Interview with an investment banker

Just in case you missed it. Investment bankers bet and speculate. In other words they are making money with money. When the banking world was about to collapse because the bet on packets of junk bonds, and were about to be caught out on it they changed their tack. They now bet and speculate on […]

Auckland house prices ‘fall 4 per cent in Feb’

Auckland house prices fell 4 per cent in February, meeting expectations of further slowing in New Zealand’s largest property market, real estate agents say. With just over 600 house sales, the average price fell to $517,613 from January in what has become a buyers’ market, Barfoot and Thompson managing director Peter Thompson said. “Generally, vendors […]

Mortgage inquiries dip

Wary first-home buyers have recoiled from a cooling housing market, while economic pressures have boosted loan defaults by members of Generation Y. • Debt sees pair in caravan Those aged 30 to 40 are retreating from the housing market where many expect price falls, figures compiled by Veda Advantage, a credit-check business, show. The findings […]

The Federal Reserve’s rescue has failed

The verdict is in. The Fed’s emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed.   The Federal Reserve building in Washington Read more from Ambrose Evans-Pritchard ‘Ninja’ loans explode on sub-prime frontline The latest news and views on the […]

Allco’s Value Getting Close to Zero

Oh oops, another one bites the dust. Terry McCrann of the Herald Sun referred to Allco Finance Group (ASX:AFG) as “Mini-Mac” the other day. What he meant was that the company has similarities to Macquarie Group (ASX:MQG). If we were Macquarie Group, we’d be downright insulted. How are the two similar? Well they’re both leveraged […]

U.S. banking sector headed for meltdown, official says

Banks face massive loan losses because of defaults on debts and housing-price slide Duncan Mavin Toronto — The U.S. banking sector is headed for a credit downturn that will be “the worst in generations,” featuring widespread defaults on a range of debts and a national housing price slide not seen since the Great Depression, one […]

U.S. Subprime Meltdown Costs the World $8.6 Trillion

There’s something happening here. What it is ain’t exactly clear. There’s a man at the Fed who’s confused. And now investors, they feel quite abused. You get the idea. The Dow fell 173 points in New York when Ben Bernanke and Hank Paulson went to Capitol Hill to repeat how bad things are in the […]

U.S. mortgage crisis spreads beyond subprime loans

NEW YORK: The U.S. credit crisis is no longer just a subprime mortgage problem. As the world’s largest economy grapples with the worst housing slump in two decades, people with good credit histories are falling behind on house payments, auto loans and credit cards at an accelerating pace. The problem, spurred by a sharp decline […]

Credit Crisis Only Begins With Mortgages

Federal Reserve Chairman Ben Bernanke (WDCPix) By Charles R. Morris 02/12/2008 349 Views <!– No more comments –>| 2 Comments Illustration by: Matt Mahurin One can pity Federal Reserve Chairman Ben S. Bernanke. No other federal reserve chairman ever cut interest rates by a full 1.25% within just eight days, as Bernanke has done. But […]

Who is to Blame for the Mortgage Carnage and Coming Financial Disaster? Unregulated Free Market Fundamentalism Zealotry

The sub-prime and overall mortgage carnage is now likely to lead to a financial crisis whose cleanup and bailout costs will make the S&L bailout bill look like spare change. We are only at the beginning of this fallout but, already, several proposals and bills in Congress have been submitted to help millions of sub-prime homeowners […]

U.S. economy’s descent steepens

LONDON: Job losses and a contraction in the business sector where more than 80 percent of Americans work show that the angle of descent for the U.S. economy is steepening. Unsurprisingly, while problems are spreading to the formerly indefatigable American consumer, the old issues – falling home prices and crippled credit markets – show no […]

Wal-Mart’s distress signal

NEW YORK (CNNMoney.com) — U.S. retailers reported their slowest monthly sales growth in five years, which would further cement fears that American consumers are buckling under the weight of a slowing economy. Leading the way was No. 1 retailer Wal-Mart Stores Inc., (WMT, Fortune 500) which on Thursday reported a big miss in its January […]

