Headlines...

NEW -> Contingent Buyer Assistance Program
<p>Yen has moved up by 5 points in one day, from 117 to 112. I truly do not know all the ramifications, but I do know this is bad. Very, very bad.</p>

<p>I can not see them, but I think I know that the hedgies are in panic mode right now and selling everything that isn't nailed down.</p>

<p>And tomorrow is options expiration.</p>

<p>I tried to short some more and my broker will not lend me any shares of anything. And he likes me.</p>
 
Gold is at 645.30 (down 25.40)(-3.80%)


Silver is at 11.25 (down 1.28)(-10.22%)


Platinum is at 1220 (down 41)(-3.25%)





Oil is at 70.80 (-2.53)





At just for you Eva, the Yen is at 112.36


(Great looking chart: <a href="http://finance.yahoo.com/charts#chart1:symbol=usdjpy=x;range=1d;charttype=line;crosshair=on;logscale=on;source=undefined">finance.yahoo.com/charts#chart1:symbol=usdjpy=x;range=1d;charttype=line;crosshair=on;logscale=on;source=undefined)</a>





Now, they've put on the trading curbs. . . . at least the brokers may have an early day. . .more time with their kids. . .
 
>>And tomorrow is options expiration.





Hoollee Sheet. I may have to get up early tomorrow just to watch.





May I nominate "comeuppance" as the word of the day?
 
Moody's downgraded Countrywide's senior debt rating to "Baa3" from "A3," due to Countrywide's funding problems. Any lower and Countrywide will achieve "junk" status.
 
Eval,





soba and udon stands all the way!!! Say hi to the dog at Shibuya station for me. Remember top shelf liquor is cheaper than beer.
 
<p>This just in from Reuters:</p>

<p>'First Magnus Financial Corp., one of the largest independent U.S. mortgage lenders, said on Thursday it has stopped funding home loans and taking mortgage loan applications because investors are not buying its loans.First Magnus said it halted lending "in light of the collapse of the secondary mortgage market," according to a statement on its Web site. "We explored all options before taking this action but were left with no viable alternative."'</p>
 
<p>Nikkei took a 875 point hit and the Yen as I type this is at 113.04. BOJ injected over $10bil. The HSI was down 285. Kopsi down 54. Shanghai down 185.</p>

<p>European markets are down about 30.</p>

<p>US futures are predicting another pounding.</p>

<p>Oil up slighly (duh labor day is coming soon). Gold is up $4.</p>
 
Worried about the stability of mortgage giant Countrywide Financial, depositors crowd branches.





By E. Scott Reckard and Annette Haddad


August 17, 2007





Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.





Countrywide Financial Corp., the biggest home-loan company in the nation, sought Thursday to assure depositors and the financial industry that both it and its bank were fiscally stable. And federal regulators said they weren't alarmed by the volume of withdrawals from the bank.





The mortgage lender said it would further tighten its loan standards and make fewer large mortgages. Those moves could make it harder to get a home loan and further depress the housing market in California and other states.





The rush to withdraw money -- by depositors that included a former Los Angeles Kings star hockey player and an executive of a rival home-loan company -- came a day after fears arose that Countrywide Financial could file for bankruptcy protection because of a worsening credit crunch stemming from the sub-prime mortgage meltdown.





The parent firm borrowed $11.5 billion Thursday by using up an existing line of credit from 40 banks, saying the money would help the lender meet its funding needs and continue to grow. But stock investors, apparently alarmed that the company felt compelled to use the credit line, sent Countrywide's already battered stock down an additional 11%.





At Countrywide Bank offices, in a scene rare since the U.S. savings-and-loan crisis ended in the early '90s, so many people showed up to take out some or all of their money that in some cases they had to leave their names.





In West Los Angeles, a Countrywide supervisor brought in from another office served coffee to more than 25 people waiting calmly for their turn with the one clerk who could help them.





Bill Ashmore drove his Porsche Cayenne to Countrywide's Laguna Niguel office and waited half an hour to cash out $500,000, which he then wired to an account at Bank of America.





