The_Scum writes:
First? All your house belong to US.
The_Scum | 03.28.08 - 9:29 am | #

Anonymous writes:
March 28 (Reuters) - Citigroup Inc along with other U.S. banks are likely to announce dividend cuts in April, as banks' earnings will not support current dividend payouts in 2008, Oppenheimer & Co analyst Meredith Whitney said.

"We continue to believe the bad news is not priced into the bank stock prices, and that progressively throughout this year, all financials, but particularly banks, will trade ... at least 25 percent lower from current levels," Whitney said.

Management at banks are only now beginning to come to terms with the severity of both the liquidity environment as well as the credit environment, the analyst said

http://www.reuters.com/article/ b...G23932920080328

I love you Meredith. APOL getting crushed.
Anonymous | 03.28.08 - 9:32 am | #

ac writes:

Looks increasingly like the US govt may be following the consumer into bankruptcy.

United Banana Republics of America?

ac | 03.28.08 - 9:34 am | #

k harris writes:
CR,

Using you suggestion (assuming I remembered it correctly), it looks from February data like real PCE rose at a 0.9% pace in Q1 (used the January/February average rise as an estimate for March). Not so good, and consistent with expectations of a contraction in Q1 GDP. Note also that the big rise in income (0.5%, biggest since last July) resulted from government checks, rather than private sector activity.
k harris | 03.28.08 - 9:35 am | #

k harris writes:
That was off topic, I know, but I figured you'd get around to it at some point.
k harris | 03.28.08 - 9:36 am | #

ac writes:

Note also that the big rise in income (0.5%, biggest since last July) resulted from government checks

What government checks and where can I get some?

ac | 03.28.08 - 9:37 am | #

awgee writes:
In order to raise capital, do Fannie and Freddie borrow or do they sell MBS? Or some combination? Or some other way?
awgee | 03.28.08 - 9:37 am | #

4822 writes:
WSJ, 1 April 2008 - "4822, the Occasional Poster to Calculated Risk, may raise as much as $20 million in capital to purchase a ranch and a small astronomical observatory in New Zealand."
4822 | 03.28.08 - 9:38 am | #

Jas Jain writes:
``Effectively they have become the lender of first, last and every resort.''

Hail to the free market and competition. Have we finally arrived at our desti-nation or what.

Let us export our ideas to the rest of the world by peaceful means or war, but we must.

Jas
Jas Jain | 03.28.08 - 9:39 am | #

ac writes:

Oh glod, not again.

ac | 03.28.08 - 9:40 am | #

Turbo writes:
Have Fannie and Freddie figured out those pesky accounting and risk management thingies yet? Might be nice, since they're now the mortgage lender of first, last and every resort
Turbo | 03.28.08 - 9:42 am | #

REBear writes:
Are severence packages included in Personal Income calculations?

Sorry if you already read my question in the previous thread.
REBear | 03.28.08 - 9:42 am | #

CalculatedRisk writes:
k harris, yeah, I'm looking at the numbers now.

Best Wishes.
CalculatedRisk | Homepage | 03.28.08 - 9:43 am | #

ac writes:

Let us export our ideas to the rest of the world by peaceful means or war, but we must.

Why aren't we waging war on Iraq or Iran using the same strategy we destroyed Iceland with?

ac | 03.28.08 - 9:45 am | #

ipodius writes:
Are severence packages included in Personal Income calculations?

Severance packages are ordinary income and, in fact, in most states you cannot even file for unemployment until the severance is bled off. They use your last income to calculate how long that is. So if you get six months severance, you are considered employed for that six months because, in effect you are. You just got paid to job search.
ipodius | 03.28.08 - 9:48 am | #

Jack Staub writes:
"``The two enterprises have effectively become the mortgage market at this point,'' Lockhart said. ``Effectively they have become the lender of first, last and every resort.''"

I don't think this is accurate since many banks are still writing mortgages that they intend to hold on their own balance sheets.
Jack Staub | 03.28.08 - 9:49 am | #

Marcus Aurelius writes:
These guys are doing everything they can to postpone the inevitable (I suspect we will have a huge and chaotic unwinding shortly after the next President is sworn in). The same philosophical mindset that drives the Iraq debacle is driving economic policy: Official denial of reality in order to continue the systemic looting of the Treasury.

