"we did see some negative credit trends among U.S. consumers during December, particularly in California, Florida and other parts of the country most affected by the housing downturn."
You know these times are really eye opening for all those who believed or still believe in universal truths:
--Home prices have never fallen, so they never will (Greenspan et al).
--Stock markets are forward looking (which is why we hit dow 14000 and six months later we are expecting 50bp to prevent the recession no one believes will happen).
--Wallstreet knows what it is doing (as CEO after CEO are shown the door)
--Stocks return 8% over time (as the S&P has returned less than a CD including dividends over the last decade).
--The Fed knows more about the economy than the Average Joe (as Greenspan calls the bottom in housing in Oct 06, and Bernanke failed to see spillover from subprime).
If the disruption in the markets was just about subprime and the credit crunch, how is it the average joe has now decided to spend less and not pay back debts?
O/T - but relevant...It is hard to get cashola at any price:
NEW YORK, Jan 10 (Reuters) - A planned $1 billion debt sale by MBIA Inc (MBI.N: Quote, Profile, Research) may be delayed until next week, investors familiar with the offering said on Thursday as they demand higher concessions to help the world's largest bond insurer shore up its capital and defend its rating.
The news came a day after MBIA slashed its dividend and said it would sell $1 billion of so-called surplus notes and buy reinsurance. The moves are part of an effort to preserve capital and the "triple-A" ratings the bond insurer needs to operate normally.
The surplus note sale, which had been expected to price on Thursday, has a fixed coupon of between 9 percent and 12 percent, nearly double what similarly rated bonds offer, according to investors briefed by dealers on the transaction.
Gosh, who could have seen this coming? (other than people reading posts on this blog many months ago).
I bet these guys are still soliciting new card customers from the pool of real winners who are still out there with no credit card.
O/T But is this not what got us into this problem?
LONDON (Reuters) - U.S. investment bank Goldman Sachs (GS.N: Quote, Profile, Research) is mulling a securitisation of the UK government's loans to beleaguered mortgage lender Northern Rock Plc (NRK.L: Quote, Profile, Research), a source familiar with the deal told Reuters on Thursday.
Under the plans, Goldman Sachs could package the government loans into bonds to sell them to investors, the source said
Gosh, who could have seen this coming? (other than people reading posts on this blog many months ago).
I suspect many people on Wall Street saw this coming but chose to say nothing or deliberately obscure the truth because that was the far more profitable course of action for them.
I have very little doubt that financial media favorites like Larry Kudlow and Jim Cramer saw this coming from a mile away and intentionally poured more fuel on the fire.
Apologies if this has already been covered. This is a big haircut:
Jan. 10 (Bloomberg) -- Lennar Corp.'s November sale of 11,000 properties in eight states set a price that may mark the bottom for the U.S. housing market: 40 cents on the dollar.
That's how much Morgan Stanley Real Estate paid for an 80 percent stake in the 32 communities, 60 percent less than the price at which the properties were valued just two months earlier
These past few days bring back the good ole days on the NASDAQ crash. There were wild gyrations all the way down as shorts got squeezed and fund managers got to unload all the way south.
It's important to watch the macro trends, not the intraday shareprice moves. Otherwise you'll be out at precisely the wrong moment.
As a valued customer, I was automatically enrolled. You had to opt out, not in. What a crock.
MAB,
Stop complaining. Once you sign up with American Express, they have a right to opt you in with whatever deal they have. They can put it on your credit card, too, because if you read the fine print, you would see it belongs to them, not you.
I've learned from FDIC sources that they are now projecting 300 bank failures and are seeking additional re-hire authority (to bring back retirees)for the DRR division. I anticipate the 300 bank failures are spread out over at least a 2-3 year timeframe at this point.
FFDIC | 01.10.08 - 2:34 pm
FFDIC, Conjure Bag wants to know if you dusted off your brief case as he suggested to you some months ago. He also feels compelled to advance the Conjure Clock.
The surplus note sale, which had been expected to price on Thursday, has a fixed coupon of between 9 percent and 12 percent, nearly double what similarly rated bonds offer, according to investors briefed by dealers on the transaction
I saw this earlier and it gave me a chuckle. How can the rating agencies keep even an ounce of credibility when their "AAA" rated companies are going hat in hand at with 10% coupons.
If that is not a slap in the face or a wake up call for the rating agencies, I don't know what is.
