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NEW -> Contingent Buyer Assistance Program
If you guys want to watch a key technical level on the DOW, watch the 50 period moving average which is currently at 13544. A close above this level with next-day follow through would be bullish. If this resistance level holds, look out, we will begin another nastly leg down.
 
<p>England seems to partake in more Kool Aid than tea.....who knew !</p>

<p> <a href="http://money.aol.com/news/articles/_a/brits-too-struggle-under-housing-woes/20070824111809990001">Brits, Too, Struggle Under Housing Woes - AOL Money & Finance</a></p>
 
<a href="http://money.cnn.com/2007/08/24/magazines/fortune/eavis_citigroup.fortune/index.htm?postversion=2007082416">Fed bends rules to help two big banks</a>







This unusual move by the Fed shows that the largest Wall Street firms are continuing to have problems funding operations during the current market difficulties, according to banking industry skeptics. The Fed's move appears to support the view that even the biggest brokerages have been caught off guard by the credit crunch and don't have financing to deal with the resulting dislocation in the markets.





So, how serious is this rule-bending? Very. One of the central tenets of banking regulation is that banks with federally insured deposits should never be over-exposed to brokerage subsidiaries; indeed, for decades financial institutions were legally required to keep the two units completely separate. This move by the Fed eats away at the principle.





Don't forget: The Federal Reserve is in crisis management at the moment. However, it doesn't want to show any signs of panic. That means no rushed cuts in interest rates. It also means that it wants banks to quickly take the big charges that will inevitably come from holding toxic debt securities. And it will do all it can behind the scenes to work with the banks to help them get through this upheaval. But waiving one of the most important banking regulations can only add nervousness to the market. And that's what the Fed did Monday in these disturbing letters to the nation's two largest banks.
 
Changing the regulation to allow banks to enter into the securities business in the first place was just wrong. Sometimes rules and regulations are good things.
 
I thing Ben has been forced to choose between the lesser of two evils: temporary allowances vs domino-style bank collapses. If he doesn't act, the outcome is certain. If he does act, it provides a window of opportunity to avoid "armageddon". Pilots would call this a dead-stick landing.
 
On a roll here. Does this <a href="http://www.coloradoan.com/apps/pbcs.dll/article?AID=/20070823/NEWS01/708230378/1002">sound familar</a> like as in S&L crisis?
 
Hat tip to CR for this NY times article: <a href="http://www.nytimes.com/2007/08/26/business/26housing.html?_r=1&oref=slogin">Drop foreseen in median price.</a>
 
<p>Another NY Times article: <a href="http://www.nytimes.com/2007/08/26/business/yourmoney/26country.html?hp">Inside the lending spree at Countrywide</a>.</p>

<p>Just FYI if you sign up for Google alerts four articles on CFC if they were one of your alerts. Bloomberg lite.</p>
 
<i>"Independent brokers who have worked with Countrywide also say the company does not provide records of their compensation to the Internal Revenue Service on a Form 1099, as the law requires. These brokers say that all other home lenders they have worked with submitted 1099s disclosing income earned from their associations.



One broker who worked with Countrywide for seven years said she never got a 1099.



?When I got ready to do my first year?s taxes I had received 1099s from everybody but Countrywide,? she said. ?I called my rep and he said, ?We?re too big. There?s too many. We don?t do it.? ?</i><p>


Depending on what Coutrywide reported on their return, someone may be going to prison.
 
<i>We?re too big. There?s too many. We don?t do it.? ?</i><p>


Yeah, there was too much paperwork involved for a company like Countrywide which isn't familiar with paperwork. I am trying to imagine myself, representing Countrywide, sitting accross during a formal review, and telling the senior IRS agent, "My client is too big and has too many brokers, and my client decided not to issue 1099s". I am also trying to imagine what type of fines and penalties the IRS would assess if this were true. There are IRS reviewers who are somewhat understanding when a carpenter uses the paperwork excuse, but I doubt if Countrywide will find any such sympathys.<p>


What will be fascinating will be to see what Countrywide claimed as commission expenses and how it matches to what the brokers claimed as income. By not issuing 1099s, Countrywide pretty much invited the brokers to get creative with claimed income and guaranteed they will not match Countrywide's expenses. How can they be so stupid? Like there is no paper trail?
 
<p>Forwarding the article to the IRS as we speak. Not only could I possibly get a "reward" from the IRS for turning them in but you and I both know the true alterior motive.</p>
 
I think stuff like this is funny.





<a rel="bookmark" href="http://activerain.com/blogsview/159381/Can-t-Decide-If" linkindex="12" set="yes">Can't Decide If The Time Is Right To Buy A Home? Read This Good News For Orange County, California Home Buyers</a>

If realtors emerge from this bubble with even the slightest amount of credibility or respect from the general public, then we as a nation are truly stupid.
 
<i>"He asked the question, "How could they have good credit if they're not able to pay their second mortgages?""</i><p>


Howz about they who have good credit borrowed too much and now they can not pay on their second mortgage. Is that really so difficult to figure out? Does he think that only folks with bad credit borrow too much. I got news for him. There are folks with good credit whose credit becomes bad credit because they borrow more than they can afford and then can not pay all their monthly debt. DUH!!
 
<p> </p>

<p>I'll paraphrase: "Better buy now, before you are priced out of the market forever." Geesh, we're only 20% into this correction, and he's recycling late 2004 realtor-talk.</p>

<p><em>Robert Rivinius, CBIA’s President and CEO, said the fact that affordability has not increased despite a housing downturn that has lasted over a year is ample proof that prices aren’t likely to drop significantly, which means families that can afford to buy should consider doing so now, before prices and interest rates start to climb again.</em></p>

<p><a href="http://www.cbia.org/index.cfm?pageid=1458&preview=yes">Linky</a></p>

<p>(Hat tip to THBB)</p>

<p>SCHB</p>
 
<a target="_blank" href="http://www.nytimes.com/2007/08/26/business/yourmoney/26view.html?_r=1&oref=slogin">NY Times article by Professor Shiller.</a>
 
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