Today- in economic reporting, everything is spin. Excuses for this or that-
Those doing most the so called 'analysis'
have vested interests in selling equities to the gullible and at times mostly uninformed public- Therefore a objectivity has been abandoned for Spin.
Shouldn't cold weather boost the sale of winter clothing giving them higher comps. At least that is how their spin works. From weekly ICSC sales numbers one can gather that consumer is rolling over, spin or no spin.
I think Bloomedberg is definitely guilty of marketing or infomercials. This one is actually verifiable, yes? Were weather conditions adverse throughout the entire large metro areas of the US in this period? Were there similar periods in the past that had correspondingly poor retail sales?
But people are too complacent...and frankly, I have better things to do than chase this one down, you?
I can wait for more evidence, but for you guys shorting the retailers, maybe not.
Quite a devastating statistic for Walmart: "Wal-Mart said U.S. comparable-store sales rose 3.9 percent at Sam's Club stores last month, and 0.4 percent at Wal-Mart stores. Argentina, Brazil, China, Mexico and the U.K. led a 19 percent increase in total international revenue."
Interestingly, the weather in February did not affect sales at luxury stores (another Bloomberg article): "Luxury department stores exceeded estimates. Seattle-based Nordstrom Inc. said comparable sales surged 9.1 percent, beating an analyst forecast for a 5.7 percent increase. Saks Inc. based in Birmingham, Alabama, yesterday said its sales soared 25 percent, more than triple what analysts estimated. Neiman Marcus Group Inc., based in Dallas, said sales gained 6.7 percent."
"Weather" is the grown-up version of the dog ate my assignment. Could be true, could be a way to buy time, could be a lie. Our Feb heating bill was 5x larger than a typical Feb $50 instead of $10 so it was damn cold in SoCal but what I see in my clients is a real reigning in of consumption. Batten down the hatches is the impression I get.
"Softness in clothing and home goods" is not good for WalMart. Those are the high-margin items. They probabaly break even on Health & Beauty just to get traffic in the store. Best Buy etc. competition has dropped the margins on electronics.
These are the FDIC's definitions of adversely classified loans:
Substandard - Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected.
Translation: the underwriting of the loan sucked, but they'll probably repay. If they don't repay, the sucky underwriting will result in less than satisfactory recovery.
Doubtful - Loans classified Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.
Translation: You can guess that a Substandard loan is a problem. You actually know that a Doubtful loan is a problem. The extent of the problem, however, is unclear at this time.
Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.
Translation: Dead puppy. The only way anyone will recover anything is through liquidation of REO, or possibly suing someone.
For those of you playing along at home, "classification" of loans involves putting them into categories or classes for purposes of estimating allowances for loan losses (reserves) and capital requirements, as well as for determining safety and soundness ratings.
Special Mention Assets
Definition - A Special Mention asset has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution's credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.
Translation: We suggest you folks go buy some mortgage insurance on these dogs, just in case.
I'm sorry, but didn't we have an online retailing revolution that meant that I would be able to spend myself into oblivion without having to go out in the rain, not to mention the snow and the sleet? Do the rest of you remember that? Was I, like, dreaming?
Go click on CR's new advertiser links, and discover how you can get MEW without having to get out of your jammies, let alone having to put a coat on and go outside.
I have been researching sales tax receipts as I look for a clue to consumer spending. I have gotten the 7 largest states based on 2005 GDP. They are listed in decreasing order
CA
TX
NY
FL
IL
PA
OH
The above account for 42% of GDP. The contrast between and even with states is remarkable. New York City is smoking hot while NY State appears to be in a depression. I have used a 3 month moving average and compared it to the prior year 3 month moving average. I have used the moving average as some retailers have to submit receipts on a monthly basis and others on a quarterly basis. Some make prepayments etc. But everyone generally has to square up on a quarterly basis. Here are the results so far:
3.10%\t08/06
2.24%\t09/06
3.46%\t10/06
4.41%\t11/06
4.01%\t12/06
1.85%\t01/07
The 3 month moving avg for Nov-Dec-Jan was only 1.85% higher than the same period in the prior years, clearly below the level of inflation. From the table above one can see it appears that we had a significant slowdown in January in consumer spending.
