It doesn't mean we have to go out and fire-sell any assets, quite the opposite in fact,'' Kahn said.The paper that falls due today or tomorrow won't be paid as it falls due.''
Uhhh. . . okay. In my neck of the woods when I make this statement:
``The paper that falls due today or tomorrow won't be paid as it falls due.''
I don't have much of a choice about how my assets are sold. I guess I come from a different class of citizenry.
You don't have to firesale my house or anything, Mr. Banker, I am just not going to pay my mortgage as it come due. No biggie.
Actually if Citi and WM go under, it will be good for the economy because
the deposits will be guaranteed by the FED; hence reflooding of liquidity in the Market.
Hmmm, face value $8bn in MBS assets of fairly recent vintage that need to be sold in order to satisfy short term obligations of approx 6-9 mos maturity that are already coming due at the shortest end. Do I hear 50¢? 40¢?
`In our view people should not take this as a precedent for other SIVs,'
The IMF added: "The extent of house price over-valuation may be considerably larger in some national markets in Europe than in the US, and there would clearly be a sizeable impact on the housing markets in the event of a widespread credit crunch."
RE bubble or credit expansion has been world wide, Canada, South America, Eastern Eurpope, going to be quite a crash!
So basic question: If xyz corp goes BK and the remanents (MBS) are sold off where the underlying pools of assets have been depreciated, why does the face value of the debt note not depreciate, too.
A new question for mortgage syndication and a great arguement! A super dupper court case.
``It doesn't mean we have to go out and fire-sell any assets, quite the opposite in fact,'' Kahn said.
He isn't necessarily spinning. Let me see...the opposite to go out and fire-sell might be come here and get what you find! Wonder what the bid on empty pizza boxes and broken Aeron chairs will be?
Well thank god. This banking mess is water under the bridge...Asia is up on credit concerns resolved and earnings/losses have been discounted. JP Moron is the way of the future
Article on wire quoting Cunningham of Federated Money Markets saying that:
Certain SIV assets sold into MLEC at "current market value"
Sellers received a discounted price for the asset BUT any profits on assets when sold or matured will be payable to seller less fees
MLEC would have backstop financing e.g. MLEC purchases funded by CP issuance by MLEC
MLEC might never have to tap the backstop funding!
Your One Stop Borrower with the Good Housekeeping Seal?
no mention of terms such as "overcollateralization" or "subordination" in the article. Unclear to me whether a haircut the SIV takes is nonrefundable or whether SIV gets cash and a first-loss exposure that yields cash if losses fall below expectations?
One angle I think some overlook to answer the question why would one not lend against creditworthy assets ex-MLEC is that to do so might be a career-limiting decision?
Well, either it's this or individual SIVs restructuring as needed; take your pick?
Ready or Not, Here Comes Fair Value
The Financial Accounting Standards Board votes thumbs-down on a one-year breather for companies to comply with FAS 157.
Sarah Johnson, CFO.com | US
October 17, 2007
Despite the request of business groups, the Financial Accounting Standards Board has decided not to defer the effective date of its new fair-value rule.
On Wednesday, most board members seemed to feel that a "wholesale" deferral of FAS 157 which provides a framework for marking value estimates to market rather than historical cost would overly delay gratification for financial statement users. Investors, after all, largely favor the expanded use of the fair-value method of accounting. A one-year delay wouldn't necessarily make corporate executives struggling with the standard feel more ready to comply, the board members concluded.
advertisement In fact, the board questioned whether companies lack the resources to comply in a timely way, as the preparers of financial statements have claimed. They wondered if instead, managers are simply engaged in a delaying tactic. "I think the goal here is to change the document rather than support it," said board member G. Michael Crooch of the intent of the comment letters FASB has recently received asking for a delay.
If FASB had voted for a deferral, the board would have also likely agreed to delay the sister standard, FAS 159, The Fair Value Option for Financial Assets and Liabilities. Both standards go into effect for most companies on November 15.
"Why would the market respond badly to this news? It has seemed to weather many very bad reports and predictions of demise."
Really? As I recall the market took a nice bath after both recent craterings in the ABX - kinda like what's happening right now for you home gamers. So Benny and the Jets "saved" the market right before it went straight to hell last month. You think this will work again and again? LOL! The next rate cut will be met with a huge sell-off my friend.
