Gary writes:
Tantapalooza!

This is not surprising news. Long expected, but . . . drip, drip, drip.
Gary | 05.09.08 - 9:55 am | #

Negative Carrion writes:
if we all walk away, where do we find ourselves
Negative Carrion | 05.09.08 - 9:57 am | #

sterlingerl writes:
Negative Carrion writes: if we all walk away, where do we find ourselves?
Depends...did you load up on SKF first?
sterlingerl | 05.09.08 - 10:02 am | #

k harris writes:
OT Warning

Trade data today give back to GDP what inventory data took away yesterday. The trade report is good for about +0.7% to the Q1 GDP revision.

Back to our regularly scheduled...
k harris | 05.09.08 - 10:03 am | #

Anonymous writes:
Meanwhile stupid Americans are still buying nearly 2 billion a day more from the rest of the world then they are selling. Dollars are still our #1 export.

The Commerce Department reported Friday that the deficit totaled $58.2 billion, down 5.6 percent from February, a larger improvement than had been expected.

The smaller deficit reflected spreading weakness in the U.S. economy, which cut demand for imports by 2.9 percent, the largest one-month decline since December 2001, one month after the last recession ended.

The decline, which pushed imports down to $206.7 billion, was led by a 5.9 percent decrease in America's foreign oil bill. The amount of petroleum fell as the average price for crude oil jumped to an all-time high. Imports of autos and a wide variety of other consumer goods from furniture to toys and clothing also fell, reflecting the hard economic times facing U.S. consumers.

Exports, which have been one of the few strong points in this period of weakness, suffered a setback in March, falling to $148.5 billion, still the second highest level on record but down 1.7 percent from the all-time high set in February. Sales of commercial airliners, cars, computers and machinery were all down.

http://www.iii.co.uk/news/?type=...& action=article
Anonymous | 05.09.08 - 10:04 am | #

giacutter writes:
Wow. 183 visitors at 10 am. Stocks must be down.
giacutter | 05.09.08 - 10:07 am | #

Lawyerliz writes:
Isn't there a zen saying that whereever you go, there you are?
Lawyerliz | 05.09.08 - 10:09 am | #

giacutter writes:
And let me add:

Die you stinking bear market rally! Die! Die!

I mean, oh my, stocks are down a bit this morning.
giacutter | 05.09.08 - 10:10 am | #

Yal writes:
last year I had PUT on them and they drove me nuts.

I bought in February after looking in the grapvine and seeing that Fremonet reps were responding to everyloan secnario - no matter how bad....

but with options you need the timing just right.. mine expire in Sep 07 with litle profit.
Yal | 05.09.08 - 10:10 am | #

Yal writes:
How much does trade add to GDP - but what about those defaltors ?
Yal | 05.09.08 - 10:12 am | #

Allen C writes:
What a gig...You run a firm into the ground and continue to collect a salary years later. I suspect some will get stay bonuses.
Allen C | 05.09.08 - 10:18 am | #

Viewing with alarm writes:
The run up in fuel prices is killing the truckers. Huge fuel sur charges will show up quickly in retail prices. CPI increases this summer should be big enough to stop all talk of further rate cuts. We reap what we sew. Or something like that.
Viewing with alarm | Homepage | 05.09.08 - 10:18 am | #

MattJ writes:
"Meanwhile stupid Americans are still buying nearly 2 billion a day more from the rest of the world then they are selling. Dollars are still our #1 export."

Shouldn't that be, 'meanwhile stupid foreigners are still sending Americans 2 billion a day of things in return for a bunch of paper.'
MattJ | 05.09.08 - 10:23 am | #

nades writes:
Yal i hear that on options... I had a couple thousand on LEND over a year ago... I think it was a $30 strike, it was at $35... I lost my a*&.... Had I held on I'd be sending this from hawaii... Painful memories... ;)
nades | 05.09.08 - 10:25 am | #

Mook writes:
Shouldn't that be, 'meanwhile stupid foreigners are still sending Americans 2 billion a day of things in return for a bunch of paper.'

... "And demanding long-term returns not even equal to inflation in return for the privilege, to boot."

I mean, talk about your classic lose-lose scenario here ...
Mook | 05.09.08 - 10:28 am | #

jo6pac writes:
You mean they're just going to walk away, how evil of them.
jo6pac
The race to the bottom continues.
jo6pac | 05.09.08 - 10:31 am | #

Yal writes:
it took japan 20 years but they finally get is:

http://www.bloomberg.com/apps/ne...9Cw& refer=japan
Yal | 05.09.08 - 10:32 am | #

w writes:
CR - I read an article today that referenced legislation in CA that will allow the government to fine lenders and realtors $1000 a day for properties that are not being maintained. Do you know anything about this legislation?

