Headlines...

NEW -> Contingent Buyer Assistance Program
<p>Nothing can help Carlyle Group now.</p>

<p>An affiliate of U.S.-based buyout firm <strong><strong>Carlyle Group</strong></strong> has defaulted on about $16.6 billion of debt and expects its lenders to seize remaining assets as the global credit crunch tightens around leveraged investors.</p>

<p><a href="http://www.cnbc.com/id/23603903">www.cnbc.com/id/23603903</a></p>
 
<p>This would have be a good idea FIVE YEARS AGO! (Although he does not really set forth any specifics. . .but at least he admits there is a problem)</p>

<p><strong>Paulson: Time to toughen rules on mortgage brokers</strong></p>

<p><a href="http://biz.yahoo.com/rb/080313/paulson.html">biz.yahoo.com/rb/080313/paulson.html</a></p>
 
<p>Barn door. Hourses. </p>

<p>Gold over 1000, tho back down, I think.</p>

<p>Oil.</p>

<p>I just heard that the mighty West Publishing, who keeps us attys enslaved to their books and computer info might be struggling.</p>

<p>A fight/riot in Palm Beach County over Section 8 vouchers.</p>

<p>I wanna go hide under the bed.</p>
 
<p>Stock market is up as investors celebrate tthe Standard & Poors ratings agency declaring that the bottom is in for the financial stocks and the big banks should be all done with their write downs.</p>

<p>This is gonna be like taking candy from a baby.</p>
 
"Standard & Poors ratings agency declaring that the bottom is in for the financial stocks and the big banks should be all done with their write downs."





What are they smoking?





Is this the same ratings agency that said CDOs of mortgages were "AAA"?
 
<p>Now, now, Irvine Commuter, I heard gossip that they were struggling not that they were anywhere close to going down.</p>

<p>If West went down, well that would be the End of the World, wouldn't it?</p>

<p>Actually, I have visited a law library a couple of times in recent months to get away from the office (and the temptations of the internet) and actually get some work done. then, the case that I had worked on so hard settled. That's good, I guess.</p>

<p>Case basically settled because the opposing atty retired to Panama, abandoning his client, and without withdrawing from the case. Weird. THAT never happened before.</p>
 
The Economist weighs in on $1000+ gold.





<a href="http://www.economist.com/displayStory.cfm?story_id=10855880&fsrc=RSS">http://www.economist.com/displayStory.cfm?story_id=10855880&fsrc=RSS</a>
 
<p>Southland home prices tumble fast</p>

<p><a href="http://www.latimes.com/business/la-fi-homes14mar14,1,1380779.story">http://www.latimes.com/business/la-fi-homes14mar14,1,1380779.story</a></p>

<p>Southern California home prices are now 19% below their peak last year, and the surprisingly rapid decline is leading experts to predict that the housing slump will be worse than initially thought -- surpassing the severe downturn of the 1990s.


...</p>

<p>Delores A. Conway, director of USC's Casden Real Estate Economics Forecast, last fall predicted a 15% decline in home values. But now, "20% to 25% looks more likely," she says, "and that's not to say we won't see 30%."





Los Angeles economist Christopher Thornberg is even more bearish. He projects that home values will sink 40% from their peaks reached last year, double his previous estimate.</p>
 
<p><em>"Standard & Poors ratings agency declaring that the bottom is in for the financial stocks and the big banks should be all done with their write downs."





What are they smoking?





Is this the same ratings agency that said CDOs of mortgages were "AAA"?"</em></p>

<p>Bear Stearns is saying that in the last day their liquidity problems have increased dramatically. Bear Stearns is going to the Fed's new auction window. BSC is down 21%.</p>

<p>But did not Standard & Poors declare the write downs may be over?</p>

<p>I think the locomotive is picking up speed.</p>
 
<a href="http://biz.yahoo.com/ap/080314/fed_credit_crisis.html">Ain't Socialism grand?</a>





As explained by <a href="http://bigpicture.typepad.com/comments/2008/03/bear-stearns-ge.html">TBP</a>:





Here's the JPM press release:

