[bsrsharma]

just got $11.5 billion in financing from 40 banks

 

One question though: Who in his right mind would loan 11B to a sinking ship? I want to open a (FDIC covered) account there (for high rates), but even I am hesitating!

And 62,500 employees losing jobs, man this is a great tragedy whichever way you see it. Bubble bursting is good ; but the human costs are going to be terrible.

[bsrsharma]

just got $11.5 billion in financing from 40 banks

 

One question though: Who in his right mind would loan 11B to a sinking ship? I want to open a (FDIC covered) account there (for high rates), but even I am hesitating!

And 62,500 employees losing jobs, man this is a great tragedy whichever way you see it. Bubble bursting is good ; but the human costs are going to be terrible.

[bsrsharma]

Some more quotes:
——————————————————-
“Investors are now starting to question economic projections, stock market projections and public officials,” said Sam Stovall, chief investment strategist at Standard & Poor’s Equity Research. “They are questioning American consumers’ continuing ability to spend beyond their means.”

………..
As they have been for much of the last four weeks, stocks were driven by grim news from the credit markets.
……………..
KKR Financial said it lost $40 million on the sale of $5.1 billion in mortgage securities and had another $5.8 billion in bonds to try to sell, which could result in the loss of another $250 million. Shares in KKR Financial, which went public in June 2005, fell 31 percent, to $10.52; the stock is down more than 60 percent for the year.

The company restructured from a real estate investment trust to a limited liability company in May. It finances most of those securities through asset-backed commercial paper vehicles that were downgraded last night by the rating agency Fitch from its highest level to junk grade because of the decline in value of the underlying assets.

The company said it would no longer invest in residential real estate and must decide what to do with the remaining portfolio of mortgage-backed securities.
…………………..

He said he had been through numerous financial crises “and this is the most disturbing liquidity crisis, with real impact throughout the economy if it does not rectify.”

One analyst suggested that the market would not recover until more funds and banks detailed their exposures to mortgage securities and other debt acquired during the recent credit boom.

“The more funds that come to confession the better it is,” said Douglas M. Peta, chief market strategist at J. W. Seligman & Company. “Once all this stuff is out, all the analysts and the people with the sharp pencils can figure out how bad it is and they can put prices to it.”
………………………..
Investors are saying, “I want only the highest credit quality, where the principal is guaranteed by the Treasury,” said Brian J. Carlin, head of fixed-income trading at JPMorgan Private Bank.
——————————————————–

[bsrsharma]

Some more quotes:
——————————————————-
“Investors are now starting to question economic projections, stock market projections and public officials,” said Sam Stovall, chief investment strategist at Standard & Poor’s Equity Research. “They are questioning American consumers’ continuing ability to spend beyond their means.”

………..
As they have been for much of the last four weeks, stocks were driven by grim news from the credit markets.
……………..
KKR Financial said it lost $40 million on the sale of $5.1 billion in mortgage securities and had another $5.8 billion in bonds to try to sell, which could result in the loss of another $250 million. Shares in KKR Financial, which went public in June 2005, fell 31 percent, to $10.52; the stock is down more than 60 percent for the year.

The company restructured from a real estate investment trust to a limited liability company in May. It finances most of those securities through asset-backed commercial paper vehicles that were downgraded last night by the rating agency Fitch from its highest level to junk grade because of the decline in value of the underlying assets.

The company said it would no longer invest in residential real estate and must decide what to do with the remaining portfolio of mortgage-backed securities.
…………………..

He said he had been through numerous financial crises “and this is the most disturbing liquidity crisis, with real impact throughout the economy if it does not rectify.”

One analyst suggested that the market would not recover until more funds and banks detailed their exposures to mortgage securities and other debt acquired during the recent credit boom.

“The more funds that come to confession the better it is,” said Douglas M. Peta, chief market strategist at J. W. Seligman & Company. “Once all this stuff is out, all the analysts and the people with the sharp pencils can figure out how bad it is and they can put prices to it.”
………………………..
Investors are saying, “I want only the highest credit quality, where the principal is guaranteed by the Treasury,” said Brian J. Carlin, head of fixed-income trading at JPMorgan Private Bank.
——————————————————–

[bsrsharma]

Some more quotes:
——————————————————-
“Investors are now starting to question economic projections, stock market projections and public officials,” said Sam Stovall, chief investment strategist at Standard & Poor’s Equity Research. “They are questioning American consumers’ continuing ability to spend beyond their means.”