Yeah, well, I'm just a little ray of sunshine today. My digging and polling is producing only piles of evidence that bigger businesses are cutting costs in a big way, indicating that the experience of the Walmart segment of the population is about to align with the experience of the JC Penney portion of the population. Because small business is very derivative of big business, a more gradual cutting cycle would be required to get the small business expansion I was hoping for and for which I have been seeing early evidence.
Here's one sample. Motorola - major cut to defined benefit pensions, major change in bonuses, significant engineering layoffs pending late spring/early summer.
Unless I can find a pony in this pile of dung somewhere, I'll be calling this a contractionary spiral sometime next week.
It ain't looking too good for the money boys on the Street either. I'm dealing with my mother's estate right now, and everywhere I go people are asking me for advice on their 401K's.
ww, thank you very much. That was my next miserable data check. Everything I see is pointing toward contraction. Particularly disturbing is that higher gas prices indicate a reinforcement of this trend at the present time.
Yeah, I saw that California already has high prices. I think the $3 figure was a national average. The DOE has a chart, it shows prices are up $.12 this week and $.17 from last year.
Off topic
MaxedOutMomma
Just a suggestion. When it comes to 401k, look for books by Ed Slott (Amazon has them). They provide the details on how to handle them and where the pitfalls are. The one I read completely was the Retirement Timb Bomb, and I have yet to find anyone that has such detailed info.
My prior would be that Walmart and its products are generally inferior goods, and that receipts would increase as the economy worsens, not the other way around. Is there any data on whether Walmart's fortunes are pro-cyclical or counter-cyclical?
An "investment advisor" just told me that Fannie Mae and Freddie Mac cannot default on their bonds, specifically that their bonds are backed by the US Treasury, by a line of credit of $300 billion at the US Treasury.
In other words, if you hold a bond from Fannie Mae backed by mortgages that are worthless, that bond will be paid off by the US Treasury.
Is any of that correct? I thought there were a few maybe's in there.
The Debt Securities, together with interest thereon,
are not guaranteed by the United States and do not
constitute a debt or obligation of the United States
or of any agency or instrumentality thereof other
than Fannie Mae.
Fannie Mae, Universal Debt Facility Offering Circular, January 22, 2002. Fannie Mae
The Debt Securities, together with interest thereon,
are not guaranteed by the United States and do not
constitute a debt or obligation of the United States
or of any agency or instrumentality thereof other
than Fannie Mae.
Fannie Mae, Universal Debt Facility Offering Circular, January 22, 2002. Fannie Mae
Agency debt is bought courtesy of our friends the Chinese who also are major purchases of tbills...is there no end to the kindness of strangers? [The Veep thinks so, (that "inappropriately large" Chinese military budget) but he also thinks big shot lawyers need constant supervision.]
A default on these bonds, ie an outcome that showed these bonds were not "guaranteed", is unthinkable.
arbogast, Fannie and Freddie's securities are backed by mortgage loans, which are in turn supported by guarantee fees (a kind of excess interest reserve), mortgage insurance, and reps and warranties of the originating lenders. They are not going to become "worthless" any time soon. However, the thing about F&F MBS is that they are guaranteed to the buyer of the security. That means that F&F guarantee the timely payment of principal and interest to the investor. If the underlying loans default, F&F make the investor whole on principal (and recover as much as it can from the REO and any mortgage insurer). There is, therefore, no credit risk to the buyer of a Fannie/Freddie MBS. There is and has always been credit risk to the buyers of private issue securities. They are different.
F&F debt issues are the sole obligation of F&F, not the federal government. F&F are privately owned companies, and creditors can go after them (and their shareholders) just like in any other case of a defaulted debt issue, should either of them default.
