Caveat Emptor
or read the fine print... hat tip to Jonathan Weil at Bloomberg.
FASB Statement #157 lists three types of income that can be reported in financials.
Level 1 mark to market or the values come from quoted prices in active markets.
Level 2 mark to model or values are measured using ``observable inputs,'' such as recent transaction prices for similar items where market quotes aren't available.
Level 3 mark to make believe or fair value is measured using subjective "unobservable inputs."
In Q2 Wells Fargo reported record net income of $2.28 billion, up 9% from a year earlier.
About $1.21 billion, or 35%, of its $3.44 billion in pretax income came from Level 3 net gains on the $18.73 billion portfolio of residential mortgage-servicing rights.
Wells reported $2.24 billion in derivative losses were Level 1 or Level 2, and netted those REAL losses against $2.01 billion in MSR (market servicing rights) gains which were all Level 3 (MAKE BELIEVE).
Paella & Sangria... Real estate accounted for almost 18% of Spain's gross domestic product last year, contributing to 3.6 % annual growth.
Interest rates went from 3.11% to 4.88% in August. Delinquency rates shot up from 0.7% to 1.75% in Q1.
This year 700,000 new housing units will go on sale across Spain, 300,000 more than projected demand.
Taking its Toll... Toll Brothers #1 luxury homebuilding posted a -85% decline in Q3 profits, said cancellations 24% had reached their highest rate in more than 20 years.
Toll declined to give guidance; with shares down about 35% this year as BofA cut Toll's rating to sell.
The limited availability of "jumbo" mortgages of more than $417,000 and higher interest rates is cutting the pool of buyers for Toll homes, which sell for an average of more than $600,000.
First Magnus Financial, the 2nd largest privately held U.S. mortgage company, and the 16th largest U.S. home lender overall during the first half of this year...
today, filed for bankruptcy. Aug. 16 Magnus shut down its lending operation after investors quit buying the company's loans.
Accredited Home Lenders Holding Co said it had stopped taking loan applications and would cut 1,600 jobs, citing subprime mortgage losses. AHLH made $15.8 billion in loans last year.
AHLH expects to close its 60 retail branches and five support centers within two weeks and said it would sell $1 billion of home loans to an unnamed investor to help limit its exposure to margin calls.
H&R Block the biggest U.S. tax preparer, said its Block Financial Corp. unit tapped lines of credit because market turmoil has curbed access to commercial paper.
ECB adding another $54 Billion in 91 day liquidity reanimation.
FASB Statement #157 lists three types of income that can be reported in financials.
Level 1 mark to market or the values come from quoted prices in active markets.
Level 2 mark to model or values are measured using ``observable inputs,'' such as recent transaction prices for similar items where market quotes aren't available.
Level 3 mark to make believe or fair value is measured using subjective "unobservable inputs."
In Q2 Wells Fargo reported record net income of $2.28 billion, up 9% from a year earlier.
About $1.21 billion, or 35%, of its $3.44 billion in pretax income came from Level 3 net gains on the $18.73 billion portfolio of residential mortgage-servicing rights.
Wells reported $2.24 billion in derivative losses were Level 1 or Level 2, and netted those REAL losses against $2.01 billion in MSR (market servicing rights) gains which were all Level 3 (MAKE BELIEVE).
Paella & Sangria... Real estate accounted for almost 18% of Spain's gross domestic product last year, contributing to 3.6 % annual growth.
Interest rates went from 3.11% to 4.88% in August. Delinquency rates shot up from 0.7% to 1.75% in Q1.
This year 700,000 new housing units will go on sale across Spain, 300,000 more than projected demand.
Taking its Toll... Toll Brothers #1 luxury homebuilding posted a -85% decline in Q3 profits, said cancellations 24% had reached their highest rate in more than 20 years.
Toll declined to give guidance; with shares down about 35% this year as BofA cut Toll's rating to sell.
The limited availability of "jumbo" mortgages of more than $417,000 and higher interest rates is cutting the pool of buyers for Toll homes, which sell for an average of more than $600,000.
First Magnus Financial, the 2nd largest privately held U.S. mortgage company, and the 16th largest U.S. home lender overall during the first half of this year...
today, filed for bankruptcy. Aug. 16 Magnus shut down its lending operation after investors quit buying the company's loans.
Accredited Home Lenders Holding Co said it had stopped taking loan applications and would cut 1,600 jobs, citing subprime mortgage losses. AHLH made $15.8 billion in loans last year.
AHLH expects to close its 60 retail branches and five support centers within two weeks and said it would sell $1 billion of home loans to an unnamed investor to help limit its exposure to margin calls.
H&R Block the biggest U.S. tax preparer, said its Block Financial Corp. unit tapped lines of credit because market turmoil has curbed access to commercial paper.
ECB adding another $54 Billion in 91 day liquidity reanimation.
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