Wednesday, May 28, 2008
Dow Chemical to raise prices up to 20 percent, blasts Washington for 'true energy crisis'
MIDLAND, Mich. (AP) -- Dow Chemical Co. will raise product prices by up to 20 percent almost immediately to offset the soaring cost of energy and raw materials, and the CEO of the chemical giant lashed out Washington on Wednesday for failing to develop a sound energy policy.
Lenders say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money.
By Les Christie, CNNMoney.com staff writer
Last Updated: May 28, 2008: 7:32 AM EDT
NEW YORK (CNNMoney.com) -- Banks say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money.
Lenders are taking much longer than necessary to approve short sales, according to Duane LeGate, of House Buyers Network, a short sale specialist.
In a short sale, a homeowner who cannot keep up with their loan asks the lender to take a dollar amount less than what is owed on a home's mortgage, and forgive the remainder of the unpaid debt.
So if a borrower has a mortgage balance of $100,000 and finds a buyer who will pay $95,000 for the house, the lender agrees to accept that $95,000 and close out the loan.
"There was a much greater chance of success with these in the past," said LeGate
Ideally in a short sale, everyone wins. Borrowers avoid the ugly foreclosure process that destroys their credit, while lenders recoup more of their costs than they would by spending the time and money it takes to kick an owner out and resell the property.
Lenders typically lose about 19% of a mortgage's value in a short sale, according to Clayton Holdings, a Conn.-based, provider of loan analytics, while they lose an average of 40% on loans that go into foreclosure.
Coldwell Banker CEO Jim Gillespie agrees that short sales are taking too long to complete. And he speaks from firsthand experience; a short-sale offer he made on a house in Marin County, Calif. in late fall didn't win approval until April.
But most buyers can't, or won't, wait that long."That's been our biggest challenge - keeping the buyers interested long enough as we wait and wait for an answer," said Jeff Morrell, a Colorado Springs real estate agent who specializes in short sales.
Running out the clock
John Fitzmorris, a short-sale expediter in East Stroudsburg, Pa., was working with Robson and Laura Pereira, who were behind on their mortgage, to market their home before a foreclosure would take it away.
"She worked, but he had a construction business that went defunct," said Fitzmorris. "That put them in trouble."
Falling home prices in the area made a normal sale impossible; the couple was upside-down in their mortgage, owing more on the property than it was worth on the current market.
After they fell behind on their payments, Laura Pereira said, "the bank sent me a letter asking me to call for help. I called them four or five times and they never got back to me. We had three [short sale] offers on the house at the time."
Fitzmorris, who has been doing short sales for more than 20 years, contacted the bank about a short sale well before the foreclosure date.
"We sent an authorization letter listing us as the contact for a short sale, a sales agreement, a completed seller's information document as well as listing and marketing information to First American Loss Mitigation, which was handling the Pereira's foreclosure process, on January 24," he said. The buyer was very interested - enough to pay for a title search.
A month later, Fitzmorris sent another complete package, including a sales contract, to the bank and started to call daily for feedback on the short-sale offer.
Greystone didn't respond until March 10, when it said that it had the file and would process it.
But by March 27 the bank still hadn't approved the short sale, and the Pereira's property went to sheriff's sale.(The bank did not respond to several requests for comment.)
"The offer we sent to the bank was $129,500," said Fitzmorris. "But another investor, TM Builders, bought the property at the sheriff's sale for $100,265."
By the time the Pereira's lost their house, they owed a total of $160,000, including principal of $144,500 in addition to late fees, legal fees, and so forth. So in the end, the bank lost $60,000 on the loan, when it could have lost $30,000 by doing a short sale.
Ironically, TM Builders flipped the home to Fitzmorris's buyer for the $129,500 short-sale price, money the bank would have gotten had it acted more quickly.
"The sellers did what they could to mitigate the problem but the bank didn't respond, which hurt both the sellers - with an unnecessary foreclosure permanently impacting their credit - and the bank," said Fitzmorris.
The difficulty in getting short sales approved stems from the same hurdles facing all the other foreclosure prevention efforts. The fact that the majority of mortgages are pooled and securitized makes it hard to get approval to change the terms of the mortgages.
"It has to do with who owns the loan," said LeGate. "If a mortgage is stuck in a pool somewhere, when something goes wrong, no one knows who the actual owner of the note is."
Additionally, the volume of troubled borrowers makes it hard for lenders to keep up. The housing crisis has put an enormous burden on mortgage servicers, the companies that manage loans for securities investors.
At many servicers, said LeGate, "There's no one really skilled at loss mitigation, and these guys have more work than they were prepared to do."
And with foreclosure filings breaking new records each month, there's no sign that this problem will ease any time soon.
Says Laura Pereira, "I feel the bank really let us down."