What makes them different is that they each have a special emergency line of credit with the Treasury. The idea behind that is, basically, that in the event of extraordinary financial termoil, F&F could keep the residential mortgage market afloat by drawing on its Treasury line if it needed to. This is why Fannie and Freddie have their own special regulator. As they have this Treasury facility that no other mortgage companies have, they have these regulators that no other mortgage companies have. It is called OFHEO. Anyone who wants to discuss the wisdom of this arrangement is cordially invited to do so. But it just pisses me off that so many people want to do so without first understanding even the basic details of how it works.
All of this is different from Ginnie Mae (which securitizes FHA and VA loans). Ginne is not a private company and does not issue debt. Its securities are backed by the full faith and credit of the United States. No Ginne Mae security has ever defaulted, and the full faith and credit has never been invoked. FHA and VA loans are insured (FHA) or partially guaranteed (VA) by the agencies that administer those loans. FHA borrowers pay mortgage insurance premiums to fund that coverage. VA provides its guarantees out of appropriations for veteran/active duty benefits. As guarantor of securities, Ginnie would never need to draw on the government until those other sources of guaranty are exhausted and the loans liquidated.
Nothing personal, but I'm getting really tired of posting this explanation over and over again. What is it with the GSE thing that breaks people's Google fingers?
That's a little broader than MEW, REBear, no? Looks like state and local governments (and Business somewhat) made up for the retreat (ok slowing) in Household debt. Is this because property taxes fell short of projections with a surprising number of foreclosures?
But increasing Business debt...all those newly crafted Professional Servicers I suppose needing some seed money?
Maybe.
arbogast, it all depends on what "is", is. And don`t make me say that again. BTW, one can get a VA loan without being a veteran or on active duty. (when you buy a "Va home") If anyone needs more info., let me know.
BusinessWeek has learned that $700 million Carrington Capital and $3 billion Greenlight Capital may have gotten badly burned because of their intricate dealings with New Century Financial, a major subprime lender whose stock has plunged 84% in four weeks amid a Justice Dept. investigations into its accounting. Magnetar Capital, a $4 billion fund formed two years ago, may be on shaky ground, too. The question is, how many others may be suffering? "This is a very opaque industry, so no one really knows," says Mark M. Zandi, chief economist and co-founder of Moody's Economy.com (MCO) "My guess is that if you look at the top hedge funds, they're bearing most of the risk."
"Perkins also said major concerns for consumer spending in the months ahead are the defaults and delinquencies in the mortgage industry. That, coupled with the decline of mortgage equity withdrawals that give consumers extra cash, could curtail spending."
Is it just me or does this quote give the impression that retailers expect folks to use home equity to go shopping these days? What ever happened to the good old days when you got a paycheck, paid the rent and utilities first, then went to the mall to buy (with cash) lots of stuff you didn't really need?
Bailey, our esteemed host provides a Google search feature on his site. You can search "Tanta" and get all her wisdom on one page suitable for framing.
Great story about Terry Bradshaw's first experience broadcasting fball games. Every game he'd invent a player, saying stuff like, so-and-so just came out of nowhere to make that great tackle. I think he went weeks without ever being called on it. Hilarious, but not nearly as much fun as your intermittent splices. Stay well.
No big surprises here, but the stat on the time frame in which they hit the wall is an interesting data point.
"Nonbank lenders lead foreclosure data
Denver Post
The standard profile of a mortgage that went into foreclosure in Colorado last year: an adjustable-rate loan with an average value of $202,000 made by a nonbank lender between 2003 to 2005.
That's the conclusion of a survey of 374 randomly chosen foreclosure filings released Wednesday by the Colorado Banker's Association.
Only about 22 percent of foreclosed loans in the study were originated by a bank or bank affiliate.
The CBA study found that the average age of a loan going into foreclosure was only 2.8 years, and that borrowers had paid down 3 percent of the mortgage amount. Nearly 8 out of 10 of the foreclosures involved adjustable-rate mortgages."
"New Century Halts Production
Our New Century rep just informed us that they have halted all production and that they are no longer purchasing any loans.
This is lovely, seeing as my company already has notes out to them that now need to find new homes."
F&F debt issues are the sole obligation of F&F, not the federal government. F&F are privately owned companies, and creditors can go after them (and their shareholders) just like in any other case of a defaulted debt issue, should either of them default.
