Creditors face losses in Aussie brokerage collapse

Another one bites the dust MELBOURNE – Unsecured creditors caught up in the collapse of stockbroker Opes Prime could lose up to half of their investment say receivers, as more clients seek legal action to prevent the sale of their shares. Opes Prime, which was involved in the lending and borrowing of securities, owes more […]

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 Next Slum?

Strange days are upon the residents of many a suburban cul-de-sac. Once-tidy yards have become overgrown, as the houses they front have gone vacant. Signs of physical and social disorder are spreading. At Windy Ridge, a recently built starter-home development seven miles northwest of Charlotte, North Carolina, 81 of the community’s 132 small, vinyl-sided houses […]

A&L shocks the markets with £185m write down

By Sean Farrell Financial Editor Thursday, 21 February 2008 Alliance & Leicester admitted regret about its investments in risky assets yesterday as it scrapped its profit target and said it would not compete strongly for new mortgage customers this year. The bank’s shares fell nearly 7 per cent to their lowest since 2000 after it […]

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 […]

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 […]

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 […]

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 […]

Shares suffer biggest fall since 9/11

The FTSE 100 on Monday suffered its biggest one-day fall since the attacks on the World Trade Centre more than six years ago as the worst fears about the prospects for the global economy took hold. In a tumultuous session, the index was down as much as 5.7 per cent to 5,571.0 as dealers capitulated […]

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 […]

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 […]

Finance group collapse leaves 7000 investors in the dark

Auckland based Capital + Merchant Finance has collapsed and been placed in receivership with debts of around $190m, leaving the deposits of at least 7000 investors under threat. It is the 13th such failure in the industry here in the past 18 months. Capital + Merchant Finance Ltd and Capital + Merchant Investments, had breached […]

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 […]

Goldman Sachs Was Wrong & 2 Million Families May Lose Their Homes

What’s going wrong in the financial sector is not so unusual after all. One of the funniest moments in the great credit crunch of 2007 came in the summer. “We are seeing things that were 25-standard deviation events, several days in a row,” said David Viniar, CFO of the smartest financial firm in the world, […]

Dollar Crisis: None dare call it ‘conspiracy’

Crude oil prices hit an all-time high this week, closing above $98 a barrel for the first time in history. According to the AAA, many drivers in my home state of California are already paying more than $4 a gallon for regular unleaded gas. And in one town south of Big Sur, unleaded gas topped […]

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 […]

US Dollar Poses Grave Risk to World Economy

“Allow me to point out the irony of this situation,” Guido Mantega, the Brazilian finance minister, told reporters at a recent global pow-wow. “Countries that were references of good governance, of standards and codes for the financial systems” were now the same countries where financial problems were threatening to wreck global prosperity. Whoever could he […]

Number of US Foreclosures Three Times Higher Than Last Year

Last week was a tough one for the markets. Oil rose over US$88 and the Dow got clobbered. It fell 366 points on Friday. The euro rose to almost US$1.43. The Boston Globe gives us a quick update on the housing picture: “‘You can see that it’s a crisis,’ said John L. O’Brien, registrar 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 […]

It’s Time For The Banks To Face The Hangman

By Mike Whitney Officials in the Treasury Dept—-working with their colleagues at Citigroup, J.P. Morgan and Bank of America—have concocted a scheme to rescue the banks from their massive losses in mortgage-backed securities. The group is planning to set up a $100 billion emergency fund which will purchase non-performing assets for short term debt. In […]

Foreclosures, Inflation to Wipe Out Credit Debt Burden for US Economy

Let’s see…the Dow rose 77 points on Friday. Oil hit a new record – at above US$85 a barrel. But we always try to look beyond to news to figure out what is going on. Despite the problems in housing, most Americans are feeling pretty fat and sassy. Living standards – at least, by the […]

Income-Inequality Gap Widens

The richest Americans’ share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers. The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue […]

US Housing Crisis: Why Real Estate is Always a Wasting Asset

Meanwhile, speaking of housing, there are a lot of long faces among house sellers this morning. According to the weekend news, the story just becomes more and more depressing. “American Dream turns to a Nightmare,” begins the report in the Arizona press. (A modest suggestion to financial journalists: find a better headline. We’ve read that […]

Half of NZ finance firms will go, says economist

Half of New Zealand’s finance companies are likely to disappear, according to ANZ/National Bank chief economist Cameron Bagrie. “I think we’re set for a real shake-out over the next 12 months,” he said. “The more marginal player is going to find it tougher,” he told the New Zealand Mortgage Brokers Association annual conference. “The weaker, […]