Monday, May 26, 2008
Friday, May 23, 2008
MONEY as TOILET PAPER only works for so long,
FED is shown now as worthless POS, f'd up the whole system...created money out or THIN AIR to BAIL OUT BSC.....and the money center whores.......insiders get paid.....lemmings dont get laid...what a mouth I have today.....
BANKS would implode if all the freebie money sent out as helping stimulus were presented at same time.
FED created this mess......FED should be closed down.
Thursday, May 22, 2008
Thursday, May 15, 2008
Martin desk rep came in..on $7K order (from San Diego) freight was 17%....$1,190 NOW fuel surcharge added 40% of the $1,190 adds addtl $476 making my freight now 25% of the $7K
This our reo was told was as “cheap as its gonna get….” This 40% will apply to almost EVERYTHING SHIPPED TO SELL IN THIS COUNTRY!!
Monday, May 12, 2008
Find Historical Data WHAT'S THIS?
Friday, May 09, 2008
Sunday, May 11, 2008
Investment in alt energy funds or stocks key ahead of Dem's victory?
How wounded gold bull? With $$ rally oil's rise suspect along with WANING DEMAND FROM YES R?? NO!!!!!
Price back below my recent downtrend line, ominous PEEK above preceded.
Strength is VERY SELECTIVE....APPL etc.
INFLATION WHERE IT HURTS.....food energy etc.....( I have FUEL SURCHARGES NOW FROM MOST SOURCES) price increases coming mid year now and now incl's CHinese manuf
DEFLATION WHERE IT KILLS....ASSETS...stocks....HOUSING one of MAIN drivers of economy.
HOUSING PRICES NOT STABLE OR BOTTOMED......leads to addt'l Banking write downs.....
CREDIT CRUNCH NOT CREDIT EXPANSION.....banks tighten standards.....STRANGLING ECONOMY
SOME SPENDING YES.....BIZ out there, but for those who shake a fist of paper....
Happy Mothers Day!
Friday, May 09, 2008
Using RENKO charts...more later.
http://money.cnn.com/2008/05/09/news/economy/creditcards/index.htm?postversion=2008050905 Americans barely getting by using Credit cards....STORY NEVER TOLD.
Rally had become INCREASINGLY SELECTIVE....less stock going up.
WE have INLFATION and DEFLATION (housing)
I personally think stock prices will follow.....Friday has makings of BIG DOWNER....watch GOLD and Interest rates too for clues...
Wednesday, May 07, 2008
an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers supramax, panamax and capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.
The index is made up of an average of the Baltic Supramax, Panamax and Capesize indices. These indices are based on professional assessments made by a panel of international shipbroking companies.<<
Read this from an intelligent poster on another board friend sent me:
When is it going to sink in again?
NEW 5/6/2008 11:25:42 PM
That we are in a real mess? I think we are about to see a real crisis, the quasi public banks like the Fed, FHLB and the GSE's going into crisis. If you read the agreements behind this auction stuff, the Fed has the right to require repurchase or to sell the stuff any time they get ready. Since the books only have to balanced overnight, this stuff is actually repoed daily. What happens if the bank that has the stuff can't perform and the Fed is suddenly stuck with some illiquid stuff? Well, I would venture the taxpayer gets the bill until the Fed earns enough money to pay back the government. The government, probably in return for the New Deal owns 100% of the profits of the Fed, save the preferred stock dividend. The Federal Home Loan banks are somewhat different and I don't know how they work. It seems though that they might be somewhat like FNMA and FHLMC, except I don't exactly know how. I do know I read recently the one in Chicago and the one in Dallas were discussing a merger, which tells me they aren't exactly public entities any more. I am wondering what happens to the bank that has propped up CFC? I don't think CFC is going away as a problem and it will be bigger than Bear. There are significant problems that have nothing but a band-aid on them. The auction loans are one of them, as they are nothing more than a method of keeping insolvents solvent until hope and time bail them out. They are clearly hoping that bad paper can in fact rise from the grave and walk on water, across the Pacific to some sucker fund in China. Surely the world isn't so stupid as to make more deals for Wall Street junk? One thing that I keep bringing up that they keep bringing someone to the table on CNBC is that credit problems like these cause economic problems and I am not talking about cyclical recessions. FNM needs another $6 billion. How much is Merrill going to need the next go around? When is Goldman going to come clean with the losses out of their $60 billion in level 3 assets? When is Wells Fargo going to come clean with its mortgage losses, as it is next to impossible for me to believe that everyone in that business made across the board bad loans except them? We are just seeing the tip of the iceberg on the prime mortgage front of losses from mortgages. Truth is the good stuff was junk and the junk was basically akin to making loans to heroin junkies. There is a supply problem in housing. Nothing is going to make this go away except a hell of a lot of well to do population. Wetbacks from Mexico aren't going to float the housing market at todays prices or even prices 50% of todays prices. It is clear the consumer credit game isn't going to be the same and corporate profits are fueled with consumer bucks. Consumer spending isn't 70% of the economy, it is all the economy either directly or indirectly. Same for the rest of the world. 