Massachusetts Accuses Merrill of Fraud

The top securities regulator in Massachusetts accused Merrill Lynch on Friday of defrauding the city of Springfield with subprime-linked investments, casting light on how Wall Street banks sold complex mortgage securities that are now plummeting in value as the housing slump deepens. Skip to next paragraph Stephan Savoia/Associated Press William Galvin, Massachusetts secretary of state, […]

Housing market ‘screeches to a halt’

House sales are down 30 per cent compared with a year ago, with prices expected to fall 5 per cent this year and remain flat for the next five years. That’s the grim prediction from Westpac’s economists who say residential property prices have “screeched to a halt, with essentially zero price movement in the past eight months”. […]

Why the attacks on 9/11 should still matter to New Zealanders today?

On 13 January 2008 in the first session of the year of the Japanese Defense and Foreign Affairs Committee  Senator  Yukihisa Fujita leader of the opposition who might very well one day become the prime minister of Japan made a presentation of evidence casting doubt on the official US version of the attacks on New York […]

Stagflation is Here

War—after all, what is it that the people get? Why—widows, taxes, wooden legs and debt. Samuel B. Pettengill “Armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. James Madison, 4th U.S. President (April 20, 1795) “Let me issue and control a nation’s currency and I […]

America’s middle classes are no longer coping

 By Robert Reich 30/01/08 “FT” — – 28/01/08 — It is an election year and the US economy is in peril of falling into recession or worse. Not surprisingly, Washington is abuzz with plans to prevent it. President George W. Bush has proposed a $150bn stimulus package and all the main presidential candidates are offering […]

Paulson says U.S. housing correction “necessary”

By Glenn Somerville WASHINGTON (Reuters) – A slump in U.S. homebuilding that slowed growth at the end of 2007 will help wring out excesses and the Bush administration is not trying to ward it off, U.S. Treasury Secretary Henry Paulson said on Wednesday. “After years of unsustainable home price appreciation, this is a necessary correction,” […]

Fed cuts rate for 2nd time in 8 days

WASHINGTON (AP) — The U.S. Federal Reserve on Wednesday cut a key interest rate for the second time in just over a week, reducing the federal funds rate by a half point. It signaled that further rate cuts were possible. Ben Bernanke, chair of the Federal Reserve, which Wednesday cut its key rate for the […]

Record plunge for new-home sales

WASHINGTON – Sales of new homes plunged a record amount in 2007, although prices edged up slightly in the weakest showing in 16 years. The Commerce Department reported yesterday that sales of new homes dropped 26.4 percent last year to 774,000. That marked the worst sales year on record, surpassing the old mark of a […]

U.S. Housing Stocks Down $2 Trillion

A trillion here…a trillion there…pretty soon you’re talking real money. U.S. stocks are down about 10% so far this year…that’s about $1.5 trillion lost. U.S. housing stock is said to be down about $2 trillion. And losses from subprime, credit cards, home equity lines, rogue traders…and hanky panky…probably add up to another trillion or so. […]

Update: Crash! Biggest fall in shares since September 11

Recession fears wipe £84bn off the value of Britain’s biggest companies as stock markets tumble across the globe By Nick Clark Published: 22 January 2008   It was the day that the fear factor took over. From Asia to South America, share prices tumbled yesterday as the world’s investors gambled that a US recession was now […]

Citigroup’s Layoffs Could Reach 24,000 This Year

Citigroup plans to announce a writedown of as much as $24 billion and layoffs that could total as much as 24,000 due to subprime and credit-related losses, CNBC has learned. Oliver Quillia for cnbc.com Citigroup plans to announce a $24 billion writedown and layoffs that could total as much as 24,000. The plans will be […]

Housing: A Fresh Jolt of Bad News

Getty Images In case you were still harboring a tiny bit of optimism about the U.S. housing sector, just take a look at a couple of headlines from Jan. 8. KB Home (KBH) President and Chief Executive Officer Jeffrey Mezger said in a conference call with investors that he sees “no sign” that the sinking […]