Monthly Archives: July 2008

"UK mortgage slump set to continue until 2011"

From the Times Online: Sir James Crosby, former chief executive of HBOS, who is carrying out a review for the Treasury, said that the “shortage of mortgage finance will persist throughout 2008, 2009 and 2010, and I suspect that current forecasts for new mortgage lending during this period will prove optimistic.” As expected, Sir James […]

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Deutsche Bank’s Michael Mayo: Citi May Write Off Another $8 Billion

When Merrill announced its surprise writedown of super senior CDOs yesterday, all eyes turned to Citigroup, another large holder. Analysts started sharpening their pencils and have offered updated estimates. From Bloomberg: Citigroup Inc. probably will write down the value of collateralized debt obligations by $8 billion in the third quarter based on Merrill Lynch & […]

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Merrill and National Australia Bank CDO Writedowns Linked, and Not the Way You’d Expect, Either

Many readers over the weekend commented on National Australia Bank’s stunning writedown of A$830 in “super senior” CDOs, which resulting in a valuation of ten cents on the dollar, and speculated that this move had implications for US banks. Then Merrill announces a surprise writedown, out of sync with its reporting cycle. Could the two […]

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Links 7/29/08

Alaska Opts for Underground Energy The Future of Things Friday’s remote solar eclipse will be on Internet PhysOrg Australia abandons asylum policy BBC A Touch of Crash: Depression Era Chic New York Post (hat tip Michael Panzner). Does that mean my old WASP propensity to wear things until they are on the verge of falling […]

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Money Market Spreads Signal Continued Stress

Even though the Fannie and Freddie near crisis, which produced a few days of panic in the credit markets, now seems to have abated, money market investors are still on edge. The Financial Times warns that various risk measures remain at elevated levels: Libor, the measure of inter-bank interest rates that is a key barometer […]

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Merrill: $5.7 Billion in 3Q Writedowns, to Sell $8.5 Billion in Shares (Uglier Updated Version)

Wow, Merrill is raising cash like there is no tomorrow. Which of course makes one wonder what they know that the rest of us don’t yet know. From Bloomberg: Merrill Lynch & Co. said it will record $5.7 billion of pretax writedowns in the third quarter because of additional losses on the sale of collateralized […]

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Has Deleveraging Even Begun? (Not For the Fainthearted)

It no doubt seems absurd to question the idea that deleveraging in underway. We’ve had three heroic central bank interventions, starting in August 2007, to reverse seize-ups in the money markets. The asset backed commercial paper market has been almost in run-off mode. Leveraged buyout loans have been scarce to non-existent. Banks have cut home […]

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Links and Quick Takes 7/28/08

Japanese sushi rage threatens iconic Mediterranean tuna PhysOrg Nukes Are Not the Best Way to Stop an Asteroid Wired. In case you wondered. Ben Stein Watch: July 27, 2008 Felix Salmon Agency Subpoenas Focus on 4 Rumors That Hit Lehman Wall Street Journal As Doctors Cater to Looks, Skin Patients Wait New York Times Mortgage […]

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Diss du Jour

From the New York Times: “I cannot find a single convincing argument that tells me that astrologers won’t do better than economists,” Mr. [Nassim Nicholas] Taleb said last week by telephone from Lebanon, where he was mountain hiking. “The problem is the arrogance of these economists,” he said. “They’re making people rely on theories that […]

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Servicers to Ask for Access to Discount Window?

You simply cannot make this stuff up. Reader Steve pointed us to a HousingWire post, which says that mortgage servicers may too come knocking on the Fed’s window for financial support, thanks to the housing bill just passed by Congress. Now we’ve been told by mortgage counsellors involved in the Hope Now Alliance that servicers […]

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William Poole Wants Nasty Fannie and Freddie to Go Away

Former regional Fed president William Poole argues forcefully in a New York Times op-ed today that Fannie Mae and Freddie Mac are not only unnecessary but also distort the financial markets and should be wound down. This program would also be consistent with a strategy of minimizing risk and cost to taxpayers. Probably due to […]

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