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    and Foreclosures, Realtytrac report below

go to page: Bank crisis? Reform!
By Rudo de Ruijter,
Independent researcher,

Finance Crisis 2007

= go to page

related NFU pages:economy
Foreclosures, Resets
Progressive Reference Conservative
  • BeyondNeanderthal
  • ChartingStocks falling dollar
  • Secrets of Money, Interest & Inflation
  • DailyKos, How Credit Markets Work  ... The investment bank then essentially makes a bond out of these pooled mortgages and sells these bonds to hedge funds, insurance companies, mutual funds and money managers who place the bonds in their portfolios  more
  • Daily Mail  Police called to break up ....
  • EIR  Liquidity pumping shows problem far bigger than Northern Rock,
  • EIR Florida land bubble of 1926 was warning to 1929 crash, Great Depression, and leading the way in 2007 mortgage bubble meltdown,  counties and municipalities tax receipts down, sinking home prices, real estate taxes, mass foreclosures, value of short-term investments of state agencies' funds collected but not spent, backed by MBS, evaporating
  • Fall of the Dollar
  • Global Public Media
  • GoWest, Al Gore, get rich 
  • Information Clearing House Home prices
  • Planet Ark news  
  • Secrets of Money, Interest & Inflation
  • Corporate Europe Observer targeting threats to democracy, equity, social justice, environment posed by corp & lobbies
  • CorpWatch Riggs Bank, Pinochet, WTO, accountability.
  • Notes: U.S. economy will continue to decline well into 2008, ...  weaker U.S. dollar, which continually set record lows against the euro during the third quarter, undoubtedly aided some export-heavy sectors. Unfortunately, the belief is that housing woes and a slowdown to the U.S. economy will sabotage profit growth for many.
  • notes: increase in foreclosures? ..Oct 07, historic levels, house values down, less equity to leverage, financial bind, limits opportunity to sell at a profit, rising interest rates due to inflation from increasing money supply, correlation of unemployment rates and foreclosure rates, clean out weak borrowers, supply and demand, percentage of REO  (bank repossession) is most important, all remedies failed,
  • Rude Awakening  Bail Out Nation article
  • meltdown started accelerating Oct 2007, debt dollar repatriation into different names is slowing, gold market manipulations, lowballing CPI numbers, liquidity injection more than a blip, Turkey and Iran ganging up to hit Kurds, Turkey no longer U. S. lapdog, will never be accepted as European, Dalai Lama 'mistake', Venezuela and Cuba combine with as much influence in SA as US.
  • WhatEverHappened, Federal Reserve, legalized counterfeiting
  • .
  • ABA 
    • Foreclosures rising, resets at $30-40 billion per month 2008.
    • .... freezing rates on subprime mortgage loans may lead to credit-rating reductions on some mortgage bonds.
  • Credit.about 
  • Everbank recession indicator
  • FGIC, controlled by PMI Group Inc., Blackstone Group LP, and Cypress Group LLC
  • Financial Services Roundtable, Bill Longbrake
  • 1.7 million preforeclosures,  950k auctions,  1.3 million REOs,  as of Oct 2007
  • GAO, Government Accounting Office, Comptroller General David Walker, ... tells journalists they must start covering the impending U. S. financial crisis ... see WMR
  • Goldseek, Residential Investment to GDP ratio as recession indicator
  • HomeOwnership Preservation Foundation
  • Hope Now Alliance 1-888-995-HOPE notes, finding qualified counselors difficult, 
  • National Training Information Center, mortgage foreclosures, resets, ARMs
  • KitcoCasey
  • HarshRealities
  • InvestorPedia
  • MarketOracle.UK banks hoarding capital to hide exposure to off-balance sheet subprime loans
  • MBIA The bond insurers promise to make interest and principal payments as they come due on securities if the issuer faltered.
  • MGIC Mortgage Guaranty Insurance Corporaton
  • Aug 07, Mortgage resets: Record bill coming due ... Billions in subprime ARMs will be subject to higher payments, ... more than 2 million subprime ... poised to reset in the coming months, teaser rates, 
  • Neighborhood Assistance Corporation, Bruce Marks,
  • NeighborWorks America, Ken Wade
  • Optimist123  Jobs research
  • PaymentsNews
  • Realty Times
  • RealtyTrac real estate short sales ... 
  • RealtyTrac foreclosures, listings, homes, best neighborhoods, buy, real estate agencies, contact, home financing, credit services, score, search foreclosures, banks, property data, pre-foreclosure, home value analysis, NOD, LIS, pay off, property in default, auction property details,
  • SafeHaven GLD StreetTracks Gold Shares, 20 million ounces held in trust, 600 metric tons tonnes,  total gold is about 30,000 tons, banks probably dramatically over-reporting physical gold holdings, 
  • Standard & Poors, rated as sound billions in loans to people with no jobs, assets ...
  • SeekingAlpha bonds determine Fed actions not vice versa
  • ShortSalesMagic
  • The Financials, short term interest rates, charts, data
  • Thompson Financial earnings 4th quarter 2007 on 1.4/% increase, worst in 5 years.
  • U. S. Conference of Mayors, forclosures, fix?
  • USNews, Recession that didn't happen
  • Securities Industry Financial Markets Association Sales of bonds backed by subprime mortgages grew to $450 billion last year from $95 billion in 2001, according to the Securities Industry Financial Markets Association, a New York- based trade group. If the rates on the mortgages are fixed at lower cost, the value of the bonds may drop.
  • Yahoo Jack Guttentag, mortgage crisis, Bringing Down the House.
  • Bureau of Economic Analysis
  • Bureau of Justice Statistics
  • Bureau of Labor Statistics
  • Bureau of Transportation Statistics
  • Census Bureau
  • Economic Research Service
  • Energy Information Administration
  • National Agricultural Statistics Service
  • National Center for Education Statistics
  • National Center for Health Statistics
  • Statistics of Income (IRS)
  • more below