5% of the US economy is somewhere around $600 billion depending on whose figures you believe. This is about what is going to be missing out of home equity extraction due to refinance or sale the next few years. It is the entire trade deficit, something that has fed the rest of the world with money to create a boom. But, that money is now owed, not free to circulate and there has to be some new real credit. Credit that was being created by virtue of a myriad of derivatives that no longer can be marketed. These CDO losses I can assure you will be more than subprime mortgages by the time they are done.The boom was perpetuated by subprime financing. The other side of this game is the long term investment projects are in full swing, but at some point it is going to be clear that the money was loaned at too low a rate, according to Mises, and the game is going to fall apart. The game is being played in China, but it is being financed by American consumer credit. It won't be long before they suddenly realize they don't have money to finish what they started and the minerals game comes back to earth. They aren't breaking their necks to keep the American financials afloat because they like losing money, but because they need the fresh money created in the US. There are some statistics that tell us the game is coming back. I don't think the consumer balance sheet and some of the more speculative ventures are going to work. I don't think gasoline is the drag it is said to be, but more the idea that the consumer is out of credit and it is going to be that much more difficult to balance the trade balance. Ditto China and Asia, which could be sending more money to the US in trade, but having to send it to OPEC instead. One thing I read a long time ago was that 80% of GDP was the real valuation line for the entire stock market capitalization and we are still way above that, probably in the 140% range. 3% was the dividend rate that capped markets for the past century, but not now. It is clear that only financial bubbles prop markets at these rates. The bulls like to spout a lot of statistics, but few of them are true. The SPX reached it old top solely because stock buybacks reduce the divisor, while dividends don't. Had they back adjusted for the roughly $200 billion to $300 billion shortfall in dividends for the past 10 years, it would have clearly shrunk. Stock buybacks do little for the holder of stock other than increase his proportion of ownership only so far as the stock remains out of the market. It is what used to be called for tax purposes, a partial liquidation. The Dow is up only by virtue of some by chance almost perfect portfolio management. If we reversed the Dow splits and then allowed for the portfolio changes, we would have a hard time having a real new high in the Dow from 2000. There was 60 points of losses saved in the split of GE alone, not to mention another 100 roughly out of the split of INTC. Prior to the last inclusion of new companies, I think BAC and Chevron (CVT?) were put in place of MO and HON, just to make the index match the split adjusted points of 1/14/00, it took 12,610 to reach a real new high. Had they left these lost points in the index, the Dow would be even another 1000 points lower. Quite interesting, MO put about 500 points on the Dow, then they threw it out before it could be bashed apart. The Nasdaq also shows the bear never really ended, only making 50% of its prior high while the big cap NDX, never got close to 50% of its old high.I think this is a speculators market, which means that not one thing I have written means a damn thing, not even the news going forward. What it does mean is that buy and hold to make money in stocks is dead. There is no doubt until the true valuations are back in stocks in the market in general, holding for long term real gains is not going to work for a good while and faces a highly risky near future. No one with a brain would hold any portfolio of stocks, unless they knew how to rotate around losses.
Tuesday, May 06, 2008
Chateau Mouton Rothschild Online
This is THE story. Forget about the stock market, that is meaningless and easy to control (for now). Large FCB (foreign central bank) purchases of agencies and treasuries have kept rates artificially low for a LONG TIME and have led to added "slosh", some of which undoubtedly winds up in the stock market. Here's the downside: As the US economy slows and the dollar falls, the perpetual dollar-recyclers (Arabs and Asians) are having a hard time pegging their currencies with the reduced net inflows so they must print to make up the difference. This printing (not in USD but in foreign currencies) is leading to a crack-up-boom in the commodity complex and is leading to food riots, hoarding, civil unrest, etc. in those countries and a small amount of this even in the US.Now some may be asking, "why would the recyclers continue this when they are stoking hyperinflation in their own currencies?" and this is a good question that I can sum up with a simple phrase: Godfather Protection Racket. So our fleet is stationed in the gulf to provide "protection" to those oil-producing nations that still want to maintain USD pegs and give support to fictitious capital and US bond bubbles. For those that choose not to support the GSE’s and bond bubble, well they might not get our protection and then who can say what bad things might happen to them? So basically they have no choice but to make large blank-check purchases. In order to facilitate this recycling, oil especially must be very high in price. This (somewhat) offsets the reduced demand and gives the Arabs some cash to recycle back into treasuries and GSE debt, but not enough without printing.The above helps explain a lot of the continuing "strength" in the oil markets. The Arabs NEED oil to be very high, and so do the US pigmen. These interest are aligned, albeit at the end of a gun barrel for the Arabs. The end-game is afoot related to all of this and that is basically a gutting of the GSE's by the pigmen. They will drive all of the FCB's into GSE debt (and the FCB have been on an absolute ****ing buying binge recently) and then collapse the GSE's with a feigned liquidity "crises" where they give the FCB's 10 cents on the dollar for the assets in a huge looting operation. This will be similar to the BSC looting operation where certain IB's (with a Fed backstop) will devour the carcass of the GSE's and then the IB's will hold the mountain foreclosures and BINGO the banking insolvency problem is resolved.Gen has said repeatedly that constant trashing of treasury and Fed balance sheets could lead to a TLT collapse, and this is correct. I just wanted to point out that a lot of this trashing is being done on purpose to orchestrate the final looting end-game scenario. Shuffle all of the crap onto the GSE balance sheets and then gut them by engineering a crises and then cherry picking the best stuff. Think BSC or CFC, etc. except on a very large scale.Have you ever asked yourself why the conforming ratios and capital reserve requirements and everything else at the GSE's have been falling into the bilge category? Well now you know the answer. The GSE's are being set up on purpose to implode.
