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Jobless claims don’t add up, HSBC restructuring

Written by Timothy Blake on November 21, 2007 under Archives, Economic Impact, Job Losses

MGIC received a document request from the SEC relating to C-BASS, oil topped $99 a barrel, and the Fed’s October rate cut was a close vote according to morning news. On top of news from Freddie Mac that shocked everyone, investors seemed unimpressed as the Dow opened down again this morning. Policy makers cited weakness in housing and rising oil prices.

Freddie shocks Wall Street and Fannie not much better

Written by Timothy Blake on November 20, 2007 under Archives, Economic Impact, Investors

Freddie Mac, the nation’s second-largest buyer and guarantor of mortgages, shocked Wall Street by announcing a $2 billion loss for the quarter. As upsetting as that was, Freddie Macwent on to say losses will deepen through 2009, and the company is considering cutting its dividend in half. Fannie Mae is the largest U.S. buyer and guarantor of home loans. Fannie Mae’s profits were down 36 percent in August, with investors asking if losses were greater than the company is reporting.

Status report on subprime, MBS and CDO

Written by Timothy Blake on November 20, 2007 under Archives, Economic Impact, Investors, Lenders

Mortgages classified as subprime provide collateral for $800 billion in securities. At the end of August, about $46 billion in subprime loans, representing 225,000 homes, had defaulted, according to Credit Suisse Group. The number will more than triple to $143 billion by the middle of 2009, said the bank. Total subprime loan defaults will top out at about $270 billion, or 1.52 million homes, in 2010 or later. Teaser rates apparently caused many of the problems. Mortgage-backed securities and collateralized debt obligations containing those securities are falling in price and will continue to slide due to falling home prices, defaults, and general distrust. The issue is not strictly a subprime issue. Here is why:

Barclays article shocks many

Written by Timothy Blake on November 18, 2007 under Archives, Economic Impact, Lenders

“Barclays makes subprime writedown” is the title of the article by Steve Slater. Two points in the articles shocked many people. Slater wrote “It continues to have exposure to some areas under pressure, but the bank said it had sought to limit any future writedowns by valuing all its residential mortgage backed securities CDO collateral and second lien mortgage collateral at zero.” As if zero value is not enough a line says this about placing the risk where it belongs: “This is going to be a one to two year workout period for subprime, the issues are deep and the excesses were severe so there will be a period to transfer the risk from those people who shouldn’t have it to those that should.” Here is the entire article:

What did the U.S. Government offer lenders to overlook them?

Written by Timothy Blake on November 17, 2007 under Analysis, Archives, Editorial, Government Positions, Mortgage Fraud, Opinion, Tax Debt

An article by Diane Francis appeared in the Financial Post on Saturday, November 17, 2007. Titled “Subprime mess is a crime story” the article outlined key issues. Diane said “At the top were mortgage lenders, then Wall Street and others who exported junk debts to lenders around the world after prettying them up. At the bottom was a corrupt system that handed out mortgage broker licences like driver’s licences, and then handed out mortgages like candy at Halloween. In between were crooked appraisers and organized crime.” (see her article) Why didn’t regulators and the Feds get involved? One answer may surprise you:

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