottom of the page. Jim is great. You should have a link to all of Jim's videos. Would hate to miss one!
Spunkmeyer,
My business, too. You are right- just because somebody wants to build doesn't mean they can. Same as in housing - intent and means are two different things. Credit is tight.
The other shoe to drop here is that public works construction - traditionally a means to keep things going during a slowdown - will have to be done by governments that will be facing huge drops in property tax collections and also drops in income and sales tax collections at the same time.
My daughter is an architect. So far she still has a job.
Fingers crossed. She says foreclosures aren't too bad in the Boston area, until you get to the outer 'burbs.
meanwhile, I'm pretty busy--defending foreclosure, and foreclosing. 100% financing == 2 foreclosures. 80-20 lending. But houses are worth less than even the first Mig.
In Broward County.
by the way, I have had 2 clients do the ruthless default/walk-away thing.
So it's not just an urban myth.
This is assuming that you bought a 2nd house in time. Right now, I don't think it's possible to buy a 2nd house.
I hear ya wally. Hard enough getting potholes filled these days; everyone seems to be writing parking tickets and speeding tickets in my little town as if their paycheck depended solely on that.
William M. Later?
OT: Re the tanking stocks of Fannie and Freddie -
So it appears one of those "when this happens" moments we talk about on these blogs all the time is now happening in real time as Freddie and Fannie are being traded down violently again today and appear headed to zero ASAP. What happens to all the government plans if the stock's trade to zero prior to the actual bailout occurring? You have to nationalize right away, right? What's the endgame to this mess now? Isn't something even more drastic and anti-capitalistic about to have to happen here? I mean isn't some drastic action by Paulson imminent, as in happening today? At every turn during this financial crisis the Fed Gov't has gotten temporary control of the out of control train just in time to avoid market capitulation. Well here is the mother of all failures, so what do they do tonight to stem the tied and cause a bounce in the price of these two? A bailout won't work because that by it's very nature destoys the common stock holders and while it's easy to say so what to that happening, what our these companies if they trade at zero but are still publicly held corporations? Held by whom at that point? Is this not the first example of the Fed NOT being able to get out ahead of the train just in time? I'm babbling but does anybody else see the conundrum we now face here? Where do you take these two companies now and very quickly? I posted a similar comment over at Mish and apologize if you are reading this twice, but looking for thoughts as this seems like such a bizarre moment in time. Thanks.
FNM.... vis count way to low!!!
I worry for Mike Brady's job. Carol might have to resort to some unsavory tricks to support the family.
JMS - it is a quandry. Best choice - BK. Stock goes to 0.
Bond holders get 30-35% with new paper being issued? Or, do they get 0 as if taken over by BoA?
The last point if interesting 'cause our Ruskie friends and our Olympic hosts carry a lot of this stuff and they wont be happy to see their bonds go to zero.
Or BK, a new company formed and sold to JPM for $2.00.
sorry for such an early OT,
Was talking to a friend who lives down on the treasure coast of flaws and he was saying that con artists are changing the locks on REO and renting out the properties to victims who pay out 1st and last to the scammed, then make payments to the bank. When the bank wonders what's going on the scammed are long gone
waitin on LEH for a stellar dive!
Cliff Diver writes:
waitin on LEH for a stellar dive
I'm kinda careful when so much is on one side (at the moment)
feelin that , painfully
Elvis, no need to worry, Mike went over to the dark side years ago.
bailout rally. 10,000 points. c'mon. don't be ungrateful.
Is there an Architects' Confidence index, too?
"Isn't something even more drastic and anti-capitalistic about to have to happen here?"
We don't have a capitalistic system we have a banana republic run by a bunch of bought and paid for whores. Just follow all the market interventions, the casino is rigged and the man named Sam in the back room stamping out the chips wants his cut.
the fellow who was here yesterday measuring for my carpet installation is/was an Architectural Designer. Working for a sub Home Depot measuring for quotes.
He was laid off 6 months ago..been working for HD installs for about two now.
FWIW
Ciao
MS
I am one of the participants of this survey. What Kermit didn't mention is that many clients, even if they are eager to build, are finding themselves having difficulty borrowing money to fund a construction project.
OT but worthy:
Analysts' Profit Forecasts Missing More Than Ever
By Lynn Thomasson
Aug. 20 (Bloomberg) -- Analysts trying to forecast U.S. earnings missed the mark by the biggest margin in at least 16 years last quarter as bank credit losses topped $500 billion and oil surged to records, according to Bloomberg data.
The CHART OF THE DAY shows analysts correctly predicted results for 6.7 percent of the companies in the Standard & Poor's 500 Index that released second-quarter earnings, the fewest since Bloomberg began tracking the data in 1992.
[snip]
from what I've read the common shareholders will/are worthless and hanky-poo will buy up whatever new issue they create after pulling an R3 (ala LEH) on it...you know the whole "wheat from chaff" thing.
It could drop this much each day and never get to zero so I wouldn't wait for that too happen.
Ciao
MS
My architectural firm's work fell off a cliff in June as soon as the Fannie Freddie unwind began. Apparently they own more than just SF loans. We have laid off staff and have no new work for the fall. I hear the same from other firms here in Texas.
