Countrywide Financial Corp (CFC.N: Quote, Profile, Research) was ordered to turn over internal records to a pension fund that says the mortgage lender may have manipulated stock options granted to top executives.
Talk about keeping the foot on the gas as you run into the wall.
From the article:
(quote)
The ABX index linked to 20 securities from the first half and given the lowest rating of BBB- was quoted today at 37, according to broker GFI Group Inc. It closed yesterday at 37.61, Markit Group Inc. composite prices show. The index rated AA, the second- highest rating, was quoted at about 87 after closing yesterday at 87.82.
Oh, this is far from over. The previous nine months of resets brought us to where we are. The next nine months are brutal in terms of resets. Starting in June we bring in significant Jumbo resets. Gulp! (I'm looking at the BoA reset graph.)
It's all okay. Bennie B. and the CONgreffs won't let those big banks get victimized by the predatory borrowers. They are going to force people to pay by begging, and rolling around on the floor, and by buying those bad old loans that the innocent bankers bought.
ow i know why the pundits are saying the worst is over...
if early '07 tranches are the worst of the worst, and we know that market no longer exists... then the Worst is Over
Neil - There are two graphs for BofA. One thats shpaed liek a bell curve and a more recent one where the resets go to next November. Needless to say both are bad, its just one of them pushes the pain out further. The more recent one is not the bell curve shaped reset chart.
"It is shocking what you see," said Kyle Bass of Hayman Advisors LP, a Dallas-based hedge fund that reported a 400 percent return on its bet the U.S. housing market would fall.
Why do hedge funds always get "returns" on their bets, while suckers in Vegas get "winnings"?
Curious. The article doesn't have any specific numbers.
What do they mean by "eclipse 2006"?
Does anyone have actual numbers?
Just a few weeks ago, these people were saying "we can't base our ratings on the market sentiments." I guess, they are eager to show that they are a bit more forward looking now....
CRE will have a long lag as many of these projects are ongoing and many are far from finished. They will have to be finished before the developers get to the point of taking money out and having to put money in. It will be then, when they are unable to rent or lease or those who agreed to rent or lease default on the contracts before this sector gets creamed.
This may not happen until we are nearing the end of the residential reset collapse.
So this down turn may have as many legs as a millipede.
No surprises; when an institution goes bad, at the end only the real crooks are still doing business. From what I understand, there was little honest way to make money from subprime this year. Why is anybody surprised at this?
"My gut is that car loans and student loans are next to see these trends."
The student loan market mirrors the subprime mortgage market in many disturbing ways. If you're a newbie like me, this article explains why:
Colleges and universities should really be called on the carpet for the whole student loan mess. Students have long since stopped being their main focus.
I went to a nice private liberal arts college that none of you have heard of unless you've got Amish neighbors. I thought it was outrageous when I found out their tuition broke 20k sometime early this decade. Now apparently it's over 30k per year.
If there is any industry in the world that needs to have some HMO type strangle hold put on their spending habits it's the US collegiate system.
What's the point of educating the young if you indebt them for life in the process?
Student loans have a built in bailout dure to guarqanttes by the gubmint. They are guaranteed to about 95-97% of the amount. Further, there is practically no way at all for a person to escape paying a student loan - short of death, and interest accrues during the default. True there has been a large and growing market for uninsured private loans, but the are actually underwritten by lenders who enforce credit standards. Also these private loans cannot be discharged thru BK.
So while student loan payment burdens are onerous and will drag the economy, the lendres will not be hurt, nor the investors in those bonds.
Many students max out the Government backed and take out huge private loans. Government backed student loans don't cover tuition at most private and some public universities.
Perhaps the wild increase in the cost of college has only been a function of easy money, the same phenomenon that propelled housing prices. The colleges could continue to raise fees because the masses were offered a way to "afford" them.
07-2: AAA, AA, A take a hit, BBB's new lows
07-1: AAA, AA, A take a hit, BBB's new lows
06-2: AAA flat, AA & A take a hit, BBB's new lows
06-1: AAA flat, AA & A take a hit, one BBB takes a hit and one BBB new low
Wow, I just checked UCLA and the fees are now over $7700 per quarter ($23,100 per year) for a state resident. When I went there about 20 years ago, it cost about $450 per quarter. Yikes.
