Archive for December, 2007

Paulson wants state help as court blocks state enforcement? Really?

Written by Timothy Blake on December 05, 2007 under Analysis, Archives, Government Positions, Quotable Quotes, Root Causes, Suggestions

While Treasury Secretary Henry Paulson was speaking, a federal appeals court shut the door to state enforcement of federally charted banks. Now Paulson wants help from the states. What in the world is going on? Didn’t the court render the states powerless to seek documents and enforce predatory lending laws, while Paulson is asking stes for help after the fact? First we blame poor people, then we take no action at the federal level, and now this? American’s are not that stupid and gullible!

Block shuts down subprime as Cerberus deal falls through

Written by Timothy Blake on December 05, 2007 under Archives, Economic Impact, Job Losses

H&R Block will put up to 620 people out the door as their efforts to sell subprime unit Option One Mortgage Corp finally fell through. Block had hoped to sell Option One to Cerberus Capital Management LP , but the subrpime crisis suggested that there would be no deal at all. H&R Block finally faced the facts today. Block is now trying to sell the part of Option One that does mortgage servicing, or ‘billing and collections’ as they prefer to call it.

Bush in jam over subprime rescue plan

Written by Timothy Blake on December 03, 2007 under Archives, Editorial, Opinion, Root Causes

As lawmakers, Treasury Secretary Henry Paulson, Housing and Urban Development Secretary Alphonso Jackson, a slew of presidential hopefuls, and many others weigh in on a solution to the subprime mess it is clear that President Bush is in a jam. While some realists say the recession of 2001 never ended, others claim the manufactured wealth needed for U.S. economic growth was sure to fall apart. That it did, but during the build-up President Bush protected businesses, predatory lenders, banks, and investors with new legislation such as the 2005 revision of bankruptcy laws.

Discover Card, Goldfish, Marbles are warning signs for U.S. banks

Written by Timothy Blake on December 03, 2007 under Archives, Economic Impact, International, Lenders, Risk Management

If the U.K. truly is a window to the future of U.S. economics the credit card industry must be on edge. Discover Card said this morning that it would take a charge to write off part of its Goldfish credit card business in Britain, where consumer credit has deteriorated. HSBC recently said they wanted to sell their Marbles credit card operation. Common sense tells us that credit cards will begin to sour, as did mortgages. On a related note, analysts finally admitted the so-called ‘subprime’ crisis is not related entirely to people with spotty credit.

Bradford & Bingley, Paragon try to stop problems

Written by Timothy Blake on December 02, 2007 under Archives, International, Outside the U.S.

As attention is focused on the United States we take a look at the U.K. where mortgage lenders have a crisis. Bradford & Bingley, the former building society, raised more than £4bn selling off two of its most solid mortgage books. Paragon, the specialist buy-to-let mortgage supplier, announced that it will attempt to repair its balance sheet with a £280m rights issue.
Shares in Paragon crashed 40% after it was forced to arrange a standby emergency funding package worth £280m with UBS.

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