  • Ambac Insurance downgrade? by Fitch ... FGIC Corp downgrade possible and CIFG Guaranty downgrade possible, sending interest rates through the roof
  • Go to Florida, Montana, Investment pool meltdown research
  • American Enterprise Institute
  • The American Securitization Forum
  • Cato Institute  
  • Center for Global Development partially funded by Citigroup, CP, Microsoft, World Bank
  • CIFG Guaranty downgrade possible, sending interest rates through the roof
  • Bank of America, Hope Now, 'help' homeowners,
  • American Bankers Association press releases, credit card, subprime, delinquency, Consumer Credit Delinquency Bulletin
  • Beazer Homes, doors open for litigation, employees of it mortgage subsidiary violated federal down payment assistance regulations, shares tumbled, Oct 2007, may have to pay reimbusements for losses on FHA loans, lawsuits and fines, actual and punitive damages, settlement?, civil suits?, fraud, down payment scams, 'inducement', acting as home seller and loan broker illegal, Bank of America
  • BusinessWeek, Citi CDO 'problem', Nov 1
  • Citigroup, off balance sheet, SIV,  'legal' fraud.  
  • Citigroup, bankrupt? SIV accounting fraud, Bloomberg Bloomberg
  • CNN Not everyone favors helping homeowners... and $2 Trillion Credit Crunch CNN
  • CountryWide bankruptcy?, Sandor Samuels, and officials to testify before Congress: Robert Steel (Bush Treasury dept), 
  • Core Mortgage Risk Monitor (CMRM) 
  • FHA Brian Montgomery, Senate hearing, 
  • Federal Reserve Statistical Releases, Consumer Credit, Factors Affecting Reserve Balances, Industrial Production, Capacity Utilization, Money Stock Measures, Commercial Paper, Country Exposure Lending Survey, Foreign Exchange Rates, Flow of Funds, Home Mortgage Disclosure Act Data,  Household Debt ratios, Survey of Consumer Finances, 
  • Fitch
  • ForeclosurePulse, RealtyTrac 
  • Global Insight
  • Hope Now Alliance 1-888-995-HOPE
  • HUD 
  • International Council of Shopping Centers
  • JP Morgan Chase & Co. bankrupt, 2 million could lose homes 2007-9
  • Ludwig von Mises Institute, Austrian theory of the business cycle, as developed by Ludwig von Mises and elaborated by Friedrich Hayek, the aggressive Fed "stimulus" is ominous indeed. 
  • MarketWatch, Dow Jones company, watch for a stock market rally right at the beginning of the recession. Oct 2007
  • Minyanville
  • Moody's Oct 07 "Global business confidence appears to have stabilized, but at a low level that is consistent with a global economy that is just avoiding recession. U."
  • Mortgage Bankers Association, about 1% of all loans are now in process of being foreclosed
  • National Association of Home Builders Sentiment Index
  • RealFacts shortage of rental units, landlords, rental rates, weak housing market, 
  • RealtyTrac real estate short sales ... 
  • Standard & Poors, rated as sound billions in loans to people with no jobs, assets ...
  • SEC Executive Compensation Reader
  • ShortSalesMagic
  • Thompson Financial earnings 4th quarter 2007 on 1.4/% increase, worst in 5 years.
  • USNews, Recession that didn't happen
  • Nov. 26, 2008  (Bloomberg) -- The Federal Reserve’s new $800 billion effort to combat the financial crisis is designed to make credit more accessible to shaken consumers who aren’t sure they want more debt.  ....   The spreads on most of Fannie’s and Freddie’s $1.7 trillion of corporate debt and $4.1 trillion of mortgage-backed bonds over comparable Treasuries tumbled to the lowest levels since early October. The cost to protect against defaults on corporate bonds and on securities backed by commercial mortgages also declined.
  • Notes: Credit card debt will increase dramatically as people use it to pay reset mortgages, short term rescue, banks raising credit limits, lower lending standards, increase recruitment, consumers can't borrow against their homes, junk mail credit card solicitations hit 5.3 billion, grab market share, code words for making loans that won't get paid back, but card defaults are up, $500 billion on cards now, Oct 2007, credit card interest is not tax deductible,   notes: growing non US international sized businesses: Johnson Electric (China, Hong Kong), Good Baby Industrial (China), Tata Group (India), Larsen & Toubro (India), Cemex (Mexico), Grupo Bimbo (Mexico), CVRD (Brazil), Petrobas (Brazil), Gazprom (Russia), Severstal (Russia), 
  • The American Securitization Forum, the New York-based industry group that worked with regulators to forge the deal, said Bush's plan is designed to work within the existing contracts. As part of a typical bond contract, servicers are required to modify loans only when it would yield more cash to debtholders than a foreclosure. Agreements also state that loans can't be modified unless a default is ``reasonably foreseeable.''
Chart: Foreclosure data from RealtyTrac, 2005-2007, from press release archives 1.7 million pre-foreclosures,  950k auctions,  1.3 million REOs,  as of Oct 2007.

Stagflation - slowing growth amid rising inflation pressures

  • Wikipedia   The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338 (November 12, 1999), is an Act of the United States Congress which repealed the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies. The Glass-Steagall Act prohibited a bank from offering investment, commercial banking, and insurance services.  
  • Financial Times "Florida fund freeze leaves schools body 'flat broke' By Andrew Ward and Stacy-Marie Ishmael in New York.   Dec, 2007 ... School districts and local governments in Florida are scrambling to raise cash to pay wages and bills after state officials suspended their access to a state-run investment fund. Counties, cities and school districts across Florida had entrusted as much as $27bn (£13bn, €18bn) to the Local Government Investment Pool, which is managed by the Florida State Board of Administration.  But the pool has now shrunk to around $15bn, as investors worried about its exposure to subprime-tainted securities demanded their money back.  ... The Florida fund invested $2bn in so-called structured investment vehicles and other debt linked to the stricken subprime mortgage market.  Around $1.5bn of these securities have since been downgraded to levels which do not meet the fund's minimum investment standards.  On Thursday, board trustees led by Governor Charlie Crist voted to halt redemptions, hoping to stem the tide of withdrawals and prevent the forced sale of assets. ... And Montana, run on the fund New York Times
  • Conduits, trouble...  what are they? Conduit debt: setup to provide debt financing to borrowers, asset collateralized, off-balance sheet unless investors stop buying the debt, similar to CDOs, and demand has now shrunk (Dec 2007), every major bank has exposure, but they're mum, see 'variable interest entities', VIE, see FIN 46-R, sham reporting, and see Asia Times and terms: the first investors to withdraw funds get %100, last get less, ...state-run  investment pools,  Local Government Investment Pool, run on the fund, no one who takes money out will put it back in,  Hillsborough County Public Schools, public accounts, modeled after private money-market funds, 'safe', liquid, short-term debt, State Board of Administration, Crist, Sink, McCollum, 
  •   MORE at NFU finance page Go to Florida, Montana, Connecticut, California Investment pool SIV downgrades,  research
  • GoldSeek  2007 Housing Bubble Bust: "Just how long did the powers to be think they could keep this Ponzi scheme of mortgage debt going before it would begin to unravel? I first wrote about it in June, 2004 when I outlined in my article “Our Worst Nightmare – the Puncture of the Current Housing Bubble” how simple mortgages were being transformed into derivative instruments called Collateralized Debt Obligations which would become bad investments if either interest rates increased or housing prices fell to the extent that they resulted in an inordinate increase in mortgage defaults. Regretfully, that has indeed happened peeking out in February (2007) , showing its ugly head in May (2007) with the Bear Stearns fund blow-up and coming home to roost during the past month."  ...  " The lenders, for their part, packaged those mortgages, along with higher grade mortgages, into securities packages called Residential Mortgage Backed Securities and sold them to eager buyers as Collateralized Debt Obligations (CDO). When the defaults escalated to a certain point (and research by RBS Greenwich suggests that 20 – 23% of all subprime loans made in 2006 will go into default and foreclosure causing losses of 10 -11.5%) it became clear the financial markets had grown lax in their pricing of risk and so, in the past two weeks, and to everyone’s alarm, the price of risk has been recalibrated and since there is a much reduced market for their CDOs those owning them (foreigners, mutual funds and hedge funds) have undertaken to sell their high quality holdings – stocks, commodities, etc – at reduced prices to meet margin calls. That explains why assets that do not normally correlate with each other have all moved together – down."
  • SafeHaven recession 2007
  • AgoraFinancial  Nov 2007 "The quantity of asset-backed commercial paper outstanding (ABCP) is plummeting. This phenomenon means that creditors are refusing to finance asset-backed entities. That’s very bad news. As long as the ABCP market continues to contract, stresses will continue to worsen thought the U.S. financial system…at least that’s our theory, and we see no reason to revise it.  ... As noted in the October 26th edition of the Rude Awakening, “A-B-C-P may be the four most influential letters in today’s financial environment. The fate of those four letters over the next few weeks will determine the fate of the  U.S. stock market and the U.S. dollar. The wellbeing of the entire U.S. economy might also hang in the balance… “The ABCP market is struggling mightily at the moment,” we continued. “Almost no one will provide financing to an asset-backed entity, especially not an asset-backed entity like a ’structured investment vehicle’ (SIV) that is full of mortgage-backed securities (MBS).  ... “Since almost all the investors who comprise the free market refuse to purchase ABCP,” we concluded, “the Federal Reserve has stepped into the breach. In other words, the Fed is now financing the very same stuff that the world’s private investors refuse to finance. What more do you need to know about the gravity of America’s credit crisis?” 
Federal Reserve Statistical Releases, Consumer Credit, Factors Affecting Reserve Balances, Industrial Production, Capacity Utilization, Money Stock Measures, Commercial Paper, Country Exposure Lending Survey, Foreign Exchange Rates, Flow of Funds, Home Mortgage Disclosure Act Data,  Household Debt ratios, Survey of Consumer Finances,  

