From Reuters:
S&P hikes mortgage loss expectations, ratings eyed
Standard & Poor’s on Tuesday raised its expectations of losses on subprime loans originated in 2006 by more than a third after signs that delinquencies and the U.S. housing market are worsening.
The expected losses for subprime loans made in 2006 — which other analysts have called the worst ever for the U.S. market — will probably rise to 19 percent, up from the previous estimate of 14 percent, S&P said in a statement.
The rating company is also assuming senior investors will receive less protection from cash flows as more loans are modified to stave off foreclosure, it said. Loan modifications may reduce projected cash flow as mortgage service companies freeze interest rates, the main feature of the nationwide plan supported by President George W. Bush.
The revisions may adversely affect ratings on outstanding mortgage-backed securities in an upcoming review, S&P said. Downgrades have already wreaked havoc on mortgage and banking companies by forcing billions of dollars in write-downs.
“These revisions reflect the growing economic consensus that U.S. home price declines will be larger than previously forecast and that the slump in the U.S. housing market is expected to last far longer,” S&P analysts wrote.
From Reuters:
New Century can’t locate 734,000 documents
Those papers were here somewhere.
New Century Financial Corp the collapsed subprime mortgage lender, said it has failed to turn over as many as 734,072 documents requested by the court-appointed bankruptcy examiner investigating its demise.
In a Monday filing with the U.S. bankruptcy court in Wilmington, Delaware, New Century blamed an outside vendor for the failure to turn over documents to examiner Michael Missal.
“The debtors recognize that such errors, even if unavoidable in the context of such a process, cause inconvenience to participants in proceedings of this nature, and accept full responsibility,” Irvine, California-based New Century said in the filing.
“failed to turn over as many as 734,072 documents”
sounds like someone had a shredding party.
SAS
Sas,
I am interested in the “Red Button Problem”, however I can not find anything about it. Just something about a phone and TV error. Does it go by something else.
You mean the documents that were to document that some of the no-document loans are missing so now there’s no documentation for those no-document loans?
“These revisions reflect the growing economic consensus that U.S. home price declines will be larger than previously forecast and that the slump in the U.S. housing market is expected to last far longer,” S&P analysts wrote.
Yes, the declines will be larger and the duration much longer than most can imagine. Just the function of the market.
“failed to turn over as many as 734,072 documents”
New Century or Roger Clemen’s lawyers?
hehe [4],
Just lost my pretzels.
hehe (4),
Brilliant!
Bernanke may move us from a “Fiet Cash System” to an “Asset Backed Cash System”. In keeping with the Current Cash Trend, the likely choice will be “Lead”. Only real concern is that much “Lead”, at Fort Knox, may tilt the Earth.
4
Post of the day.
made me go “hehehehehehehe”.
BC Bob Says:
January 15th, 2008 at 7:03 pm
hehe [4], Just lost my pretzels.
Bost: just once I want you to have rear evacuation instead of an front one….
Don’t these sellers realize they are way under-priced on this one? :o
http://www.realtor.com/realestate/roseland+boro-nj-07068-1085295281/
Just Put It on My 401(k) Debit Card
Monday January 14, 12:50 pm ET
BySimone Baribeau, Editorial Assistant
Borrowing against your nest egg is becoming as easy as stopping at an ATM.
A growing number of companies now offer employees the option of being issued a debit card that taps a 401(k) loan. The card, called ReservePlus, allows workers to withdraw funds from their 401(k)s.
The immediate concern for consumers is that impulse spending desires could trump their long-term savings needs.
Here’s how it works: After a company adopts the program, employees can transfer their approved loan line into a ReservePlus account online. Later, they receive a debit card that they can use to take out as much or as little as they need of the loan amount — on average taking out 35% less than they applied for, says David Young, director of Reserve Solutions at The Reserve, the company offering the cards.
The loan begins only after the money is removed from the account. Instead of a payroll deduction, participants are billed directly, and then pay back the loan through the same mechanisms used to repay a credit card. Depending on the employer, some may also qualify for a revolving loan — taking out and paying back money as they need it.