BTW, we just got another fresh confirmed Hindenburg Omen today, so start the 40 day clock...
WSJ
Flagstone Reinsurance Cut To Hold From Buy By Citigroup
Platinum Underwriters Cut To Hold From Buy By Citigroup
Everest Re Cut To Hold From Buy by Citigroup
RenaissanceRE Cut To Sell From Hold By Citigroup
W.R. Berkley Started At Neutral By UBS
Telegraph UK
JP Morgan Chase writes off $1.6 bn
Jamie Dimon said, "There may be some SIVs that it's not going to help, and that's life in the fast lane." JP Morgan Chase writes off $1.6bn - Telegraph
after the SIV was forced to liquidate assets to repay maturing commercial paper.
Its always good to revisit basics so I looked up what commercial paper was: Commercial paper - Wikipedia, the free encyclopedia
excerpts:
...issued by large banks and corporations... commercial paper returns are not large... There are four basic kinds of commercial paper: promissory notes, drafts, checks, and certificates of deposit....do not exceed nine months.... the notes are exempt from registration as securities with the [SEC].
So, there is no filing that describes how/what they offer to back the borrowing - just their good name... and when that is in mud ?
I know its credit and not money but looking at it with ancient glasses, once upon a time a bank issued its own notes - in the same vein it seems they were just issuing money/currency since all a banknote is - "I promise to pay.." that's all. These buggers really have gone to town on this haven't they ?
Clearly this stuff has been around for ages - with old fashioned uses - I'd love to get into the devious minds that conjured up their present convoluted use - was it a desperation response, a logical follow up to MBSes, swaps, CDOs or a "to get THERE I have to start HERE" type of thing ?
As CR points out, ne ful wd noe that
borrowing short to lend long is a bad idea. Hell, forget CR, even the Fed governor Bill Poole proudly exhibited his knowledge of this age old truism. So how come THESE guys did it ?
Because it wasn't their money, and it's a pretty safe bet that before it all came unglued they were able to claim -- and take 20% of -- some very nice illusory profits.
Also, you once made a comment that Bernanke was chosen Fed Chair because he knew how to deal with a Kondratiev Winter. (You did, really). What did you mean by that...you mean all that Great Depression study he did prepared him for this type of an economic environment.
Medium sized banks seem to be weakening. These banks don't get much coverage in the news. The ones that I have been watching (due to long term puts and high RE exposure) include BKUNA, CNB, FMER, BPOP, TSFG, ZION and WTNY. BKUNA and Zion have been weakest for some time. CNB (Colonial) had an interesting reversal yesterday . It was up on earnings coming in right at expectations yesterday morning but went down in mid afternoon and did not recover when the rest of the market recovered. It will be interesting to see how the financials, including these medium sized banks with high CRE exposure will do.
These unfinished homes will stand for years and are a blight upon the landscape
That's right. Here are some burning questions I want to know the answer to:
How long can a partially-finished development sit empty before the elements, vandals and thieves render it worthless?
Won't local authorities get pissed and put tax liens on the properties, further complicating any fire sales? Building permits usually have time limits on them, so partially built developments could create further headaches.
If a builder goes bankrupt and no buyers step up to scoop up these rotting "assets", can a local govt use eminent domain to seize them? It would seem to be a slam dunk, given our recent Supreme Court ruling in favor of local governments aggressively using this power to kick out poor folks in favor of gambling casinos, condos and other morally dubious re-development plans.
One trick I know that the builders play is to delay finishing a home when the market slows, in order to avoid getting a CO (certificate of occupancy) from the county. I see this all around my neck of the woods (Atlanta). Once the CO is issued, the builder is on the hook for property taxes until the unit is sold.
Of course, the county will fine them after a certain point but these guys are in full survival mode and would rather pay a $100 fine to the county than full property taxes on an empty 600K house.
I have to think that the holders of notes that fall due in the future are the same as the people who hold the notes currently comming due. Otherwise, I can't see how they'd get away with this. Otherwise, the holders's of the current notes would sue. Or maybe I just don't understand how bankrupcy works. I've assumed that UNTIL you're insolvent (debts exceed assets) you're obliged to pay your bills. Once you're isolvent, you must file for bankrupcy and either get a workout ar face liquidation.