Construction Spending y/y change  Census Bureau  and Commerce Department

Housing Starts  yr / yr change, Census Bureau and Commerce Department


above: 10 yr. TNX

and see 2 yr Treasury Note data StockCharts

  & and go to: 

Go to: More Economic Indicator Charts

 &  Foreign held US securities info

Fed: Marketable securities held in custody for foreign official and international accounts and NFU chart

more: Mineset (chart) Reuters

above: Short term interest rates: IRX,

and see 2 yr Treasury Note data StockCharts


Dollar Collapse?
Progressive Reference Conservative
  • Counterpunch How the world could stop Bush, Dump Dollars, ... The US is totally dependent upon foreigners (China, Japan, largest) to finance its budget and trade deficits. By financing these deficits, foreign governments are complicit in the Bush Regime's military aggressions and war crimes
  • Cultural Economics The relationship between oil consumption, expenditures and recessions  ...   oil price hike recessions (1973, 1979, 1990 and 2000) 
  • Democratic Underground "Saudi Arabia has refused to cut interest rates in lockstep with the US  break the dollar currency peg in a move that risks setting off a stampede out of the dollar 
  • DissodentVoice, Socialism, 1 percent of US population owns 50 per cent of the wealth.
  • Information Clearing House Saudi Arabia, South Korea, China, Venezuela, Sudan, Iran, Russia among first countries to sell dollars, fall 2007 more at NFU finance page
  • JackLessinger The fall of the consumer economy and the rise of the responsible capitalist. ...  Mercantile Aristocrat of the 1700s through to the intersection of the Consumer Economy and the Responsible Capitalist 
  • Online Journal "China’s "nuclear option" to dump the dollar is real" depress consumer spending, 
  • Rediff US current account deficit is current account surplus in countries that export to US, to cover US borrows from those countries, holding up the value of the dollar. Asian countries are just as much to blame as US.  Limitations to system.  Global imbalance.  US has to have 5% interest rate to keep foreign investment flowing in... so can't cut rates to stimulate in face of 'housing' recession
  • Notes: Among those filing bankruptcy were New Century Financial Corp., Quality Home Loans, Aegis Funding, HomeBanc Mortgage Corp. and People's Choice Financial Corp. ... 
  • RealityZone, The Creature of Jekyll, you'll never trust a banker again
  • notes: five reasons why we are closer to a recession, (1) Inverted Yield Curve is followed by a recession, demand for short term loans is down, indicating a cooling economy, (2) Falling housing prices, 10-25 % predicted, no telling how long it will last, consumer spending slowing, (3)  Credit Crunch, subprime mess, check LIBOR for indicator of resistance in interbank loans, fear, (4)  (5) Falling dollar, foreign countries don't want to buy our debt in a currency that is losing value,  
  • Fed cut rates to fix emerging markets stock collapse in 1997, 1998 ... cut rates for tech bubble crash, cut rates for housing crash, what's next, credit cards?
  • WhatEverHappened, Federal Reserve, legalized counterfeiting
  • notes: "While history shows emerging markets have the greatest potential for growth, they are also susceptible to some of the biggest declines. The Mexican peso devaluation in December 1994 led to a 24 percent drop in developing nations' stocks, while Thailand's decision to let the value of its currency fall on July 2, 1997 spurred a 37 percent loss in six months. Emerging- market shares fell another 19 percent after Russia defaulted on $40 billion of debt on Aug. 17, 1998." Bloomberg
  • Roadblocks, in subprime solutions, 
    • Summary, Saving the Dollar
    • Bloomberg Rising Euro is what China needs to dump dollar, the R-word, 
    • Democratic Underground Saudi Arabia has refused to cut interest rates in lockstep with the US 
    • Bloomberg, Bank of Korea urges shipbuilders to settle contracts in won,
    • Rediff US current account deficit is current account surplus in countries that export to US
    • Financial Sense, China dumping dollars,  and Financial Sense, China
    • Tehran Times Japan Corporations pay for Iran oil with Yen.  Iran requested this.
    • Bloomberg yield curve, Oct 2007
    • Bloomberg, Currency controls, Nov 2007
  • Action Economics, repo market, no employee is associated with any financial ...
  • BBC Market Data
  • Bankrate, foreclosures formula
  • Bloomberg Rising Euro is what China needs to dump dollar, the R-word, 
  • Bloomberg, Canada, Subprime Panic Freezes $40 billion of Canadian Commercial Paper, search terms: September 25, 2007, Baffinland Iron Mines Corp, freeze in market for short-term debt, Toronto, defaults on subprime mortgages in Southern California and Florida, cash in commercial paper, debt backed by mortgages, corporate bonds, auto loans, all stable for decades, yielded 1 percent more than commercial paper, government debt sales fell because of  government surpluses, Libor is benchmark for commercial paper rates, no alternative plans for liquidity, locks up system, 
  • ChartingStocks market crash
  • CommodityOnline The Fed saved the stock market Aug 2007
  • CSM Missing $2.9 Trillion
  • DailyFX
  • DailyReckoning  
  • Energy Bulletin News by region, industry, company
  • Everbank
  • Financial Sense, China dumping dollars,  and Financial Sense, China
  • Financial Sense, Is This the Modern Day 1931
  • Financial Times Foreign investors flee US securities, TIC report, ... how vulneralble the dollar is to a continuation of the credit crunch-risk averse environment, lack of corporate bond inflows, 
  • Financial Times,
  • GATA Gold Anti-Trust Action Committee, Times of London, doubts about the quality and disposition of gold reserves in UK, British and US governments don't want citizens to know about their gold reserves, 
  • Generational Dynamics stock market crash 2007
  • Gold Eagle, book value, Dow  and GE custodial holdings of treasuries for foreign central banks
  • Gold Field Mineral Services, 
  • GoldSeek, meltdown, sept 22
  • GravMag oil
  • Gulf News "Qatar last week said its $50 billion sovereign wealth fund has cut its exposure to the dollar by more than half to about 40 per cent of its portfolio."
  • Gulf Times  "Middle Eastern investors, led by the Arabian Gulf, will spend as much as $300bn on Chinese equities through 2020 to build relationships in Asia and secure higher returns, according to Merrill Lynch.
  • housing price index
  • International Energy Agency tracks China oil demand  China data
  • IPODesktop
