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Merrill Lynch posts steep first-quarter loss on write-downs.



It marks the third straight quarterly loss for Merrill amid a global credit crisis that began last summer.



My question is, how and why does a company even exist if it loses money for three straight quarters. Why would you be a shareholder?
 
It's a good thing that the mortage/lending problems are confined to sub-prime lending.



<a href="http://news.yahoo.com/s/nm/20080417/bs_nm/studentloans_salliemae_outlook_dc">http://news.yahoo.com/s/nm/20080417/bs_nm/studentloans_salliemae_outlook_dc</a>



"WASHINGTON (Reuters) - Sallie Mae (SLM.N), the largest U.S. student loan company, on Thursday affirmed its 2008 profit forecast, but warned of a "train wreck" in the $85 billion education financing market without urgent government intervention."
 
Apart from the last year Merrill have been making record profits year on year. So I am sure they have a few reserves and worst case they can sell/spin off some of the companies they have bought out over the years.



They are a big company and will be around for quite a lot longer (at least I hope so, many of my friends still work there)
 
WTF?



Top Stories

As of 51 minutes ago

Google, Citi Spark Fierce Rally- AP



<strong>Wall Street charged higher Friday as results from companies like Citigroup Inc. and Google Inc. helped ease investor anxiety about the health of corporate profits.</strong> The major stock indexes each rose more than 2 percent, with the Dow Jones industrial average at times advancing more than 250 points.



* Google Shares Soar 20 Percent on Strong 1Q Results- AP

* AT&T;to Cut Apx 4,600 Jobs, Sees $374M Charge- AP

<strong>* Citigroup Reports $5.1 Billion Loss, to Cut 9,000 Jobs- AP</strong>

* Oil Surges to New Record -- $116 -- Gas Nears $3.50- AP

* Canada Says Chemical in Plastic Water Bottles Unsafe- AP

* Wall Street CEO Playbook: Bet Big. Get Rich. Screw up. Enjoy Golden Parachute- Tech Ticker



So, the article headline says Citigroup is helping to ease investor anxiety. Yet I see Citigroup reports 5 BILLION dollar loss and cuts 9,000 jobs.



Again, WTF!?
 
[quote author="lendingmaestro" date=1208567979]WTF?



Top Stories

As of 51 minutes ago

Google, Citi Spark Fierce Rally- AP



<strong>Wall Street charged higher Friday as results from companies like Citigroup Inc. and Google Inc. helped ease investor anxiety about the health of corporate profits.</strong> The major stock indexes each rose more than 2 percent, with the Dow Jones industrial average at times advancing more than 250 points.



* Google Shares Soar 20 Percent on Strong 1Q Results- AP

* AT&T;to Cut Apx 4,600 Jobs, Sees $374M Charge- AP

<strong>* Citigroup Reports $5.1 Billion Loss, to Cut 9,000 Jobs- AP</strong>

* Oil Surges to New Record -- $116 -- Gas Nears $3.50- AP

* Canada Says Chemical in Plastic Water Bottles Unsafe- AP

* Wall Street CEO Playbook: Bet Big. Get Rich. Screw up. Enjoy Golden Parachute- Tech Ticker



So, the article headline says Citigroup is helping to ease investor anxiety. Yet I see Citigroup reports 5 BILLION dollar loss and cuts 9,000 jobs.



Again, WTF!?</blockquote>


It coulda been $10B and 20K jobs LM. All is right with the world...
 
It's days like yesterday and today that just reaffirms how the market is totally independent of the nation's economy. The FED has basically shown that they'll do anything they can to save them market, even violate their charter if they have to do so. F*ck the dollar, and f*ck the average American tax payer. Isn't that right Ben?
 
I don't think things are getting better yet...



<a href="http://ocbiz.freedomblogging.com/2008/04/18/oc-lost-nearly-22000-jobs-since-march-07/"><strong>O.C. down nearly 22,000 jobs since March ?07</strong></a>

Orange County?s job outlook continued to be bleak in March with 21,700 fewer workers on local payrolls ? a 1.4 percent drop from a year ago, state Employment Development Department officials reported today.



The mortgage industry and other financial services continued to bear the brunt of the losses, with 18,400 jobs eliminated since March 2007. Construction also was hurting, down 5,100 workers in the last year.



Educational and health services remained the biggest bright spot, adding 2,400 jobs, mostly in health care and social assistance.



Employers actually added 6,900 net new local jobs from February to March, mostly in professional and business services and leisure and hospitality, but the monthly increase was not enough to make a major difference in the annual losses.



The year-over-year job loss bumped up the county?s March unemployment rate to 4.6 percent from a revised 4.3 percent in February. In March a year ago, unemployment was at 3.5 percent.



Orange County was still doing better than the state as a whole, which had a March unemployment rate 6.4 percent. Nationwide unemployment stood at 5.2 percent in March.
 
[quote author="caliguy2699" date=1208569419]I don't think things are getting better yet...



<a href="http://ocbiz.freedomblogging.com/2008/04/18/oc-lost-nearly-22000-jobs-since-march-07/"><strong>O.C. down nearly 22,000 jobs since March ?07</strong></a>

Orange County?s job outlook continued to be bleak in March with 21,700 fewer workers on local payrolls ? a 1.4 percent drop from a year ago, state Employment Development Department officials reported today.



