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 […]

Many more going bankrupt

Bankruptcy filings have surged 22 percent in Massachusetts this year, as more people are unable to afford their rising mortgage payments or refinance their homes to pay bills, according to court filings and bankruptcy attorneys. Massachusetts filings in US Bankruptcy Court increased to 2,493 between Jan. 1 and March 5, from 2,039 during the same […]

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 […]

The Mother of All Rip-offs. “Get Ready For A Real Hosing”

By Mike Whitney  11/02/08 “ICH” — — Low interest credit and “financial innovation” are a deadly-combo. They’ve knocked the banking system for a loop, clogged the credit markets with billions of dollars of subprime sludge, and left the real estate market sprawling on the canvas. Still—even though $2 trillion of capitalization has been wiped-out from falling […]

World bourses lost 5.2 trillion dlrs in January: credit rater

PARIS (AFP) — World stockmarkets lost 5.2 trillion dollars (3.6 trillion euros) in January thanks to the fallout from the US subprime crisis and fears of a global economic slowdown, Standard & Poor’s said Saturday. “If investors thought the market could only go up, January’s wake-up call pulled them back into reality,” the independent credit […]

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 […]

US recession could be worst in 20 years

WASHINGTON – The chances of the United States avoiding a recession appear to be growing dimmer by the day, and any contraction in the economy will likely last longer and be more severe than other downturns in the past 20 years. Recent reports have shown the US housing market slump and rising defaults in the […]

Stimulus Plan is a Scam to Benefit the Rich

Higher loan limits will lead to Fannie Mae, Freddie Mac bailout Sunday, February 3, 2008 Congress is about to sell us the biggest fraud in American history. It’s been highly touted as an economic stimulus bill that will help millions of Americans – and has the backing of both President Bush and House Speaker Nancy […]

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”. […]

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 […]

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. […]

The Mortgage Mogul and His Victims

As banks, money markets and stock exchanges convulse over a sinking American economy, we see the folks sprawled at the bottom of the smoking rubble — debt-crushed American consumers. It is they whose reckless or trusting natures enriched so many, at least for a while, and whose troubled loans have sent markets into panic. But […]

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 […]

Chinese shares close more than 5% lower

    BEIJING, Jan. 21 (Xinhua) — Chinese shares plunged more than 5percent on Monday, as investors dumped stocks amid liquidity concerns sparked by the huge share sale plan of Ping An Insurance.     The benchmark Shanghai Composite Index, which covers both A and B shares, tumbled 266.08 points, or 5.14 percent, to 4,914.44, while the Shenzhen Component […]

Bernanke: Juice the economy ‘quickly’

NEW YORK (CNNMoney.com) — Federal Reserve Chairman Ben Bernanke told Congress Thursday that legislators should enact a fiscal stimulus package in order to help beleaguered consumers as recession fears grow. The comments by Bernanke, who testified before the House Budget Committee, came as a cascade of more bad news about the housing, financial and manufacturing […]

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 […]

US subprime lenders targeted blacks, poor: report

WASHINGTON (AFP) — US mortgage lenders targeted minorities and people with low incomes in recent years as the “best candidates” for subprime home loans, with devastating economic consequences, a report claimed Tuesday. The report by the United for a Fair Economy (UFE) advocacy group said subprime mortgages, home loans issued to Americans with scant finances, […]

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 […]

US credit crisis pushes up NZ mortgages

The US credit crunch has finally hit New Zealand home-buyers directly in the form of rising mortgage rates. Westpac yesterday raised its fixed rate mortgages by 20 points, taking its two-year fixed rate from 9.4 per cent to 9.6 per cent. The increase matches moves by New Zealand’s largest bank, ANZ National, within the last […]

U.S. Stocks Decline, Poised for Worst Fourth Quarter Since 2000

Dec. 29 (Bloomberg) — U.S. stocks fell and were poised for their first fourth-quarter decline since 2000 after government reports on durable goods and unemployment reinforced speculation the housing-market collapse will push the economy into recession. Citigroup Inc., JPMorgan Chase & Co. and Merrill Lynch & Co. dropped after Goldman Sachs Group Inc. analyst William […]

MORTGAGE MELTDOWN

New proposals to ease our great mortgage meltdown keep rolling in. First the Treasury Department urged the creation of a new fund that would buy risky mortgage bonds as a tactic to hide what those bonds were really worth. (Not much.) Then the idea was to use Fannie Mae and Freddie Mac to buy the […]

Home Sweet Gone

Behind every great bubble and its subsequent bust lies the power of Wall Street’s trading operations. In the case of our national housing market saga and toxic subprime fallout, it’s true that banks and specialist lending institutions rapaciously extended credit to ill-equipped borrowers.But that’s not the whole story. Housing value fluctuations weren’t just caused by […]

The Financial Tsunami: Sub-Prime Mortgage Debt is but the Tip of the Iceberg

Part 1: Deutsche Bank’s painful lesson                  Even experienced banker friends tell me that they think the worst of the US banking troubles are over and that things are slowly getting back to normal. What is lacking in their rosy optimism is the realization of the scale of the ongoing deterioration in credit markets globally, centered in […]

US home sales hit fresh lows as unsold properties flood market

WASHINGTON (AFP) – Sales of US homes and apartments tumbled a hefty eight percent in September extending one of the nation’s worst housing slumps in decades, an industry group said Wednesday. The National Association of Realtors said in a monthly snapshot that sales of existing homes and apartments fell to a seasonally adjusted rate of […]

‘Definite end’ to housing boom

The housing market boom will come to a “definite end” next year and the Kiwi dollar may rise back to US81c because of higher interest rates, economists predict. Independent economics group Infometrics’ latest forecast picks the Reserve Bank to raise official interest rates twice, to 8.75 per cent, within the next six months to hold […]