  • JSMinset Foreign Central Bank holdings of treasuries ...Fed Custodial Account holdings for Foreign Central Banks
  • KYIVPost As the US Dollar continues its slide, Ukraine’s central bank is likely to strengthen the country’s national currency, a move that would boost the purchasing power of average Ukrainians while taking a bite out of the margins of export-oriented big business tycoons.
  • recessions Third Leg of Bear Market
  • Metal Bulletin trying to ascertain the quality of UK gold reserve condition, does it meet London Good Delivery (LDG) standards, substandard condition, 
  • MoundReport
  • New York University, Voodoo economics, debt
  • SafeHaven, Dow 36000 or 3600?
  • SFGate Fed Rate Cut Can't Pull Home Builders Out of Free Fall"
  • Stabroek News, Guyana, depreciating dollar, causes, consequences, devaluation after decades of dominance, status as an international currency, world stock market equities valued in dollars, nominal anchor for exchange rates, is the hegemony threatened, 
  • Strong, Ed .. run on the dollar, 
  • China threatens 'nuclear option', 
  • This is dfg
  • Treasury Department Treasury International Capital System TIC reports, historical data
  • Wikipedia, Velocity of Money
  • WorldWatch Institute
  • Barclays  \
  • $80 Billion, Dubai construction projects, 2007  and see Taiwan ETF: EWT
  • Bank of England hedge funds raid, 
  • Money  deterioration of gold reserves, mint condition? 99.9 pure? adulterated by a base metal? assay marks not as important as assay certificates, 
  • Bloomberg "Sept. 19, 2007 ...  Bloomberg yield curve, Oct 2007
  • Bloomberg, Bank of Korea urges shipbuilders to settle contracts in won, spread sales of currency forward contracts, hedging activities, to curb won's gains against the dollar, 
  • no more Bush Clinton?
  • BreakingNewsUpdate, Debka, Situation Room, October Market Crash, commodities, inflation
  • Citigroup, gold being used for the surreptitious manipulation of markets, 
  • CNBC, editorial policy of avoiding negative news?  like a stock market crash 2007
  • Cosmo Oil, Japan, will pay for Iran oil with yen. Oct 2007 ... pressure from Washington to limit Iran's dealings with US financial system
  • Credit Derivative Research, Corporate default insurance, super senior debt, corporate debt, pension funds, hedge funds,  write-downs, credit crunch, tranches, 
  • DLC Democratic Leadership Council
  • Fars News Agency (IRAN)  Japan Corporations pay for Iran oil with Yen.  Iran requested this.   1944 Bretton Woods, allowing the US to accumulate trade deficits and fiscal debts without consequence, 
  • Market crashes
  • FoxNews, five reasons why we are closer to a recession, Inverted Yield Curve is followed by a recession, demand for short term loans is down, indicating a cooling economy, 
  • HSBC, gold used to prop up currencies in times of adversity, used to finance emergency imports, Gordon Brown decision to sell 400 tonnes of gold between 1999 and 2000, Chancellor, government sales of reserves down.
  • Japan Energy Corp will pay for Iran oil with yen, Oct 2007
  • Library of Economics and Liberty
  • London Bullion Market Association
  • Market Watch Bond reinvestment risk, in a interest rate cut environment
  • Merrill Lynch
  • Minyanville Ron Paul " ... I think moral hazard begins at the very moment that we create artificially low interest rates which we constantly do. 
  • Mortgage Bankers Association mortgage applications data
  • MSN, Epic Bear Market
  • New York Federal Reserve,  search data on China dollar
  • Nippon Oil, Japan refiners pay for Iran Oil with yen
  • Royal Institution of Chartered Surveyors
  • Tehran Times  (IRAN) Japan Corporations pay for Iran oil with Yen.  Iran requested this.
  • Zillow notes:Defaults are soaring. Home sales and prices are falling. Business is thin for real estate agents and mortgage brokers. But the money keeps pouring into Zillow, a Web site that computes the value of homes
  • New York Times, remember Judith Miller and all her lies leading up to the Iraq war  Business
  • StockPickr 
  • TheStreet dollar daize
  • The Creature from Jekyll Island, about the true origination and character of the Federal Reserve  Minyanville
  • notes: 11% solution, Barron's, Wall Street Journal, Murdoch, in any 20 year period since 1920, market is constant, in average earnings, growth, 1996-2007 bubble true then, so next nine years have to compensate, average earnings are 11% of book value, makes no difference what's going on politically, economically ...etc.
  • billionaires list
  • notes: shipbuilders sell dollars and buy won in the forward market, hedge foreign-exchange-rate risks, regulators probing surge in sales of forward contracts that caused elevation of won to dollar, ... export boom expected to continue, look into how forward sales and rising short-term borrowings affect currency market, Iran sells more than 70 % of its oil in euro and yen. source: Bloomberg 
  • notes: Citigroup BOD ...C. Michael Armstrong , Chairman - Board of Trustees, Johns Hopkins Medicine, Health System Corporation and Hospital; • Alain J.P. Belda, CEO, Alcoa Inc.; • George David, CEO, United Technologies Corporation; • Kenneth T. Derr, Chairman, Retired, Chevron Corporation; • John M. Deutch, Institute Professor, Massachusetts Institute of Technology; • Roberto Hernández Ramírez; Chairman, Banco Nacional de Mexico; • Andrew N. Liveris; CEO, The Dow Chemical Company; • Anne Mulcahy, CEO, Xerox Corporation; • Richard D. Parsons, CEO, Time Warner Inc.; • Judith Rodin, President, Rockefeller Foundation; • Robert E. Rubin, Chairman, Citigroup Inc.; • Robert L. Ryan; Chief Financial Officer, Retired, Medtronic Inc. • Franklin A. Thomas, Consultant, TFF Study Group
  • PIMCO’s Bill Gross "... view is that a U.S. Fed easing cycle historically has required a destination of 1% real short rates or lower. Under a conservative assumption of 2½% inflation, that implies Fed Funds at 3¾% or so over the next 6-12 months. Actually that’s only two, 50 basis point reductions, something that could, but probably won’t, be accomplished by year-end. Don Kohn’s asymmetric elevator will likely be interrupted by false hopes of a housing bottom, fears of a dollar crisis, or misinterpreted one month’s signs of employment gains and faux economic strength. The downward path of home prices, however, will dominate Fed policy over the next several years as will the lingering unwind of related financial structures and derivatives that have yet to be discovered by the public, and marked to market by their conduit holders."
  • Bill Gross, PIMCO

