Posts Tagged ‘Capital’
Check out this statement from Paul Miller, a Friedman, Billings, Ramsey & Co analyst regarding IndyMac: “Given continued home price declines, management’s higher loss estimates, recent ratings agency downgrades on the company’s mortgage-backed securities and the company’s decision to stop new mortgage originations, we do not believe that there is any value left for common shareholders,” Miller wrote. Once a major player in the Alt-A market, IndyMac is being hit from all sides and mortgage blues continue to pound the company.
Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135. Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters’ assessment at a hearing on proposed legislation to limit speculation in futures markets. Krapels said that it wouldn’t even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.
Yesterday we were presented with a report that ut a glossy shine on the subprime crisis. In part – and the main emphasis on the report – was that the worst was over for the subprime crisis. We questioned the validity of the report, seen nationally and on Google News. Today, we are told the opposite – “About half of recent subprime and Alt-A borrowers may soon owe more on their mortgages than their houses are worth or hold minimal equity, putting $800 billion of debt at greater risk of default, according to Barclays Capital.”
Goldman Sachs is expected to lay off up to 15 percent of its work force, from its capital markets division and related support staff, the New York Post said on Friday. Employees were first notified about the cuts on Monday, with most of them taking place by the end of March, the Post said. It said Goldman employs about 32,000 people. The report did not give the number of people effected, nor did the report say how many Goldman Sachs employees work in its capital markets division.
There is no disputing the fact that Thornburg mortgage is in a slump. The 52 week high for Thornburg was $28.40, while the 52 week low was 69 cents. No, not a typo – 69 cents. So when Thornburg said it needs to raise $1 million (USD) or perhaps they will go broke, who is going to listen? Obviously there must be a handsome return on the risky investment. In exchange for consideration Thornburg will seriously dilute their stock. The capital, to be raised via a convertible bond issue, would lead to investors in those securities owning 27% of the company.