----------"Choose! Choose the form of the Destructor!' The choice is made!" - Gozer"the idea that you're "entitled" to a 5 or 6 percent 30 year mortgage is horse****, and so is the housing prices that it has created." - Genesis
The mortgage lender's revenues climbed 28% year-over-year to $3.78 billion. But Fannie Mae still reported a loss of $2.19 billion, or $2.57 per share, for the first quarter. One year ago Fannie Mae earned $961 million, or $0.85 per share.
The negative results were driven by losses from derivatives and trading securities, which totaled $4.4 billion, as well as credit expenses related to higher charge-offs from defaults and loan losses, which totaled $3.2 billion, according to this morning's edition of The Wall Street Journal.
The mortgage credit book of business grew by 3%, and estimated market share increased to approximately 50% of new single-family mortgage-related securities issued.
Core capital totaled $42.7 billion at the end of the quarter, $5.1 billion above the company's current regulatory requirements.
Fannie Mae announced plans to raise $6 billion in new capital through common stock public offerings, noncumulative mandatory convertible preferred stock, noncumulative, nonconvertible preferred stock. The new capital is intended to enhance the company's balance sheet and provide stability to the secondary mortgage market. By increasing its capital base, Fannie Mae can lend additional funds and also increase its protection against future hiccups in its loan portfolio.
According to the company, the Office of Federal Housing Enterprise Oversight (OFHEO), Fannie Mae's watchdog, would reduce the required 20% capital level to 15% upon completing the capital-raising plan. Fannie Mae also said OFHEO indicated the required capital surplus would be trimmed by an additional five percentage points to a 10% surplus requirement in September 2008, based upon the company's continued maintenance of excess capital above its required level. This, of course, assumes no material adverse changes to the company's ongoing regulatory compliance.
As part of Fannie Mae's capital raise, the company will reduce its quarterly dividend. Beginning in the third quarter, the company will cut its dividend to $0.25 per share from $0.35 per share, which will free an additional $390 million of capital per year.
Separately, Fannie Mae is planning a series of initiatives to provide liquidity, stability, and affordability to the housing and mortgage markets for the long term. The plan intends to keep struggling borrowers in their homes, assist prospective homebuyers, and stabilize communities affected by the mortgage market downturn. Such moves will ultimately help restore the housing market by providing further support to the industry. Such support is essential to helping boost economic health.
--Jeffrey Ham, Briefing.com
Saturday, May 03, 2008
Indeed, Washington’s validation of the current dysfunctional Credit system structure could very well lay the groundwork for extreme global price distortions, volatility, and social/political unrest. On the current course of things, it’s difficult for me to not think in terms of NASDAQ 1999 or subprime 2006. Throw additional liquidity on overheated Credit, inflationary, and speculative “biases” and be prepared for the spectacular.
When Financial Arbitrage Capitalism’s excesses were spurring acute U.S. securities market inflation, the system enjoyed a period of perceived rising wealth to go with a boom in Wall Street securities issuance (to help offset inflated demand). When this Structure’s excesses were directed at the Mortgage Finance Bubble, the upshots were inflating home prices along with attendant construction and consumption booms. Now, however, with acute inflationary effects prevailing throughout global markets for food, energy, and commodities, one should be prepared for the likes of problematic supply bottlenecks and shocks, hoarding, trade frictions and interruptions, and generally heightened geopolitical instability.
I argued back in 2002 that the overriding systemic issue was not “deflation” but rather myriad risks associated with an unfolding U.S. Credit Bubble. Now, some years later, these risks have expanded alarmingly, as runaway Credit Bubbles have ballooned both at home and abroad.
Friday, May 02, 2008
Thursday, May 01, 2008
Like how this guy presents market data.