Metrics Wonk,
But our president just stepped in to artificially lower interest rates for college loans. Since this had such a lasting positive affect on real estate, Uncle Sam thought he could do the same favor for education.
University of Illinois: in-state tuition, room, board, fees and books -- $26,000.00, give or take a couple hundred.
Direct Loan rate for parent loan - 7% (thanks for the subsidy)
Ouch!
"Wow, I just checked UCLA and the fees are now over $7700 per quarter ($23,100 per year) for a state resident. When I went there about 20 years ago, it cost about $450 per quarter. Yikes."
State of California now pays only 20 percent of the UC budget, that's why. They used to pay most of it; education was considered an investment by the state in its people. No more.
As I recall, UC was basically tuition-free up into the 60s and maybe into the early 70s. I do know that my tuition at San Jose State University (different system) was a big $125 a semester in the mid-70s.
At my middle-of-the-cornfields public university, tuition went from $3500/year in 1996 to $5500/year in 2001 when I graduated. I borrowed every penny of it, and am now sitting on about $17,000 in student loan debt in a fixed 2.25%, 15-year loan. LOL. I think I did ok.
I'm surprised that there is a subprime vintage of 2007 at all. Didn't the subprime industry collapse in Feb/Mar?
Peter T | 10.04.07 - 5:14 pm |
According to the article, most of the loans were 2006 vintage, when the market began to choke last year, the banks held them to the beginning of this year and then securitized (and sold) them. The Securities are from 2007, the loans bundled in the Securities are from 2006.
As an alumni of the U of I system, I get the Alumni magazine. Costs are increasing, but according the the Alumni magazine, their biggest financial problem is the drop in state government funding. State governments are abdicating what in my opinion is one of their most important functions: financing the education of the masses. Elected officials have found another way to stick it to the general public by diverting education money to other pet projects.
The student loan/subprime relationship goes more like this:
1) Borrow $60,000 for college.
2) Get History degree (no offense!).
3) Have trouble finding work.
4) Miss student loan payments
5) Find work eventually
6) Get Subprime loa
According to 'One Stop'... U Minnesota isn't expensive at all... about $4000 tuition per semester for most in-state undergrads. Throw in about a $1000 in fees and it comes to about $10000/year.
Since about 75% of the students are 'commuters' the room & board varies a lot. If you live at home with the folks it's gas money & parking... nothing. Have your own 'swank pad' and it gets real pricey (U of MN is in the middle of the Twin Cities & rent isn't cheap there).
Perhaps the wild increase in the cost of college has only been a function of easy money, the same phenomenon that propelled housing prices. The colleges could continue to raise fees because the masses were offered a way to "afford" them.
Deb says little, but what she says is so right it tears a hole in my heart.
No trolls came before me??? first.
Barefoot Bankhead -- LOL.
Countrywide ordered to provide internal records
Countrywide ordered to provide internal records
| Reuters
Countrywide Financial Corp (CFC.N: Quote, Profile, Research) was ordered to turn over internal records to a pension fund that says the mortgage lender may have manipulated stock options granted to top executives.
Is this really a surprise? Are we really that shocked? Its going to get worse before it gets better.
Talk about keeping the foot on the gas as you run into the wall.
From the article:
(quote)
The ABX index linked to 20 securities from the first half and given the lowest rating of BBB- was quoted today at 37, according to broker GFI Group Inc. It closed yesterday at 37.61, Markit Group Inc. composite prices show. The index rated AA, the second- highest rating, was quoted at about 87 after closing yesterday at 87.82.
(end quote)
Neal,
Thanks for the ABX update.
Oh, this is far from over. The previous nine months of resets brought us to where we are. The next nine months are brutal in terms of resets. Starting in June we bring in significant Jumbo resets. Gulp! (I'm looking at the BoA reset graph.)
Got popcorn?
Neil
Unbelievable!