  • Rediff US current account deficit is current account surplus in countries that export to US, to cover US borrows from those countries, holding up the value of the dollar. Asian countries are just as much to blame as US.  Limitations to system.  Global imbalance.  US has to have 5% interest rate to keep foreign investment flowing in... so can't cut rates to stimulate in face of 'housing' recession
  •   Sept 2007,  "The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation. ... such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.  ...  It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds. ...  He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.  ...  gold bullion, regarded as the best insurance against any turmoil in global money markets, but reserves in UK, US may not be pure gold, cracks fissures, 
  • Bloomberg   The dollar dropped to a record low against the euro, now worth more than $1.40. While a weakening dollar can give a lift to shares of companies that are big exporters, it also threatens to make inflation worse because of the United States' heavy reliance on imported goods. ...  
  • it would take a "change in attitude from the investment side of the market" to send gold prices significantly lower,  ...  A big stretch We're really talking about something short of a miracle for gold prices to drop from their current levels ...  India could slow its consumption, the U.S. could go into a recession, the U.S. stock market could rally further, taking the attention away from gold, and the credit crunch could continue and spur massive gold sales, ... The credit crisis would have to abate, western housing markets stabilize and the U.S. consumer continue on the merry spending spree ... 
  • CommodityOnline (market crash) "The second act is when the market finds out how big the losses are and who has them. This is what happened in 1998. The market fell hard in August of that year due to turmoil in the international bond market, bounced, in September, and then dropped hard again to form a double bottom when the Long-Term Capital hedge fund blew up ... the first act of a financial crisis - and normally those unfold in two stages. The first being when people realize there is a big problem causing huge frightening losses the extent of which are unknown and are forcing institutional investors to selling due to margin calls and redemptions. ...  The second act is when the market finds out how big the losses are and who has them. This is what happened in 1998. The market fell hard in August of that year due to turmoil in the international bond market, bounced, in September, and then dropped hard again to form a double bottom when the Long-Term Capital hedge fund blew up. ... The Fed is supposed to lower rates as you approach the trough of a business cycle, not right up near the top when there is inflation. To do so is very dangerous and if Bernanke continues this course he will destroy the value of the dollar.
  • Citigroup, off balance sheet structures, SIV, isn't that also called fraud?
  • TheStreet  How the Market Will Unravel ... "Lower Business Spending Based on a Weakening Domestic Economy: In the coming months, the credit market's unwind will most likely be felt by a reduction in hirings and delays in business fixed investment. Last week's ISI Group surveys -- trucking and shipping, U.S. CFO Diffusion Index (Fuqua), U.S. Small Business Optimism Index, the North America Business Confidence Index, U.S. CFO Employment Expectations (Fuqua), U.S. CFO Capital Spending Expectations (Fuqua) and U.S. Small Business Trends (NFIB) Capex Plans -- all point to multiyear lows in confidence and are supportive of a marked slowdown in business spending.
  • A point is 1% of the total mortgage amount, charged as prepaid interest.   A "repo" is a short-term agreement that allows dealers to sell government securities to investors and buy them back the following day.
  • Strong, Ed "Central banks around the world no longer have to load up on dollars simply because there is no alternative; the euro is one, the Chinese yuan will soon become another.  As far as the economy is concerned, the strong dollar has allowed the US to live beyond its means for far longer than has been healthy either for America or the global economy as a whole.  A high dollar meant exports into the US were cheap, and that kept both inflation and interest rates low.  Easy credit terms meant that the US has had not one but two speculative booms over the past decade, the first in dot com shares, the second in the housing market. Growth has been artificially boosted and the trade deficit has exploded."
  • Long-term Treasury prices increase on drop in new home sales,   Treasuries, which carry a government guarantee, often perform well when data indicates the economy is weakening and investors should buy low-risk assets. Auctions include an an  indirect bid, a category that is carefully monitored because it includes foreign central banks. High indirect bids soothe worries that foreign governments are scaling back their holdings in Treasuries.  The benchmark is the 10-year Treasury note ... Prices and yields move in opposite directions.  The 30-year long bond   The 2-year note  The yield on the 3-month Treasury bill 
  • Comptroller General Walker / WMR  "Comptroller General Walker: Financial tsunami coming  ...  David Walker, the Comptroller General of the United States, urged journalists gathered in Washington for the annual meeting of the Society of Professional Journalists to start covering with more honestly the impending financial crisis facing the United States. Walker is the head of Congress' Government Accountability Office (GAO), a non-partisan oversight and chief accountant position with a 15-year term. ... Walker warned that with the first "baby boomer" retiring on January 1, 2008, a tsunami of increased non-discretionary spending for Social Security, Medicare, and Medicaid will bankrupt the United States government and may force U.S. bonds into "junk" status in 20 years.  ...  The Comptroller General also warned that the U.S. work force is decreasing and, as a result, so will the tax base. He also said that the United States currently ranks 16 out of 28 among industrialized nations in leading quality of life indicators, including health care, the environment, personal savings, and education. 
  • Bloomberg "Central banks from Bogota to Mumbai are imposing foreign-exchange curbs to take control of their soaring currencies from traders dumping the dollar.  In Colombia, international investors buying stocks and bonds must leave a 40 percent deposit at Banco de la Republica for six months. The Reserve Bank of India created a bureaucratic thicket to curb speculation by foreign money managers. The Bank of Korea is investigating trading of currency forward contracts to limit gains in the won, now at a 10-year high.  Instead of using currency reserves or interest rates to influence foreign exchange markets, central banks and finance ministries are setting up obstacles to keep the falling dollar from threatening company profits and economic growth. The U.S. currency slumped 10 percent this year against its biggest trading partners, the steepest decline since 2003, while Treasury Secretary Henry Paulson has reiterated that the U.S. supports a ``strong'' dollar." 
  • Any country with loads of debt, even the US, is tempted to inflate its currency, reducing its value, but erasing the debt, destructive spiral ... poor economic policy.
  • Bloomberg  "School districts, counties and cities across Florida sought to raise cash after being denied access to their deposits in a $15 billion state-run investment fund.  The Jefferson County school district was forced to take out a short-term loan to cover payroll for the 220 teachers and other employees in the system after $2.7 million it held in the pool was frozen yesterday. At least five other districts also obtained last-minute loans, said Wayne Blanton, executive director of the Florida School Boards Association. ... terms ..classic run-on-th-bank,  and Bloomberg "Money market rates rise ...
  • Bloomberg Survey companies:  4CAST Ltd., Action Economics, Aletti Gestielle SGR, Ameriprise Financial Inc, Argus Research Corp., Banc of America Securitie Bank of Tokyo- Mitsubishi, Bantleon Bank AG, Barclays Capital, BMO Capital Markets, BNP Paribas,, Calyon, CIBC World Markets, Citi, ClearView Economics, Commerzbank AG, Credit Suisse, Daiwa Securities America, Danske Bank, DekaBank Desjardins Group, Deutsche Bank Securities, Deutsche Postbank AG, Dresdner Kleinwort, DZ Bank, First Trust Advisors, Fortis Helaba, Herrmann Forecasting, High Frequency Economics, Horizon Investments, HSBC Markets, IDEAglobal, IHS Global Insight Informa Global Markets, ING Financial Markets, Insight Economics, Intesa-SanPaulo, J.P. Morgan Chase, Janney Montgomery Scott L, JPMorgan’s Private Wealth, Landesbank Berlin, Landesbank BW, Lloyds TSB, Maria Fiorini Ramirez Inc, Merrill Lynch, MFC Global Investment Man, Moody’s, Morgan Keegan & Co., Morgan Stanley & Co., National Bank Financial, National City Corporation, Natixis, Newedge , Nomura Securities Intl., PNC Bank, RBC Capital Markets, RBS Greenwich Capital, Ried, Thunberg & Co., Schneider Trading Associa, Scotia Capital, Societe Generale, Standard Chartered, Stone & McCarthy Research, TD Securities Thomson Financial/IFR, UBS Securities LLC, Unicredit MIB, University of Maryland, Wachovia Corp., Wells Fargo & Co., WestLB AG Westpac Banking Co., Wrightson Associates
Economic Indicators, data sources  
Economic Indicator Links Market data
Resources Education
The basic parts of an option symbol are:
Root symbol + Month code + Strike price code

