Headlines...

NEW -> Contingent Buyer Assistance Program
<p>I heard that the sales drop for Single family homes in Miami-Dade County was 54%, in Sept, year to year. It was down 44% the previous month. I see no improvement for October.</p>
 
<p>One of the network morning shows had a segment about improving your kitchen in order to make your house nicer to sell. Apparently advice is that you should borrow the money and take out a second mtg to do it. These people who are supposed to be reporting the news are either totally out of it or just shills for somebody. </p>

<p>That advice wasn't bad on August the 7th, but by the 10th it wasn't good advice anymore.</p>

<p>The big media are interested in reporting your horrible fires, but not at all interested in reporting the coming and present financial disaster.</p>

<p>You can't show pretty pictures of someone NOT paying a mtg. However, in a few years I suppose they can show pictures of breadlines. And nobody will have them explain why they didn't report that coming.</p>

<p>Media moral hazard. . . </p>
 
Platinum near record:





<a href="http://www.bloomberg.com/apps/news?pid=20601012&sid=atszD4l45KZA&refer=commodities">http://www.bloomberg.com/apps/news?pid=20601012&sid=atszD4l45KZA&refer=commodities</a>
 
From our friends at Calculated Risk





<a href="http://calculatedrisk.blogspot.com/2007/10/up-to-4-trillion-decline-in-us.html">Up to $4 Trillion Decline in U.S. Household Real Estate Value Predicted</a>
 
<p>The Europeans are feeling the pain from the "credit crisis." </p>

<p>"The ill tidings came in several European capitals Thursday, including a reduced growth forecast in Germany and a Bank of England report that said financial markets were still vulnerable to shocks from the crisis that originated in the American home mortgage market."</p>

<p><a href="http://www.nytimes.com/2007/10/26/business/worldbusiness/26euro.html?_r=1&oref=slogin">NY Times 10/26/07</a></p>
 
<p>Keep'em comming.</p>

<p>AIG may take $9.8 billion subprime hit</p>

<p><a href="http://www.marketwatch.com/news/story/aig-may-take-98-bln/story.aspx?guid=%7B7D2129DC%2DFAC3%2D416C%2DBBF3%2D41F67B8AE3A1%7D">http://www.marketwatch.com/news/story/aig-may-take-98-bln/story.aspx?guid=%7B7D2129DC%2DFAC3%2D416C%2DBBF3%2D41F67B8AE3A1%7D</a></p>

<p>Cut and paste link?</p>

<p />

<p> </p>
 
And when all the corporate ABS devalueing because the non-market for it becomes even less of a market? Estimates are between $20 tril and $450 tril of OTC derivatives which may or may not have asset backing.
 
Countrywide sez it will return to profitability in the 4th quarter,

and people are believing them.



I'd like to get some of the good dope the Countrywide are buyers are smokin'.



You expect Countrywide to lie; you don't expect people to believe this nonsense.



Gosh, it's because they are admitting to losing 1.2 billion, and of course that has to be the bottom.
 
<p>ooops...</p>

<p>"Facing billions of dollars in losses from the subprime mortgage crisis, Merrill Lynch chairman and chief executive, E. Stanley O'Neil, floated the idea of a merger with a large bank, a foray that angered Merrill’s board and could cost him his job, according to people close to the beleaguered Wall Street firm. Mr. O’Neal broached the possibility of a merger with Wachovia, the bank based in Charlotte, N.C., without first getting the approval of Merrill’s board, a major breach of corporate protocol at a time when directors were already concerned about the company’s performance, these people said."</p>

<p><a href="http://www.nytimes.com/2007/10/26/business/26merril1.html?_r=1&hp&oref=slogin">linky</a></p>
 
<img height="312" alt="Worse Than Expected" width="366" src="http://graphics8.nytimes.com/images/2007/10/24/business/mortgagelarge.jpg" />
 
Oil over $92 a barrel, dollar hits record low:





<a href="http://news.yahoo.com/s/nm/20071026/bs_nm/markets_oil_dc_4">http://news.yahoo.com/s/nm/20071026/bs_nm/markets_oil_dc_4</a>
 
<a href="http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=a2TWmuh3vHHI">Almost 2/3rd's of Americans think a recession is likely.</a>
 
<p>So 72% of GDP is consumer spending and 2/3 of those consumers think we're headed for trouble. The correction I've been dreading for 18 months will be upon us if their spending begins to fully reflect this sentiment. </p>
 
<p>"Though Fannie Mae and Freddie Mac have been arguing that they should be granted authority to buy more mortgages to help ease a credit crunch, data released by the companies this week show that they haven't been using the authority they already possess. Both companies reduced their mortgage-related investments in September, widening the gap between their holdings and the limits on those holdings." <a href="http://www.washingtonpost.com/wp-dyn/content/article/2007/10/26/AR2007102602151.html">Linky</a></p>
 
Oh happy Monday.





<a href="http://tinyurl.com/2xnh7o">Stan O'neal of Merrill</a> is most likely going to step down as CEO.





<a href="http://tinyurl.com/2574tq">UBS is planning</a> on writing down $700 million.





And in England mortgage lending is down.





Good news is <a href="http://tinyurl.com/yqk63h">Argentina has a new female president</a>. Here is the <a href="http://link.brightcove.com/services/link/bcpid203719194/bclid86272812/bctid1273082240">linky</a> for the video at MW on their take.
 
Ugh can't sleep so I'm not done.


<a href="http://krugman.blogs.nytimes.com/2007/10/27/some-housing-pictures/">


Krugman at the NY Times gets chart happy</a>. Looks like he wants to get all <a href="http://calculatedrisk.blogspot.com/">CalculatedRisk</a> on us or he could just be ripping off the blogs that already posted that info.
 
<p>Hmm, I wondered where that big right hand spike in option ARMs came from on the graph showing all the upcoming resets. I guess this explains some of it. Leeches out to suck every last drop of equity out of people. This doesn't bode well for taxpayers in the future ...</p>

<p>Lenders banking on home refinancing pitches</p>

<p><a href="http://www.latimes.com/business/la-fi-loanpitch29oct29,0,645070.story?page=1&coll=la-home-business">http://www.latimes.com/business/la-fi-loanpitch29oct29,0,645070.story?page=1&coll=la-home-business</a></p>

<p>Despite the mortgage meltdown, the blizzard of advertising for home loans continues. With the sub-prime market in tatters in the wake of record defaults and foreclosures, fewer pitches scream "Bad credit? No problem!" Instead, lenders struggling to remain profitable now are targeting people who have good credit and plenty of home equity.





With fewer homes being sold these days -- and therefore fewer loans taken out to finance purchases -- it's only logical that the mortgage firms that survived the sub-prime shakeout are focusing their marketing on getting homeowners to refinance.</p>

<p>...</p>

<p>The salesman, who asked not to be identified because he wasn't authorized to speak for Sunwest, said the company provided option-ARM loans from several companies, including Wachovia, that keep the loans as investments rather than sell them.





Sunwest considered disclosing more about pay-option perils in its two-page mailings, the salesman said. "But that would have taken up too much space. You'd need four pages to cover everything." The firm instead relies on explanations by its employees, he said.</p>

<p>...</p>

<p>Of course, the salesman acknowledged, many borrowers at all income levels are attracted to the option ARM because they have let their personal spending get so out of control that the low payment is the only one they can afford.





"Newport Beach, where everyone is driving a Mercedes and the homes start at $1 million, is like an old western movie set," he said, describing the finances of many wealthy homeowners as precarious. "It's all just a front, with stilts holding it up."</p>

<p></p>
 
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