subprime-mortgages
Banks Bounce Back from the Dead
Bank shares are back in style. Even after staggering losses were announced by the likes of Wachovia, which registered a $8.9 billion loss in the second quarter, and Washington Mutual, which posted a $3.3 billion stain of red ink in the same period, their shares traded up by 27 percent and 6 percent, respectively.
The share [...]
Get out the Bubbly?- by Greg Strid
Sales of existing homes and condos increased 2.9 percent
to a seasonally adjusted annualized rate of 5.03 million,
crawling past the 4.85 million low-ball concensus estimate
from America’s practitioners of the dismal science- sometimes
known as economists. So, is it time to bring out the bubbly?
This marks the strongest showing for existing home sales
since last October. But, sales are [...]
Struggling Banks Get Foreign Investment
It seems as though xenophobia has an inverse relationship to the ebb and flow of the stock market. As stocks prices sink under the gathering economic gloom brought on by the collapsing housing bubble, paranoia about sovereign wealth funds started to rise. These funds are made up of the accumulated savings of developing nations, such [...]
Big Bank Set To Buy Big Pile of Trouble- by Greg Strid
Bank of America is inching closer to purchasing Countrywide
Financial, the poster child for all that went wrong with
subprime mortgage lending over the past several years.
Granted, no cash will change hands; Bank of America will
pay $4 billion in stock. This is on top of $2 billion in preferred
stock that Bank of America invested in Countrywide last [...]
2007: Naughty Banks Spanked- by Greg Strid
The meltdown in the market for subprime mortgage
securities is fast unraveling into a banking crisis that
threatens to drag the American economy into recession.
During the final stretch of the greatest housing bubble
in American history, financial institutions were tripping
over themselves to extend excessive amounts of credit
to prospective buyers that were lacking in both
qualification and responsibility.
No document loans, [...]
Banana Nation- by Greg Strid
Apparently, the United States is bent on achieving
third world investment grade status. This nation
already sports a trade deficit that would normally
cause the International Monetary Fund (IMF) to
handcuff the government’s fiscal policy. If we were
not a founding member of this institution, it would
probably force our inept leaders to increase taxes
and reduce spending (we might even have [...]
Deal of the Century- By Greg Strid
I read a distressing tale in the Star Ledger yesterday.
The article discussed the price-slashing that Red Bank,
New Jersey-based homebuilder Hovnanian engaged in
during its “Deal of the Century†blow-out sale in October.
It is common knowledge that the real estate market is
in a slump, and Hovnanian slashed prices on its cavernous
homes by as much as $100,000 to [...]
Wall Street Relies Too Heavily on Interest Rate Cuts
A decaying housing market, deteriorating credit conditions, a sickly dollar, sky-high oil prices, two expensive and useless wars, and the looming mass-retirement of baby boomers are the main ingredients that will create the fuel for a tumble in US economic growth over the next year or two (or three or four, etc.)
Yet the party on [...]
The Fed to the Rescue!- by Greg Strid
Captain Ben, our rather green Federal Reserve Chairman, rode on his magnificent white pony (named “Liquidityâ€) today to rescue the panicking financiers on Wall Street, and, to be more accurate, gambling dens, pits and crevices the world over. He valiantly slashed the discount rate, or the rate charged by the Fed to member banks for [...]
Giant Mortgage Lender Files For Bankruptcy
American Home Mortgage, one of the largest mortgage lenders - and a glaring symbol of unsound business practices- filed for bankruptcy early this week. Mortgage lenders like American Home Mortgage are responsible for helping to inflate the largest housing bubble in American history. Now investors are running from the crappy mortgage-backed securities originating from these [...]