It's all okay. Bennie B. and the CONgreffs won't let those big banks get victimized by the predatory borrowers. They are going to force people to pay by begging, and rolling around on the floor, and by buying those bad old loans that the innocent bankers bought.
ow i know why the pundits are saying the worst is over...
if early '07 tranches are the worst of the worst, and we know that market no longer exists... then the Worst is Over
wait a second...this guy says it's shocking, and the other guy says it's boring and predictable?
Booksigning today by Alan Greenspan
Booksigning today by Alan Greenspan (Comics)
My gut is that car loans and student loans are next to see these trends.
It's not over until the last American debtor goes bankrupt!
Neil - There are two graphs for BofA. One thats shpaed liek a bell curve and a more recent one where the resets go to next November. Needless to say both are bad, its just one of them pushes the pain out further. The more recent one is not the bell curve shaped reset chart.
CRE next. No iffs and buts.
Vested interest AND tne truth...refreshing
CRE has about a 5 quarter lag. There is already weakness in that market.
"It is shocking what you see," said Kyle Bass of Hayman Advisors LP, a Dallas-based hedge fund that reported a 400 percent return on its bet the U.S. housing market would fall.
Why do hedge funds always get "returns" on their bets, while suckers in Vegas get "winnings"?
Citizens Banking Co. takes on Miami Valley deposits
Ohio regulators close Miami Valley Bank; FDIC appointed receiver
Ohio bank closed by state regulator - MarketWatch
Curious. The article doesn't have any specific numbers.
What do they mean by "eclipse 2006"?
Does anyone have actual numbers?
Just a few weeks ago, these people were saying "we can't base our ratings on the market sentiments." I guess, they are eager to show that they are a bit more forward looking now....
CRE will have a long lag as many of these projects are ongoing and many are far from finished. They will have to be finished before the developers get to the point of taking money out and having to put money in. It will be then, when they are unable to rent or lease or those who agreed to rent or lease default on the contracts before this sector gets creamed.
This may not happen until we are nearing the end of the residential reset collapse.
So this down turn may have as many legs as a millipede.
This word shocking... I do not think it means what he thinks it means.
In May this prediction would be shocking. If you're surprised by this in October then you apparently weren't paying attention.
No surprises; when an institution goes bad, at the end only the real crooks are still doing business. From what I understand, there was little honest way to make money from subprime this year. Why is anybody surprised at this?
"My gut is that car loans and student loans are next to see these trends."
The student loan market mirrors the subprime mortgage market in many disturbing ways. If you're a newbie like me, this article explains why:
Business Week Online > File Not Found
Colleges and universities should really be called on the carpet for the whole student loan mess. Students have long since stopped being their main focus.
I went to a nice private liberal arts college that none of you have heard of unless you've got Amish neighbors. I thought it was outrageous when I found out their tuition broke 20k sometime early this decade. Now apparently it's over 30k per year.
If there is any industry in the world that needs to have some HMO type strangle hold put on their spending habits it's the US collegiate system.
What's the point of educating the young if you indebt them for life in the process?
Student loans have a built in bailout dure to guarqanttes by the gubmint. They are guaranteed to about 95-97% of the amount. Further, there is practically no way at all for a person to escape paying a student loan - short of death, and interest accrues during the default. True there has been a large and growing market for uninsured private loans, but the are actually underwritten by lenders who enforce credit standards. Also these private loans cannot be discharged thru BK.
So while student loan payment burdens are onerous and will drag the economy, the lendres will not be hurt, nor the investors in those bonds.
Many students max out the Government backed and take out huge private loans. Government backed student loans don't cover tuition at most private and some public universities.
Maybe if I had taken one out I could have learned to spell??
Perhaps the wild increase in the cost of college has only been a function of easy money, the same phenomenon that propelled housing prices. The colleges could continue to raise fees because the masses were offered a way to "afford" them.
October 4, 2007 ABX roundup:
07-2: AAA, AA, A take a hit, BBB's new lows
07-1: AAA, AA, A take a hit, BBB's new lows
06-2: AAA flat, AA & A take a hit, BBB's new lows
06-1: AAA flat, AA & A take a hit, one BBB takes a hit and one BBB new low
If Subprime Delinquencies keep Accelerating they will be in default before they even close.