<p><a href="http://biz.yahoo.com/bw/080314/20080314005430.html?.v=1">JPMorgan Chase and Federal Reserve Bank of New York To Provide Financing To Bear Stearns</a>


http://biz.yahoo.com/bw/080314/20080314005430.html?.v=1</p>

<p>JPMorgan Chase & Co. (NYSE: <a href="http://finance.yahoo.com/q?s=jpm&d=t">JPM</a> - <a href="http://finance.yahoo.com/q/h?s=jpm">News</a>) announced that, in conjunction with the Federal Reserve Bank of New York, it has agreed to provide secured funding to Bear Stearns, as necessary, for an initial period of up to 28 days. Through its Discount Window, the Fed will provide <u>non-recourse, back-to-back</u> financing to JPMorgan Chase. Accordingly, JPMorgan Chase does not believe this transaction exposes its shareholders to any material risk. JPMorgan Chase is working closely with Bear Stearns on securing permanent financing or other alternatives for the company.</p>




If you are wondering WTF a non-recourse, back-to-back financing is, pull up a chair:

<p> JPM gets to go the the Discount Window and borrow all the greenbacks they want; Then they loan that to Bear. In the event that Bear defaults, the NY Fed cannot go back to recover from JPM -- hence, non-recourse.


</p>




Clearly, I need better friends.
 
In case you didn't see this on blownmortgage.com, I highly recommend it - it's a p<a href="http://www.blownmortgage.com/files/presentation3-2008.pdf">retty easy to follow report</a> by T2 Partners analyzing the mortgage crisis and why it's only getting started - lots of scary but informative graphs and charts.
 
<p>Oh the stuff is hitting the fan now.</p>

<p><strong>Bear Stearns Gets Bailout From the Federal Reserve</strong> </p>

<p class="textBodyBlack">The Federal Reserve agreed to provide emergency financing to <strong><strong>Bear Stearns</strong></strong>, after the


investment bank said its cash position had deteriorated sharply in the past 24 hours.</p>

<p class="textBodyBlack">The short-term financing from the Fed Bank of New York is being arranged through <strong><strong>JPMorgan Chase</strong></strong>. Bear said the financing is intended to help shore up confidence in its operations.</p>

<p><a href="http://www.cnbc.com/id/23630235">www.cnbc.com/id/23630235</a></p>

<p> </p>
 
<p>There is not enough money is the world to fix this. We are just lurching from month to month. Confidence--any reason why should this give us any?</p>

<p>I suppose it gives those so inclined to buy extra canned goods and gold.</p>
 
<p>Could we be looking at a Black Monday? Won't the international markets keel over come Sunday?</p>

<p>Edit: Maybe I'm just a little stunned by how orderly the market has declined the past few months considering the barrage of negativity. I just don't get it.</p>
 
<em>"Maybe I'm just a little stunned by how orderly the market has declined the past few months considering the barrage of negativity. I just don't get it."</em>





Institutional selling is generally very orderly and technical. They don't want to alarm the general public because they need them to buy and become the bagholders. When the general public gets spooked, that's is when all hell brakes loose.
 
<p>Death of a thousand cuts.</p>

<p>Actually, I think that a lot of relatively rich people are getting a lot poorer, probably faster than the middle and lower class. All the execs at Bear, will they lose their jobs? Next year's wall street bonuses will probably be greatly dimished. Poor people don't have assets to put into sivs. They do have jobs to lose tho.</p>
 
<p>Economists React: ‘Unexpected Gift’ From Consumer Prices</p>

<p><a href="http://blogs.wsj.com/economics/2008/03/14/economists-react-unexpected-gift-from-consumer-prices/">http://blogs.wsj.com/economics/2008/03/14/economists-react-unexpected-gift-from-consumer-prices/</a></p>

<p><strong>The [owner’s equivalent rent] item is worth</strong> highlighting because a stepped up pace of deceleration in this important category is likely to continue to put downward pressure on the core CPI in the months ahead. As we have noted in the past, a very large inventory of unsold homes and condominiums appears to be leading to an increase in available supply of rental properties. This is putting downward pressure on rents across much of the nation. In particular, rents for single-family residences — a very important classification in the OER sample — appear to be sliding quite a bit. OER accounts for 31% of the core CPI and the +0.1% result for OER in February has only been matched once since 2004. Moreover, OER peaked at +4.3% on a year/year basis in Jan 2007 and is now running at +2.7%. We could see a further deceleration of as much as a full percentage point over the next year or so, which would shave 0.3 percentage points from the core reading all by itself. <em>–David Greenlaw, Morgan Stanley</em></p>
 
My understanding is JPM will borrow treasuries from the Fed using agency backed MBS as collateral and JPM will lend the treasuries to Bear Stearns without collateral. BSC can not sell the treasuries. BSC can only use the treasuries as reserves from which to loan created credit. In 28 days the Fed can roll over the loan to JPM.<p>


Who is next to go? I am guessing Lehman.
 
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