A rational response by our government would be to stem the tide of loss to the taxpayer - not to ratchet it up higher at every opportunity.

We are being scammed.
Marcus Aurelius | 03.28.08 - 9:50 am | #

TheFinancialNinja writes:
FNM and FRE common shareholders will get wiped out (a la Thornburg Mortgage) as these guys desperately raise and re-raise capital... over and over again.

Short Entry Zones Were Damn Near Perfect
TheFinancialNinja | Homepage | 03.28.08 - 9:52 am | #

number2son writes:
When will someone at the Lockhart home hide his car keys so he can't go to work and screw things up even further?
number2son | 03.28.08 - 9:53 am | #

Bill Melater writes:
No wonder they call you the last of the five good emperors, Marcus.
Bill Melater | 03.28.08 - 9:57 am | #

ipodius writes:
Marcus I would disagree with you on two points. The great unwinding is not going to wait for the next president. It is happening now, at first slowly, but it will pick up steam a bit.

And the second is that I don't see the scam at all. I'm the sebastian of Fed policy. I think they are actually doing a fantastic job of keeping order and assisting in the orderly unwind by whatever creative means they can. Whether the unwind cooperates with them, however, remeains to be seen. That is what I worry about.
ipodius | 03.28.08 - 10:02 am | #

Rob Dawg writes:
Time to revive yet another hollow political catchphrase; "Just say no."
Rob Dawg | Homepage | 03.28.08 - 10:11 am | #

Geoff writes:
Read my lips - just say no.

Or for a good explanation of where we are, you can go back in time to Bush 1 days and listen to Megadeth's Countdown to Extinction CD. 16 years later and we've clearly learned nothing.
Geoff | 03.28.08 - 10:17 am | #

Jas Jain writes:
--
"I love you Meredith."

Watch out, Anon. Her hubby is a wrestler.


Jas
Jas Jain | 03.28.08 - 10:21 am | #

Punditry writes:
were either all subprime or all prime

everyone should get the same rate if the govvie is "the" market
Punditry | 03.28.08 - 10:24 am | #

transient writes:
Anyone else see the google ad on here for a class action lawsuit against Bear Stearns?
transient | 03.28.08 - 10:25 am | #

Jas Jain writes:
--
"We are being scammed."

MA,

Normal outcome in a criminalized economy (mostly the financial system) aided and abetted by the Fed and the USG.

We can't leave something as important as the American nightmare to the free market.

Jas
Jas Jain | 03.28.08 - 10:26 am | #

Jas Jain writes:
--
"or all prime"

Targets!

Jas
Jas Jain | 03.28.08 - 10:27 am | #

JJL writes:
"Effectively they have become the lender of first, last and every resort."

I am truly sickened by this new development where Fannie and Freddie are making loans to resorts. They are supposed to make loans for housing, not Club Med or the Sandals resorts! This is getting out of control in a hurry!

-kidding-
JJL | Homepage | 03.28.08 - 10:27 am | #

Jas Jain writes:
--
OT... my apologies to Seb. I honestly like the guy.

Jas
Jas Jain | 03.28.08 - 10:30 am | #

Marcus Aurelius writes:
Bill M:

Thanks. I am, however, only a ghost of my former self. ; )

Ipodius:

We'll see what happens between now and Jan., 2009. No matter what, I think we'll have a major "readjustment" (yikes!) then.

As for the Fed's (Shadow Government's) actions, I think that they could have done many things to battle the trends, but they chose to concentrate on the top-tier money losers. In doing so, they have played into the hands of the culpable.

These guys will not spend the money they are being given (forgiven?), they will hoard it. They will take it overseas. The taxpayer will bear the brunt of less money and horrendous debt, both personal and national.

Better to have actual helicopters drop real dollars to the populace than to precision bomb the same dollars directly into the pockets of the thieves.
Marcus Aurelius | 03.28.08 - 10:32 am | #

Peripheral Visionary writes:
Fannie Mae and Freddie Mac, the U.S. government-chartered mortgage companies, may raise as much as $20 billion in capital

from . . . who, exactly?