A root symbol is not the same as the ticker symbol. Please refer to the option chain for that ticker to find the corresponding root.

.X" suffix to identify the security type as an option.

Example: June 06, 540 puts on OEX-X.W       quote =OEBQH.X   where OEB = Root symbol, Q=Month code, H=Strike price code, .X=option

Yields on 10-year notes  souce data: ^TNX,  chart updated daily ...  a weakening economy will raise bond yields.  figure represents investor inflation expectations for the next decade ... 
  • Bloomberg "Petroleum exporters are adding to holdings of U.S. debt three times faster than other foreign investors, the Treasury data show. Yields on 10-year notes are 21 basis points lower because of the additional petrodollar reinvestment, New York- based consulting company McKinsey & Co. said last week." ... ``Oil revenues are up; they're still in dollars and it has to be put to work,'' said David Ader, head of U.S. government bond strategy in Greenwich, Connecticut, at RBS Greenwich Capital, one of the 21 primary dealers that underwrite U.S. government debt. ``It bodes well for U.S. debt.'' ...  Demand from oil exporters may help drive yields lower even as signs the U.S. economy is weathering the worst housing market in 16 years reduce investor expectations for lower interest rates. The chances that the Federal Reserve will lower its target rate for overnight loans between banks this month fell to 48 percent from 74 percent a week ago, based on prices at the Chicago Board of Trade.  ...  OPEC's Windfall  The yield on the benchmark 4 3/4 percent note due in August 2017 rose 4 basis points last week to 4.64 percent, according to New York-based bond broker Cantor Fitzgerald LP. The price, which moves inversely to the yield, fell 10/32, or $3.13 per $1,000 face amount, to 100 7/8. A basis point is 0.01 percentage point. The yield was little changed at 4.63 percent today.  ... OPEC's windfall suggests there will be demand for U.S. debt from international investors even as the dollar falls to a record low versus the euro, said Michael Pond, a debt strategist at Barclays Capital Inc. The London-based firm is also a primary dealer. Among foreign holders only Japan, China and the U.K. own more Treasuries than the 12 members of OPEC, which supplies more than 40 percent of the world's crude. .. Oil exporters eclipsed Asian nations last year as the biggest source of global capital for the first time since the 1970s, McKinsey found. At $70 a barrel, $628 billion of fresh petrodollars will flood through global financial markets yearly, McKinsey said."

  • September 2007, Inter-bank lending has been virtually frozen as a result of record defaults and late payments on mortgages in the US taken out by lenders on low incomes or with poor credit.  They have been unable to keep up with their monthly repayments after successive interest rate rises.  This has caused havoc in financial institutions worldwide as many have invested in complicated debt instruments which have been hugely exposed to the lower end of the US housing market.

  • discount rate - a largely symbolic interest rate that determines what banks pay to borrow from the Fed