How long can a partially-finished development sit empty before the elements, vandals and thieves render it worthless?
Won't local authorities get pissed and put tax liens on the properties, further complicating any fire sales? Building permits usually have time limits on them, so partially built developments could create further headaches.
I don't know the answer to these but I am sure someone knows what happened to the overbuilt/mail-in-the-keys houses in Texas back in the last oil price collapse. I remember seeing (back when I watched the network news) street after street of empty, rotting houses. Who knows that happened? Were they demolished and rebuilt? Sold as handyman specials to investors?
">1. How long can a partially-finished development sit empty before the elements, vandals and thieves render it worthless?"
Few years probably unguarded. The situation is so unprecedented because whole neighborhoods will be left to rotten. That is like an invitation for thieves. Add to that a possible very hard economic recession and even regular folks will be stealing stuff from those empty houses.
">2. Won't local authorities get pissed and put tax liens on the properties, further complicating any fire sales? Building permits usually have time limits on them, so partially built developments could create further headaches."
They will be eventually overwhelmed by the sheer numbers of foreclosures. In the end they just don't give shit.
"How long can a partially-finished development sit empty.."
If 'partially finished' means fully enclosed, heated but lacking kitchen cabinets or trim or finish materials, I'd say maybe 2 to 3 years IN GOOD TIMES. It depends on the builder checking things regularly, paying the utilities, mowing the grass, paying the taxes and continuing to market and show the house. If the builder is no longer in financial condition to do those things then it will go downhill in a couple of months.
Isn't the reason that there will be no fire-sale because there is a receiver. UK's is the applicable law, so I won't pretend to know anything about it, but a receiver had already been appointed.
SunTrust Banks which already has cut jobs and real estate costs, on Thursday said it was taking a second look at business units for further possible restructuring moves.
Now comes the M-LEC, which I believe raises some serious accounting issues. In short, inflating the equity of the banks. You can find my questions on this structure at my blog, Polecolaw .
Keep up the news!
Holy smokes, I'm amazed anyone remembers me saying that! Based on historical precedence, it's not hard to see that the Fed was able to not only navigate the last K-Winter safely, but actually consolidate power by driving non-member banks out of business. These are very smart people and Bernanke is also very smart. There is a common misconception floating around that the Fed fears deflation and/or depression and will hold no bars to stop it. Why should they considering how they made out during the last one?
The only thing the Fed truly fears is hyperinflation because this is the one and only scenario that puts them out of business and I will challenge anyone on this board to dispute this. Modest inflation or even high inflation and/or a deflationary bust will not put the Fed out of business, and they will not give up power that easily. Now here's where some people will jump in and say that the US Gov debt will prevent the Fed from "allowing" deflation to happen, but this is also a non-starter. The Fed is a private banking cartel and they don't work for the Government! I'm surprised that anybody still believes that they do, based upon the recent Wall St. pigmen rate-cut performance.
Yes, Bernanke has been quoted as saying that the Fed can stop deflation through helicopter drops, but he was speaking acedemically. He was basically saying that there is no way to stop a deflationary credit bust other than through hyperinflation, and this is 100% true. The K-Winter cannot be stopped by any other means. People took this to mean that this is the course of action that the Fed would take, but they're forgetting that this isn't in the best interest of the Fed.
Given all of the above, what better person than the world's premier depression expert to navigate the coming one. Now whether this was by design or sheer luck is debatable but I'm going with the former. Not often do things of this importance occur by chance.
We are at the end of K-Autumn and K-Winter probably began in September, imho. It starts with a modest recession and gains steam from there as the cascading cross-defaults purge the system of all bad debt. Several large states (including Ca) are proven to be in recession based on tax receipts.
Only time will tell for sure but it certainly looks as if the deflationary credit bust has begun.
History doesn't repeat; it skips like a broke record!
TheSunNews.com - Myrtle Beach News | The Sun News
It looks like Levitt and Sons is toast. I wonder who their bank was?
interesting story one that will be repeated many times. Wonder how much leverage was used?
Tomorrow should make for an interesting market day . . . and this time, there doesn't seem to be an Intel story to brighten up the news.
It's not a DeFault , it's a DeLay
sources say
The market is interesting in the same way watching a two-year-old try to tie shoes is interesting.
in honor of tommorows market, I will
shave , shower and maybe wear a suit.
