Headlines...

NEW -> Contingent Buyer Assistance Program
<p>Latest Trouble Spot for Banks: Souring Home-Equity Loans</p>

<p>http://online.wsj.com/article/SB120527998662928743.html?mod=hps_us_whats_news</p>
 
<a href="http://bigpicture.typepad.com/comments/2008/03/bove-fed-term-s.html">If only my name were Bear Stearns, I could give my crap to the Fed and get a 28 day loan.</a> Alas, it is not to be.





I especially like the end comment: "Ain't socialism grand?"
 
Right, how do we start an organization that makes billions of dollars with massive tax breaks yet we can get bailed out when we lose money? Can we get this started right away?





Thank you,





LM
 
<p>From the <a href="http://blogs.wsj.com/economics/2008/03/11/merrill-lynch-recession-to-be-worst-since-1970s/">WSJ</a> :</p>

<p><em>Mr. Rosenberg says in a note to clients that the current downturn is hitting more broadly than the credit crunch and real estate meltdown in the 1990-91 recession, which lasted eight months (as did the mild 2001 contraction). <strong>Home prices today are falling in 85% of the country vs. 40% during that period</strong>, he notes. When prices hit bottom in 1992, the <strong>inventory of new and existing homes for sale was at 7 months of supply. Now it’s at 10 months’ supply “with no improvement in sight,”</strong> says Mr. Rosenberg, who was among the first economists to forecast a 2008 recession. He sees average prices nationwide dropping 20% to 30% more, <strong>on top of the 11% decline since the 2006 peak</strong>.</em></p>

<p><em>The mid-1970s recession “not only saw a sharp and sustained rise in food and energy prices, as is the case today, but also saw a very similar consumer balance sheet squeeze from a simultaneous deflation in residential real estate and equity assets, which never happened in the 2001 recession, the 1990-91 recession or the recessions of the early 1980s for that matter,” he writes. “The last time we had more than one quarter of outright contraction in the value of both asset classes on the household balance sheet was in the 1973-75 recession.”</em></p>

<p>Do you think he's long the homebuilders? </p>
 
<p><a href="http://www.ft.com/cms/s/0/0e63ad12-ef9c-11dc-8a17-0000779fd2ac.html">Going, going, gone: a rising auction of scary scenarios</a></p>

<p>By Martin Wolf</p>

<p><img alt="" src="http://media.ft.com/cms/b5bffd06-ef9a-11dc-8a17-0000779fd2ac.jpg" /></p>

<p><em>What am I bid on financial sector losses from the US subprime mortgage crisis? Do I have advances on the $100bn suggested by Ben Bernanke, chairman of the Federal Reserve, only last July? Yes, I now have $500bn from the gentlemen from Goldman Sachs. Any advances on $500bn? Yes, I have $1,000bn-$2,000bn from Nouriel Roubini of New York University’s Stern School of Business. Any advances? Going, going, gone. </em></p>

<p><em>It is easy to be cynical about this ascending auction of scary prognoses. But we cannot ignore them.</em></p>

<p><img alt="" src="http://media.ft.com/cms/2acbfdaa-ef9d-11dc-8a17-0000779fd2ac.gif" /></p>
 
I added to my FRE short today. Just 50 more shares, but that would be $1000 if they go BK. I'll probably cover when they get close to 10. Does anyone know if FRE could actually be acquired? I'm thinking no, but they can be rescued....by the generosity of taxpayers.
 
<p>Rules Let Too Many Poor People Buy Houses, Syron Says (Update2) </p>

<p><a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRGiT9IV3UC0">http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRGiT9IV3UC0</a></p>

<p>March 12 (Bloomberg) -- <a t_delay="50" t_width="110" t_bgcolor="#ddedd9" t_fontface="Verdana,sans-serif" t_fontcolor="#000000" t_static="true" t_above="true" href="http://www.bloomberg.com/apps/quote?ticker=FNM%3AUS">Freddie Mac</a> Chief Executive Office <a t_delay="50" t_width="110" t_bgcolor="#ddedd9" t_fontface="Verdana,sans-serif" t_fontcolor="#000000" t_static="true" t_above="true" href="http://search.bloomberg.com/search?q=Richard+Syron&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1">Richard Syron</a> said he's urging changes in federal rules that enabled too many low- and moderate-income Americans to buy houses they can't afford. </p>

<p>It's ``perverse'' that Freddie Mac and Fannie Mae, the two biggest providers of money for U.S. home loans, have been encouraged ``to put people into homes that they end up losing,'' Syron said at a meeting with <a t_delay="50" t_width="110" t_bgcolor="#ddedd9" t_fontface="Verdana,sans-serif" t_fontcolor="#000000" t_static="true" t_above="true" href="http://www.bloomberg.com/apps/quote?ticker=FRE%3AUS">analysts</a> and investors in New York. </p>
 
<a href="http://www.washingtonpost.com/wp-dyn/content/story/2008/03/11/ST2008031103060.html">This </a>is certainly an interesting take on why the Fed did what it did this week.
 
<p><a href="http://www.cnbc.com/id/23603903">http://www.cnbc.com/id/23603903</a></p>

<p class="textBodyBlack"><strong><strong>Carlyle Capital</strong></strong>, an affiliate of private equity firm <strong><strong>Carlyle Group</strong></strong>, said on Wednesday its lenders are likely to take possession of its remaining assets after it was unable to reach a mutually beneficial agreement to stabilize its financing. </p>
 
<a href="http://tinyurl.com/2qg4fo">Ouch... the Asian markets took a big hit</a>.





US futures are looking ugly, and currently the <a href="http://www.cbot.com/cbot/pub/page/0,3181,432,00.html">Dow futures are below the 12k mark</a>.





Looks like I need to place an order for some <a href="http://www.marketwatch.com/quotes/sds">SDS</a> calls again.
 
<p>Eva - My take is the Fed created the new auction for Goldman Sachs and to a lesser extent Bear Stearns and Lehman. It will not do Carlyle or Thornburg any good because they do not have access to the auction.</p>

<p>It seems Paulson is talking today and although he will not come out and say it, he is getting the American taxpayer ready to purchase mortgages.</p>
 
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