  • TheStreet "... rate cuts do steepen the yield curve, which helps banks that borrow in the short-term markets and lend out at longer, higher rates, meaning they have what's called positive carry. But "any rate cut will be muted in the real world" until investors believe there's a rescue for the SIVs and the banks, ...  The problem there is that the excess liquidity that a fed funds rate cut generates doesn't usually move into the worst parts of the market. ....  the rate cut is not necessarily effective because "liquidity seeks out the inflating, not the deflating asset."
World Finance, 2007, Recession?
Progressive Reference Conservative
  • BeyondNeanderthal
  • DailyKos, How Credit Markets Work  ... The investment bank then essentially makes a bond out of these pooled mortgages and sells these bonds to hedge funds, insurance companies, mutual funds and money managers who place the bonds in their portfolios  more
  • Daily Mail  Police called to break up ....
  • EIR  Liquidity pumping shows problem far bigger than Northern Rock, BOE emergency measures, injecting 20 billion pounds into banking system, special unlimited emergency credit line,  insure all deposits,  
  • Guardian, Business, meltdown
  • Guardian, "Spain Spain's runaway economy hits the buffers as building boom stalls"
  • Huffington Post The money markets are seriously malfunctioning at present, and there's no end to this crisis in sight,'' said Marcus Ostwald, a fixed-income strategist at Insinger de Beaufort SA in London.
  • Independent  Panic on the streets of Britain: Northern rocked, City shocked   
  • Planet Ark news
  • Press Esc Dollar collapse
  • Information Clearing House
  • The Oil Drum, Canada, the recession is already here.
  • WSWS Spanish property boom ends amidst share panic, net aquisition of financial assets minus net increase in liabilities, chart looks like a recession waiting to happen. ITulip
  • notes: Other major British banks, including Bradford & Bingley, Alliance & Leicester and Paragon, issued statements insisting they were not in similar trouble, The Telegraph reported.  ...   The panic jammed Northern Rock's phone lines, crashed its Web site and packed its 72 branches with customers monitored by security guards and police. ..
  • Business Week "Commercial Paper,  A has to be what has happened in the commercial paper market. Used to be that banks provided all the money a business needed to function. That’s changed dramatically over the past few decades, thanks in part to the rise of the $2 trillion commercial paper market. Commercial paper consists of short-term (under 270 days maturity but mostly a week or less) securities issued by all kinds of companies and purchased by all kinds of investors including money market mutual funds. About half the market consists of companies putting up some of their assets — could be receivables, could be leases, could be mortgages — as collateral. Putting up the collateral means the companies pay a lot lower rate of interest, rating agencies grant higher ratings and the economy powers on."
  •   for latest version of this chart ... see Commercial Paper statistics, .... and yield curve.
  • PCE Personal Consumption expenditures deflator, personal spending report, eliminates volatile food and energy prices, 
  • DailyKos   2007 Credit Crisis:   Here we have a simple borrower and lender. The borrower goes to the lender and asks, "Can I borrow some money"? The Lender says, "sure", and makes a $100,000 at 5% loan for 30 years. We’ll assume this is your simple, run-of-the-mill mortgage.  Now, the lender doesn’t keep the loan on his books. Instead, he sells them to an investment bank. The lender gets cash for the loan and the investment bank gets a mortgage. The investment bank then pools the mortgage with other similar mortgages. Remember at the beginning we got a $100,000 30-year loan at 5%. The investment banker will pool out loan with other 30-year, 6% $100,000 loans.  The investment bank then essentially makes a bond out of these pooled mortgages and sells these bonds to hedge funds, insurance companies, mutual funds and money managers who place the bonds in their portfolios. Now we’re in this part of the diagram: OK – so what is happening in the credit markets right now? Investment banks aren’t buying loans. That means lenders – instead of getting money for the loans they make are having to keep the loans on their books. That also means that lenders can’t make as many loans. Investment banks area having a harder time selling loans/assets to money mangers, hedge funds and mutual funds. That means investment banks are having to keep assets on their books they would normally sell down the line. In short, the flow of funds throughout the financial system is at a standstill as all of the players reevaluate what they are doing.  In short, money is supposed to move pretty easily from the lender, through investment banks and into the portfolios of institutional investors. But that's not happening right now. The big guys are concerned about credit quality and excessive exposure to the subprime market. That's why they've stopped buying pooled mortgages.  

  • Recession indicator:  "Kasriel pointed to his own favorite indicator of recession -- when the spread between the yield on the 10-year Treasury note and the fed funds rate turns negative and when there is also a year-over-year contraction in the Fed's monetary base adjusted for inflation."
  • Recession indicator ".. six-month changes in the number of people with jobs, as reported by the Labor Department’s household survey. In a growing economy, with the labor age population rising, the number of jobs almost always increases.  ...  But not now. The August employment figures, reported last week, showed 145,794,000 people with jobs, or 125,000 fewer than in February. When that number goes into negative territory, it is a warning of a slowdown.  As can be seen from the chart, the job warning was sent out in July 1990, the month in which the recession began. A warning of the 2001 recession arrived in July 2000, but few took it seriously." NYTimes  Dept of Labor table
  • Business Standard Sep 07 "Around 80 per cent of the $8 trillion residential mortgage debt has been securitised and may be sitting in portfolios of Korean insurance companies, Taiwanese funds, German banks, US pension funds and in the overseas portfolio of some Indian banks as well. Only the portion of mortgages that has not been securitised can be easily reset."
  • Don Rissmiller of New York-based economic consulting firm Strategas, the Federal Reserve's Open Market Policy Committee has already sprung into action. Over the last four weeks it's injected some $183 billion into the economy via what's called "repo operations." In effect, they've increased a key money supply measure by an annual rate of 19 percent. That's a big-time increase. Maybe Cramer struck a nerve. Strategas, however, puts the odds of recession at less than 50 percent. Madison Sept 2007
  • Guardian Sep 07 "Spain's runaway economy hits the buffers as building boom stalls ... · Government warns of uncertain times · Unemployment growth rate highest for 11 years ... Giles Tremlett in Madrid Thursday September 6, 2007 The Guardian  ... Spain's 10-year economic boom finally showed signs of stalling yesterday as the socialist government of the prime minister, José Luis Rodríguez Zapatero, which faces an election in March, admitted the country faces an uncertain future. "We face a period of uncertainty and lack of clarity," Pedro Solbes, the finance minister, said yesterday. "This is always bad for the economy."  Mr Solbes was speaking as unemployment figures showed a sharp increase in workers being forced off building sites, amid claims that a housing bubble was set to burst. Vicente Martínez Pujalte, the spokesman for the centre-right People's party, said the unemployment figures were a sign that the economy was "running out of gas".
  • Daily Times, Sep 07 .. "Overseas investors own more than $4.4 trillion in US debt in the form of bonds and securities. Even if they sell only 25 percent of that sum, the US would feel the pinch of hyper-inflation. For the last decade foreigners have been eager to by our treasuries and equities—-gobbling up America’s enormous $800 billion current account deficit and keeping demand for the dollar artificially high. But just like the subprime mortgage holder whose ‘teaser rate’ has suddenly expired, the US now faces the painful adjustment of higher payments and less discretionary income for indulgences."  bank run eases Marketwatch Callaway
  • Reuters "... why in the face of recession fears and a falling currency has Wall Street too powered to a record high on (Sep 30, 2007)?  Two big reasons are related to emerging markets too.  The first is that rising hard currency reserves in emerging markets -- $4.3 trillion at the IMF's last count -- are partly being channeled into so-called sovereign wealth funds and are expected to be reinvested over time in world markets such as U.S. and European equities among others.  ...  Investment banks estimate the total size of these sovereign funds could climb as high as $12 trillion by 2015.  ...  And another reason for U.S. and European equities being drawn into the slipstream is transnational firms there are increasingly dependant on earnings growth from overseas. ...  Bank of America estimates that overseas earnings of U.S. companies soared 16.4 percent in the first quarter of this year and U.S. affiliate sales and income in countries such as Poland, Russia, Brazil, China and Turkey are running at record highs.  ...  Domestic earnings by contrast rose by just 2.7 percent."   and Wikipedia  ... part of nervousness with SWFs stems from potential for a political backlash against foreign-government ownership of major corporations.  ex: China's State Foreign Exchange Investment Corporation bought non-controlling shares in private-equity giant Blackstone, and Dubai's Borse's acquisition of stake in Nasdaq.
  • The Economist Sovereign Wealth Funds "To understand them, it helps to think about where their money comes from. Many emerging markets, notably China, have built up vast reserves of foreign exchange. Such reserves are traditionally invested in liquid assets like Treasury bonds, which could be sold quickly to prop up the currency. But many countries have far more reserves than they need for this purpose. And China is protected by capital controls. That leaves the government free to buy more exciting things where it might make a better return. Earlier this year China decided to set up a sovereign fund.  ...  Many of these funds are trying to imitate the success of Norway’s Government Pension fund. This has two jobs: to act as a buffer against volatility in the price of oil and as a long-term savings vehicle. It too is taking on more risk. In April the fund announced it would increase the share of equities in its portfolio from 40% to 60%.  ...  The Chinese fund is likely to be modeled on Singapore’s two funds, GIC and Temasek. These entities are more used to taking big stakes in companies than Norway’s fund. The Singaporean funds also try to import expertise through their investments—hence a focus on telecoms and banking. It would be surprising if China’s fund did not make investment decisions for similar reasons. "  and Gulf News "Qatar last week (Oct 07) said its $50 billion sovereign wealth fund has cut its exposure to the dollar by more than half to about 40 per cent of its portfolio."
  • America for sale, EU, Asian, Middle Eastern taking advantage of weak dollar to grab US tech, wipe out competition, (BEA Foreign Direct Investment) foreign corporations buying US businesses, $147 billion 2006, $257 billion 2007, Sovereign Wealth Funds are also buyers.
CDOs, SIVs, CDSs Voodoo debt
Progressive Reference Conservative
  • notes: housing bust is here, housing prices cannot continue compounding faster than incomes, lending standards for mortgage lenders, borrowers have dropped to a zero standard, loose loans that prolonged the boom will worsen the bust, self-feeding greed turns to self-feeding fear,  
  • MarketWatch, CDOs
  • MSN, VooDoo Debt, and the Coming recession, CDOs, "credit fault swaps",  CDSs, the glue that held together housing finance speculation, mortgage exotica, indices ABX.HE , asset-backed home-equity securities, subdivided into tranches,  grouped by relative risk, buyers have disappeared, 
  • Campbell Real Estate Timing Letter
  • Alt-A
  • Bradford & Bingley - will remain vulnerable to this kind of negative speculation unless and until the Bank of England succeeds in restoring confidence to wholesale money markets
  • Money.CNN double digit house price declines
  • Alliance & Leicester bank shares fell by more than 31% on Monday 10/17/07, - much of the slump coming in the last half-hour of trading.  ...mortgages play a key role in A&L's business model.  BBC 
  • Washington Post, 3 Telling Days
  • MSN CDOs "Here's how it worked: In olden days, like 10 years ago, banks wrote and funded their own loans. In the new game, Das points out, banks "originate" loans, "warehouse" them on their balance sheet for a brief time, then "distribute" them to investors by packaging them into derivatives called collateralized debt obligations, or CDOs, and similar instruments. In this scheme, banks don't need to tie up as much capital, so they can put more money out on loan. ...  The more loans that were sold, the more they could use as collateral for more loans, so credit standards were lowered to get more paper out the door -- a task that was accelerated in recent years via fly-by-night brokers now accused of predatory lending practices.    ...   As subprime loan default rates doubled, in contravention of what the models forecast, the CDOs those mortgages backed began to collapse. Because they were so hard to value, banks and funds started looking at all CDOs and other paper backed by mortgages with suspicion, and refused to accept them as collateral for the sort of short-term borrowing that underpins today's money markets.  CDOs were first widely used back in the late 1980s by Drexel Burnham Lambert junk-bond king Michael Milken to sell off damaged and previously unsellable debt in a way that was more palatable to customers"  Bush's Bailout Might Work

