Countrywide BK?
Pending Home Sales Nov -2.6% vs prior -0.6% Full Report
Inside the number: YOY -19.2%. Seasonally Adjusted NE -13%; MW -4.1%; S +2.3%; West -2.1%. Unadjusted: -16.8%; NE -28.2%; MW -18.2%; S -11.8%; West -15.9%
50% off... KB Home stock is already where real estate is headed, having lost 50% of its value.
Today the homebuilder reported $917 million in write downs, net loss of $772 million vs $49 million last year.
Revenue declined 31%, orders 32%, backlog -40% and the cancellation rate increased to 58%.
For the fiscal year KB reported a net loss of $929 million vs profit of $482 million last year.
4% off... Family Dollar Stores Q1 net income fell 4.1% as the company cut its fiscal-year guidance and projected Q2 earnings well below estimates. Same store sales fell 1%.
CEO Howard Levine: "Our customers were more constrained with their discretionary spending this quarter."
Liquored Up... Constellation Brands reported Q3 profit rose 11%, lifted by strong liquor sales. However, the world's biggest wine company lowered its full year profit outlook.
Step down... WSJ reports Bear Stearns CEO James Cayne is stepping down amidst write downs. Barclays Capital co president Grant Kvalheim is also stepping down, amidst write downs.
Step Back Up... After hearing of 14,000 McBaristas serving McLatte, Howard Schultz, the chairman of Starbucks is reclaiming the CEO position.
Backed up Fannie? Fannie Mae CEO Daniel Mudd: the mortgage crisis and its effect on the housing market will be a drag on the entire U.S. economy. The housing market will weaken through 2009, with a turnaround unlikely until 2010.
Two step... Philadelphia Fed Head Plosser said policy decisions are more difficult because recent data suggest inflation is more broad based and that slow growth can not be relied on to reduce inflation.
Plosser is open on further rate cuts, but he has not yet made up his mind. Hmm... broad based inflation? I thought inflation was "tame" and a NON issue that the Fed for some reason, needed to be "vigilant" about?
Stand down... Boston Fed Head Rosengren said if forecasts are correct, the U.S. will have the longest housing investment decline in 50 years. Newsflash... the forecasts are conservative and very optimistic.
About face... Treasury Secretary Paulson said there are no signs that the housing market problems are easing and if anything signs are pointing to a further downturn.
Its official Part II... Its a Shadow Banking Recession... Pyramids Crumbling Bill Gross at PIMCO:
"Pyramid schemes and chain letters collapse because there is no more credit to feed them.
As the system of modern day levered shadow finance slows to a crawl, or even contracts at the edges, its ability to systemically fertilize economic growth must be called into question.
Our modern shadow banking system craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever.
Credit default swaps are perhaps the most egregious offenders.
Goldman Sachs estimates that mortgage related losses of $200-$400 billion alone might lead to a pullback of $2 trillion of aggregate lending.
Add to that my $250 billion loss estimate from CDS, as well as prospective losses in commercial real estate and credit cards in 2008 and you have a recipe for a contraction in credit leading to a recession."
Down grade... Moody's has downgraded 46 Bear Stearns tranches back by Alt-A Mortgage loans and placed National City's credit rating under review for a possible downgrade.
CDS totaling $43 trillion were outstanding at year end 2007, more than half the size of the entire asset base of the global banking system.
According to Reuters and Forbes, several troubled CDOs are liquidating over $5 billion in distressed securities this week, many more are in default and on the verge of liquidation.
Speaking of Liquidation... Countrywide the largest US homelender, stock down 79% last year... stock down 21% today prior to a trading halt on Chapter 11 rumours.
Countrywide refutes the alligators:
"There is no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company."
The Nattering One muses... its official.
Inside the number: YOY -19.2%. Seasonally Adjusted NE -13%; MW -4.1%; S +2.3%; West -2.1%. Unadjusted: -16.8%; NE -28.2%; MW -18.2%; S -11.8%; West -15.9%
50% off... KB Home stock is already where real estate is headed, having lost 50% of its value.
Today the homebuilder reported $917 million in write downs, net loss of $772 million vs $49 million last year.
Revenue declined 31%, orders 32%, backlog -40% and the cancellation rate increased to 58%.
For the fiscal year KB reported a net loss of $929 million vs profit of $482 million last year.
4% off... Family Dollar Stores Q1 net income fell 4.1% as the company cut its fiscal-year guidance and projected Q2 earnings well below estimates. Same store sales fell 1%.
CEO Howard Levine: "Our customers were more constrained with their discretionary spending this quarter."
Liquored Up... Constellation Brands reported Q3 profit rose 11%, lifted by strong liquor sales. However, the world's biggest wine company lowered its full year profit outlook.
Step down... WSJ reports Bear Stearns CEO James Cayne is stepping down amidst write downs. Barclays Capital co president Grant Kvalheim is also stepping down, amidst write downs.
Step Back Up... After hearing of 14,000 McBaristas serving McLatte, Howard Schultz, the chairman of Starbucks is reclaiming the CEO position.
Backed up Fannie? Fannie Mae CEO Daniel Mudd: the mortgage crisis and its effect on the housing market will be a drag on the entire U.S. economy. The housing market will weaken through 2009, with a turnaround unlikely until 2010.
Two step... Philadelphia Fed Head Plosser said policy decisions are more difficult because recent data suggest inflation is more broad based and that slow growth can not be relied on to reduce inflation.
Plosser is open on further rate cuts, but he has not yet made up his mind. Hmm... broad based inflation? I thought inflation was "tame" and a NON issue that the Fed for some reason, needed to be "vigilant" about?
Stand down... Boston Fed Head Rosengren said if forecasts are correct, the U.S. will have the longest housing investment decline in 50 years. Newsflash... the forecasts are conservative and very optimistic.
About face... Treasury Secretary Paulson said there are no signs that the housing market problems are easing and if anything signs are pointing to a further downturn.
Its official Part II... Its a Shadow Banking Recession... Pyramids Crumbling Bill Gross at PIMCO:
"Pyramid schemes and chain letters collapse because there is no more credit to feed them.
As the system of modern day levered shadow finance slows to a crawl, or even contracts at the edges, its ability to systemically fertilize economic growth must be called into question.
Our modern shadow banking system craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever.
Credit default swaps are perhaps the most egregious offenders.
Goldman Sachs estimates that mortgage related losses of $200-$400 billion alone might lead to a pullback of $2 trillion of aggregate lending.
Add to that my $250 billion loss estimate from CDS, as well as prospective losses in commercial real estate and credit cards in 2008 and you have a recipe for a contraction in credit leading to a recession."
Down grade... Moody's has downgraded 46 Bear Stearns tranches back by Alt-A Mortgage loans and placed National City's credit rating under review for a possible downgrade.
CDS totaling $43 trillion were outstanding at year end 2007, more than half the size of the entire asset base of the global banking system.
According to Reuters and Forbes, several troubled CDOs are liquidating over $5 billion in distressed securities this week, many more are in default and on the verge of liquidation.
Speaking of Liquidation... Countrywide the largest US homelender, stock down 79% last year... stock down 21% today prior to a trading halt on Chapter 11 rumours.
Countrywide refutes the alligators:
"There is no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company."
The Nattering One muses... its official.
Comments