Since it is now well-publicized that FNM and FRE are buying anything with the word "mortgage" stamped on top, who is going to risk giving them capital?

I realize the markets are celebrating the lifting of FNM's and FRE's capital restrictions, but just wait until they actually try and raise the capital in question. I have serious questions about where the estimated $2 T in additional money is going to come from.
Peripheral Visionary | 03.28.08 - 10:32 am | #

Lawyerliz writes:
Amen, Marcus
Lawyerliz | 03.28.08 - 10:33 am | #

Shnaps writes:
I don't think this is accurate since many banks are still writing mortgages that they intend to hold on their own balance sheets.

Good observation, Staubster.

In 2008 YTD originations, I see 36% are bank portfolio, 30% are GSE, and 9% are private investors. the rest is still warehoused (plus a pinch of GNMA), but even if all the warehouse ends up with the GSEs, there is still a siginficant portion being done outside of the GSE realm.

I never thought Lockhardt was given to hyperbole. I'm a little surprised by that quote.
Shnaps | Homepage | 03.28.08 - 10:43 am | #

Tom Stone writes:
The Traditional way to restore confidence in America is with slogans.I'd like to kick it off with one for Publisher's Clearing House "America's Retirement Plan".
Tom Stone | 03.28.08 - 10:44 am | #

dryfly writes:
And the second is that I don't see the scam at all. I'm the sebastian of Fed policy. I think they are actually doing a fantastic job of keeping order and assisting in the orderly unwind by whatever creative means they can. Whether the unwind cooperates with them, however, remeains to be seen. That is what I worry about.

I'm with MA (a few posts above) - we'll see if the baby can wait until Jan 09 & whether the fed is a good midwife or not. Just hope they got gas...

dryfly | 03.28.08 - 10:45 am | #

michael schumacher writes:
As in the same vein when Citigroup said it was going to "lighten" it's exposure by selling $45b in mortgages securities...

I asked the same question:

To whom are they going to sell to??

Just like all the homeowners who want to sell at a still inflated price....denial goes all the way to the top floor at C too.

Marcus-

could not agree more......

Ciao
MS
michael schumacher | 03.28.08 - 10:46 am | #

Rob Dawg writes:
PV,
It isn't $2T. The GSEs lever their capital. They'll loan out the same $20b 100x if necessary.
Rob Dawg | Homepage | 03.28.08 - 10:47 am | #

dryfly writes:
I have serious questions about where the estimated $2T in additional money is going to come from.
Peripheral Visionary | 03.28.08 - 10:32 am | #

I wouldn't be surprised to find that if you let a bloodhound loose a lot of that $2T could be tracked back to a fed window somewhere.

But that's not a problem, right, 'cause money is 'fungible'.

dryfly | 03.28.08 - 10:50 am | #

Tom Stone writes:
At what price would a prudent buyer touch their paper? In my bubble area prices have dropped to 350x monthly rent from 500x monthly rent.Around here I would want 25% down and 14% for a 30 year fixed,and i'd still be nervous.
Tom Stone | 03.28.08 - 11:14 am | #

Jas Jain writes:
--
"Why aren't we waging war on Iraq or Iran using the same strategy we destroyed Iceland with?"

ac,

Because in Iran and Iraq we were dealing with heretics. In Iceland we had the believers. It is lot easier to con a believer. Case in point -- democratic dupes!

Jas
Jas Jain | 03.28.08 - 11:15 am | #

Jas Jain writes:
--
"Better to have actual helicopters drop real dollars to the populace than to precision bomb the same dollars directly into the pockets of the thieves."

MA,

Fed is doing its job -- "bomb the same dollars directly into the pockets of the thieves."

The USG does a bit for "the populace."

You don't need Mafia (actually, we needed to get rid of the Mafia because it was competing with the Fed and the USG!) when we have legalized financial criminal gangs.

US e-CON-omy -- a criminal enterprise at a gigantic scale supported by force.