The ReservePlus loan program is growing. The card was first offered in 2003, and Young says employees who have used the debit cards for loans now number in the thousands.
“There’s a lot of interest in what we’re doing,” says Young. “It’s a unique and logical solution to an archaic process.”
The debit cards are “not for everybody,” Young says. But adds, though, that the cards give people a sense of confidence and control, which in turn encourages otherwise reluctant people to participate in retirement programs, knowing that their savings won’t be locked up for decades.
Critics contend use of the cards risks depleting already skimpy retirement savings. “Big picture: it just takes us out of the context of a 401(k) loan being a loan of last resort,” says Jean Setzfand AARP’s Director of Financial Security. “Seeing what we see, with retirement savings not quite where we want to see it, we’re just afraid that this is going to deplete it further.”
The card clearly has benefits for human-resource departments. The 401(k) debit-card program means that it no longer bears the administrative burden of creating amortizations schedules and collecting loan payments. And the program is free for them to adopt: employees pay for the programs administration through an initial sign up fee and interest on their loans.
The plan has major advantages for employees as well.
Generally, with traditional 401(k) loans, employees must pay back their loan within 60 days of leaving a job or be subject to hefty tax and early withdrawal penalties. But with ReservePlus, an employee is able to continue paying the loan off of its initial course — typically five years — regardless of employment. Young estimates that traditional loan programs’ lack of portability causes $50 billion a year to be leaked out of retirement programs. And employees have an easier time paying back loans early: rather than a set payroll deduction, employees can pay back as much as they choose each month — on average paying 14% more than the minimum payment, says Young.
But easy access to money can be a double-edge sword. Employees pay for the convenience: The interest rate on ReservePlus loans is 2.9% higher than the prime rate, which is higher than traditional loans, and employees pay an initial set-up fee. And, according to a federal government study into the country’s low retirement savings rate, though there is no data, loan defaults are “expected to be much lower where repayments are made by payroll withholding.” ReservePlus currently offers no payroll withholding option, but the company says it will introduce one shortly.
And critics argue that in some cases debit cards may encourage unnecessary borrowing. “By making it a debit card, you make it sound like the loan that you take on the 401(k) for everyday purchases,” says AARP’s Setzfand. “In our opinion, a 401(k) loan should only be taken as a loan of last resort, for a dire medical situation, or if there’s no other way to get a home loan, not to go shopping.”
Indeed, a November study by the U.S. Government Accountability Office into the country’s low retirement savings rate found that preretirement access to funds may lead to lower retirement savings, though it also cited evidence that a loan feature increases retirement plan participation.
Using ReservePlus loans as a mechanism to increase retirement savings participation just makes sense for some demographics, says Young. The participation rate for the GenY age group is low because people “don’t want to tie their money up in a program they can never access during their working years. People want to be in control of their retirement plan savings, and when they feel in control, they’re more likely to participate or contribute at higher levels.” And it makes stable lending possible for seasonal employees and industries with high employee turnover.
Fred Barstein, president and chief executive of 401(K) Exchange, adopted ReservePlus for his employees almost a year ago. He says the program hasn’t changed the frequency with which his workers take out loans against their retirement, or the size of their loans, but it has created a stable loan program for his largely transitory work force — about 75 of his 110 employees work in the call center. As the head of a company, who helps plan sponsors and advisers find the right plan, he says, it was particularly important for him to provide his employees with a “state of the art plan.”
Still, Barry Kublin, president of BPA-Harbridge, an employee-benefits company with 15% of its outstanding 401(k) loan portfolio comprised of ReservePlus loans, says there is some resistance to the product’s adoption. Investment advisers, he says, worry about money leaving the plans and employers worry about employees squandering their savings.
“It’s a young technology, and clearly requires education to address misconceptions,” says Kublin. “Do we deny the overwhelming percentage of 401(k) participants a portable convenient loan product that is responsive to their needs because of the irresponsible few?”
#5 BC BoB: I just saw some so called expert on KUdlow, I did not catch his name or who he was with, but he was not in the usual suit and tie that the “street” guests always wear.