<a target="_blank" href="http://www.latimes.com/business/la-fi-countrywide17aug17,1,5048775.story?ctrack=1&cset=true">http://www.latimes.com/business/la-fi-countrywide17aug17,1,5048775.story?ctrack=1&cset=true</a>
 
Well... I think it was all a carefully orchestrated publicity stunt to get the Fed to open the discount window. I'm beginning to think that Countrywide purposefully floated the rumor of their BK to create a run on the bank.
 
<p>Yeah, and I don't like being cynical either, but ever since Cramer admitted to floating information to move markets, I can't but help.</p>

<p>Nope, not a short seller. The man in the family handles all the money. I just spend it. </p>
 
Check out what I found in Barron's this morning.





----------------------


<p style="text-align: justify;" class="MsoNormal">How did this<strong style=""> </strong>all come about? A (bearish) hedge-fund operator, in a letter to his investors, describes how a senior Wall Street marketing director recounted the genesis of the current situation: "`Real money' (U.S. insurance companies, pension funds, etc.) accounts had stopped purchasing mezzanine tranches of U.S. Subprime debt in late 2003 and [Wall Street] needed a mechanism that could enable them to `mask up' these loans, package them opaquely, and EXPORT THE NEWLY PACKAGED RISK TO UNWITTING BUYERS IN ASIA AND CENTRAL EUROPE!!!! "He told me with a straight face that these CDOs were the only way to get rid of the riskiest tranches of subprime debt. Interestingly enough, these buyers (mainland Chinese banks, the Chinese Government, Taiwanese banks, Korean banks, German banks, French banks, U.K. banks) possess the `excess' pools of liquidity around the globe. These pools are basically derived from two sources: 1) massive trade surpluses with the U.S. in U.S. dollars, 2) petrodollar recyclers. These two pools of excess capital are U.S. dollar-denominated and have had a virtually insatiable demand for U.S. dollar-denominated debt ...until now." These investors then had standing orders on Wall Street desks for any U.S. debt rated triple-A. Through the "alchemy of CDOs" and "the help of the ratings agencies," the CDO managers collected triple-B and triple-B-minus subprime and repackaged them so the top tier got paid out first. Then leverage the lower mezzanine tranches by 10-20 times and, "POOF...you magically have 80% of the structure rated `AAA' by the ratings agencies, despite the underlying collateral being a collection of BBB and BBB- rated assets." The letter concludes: "This will go down as one of the biggest financial illusions the world has EVER seen." And to think it's all played out is even more laughable.</p>
 
<p><a href="http://abalert.com/Public/MarketPlace/MarketStatistics/index.cfm">Website</a> find of the day. Click on the charts to get the data in excel. The best is non-agency US MBS issuance in May $61.3 billion and so far for August <strong>$0.6 </strong>billion. </p>

<p>Now Hiring! The US treasury and Federal Reserve are seeking container makers. The makers of the larger containers will get first priority interview privileges as well as mass producers. Must be able to create high quality containers that are guaranteed not to leak for a minimum of ten years. Experience and speed are a must, no education requirements and dry personality preferred. Salary determined by quantity, dimensions, speed and leak resistance. Please email your resume ASAP to <a href="mailto:bbchopper@fedreserve.gov">bbchopper@fedreserve.gov</a> and <a href="mailto:thehammer@ustreasury.gov">thehammer@ustreasury.gov</a>. </p>

<p>Note: This is a temporary position not to exceed six months we hope, however the contract may be extended indefinitely. </p>

<p>The US government is an equal opportunity employer. Background check and documentation may be waived for certain circumstances i.e. you can start immediately or you currently have several large containers. China need not apply until the Yuan is floated against the dollar. Please email <a href="mailto:thehammer@ustreasury.gov">thehammer@ustreasury.gov</a> for another possible meeting to discuss exceptions.</p>
 
<a target="_blank" href="http://www.marketwatch.com/news/story/countrywide-laying-off-loan-origination-staff/story.aspx?guid=%7BA146168C-B123-4973-8659-B527C8966952%7D">CFC layoffs</a>.
 
Many here get Patrick's email but if you don't here is a great <a href="http://online.wsj.com/public/page/8_0006.html?bcpid=86195573&bclid=86272812&bctid=1147023428">interview WSJ</a> with Robert Shiller.
 
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