OT - copper thieves shut down little league

http://www.venturacountystar.com...gue-ball-games/
w | 05.09.08 - 10:33 am | #

Gary writes:
From Marketwatch:

Citigroup Inc. plans to reduce about $500 billion of non-core, "legacy" assets over the next several years in a bid to shore up its capital base and divest itself of riskier investments, the banking giant said Friday.
Gary | 05.09.08 - 10:34 am | #

Gary writes:
Some legacy, Mr. Weil, Mr. Prince.
Gary | 05.09.08 - 10:35 am | #

AlphaBeta writes:
"Shouldn't that be, 'meanwhile stupid foreigners are still sending Americans 2 billion a day of things in return for a bunch of paper.'"

Well, now Americans are sending every piece of scrap metal they can find or steal (like copper plumbing from second homes and catalytic converters from cars) to China/India.

It won't take long before somebody steals the torch from Statue of Liberty... :) Scrap metal and paper are actually among those few items that US is able to export to Asia. (Hot Air from LA being the number one).
AlphaBeta | 05.09.08 - 10:39 am | #

Elvis writes:
The fact that companies are having trouble in this non-recession environment is shocking, indeed. Just shocking.
Elvis | 05.09.08 - 10:41 am | #

Fast Eddie writes:
Copper thieves
As McCain would say that's work that regular Americans won't do.
Fast Eddie | 05.09.08 - 10:42 am | #

ac writes:

The run up in fuel prices is killing the truckers. Huge fuel sur charges will show up quickly in retail prices.

This is going to be hard to pull off in an environment of weakening demand. These surcharges could just cause a steeper drop off in demand that offsets the higher prices.

This is why it's critical to differentiate between the price increases we're seeing now and the price increases we saw in the 70s that were supported by a steep rise in nominal wages.

Also the decline in exports last month doesn't bode well for the "China is going to save us" argument.

ac | 05.09.08 - 10:43 am | #

barely writes:
Look at that AIG open interest! Institutions are hammering that lever on AIG hard, driving it up so they get it up over $45 by May expiry.

Be interesting to keep an eye on...
barely | 05.09.08 - 10:45 am | #

Viewing with alarm writes:
I cleaned up a truck load of typical farm scrap steel this week and sold it for $160 a ton at a local scrap dealer. It was like christmas! The dealer said every car load they ship out goes to China. Thank goodness they are buying so I can pay the arabs for my fuel. What a great country! (USA that is)
Viewing with alarm | Homepage | 05.09.08 - 10:45 am | #

cd writes:
barely,
did you catch that backfill on Skf..
Market is ppt's bee with an itch right now. It's actually down..

Unbelievable
cd | 05.09.08 - 10:48 am | #

Anonymous writes:
I look forward to when some of the PPT banks go under.

Maybe we'll see real actual market pricing once again.
Anonymous | 05.09.08 - 10:50 am | #

number2son writes:
OT, but certainly of morbid interest to regulars of this blog:

http://www.sfgate.com/cgi-bin/ ar...ype=newsbayarea

A mortgage fraud scam gone bad, an emblematic tale of the greed and moral decay engendered by the housing bubble.
number2son | 05.09.08 - 10:54 am | #

ac writes:

barely,
did you catch that backfill on Skf..
Market is ppt's bee with an itch right now. It's actually down..

Unbelievable

Not with all the shorts lined up to buy financial stocks.

Not only is it believable, it's exactly what you'd expect.

It's just like with Fannie - a few shorts decide to cash in on some bad news and it starts a flurry of buying and the stock ends way up for the day.

Same thing with all the short interest in 1928 that lead to one of the biggest stock market rallies in history despite an obviously deteriorating economy.

Was there a PPT back then?

ac | 05.09.08 - 10:56 am | #

stuck_in_reverse writes:
Yal & Nades

Buying puts is like a casino with loaded dice. You may know that it will eventually turn up 1s, but while the management is using the loaded dice (buy-backs, fudging numbers, issuing dividends by borrowing, etc.) to keep showing 6s.

To make a killing you need to be in the known.

The only way for the common knowledgeable mortal to make money is with buying long dated put spreads or selling long dated call spreads. Sure it is not a killing, but at least you *can* wait it out until the schviiet hits the fan. Making 25% is better than making -100%. ;-)

The risk with options, futures and the like in these days, is making sure your broker does not blow up. Sure the big boys offer options and futures but they rape you along the way.
The discout brokers you never know if they will blow up...
stuck_in_reverse | 05.09.08 - 11:01 am | #

barely writes:
ac - "It's just like with Fannie - a few shorts decide to cash in on some bad news and it starts a flurry of buying and the stock ends way up for the day"

Not so sure. Check out what your bought-and-paid-for elected representatives are up to with future claims on your tax dollars. There are so many competing bailout bills and amendments it's impossible to keep track.