………..
As they have been for much of the last four weeks, stocks were driven by grim news from the credit markets.
……………..
KKR Financial said it lost $40 million on the sale of $5.1 billion in mortgage securities and had another $5.8 billion in bonds to try to sell, which could result in the loss of another $250 million. Shares in KKR Financial, which went public in June 2005, fell 31 percent, to $10.52; the stock is down more than 60 percent for the year.

The company restructured from a real estate investment trust to a limited liability company in May. It finances most of those securities through asset-backed commercial paper vehicles that were downgraded last night by the rating agency Fitch from its highest level to junk grade because of the decline in value of the underlying assets.

The company said it would no longer invest in residential real estate and must decide what to do with the remaining portfolio of mortgage-backed securities.
…………………..

He said he had been through numerous financial crises “and this is the most disturbing liquidity crisis, with real impact throughout the economy if it does not rectify.”

One analyst suggested that the market would not recover until more funds and banks detailed their exposures to mortgage securities and other debt acquired during the recent credit boom.

“The more funds that come to confession the better it is,” said Douglas M. Peta, chief market strategist at J. W. Seligman & Company. “Once all this stuff is out, all the analysts and the people with the sharp pencils can figure out how bad it is and they can put prices to it.”
………………………..
Investors are saying, “I want only the highest credit quality, where the principal is guaranteed by the Treasury,” said Brian J. Carlin, head of fixed-income trading at JPMorgan Private Bank.
——————————————————–

[bsrsharma]

I think you should invest it all in a diversified set of global/international funds. Too much risk if all your investments are tied to US/$

[bsrsharma]

I think you should invest it all in a diversified set of global/international funds. Too much risk if all your investments are tied to US/$

[bsrsharma]

I think you should invest it all in a diversified set of global/international funds. Too much risk if all your investments are tied to US/$

[bsrsharma]

we have more than 300K

Unless you have had competent  advice, you may sleep better if you spread it around a couple more institutions. With all the problems in money market & commercial paper, you can't predict when and where the earthquake will hit next.

[bsrsharma]

we have more than 300K

Unless you have had competent  advice, you may sleep better if you spread it around a couple more institutions. With all the problems in money market & commercial paper, you can't predict when and where the earthquake will hit next.

[bsrsharma]

we have more than 300K

Unless you have had competent  advice, you may sleep better if you spread it around a couple more institutions. With all the problems in money market & commercial paper, you can't predict when and where the earthquake will hit next.

[bsrsharma]

I think the sobering fact that will bring sense to the REO auctions now onward is the simple lack of money. First, it will be 20% down, which even for a 300K house, is 60K – that should keep out any riff raff. I can’t think of anyone who can write a check for 60K will be so airheaded as to fall for the auction tricks. Next thing is, they can’t most likely get a jumbo. That limits the bids to a bit above 500K. And soon, with most of the mortgage bankers out of business, more ARM resets and resulting defaults, the rates will rise. Put all the three and your fear of festive auctions is shortlived. By mid 2008, you should be able to sense the coldness of death as many houses are auctioned at or below 40% of peak prices.

[bsrsharma]

I think the sobering fact that will bring sense to the REO auctions now onward is the simple lack of money. First, it will be 20% down, which even for a 300K house, is 60K – that should keep out any riff raff. I can’t think of anyone who can write a check for 60K will be so airheaded as to fall for the auction tricks. Next thing is, they can’t most likely get a jumbo. That limits the bids to a bit above 500K. And soon, with most of the mortgage bankers out of business, more ARM resets and resulting defaults, the rates will rise. Put all the three and your fear of festive auctions is shortlived. By mid 2008, you should be able to sense the coldness of death as many houses are auctioned at or below 40% of peak prices.

[bsrsharma]

I think the sobering fact that will bring sense to the REO auctions now onward is the simple lack of money. First, it will be 20% down, which even for a 300K house, is 60K – that should keep out any riff raff. I can’t think of anyone who can write a check for 60K will be so airheaded as to fall for the auction tricks. Next thing is, they can’t most likely get a jumbo. That limits the bids to a bit above 500K. And soon, with most of the mortgage bankers out of business, more ARM resets and resulting defaults, the rates will rise. Put all the three and your fear of festive auctions is shortlived. By mid 2008, you should be able to sense the coldness of death as many houses are auctioned at or below 40% of peak prices.

[bsrsharma]

dipping into the old guy's Del MAr or LaJolla equity to fund a LaCosta condo purchase.

What a dumb idea when they could've got 100% cheap loans when the party lasted.

[Author]

Posts