(Somebody should have told him the Regis Philbin look died with the end of Who wants to be a millionaire.)
Anyhow believe it or not he said he expects the housing market “if not to rebound, then at least to stabalize between quarters 1 and 2 of 08.
Kudlow of course did not even raise an eyebrow at that comment. Kudlow, the village idiot.
#12 gary Must be “priced for a quick sale”.
12 gary
is that a ranch? cape?
those pictures are awful, so blurry. that realtor could use a new camera.
oh Gary come on. The wallpaper in the bathroom alone is worth that much.
#16 Ann: Do I have to explain everything;it is a fabulous splanch!!!
3b
Ah, yes, a splanch.
Perhaps of the sugar-maple variety?
Gary it will be a cold day in hell before they sell that at 600 let alone 800.But you never know,sucker born every day.NAh nobody could be that dumb.
Just Put It on My 401(k) Debit Card
It was only a matter of time…
From Reuters:
IndyMac slashes 2,403 jobs
IndyMac Bancorp Inc, one of the largest U.S. mortgage lenders, said on Tuesday it is eliminating 2,403 jobs, or 24 percent of its workforce, to cope with deteriorating housing and capital markets.
Chief Executive Michael Perry announced the cuts in an e-mail to employees, three months after he had said the Pasadena, California-based parent of IndyMac Bank was “largely done” with staff cuts.
“The reality is that since October 12 conditions have gotten worse,” Perry wrote.
The latest cuts include double-digit percentage reductions in most major business lines, including a 30 percent cut in mortgage production. IndyMac also plans to close five of its 16 wholesale mortgage centers by the end of March. It expects to employ 7,535 people after the cuts.
“This action is clearly painful, but it is necessary in our drive to return IndyMac to profitability soon,” Perry wrote. He said the company has a “realistic shot” of returning to profitability in the second half of 2008.
OK house under water,cc maxxed,now this great idea blow thw 401k.Its like a bad horror movie.
No don’t go down the basement in the dark alone in the haunted house, you watch & can’t believe
it.If this wasn’t so sad it would be funny.
Mike, I was actually picturing your scene, and I was in Gary’s splanch house.
But then what seemed like 700,000 pieces of paper floated around me and I couldn’t breathe.
All I could see through the paper was this orange face laughing and laughing and laughing.
24 PAT you tied up the whole thread even got Ang in, beautiful!
22
He said the company has a “realistic shot” of returning to profitability in the second half of 2008.
Reality is very subjective.
Its the plane! Its the plane!
“I just saw some so called expert on KUdlow,”
3b [14],
I was watching the same. He’s Andy Busch, FX strategist, BMO Capital Markets. I guess he’s not paying attention to the yen/dollar and yen/euro crosses.
TJ,
check out the writings and interviews of Catherine Austin Fitts.
Here is her credentials:
http://www.solari.com/about/ca_fitts.html
She calls it the “red button problem”, it might go by a different name, or she may have changed it.
Bsically, the red button is that if you could press this button the rid the world of illegal drugs, would you do it?
the catch is, if you pressed it, odds are the stock market would crash, your 401 funds would goto hell, and there would be alot of unemployment.
why?
Because all the billions of black money that gets invest in the financial markets and think about all the jobs and livelihoods depend on the illegal drugs trade….no matter what side of the fence you are on.
Think about the jobs at DEA, all the technology that they buy, cops, prisons, court people, etc etc.. you see where this is going?
Basically, its critical that drugs remain illegal, so we can build a multi billion dollar economey and black economey around it and it doesn’t undermine big pharma’s profits (i.e marijuana).
so, if you think the govt cares about keeping your kids off drugs, ha think again.
but, you would have to read what she says, she has written papers about it.
hope that helps.
SAS
Dyammmmmmmmmmm…Hillary just slammed the COUNTRYWIDE severance…..hammered that @sshole!
TJ,
and also,
if you don’t think the CIA & Contras, shipped in crack into this country as apart to help finance the Contra rebels… do some research.