It doesn't mean we have to go out and fire-sell any assets, quite the opposite in fact,'' Kahn said.The paper that falls due today or tomorrow won't be paid as it falls due.''
Uhhh. . . okay. In my neck of the woods when I make this statement:
``The paper that falls due today or tomorrow won't be paid as it falls due.''
I don't have much of a choice about how my assets are sold. I guess I come from a different class of citizenry.
You don't have to firesale my house or anything, Mr. Banker, I am just not going to pay my mortgage as it come due. No biggie.
Any estimates on how much of the $8B has evaporated and gone to credit heaven?
Actually if Citi and WM go under, it will be good for the economy because
the deposits will be guaranteed by the FED; hence reflooding of liquidity in the Market.
"Financial woes for builder, Inlet construction halted"
"Troubled home builder Levitt and Sons has halted construction at all of its home projects across the Southeast"
These unfinished homes will stand for years and are a blight upon the landscape.
Why would the market respond badly to this news? It has seemed to weather many very bad reports and predictions of demise.
Hmmm, face value $8bn in MBS assets of fairly recent vintage that need to be sold in order to satisfy short term obligations of approx 6-9 mos maturity that are already coming due at the shortest end. Do I hear 50¢? 40¢?
`In our view people should not take this as a precedent for other SIVs,'
[clears throat]
If you like Calculated Risks (and who doesn't?), you might wish to check out the latest IMF report.
One might not agree with the objectiveness of my findings of their findings, but one can't argue much with the facts I present.
The word "risk" was used 265 times in one frickin' report, lol.
[unconfortable silence]
Exactly what the super conduit was set up for.
Like the old Life cereal commericial, "Let Mikey try it, he'll eat anything."
Unfortunately, the cereal bowl is too small.
The IMF added: "The extent of house price over-valuation may be considerably larger in some national markets in Europe than in the US, and there would clearly be a sizeable impact on the housing markets in the event of a widespread credit crunch."
RE bubble or credit expansion has been world wide, Canada, South America, Eastern Eurpope, going to be quite a crash!
So basic question: If xyz corp goes BK and the remanents (MBS) are sold off where the underlying pools of assets have been depreciated, why does the face value of the debt note not depreciate, too.
A new question for mortgage syndication and a great arguement! A super dupper court case.
``It doesn't mean we have to go out and fire-sell any assets, quite the opposite in fact,'' Kahn said.
He isn't necessarily spinning. Let me see...the opposite to go out and fire-sell might be come here and get what you find! Wonder what the bid on empty pizza boxes and broken Aeron chairs will be?
Dollar plunges to new lows tonight.
INO Equities Stocks Indexes - US DOLLAR INDEX (NYBOT:DX) Price Chart and Quote
`In our view people should not take this as a precedent for other SIVs,'
Ya feeling lucky punk? Are You?
Dollar plunges to new lows tonight.
A new low but not The Low. That be a long way down from here.
Well thank god. This banking mess is water under the bridge...Asia is up on credit concerns resolved and earnings/losses have been discounted. JP Moron is the way of the future
Gee, whoda thunk that failure to pay would hurt market confidence?
Article on wire quoting Cunningham of Federated Money Markets saying that:
Certain SIV assets sold into MLEC at "current market value"
Sellers received a discounted price for the asset BUT any profits on assets when sold or matured will be payable to seller less fees
MLEC would have backstop financing e.g. MLEC purchases funded by CP issuance by MLEC
MLEC might never have to tap the backstop funding!
Your One Stop Borrower with the Good Housekeeping Seal?
no mention of terms such as "overcollateralization" or "subordination" in the article. Unclear to me whether a haircut the SIV takes is nonrefundable or whether SIV gets cash and a first-loss exposure that yields cash if losses fall below expectations?
One angle I think some overlook to answer the question why would one not lend against creditworthy assets ex-MLEC is that to do so might be a career-limiting decision?
Well, either it's this or individual SIVs restructuring as needed; take your pick?
This kind of mentality spreads.
Soon nobody's going to be paying their debt because everybody else is walking away from obligations, and that makes it OK.
Broken window syndrome.
Ready or Not, Here Comes Fair Value
The Financial Accounting Standards Board votes thumbs-down on a one-year breather for companies to comply with FAS 157.