People need to come to terms with the real nature of the American system. It puts all the criminal enterprises in history to shame.

Jas
Jas Jain | 03.28.08 - 11:23 am | #

Anonymous writes:
"US e-CON-omy -- a criminal enterprise at a gigantic scale supported by force.

People need to come to terms with the real nature of the American system. It puts all the criminal enterprises in history to shame.

Jas"

Jas, seriously, it's great. We all got it. Now please go and spend your efforts posting this on any Fox News blog. I'm sure Hannity or O'Reilly have some blogs that you would be speaking to the needy. I'm sure their comments sections need someone just like you.

Go there, and give 'em hell. Don't reference us, please, but rest assured we're completely behind you in your pontificatory endeavors.

Go, Jas, Go beyond and spread the word!!

[Key word here is beyond.]
Anonymous | 03.28.08 - 11:32 am | #

banana republic writes:
Maybe at this point we should question whether Fannie Mae and Freddie Mac should even exist. Should the taxpayer, er I mean government be in this business?

Does it makes sense for the GSEs to take on loans that private enterprises won't even take?

But I guess Wall Street and the whole housing industry needs to be propped up and the taxpayer has to do it. No wonder Republicans hate taxes so much when activities like these make them look like vehicles for special interests to rape the public.
banana republic | 03.28.08 - 11:43 am | #

Jas Jain writes:
--
Anonymous,

You are given the right to spread my words wherever you see fit. Hannity is a rogue broadcaster. Actually, Faux Propaganda Machine recruits propagandists with great care.

Jas
Jas Jain | 03.28.08 - 11:57 am | #

Jas Jain writes:
--
OT...
Bush: "In order for democracy to survive the Iraqi People must have confidence in their govt."

Does the same apply to America?

Jas

PS: According to one author only 1% of Iraqis have confidence in their govt!! I wonder what the % is for Americans.
Jas Jain | 03.28.08 - 12:01 pm | #

Anonymous writes:
Hey,

I need help on another CR thread!! An invasion of clowns is distorting reality.

Help!

Re: Federal Reserve Governor Frederic S. Mishkin spoke tonight
Anonymous | 03.28.08 - 12:23 pm | #

grizz writes:
FNM and FRE need to raise capital just to put some non-fictional accounting assets back on their balance sheets, and would have a hard time just doing that. But to fix the mortgage crisis? Not without being nationalized.
grizz | 03.28.08 - 12:30 pm | #

Interesting Times writes:
At what price would a prudent buyer touch their paper? In my bubble area prices have dropped to 350x monthly rent from 500x monthly rent.Around here I would want 25% down and 14% for a 30 year fixed,and i'd still be nervous.
Tom Stone | 03.28.08 - 11:14 am | #

Damn... 350x rent would take 29 years to the Breakeven - that's not even accounting for taxes, maintenance, interest... wow.
Interesting Times | 03.28.08 - 12:38 pm | #

Josiphos writes:
I have to laugh at the people who think allowing a Californian to buy a 715k house is going to fix this whole mess.

Not to mention, 715K in San Fran will get you a nice 1500 sqf box.

Uh...its the overpricing Stupid!

Just another way to prop up this mess a bit more
Josiphos | 03.28.08 - 12:50 pm | #

sdtfs writes:
I have to laugh at the people who think allowing a Californian to buy a 715k house is going to fix this whole mess.

It will. We just need to find the right guy!
sdtfs | 03.28.08 - 1:08 pm | #

Pondering the Mess writes:
Awesome! The Housing Bubble is solved! Yeah - now get back to buying houses at 5x, 7x, and 10+x your income!

Oh, wait... so, what happens when: 1) nobody can qualify for a GSE loan, and/or 2) anyone qualify, we reinflate the Bubble, and then the GSE's roll over and die and we're left with nothing but hyperinflation?

Hmmm... maybe this doesn't fix everything!
Pondering the Mess | 03.28.08 - 1:12 pm | #

Pulse writes:
I heard a rumor Fannie and Freddie will be nationalized - anybody here this? what are your thoughts of the effect this will have!?

gracias,
Pulse | 03.30.08 - 1:52 pm | #