LMFAO
I saw this earlier and it gave me a chuckle. How can the rating agencies keep even an ounce of credibility when their "AAA" rated companies are going hat in hand at with 10% coupons.
So theoretically if you are rated AAA via insurance from MBIA, that lets you borrow at 5 or 6 %, which you then turn around and lend to MBIA at 10%? Hey, sounds like a good business model to me!
As the first poster mentioned, this should send stocks up tomorrow. This is excellent, bad news! Keep it coming, so the Fed can lower rates 100 bps at a whack. Yeah, that'll save economy.
The short sightedness of the stock market is appalling. A leading indicator my ass. All the smart folks on Wall Street with their Ivy League MBAs are driving the economy into the ditch. Nice job.
Did you see gold jump again today when Bernanke's text was released? Look at a combined chart of the US dollar, gold, oil, and commodities. They really started climbing (except the dollar of course) in August, after the first discount rate cut. You can see the inflation coming a mile away, but we still can't get away from it in time.
It is great to see the same signs developing with credit cards as happened with real estate just a few short months ago. The write-offs start small but they are sure to grow exponentially in coming months.
This news should send stocks up once again.
"The company plans to reserve $440 million for the fourth quarter, preparing for loans that are currently overdue"
I see no deliquency percentages anywhere in the press stmts. Anybody have anything?
We've seen this movie before. Two steps back, one forward.
Housing was a monster bubble!
Bank America's decision to average down here will not change the finances of the underwater home owners.
Losses are coming. Many of the financial industries recent record profits were fiction. Just like the gains on all those millions of houses.
I just hope its orderly. Lower housing prices -YES. Bank failures - NO.
"we did see some negative credit trends among U.S. consumers during December, particularly in California, Florida and other parts of the country most affected by the housing downturn."
Guess Amex will appreciate my non rich payment in full this month.
If folks are having issues with CC and mortgage payments, what happens when the 1040 payments come due ?
You know these times are really eye opening for all those who believed or still believe in universal truths:
--Home prices have never fallen, so they never will (Greenspan et al).
--Stock markets are forward looking (which is why we hit dow 14000 and six months later we are expecting 50bp to prevent the recession no one believes will happen).
--Wallstreet knows what it is doing (as CEO after CEO are shown the door)
--Stocks return 8% over time (as the S&P has returned less than a CD including dividends over the last decade).
--The Fed knows more about the economy than the Average Joe (as Greenspan calls the bottom in housing in Oct 06, and Bernanke failed to see spillover from subprime).
AMEX really cheesed me off late last year.
They tried to send me a 2008 organizer for free. Unfortunately, it came with a three year subsciption for 2009-2011 which was not free.
As a valued customer, I was automatically enrolled. You had to opt out, not in. What a crock.
according to the Kramers and Kudlows of the world, if the Fed would just lower interest rates, there wouldn't be all these credit card deliquencies.
Average Joe,
You gotta think long term. REALLLLY long term. HAHAHAHA
If the disruption in the markets was just about subprime and the credit crunch, how is it the average joe has now decided to spend less and not pay back debts?
This is starting to feel like a food fight. Pretty soon everyone will be throwing their bad news.
If Amex has "good credit" customers what's gonna happen to the issuers with marginal credit customers?
It's gonna be a wipeout.
CR,
A while back you had a chart showing GDP with and without MEW.
Any chance we could get an update?
O/T - but relevant...It is hard to get cashola at any price:
NEW YORK, Jan 10 (Reuters) - A planned $1 billion debt sale by MBIA Inc (MBI.N: Quote, Profile, Research) may be delayed until next week, investors familiar with the offering said on Thursday as they demand higher concessions to help the world's largest bond insurer shore up its capital and defend its rating.
The news came a day after MBIA slashed its dividend and said it would sell $1 billion of so-called surplus notes and buy reinsurance. The moves are part of an effort to preserve capital and the "triple-A" ratings the bond insurer needs to operate normally.
The surplus note sale, which had been expected to price on Thursday, has a fixed coupon of between 9 percent and 12 percent, nearly double what similarly rated bonds offer, according to investors briefed by dealers on the transaction.
Gosh, who could have seen this coming? (other than people reading posts on this blog many months ago).
I bet these guys are still soliciting new card customers from the pool of real winners who are still out there with no credit card.
The sensationalism just never ends.
I just heard the following on the radio:
"Country Wide Financial soars more than fifty percent today"
My comment for context:
"Country wide gains back 5% of recent 90% crash."
O/T But is this not what got us into this problem?