And they really hit the black communities hard.
SAS
we better switch back to RE.
sorry blokes for getting off topic.
SAS
SAS I don’t know if I’m so cynicial as to agree with her,but it makes me wonder.Oh great now I’ll never get that song out of my head tonight.
401K debit card? Are these things for real?
If I received one from Fidelity, first thing I would do would be to destroy it ASAP.
# mikeinwaiting Says:
January 15th, 2008 at 3:23 pm
Does anyone know about area around James Madison U in Harrisburg Va.Have an opportunity at the school will be down there next week to interview.Don’t know squat about Va.
Went to school there (less than a decade ago. Man, i feel old). Nice college town, good bar scene. The school apparently has a booming IT department. If you’re looking to speak with somebody down there about RE or such, i used to write for the paper, I can put you in touch with someone.
#27 I guess he’s not paying attention to the yen/dollar and yen/euro crosses.
Not to mention the housing market. He must be on crack, yep thats it, an FX strategist on crack.
“Dyammmmmmmmmmm…Hillary just slammed the COUNTRYWIDE”
Lets all run out and vote for Hillary, that will really help things.
Hillary is a twit, when she speaks of economics it makes my skin crawl, like fingernails on the chalkboard. I am sure she will be perfect for the sheeple NJ voter.
mikeinwaiting [20],
600? Do I hear the high 300s?
I am enjoying the answers tonight all of thee DEMS sound great….eat sh@t JBJB…eat giant steaming turds…and cast your vote for Romney.
P.S. I hate republicans….they have singlehandedly ruined this country. Time for a change.
Essex
Time for you pills.
Bloodbath Great if it works out I wiil need an RE person.Son will attend if we move, (out of NJ
yeh)how did you like the school?
Essex So Bush f##ked up & you want Clinton or wet behind the ears Obama.After Jimmy Carter every one should have sworn off the dems for life.Oh but that doesn’t make sense.
Mike. Don’t overstretch. You might pull something.
Gary 37 Don’t know the market there.But I sure knew 800 was insane for that anywhere.
Any one of the three people speaking tonight were more articulate….and cogent…than GW on his best day. Anyone of them.
….oh lord please release us from the GOPs’ complete and total failure….their politics of fear….and the disaster they call leadership…..AMEN
They may be articulate, but there all nanny-state liberals pandering the same old left wing nonsense of a generation ago (at least in Hillary & Edward’s case). Lets turn the entire country into a welfare state a la NJ, whooopeee!
Essex Time for a change yes.Cut spending,change the way fed gov raises money,stop judges from writing our laws,get us out of debt.Those would be great.Whats your platform?
JBJB is going for the big laughs tonight….keep telling me ‘why’ the GOP has taken the country down the road they have….and why the nation is in it’s current state of disarray — after two terms of ‘leaderhip’…..I’ll hang up and listen.
My platform? Keep on rockin.
Yea, the nation is in a real “state of disarray”. Stop looking out your window, thats Newark. Sound’s an awful lot like the “politics of fear” to me.
Geezus freakin christ JB…..you need to pull your head out of you @ss..
Subprime Nation…Pat Buchanan
Posted: January 14, 2008
9:29 p.m. Eastern
Since it began to give credit ratings to nations in 1917, Moody’s has rated the United States triple-A. U.S. Treasury bonds have been seen as the most secure investment on earth. When crises erupt, nervous money seeks out the world’s great safe harbor, the United States. That reputation is now in peril.
Last week, Moody’s warned that if the United States fails to rein in the soaring cost of Social Security, Medicare and Medicaid, the nation’s credit rating will be down-graded within a decade.
Our political parties seem oblivious. Republicans, save Ron Paul, are all promising to expand the U.S. military and maintain all of our worldwide commitments to defend and subsidize scores of nations.
Democrats, with entitlement costs drowning the federal budget in red ink, are proposing a new entitlement – universal health coverage for the near 50 million who do not have it – another magnet for illegal aliens. Moody’s is telling America it needs a time of austerity, while the U.S. government is behaving like the governments we used to bail out.
