We're Here to Pump You UP!!
Pump priming... Oil spiking above $77 as Nigerian rebels get called off the bench to spook the herd...
Libor climbing for 11th straight session to fresh 7-yr highs. Fed injecting $31.25 Billion of temporary reserves to banking system. ECB injecting $57.7 Billion...
In the past month, central banks pumped more than $350 billion into money markets. We Natter once again, its not a liquidity issue, its a solvency problem.
Realist... Erik Sirri, director of market regulation at the SEC, told the House Financial Services Committee his agency is monitoring whether...
A failure of a large asset backed commercial paper program would threaten the market.
Surreal Delusion... repeat the mantra. Atlanta Fed Head Dennis Lockhart said...
there are no signs of that the housing and subprime mortgage market woes are spilling over into other sectors of the economy.
...so surreal that even The Nattering One, who does not partake, wants a toke of what the Fed heads are smokin, its really gotta be da'kine...
Fed Facts... Last week, asset backed paper, such as notes backed by mortgages and credit cards, fell by $31.3 billion, or more than 3%, to $966.7 billion.
The outstanding volume of commercial paper dropped by $54 billion, or almost 3%, to $1.93 trillion, after many companies couldn't find takers for these notes.
The decline follows a massive outstanding paper decline of $259 billion, or almost 12%, in August.
Less takers means more paper being held on the books of the commerical banks.
Any downgrade of said paper requires the holding commerical bank to increase its reserve's exponentially.
If the bank cannot come up with the required reserves, liquidation of the paper assets ensues.
The Dead Pool rises... according to JPMorgan Chase analysts: Deutsche Bank, Germany's biggest bank...
will probably be the European securities firm most affected by fallout from rising U.S. subprime mortgage defaults.
"Third-quarter earnings will suffer from a decline in the value of leveraged-loan holdings."
The analysts cut earnings expectations for Deutsche, Credit Suisse and UBS. Marking to market leveraged loan commitments, assuming about half have been hedged, would result in:
A 625 million-euro ($853 million) charge for Deutsche Bank in Q3 and charges of 1 billion Swiss francs ($831 million) for Credit Suisse and only 375 million francs for UBS.
London's Jon Peace and Robert Law, predicted that European banks will suffer after tax writedowns of as much as 25% of full year earnings this year.
The Dead Pool: #1 Countrywide, #2 Barclays, #3 Wachovia, #4 Deutsche Bank #5 Wells Fargo, #6 Citibank. Dishonorable mention: WaMu
Bailing... Just two weeks after the fourth largest investment bank said it was closing its subprime mortgage lending business...
it will fire 850 workers in its mortgage operations. Lehman Brothers said it is shrinking its mortgage lending operations in the US and UK, and closing its Korean home loan business.
Bailing faster... The 3rd straight quarter of record setting foreclosure rates...
Q2 foreclosure starts rate is the highest in the history of the survey, with the previous high being Q1's rate.
Mortgage Bankers Association said 0.65% of loans entered the foreclosure process on a seasonally adjusted basis, +7 basis points vs Q1; +22 bps vs Q206.
Delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 5.12% of all loans outstanding in Q207, +28 basis points vs Q1 , +73 bps vs Q206.
Foreclosure rate was 1.40% of all loans, +12 bps vs Q1, +41 bps vs Q206. Foreclosures increased as the rate of delinquency on subprime loans went up to Q2 14.82% vs Q1 13.77% vs Q206 11.7%.
California, Nevada, Arizona and Florida are driving the rate higher, excluding those four states, the national foreclosure rate actually declined in Q2.
These four states have more than 33% of the nation’s subprime ARMs, and more than 33% of the foreclosure starts on subprime ARMs.
California has 17% of the subprime ARMs in the country and over 19% of the foreclosure starts on subprime ARMs.
Inventories of homes for sale are soaring to all time highs and a disproportionate amount of loans are to...
greedy investors who have less at stake (low down, no down, no skin in the game). Let em eat cake!!
Non-owner occupied share of defaulted loans (90 days of more past due or in foreclosure) was:
32% in Nevada, 25% in Florida, 26% in Arizona and 21% in California, compared with 13% in the rest of the nation.
Expected deeper house price declines into 2008 have sparked forecasts of a steeper rise in delinquencies.
Due to the upcoming spike in ARM resets, the peak of loan failures might not hit for another year or more.
Same store sales... yesterday, Costco disappointed, today, Wal-Mart +3.1% and Target surprised,
perhaps certain people are biting the bullet... by ditching the membership cost and shopping at the cheaper store. Lets watch and see if this trend continues...