Sarah Johnson, CFO.com | US
October 17, 2007
Despite the request of business groups, the Financial Accounting Standards Board has decided not to defer the effective date of its new fair-value rule.
On Wednesday, most board members seemed to feel that a "wholesale" deferral of FAS 157 which provides a framework for marking value estimates to market rather than historical cost would overly delay gratification for financial statement users. Investors, after all, largely favor the expanded use of the fair-value method of accounting. A one-year delay wouldn't necessarily make corporate executives struggling with the standard feel more ready to comply, the board members concluded.
advertisement In fact, the board questioned whether companies lack the resources to comply in a timely way, as the preparers of financial statements have claimed. They wondered if instead, managers are simply engaged in a delaying tactic. "I think the goal here is to change the document rather than support it," said board member G. Michael Crooch of the intent of the comment letters FASB has recently received asking for a delay.
If FASB had voted for a deferral, the board would have also likely agreed to delay the sister standard, FAS 159, The Fair Value Option for Financial Assets and Liabilities. Both standards go into effect for most companies on November 15.
FAS 157
Hey,
Maybe if we time it right, we can get the U.S. markets to tank at the same time as Asia and Europe.
That would be some hat trick now wouldnt it.
[i]Cheyne Finance's debt with different maturities will now be pooled together,[/i]
"The power of accurate observation is commonly called cynicism by those who have not got it." GB Shaw.
Thanks for a good laugh!
Dear Sirs: VISA, AMEX, MC,
I have decided that debt with different maturities will now be pooled together, rather than shorter term debt being repaid sooner.
It doesn't mean I am not going to pay you, quite the opposite in fact, the bills that fall due today or tomorrow won't be paid as they fall due.
Sincerely,
Joe Zixpaugh.
Such chutzpah! I like it.
"...there would clearly be a sizeable impact on the housing markets in the event of a widespread credit crunch."
Anyone wanting to know what's going to happen simply has to replace every occurrence of "in the event of" with "when" in these types of statements.
"Why would the market respond badly to this news? It has seemed to weather many very bad reports and predictions of demise."
Really? As I recall the market took a nice bath after both recent craterings in the ABX - kinda like what's happening right now for you home gamers. So Benny and the Jets "saved" the market right before it went straight to hell last month. You think this will work again and again? LOL! The next rate cut will be met with a huge sell-off my friend.
BTW, we just got another fresh confirmed Hindenburg Omen today, so start the 40 day clock...
Red, you're a funny fool!
A song for our time:
I have stepped into a mud hole,
And got mud all over me ...
Mud between my toes,
Mud all on my clothes,
Mud is in my hair,
Pretty near everywhere.
I just fell into a mud hole,
And got mud all over me ...
"Mud Hole," by Malachi Thompson (Blue Jazz cd, no free version yet.)
Borrow short, lend long, go broke; one of the oldest stories in lending...
Shouldn't this be "Borrow short, lend long, walk away filthy rich when your customers go broke; one of the oldest stories in lending."?
Google up "Stuart Fiertz", and/or "Jonathan Lourie".
For example, Two of the highest paid dealers in the City, Stuart Fiertz and Jonathan Lourie, today had to admit ....
Or, some way down the page in The City set who control £2 trillion.
WSJ
Flagstone Reinsurance Cut To Hold From Buy By Citigroup
Platinum Underwriters Cut To Hold From Buy By Citigroup
Everest Re Cut To Hold From Buy by Citigroup
RenaissanceRE Cut To Sell From Hold By Citigroup
W.R. Berkley Started At Neutral By UBS
I don't think this is a good time to be in the US market.
[i]Moody's cut the SIV's top credit ratings on Oct. 4 by as many as 12 levels to Ba3[/i]
That is what I call cut. lol
FT- Super fund banks to back $4bn note issue...
FT.com / UK - Super fund banks to back $4bn note issue
Telegraph UK
JP Morgan Chase writes off $1.6 bn
Jamie Dimon said, "There may be some SIVs that it's not going to help, and that's life in the fast lane."
JP Morgan Chase writes off $1.6bn - Telegraph
"That which we call a pig by any other name would stink as much"
Joe Shakespack
re: original article
after the SIV was forced to liquidate assets to repay maturing commercial paper.
