Odds & Ends & Observations 06/21/07
Let me tell you how it will be... There's one for you, nineteen for me...
H&R Block #1 U.S. tax preparer, posted a Q4 loss, as the deterioration of the U.S. subprime market hurt the value of its mortgage business.
In a recession proof business much like a morticians... losing money... net loss of $85.6M reflecting $678 M in losses attributed to their Option One Mortgage arm.
Lighter Latte or Less Joe?? Starbucks warned it will be difficult to reach the high end of its fiscal 2007 earnings forecast range
...citing high dairy costs and soft domestic transaction growth. SBUX -3%
Deja Vu? or Ring of Fire? Mark Kiesel of Pimco:
"The housing sector will push the U.S. economy into recession unless the Federal Reserve cuts its benchmark rate at the first surge in unemployment."
Now where have I heard that Nattering before??? Of the $2.5 Trillion in MEW (mortgage equity withdrawl) since 2001...
around 33% or $833 Billion was used for consumer spending. The other $1.6 Trillion went to speculation in housing and equities.
If job creation continues to slow, which will likely be the case as overall growth (GDP) in the U.S. continues to weaken...
the number of foreclosures will continue to rise and home sales/prices could be in for a sharp decline.
Any deterioration in employment and falling home prices would lead to a drastic slowdown in consumer spending.
Consumer spending accounts for 75% of GDP and as the "wealth effect" deteriorates further, so will the economy.
The emasculated economy is a vicious circle and much like Iraq, with no exit strategy...
From 02/27/07: a minimum 9 PERMANENT bases built in Afghanistan and Iraq on $60 Billion plus in appropriations over the last two years...
the bases just happen to follow the path of the oil pipeline installed by Haliburton...
a pipeline that the US backed and Bin Laden led "Taliban" refused to let us install after rising to power...
and he who thinks that this war is about the Iraqi people, freedom, democracy or that we are leaving ANYTIME is a misled fool, in the extreme.
Coyote Ugly?? BSC CDO asset liquidation update: Merrill Lynch has sold $100M of the $850M of the BSC Fund CDO assets auctioned yesterday afternoon.
ML are deferring sale on the remaining $750 M until restructuring arrangements have been worked out with Bear Stearns.
Merrill's decision yesterday to accept bids on $800M of bonds it took as collateral for its loans further stifled trading in CDO securities.
David Castillo, who trades asset- backed, commercial-mortgage and CDO bonds at Further Lane Securities:
"Nobody wants to look at the truth right now because the truth is pretty ugly."
"Where people are willing to bid and where people have them marked are two different places."
"Dancin on the Street"... Scott Simon at Pimco: "Some CDOs are so rarely traded that their owners can't tell whether they are worth 50 cents or 90 cents on the dollar."
"The problem with these bonds is that there's no market. Investors also don't know how many of the CDOs are held by buyers who paid cash or...
whether it's going to be a series of "Bear Stearnses" because the hedge funds borrowed money to make the purchases."
You've lost that loving feeling... Oh, that loving feeling... You've lost that loving feeling... Now it's gone, gone, gone... Whoa-oh
H&R Block #1 U.S. tax preparer, posted a Q4 loss, as the deterioration of the U.S. subprime market hurt the value of its mortgage business.
In a recession proof business much like a morticians... losing money... net loss of $85.6M reflecting $678 M in losses attributed to their Option One Mortgage arm.
Lighter Latte or Less Joe?? Starbucks warned it will be difficult to reach the high end of its fiscal 2007 earnings forecast range
...citing high dairy costs and soft domestic transaction growth. SBUX -3%
Deja Vu? or Ring of Fire? Mark Kiesel of Pimco:
"The housing sector will push the U.S. economy into recession unless the Federal Reserve cuts its benchmark rate at the first surge in unemployment."
Now where have I heard that Nattering before??? Of the $2.5 Trillion in MEW (mortgage equity withdrawl) since 2001...
around 33% or $833 Billion was used for consumer spending. The other $1.6 Trillion went to speculation in housing and equities.
If job creation continues to slow, which will likely be the case as overall growth (GDP) in the U.S. continues to weaken...
the number of foreclosures will continue to rise and home sales/prices could be in for a sharp decline.
Any deterioration in employment and falling home prices would lead to a drastic slowdown in consumer spending.
Consumer spending accounts for 75% of GDP and as the "wealth effect" deteriorates further, so will the economy.
The emasculated economy is a vicious circle and much like Iraq, with no exit strategy...
From 02/27/07: a minimum 9 PERMANENT bases built in Afghanistan and Iraq on $60 Billion plus in appropriations over the last two years...
the bases just happen to follow the path of the oil pipeline installed by Haliburton...
a pipeline that the US backed and Bin Laden led "Taliban" refused to let us install after rising to power...
and he who thinks that this war is about the Iraqi people, freedom, democracy or that we are leaving ANYTIME is a misled fool, in the extreme.
Coyote Ugly?? BSC CDO asset liquidation update: Merrill Lynch has sold $100M of the $850M of the BSC Fund CDO assets auctioned yesterday afternoon.
ML are deferring sale on the remaining $750 M until restructuring arrangements have been worked out with Bear Stearns.
Merrill's decision yesterday to accept bids on $800M of bonds it took as collateral for its loans further stifled trading in CDO securities.
David Castillo, who trades asset- backed, commercial-mortgage and CDO bonds at Further Lane Securities:
"Nobody wants to look at the truth right now because the truth is pretty ugly."
"Where people are willing to bid and where people have them marked are two different places."
"Dancin on the Street"... Scott Simon at Pimco: "Some CDOs are so rarely traded that their owners can't tell whether they are worth 50 cents or 90 cents on the dollar."
"The problem with these bonds is that there's no market. Investors also don't know how many of the CDOs are held by buyers who paid cash or...
whether it's going to be a series of "Bear Stearnses" because the hedge funds borrowed money to make the purchases."
You've lost that loving feeling... Oh, that loving feeling... You've lost that loving feeling... Now it's gone, gone, gone... Whoa-oh
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