Which is why there is credit risk for F&F creditors unless the government steps in.
When it is 70 degrees and sunny, we'll hear that sales are down because "who wants to shop in such nice weather?"
Valentines day got folks out of the stores.
Tanta,
Can you play babblefish on regulatorese? What is the English translation of "substandard" as it relates to FMT's loans?
Today- in economic reporting, everything is spin. Excuses for this or that-
Those doing most the so called 'analysis'
have vested interests in selling equities to the gullible and at times mostly uninformed public- Therefore a objectivity has been abandoned for Spin.
Shouldn't cold weather boost the sale of winter clothing giving them higher comps. At least that is how their spin works. From weekly ICSC sales numbers one can gather that consumer is rolling over, spin or no spin.
I think Bloomedberg is definitely guilty of marketing or infomercials. This one is actually verifiable, yes? Were weather conditions adverse throughout the entire large metro areas of the US in this period? Were there similar periods in the past that had correspondingly poor retail sales?
But people are too complacent...and frankly, I have better things to do than chase this one down, you?
I can wait for more evidence, but for you guys shorting the retailers, maybe not.
Quite a devastating statistic for Walmart:
"Wal-Mart said U.S. comparable-store sales rose 3.9 percent at Sam's Club stores last month, and 0.4 percent at Wal-Mart stores. Argentina, Brazil, China, Mexico and the U.K. led a 19 percent increase in total international revenue."
Interestingly, the weather in February did not affect sales at luxury stores (another Bloomberg article):
"Luxury department stores exceeded estimates. Seattle-based Nordstrom Inc. said comparable sales surged 9.1 percent, beating an analyst forecast for a 5.7 percent increase. Saks Inc. based in Birmingham, Alabama, yesterday said its sales soared 25 percent, more than triple what analysts estimated. Neiman Marcus Group Inc., based in Dallas, said sales gained 6.7 percent."
It only snows on poor people.
calmo,
I don't know how much of an impact it really had, but this article says it was the coldest February since 1979.
"Weather" is the grown-up version of the dog ate my assignment. Could be true, could be a way to buy time, could be a lie. Our Feb heating bill was 5x larger than a typical Feb $50 instead of $10 so it was damn cold in SoCal but what I see in my clients is a real reigning in of consumption. Batten down the hatches is the impression I get.
"Softness in clothing and home goods" is not good for WalMart. Those are the high-margin items. They probabaly break even on Health & Beauty just to get traffic in the store. Best Buy etc. competition has dropped the margins on electronics.
These are the FDIC's definitions of adversely classified loans:
Substandard - Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected.
Translation: the underwriting of the loan sucked, but they'll probably repay. If they don't repay, the sucky underwriting will result in less than satisfactory recovery.
Doubtful - Loans classified Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.
Translation: You can guess that a Substandard loan is a problem. You actually know that a Doubtful loan is a problem. The extent of the problem, however, is unclear at this time.
Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.
Translation: Dead puppy. The only way anyone will recover anything is through liquidation of REO, or possibly suing someone.
For those of you playing along at home, "classification" of loans involves putting them into categories or classes for purposes of estimating allowances for loan losses (reserves) and capital requirements, as well as for determining safety and soundness ratings.
Special Mention Assets
Definition - A Special Mention asset has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution's credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.
Translation: We suggest you folks go buy some mortgage insurance on these dogs, just in case.
http://www.fdic.gov/regulations/safety/manual/section3-2.html#loanAppraisal
I'm sorry, but didn't we have an online retailing revolution that meant that I would be able to spend myself into oblivion without having to go out in the rain, not to mention the snow and the sleet? Do the rest of you remember that? Was I, like, dreaming?
Go click on CR's new advertiser links, and discover how you can get MEW without having to get out of your jammies, let alone having to put a coat on and go outside.
For March, retail sales may be challanged by higher gas prices, I read one prediction of $3/gallon by summer.
Is this what they mean by the Goldilocks economy - one based entirely on the weather? Too hot... Too cold ... Just right...
Bob: $3 a gallon is a now rate in Sonoma and other areas in the Bay area.