(Column continues below)
California has already hit the wall. With an economy as large as a G-8 nation, the Golden State is looking at a $14 billion deficit in 2009 and a $3 billion shortfall in 2008. Gov. Schwarzenegger has called for slashing prison staff by 6,000, including 2,000 guards, early release of 22,000 inmates, closing four dozen state parks and a 10 percent across-the-board cut in all state agencies. The Democratic legislature is demanding tax hikes, which would drive more taxpayers back over the mountains whence their fathers came.
Meanwhile, Washington drifts mindlessly toward the maelstrom. With the dollar sinking, oil surging to $100 a barrel, the Dow having its worst January in memory, foreclosures mounting, credit card debt going rotten, and consumers and businesses unable or unwilling to borrow, we appear headed into recession.
If so, tax revenue will fall and spending on unemployment will surge. The price of the stimulus packages both parties are preparing will further add to the deficit and further imperil the U.S. credit rating. This all comes in the year that the first of the baby boomers, born in 1946, reach early retirement and eligibility for Social Security.
To stave off recession, the Fed appears anxious to slash interest rates another half-point, if not more. That will further weaken the dollar and raise the costs of the imports to which we have become addicted. While all this is bad news for the Republicans, it is worse news for the republic. As we save nothing, we must borrow both to pay for the imported oil and foreign manufactures upon which we have become dependent.
We are thus in the position of having to borrow from Europe to defend Europe, of having to borrow from China and Japan to defend Chinese and Japanese access to Gulf oil, and of having to borrow from Arab emirs, sultans and monarchs to make Iraq safe for democracy.
We borrow from the nations we defend so that we may continue to defend them. To question this is an unpardonable heresy called “isolationism.”
And the chickens of globalism are coming home to roost.
We let Europe to get away with imposing value-added taxes averaging 15 percent on our exports to them, while they rebate that value-added tax on their exports to us. Thus, the euro has almost doubled in value against the dollar in the Bush years, as NATO Europe begins to bail out on Iraq and Afghanistan.
We sat still as Japan protected her markets and dumped high quality goods into ours and China undervalued its currency to suck jobs, technology and factories out of the United States. Now, China and Japan have $2 trillion in cash reserves. The Arabs have an equal amount of petrodollars. Both are headed here to spend their depreciating dollars snapping up U.S. assets – banks, ports, highways, defense contractors.
America, to pay her bills, has begun to sell herself to the world.
Its balance sheet gutted by the subprime mortgage crisis, Citicorp got a $7.5 billion injection from Abu Dhabi and is now fishing for $1 billion from Kuwait and $9 billion from China. Beijing has put $5 billion into Morgan Stanley and bought heavily into Barclays Bank.
Merrill-Lynch, ravaged by subprime mortgage losses, sold part of itself to Singapore for $7.5 billion and is seeking another $3 billion to $4 billion from the Arabs. Swiss-based UBS, taking a near $15 billion write-down in subprime mortgages, has gotten an infusion of $10 billion from Singapore.
Bain Capital is partnering with China’s Huawei Technologies in a buyout of 3Com, the U.S. company that provides the technology that protects Pentagon computers from Chinese hackers.
This self-indulgent generation has borrowed itself into unpayable debt. Now the folks from whom we borrowed to buy all that oil and all those cars, electronics and clothes are coming to buy the country we inherited. We are prodigal sons, and the day of reckoning approaches.
What do you mean? Because I think Hillary would be a disaster? I think that puts me right in the mainstream. I don’t want my country to be NJ, run by race hustlers, unionists, and corrupt liberals with little comprehension of economics and markets.
I seriously doubt that Hillary will capture the nomination. But she sounded pretty good tonight….she has way too much baggage and is simply not going to win the big race….but anyone who spouts nonsense about how the GOP can lead seems to be lost.
Democrats, with entitlement costs drowning the federal budget in red ink, are proposing a new entitlement – universal health coverage for the near 50 million who do not have it – another magnet for illegal aliens. Moody’s is telling America it needs a time of austerity, while the U.S. government is behaving like the governments we used to bail out.