  • SIVs, CitiGroup created first in 1988,  ... Moodies cut ratings on SIVs, they sell short-termdebt to buy longer-term higher yielding assets, top 30 SIVs (had) $300 billion in assets, cut capital notes that rank below commercial paper and medium term notes.  .... list: Links Finance (Bank of Montreal), Centauri (largest Citigroup SIV) had P1 cp rating placed on review for downgrade, Deutsche Industriebank AG and Cheyne Capital Management Ltd SIVs defaulted Oct 2007, investors stopped buying their ABCSs, ... Beta Finance (Citigroup) review for downgrade - net asset value declined 60%, Sedna, Dorada, Zela, Five Finance programs on review, Caa3 from Baa1 ...  Orion, Links, cut 11 levels, ... Duke Funding Ellington Global Asset Management LLC, temporary vehicles, downgraded. Bloomberg


CPI data   nonfarm payroll  nonfarm econmagic

.Federal Reserve Statistical Releases, Consumer Credit, Factors Affecting Reserve Balances, Industrial Production, Capacity Utilization, Money Stock Measures, Commercial Paper, Country Exposure Lending Survey, Foreign Exchange Rates, Flow of Funds, Home Mortgage Disclosure Act Data,  Household Debt ratios, Survey of Consumer Finances, 


Hedge Funds
Progressive Reference Conservative
  • Guardian BOE forced to hand emergency funding to Northern Rock, 1st major institution in trouble as a result of global credit crisis, begun by US subprime collapse, BOE wants voluntary code of conduct to encourage transparency, better governance, no central registry of balance sheet positions, lower risk of instability caused by collapse of a major hedge fund, 
  • notes: "Hedge funds work by taking positions in all kinds of financial instruments and markets, generally using funds from wealthy investors topped up by huge amounts of money borrowed from banks. In the jargon they are known as "highly leveraged" institutions and are estimated to wield about $1.5 trillion (£780bn)". Guardian
  • European Central Bank wants central registry of hedge fund positions, 'locusts', 
  • Telegraph, Three of the world's most powerful hedge funds are plotting a break-up of Northern Rock that could generate profits of hundreds of millions of pounds from the stricken mortgage bank – but leave shareholders with virtually nothing.
  • Yahoo Hedge fund, investing, 2008 elections, Dodd, Clinton, Obama, Gravel
  • Long Term Capital, collapse, 1998, Money.CNN history ...   (2007) The worst credit markets since Russia's debt default in 1998 and the collapse of John Meriwether's hedge fund, Long-Term Capital Management LP, was triggered by defaults on subprime mortgages in the U.S.
  • Cerberus, vulture fund that owns Chrysler, part of group to break up Northern Rock
  • Citadel, part of group to break up Northern Rock
  • Goldman Sachs, Chris Flowers, made a fortune from the rescue of Japanese bank, part of group to break up Northern Rock, GS perceived as world's largest hedge fund. p
  •   Telegraph "The proposed deal would see the funds divide up Northern Rock's mortgage book, worth more than £100bn. But shareholders would be left penniless. News of the possible move came after Alistair Darling, the Chancellor, revealed plans to overhaul the protection system for savings deposits, extending the limit to £100,000.  ...  The hedge funds believe they could acquire Northern Rock's mortgages at below face value and make huge profits by holding them until they mature. The funds have yet to approach the Northern Rock board, which has spent the week scrabbling to find a new source of financing  ...  
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