MBS- FNMA 4.5 price: 100-19
10-yr Treasury Yield: 3.70%
MBS- FNMA 4.5 price: 100-22
10-yr Treasury Yield: 3.67%
MBS- FNMA 4.5 price: 100-09
10-yr Treasury Yield: 3.76%
As Financial Crisis Inquiry Commission Chairman Phil Angelides says, “It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars.” Yep.
WASHINGTON — Goldman Sachs’ chief acknowledged Wednesday that the investment bank engaged in “improper” behavior in 2006 and 2007 when it made huge bets on a housing downturn while peddling as safe more than $40 billion in securities backed by risky U.S. home loans. Link to article…
MBS- FNMA 4.5 price: 100-14
10-yr Treasury Yield: 3.74%
Live blogging and video of the heads of Goldman Sachs, Bank of America, Morgan Stanley, and JP Morgan/Chase testify before Congress can be found by clicking here.
MBS- FNMA 4.5 price: 100-14
10-yr Treasury Yield: 3.73%
Banking just ain’t pretty these days. But does anyone have sympathy for them? Anyone, Buehler? Anyone?
Jan. 12 (Bloomberg) — President Barack Obama plans to raise as much as $120 billion through a fee on financial institutions to help recoup losses from the Troubled Asset Relief Program and reduce the deficit, according to an administration official. Link to article…
MBS- FNMA 4.5 price: 100-07
10-yr Treasury Yield: 3.82%
More on interest rates and where the predicting-set think they’re going:
TOKYO (MarketWatch) — St. Louis Federal Reserve President James Bullard said Monday that U.S. interest rates may remain low for “quite some time,” easing concerns over the potential for an interest-rate hike and helping to pull the dollar lower against its currency rivals.
“Policy rates are near zero in the U.S. and the rest of the [Group of Seven] countries, something not seen in postwar economic history,” Bullard said in an address to a conference in Shanghai. “Interest rates may remain low for quite some time.” Link to article…
I continue to contend that this is the story of the decade:
Jan. 6 (Bloomberg) — The U.S. should “explicitly” regulate derivatives dealers, said Gary Gensler, who has pushed Congress to impose new rules on the $300 trillion over-the- counter derivatives market.
Gensler, chairman of the Commodity Futures Trading Commission, has asked Congress to give the commission the power to regulate over-the-counter contracts to police commodity speculation that is outside of regulated exchanges. Link to article…
MBS- FNMA 4.5 price: 100-09
10-yr Treasury Yield: 3.83%
Jeez, are they getting in line for a modification? …. from The Huffington Post:
NEW YORK — The partnership that paid a record $5.4 billion for two of New York City’s biggest apartment complexes is having money problems.
The group led by Tishman Speyer and BlackRock Realty says it wasn’t able to make a full $16 million loan payment that was due Friday.
The companies say the missed payment won’t affect the 25,000 tenants of Stuyvesant Town and Peter Cooper Village in Manhattan.
Analysts have been expecting the group to default on the loan for several months.
The group bought the complexes in 2006 in the nation’s largest residential real estate deal. Since then, the city’s housing market has cooled considerably.
The partnership says it is trying to restructure debt.
MBS- FNMA 4.5 price: 100-13
10-yr Treasury Yield: 3.81%
MBS- FNMA 4.5 price: 100-09
10-yr Treasury Yield: 3.82%
A little insight on how the Fed sees the government backing of Fannie and Freddie:
WASHINGTON (JEANNINE AVERSA — AP) — Some Federal Reserve policymakers last month were conflicted over whether to expand or cut back a program intended to drive down mortgage rates, bolster the housing market and keep the recovery going, according to a document released Wednesday.
Minutes of the Fed’s closed-door meeting on Dec. 15-16 revealed that a “few members” thought that the Fed’s $1.25 trillion program to buy mortgage securities from Fannie Mae and Freddie Mac might need to be expanded and extended beyond its current end date of March 31. Such an additional dose of stimulus would be especially needed if the economic recovery were to weaken, they argued. Link to article…
Great info here on how banks operate with debit cards. Please read the info below to protect yourself from fraudulent charges, and check out the full article by clicking the link:
Federal regulations do limit liability for debit card holders who are defrauded, but the protection isn’t as extensive as for credit cards. Unless the card holder reports the fraudulent charges within a certain time frame, he or she could end up being on the one footing the bill. According to the Federal Reserve federalreserve.gov), the cardholder’s loss is limited to $50 as long as the cardholder notifies the financial institution within two business days after learning of loss or theft of the card or PIN code. If the cardholder doesn’t alert the card issuer within two business days, he or she could lose as much as $500. Much worse, if an unauthorized transfer that appears on the statement is not reported within 60 days after the statement was mailed, the cardholder risks unlimited loss on transfers made after the 60-day period. In short, you could theoretically lose all the money in your account plus your maximum overdraft line of credit, if any. Link to article…
MBS- FNMA 4.5 price: 100-14
10-yr Treasury Yield: 3.83%
Here is a well-framed portrait of how ineffective the mortgage modification program has been. I still remember the “cramdown” bill (that didn’t pass). We wouldn’t be seeing this story had the cramdown passed, I believe.
As of Oct. 31, only 4.7 percent of the modifications that had been on the books for at least three months had become permanent, according to the Congressional Oversight Panel.
While that doesn’t mean that more than 95 percent of trial modifications begun three months or more earlier “are failures,” in the panel’s words, it does mean that the “vast majority” of trial modifications failed to convert on the schedule that the Treasury originally announced.
