Quelle Surprise! The Fed is Reporting Losses on Its Bear Stearns and AIG SPVs
2009-07-20 NakedCapitalism.com
“Readers may recall that during the heat of bailout battle, the Federal Reserve got into the fancy finance business, relying on the sort of deal structuring sometimes used to try to turn toxic odd pork scraps into barely-digestible sausage, the procedure used for pigs so dead that merely putting lipstick on them just won’t do.
The items in question are Maiden Lane, the vehicle used to backstop JP Morgan’s purchase Bear Stearns, and two sons of Maiden Lane created for dodgy AIG exposures. The bank was permitted to move some particularly fragrant collateral from Bear over to the Fed for a loan of $30 billion. The arrangement got reworked on the fly, and in the end, the Fed loan was reduced to roughly $29 billion as JP Morgan agreed to assume $1.15 billion of risk. The assets were placed in a holding company to be managed by BlackRock.”
Congressman Stearns: Mr Paulson How Do You Have Any Credibility?
It’s about time that people start asking the tough questions.
U.S. Rescue May Reach $23.7 Trillion, Barofsky Says
2009-07-20 Bloomberg.com
THIS IS NOT A MISPRINT.
“U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.
The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.
“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.
Treasury spokesman Andrew Williams said the U.S. has spent less than $2 trillion so far and that Barofsky’s estimates are flawed because they don’t take into account assets that back those programs or fees charged to recoup some costs shouldered by taxpayers.
“These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs,” Williams said. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”
Option-ARMs worse than subprime
2009-07-14 TheMessThatGreenspanMade
“More than one-third of all Option-ARMs (called Pick-A-Pay loans below) are in default and most of these are likely to make it to the foreclosure stage eventually.”
SandP Downgrades 120 Classes of Alt-A RMBS
2009-07-13 Housingwire.com
“After a review of 13 US residential mortgage-backed securities (RMBS) transactions, Standard and Poor’s lowered its ratings on 120 of the securities’ classes last week. The collateral backing the vintage 2005-2007 securities are primarily Alt-A, first-lien residential mortgages.”
Short Sellers BEWARE
2009-07-10 Calculatedrisk.blog
“Often, the troubled home owner assumes the loss will be eaten by the lender. But Bank of America and Chase have quietly added language in their short-sale agreements that require the borrower to sign a promissory note for the shortfall.”
Ron Paul On Fed Audit: We Will Not Be Stopped
2009-07-09 PrisonPlanet.com
“Congressman Ron Paul has vowed that he will not be stopped in his effort to audit the Federal Reserve, as he slammed Senate authorities for blocking the bill earlier this week.
Appearing on Fox News’ Freedom Watch with Judge Napolitano Paul referred to Senate authorities blocking Jim DeMint’s attempt to attach the legislation, which already has 250 co-sponsors in the House, as a provision to a spending bill as a “facade”.
PMI Expects Lower Housing Prices in 2011
2009-07-o7 Housingwire.com
“Home prices will be lower in two years compared to Q109 for much of the country’s metropolitan statistical areas, (MSAs) according to an economic trends report released by PMI Mortgage Insurance Co.”
Another wave of foreclosures is poised to strike
2009-07-04 LATimes.com
“Reporting from Washington — Just as the nation’s housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy.
Amid rising unemployment and falling home prices, mortgage defaults have surged to record levels this year. Until recently, many banks have put off launching foreclosure action on the troubled properties, in part because they had signed up for the Obama administration’s home-stability plan, which required them to consider the alternative of modifying loans to make it easier for borrowers to make payments….”
Banks Falling 23% Since May Foreshadow S&P 500 Slump
2009-07-01 Bloomberg.com
“Declines of more than 20 percent in regional banks and homebuilders and the failure of transportation companies to erase their annual loss may be signs the rally in the Standard & Poor’s 500 Index is about to fizzle.”
Delinquencies Double on Least-Risky Loans, U.S. Says
2007-07-01 Bloomburg.com
“Delinquency rates on the least risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure.”
Bailout Tracker: TARP, TIP, PPIP and TALF
Wall Street Journal.com’s Bailout Tracker
Where is the $$$ going?
175 California Hotels In Default; Sheraton Keahou Bay Resort in Hawaii Defaults; More Defaults Coming
2009-06-28 Mishs Global Economic Blog
In California, 175 hotels are in default — the first stage in the foreclosure process — according to a report from Atlas Hospitality Group, an Irvine-based brokerage firm. Another 31 have been foreclosed, nearly one third of them in the Inland region.
Of those in default or foreclosure, about 75 percent obtained new loans between 2005 and 2007 for construction financing, re-financing or to buy the hotel, according to the firm. Atlas Hospitality estimates that 2,500 hotels — about 25 percent of the state’s entire hotel population — refinanced or obtained new loans in that time meaning more defaults and foreclosures could be on the horizon.
Agency MBS (Mortgages)? Better Read This!
2009-06-29 Denninger.net
“Mad props once again to Zerohedge who shone the bright light on Freddie’s latest screed. I’m not going to take from their discussion of The Fed buying up paper at what will (almost certainly) lead to ruinous losses – you can find that there. Rather, I am going to look at some of the internals from the document published that they didn’t focus on.”
Wary of dollar, China wants super-sovereign currency
2009-06-26 Forbes.com
China’s central bank renewed its call on Friday for the creation of a super-sovereign reserve currency to reduce the dollar’s global domination, which it said had worsened the financial crisis. In its annual financial stability report, the central bank did not mention the dollar by name but said it was a serious defect that one currency should tower over all others. “An international monetary system dominated by a single sovereign sovereign currency has intensified the concentration of risk and the spread of the crisis,” the People’s Bank of China said.
Delinquencies on US Auto-backed Securities Jump 22%
2009-06-27 ResearchRecap.com
Roubini: No confidence in government exit strategy
2009-06-26 Bloomburg:
In this Bloomberg segment Dr. Nouriel Roubini shares his thoughts on why pundits proclaiming the stabilization of the housing market are wrong and why the current policy path is unsustainable and likely to have a messy exit. My favorite part? The idea of our debt ballooning from 40% GDP to 80%. Lovely. Can you say bust?
-
Archives
- May 2011 (1)
- April 2011 (1)
- December 2010 (3)
- November 2010 (10)
- October 2010 (8)
- July 2010 (10)
- May 2010 (4)
- April 2010 (15)
- December 2009 (8)
- November 2009 (5)
- September 2009 (13)
- July 2009 (17)
-
Categories
-
RSS
Entries RSS
Comments RSS
