General Motors, Credit Suisse, Berkshire Hathaway, MBIA, Ambac, FGIC, Project Lifeline, IndyMac & Higher GSE Limits

When will the GM stockholders learn?...

General Motors, the world's largest automaker, not counting costs and gains the company considers one time, reported an adjusted profit of $64 million for Q4.

The adjusted profit stemmed mostly from a $1.6 billion tax benefit. The tax gain stems from the sale of the Allison transmission unit...

and a $7.7 billion reduction in GM's overall pension and retiree health care liabilities. Pretty good work eh?

Upon further review... counting one time costs and gains, GM posted a Q4 loss on shrinking sales in North America.

GM's Q4 net loss of $722 million followed year earlier net income of $950 million.

In North America, GM lost $1.1 billion, and the full year deficit was a record $38.7 billion vs 2006, when GM lost $1.98 billion and 2005, when GM lost $10.4 billion.

CEO Rick Wagoner is certainly delivering on his goals? From a $1.98 billion loss to a $38.7 billion loss, now thats what I call progress. Way to go little Ricky!

And, in the only way he knows how to make a profit, Ricky boy also announced details of a buyout plan for the remaining 74,000 UAW employees in the U.S.

Running like a Swiss Watch... Credit Suisse Group, Switzerland's 2nd biggest bank,

said Q4 profit fell 72% after writedowns of $1.2 billion on debt and leveraged loans. Stock down 16% on the year...

Q4 revenue fell 13%, with investment-banking down 36%, after markdowns of leveraged loans, MBS mortgage-backed securities and CDO collateralized debt obligations.

Reinsuring only the insurable... Berkshire Hathaway sent an offer to reinsure the municipal bond holdings of Ambac, MBIA and FGIC.

Berkshire offered to take a liability of $800 billion, adding $5 billion of its resources.

Berkshire would put up the $5 billion as capital and is offering to insure the municipal debt for 1.5 times the premium charged by the bond insurers.

The bond insurers were given 30 days to find a better offer. Buffet is shrewd, as the municipal business is the book of business where the value in the companies is.

The offer does NOT include CDOs and other investment vehicles that have been hit the hardest by the subprime crisis.

Refinancing only the unfinanciable... "Project Lifeline" is Hanky Paulson's latest offering to bail out his banking buddies.

All 90 day delinquent homeowners will be able to get their foreclosure suspended for 30 days so they can workout affordable loans with lenders.

Six of the largest mortgage lenders will be participating in the plan: Bank of America, JPMorgan Chase, Citigroup, Countrywide, Washington Mutual and Wells Fargo.

A BIG MAC IF... IndyMac Bancorp, the 2nd biggest independent U.S. mortgage company,

posted its first annual loss in its 23 year history and suspended their dividend indefinitely.

A record Q4 net loss of $509.1 million, vs profit of $72.2 million, a year earlier, follows an 80% loss of IndyMac's market value in the past 12 months.

Suspending the annual dividend of $1 a share and reducing IndyMac's balance sheet by 14% because of limited "jumbo" lending freed up $400 million of added capital.

The moves may avert the need for fire selling either the entire company or their reverse mortgage business. In a reassuring note...

IndyMac said their $2.4 billion in reserves is adequate if the pace of borrowers missing one or more payments continues...

at the Q4 rate until October and then declines to 70% of that level by the end of next year.

The Nattering One muses... The deadbeats running IndyMac should be strung up,

along with the other losers (excepting Bof A) managing the five banks participating in Project Lifeline. Why?

Their behaviour has been reprehensible, negligent and criminal. FYI, We are currently working on an real life expose of IndyMac...

and their criminal lending practices which will grace these pages at a date to be determined.

Now we know why... we had heard rumours indicating that some borrowers have not made payments in over 7 months,

and had not received delinquency, default or trustee sale notices. What gives?

In effect these borrowers are "current" and can be thrown into the heap of bad loans that will be foisted by the banks onto the taxpayer.

Sleight of hand... The 7 month "forebearance", the "pause program" and higher FNMA, FHLMC & FHA limits...

obfuscated under the Economic "Stimulus" bill, should push all the bad debt from the banks onto the taxpayer through the GSE's.

These "stimulus" programs should also allow IndyMac and other lenders saddled with bad jumbo loans...

to resume their profitable jumbo liar loan programs and pass those bad loans en masse onto the taxpayer.

In the next three years, when the FNMA, FHLMC & FHA debacles come to the forefront of the headlines,

readers of these pages will be able to say they were warned, well in advance.

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