It's the BAILOUT PREMIUMS!
barely | 05.09.08 - 11:03 am | #

cd writes:
Ac-Your a wise young sage! I feel better already..It's funny I wouldn't be in the market if they would pay a decent rate on a cd..Live and learn..
cd | 05.09.08 - 11:05 am | #

Alec writes:
Can somebody explain to me what part of keeping Glass/Steagall would have done to prevent Fremont, Downey or Countrywide from happening?

Not being snide, asking a question.
Alec | 05.09.08 - 11:09 am | #

Barley writes:
I had to read the title twice - I was not sure they were still in business. But I guess they are, huh
Barley | 05.09.08 - 11:19 am | #

ac writes:

The logic of these Wall Street con artists never ceases to amaze and entertain:

In fact, as I pointed out a few weeks ago, the U.S. market has outperformed many of its overseas peers. Want to find a real bear market? Then look to last year's can't-miss superstars, China and India. The Shanghai Composite Index lost more than half its value from its all-time high above 6,000, and the Bombay Sensex Index declined almost 30% from its peak. That's a bear market.

The reason why the U.S. markets are holding up so well relative to much faster growing parts of the world is that our economy just isn't as bad as the gloom merchants say it is.

The reason that the US stock market is holding up and the Chinese stock market got cut in half is because fundamentals justify it.

Apparently the fact that the Chinese economy is growing at over 10x the rate of ours is a big, big negative.

What Bear Market? What Recession?

ac | 05.09.08 - 11:24 am | #

John Stark writes:
My favorite part of the FDIC release on Fremont are the three little words "among other things."
John Stark | 05.09.08 - 11:26 am | #

lama writes:
ac,
Also factor in the discount on US equities due to the weak dollar. We have a large overseas firm salivating over acquisitions in the US for that very reason. With the exchange rate being the reason, they can't be alone.
lama | 05.09.08 - 11:29 am | #

kis writes:
Can someone explain how IYR and SRS can both be down? Is it all short-profit taking?
kis | 05.09.08 - 11:30 am | #

Reggie writes:
CR
You should be expecting a LOT more bank failures. I have started releasing the research that led to my shorts in this sector. Bad underwriting + paper thin capital = failure. I included a couple of links below in order of increasing importance.

Primer on the real estate bubble (not really necessary for your readers)- http://boombustblog.com/componen...html/Itemid,20/

Primer on the asset securitization crisis (many know this, but I needed it to fill in the cracks)- http://boombustblog.com/componen...html/Itemid,20/

A study on the credit default swap market (I can guarantee that many could benefit from this piece) - http://boombustblog.com/componen...html/Itemid,20/

If any one is interested, I will be posting the consumer finance and the short candidate scan, which will reveal who I believe are some of weakest links in the chain.
Reggie | Homepage | 05.09.08 - 11:38 am | #

Ethan writes:
Re: Fuel surcharge

Chicago cabs may now charge a flat $1 extra as a fuel surcharge regardless of length (shortness) of trip.

Any other cities?
Ethan | 05.09.08 - 11:39 am | #

Cobradriver writes:
Viewing with alarm | Homepage | 05.09.08 - 10:45 am |

Viewing,

A friend buys a few loads of steel per year for his biz. Usually it is right around 1800.00. In less than 6 months it went past 6k for the exact same amount. I have a feeling there might be just a small amout of speculation going on...

Chris
Cobradriver | 05.09.08 - 11:43 am | #

squeezed writes:
Can someone explain how IYR and SRS can both be down?

Because they have different portfolios and leverage.

The action in TWM is amusing.
squeezed | 05.09.08 - 11:49 am | #

Terry writes:
OT:

Cobradriver: The foreclosure possibility that I mentioned a while back is taking place.
Terry | 05.09.08 - 11:51 am | #

lama writes:
I don't know Chris, "They're not making any more" iron ore.
lama | 05.09.08 - 12:00 pm | #

Jonny writes:
Isn't SRS just a double-inverse of IYR? If so, sounds like an arbitrage opportunity.
Jonny | 05.09.08 - 12:04 pm | #

Chris writes:
More banks will go under? Care to tell us where we might find the candidates?
Chris | 05.09.08 - 12:08 pm | #

kis writes:
Isn't SRS just a double-inverse of IYR? If so, sounds like an arbitrage opportunity.