Treasury’s Barr said that mortgage servicers — some them stand-alone companies, others units of big Wall Street banks — simply aren’t doing enough to move homeowners from trial to permanent modifications. Link to article…
I think it’s wise to also consider the opposing point of view on the cramdown option. Predictably, this Investor’s Business Daily article is opposed to the idea, arguing that it would be a “body blow” to real estate sales and to lending rates. That’s a perfectly credible argument and it is probably true that the effect would raise rates— since the lure of mortgage-backed securities would lose some of its shimmer to hungry investors. I found it comical how the negative effect on the HAMP program was cited as one reason why cramdown should not be made law. (This is the very program that has managed to modify only 30,000 or so out of over 700,000 applications thus far. That’s less than 5%, folks.)
So here is my argument: servicers and lenders have NO INCENTIVE TO MODIFY MORTGAGES. So they don’t. That’s the bottom line. The HAMP program has no teeth, and this is exactly what the cramdown legislation could have provided: teeth. Lenders would be subject to a bankruptcy judge’s authority and would have to comply with the ruling if the judge determined that a reasonable option for saving someone’s home was possible, but had not been made available. It’s actually a very reasonable policy in my opinion that makes it at least possible for a homeowner to MAKE A PLEA TO SOMEONE OTHER THAN THEIR OWN LENDER OR SERVICING COMPANY— an entity that, incidentally, doesn’t typically give a crap that your home is your home and has been part of your family for generations, etc. But a judge, especially after hearing the story from the homeowner of how much effort most homeowners undertake to obtain modifications, and how lenders have stalled, and not returned phone calls, and have lost documentation, and have demanded a perpetually unending list of conditions, and who generally aren’t getting it done… hmmmmm… well, I just wonder on whose side that judge is going to come down?
In the Investor’s Business Daily article, a commentor said his lender friends were “in a panic” when the legislation passed the House last March. That should be music to our ears considering the bailout the banking industry has received.
How about a public option for lending? One that negotiates a short refinance for the millions of upside down homes in this country? How about something WITH SOME TEETH? Something like that already exists…
FHA enables a short refinance program… if you’re willing to battle your lender to agree to a short pay off and endure the blow to your credit for settling the account for less than owed. But, considering the dismal effectiveness of mortgage modifications a short refinance actually has some promise. And unlike with an application for a modification, the homeowner actually has some leverage in the form of a new lender with what is essentially an offer of take it or leave it. More music to my ears!
So, since the concept of a cramdown is not gathering the support it needs to succeed I believe the solution is now in the realm of short refinancing and short selling. It’s still a battle, but so is everything with regard to home finance right now. Keep your heads up folks and keep fighting for your homes! It truly is fighting the good fight.
MBS- FNMA 4.5 price: 100-03
10-yr Treasury Yield: 3.83%
Happy new year, everyone! Thanks to Weekend Wanderings reader, Tom, for sending the link to this article from the New York Times about the ways Americans are adapting to the economic realities they face. Seems like a good one to highlight for the first of hopefully many articles I’ll point out to you this year:
But Americans are not just getting by with less. They are also doing more.
Some are working longer hours, but a larger proportion, the poll shows, are spending additional time with family and friends, gardening, cooking, reading, watching television and engaging in other hobbies.
The Department of Labor’s time-use surveys show a similar trend: compared with 2005, Americans spent less time in 2008 buying goods and services and more time cooking or taking part in “organizational, civic and religious activities.” Link to aricle…
MBS- FNMA 4.5 price: 99-27
10-yr Treasury Yield: 3.87%
I’m completely convinced this is THE FINANCIAL STORY OF THE DECADE (from McClatchyDC.com):
NEW YORK — When financial titan Goldman Sachs joined some of its Wall Street rivals in late 2005 in secretly packaging a new breed of offshore securities, it gave prospective investors little hint that many of the deals were so risky that they could end up losing hundreds of millions of dollars on them.
McClatchy has obtained previously undisclosed documents that provide a closer look at the shadowy $1.3 trillion market since 2002 for complex offshore deals, which Chicago financial consultant and frequent Goldman critic Janet Tavakoli said at times met “every definition of a Ponzi scheme.”
The documents include the offering circulars for 40 of Goldman’s estimated 148 deals in the Cayman Islands over a seven-year period, including a dozen of its more exotic transactions tied to mortgages and consumer loans that it marketed in 2006 and 2007, at the crest of the booming market for subprime mortgages to marginally qualified borrowers.
In some of these transactions, investors not only bought shaky securities backed by residential mortgages, but also took on the role of insurers by agreeing to pay Goldman and others massive sums if risky home loans nose-dived in value — as Goldman was effectively betting they would.
Some of the investors, including foreign banks and even Wall Street giant Merrill Lynch, may have been comforted by the high grades Wall Street ratings agencies had assigned to many of the securities. However, some of the buyers apparently agreed to insure Goldman well after the performance of many offshore deals weakened significantly beginning in June 2006. Link to full article…
This one ought to be noticed. Hoping for everyone’s sake this trend goes the right way in 2010. It’s got to be the prime indicator of real improvement for Main Street.
NEW YORK (CNNMoney.com) — The number of Americans filing first-time claims for unemployment insurance fell sharply last week to the lowest level in 17 months, the government said Thursday. Analysts had expected an increase. Link to article…
Gotta say, I find this one interesting too (from FireDogLake.com):
When House leadership was handing out committee assignments to the freshmen class of 2008, in the midst of one of the biggest financial crises to ever rock the country, it was decided that the best thing to do was put new members who needed campaign cash for tough 2010 battles on the Financial Services Committee.
And so 11 freshmen members from conservative leaning districts were assigned to the committee, basically setting them up to be “bribed” by Wall Street. Link to article…