Thanks MOM for reminding us about the wealth gradient and why WalMart stats are significant in context.
You can be my news provider any day.
Momberg. Looking out for your interests, not your wallet.'
I like it.
I have been researching sales tax receipts as I look for a clue to consumer spending. I have gotten the 7 largest states based on 2005 GDP. They are listed in decreasing order
CA
TX
NY
FL
IL
PA
OH
The above account for 42% of GDP. The contrast between and even with states is remarkable. New York City is smoking hot while NY State appears to be in a depression. I have used a 3 month moving average and compared it to the prior year 3 month moving average. I have used the moving average as some retailers have to submit receipts on a monthly basis and others on a quarterly basis. Some make prepayments etc. But everyone generally has to square up on a quarterly basis. Here are the results so far:
3.10%\t08/06
2.24%\t09/06
3.46%\t10/06
4.41%\t11/06
4.01%\t12/06
1.85%\t01/07
The 3 month moving avg for Nov-Dec-Jan was only 1.85% higher than the same period in the prior years, clearly below the level of inflation. From the table above one can see it appears that we had a significant slowdown in January in consumer spending.
Yeah, well, I'm just a little ray of sunshine today. My digging and polling is producing only piles of evidence that bigger businesses are cutting costs in a big way, indicating that the experience of the Walmart segment of the population is about to align with the experience of the JC Penney portion of the population. Because small business is very derivative of big business, a more gradual cutting cycle would be required to get the small business expansion I was hoping for and for which I have been seeing early evidence.
Here's one sample. Motorola - major cut to defined benefit pensions, major change in bonuses, significant engineering layoffs pending late spring/early summer.
Unless I can find a pony in this pile of dung somewhere, I'll be calling this a contractionary spiral sometime next week.
It ain't looking too good for the money boys on the Street either. I'm dealing with my mother's estate right now, and everywhere I go people are asking me for advice on their 401K's.
ww, thank you very much. That was my next miserable data check. Everything I see is pointing toward contraction. Particularly disturbing is that higher gas prices indicate a reinforcement of this trend at the present time.
thanks ww
Ron,
Yeah, I saw that California already has high prices. I think the $3 figure was a national average. The DOE has a chart, it shows prices are up $.12 this week and $.17 from last year.
Well, now.
Where the elites live and work, DC and New York City are hot hot hot. So we get the news that all is well.
MSN picking up on CR's theme about housing related layoffs. The author is quoting 50-75K losses per month.
Weak housing market weighs on job growth - Eye on the Economy- msnbc.com
Off topic
MaxedOutMomma
Just a suggestion. When it comes to 401k, look for books by Ed Slott (Amazon has them). They provide the details on how to handle them and where the pitfalls are. The one I read completely was the Retirement Timb Bomb, and I have yet to find anyone that has such detailed info.
My prior would be that Walmart and its products are generally inferior goods, and that receipts would increase as the economy worsens, not the other way around. Is there any data on whether Walmart's fortunes are pro-cyclical or counter-cyclical?
An "investment advisor" just told me that Fannie Mae and Freddie Mac cannot default on their bonds, specifically that their bonds are backed by the US Treasury, by a line of credit of $300 billion at the US Treasury.
In other words, if you hold a bond from Fannie Mae backed by mortgages that are worthless, that bond will be paid off by the US Treasury.
Is any of that correct? I thought there were a few maybe's in there.
The Debt Securities, together with interest thereon,
are not guaranteed by the United States and do not
constitute a debt or obligation of the United States
or of any agency or instrumentality thereof other
than Fannie Mae.
Fannie Mae, Universal Debt Facility Offering Circular, January 22, 2002.
Fannie Mae
The Debt Securities, together with interest thereon,
are not guaranteed by the United States and do not
constitute a debt or obligation of the United States
or of any agency or instrumentality thereof other
than Fannie Mae.
Fannie Mae, Universal Debt Facility Offering Circular, January 22, 2002.
Fannie Mae
There was a whole series of post about the implicit guarantee for Freddie and Fannie by the Fed on Home - Housing Doom
I suggest everyone read it.
