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NEW -> Contingent Buyer Assistance Program
<a href="http://bigpicture.typepad.com/comments/2008/03/oil-all-time-in.html">Barry has your oil, er inflation right here</a>...





<img src="http://bigpicture.typepad.com/comments/images/2008/03/03/oil_10395.png" alt="" />





<p>Oil prices today passed their all time, inflation-adjusted record, just kissing the underside of $104 dollars. As the chart above shows, crude prices have broken out from a 6 month consolidation between $85 and $95. </p>

<p>The commodity looks like it has legs, which is trader talk for its going higher. While I do not make a habit of forecasting commodity prices, $110, and then $125 are our next two targets. </p>

<p>I got your core inflation <em>right here </em>. . .</p>
 
<p>Buffett was quoted as having interests in Miami-Dade and Broward County. </p>

<p>He said listings used to be in balance, more or less(my summary). Now, he said the inventory was 82,000 and the sales per month were 1,500. About 5 years supply. Don't know if that's both Dade and Broward or the said amount each.</p>

<p>Plenty more condos coming on line. Plenty more REOs.</p>

<p>I got 2 new real estate clients today. One wants to get out of a pre-construction contract.</p>

<p>The other one's 85 year old mom bought a house for an outrageous price and proposed to mtg her paid off home to buy it. She just gets SS. No way she could qualify for a $250,000.00 mtg. How are they still doing this stuff?</p>

<p>Sooner or later that inventory will have to be sold. I can't imagine how low the prices will have to be to get rid of it.</p>
 
> The other one's 85 year old mom bought a house for an outrageous price and proposed to mtg her paid off home to buy it. She just gets SS. No way she could qualify for a $250,000.00 mtg. How are they still doing this stuff?





That's one of the more disgusting things I have ever heard. During the bubble era, you would read about things like illegal immigrants who worked picking strawberries for a living buying $700k houses. Bleeding heart liberals used lightly veiled racism to try to convince people that it was predatory lending. You can call me a cynic if you like, but I just don't buy the sob stories of people (consumers) being taken advantage of. I think these people were predatory borrowers that got the idea of buying a $700k house from stories heard in the fields of other people who achieved the American dream of achieving easy wealth with no work.





But this is another matter entirely.





There is a special place in hell for the people who are trying to con people like your client's mother our of their homes.
 
<p>


Yikes! -50% today because of margin calls and they are deleveraging their positions through a probably fire sale.





As a Warren Buffet said today, expect deleveraging waves to hit the markets, ha ha, some hedge funds managers are not sleeping at all.





He said last week was pretty chaotic, he just sits and expect calls from distressed investors, you're <strong>the man</strong>, when that happens to you.





<a href="http://finance.yahoo.com/q?s=TMA">TMA</a></p>

<p><img height="288" alt="Chart for Thornburg Mortgage Inc. (TMA)" width="512" border="0" src="http://chart.finance.yahoo.com/c/3m/t/tma" /></p>
 
<p>Interesting take on the conversion of Condo projects to apartments with a little tidbit about Irvine Co's. problems trying to lease high end apartments near the Spectrum.</p>

<p><a href="http://www.ocregister.com/money/says-apartments-apartment-1990391-condos-rents">http://www.ocregister.com/money/says-apartments-apartment-1990391-condos-rents</a></p>
 
<p>The Case for Foreclosures


One family's sorrow is another's joy</p>

<p><a href="http://www.slate.com/id/2185303/">http://www.slate.com/id/2185303/</a></p>
 
<p><strong><a href="http://www.nytimes.com/2008/03/04/business/worldbusiness/04oil.html?em&ex=1204779600&en=6beb3ee91513cfca&ei=5087%0A">Oil Tops Inflation-Adjusted Record Set in 1980 </a></strong></p>

<p><img height="276" alt="" width="600" border="0" src="http://graphics8.nytimes.com/images/2008/03/03/business/20080304_OIL600x275_GRAPHIC.gif" /></p>
 
<a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=avH68.TOCYHM&refer=home">http://www.bloomberg.com/apps/news?pid=20601087&sid=avH68.TOCYHM&refer=home</a>

<p> <em>"It's still a liquidity issue, not a credit issue,'' Torres said."</em></p>

<p> Actually it is a solvency issue.</p>
 
<p>Awgee, do you know what's going on with the Auction bonds? That's a serious question. Do I read that right when I read it as basicaly, muni-bonds have had their required yield nearly double in 90 days?</p>

<p>Is the solvency issue with the banks or the underlying bonds.</p>

<p>And if you can give a mini-refresher course on why the bank's liquidity makes a difference? Or is in reality the flush cash is gone from the investors and all the yield pigs went home and the artificial demand cause by home equity is gone like so many other items.</p>

<p> </p>
 
If I understand the situation correctly, there is so many crappy loans and bad debt floating around that lenders have been avoiding buying debt of any kind -- even the safe stuff. The commercial paper market, which is composed of relatively safe, very short-term debt has seized up. This is why the guy is complaining about liquidity. The municipal bond market is also getting reamed because nobody trusts the monoline insurers to make good on their insurance. We have lived in an era of very low risk premiums, and the market has suddenly awoke to the fact there is risk in the world, and they don't know how to evaluate it or price for it.
 
