Headlines...

NEW -> Contingent Buyer Assistance Program
only the media can spin this housing news. What a joke! Hmmm....SFR's are down yet apartment units are up? How can that be??? Surely builders aren't assuming more foreclosures will continue, forcing people to move into apartments!
 
[quote author="lendingmaestro" date=1210992831]only the media can spin this housing news. What a joke! Hmmm....SFR's are down yet apartment units are up? How can that be??? Surely builders aren't assuming more foreclosures will continue, forcing people to move into apartments!</blockquote>


Short deadlines + lazy reporters + no specialized knowledge + complex topics = crap reporting



Short deadlines + lazy reporters + no specialized knowledge + complex topics + knowledge of who the news outlet's owners or advertisers are = crap reporting spun to advertisers' or owners' favorite view of the world
 
One has to wonder why the banks "need" the US govt to put the price guarantee in at 85%. If the plan is so sensible, and the govt wouldn't lose any money as claimed, why can't the banks just write the principal down themselves 15% w/o any govt guarantee? Hmm....





Bush Stresses He Won't Back Bill to `Bail Out' Housing Lenders

http://www.bloomberg.com/apps/news?pid=20601087&sid=amPQYwCelf3Y&refer=home
 
http://money.cnn.com/2008/05/19/news/economy/dodd_shelby_deal/index.htm?cnn=yes





<span style="color: blue;"><span style="font-size: 16px;">Senate deal struck on mortgage aid</span></span>

Plan would let government back loans for at-risk borrowers. Key lawmakers reach compromise - taxpayers will not be on the hook if loans go bad.

Special Report



Senate deal struck on mortgage aid

Need a new mortgage? Call Uncle Sam

Apartments key to home construction gain

Elusive housing bill inches forward





NEW YORK (CNNMoney.com) -- Senate Banking Committee leaders said Monday that they have come to a deal on a housing bill that would prevent foreclosures, create affordable housing and revamp oversight of two of the mortgage market's biggest players: Fannie Mae and Freddie Mac.



A major part of the legislation would allow the Federal Housing Administration to insure $300 billion in new loans for at-risk borrowers if lenders agree to write down loan balances below the appraised value of borrowers' homes.



The deal was struck between the top Democrat and Republican on the Banking Committee: Chairman Christopher Dodd, D-Conn., and Ranking Member Richard Shelby, R-Ala.



"This legislation is good news for both the markets and homeowners," Dodd said in a statement. "The bill addresses the root of our current economic problems - the foreclosure crisis - by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes."



Dodd and Shelby had been in prolonged negotiations over the bill.



A key sticking point has been Shelby's push to shield taxpayers if borrowers default on their payments after getting government-backed loans. He has said that he wants the FHA plan funded by redirecting money that Dodd's original bill earmarked for a new affordable housing trust fund. The funds would be paid by Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).



"My primary consideration ... has been to protect the American taxpayer, and I believe we've made significant progress toward that goal," Shelby said in a statement.



Dodd said Monday that the compromise bill would still create a fund to spur affordable housing but would use the funding for that program in the first year to backstop the FHA mortgage program.



Regulating the big boys



Another big issue in the legislation is a measure that would provide for stricter oversight of Fannie and Freddie. The two government-sponsored enterprises guarantee the purchase and sale of home mortgages in the secondary market.



Shelby had been campaigning for more stringent safeguards than Dodd's original bill provided. Both Fannie and Freddie have experienced accounting scandals in the past and both saw steep first-quarter losses.



The Banking Committee is scheduled to debate and vote on the bill Tuesday. The measure is certain to pass at the committee level and Dodd said he is hopeful he can get the votes he needs to pass the bill through the full Senate in time to go to President Bush before the July 4 congressional recess.



It remains an open question whether Bush would support the bill. He has threatened to veto a similar bill sponsored by Rep. Barney Frank, D-Mass., and passed by the House several weeks ago. But Dodd said that while the White House hasn't endorsed his bill yet, "there's been some positive reaction out of the White House."



A spokesman for Frank said the congressman was pleased a compromise had been reached. "We look forward to working with them," he said.