There was a whole series of post about the implicit guarantee for Freddie and Fannie by the Fed on Home - Housing Doom
I suggest everyone read it.
Agency debt is bought courtesy of our friends the Chinese who also are major purchases of tbills...is there no end to the kindness of strangers? [The Veep thinks so, (that "inappropriately large" Chinese military budget) but he also thinks big shot lawyers need constant supervision.]
A default on these bonds, ie an outcome that showed these bonds were not "guaranteed", is unthinkable.
This year's theme song
Milli Vanilli - Blame It On The Rain
YouTube - Milli Vanilli - Blame It On The Rain
arbogast, Fannie and Freddie's securities are backed by mortgage loans, which are in turn supported by guarantee fees (a kind of excess interest reserve), mortgage insurance, and reps and warranties of the originating lenders. They are not going to become "worthless" any time soon. However, the thing about F&F MBS is that they are guaranteed to the buyer of the security. That means that F&F guarantee the timely payment of principal and interest to the investor. If the underlying loans default, F&F make the investor whole on principal (and recover as much as it can from the REO and any mortgage insurer). There is, therefore, no credit risk to the buyer of a Fannie/Freddie MBS. There is and has always been credit risk to the buyers of private issue securities. They are different.
F&F debt issues are the sole obligation of F&F, not the federal government. F&F are privately owned companies, and creditors can go after them (and their shareholders) just like in any other case of a defaulted debt issue, should either of them default.
What makes them different is that they each have a special emergency line of credit with the Treasury. The idea behind that is, basically, that in the event of extraordinary financial termoil, F&F could keep the residential mortgage market afloat by drawing on its Treasury line if it needed to. This is why Fannie and Freddie have their own special regulator. As they have this Treasury facility that no other mortgage companies have, they have these regulators that no other mortgage companies have. It is called OFHEO. Anyone who wants to discuss the wisdom of this arrangement is cordially invited to do so. But it just pisses me off that so many people want to do so without first understanding even the basic details of how it works.
All of this is different from Ginnie Mae (which securitizes FHA and VA loans). Ginne is not a private company and does not issue debt. Its securities are backed by the full faith and credit of the United States. No Ginne Mae security has ever defaulted, and the full faith and credit has never been invoked. FHA and VA loans are insured (FHA) or partially guaranteed (VA) by the agencies that administer those loans. FHA borrowers pay mortgage insurance premiums to fund that coverage. VA provides its guarantees out of appropriations for veteran/active duty benefits. As guarantor of securities, Ginnie would never need to draw on the government until those other sources of guaranty are exhausted and the loans liquidated.
Nothing personal, but I'm getting really tired of posting this explanation over and over again. What is it with the GSE thing that breaks people's Google fingers?
Video: The housing mess as it unfolds
Video Library - cbs5.com
More deceptive "Goldilocks" spin from MarketWatch.
http://www.marketwatch.com/news/story/net-worth-rises-101-rate/story.aspx?guid={EAD9F240-5FFB-486F-BCEF-55C0378D36C3}&siteid=myyahoo&dist=myyahoo
Sebastia
Anthony Fleming: Maybe Fab Morvan can lipsync during the half-time show on C-SPAN the next time Bernanke testifies in front of Congress?
Girl, you know it's --
Girl, you know it's --
Girl, you know it's --
4th quarter MEW
http://www.federalreserve.gov/releases/z1/current/z1.pdf
But Gertie, we LOVE your explanations! How about asking CR to add a few search-by-subject links to your oldies but very goodies??
That's a little broader than MEW, REBear, no? Looks like state and local governments (and Business somewhat) made up for the retreat (ok slowing) in Household debt. Is this because property taxes fell short of projections with a surprising number of foreclosures?
But increasing Business debt...all those newly crafted Professional Servicers I suppose needing some seed money?
Maybe.
I dunno, bailey. I'm thinking seriously about just starting to make shit up to make people start Googling to catch me. Heh.
arbogast, it all depends on what "is", is. And don`t make me say that again. BTW, one can get a VA loan without being a veteran or on active duty. (when you buy a "Va home") If anyone needs more info., let me know.