There is a cold wind a'blowin in the Commercial Real Estate market.
My wife is in the booze business, and her sales also tanked bigtime in July. This is a business that has never known a recession. People drink when they are happy, sad, broke, etc.
archibroke writes:
"My wife is in the booze business"
I would like to meet your wife.
(lol)
The numbers appear to represent a lag from when Fanny may/mac took a dive and when AIA numbers sank. Also, I would like to see how these numbers correlate geographically. What area's were exploding with growth compares the areas are being hit the hardest.
My wife is in the booze business, and her sales also tanked bigtime in July. This is a business that has never known a recession. People drink when they are happy, sad, broke, etc.
Is she named Lefty?
Yuuki Sakurai, the general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co., said his firm is also ``a little bit worried about the fate of'' Fannie and Freddie.
``The conditions don't seem to be turning into a good environment,'' Sakurai said.
heh
.....and then Sakurai thought to himeslt, " We really need to start charging for the happy thoughts in those fortune cookies. "
"a little worried"...
understatement of the year.
What happens to the rest of these potential equity raises when the US gov't with the hand of the big four involved say screw you to the very people they are trying to steal,sorry....RAISE more capital from.
This is better than a novella...
Cia
MS
``a little bit worried about the fate of'' Fannie and Freddie.
I assume that this is Japanese polite-speak. The correct translation is probably: We think they're goners.
Sparks
Hmmm Sakurai is Japanese, Fortune correctly identify these two countries when you invest
The Japanese are masters of understatement.
In other news, I posted about a project near my office in Seattle a few months ago. Prime downtonwn real estate, and controversial 'cause they had to tear down part of a church to build there.
Well, three months later (after the church buildings were razed) and still no sign of the builders. The weather won't be getting any better the next few months!
I'd glady pay you tomorrow for a drink (or 12) i can have today
Regardless of the rational concerns expressed here about Fanny&Freddie, the market doesn't seem too distressed today. What, me worry?
Well, three months later (after the church buildings were razed) and still no sign of the builders.
Ha! We're winning the War on Christmas! All your darkest fears are coming true.
Hmmm Sakurai is Japanese, Fortune correctly identify these two countries when you invest
Hmm,...Japanese, Fortune [cookies are an American innovation for Chinese restaurants, please] identify these two countries...
Nice 'on-the-homestretch' pump by the shysters.
Light volume, so they can get away with this, now.
The pump games end in October in the face of big volume and sell pressure, I'm guessing.
Ok, now I hear that they are doing repair work on the remaining church before the real work starts. Uh, nevermind... (doh!)
Architects, shmarchitects...the real issue is far greater. If you want to really cry about the future economy and wallow in gloom read Roubini's latest:
RGE - The worst economic and financial crisis in decades
And the worst thing is that he has always been right on the button. Hundreds of small banks to go belly up, etc., etc. I need to take a break and find some kind of tranquilizer to get me through the rest of the day. LOL.
Good explanation for excess saving in China:
Bronte Capital
It does seem that The Ownership Society here in America is devolving into this: Zimbabwe's Central Statistics Office has reported annual inflation running at 11.2 million percent in June, the state-controlled Herald newspaper reported on Tuesday.
But independent sources put it higher - leading Zimbabwean financial institution Kingdom Bank reportedly issued a report estimating inflation at over 20 million percent.
You have to nationalize right away, right? What's the endgame to this mess now?
Have a look at the future:
Venezuelan officials, together with the National Guard, took control of the local operations of Cemex after negotiations between the government and the company failed to produce an agreement on the nationalization terms, according to media reports Tuesday.
Venezuela moves to nationalize cement industry
A few million percent here and there, pretty soon your talking inflation...
full disclosure: got stopped out of SKF. That is where my moral obligations end.
I just noticed the "Another REO from Jim the Realtor" clip at the bottom of the page. Jim is great. You should have a link to all of Jim's videos. Would hate to miss one!
Spunkmeyer,
My business, too. You are right- just because somebody wants to build doesn't mean they can. Same as in housing - intent and means are two different things. Credit is tight.
The other shoe to drop here is that public works construction - traditionally a means to keep things going during a slowdown - will have to be done by governments that will be facing huge drops in property tax collections and also drops in income and sales tax collections at the same time.
My daughter is an architect. So far she still has a job.
Fingers crossed. She says foreclosures aren't too bad in the Boston area, until you get to the outer 'burbs.
meanwhile, I'm pretty busy--defending foreclosure, and foreclosing. 100% financing == 2 foreclosures. 80-20 lending. But houses are worth less than even the first Mig.
In Broward County.
by the way, I have had 2 clients do the ruthless default/walk-away thing.
So it's not just an urban myth.
This is assuming that you bought a 2nd house in time. Right now, I don't think it's possible to buy a 2nd house.
I hear ya wally. Hard enough getting potholes filled these days; everyone seems to be writing parking tickets and speeding tickets in my little town as if their paycheck depended solely on that.
Every agency and every department is now expected to be a 'profit center'.
Fannie and Freddie are smokin crack and Pukin Dog is doin the wild thing in Georgia and Condi is selling wolf tickets. Of course the market is up.
Confirmed. Carol Brady is turning tricks to support the Bunch. What has this world come to?