The mortgage industry and other financial services continued to bear the brunt of the losses, with 18,400 jobs eliminated since March 2007. Construction also was hurting, down 5,100 workers in the last year.



Educational and health services remained the biggest bright spot, adding 2,400 jobs, mostly in health care and social assistance.



Employers actually added 6,900 net new local jobs from February to March, mostly in professional and business services and leisure and hospitality, but the monthly increase was not enough to make a major difference in the annual losses.



The year-over-year job loss bumped up the county?s March unemployment rate to 4.6 percent from a revised 4.3 percent in February. In March a year ago, unemployment was at 3.5 percent.



Orange County was still doing better than the state as a whole, which had a March unemployment rate 6.4 percent. Nationwide unemployment stood at 5.2 percent in March.</blockquote>


Looks like people are temping more and more because they can't get perm gigs...
 
I think there is a bigger problem regarding the student loan crisis in that there may be a possibility that student may not be able to get the necessary loans to go to school. One of the issues that was brought up in the article was that private lenders increasely reducing their presence in student loans and thus leaving more the burden onto Sallie Mae. There is a possibility that middle class students will not be able to go to the more expensive school because of a lack of funding.



Also, which LIBOR is the most relevant for housing purposes? Is it the 3 month or the 1 year (or some other rate)?
 
Well, if kids don't apply to the expensive schools, maybe they will

have to LOWER THEIR TUITION. I read some expensive school,

Brown, maybe?, had enough money so as not to have to charge

tuition at all, but they did anyway. I don't thing that the education

provided is that much better than a good state school anyway.
 
I have to agree with lawyerliz, just like housing and cheap lending and healthcare and the indirectness of insurance payment, student loans have desensitized people to the price increases in education. Note that these three things are the only things that seem to go up faster than inflation. It's always the things you borrow and/or pay for with other people's money.
 
Bitserv I really like your avatar, but I also find

it terrifying.



I have decided to ignore the stock market, since what

it is doing is literally insane.



You know, the developers in Miami were asking 30% down to

speculators, partly to discourage them, partly to recompense

them if everybody walked--well they could reduce prices by

up to 30% and still do fine. It never crossed their minds that

prices could go down more than 50%. And when there is a true

speculative frenzy, then NOTHING will discourage speculators,

until it's over.



Maybe that's what's going on in the mkt? Nobody believes that

it will drop enormously?



How can a huge drop in MEW (mtg equity withdrawl) not have

an effect on virtually all industries?



We will know we are at the bottom when people start to say that

real estate always goes down.
 
Delinquencies Rise on Home Equity Lines of Credit

http://blogs.wsj.com/economics/2008...it/?mod=WSJBlog?mod=homeblogmod_economicsblog



S&P;said that 9.19% of lines issued in 2005 and 11.45% of loans issued in 2006 are delinquent, up 6.49% and 6.51% from February. Serious delinquencies, where lines are 90-days plus overdue or in foreclosure, shot up 8.83% and 8.75% for 2005 and 2006, respectively, representing 5.3% and 6.34% of the years? total issuance.
 
The OC real estate bulls are going to HATE this article in BusinessWeek. Enjoy:



"The Other Orange County -- What you won't see on fantasy TV shows: a cratered real estate industry, few jobs, foreclosed homes, and empty office space "



http://www.businessweek.com/bwdaily/dnflash/content/apr2008/db20080415_242666.htm?chan=search



Oh, and the related slideshow's title is awesome too: "The Real (Foreclosed) Homes of Orange County"



http://images.businessweek.com/ss/08/04/0417_orangecounty/index_01.htm?chan=rss_topSlideShows_ssi_5
 
Right on schedule, Downey Savings steps into the next circle of Hell.



<a href="http://biz.yahoo.com/prnews/080421/lam109.html?.v=89">Downey Savings Report</a>



Downey Announces First Quarter 2008 Results and Dividend

Monday April 21, 6:26 pm ET



NEWPORT BEACH, Calif., April 21 /PRNewswire-FirstCall/ -- Downey Financial Corp. (NYSE: DSL - News) reported a net loss for first quarter 2008 of $247.7 million or $8.89 per share on a diluted basis, compared to net income of $42.9 million or $1.54 per share in the year-ago first quarter.



<strong>Non-performing assets increased during the quarter by $521 million to $1.562 billion and represented 11.90% of total assets, compared with 7.77% at year-end 2007 and 0.94% a year ago.</strong>



OMG
 
<a href="http://www.cnbc.com/id/24187419">http://www.cnbc.com/id/24187419</a>



"Increasing numbers of Americans are simply walking away from their houses and mortgages, increasing pressure on banks and the economy."



One of my favorite quotes:



"I don't know where the tipping point is," Wachovia chief risk officer Don Truslow told analysts on a conference call. "<strong>But somewhere when a borrower crosses the 100 percent loan to value, somewhere north of that...their propensity to just default and stop paying their mortgage rises dramatically and really accelerates up</strong>. It's almost regardless of how they scored, say, on FICO or other kinds of credit characteristics."



So, what you are telling me is that when people tend to walk away from their homes/loans when they owe more than what the house is worth? Who would have thought that? Weird.
 
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