LONDON (Reuters) - U.S. investment bank Goldman Sachs (GS.N: Quote, Profile, Research) is mulling a securitisation of the UK government's loans to beleaguered mortgage lender Northern Rock Plc (NRK.L: Quote, Profile, Research), a source familiar with the deal told Reuters on Thursday.
Under the plans, Goldman Sachs could package the government loans into bonds to sell them to investors, the source said
Gosh, who could have seen this coming? (other than people reading posts on this blog many months ago).
I suspect many people on Wall Street saw this coming but chose to say nothing or deliberately obscure the truth because that was the far more profitable course of action for them.
I have very little doubt that financial media favorites like Larry Kudlow and Jim Cramer saw this coming from a mile away and intentionally poured more fuel on the fire.
Apologies if this has already been covered. This is a big haircut:
Jan. 10 (Bloomberg) -- Lennar Corp.'s November sale of 11,000 properties in eight states set a price that may mark the bottom for the U.S. housing market: 40 cents on the dollar.
That's how much Morgan Stanley Real Estate paid for an 80 percent stake in the 32 communities, 60 percent less than the price at which the properties were valued just two months earlier
Lennar's New Homes Fetch 60% Less
These past few days bring back the good ole days on the NASDAQ crash. There were wild gyrations all the way down as shorts got squeezed and fund managers got to unload all the way south.
It's important to watch the macro trends, not the intraday shareprice moves. Otherwise you'll be out at precisely the wrong moment.
MAB,
Stop complaining. Once you sign up with American Express, they have a right to opt you in with whatever deal they have. They can put it on your credit card, too, because if you read the fine print, you would see it belongs to them, not you.
Besides, it's good for the economy.
Oh, c'mon, I'm just late with my Christmas payment, guys, don't panic...
OT, some slowing going on in November?
German industrial production:
Jan 09, 2008 10:00 GMT
m/m
Actual -0.9%
Previous -0.3%
y/y
Actual 3.5%
Previous 6%
French industrial production:
Jan 10, 2008 06:45 GMT
m/m
Actual -1.5%
y/y
Actual 2.5%
Previous 4%
FFDIC from Countrywide thread:
I've learned from FDIC sources that they are now projecting 300 bank failures and are seeking additional re-hire authority (to bring back retirees)for the DRR division. I anticipate the 300 bank failures are spread out over at least a 2-3 year timeframe at this point.
FFDIC | 01.10.08 - 2:34 pm
FFDIC, Conjure Bag wants to know if you dusted off your brief case as he suggested to you some months ago. He also feels compelled to advance the Conjure Clock.
Conjure Clock 11:59:01
The surplus note sale, which had been expected to price on Thursday, has a fixed coupon of between 9 percent and 12 percent, nearly double what similarly rated bonds offer, according to investors briefed by dealers on the transaction
I saw this earlier and it gave me a chuckle. How can the rating agencies keep even an ounce of credibility when their "AAA" rated companies are going hat in hand at with 10% coupons.
If that is not a slap in the face or a wake up call for the rating agencies, I don't know what is.
LMFAO
I saw this earlier and it gave me a chuckle. How can the rating agencies keep even an ounce of credibility when their "AAA" rated companies are going hat in hand at with 10% coupons.
So theoretically if you are rated AAA via insurance from MBIA, that lets you borrow at 5 or 6 %, which you then turn around and lend to MBIA at 10%? Hey, sounds like a good business model to me!
As the first poster mentioned, this should send stocks up tomorrow. This is excellent, bad news! Keep it coming, so the Fed can lower rates 100 bps at a whack. Yeah, that'll save economy.
The short sightedness of the stock market is appalling. A leading indicator my ass. All the smart folks on Wall Street with their Ivy League MBAs are driving the economy into the ditch. Nice job.
Did you see gold jump again today when Bernanke's text was released? Look at a combined chart of the US dollar, gold, oil, and commodities. They really started climbing (except the dollar of course) in August, after the first discount rate cut. You can see the inflation coming a mile away, but we still can't get away from it in time.
Friday's import/export data will be fun to watch.
So far, i have payed my AXP bills on time. I don't understand why they need to write off.
Does this logic sound familiar?
It's important to watch the macro trends, not the intraday shareprice moves. Otherwise you'll be out at precisely the wrong moment.
barely
exactly! good point..
It is great to see the same signs developing with credit cards as happened with real estate just a few short months ago. The write-offs start small but they are sure to grow exponentially in coming months.