Subprime Market

[Oldcoin]

http://www.stocktiming.com/Friday-DailyMarketUpdate.htm

Mortgage company woes ...

Yesterday, we looked at the Banking Index. This morning, we will look at the trouble the mortgage market is in. For those who have not been looking at the charts of sub-prime lenders, today's charts will be an eye-opener.

After sub-prime loans surged to a seven-year high and even those with the poorest credit were finding waysto finance a home. In the past year, more than 20 lenders have closed or started looking for buyers.
Currently, about 10 percent of subprime loans are 60 days delinquent or in foreclosure.

The big news this morning is about the nation's third largest sub-prime lender ... New Century Financial. Last week, they stopped accepting loan applications. The fear now is, that they might file for bankruptcy as regulators initiate a criminal probe into their activities.

 

[Oldcoin]

Bies Says Subprime Defaults Are `Beginning of Wave' (Update1)
By Alison Vekshin

March 9 (Bloomberg) -- U.S. Federal Reserve Governor Susan Bies, formerly the U.S. central bank's top official on banking policy, said delinquencies from subprime loans made at a low introductory rates have just begun.

``What's happening is the front end of this wave of teaser- rate loans that are coming into full pricing,'' Bies said today at a risk-management forum in Charlotte, North Carolina. ``So what we're seeing in this narrow segment is the beginning of the wave -- this is not the end, this is the beginning.''

Bies's comments reflect growing attention among bank regulators to the turmoil in the subprime mortgage market and its impact on consumers and U.S. lenders. Many subprime borrowers facing large prepayment penalties are at risk since housing prices aren't growing and they can't refinance or sell their homes, she said.

http://quote.bloomberg.com/apps/news?pid=20601087&sid=aX7j51EwgKYY

 

[Oldcoin]

Subprime's Next Victims: Hedge Funds

By Doug Kass
Street Insight Contributor

http://www.thestreet.com/_tscrss/markets/activetraderupdate/10342448.html

The fallout in the subprime market won't be limited to the originators of these risky mortgages -- the next area to keep an eye on is hedge funds.

First, it's clear we haven't seen the worst of the subprime wreakage and that we'll soon see the hurt spread to the prime-mortgage arena, as I've argued recently.
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I’m going to stick with my domino theory for the subprime market. I think we could get a cascade effect with the continued problems in this area.

 

[Oldcoin]

New Century Gets Default Claims, Says It Lacks Cash (Update2)

By Yalman Onaran

March 12 (Bloomberg) -- New Century Financial Corp., the nation's second-biggest subprime lender, said today it can't meet demands by its lenders for accelerated payments. The shares, already down 90 percent in 2007, lost half their remaining value.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aW8f7kW.nSzU&refer=home

 

[Oldcoin]

GE's WMC Mortgage loans hit subprime index

Mon Mar 12, 2007 8:02AM EDT

By Al Yoon - Analysis

NEW YORK (Reuters) - General Electric Co.'s (GE.N: Quote, Profile, Research) subprime mortgage unit is responsible for some of the worst-performing loans in the benchmark index for the $575 billion market for home equity asset-backed securities, showing few lenders are immune to recent U.S. housing sector problems.

http://tinyurl.com/2lg7gq

 

[James48843]

Sub-prime adjustables-

In my area, bankruptcies are up 120% this year over last, and foreclosures are up 200%.

Just the beginning of the shakeout.

 

[Oldcoin]

Sub-prime adjustables-

In my area, bankruptcies are up 120% this year over last, and foreclosures are up 200%.

Just the beginning of the shakeout.

http://www.nuzmo.com/t68.html Partial quote from the article;

“So where do we go from here? As most of you know, since 1982, my specialty in real estate was foreclosures. I have never seen a cycle like this before so I have no historical comparison to draw from. All I can offer is some thoughts and points to ponder over:”

This guy specializes in real estate foreclosures and he’s blown away. I think your right, just the beginning. People are starting to compare this to the S&L fiasco.

 

[Oldcoin]

Will subprime mess ripple through economy?
Q&A: Looking at the impact of the mortgage meltdown

http://www.msnbc.msn.com/id/17584725/

Pretty good Q&A on the subprime lending market.

 

[Oldcoin]

http://tinyurl.com/3cojzc

New foreclosures at record high
Mortgage delinquencies rise across the board in fourth quarter


I wonder what the numbers in the first quarter of '07 wiil look like?

 

[Oldcoin]

Is this the subprime apocalypse? (Or is it just a scary story?)