Though I shunned spelling class, between 2000 and 2004, my school raised tuition 10% a year. Right there with housing.
Wow, I just checked UCLA and the fees are now over $7700 per quarter ($23,100 per year) for a state resident. When I went there about 20 years ago, it cost about $450 per quarter. Yikes.
Metrics Wonk,
But our president just stepped in to artificially lower interest rates for college loans. Since this had such a lasting positive affect on real estate, Uncle Sam thought he could do the same favor for education.
University of Illinois: in-state tuition, room, board, fees and books -- $26,000.00, give or take a couple hundred.
Direct Loan rate for parent loan - 7% (thanks for the subsidy)
Ouch!
I'm surprised that there is a subprime vintage of 2007 at all. Didn't the subprime industry collapse in Feb/Mar?
TC- the ucla figures are just tuition!!! for a PUBLIC university! $23,000++
TC- the ucla figures are just tuition!!! for a PUBLIC university! $23,000++
deb | 10.04.07 - 5:20 pm | #
Tuition only!! Holy S***! and I thought U of I (also public) was bad (and it is)
Of course, U of I is in the middle of corn fields, not one mile from Beverly Hills.
Inflation at a reasonable 3% per year, BS!!!!
"Wow, I just checked UCLA and the fees are now over $7700 per quarter ($23,100 per year) for a state resident. When I went there about 20 years ago, it cost about $450 per quarter. Yikes."
State of California now pays only 20 percent of the UC budget, that's why. They used to pay most of it; education was considered an investment by the state in its people. No more.
As I recall, UC was basically tuition-free up into the 60s and maybe into the early 70s. I do know that my tuition at San Jose State University (different system) was a big $125 a semester in the mid-70s.
Metrics Wonk | 10.04.07 - 4:14 pm |
You went to F&M
At my middle-of-the-cornfields public university, tuition went from $3500/year in 1996 to $5500/year in 2001 when I graduated. I borrowed every penny of it, and am now sitting on about $17,000 in student loan debt in a fixed 2.25%, 15-year loan. LOL. I think I did ok.
ChicagoDude,
That's one loan you don't want to pre-pay HA!
I'm surprised that there is a subprime vintage of 2007 at all. Didn't the subprime industry collapse in Feb/Mar?
Peter T | 10.04.07 - 5:14 pm |
According to the article, most of the loans were 2006 vintage, when the market began to choke last year, the banks held them to the beginning of this year and then securitized (and sold) them. The Securities are from 2007, the loans bundled in the Securities are from 2006.
Public education, including all Universities, is absolutely free in Germany, even to foreigners.
As an alumni of the U of I system, I get the Alumni magazine. Costs are increasing, but according the the Alumni magazine, their biggest financial problem is the drop in state government funding. State governments are abdicating what in my opinion is one of their most important functions: financing the education of the masses. Elected officials have found another way to stick it to the general public by diverting education money to other pet projects.
Way back when it cost me exactly zero for 5 years of college and, in fact, they owed me when I graduated.
You can still get those kind of scholarships if you are good in sports (ie, football) - and I was.
This is extremely bad and ominous news.
The student loan/subprime relationship goes more like this:
1) Borrow $60,000 for college.
2) Get History degree (no offense!).
3) Have trouble finding work.
4) Miss student loan payments
5) Find work eventually
6) Get Subprime loa
According to 'One Stop'... U Minnesota isn't expensive at all... about $4000 tuition per semester for most in-state undergrads. Throw in about a $1000 in fees and it comes to about $10000/year.
Since about 75% of the students are 'commuters' the room & board varies a lot. If you live at home with the folks it's gas money & parking... nothing. Have your own 'swank pad' and it gets real pricey (U of MN is in the middle of the Twin Cities & rent isn't cheap there).
Overall it is still pretty affordable for most.
Perhaps the wild increase in the cost of college has only been a function of easy money, the same phenomenon that propelled housing prices. The colleges could continue to raise fees because the masses were offered a way to "afford" them.
Deb says little, but what she says is so right it tears a hole in my heart.
That can only be filled by more cowbell.
Cheers,
prat