Investors

Lobbyists and special interests buy our government

Written by Timothy Blake on December 20, 2007 under Analysis, Archives, Investors, Lenders, Statistics

The mortgage crisis of 2007 worsens and threatens to tip the economy into a recession. Many are asking where was Washington? Washington was in the same place as always, the question regarding what they were doing, and why, are the issues at the heart of the matter. Of greater interest to me are political contributions and lobbying expenses in the years leading up to this point.

UBS shows $10 billion subprime writedown

Written by Timothy Blake on December 12, 2007 under Archives, Economic Impact, International, Investors, Root Causes

This time it’s an investment bank with problems. Swiss-based UBS announced a $10 billion writedown this week on subprime exposures. An injection of capital from investors in Singapore and the Middle East was also announced. UBS has also slammed on the brakes at its investment bank, where the problems originated. UBS has been the biggest casualty so far among major European banks of the meltdown in U.S. subprime mortgages. Some analysts continue to characterize subprime as loans made to people with poor credit histories. Others say lack of regualtory action and oversight transformed predatory lending into acceptable lending standards.

HSBC Mum on SIVs Until Moodys Spoke

Written by Timothy Blake on November 26, 2007 under Archives, Investors, Lenders, SIVs

Does this sound odd to you? HSBC never mentioned anything about HSBC structured investment vehicles, or SIVs. However, in a report found here on Household – HSBC Watch on Thursday, November 8th, 2007 at 10:00 am, Moodys said that it would look at two of HSBC’s SIV’s (and three belonging to Citigroup.) By Monday, November 26th, HSBC said it would pump $35 billion into the HSBC SIVs. Later in the day Bloomberg revised that amount upward to $45 billion. The amount was required to avoid a firesale on assets.

Losses much greater than forecast as audits near

Written by Timothy Blake on November 25, 2007 under Analysis, Archives, Investors

One factor undermining investor confidence is that the projected size of this year’s credit shock is now rising rapidly. The US government initially forecast $50bn losses on subprime securities. However, investment banks now expect $200bn-$500bn subprime losses – and additional massive losses in other debt markets, such as credit card loans. End of the year audits are another problem. Here is why:

Mortgage Bond Trading Between Banks Suspended

Written by Timothy Blake on November 21, 2007 under Archives, International, Investors

European banks agreed to suspend trading in the $2.8 trillion market for mortgage debt known as covered bonds to halt a slump that has closed the region’s main source of financing for home lenders. Banks including Barclays Capital, HSBC Holdings Plc and UniCredit SpA took the step as investors shy away from bank debt on concern lenders face more mortgage-related losses. That is probably a safe bet as losses are expected through 2009. Without market making between banks, investors will shun the sales of new covered bonds.

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