Essex you posted this.Maybe you should be for Paul.We are in deep sh#t but the sheeple don’t know it.So you want the dems.By the way Pat B. is on the money.
Paul doesn’t have a prayer….my beliefs are aligned with his….but he aint gonna make the cut…..And yes indeed….Pat B ‘is’ right on.
29 essex
what was the context?
She basically said that greed was unacceptable and there was no reason why the architect of the subprime fiasco — the CEO of CFC — should walk away with a 110M severance. It was nice to hear.
wow – just surfacing momentarily and see romney wins MI.
That one could get interesting, especially after Huckabee takes SC.
good
55
there are so many clowns out there now that anything can happen
They sounded sharp tonight…..I’m fired up!!! I tuned in and they sounded excellent….we got good people….they can do this thing.
Essex I think you are right on Paul(to bad for our country)& you like Pat so how can you agree
with the dems.Don’t go for them because you hate Bush most of the people on the right are pissed to.But that doesn’t mean you should vote for people who don’t share your beliefs.Change can be for the worse to.
I believe we owe something not to the billionaires of the world….but to the single mom who can’t afford to send her sick kid to the doctor.
I think we need to have sensible and open government….and need to stop letting fear guide every move we make.
I believe that people in this country are the greatest people on the planet….we deserve laws that protect us and our assets…we need privacy….and we require a leader who will act in the best interest of the country…and not the banks….or major corporations.
Damn people I am fired up! A new day is coming!!! A new day is coming!!!
http://www.bloomberg.com/apps/news?pid=20601102&sid=agH4LYeYEbGs&refer=uk
northern rock to be nationalized
64
it’s not just Bush – who in congress stood up to Bush at any time in the last 7 years?
Essex65 We don’t have the money.The country can’t afford it .So do we sink the whole ship.
There will be pain & death in this world the gov can’t make it all go away like mommy when you have a bad dream.That is not the function of
gov.The more we do these things the worse it gets read your own post 53.
We cannot invest in kid’s health? Yet we can dump billions into other country’s sandy ground….check your balance sheet.
OBAMA/EDWARDS 2008
Do you think the dems are going to stop spending around the world no they will give you healthcare & still keep spending we go broke, we are broke.They are not the change you seek.
I dunno, mike, just looking at the results in spending under Reagan, Clinton and Bush, there seems to be a pattern, and it’s not one that leads me to the conclusion that republicans are more fiscally responsible than democrats at the federal level. Quite the opposite, in fact.
Agreed Mike. I would rather have any one of them in charge though.
I would like to see Paul but I’m not going to get him.So I can only go with someone who calls for less spending & taxes will
they do it who knows.On the other hand I have no chance to save are country with
more programs,taxes,&entitlememt.So I vote & hope.
indeed……….a place…………..called…………hope. G;night John Boy
One of my favorite articles. Its a step back in time to 2005,
http://www.freerepublic.com/focus/f-news/1450144/posts
I really love the a prepayment penalty and balloon payment.
Kids today. Lazy. All of you.
International markets down between three and five percent. Intel is gonna crush the techs today. I’m selling out of my IBM and FDS with a 10 and 15% loss respectively. I’ll need the losses to offset my mega gains in SRS and CMG. Would not be surprised if today turns out to be a Black Wednesday as I’m pretty certain many stop loss targets will trigger today as the markets are approaching or breeched August lows. Gold (and Silver) is gonna rocket for the precious metal holders. Those who like volatility might be in the front seat of the coaster today.
Disclaimer: My crystal ball might not work properly as the voltage in India is 220 and the ball only works on 110.
Did I say 5%, now 5.25%. This is gonna be UGLY ugly.
Now 6%!
oh boy
Thanks for the updates on the international front, Stu – hope all’s well by you.
Nikkei (Japan) at 26 month low. Weren’t all of those writers saying that Japan was rebounding?
Is BI a ghostwriter.
The only thing that will save us is that the Asian markets will close soon. Unfortunately, not soon enough.
And now the European markets plummet…
Everything is great!