New Century has fallen almost 90 cents in the last 30 minutes. There is chatter of a chapter 11 filing, but that is just rumor at this point.
calmo,
To tell you the truth i don't understand 95% of what's in that document. I was hoping some of you would translate it for me
Greenlight's Einhorn resigns from New Century board
Greenlight's Einhorn resigns from New Century board - MarketWatch
More interesting is this...
BusinessWeek has learned that $700 million Carrington Capital and $3 billion Greenlight Capital may have gotten badly burned because of their intricate dealings with New Century Financial, a major subprime lender whose stock has plunged 84% in four weeks amid a Justice Dept. investigations into its accounting. Magnetar Capital, a $4 billion fund formed two years ago, may be on shaky ground, too. The question is, how many others may be suffering? "This is a very opaque industry, so no one really knows," says Mark M. Zandi, chief economist and co-founder of Moody's Economy.com (MCO) "My guess is that if you look at the top hedge funds, they're bearing most of the risk."
The Mortgage Mess Spreads
I love those smart money guys. May their tribe increase!
Jan 07 tempuratures:
http://www.noaanews.noaa.gov/stories2007/images/jan2007-temp-ranks.jpg
"Perkins also said major concerns for consumer spending in the months ahead are the defaults and delinquencies in the mortgage industry. That, coupled with the decline of mortgage equity withdrawals that give consumers extra cash, could curtail spending."
Is it just me or does this quote give the impression that retailers expect folks to use home equity to go shopping these days? What ever happened to the good old days when you got a paycheck, paid the rent and utilities first, then went to the mall to buy (with cash) lots of stuff you didn't really need?
Bailey, our esteemed host provides a Google search feature on his site. You can search "Tanta" and get all her wisdom on one page suitable for framing.
Does anyone know what just happened to make NEW stock puke?
Just heard on CNBC rumors of Chapter 11 for NEW.
Well, in the first place, having Tanta reply to a post is a lot like having Scarlett Johansson answer an e-mail. I am grateful.
And, I confess, I did not Google it. But, I must say that even if I had, I would have still needed Tanta's post.
U.S. Mortgage out of NV filed for BK on Friday. Anybody heard of them.
NEW stock is taking a huge dive!
From the Mortgage Gapevine:
WMC Closing some offices right now
Mortgage Grapevine: WMC Closing some offices right now
Great story about Terry Bradshaw's first experience broadcasting fball games. Every game he'd invent a player, saying stuff like, so-and-so just came out of nowhere to make that great tackle. I think he went weeks without ever being called on it. Hilarious, but not nearly as much fun as your intermittent splices. Stay well.
No big surprises here, but the stat on the time frame in which they hit the wall is an interesting data point.
"Nonbank lenders lead foreclosure data
Denver Post
The standard profile of a mortgage that went into foreclosure in Colorado last year: an adjustable-rate loan with an average value of $202,000 made by a nonbank lender between 2003 to 2005.
That's the conclusion of a survey of 374 randomly chosen foreclosure filings released Wednesday by the Colorado Banker's Association.
Only about 22 percent of foreclosed loans in the study were originated by a bank or bank affiliate.
The CBA study found that the average age of a loan going into foreclosure was only 2.8 years, and that borrowers had paid down 3 percent of the mortgage amount. Nearly 8 out of 10 of the foreclosures involved adjustable-rate mortgages."
Nonbank lenders lead foreclosure data - The Denver Post
Boy that Mortgage Grapevine has some edumacated righters...
...losing there jobs as I right this
From Blown Mortgage:
"New Century Halts Production
Our New Century rep just informed us that they have halted all production and that they are no longer purchasing any loans.
This is lovely, seeing as my company already has notes out to them that now need to find new homes."
http://blownmortgage.typepad.com/blownmortgage_blog/
F&F debt issues are the sole obligation of F&F, not the federal government. F&F are privately owned companies, and creditors can go after them (and their shareholders) just like in any other case of a defaulted debt issue, should either of them default.
Which is why there is credit risk for F&F creditors unless the government steps in.