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strbear

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Posts posted by strbear

  1. ING Direct, a subsidiary of the Dutch financial group, is to take over the customers and insured deposits of NetBank, an online lender with $2.5bn (£1.2bn) in assets that was shut down on Friday by the US government following losses on subprime mortgages and other loans.

    The closure marks the largest US bank failure since the end of the savings and loan crisis in the early 1990s.

    http://www.ft.com/cms/s/0/b58d03ee-6dfc-11...00779fd2ac.html

  2. Pimperne1,

    Actually I post on a variety of issues (some even on the UK market) but as everyone knows (well I thought everyone but you've proved me wrong) that what's happening across the pond is very relevant to what will be happening here in 6 months so please read them for "background information" and in time I think you'll be surprised how useful they are. Of course continue to enjoy my UK based posts as well, ;)

    Enjoy

    SB

  3. As many as half of the 450,000 subprime borrowers whose mortgage payments increase in the next three months may lose their homes because they can't sell, refinance or qualify for help from the U.S. government.
    There's no lifeline in sight for subprime borrowers, who face an average increase of 26 percent, or $400 a month, according to CoreLogic. Falling prices and a rising inventory of unsold homes make it difficult or impossible to sell or refinance without losing money and government programs aren't designed to aid the most desperate. That leaves foreclosure as the only alternative, and one that will deepen and prolong the worst housing downturn in at least 16 years.
    About 48 percent of subprime borrowers wouldn't qualify to refinance into a mortgage that conforms to the underwriting rules established by government-sponsored agencies Fannie Mae in Washington and Freddie Mac in McLean, Virginia, according to a report by New York-based analysts for UBS AG, Switzerland's largest bank.

    http://www.bloomberg.com/apps/news?pid=206...&refer=home

    Ben flew in on a Chinook but dropped a band aid . . . . .

    Its no where near over yet,

    SB

  4. E*Trade Financial Corp., best known for providing cheap trades to individual investors, this afternoon warned investors that it has been badly stung by the recent fallout in the mortgage market.

    The company says it expects profits to come in 31% below the most recent guidance it had given analysts -- partly due to its exposure to the mortgage business.

    The news, weeks ahead of its scheduled third-quarter earnings report, provided Wall Street with a glimpse of what may be in store tomorrow when the country's biggest brokerages, beginning with Lehman Brothers Holdings Inc., start reporting third quarter earnings.

    Umm - what does that mean for the other brokerages?

    http://online.wsj.com/article/SB1190061260...p_us_whats_news

    Good night

    SB

  5. Fears are mounting that the sub-prime mortgage crisis is beginning to infect America’s $300 billion (£150 billion) car loan market as evidence emerges of a surge in the numbers of US motorists in arrears.

    According to the National Automotive Finance Association (NAF), the trade body that represents America’s sub-prime vehicle lending market, the number of car loans that were late by at least 30 days, or had missed repayments, jumped to its highest level for three years.

    Lenders who made more than 40,000 sub-prime car loans in 2006 saw the percentage of those in arrears jump from 6.8 per cent to 8 per cent, while smaller lenders who tend to offer loans to higher-risk customers saw their arrears levels more than double from 6.2 per cent in 2005 to 14.6 per cent in 2006. Wall Street is worried that the same mortgage borrowers who are falling behind with their home loan repayments will also miss repayments on their car loans.

    http://business.timesonline.co.uk/tol/busi...icle2469491.ece

    Looks like its debt in general thats the issue,

    Enjoy

    SB

  6. US house prices are likely to fall significantly from their present levels, Alan Greenspan has told the Financial Times, admitting that there was a bubble in the US housing market.

    In an interview ahead of the release on Monday of his widely-anticipated memoirs, the former chairman of the Federal Reserve said the decline in house prices “is going to be larger than most people expect”.

    http://www.ft.com/cms/s/0/31207860-647f-11...00779fd2ac.html

    More bear food and its not even Monday yet,

    SB

  7. Without being too melodramatic;

    1) Your house isn't sold until you exchange/complete - has the purchaser got their mortgage in place yet as its just got a LOT harder?