Libor climbing for 11th straight session to fresh 7-yr highs. Fed injecting $31.25 Billion of temporary reserves to banking system. ECB injecting $57.7 Billion...
In the past month, central banks pumped more than $350 billion into money markets. We Natter once again, its not a liquidity issue, its a solvency problem.
Realist... Erik Sirri, director of market regulation at the SEC, told the House Financial Services Committee his agency is monitoring whether...
A failure of a large asset backed commercial paper program would threaten the market.
Surreal Delusion... repeat the mantra. Atlanta Fed Head Dennis Lockhart said...
there are no signs of that the housing and subprime mortgage market woes are spilling over into other sectors of the economy.
...so surreal that even The Nattering One, who does not partake, wants a toke of what the Fed heads are smokin, its really gotta be da'kine...
Fed Facts... Last week, asset backed paper, such as notes backed by mortgages and credit cards, fell by $31.3 billion, or more than 3%, to $966.7 billion.
The outstanding volume of commercial paper dropped by $54 billion, or almost 3%, to $1.93 trillion, after many companies couldn't find takers for these notes.
The decline follows a massive outstanding paper decline of $259 billion, or almost 12%, in August.
Less takers means more paper being held on the books of the commerical banks.
Any downgrade of said paper requires the holding commerical bank to increase its reserve's exponentially.
If the bank cannot come up with the required reserves, liquidation of the paper assets ensues.
The Dead Pool rises... according to JPMorgan Chase analysts: Deutsche Bank, Germany's biggest bank...
will probably be the European securities firm most affected by fallout from rising U.S. subprime mortgage defaults.
"Third-quarter earnings will suffer from a decline in the value of leveraged-loan holdings."
The analysts cut earnings expectations for Deutsche, Credit Suisse and UBS. Marking to market leveraged loan commitments, assuming about half have been hedged, would result in:
A 625 million-euro ($853 million) charge for Deutsche Bank in Q3 and charges of 1 billion Swiss francs ($831 million) for Credit Suisse and only 375 million francs for UBS.
London's Jon Peace and Robert Law, predicted that European banks will suffer after tax writedowns of as much as 25% of full year earnings this year.
The Dead Pool: #1 Countrywide, #2 Barclays, #3 Wachovia, #4 Deutsche Bank #5 Wells Fargo, #6 Citibank. Dishonorable mention: WaMu
Bailing... Just two weeks after the fourth largest investment bank said it was closing its subprime mortgage lending business...
it will fire 850 workers in its mortgage operations. Lehman Brothers said it is shrinking its mortgage lending operations in the US and UK, and closing its Korean home loan business.
Bailing faster... The 3rd straight quarter of record setting foreclosure rates...
Q2 foreclosure starts rate is the highest in the history of the survey, with the previous high being Q1's rate.
Mortgage Bankers Association said 0.65% of loans entered the foreclosure process on a seasonally adjusted basis, +7 basis points vs Q1; +22 bps vs Q206.
Delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 5.12% of all loans outstanding in Q207, +28 basis points vs Q1 , +73 bps vs Q206.
Foreclosure rate was 1.40% of all loans, +12 bps vs Q1, +41 bps vs Q206. Foreclosures increased as the rate of delinquency on subprime loans went up to Q2 14.82% vs Q1 13.77% vs Q206 11.7%.
California, Nevada, Arizona and Florida are driving the rate higher, excluding those four states, the national foreclosure rate actually declined in Q2.
These four states have more than 33% of the nation’s subprime ARMs, and more than 33% of the foreclosure starts on subprime ARMs.
California has 17% of the subprime ARMs in the country and over 19% of the foreclosure starts on subprime ARMs.
Inventories of homes for sale are soaring to all time highs and a disproportionate amount of loans are to...
greedy investors who have less at stake (low down, no down, no skin in the game). Let em eat cake!!
Non-owner occupied share of defaulted loans (90 days of more past due or in foreclosure) was:
32% in Nevada, 25% in Florida, 26% in Arizona and 21% in California, compared with 13% in the rest of the nation.
Expected deeper house price declines into 2008 have sparked forecasts of a steeper rise in delinquencies.
Due to the upcoming spike in ARM resets, the peak of loan failures might not hit for another year or more.
Same store sales... yesterday, Costco disappointed, today, Wal-Mart +3.1% and Target surprised,
perhaps certain people are biting the bullet... by ditching the membership cost and shopping at the cheaper store. Lets watch and see if this trend continues...
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