NSR - The banks who underwrite bond sales usually buy the bonds if they do not sell for a normal price. Not only does there exist a dearth of bidders for the bonds, or the short term paper derived from them, but the banks are longer buying them when they do not sell. If it was just liquidity keeping the banks from borrowing, they could go to the TAF or the discount window or even boorow at the overnight rate, but they aren't.<p>

The member banks have negative reserves. They have borrowed from the Fed to meet Fed reserve requirements. Is that legal? I dunno, but my suspicion is that it isn't and the Fed is bending the rules because the Fed does not care to face the consequences of insolvent banks.<p>

Are the institutions issuing the bonds also insolvent? I dunno. My suspicion is some are and some aren't. And I would guess that many more are insolvent than anyone cares to admit to. My guess is the normal bond traders, buyers, and insurers do not want to know.<p>

Muni bonds and the derivatives of them are federal income tax free. Why aren't they selling? And at discounts no less.<p>

And to top it off, the yen is below 104, thus forcing some hedge funds to unwind. When the hedge funds unwind, if they are leveraged, they have to sell alot of assets, and that may include bonds and derivatives of bonds.
 
<a href="http://tinyurl.com/3abemr">Ut roh... the credit crunch directly hits the Bush family</a>.





Carlyle affiliate fails to make margin payments

<p>Fund receives notice of default from one counterparty, expects another</p>

By <a href="http://www.marketwatch.com/news/mailto.asp?x=115+107+101+110+110+101+100+121&y=Simon+Kennedy&z=marketwatch.com&guid=%7B75262005-076a-4eb7-a438-dae2d0e3fa36%7D&siteid=mktw">Simon Kennedy</a>, MarketWatch

<p> </p>

<p>LONDON (MarketWatch) -- Carlyle Capital Corp., an investment fund managed by the Washington private-equity firm Carlyle Group, said Thursday that it's failed to meet margin calls from four counterparties and has already received one notice of default.</p>

<p>Carlyle Capital which is based in Guernsey, Channel Islands, and listed in Amsterdam, said that it received margin calls from seven of its 13 counterparties on March 5 totaling more than $37 million. </p>

<p> "The company has met margin calls from three of these financing counterparties that have indicated a willingness to work with the company during these tumultuous times, but did not meet the margin requirements of the four other repo financing counterparties," it said in a statement. </p>

<p> One of those four has already sent a notice of default and the firm said it expects at least one more to do so. </p>

<p> Carlyle has a $21.7 billion portfolio of residential-mortgage-backed securities issued by Fannie Mae and Freddie Mac , which it finances through short-term loans, or repurchase agreements. Securities from these firms are considered to have an implied government guarantee. </p>

<p> But Carlyle said turbulence in the last few days means margin prices "are not representative of the underlying recoverable value of these securities." </p>

<p>The fund said it's negotiating with counterparties to develop more stable financing terms. </p>

<p>Shares in the fund fell 1.7% in early Dutch trading and are down around 40% from July, when it was listed. </p>

At the end of February the fund reported fourth-quarter net income of $17.6 million and said Carlyle Group had increased its credit line to $150 million from $100 million. At that time it still had $80 million available under the credit facility.
 
<p>Federal Reserve Report Shows Homeowner Equity Dipping Below 50 Percent, Lowest on Record </p>

<p><a href="http://biz.yahoo.com/ap/080306/home_equity.html">http://biz.yahoo.com/ap/080306/home_equity.html</a></p>

<p>Homeowners' percentage of equity slipped to a revised lower 49.6 percent in the second quarter of 2007, the central bank reported in its quarterly U.S. Flow of Funds Accounts, and declined further to 47.9 percent in the fourth quarter -- the third straight quarter it was under 50 percent. That marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945.</p>
 
<p><a href="http://news.yahoo.com/s/ap/20080306/ap_on_bi_ge/home_equity"><strong>Homeowner equity is lowest since 1945</strong></a> </p>

<p>NEW YORK - Americans' percentage of equity in their homes fell below 50 percent for the first time on record since 1945, the Federal Reserve said Thursday.</p>

<p>Homeowners' portion of equity slipped to downwardly revised 49.6 percent in the second quarter of 2007, the central bank reported in its quarterly U.S. Flow of Funds Accounts, and declined further to 47.9 percent in the fourth quarter — the third straight quarter it was under 50 percent.</p>

<p>That marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945.</p>

<p>The total value of equity also fell for the third straight quarter to $9.65 trillion from a downwardly revised $9.93 trillion in the third quarter.</p>

<p><strong>SInce 1945??!!</strong></p>

<p><img style="WIDTH: 355px; HEIGHT: 224px" height="329" width="465" alt="" src="http://www.nmwh.org/war%20bonds%20with%20Nazi%20bomber%20002.jpg" /></p>

<p> </p>
 
<p>From the la times article above,</p>

<p>"As the housing slump worsened last fall, Don Dale struggled to find buyers for the $900,000 houses he was selling for Shea Homes in the hills of Aliso Viejo. Then in January, Shea slashed prices to about $750,000. Dale sold nine in one day."</p>

<p>I am sorry, call me cynical, but I am calling BS on that one. Really, nine in one day? I am not sure that he sold nine in one day even during the boom.


</p>
 
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