Headlines...

NEW -> Contingent Buyer Assistance Program
<p>>>>How much longer can they hold back the flood of REO? <<<</p>

<p>I've been wondering that myself. Why not mark down those homes just like the loans it's holding to reduce inventory?</p>

<p>Sometimes I wonder if it is collusion or just herd mentality that these banks don't want to flood the market with all their REO's. </p>
 
<p>oc,</p>

<p>Is it possible they are holding the physical assets that they know they cannot sell now as a last minute hedge against insolvency?</p>
 
I've thought about something like that. My other thought is that dumping the homes would require them to go back and change the books to reflect what they actually got for the home and not what they have the home priced at. Just one more quarter of good numbers....
 
<p><strong>"Bernanke, Paulson Were Wrong: Subprime Contagion Is <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=a.pPEmZeZZCk&refer=home">Spreading</a>"</strong></p>

<p />
 
<p>I think we need to rename Bloomberg to Doomberg. oc_fliptrack has my vote for best article of the day.</p>

<p>``There's no model for what's happening now in the housing and mortgage industries,'' Rosner says. ``We have to give Bernanke a chance. He is a reasoned and traditional central banker. He knows how to manage crazies.'' </p>

<p>Remember when us bubbleheads were considered "the crazies"?</p>
 
<p>People were greedy about houses while I was frozen with fear.</p>

<p>Now people are in a panic and I'm feeling so greedy that it's keeping me up at night.</p>

<p>I'll still proudly wear the "crazy" title. </p>
 
<p>The CNBC ticker right now is bear pornicopia.</p>

<p>ECB injects more liquidity/kool-aid. Japan and Australia inject liquidty/kool-aid. Novastar posts large 2Q loss credit losses and writedowns. The SEC is investigating large broker's books to see if they are hiding subprime losses. WAMU is having liquidity issues. Countrywide says the credit markets are experiencing "unprecedented disruptions". Countrywide is holding loans but isn't sure for how long. Fannie Mae CEO calls lawmakers to up loan guidelines. </p>

<p>YEN is at 118, Nikkei is down 405, FTSE is down 108, DAX is down 116, HSI is down 646, all Asian markets are down and US futures are now predicting down. Oh and it is worse since I started typing this.</p>

<p>The good news is oil is down.</p>
 
<p>graphix - Everyone loves the kool-aid. </p>

<p>Just 1 week ago Countrywide was making all kinds of soundbites...</p>

<p>"Countrywide has longstanding and time-tested funding liquidity contingency planning," said Eric P. Sieracki, Chief Financial Officer..."Our mortgage company has significant short-term funding liquidity cushions and is supplemented by the ample liquidity sources of our bank."..."Countrywide's financial condition remains strong, as evidenced by over $14 billion of net worth, significant excess capital and our strong investment grade credit ratings..."</p>
 
<p>And no one, I seriously mean no one, knows what is happening in the credit default swap and interest rate swap markets.</p>

<p>Well, it seems the ECB and our own Federal Reserve are injecting liquidty onto the markets like firemen hose water onto a fire. But, firemen seem to have a bit more success. European, Asian, and US markets are still declining. I guess you could say it would be worse without the bond buybacks, but who knows for sure?</p>

<p>And what is this? Did gold and silver detach from the equities markets? Could it be that value investors don't like CB interference? We will see.</p>

<p>Cash is king, unless the CBs keep printing. The Fed said all of the collateral accepted in the 3-day repo on Friday was mortgage-backed debt. The repurchase was the largest 3-day operation in at least a year.


</p>
 
<p>I hear the helicopters, but it seems the drop is going straight into Goldman Sachs, JP Morgan, Citigroup, etc.</p>

<p>Don't you feel secure knowing that Ben is tough on inflation?</p>
 
<p><em>"The Fed said all of the collateral accepted in the 3-day repos on Friday was mortgage-backed debt"</em></p>

<p>Questions: What kind of mortgages are they accepting as collateral? What happens if they just default and surrender the collateral?</p>

<p> </p>
 
There is a great discussion of this at Brad Delong's site, particularly in comments. <a href="http://delong.typepad.com/sdj/2007/08/the-fed-is-buyi.html">Here's the link</a>.
 
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