Its always good to revisit basics so I looked up what commercial paper was:
Commercial paper - Wikipedia, the free encyclopedia
excerpts:
...issued by large banks and corporations... commercial paper returns are not large... There are four basic kinds of commercial paper: promissory notes, drafts, checks, and certificates of deposit....do not exceed nine months.... the notes are exempt from registration as securities with the [SEC].
So, there is no filing that describes how/what they offer to back the borrowing - just their good name... and when that is in mud ?
I know its credit and not money but looking at it with ancient glasses, once upon a time a bank issued its own notes - in the same vein it seems they were just issuing money/currency since all a banknote is - "I promise to pay.." that's all. These buggers really have gone to town on this haven't they ?
Clearly this stuff has been around for ages - with old fashioned uses - I'd love to get into the devious minds that conjured up their present convoluted use - was it a desperation response, a logical follow up to MBSes, swaps, CDOs or a "to get THERE I have to start HERE" type of thing ?
As CR points out, ne ful wd noe that
borrowing short to lend long is a bad idea. Hell, forget CR, even the Fed governor Bill Poole proudly exhibited his knowledge of this age old truism. So how come THESE guys did it ?
Ideas ?
-K
sk,
Because it wasn't their money, and it's a pretty safe bet that before it all came unglued they were able to claim -- and take 20% of -- some very nice illusory profits.
Darth Toll:
What is a Hindenberg Omen?
Also, you once made a comment that Bernanke was chosen Fed Chair because he knew how to deal with a Kondratiev Winter. (You did, really). What did you mean by that...you mean all that Great Depression study he did prepared him for this type of an economic environment.
Thx
Medium sized banks seem to be weakening. These banks don't get much coverage in the news. The ones that I have been watching (due to long term puts and high RE exposure) include BKUNA, CNB, FMER, BPOP, TSFG, ZION and WTNY. BKUNA and Zion have been weakest for some time. CNB (Colonial) had an interesting reversal yesterday . It was up on earnings coming in right at expectations yesterday morning but went down in mid afternoon and did not recover when the rest of the market recovered. It will be interesting to see how the financials, including these medium sized banks with high CRE exposure will do.
These unfinished homes will stand for years and are a blight upon the landscape
That's right. Here are some burning questions I want to know the answer to:
One trick I know that the builders play is to delay finishing a home when the market slows, in order to avoid getting a CO (certificate of occupancy) from the county. I see this all around my neck of the woods (Atlanta). Once the CO is issued, the builder is on the hook for property taxes until the unit is sold.
Of course, the county will fine them after a certain point but these guys are in full survival mode and would rather pay a $100 fine to the county than full property taxes on an empty 600K house.
I have to think that the holders of notes that fall due in the future are the same as the people who hold the notes currently comming due. Otherwise, I can't see how they'd get away with this. Otherwise, the holders's of the current notes would sue. Or maybe I just don't understand how bankrupcy works. I've assumed that UNTIL you're insolvent (debts exceed assets) you're obliged to pay your bills. Once you're isolvent, you must file for bankrupcy and either get a workout ar face liquidation.
I don't know the answer to these but I am sure someone knows what happened to the overbuilt/mail-in-the-keys houses in Texas back in the last oil price collapse. I remember seeing (back when I watched the network news) street after street of empty, rotting houses. Who knows that happened? Were they demolished and rebuilt? Sold as handyman specials to investors?
Cheyne Finance's debt with different maturities will now be pooled together
Who is out there, in lender-land, that just had their debt repayment stream cut off at the knees ?
This type of action could ripple and cause others to default on debts/mortgages/etc. Think of someone with an 800 FICO getting blind-sided by this.
">1. How long can a partially-finished development sit empty before the elements, vandals and thieves render it worthless?"
Few years probably unguarded. The situation is so unprecedented because whole neighborhoods will be left to rotten. That is like an invitation for thieves. Add to that a possible very hard economic recession and even regular folks will be stealing stuff from those empty houses.
">2. Won't local authorities get pissed and put tax liens on the properties, further complicating any fire sales? Building permits usually have time limits on them, so partially built developments could create further headaches."
They will be eventually overwhelmed by the sheer numbers of foreclosures. In the end they just don't give shit.
Sounds to me like these guys are in prime position to take the next step up.
Isn't this kinda crap a resume builder?