    2) Most people on this site think house prices will fall between 20 and 50% in the next 3 years - so why buy now?

    3) Rents are cheap when compared to mortgages - so rent a better property than you can buy and let someone else take the loss

    4) The saying "rent is money down the drain" doesn't apply in a falling market

    Choice is yours,

    Regards

    SB

  8. I'm going to say I am a realist - the market will crash but here is the rub - everyone is looking to the fundamentals to see when it will collapse and thats not where it will be seen - sentiment is the key - we're starting to see broadsheets carry a bearish message and once the tabloids do the same the wheels will come off very quickly - the crash is starting but like any system the measures will take time to come through and be seen - we've all been predicting it for long enough - we are right and it will happen.

    Should have seen the face on my new neigbour when I told him the £900K house he has just bought might be worth £450K in 3 years time - not what he wanted to hear and we won't get invited round for drinks - ho hum - keep the faith we're almost there

    B)

    SB

  9. One thing sticks out to me - they claim that flats are the fastest growing type of property up over 15% this year - now that does not sound right at all to me as flats in this area (Leeds/York/Wakefield etc) are not selling (at all?) and certainly prices have been falling over the last 6 - 9 months so how comes they are tha fastest growing?

    I suspect its something to do with asking vs sales prices and does not take into account other discounts?

    Anyone care to comment?

    SB

  10. Goldman Sachs Group Inc.'s Global Alpha hedge fund fell 22.5 percent in August, its biggest monthly decline, on losses from currency and stock trades, according to an update sent to investors.

    The fund, managed by Mark Carhart and Raymond Iwanowski, has dropped by a third in 2007 and 44 percent from its peak in March 2006. Investors notified New York-based Goldman last month that they plan to withdraw $1.6 billion from the fund, or almost a fifth of the assets as of July 31.

    Goldman blamed its losses on too many quantitative funds making the same trades, and said in mid-August it would have to develop new strategies.

    Ummm, all that money to follow the crowd?

    ;)

    SB

  11. A profound sea change in market sentiment is evident in the UK housing market. The

    sustained second wave of house price inflation that followed the slump in 2005 has now

    lost all impetus and prices have begun to slide in the majority of England’s regions. That

    such a tipping point* would eventually be reached was clearly apparent, should the

    economic observer have compared the trends in interest rates, house prices and average

    earnings, as far back as Q4 2006. However, the precise timing of when the transition

    from a sellers’ market to one that favours buyers would take place was less clear.

    Funny how hindsight is now going to be the msjor talking point - everyone knows whats going to happen its just people pretending they knew

    SB

  12. "... in the L.A. market there is no bubble. "

    I would also like to deny the existence of gravity, the Earth's moon and the Sun.

    Posted by: jemarqu | September 09, 2007 at 09:21 AM

    Guess Ms. Realtor Susan Stone is loathe to give up her leased Mercedes, designer clothes, and new tract home in Agoura Hills..And, after they read Viles post, she be giving up her clients who have half a brain. A-Mazing!

    Posted by: LA Expat in Arkansas | September 09, 2007 at 09:31 AM

    I can only say that the realtor on this piece is in denial. When you lose 100k of equity in less than a year, the bubble is bursting or slowly deflating. Yes there is a bubble and the bubble is deflating rapidly. Then again is just an opinion and you know how Dirty Harry felt about opinions.

    Posted by: Willie | September 09, 2007 at 09:32 AM

    Six months ago, many people would have agreed with this realtor; right now she's quite hilarious.

    Floods, riots and Rodney King happened after the bubble popped which was in 1989. People have a tendency to create their own cause and effect scenarios based on their thesis. If prices had fallen in 2001 people would have remembered it as a result of 9/11 and maybe years from now people will say prices fell because of the war in Iraq.The truth is the Southland has a long history of booms and busts and each time people say: this time it's different!

    When real estate prices become unrealistic they drop. Right now, using realistic loans, most buyers can't buy houses and apartments. Nor do investors rush in. For smart money to invest in California the prices need to show high rates of return of at least 7-8% on rents. Prices need to drop 50% to becomes attractive to both these groups.

