Leaking Like A SIV Part I
Snipets from Bloomberg & MSN with a large sprinkle of Nattering love...
Sung to "Dude Walks Like a Lady" by Aerosmith..."Do the Hanky Skanky"... click your heels three times and repeat the mantra... there is no spillover.
The Nattering One has mused before re: with all this bad news during "good" times, what happens if things get bad??
Good times, bad times...
Announced lay-offs skyrocketed 85% in August, to 79,459 from 42,897 in July, according to Challenger, Gray & Christmas Inc:
"Nearly half of the August cuts came from the financial sector, as dozens of mortgage and subprime lenders caved under the pressure of a sinking housing market."
Ian Shepherdson, chief U.S. economist at High Frequency Economics:
"This is disastrous. In short, evidence is starting to emerge that the labor market is finally cracking."
Robert Steel, Treasury undersecretary for domestic finance, before a House committee comments on the full impact of the upheaval in financial markets:
"This process is far from over. ... The ultimate impact of these events on the economy has yet to play out."
I'll remove the symptom, but not the cause...
Last week at Jackson Hole, Ben S. Bernanke AKA Bennie & The Feds said that "lending restrictions...if sustained...
would increase the risk that the current weakness in housing could be deeper or more prolonged than previously expected."
Meanwhile, residential construction has subtracted from economic growth for six straight quarters, the longest stretch since 1982.
What is it?
Quotes from various analysts: "People aren't willing to do deals right now. The expectation is that prices will come down. There are so many deals falling apart. People who can get out are getting out.
No one's going to want to sell in this environment, because you're not going to get your price."
If you thought those comments were in regard to residential real estate, you were wrong.
U.S. commercial real estate prices may fall as much as 15% over the next year. The Bloomberg Office Property Index of real estate investment trusts has dropped 24% since reaching a record high on Feb. 8.
The slump has even ensnared New York developer Harry Macklowe, who may have to sell assets to pay back $3.4 billion of short- term debt.
Moving up in our pool...
Barclays Plc, the U.K.'s third-biggest bank, has borrowed twice at the Bank of England's "emergency window" penalty rate in the past month.
The Dead Pool: #1 Countrywide, #2 Barclays, #3 Citibank, #4 Wachovia, #5 Wells Fargo
Conduit's Leaking Like SIV's...
Wall Street Journal reporting that Citigroup and other banks may find themselves burdened with affiliated investment vehicles (SIVs) that issue tens of billions of dollars in short-term debt (commercial paper.)
Moody's Investors Service said it had downgraded or placed on review for downgrade $14 billion of bonds sold by funds known as structured investment vehicles.
The #1 US Bank, Citigroup has about 25% of the market for SIVs, representing almost $100 billion of assets under management, which had $21 billion of debt outstanding in February.
Pot calls Kettle black III... Citigroup cuts estimates on two brokers; Lehman Brothers and Morgan Stanley; Lehman downgraded two banks; Deutsche Bank and Credit Swisse
Sung to "Dude Walks Like a Lady" by Aerosmith..."Do the Hanky Skanky"... click your heels three times and repeat the mantra... there is no spillover.
The Nattering One has mused before re: with all this bad news during "good" times, what happens if things get bad??
Good times, bad times...
Announced lay-offs skyrocketed 85% in August, to 79,459 from 42,897 in July, according to Challenger, Gray & Christmas Inc:
"Nearly half of the August cuts came from the financial sector, as dozens of mortgage and subprime lenders caved under the pressure of a sinking housing market."
Ian Shepherdson, chief U.S. economist at High Frequency Economics:
"This is disastrous. In short, evidence is starting to emerge that the labor market is finally cracking."
Robert Steel, Treasury undersecretary for domestic finance, before a House committee comments on the full impact of the upheaval in financial markets:
"This process is far from over. ... The ultimate impact of these events on the economy has yet to play out."
I'll remove the symptom, but not the cause...
Last week at Jackson Hole, Ben S. Bernanke AKA Bennie & The Feds said that "lending restrictions...if sustained...
would increase the risk that the current weakness in housing could be deeper or more prolonged than previously expected."
Meanwhile, residential construction has subtracted from economic growth for six straight quarters, the longest stretch since 1982.
What is it?
Quotes from various analysts: "People aren't willing to do deals right now. The expectation is that prices will come down. There are so many deals falling apart. People who can get out are getting out.
No one's going to want to sell in this environment, because you're not going to get your price."
If you thought those comments were in regard to residential real estate, you were wrong.
U.S. commercial real estate prices may fall as much as 15% over the next year. The Bloomberg Office Property Index of real estate investment trusts has dropped 24% since reaching a record high on Feb. 8.
The slump has even ensnared New York developer Harry Macklowe, who may have to sell assets to pay back $3.4 billion of short- term debt.
Moving up in our pool...
Barclays Plc, the U.K.'s third-biggest bank, has borrowed twice at the Bank of England's "emergency window" penalty rate in the past month.
The Dead Pool: #1 Countrywide, #2 Barclays, #3 Citibank, #4 Wachovia, #5 Wells Fargo
Conduit's Leaking Like SIV's...
Wall Street Journal reporting that Citigroup and other banks may find themselves burdened with affiliated investment vehicles (SIVs) that issue tens of billions of dollars in short-term debt (commercial paper.)
Moody's Investors Service said it had downgraded or placed on review for downgrade $14 billion of bonds sold by funds known as structured investment vehicles.
The #1 US Bank, Citigroup has about 25% of the market for SIVs, representing almost $100 billion of assets under management, which had $21 billion of debt outstanding in February.
Pot calls Kettle black III... Citigroup cuts estimates on two brokers; Lehman Brothers and Morgan Stanley; Lehman downgraded two banks; Deutsche Bank and Credit Swisse
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