- With additional reporting from CNN Producer Lesa Jansen



First Published: May 19, 2008: 5:14 PM EDT
 
NEW YORK (CNNMoney.com) -- Senate Banking Committee leaders said Monday that they have come to a deal on a housing bill that would prevent foreclosures, create affordable housing and revamp oversight of two of the mortgage market's biggest players: Fannie Mae and Freddie Mac.



A major part of the legislation would allow the Federal Housing Administration to insure $300 billion in new loans for at-risk borrowers if lenders agree to write down loan balances below the appraised value of their homes.



The deal was struck between the top Democrat and Republican on the Banking Committee: Chairman Christopher Dodd, D-Conn., and Richard Shelby, R-Ala.



"This legislation is good news for both the markets and homeowners," Dodd said in a statement. "The bill addresses the root of our current economic problems - the foreclosure crisis - by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes."



Dodd and Shelby have been in prolonged negotiations over the bill.



A key sticking point has been Shelby's push to shield taxpayers if borrowers default on their payments after getting government-backed loans. He has said he wants the FHA plan funded by redirecting money that Dodd's original bill earmarked for a new affordable housing trust fund. The funds would be paid by Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).



"My primary consideration ... has been to protect the American taxpayer, and I believe we've made significant progress toward that goal," Shelby said in a statement.



Dodd said Monday that the compromise bill would still create a fund to spur affordable housing but would use the funding for that program in the first year to backstop the FHA mortgage program.



Regulating the big boys



Another big issue in the legislation is a measure that would provide for stricter oversight of Fannie and Freddie. The two government-sponsored enterprises guarantee the purchase and sale of home mortgages in the secondary market.



Shelby had been campaigning for more stringent safeguards than Dodd's bill provided. Both Fannie and Freddie have experienced accounting scandals in the past and both saw steep first-quarter losses.



Dodd said he is hopeful he can get the votes he needs to pass the bill Tuesday and through the full Senate in time to go to President Bush when Congress adjourns before July 4.



It remains an open question whether Bush would support the bill. He has threatened to veto a similar bill sponsored by Rep. Barney Frank, D-Mass., and passed by the House several weeks ago. But Dodd said that while the White House hasn't endorsed his bill yet, "there's been some positive reaction out of the White House."



A spokesman for Frank said the congressman was pleased a compromise had been reached. "We look forward to working with them," he said.
 
Well, Quail Hill can have block parties now. Won't do anything for the ones that were smart enough to sell during the bubble or not even to buy. Oh well, Good guys finish last, I guess.
 
[quote author="awgee" date=1211239683]Talk about big cajones: Doug Kass has shorted BRK!</blockquote>


Just wait until you see the futures today. Dougie is going to be a happy man if they hold true.



They are yammering on, on CNBC, about the German PPI data beating expectations and what that will mean for our PPI later today. The PPI could actually start to effect the CPI now according to the "experts" on CNBC. Wow, they get econ 101 now. Whoa... this dude they have on now has a toupee worse than IR2's.



We will see what the COTs show tomorrow. Last week it was slightly positive, with the dow being short and all other markets slightly on the long side, and commodities short. Some may have been burned. I think emotion is going to be a major factor very soon.
 
Is that how you spell Dougie? I kept trying and nothing looked right, but your spelling looks fine. Why couldn't I figure that out?<p>/


What do you think of ERTS as a short? I am trying to find some right priced puts, or a decent bear call spread.
 
A bottom indeed. Here is the front page of today's Marketplace "section" in the Register. Kinda funny to me how the biggest (optimistic) headline does not go at all with the smaller headline on the right (foreclosures) - and really does not tell the full story about how RE sales are below '07 figures and really below historical April figures.
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[quote author="awgee" date=1211315264]Is that how you spell Dougie? I kept trying and nothing looked right, but your spelling looks fine. Why couldn't I figure that out?<p>/


What do you think of ERTS as a short? I am trying to find some right priced puts, or a decent bear call spread.</blockquote>


Mmmm... IMHO, I would wait to see what it does the next few days. If it can't break the $51 resistance level, then a short might work. I hate to say this, but I would be more inclined to short RIMM. I am looking into the calls on UNG though. T. Boone Pickens likey the nat gas. If it breaks the support level of $54, then it could be on again. A spread could be good on that one too. The $48 puts look cheap enough to make it work.