It's not how much money you make anymore, it's the style in which you lose it. These guys get an A+ for their Orwellian smugness.
It's not how much money you make anymore, it's the style in which you lose it.
Major World Indices - Yahoo! Finance
You pays your money you take your chances. TA-100 -9.93%
Think of the few people sprinkled around in these subdivisions that had purchased...Not a pleasant thought.
"How long can a partially-finished development sit empty.."
If 'partially finished' means fully enclosed, heated but lacking kitchen cabinets or trim or finish materials, I'd say maybe 2 to 3 years IN GOOD TIMES. It depends on the builder checking things regularly, paying the utilities, mowing the grass, paying the taxes and continuing to market and show the house. If the builder is no longer in financial condition to do those things then it will go downhill in a couple of months.
What is a Hindenberg Omen?
Hindenburg Ome - Wikipedia, the free encyclopedia
Isn't the reason that there will be no fire-sale because there is a receiver. UK's is the applicable law, so I won't pretend to know anything about it, but a receiver had already been appointed.
I've always been a big believer in the jobless claims numbers. Let's see if this turns into a trend:
Biggest jobless claims rise since February
http://www.weblinks247.com/indexes/idx24_usd_en_2.gif
White water rapids waterfall ahead.
bank of america profit down 32 pct:
Bank of America Earnings Drop on Loan Writedowns (Update5) - Bloomberg.com
Countrywide shares fall 3.2%, to $16.80 in pre-market trade
Does this mean BAC is now down $1.20/share on their $2B loan to CFC ?
SunTrust has more cuts ahead:
SunTrust takes second look for restructuring moves
| Reuters
SunTrust Banks which already has cut jobs and real estate costs, on Thursday said it was taking a second look at business units for further possible restructuring moves.
Now comes the M-LEC, which I believe raises some serious accounting issues. In short, inflating the equity of the banks. You can find my questions on this structure at my blog, Polecolaw .
Keep up the news!
Deloitte was appointed receivers on September 5th. Not much news here.
Deloitte to oversee Cheyne receivership - Accountancy Age
Global Savings Slut,
Holy smokes, I'm amazed anyone remembers me saying that! Based on historical precedence, it's not hard to see that the Fed was able to not only navigate the last K-Winter safely, but actually consolidate power by driving non-member banks out of business. These are very smart people and Bernanke is also very smart. There is a common misconception floating around that the Fed fears deflation and/or depression and will hold no bars to stop it. Why should they considering how they made out during the last one?
The only thing the Fed truly fears is hyperinflation because this is the one and only scenario that puts them out of business and I will challenge anyone on this board to dispute this. Modest inflation or even high inflation and/or a deflationary bust will not put the Fed out of business, and they will not give up power that easily. Now here's where some people will jump in and say that the US Gov debt will prevent the Fed from "allowing" deflation to happen, but this is also a non-starter. The Fed is a private banking cartel and they don't work for the Government! I'm surprised that anybody still believes that they do, based upon the recent Wall St. pigmen rate-cut performance.
Yes, Bernanke has been quoted as saying that the Fed can stop deflation through helicopter drops, but he was speaking acedemically. He was basically saying that there is no way to stop a deflationary credit bust other than through hyperinflation, and this is 100% true. The K-Winter cannot be stopped by any other means. People took this to mean that this is the course of action that the Fed would take, but they're forgetting that this isn't in the best interest of the Fed.
Given all of the above, what better person than the world's premier depression expert to navigate the coming one. Now whether this was by design or sheer luck is debatable but I'm going with the former. Not often do things of this importance occur by chance.
Darth Toll:
I appreciate you taking the time to write such a detailed answer.
Where exactly do you think we are in the K cycle now...I have seen multiple suggestions.
Thx again.
Buddy,
Thanks for the link. Didn't realize it was a TA signal...hello, more coffee please!
Thx
My thoughts on the K-Wave mirror those of theroxylandr exactly and I've found no better synopsis of the subject in layman's terms:
Kondratieff wave
We are at the end of K-Autumn and K-Winter probably began in September, imho. It starts with a modest recession and gains steam from there as the cascading cross-defaults purge the system of all bad debt. Several large states (including Ca) are proven to be in recession based on tax receipts.
Only time will tell for sure but it certainly looks as if the deflationary credit bust has begun.