In February, I posted here about Roubini Global Economics' prediction that defaults in subprime mortgages would ripple through the financial system and set off a recession. The next week, the stock market tanked, and lots people blamed subprimes. What's the link between subprimes and the rest of us? Here's how I summed it up last month:

http://money.cnn.com/blogs/generationrisk/?cnn=yes

 

[Oldcoin]

Alt-A mortgage losses accelerate, study says
Growing Alt-A problems could threaten some mortgage-backed securities

http://tinyurl.com/2fbooc

 

[Oldcoin]

You know I didn’t think the subprime meltdown would occur at this point in time. I was anticipating more collateral damage in other sectors before the market reacted. So I’m not sure that this was the cause of today’s action. Things are bad in the subprime area and I think it’s great that’s it in the news, but it really hasn’t reached its full potential yet. So I’m a bit suspect when the talking heads start doing their spin thing. There is more to this action than the subprime market.

 

[Oldcoin]

If you're referring to the Philadelphia Bank Index its $BKX


http://www.phlx.com/products/bkx.html

It appears that the Philly Bank Index $BKX went through its 200 day MA and appears to have gone through lower resistence set in Nov and Dec '06.

 

[Remo]

Here's one reason the Market reacted like it did....:notrust:

http://www.mortgagebankers.org/NewsandMedia/PressCenter/50974.htm

I need to know when and how often this report comes out to try and avoid future meltdowns like today.

 

[Show-me]

You know I didn’t think the subprime meltdown would occur at this point in time. I was anticipating more collateral damage in other sectors before the market reacted. So I’m not sure that this was the cause of today’s action. Things are bad in the subprime area and I think it’s great that’s it in the news, but it really hasn’t reached its full potential yet. So I’m a bit suspect when the talking heads start doing their spin thing. There is more to this action than the subprime market.

You bet there is more to it. Job market is weak, housing market weak, inflation higher, spending out of control, baby boomer's retiring, trade deficit, everyone in the world envies us/hates us, we become complacent, we let illegal immigrants work here while we pay U.S. citizens to not work. I'll stop now. You can still make a buck in the market.............wait for it.

 

[Oldcoin]

Home builders assess exposure to risky mortgages

http://news.yahoo.com/s/nm/20070314/bs_nm/usa_subprime_homebuilders_dc_1

NEW YORK (Reuters) - U.S. builders are assessing their exposure to home buyers with weak credit histories amid a subprime mortgage lender meltdown, while one analyst estimated the figure at 8 to 15 percent of their business on average.

"We think the discount ... is overdone," Rehaut said, adding that the U.S. housing industry and particularly the large home builders are seeing some signs of stabilization of supply and demand.

"Just because things are getting less worse, that means earnings are going up? No," said Alex Vallecillo, co-manager of the Allegiant Mid Cap Value Fund, which sold its holdings in home builders about two years ago.

 

[Oldcoin]

"Just because things are getting less worse,

For some reason I really liked that quote....so I had to throw it in

 

[Oldcoin]

'No Money Down' Falls Flat
By Steven Pearlstein

Wednesday, March 14, 2007; D01

Today's pop quiz involves some potentially exciting new products that mortgage bankers have come up with to make homeownership a reality for cash-strapped first-time buyers.

http://www.washingtonpost.com/wp-dyn/content/article/2007/03/13/AR2007031301733_pf.html

 

[Oldcoin]

Sub-prime adjustables-

In my area, bankruptcies are up 120% this year over last, and foreclosures are up 200%.

Just the beginning of the shakeout.

Housing woes deepen in U.S. industrial heartland
Thu Mar 15, 2007 8:24AM EDT

By Andrea Hopkins and Kevin Krolicki
DETROIT (Reuters) - Job losses in the U.S. industrial heartland have left states like Michigan and Ohio more vulnerable to mortgage defaults, as home finance costs rise amid often moribund real-estate markets.

http://www.reuters.com/article/dome...070315?src=031507_0810_TOPSTORY_mortgage_pain

At this time some regions are getting hit harder than others, as noted in this story. I have a family member who deals in Real Estate in Southern California; they have not had a serious problem…….so far.

 

[Oldcoin]

Greenspan Says He Expects Subprime-Mortgage Fallout to Spread
By Steve Matthews and Scott Lanman

March 15 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said he expects the fallout from subprime-mortgage defaults to spread to the broader economy, especially if home prices decline.

``If prices go down, we will have problems -- problems in the sense of spillover to other areas,'' Greenspan said in remarks to the Futures Industry Association meeting in Boca Raton, Florida today. While he hasn't seen such spreading yet, ``I expect to.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMNo.k9C9eP8&refer=home

We’ve been Greenspanned again!