<a href="http://www.marketwatch.com/news/story/credit-crisis-far-over-banks/story.aspx?guid={1BC0102D-4AE8-4859-9E8E-5C5F0CBF9B1F}">Ut roh... the credit crunch may not be over</a>...



<em>"Our view is that the credit crisis will extend well into 2009 and perhaps beyond, and although the complexion will change, the net effect will be the same: three years of multibillion-dollar revenue reversals," the Oppenheimer analysts wrote in a note, led by Meredith Whitney. Whitney has built up credibility for her bearish and prescient calls on Citigroup Inc. and other Wall Street giants during the credit storm.



Oppenheimer warns of billions of dollars of additional asset write-downs and loan-loss reserves as a result of underwriting excesses. "We estimate that by the end of 2009, over $170 billion of reserve builds will flow through bank earnings on top of 'business as usual' loan-loss provisions," Whitney wrote. "Multitrillion dollars of loans were underwritten with the false assumption that home prices would go up in perpetuity on a national basis," the analyst said.



Other headwinds include "unprecedented leverage" and too much dependence on the securitization market for consumer liquidity. </em>
 
per Whitney in the article link by graphix - yeah, it's hard to understand how things could be getting better for the banks when IrvineRenter's daily blog losses seem to be getting worse and worse...
 
[quote author="graphrix date=1211338131]

Mmmm... IMHO, I would wait to see what it does the next few days. If it can't break the $51 resistance level, then a short might work. I hate to say this, but I would be more inclined to short RIMM. I am looking into the calls on UNG though. T. Boone Pickens likey the nat gas. If it breaks the support level of $54, then it could be on again. A spread could be good on that one too. The $48 puts look cheap enough to make it work.</blockquote>


<p>



RIMM - Oh my gosh! RIMM is a disaster waiting to happen. But, I have shorted it once and had to cover for a loss, been long puts and had to sell at a loss, and lost on a bear call spread.<p>Yech!<p>

I think their accounting is a black hole from which no one can see, but they just keep on humming. Anyways, as much as I would love to short RIMM, my timing has been awful on it and I am tired of losing money on it. I heard Boone on nat gas this morning, but I know noting about it so I will pass.<p>

It was a good day for silver.
 
http://www.cnn.com/2008/LIVING/wayoflife/05/19/homeless.mom/index.html



Does a civilized society address a problem like this by designating gated parking lots for its sudden wave of middle class homelessness? The housing crisis and its drag on the economy is so much more severe than the numbers and stats on foreclosures. People may scoff at the stupid people who bought that shouldn't have, but the fact of the matter is that these are human beings.
 
Maybe the credit crisis would be more aptly termed the debt crisis. If considered in the light of debt excess being the problem, it would seem more folks would relate to underlying problem. Calling it a credit crisis makes it sound like it is just a bit difficult getting credit right now. Borrowing more money is not a solution to excess debt. This isn't a liquidity problem. This is a solvency problem.
 
awgee,



I keep reading the following: Businesses are finding it difficult to raise capital as well though. Businesses borrow to invest in projects that have a greater return than the cost of borrowing. Municipalities are suffering and they need to raise money for long term projects that are investments. Students are having a hard time finding loan money to invest in their future earning power. The consensus is that credit is tight all around.



I'm confused on the consumer side though. We had zero problem getting an excellent mortgage. In fact, we took out two mortgages in the last 7 months. My cc's are offering some of the best balance transfer/cash advance check offers that I've seen in years (1.99 and 2.99 for the life of it). Home Depot gives us an $8K line with no payments or interest for 12 months. Finally bought a new car after 14 years and the loan was so easy with a great rate. Every week there are several offers of 0% for 12 months. I'm wondering if it really is a crunch on the consumer side or if its more of a tightening of standards.



I remember the days when credit was something that you had to earn and bust outs weren't able to access credit. Then deregulation made it so that people that shouldn't be borrowing were able to borrow at horridly desctructive rates. It seems to me that when we had better regulations, we were a healthier society in terms of savings, borrowing and spending. Well, except for the government because you know we just had to bring that wall because it wasn't going to fall on its own.
 
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