    Since Real Estate is slow to buy and sell and inquires major transactional costs, including moving costs, the market moves slowly. If this was like the stock market where one can sell an asset in less than a minute and the prices on assets are updated by the second, we would have already seen a Nasdaq-like crash of 60% in prices and major panic selling. But since this is RE it will take several years.

    The Realtor is in denial.

    Posted by: amir | September 09, 2007 at 09:37 AM

    Realtors are like leaf blowers.......their simply annoying!!!!!!

    Posted by: Matt | September 09, 2007 at 10:07 AM

    Ex: I bought a 9 unit bldg in santa monica at a retail price with a 'normal' 8% loan and income at 9.5 X gross with a 'low' 6% return 10 years ago. The rent is up 16% and the property value up about 100%. Banks will only make a 50% loan if I sold the property at the current value. A newer owner would have to buy at cash to get maybe a 3% return. With the emerging lack of liquidity from tightening credit, especially in home equity, noone will buy bldgs such as mine at such inflated prices with uber-low income. We may not burst and drop like a rock, but we certainly can sink like a bag of bones at the La Brea tar pits a long way until we revert to the historical norm in values.

    Posted by: al | September 09, 2007 at 10:11 AM

    The real problem that caused the current credit crisis and subsequent real estate bubble was that interest rates were too low for way too long for way too many people. Let's not forget that mortgage lenders were giving out 5% ARMs, no documentation jumbo loans with zero down payment. That is a recipe for disaster.

    What responsible lenders did prior to the current bubble:

    No documentation or substandard credit: +100 to +300 basis points

    Zero down payment: +200 basis points

    10% down payment: +100 basis points

    Jumbo loan: +100 to +200 basis points

    When the ARMs, 2/28's, interest only loans reset, the interest rates on those should be in the 9% to 12% range. The only borrowers who should receive the lowest interest rates are the ones with good credit, 20% down payment/equity and are not carrying a jumbo (+417,000) loan.

    Posted by: Dwayne | September 09, 2007 at 10:31 AM

    There is no bubble? What is this person smoking?

    Posted by: Jason Hoppe | September 09, 2007 at 10:42 AM

    B)

  13. A survey by the Mortgage Bankers Association found that mortgages on properties that aren't occupied by the owner -- mostly investment homes -- account for between 21% and 32% of the defaults on prime-quality home loans in Arizona, California, Florida and Nevada, states where overdue payments are mounting fast.

    Of couse it couldn't happen here!

    http://online.wsj.com/article/SB1188518385...p_us_whats_news

    SB

  14. The amount British banks have been forced to write off as bad debt has jumped by a fifth to almost £9bn. It is a stark sign that households are struggling to keep up their repayments.

    Lenders had to write off £2.3bn worth of bad debts in the second quarter - up from the £2.1bn in the previous quarter, according to figures published by the Bank of England.

    http://www.telegraph.co.uk/money/main.jhtm...1/cndebt131.xml

    The Bank's own figures showed that 115,000 new mortgages were approved in July - considerably more than analysts had expected. "Mortgage approvals continue to defy gravity," said Alan Clarke of BNP Paribas. "A correction is long overdue."

    Another step in the right direction . . . .

    SB

  15. The chief executive of one of America’s biggest sub-prime mortgage lenders has predicted that the current “dislocation” in the US home loan market could be the most severe since the Great Depression in the 1930s.

    Mark Ernst, chief executive of H&R Block, made the comments after it emerged that Cerberus Capital Managament, the US hedge fund, was in advanced talks to reduce the $1 billion price that it agreed to pay to H&R five months ago for one of its subsidiaries.

    http://business.timesonline.co.uk/tol/busi...icle2358099.ece

    Meanwhile, Freddie Mac, the American mortgage financier, yesterday admitted to a 45 per cent slide in profits during the second quarter of the year. It said that it had taken a $320 million hit over the period on new mortgages and reported net income of $764 million, down from $1.4 billion for the same period the year before.

    RB 1 - Bulls Nil

    B)

    SB

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