I think it is a basket of assets that behave similar to what a double-inverse of an IYR basket performs. As an ETF, neither are truly indices. For instance, they get dividends, which a normal index wouldn't.

Anyway, I'm presuming that each has distinct bid/ask pools which drives the minute by minute prices. But you are right, it should represent an arbitrage opportunity if there is some lag in them realigning correctly with each other.
kis | 05.09.08 - 12:11 pm | #

mock turtle writes:
Alec writes:
Can somebody explain to me what part of keeping Glass/Steagall would have done to prevent Fremont, Downey or Countrywide from happening?

Not being snide, asking a question.
Alec | 05.09.08 - 11:09 am | #

mock turtle tries to answer:

glass steagall would have prevented fdic and fed back stopped lender of last resort institutions from funding the real estate bubble directly

but rest assured the pig men on wall would have found another way to work around, and gather the money

and now with the fed even providing support for investment banks and broker -dealers...and every thing else

i'm not smart enough to answer your question with expertise

but i believe the end result would have been similar if not the same.

while i fault clinton (d) for signing senator phill gramms (r) bill ending most of glass steagall and agree that did great harm...

i judge from limited knowlege that lack of regulation in the loan industry on the part of the gov and failure of proper internal insitutional lending policy was a bigger culprit.

and greed
mock turtle | 05.09.08 - 12:24 pm | #

Billy Hill writes:
OT - We haven't seen the Mortgage Pig
for a while. I think she should appear
to commemorate major bankruptcies,
resignations, indictments, etc.
Billy Hill | 05.09.08 - 12:59 pm | #

Alec writes:
Mock,

Thanks. I read G/S and it just seemed to me to set out the structure to what was a govt. backstopped bank. Last night I wrote the following and it's more germane to this thread:

Re: causes

IMO,
1: the speed at which securitization took place due to increases in computing power

2: greed

3: EZ money

4: lax regulatory enforcement is what led to this particular market failure.

Maybe more regs is what's needed, but let's cast a more jaundiced eye at the latter two, because the 1st two will always be around.
Alec | 05.09.08 - 1:12 pm | #

Big E writes:
I was just in Seattle, and they've got a $1.50 fuel surcharge on every trip, no matter how short. OUCH!
Big E | 05.09.08 - 1:21 pm | #

Kicker writes:
Negative Carrion writes: if we all walk away, where do we find ourselves?
Depends...

did you load up on SKF first?

The short's prayer...

Please, let everybody walk away but the counter-parties to my double-short ETF..
Kicker | 05.09.08 - 1:58 pm | #

Mike Dillon writes:
http://www.mass.gov/?pageID=cago...pheld& csid=Cago

May 05, 2008
For immediate release:

Appeals Court Judge Upholds Preliminary Injunction Against Fremont in Predatory Lending Case

BOSTON – A single justice of the Massachusetts Appeals Court has upheld a preliminary junction against California-based Fremont General and Fremont Investment and Loan (“Fremont”), a subprime lender that originated thousands of loans in Massachusetts and whose risky loan-selling conduct significantly contributed to the foreclosure crisis in Massachusetts. Justice Cynthia Cohen of the Massachusetts Appeals Court upheld a preliminary injunction that had been granted by Superior Court Judge Ralph D. Gants.

“We are pleased that the Appeals Court has upheld Judge Gants’ ruling, which offers some measure of relief to homeowners and communities suffering from the effects of Fremont’s loans,” said Attorney General Coakley. “Lenders cannot escape responsibility for their illegal conduct and contribution to the foreclosure crisis in Massachusetts, and we will continue to hold accountable those who have engaged in allegedly unfair and deceptive practices.”
Mike Dillon | Homepage | 05.09.08 - 2:13 pm | #

dashingdwl writes:
w writes: OT - copper thieves shut down little league.
-----

Please don’t worry. President Obama will get tough on criminals.
dashingdwl | 05.09.08 - 2:38 pm | #

Gavshire Hathaway writes:
"Please, let everybody walk away but the counter-parties to my double-short ETF.."

Uh oh, I never thought of that. I've had a position in SKF for some time now. Does anybody know if there is counterparty risk behind SKF that might make it a losing bet even if financials tank?

Given my aggressive position shorting banks, would I be able to take money out of the brokerage in the "financial armegeddon" case?

If possible, I want to avoid the screwed if I'm wrong, screwed if I'm right scenario :(
Gavshire Hathaway | 05.09.08 - 5:56 pm | #

me writes:
Same people ran this Fremont, eight years ago:
http://findarticles.com/p/articl...c_1/ ai_67499732

What business will they be in next?
me | 05.09.08 - 10:23 pm | #