Posted on November 21st, 2008 by Bank REO
More of the same, but what did you really expect? My favorite part of the article is them talking about Timothy Geithner and his helping with the handling of the current financial meltdown. Bear Stearns, AIG and Lehman failure. They talk about these like they are good things that would be something you would look for in a new Treasury Secretary. I would say this whole situation has been bungled and I would steer clear of anyone involved in this crisis.
News:
President-elect Barack Obama picked Timothy Geithner, head of the Federal Reserve Bank of New York, to be his Treasury secretary, with Lawrence Summers getting a senior White House role, a Democratic aide said.
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Posted on November 20th, 2008 by Bank REO
GMAC has applied for status as a bank holding company so it can get access to the Treasury’s $700 billion rescue fund for the financial industry.
The lender also began an exchange offer for $38 billion of notes issued by the company and its Residential Capital LLC home lending unit to reduce outstanding debt levels, Detroit-based GMAC said today in a statement.
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Posted on November 20th, 2008 by Bank REO
Reality is setting in, we are in recession and it is getting deep. In the news piece, they mention we have just over 4 million people getting unemployment benefits as well. Most economic analysts are calling for at least 9-11% unemployment. Another stimulus package is in the works and congress is working on extending unemployment benefits as well.
This is fine but it is only a band-aid for our real problems. We need to lets prices fall in all asset classes so we have a sustainable price level people can afford and we need to work on job creation, focusing on manufacturing and exports. The goal should be to get us from a unrealistic service-based economy to a economy that makes things the world want to purchase along with our own citizens.
News:
First-time filings for unemployment benefits shot up to their highest level since July 1992 last week, rising 27,000 to a seasonally adjusted 542,000 and punctuating the struggling state of the U.S. labor market, government data showed Thursday. Meanwhile, the number of people receiving benefits rose to 4.01 million in the week ending Nov. 8, the highest level in 26 years.
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Posted on November 19th, 2008 by Bank REO
Looks like the next shoe to drop will be the commercial real estate market. It has lagged behind the residential market but it is not immune by any stretch. Looks like you need 700 basis points (7%) to get debt insurance (CDS) on a CMBS (Commercial Mortgage Backed Security).
Just today, the premium rose, 1.3%. With businesses either shutting down or cutting back on their expenses, this will have a direct effect on the commercial real estate market. If you have been following the CoStar newsletter that tracks the commercial market, they have not had a rosie picture for our current real estate market either. Time to batten down the hatches.
News:
The cost to protect top-rated commercial-mortgage bonds against default rose to a record, a day after two bad loans boosted concern the debt will cause losses.
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Posted on November 19th, 2008 by Bank REO
Construction starts on new U.S. homes fell to a record low in October, as did new applications for building permits, a report by the Commerce Department showed on Wednesday, signaling that the national housing downturn may extend well into the future.
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Posted on November 19th, 2008 by Bank REO
Not too much of delay but they really need to get these rules in place. Also I feel that a hard look should be looked at in terms of how the credit rating agencies played a part in this crisis. If people broke the law, then they should have to answer for their actions.
News:
U.S. securities regulators on Wednesday delayed action on adopting stricter rules to rein in the credit rating agencies until Dec. 3.
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Posted on November 18th, 2008 by Bank REO
After Hank Paulson released that he was going to change course and not use the bailout funds for bad assets or partial continued capitalization of the banking system, he was instead going to focus on credit card, auto and college loan debt to try and restart normal lending. We now see what their purpose was and people are not happy at all. Frank wants to see homeowners helped with our taxpayer monies.
Personally, I don’t see why any money is needed to get lenders to modify their mortgage portfolios. You would think if it was in their best interest to keep people in their homes to avoid foreclosure costs then they would do it regardless. My vote is if the borrower has an income that supports a normal fixed rate payment then they should stay and if not then they should be foreclosed on.
News:
The chairman of a key U.S. congressional committee said on Tuesday he expects a change in the Bush administration’s resistance to spending money from a $700-billion bank bailout fund on reducing foreclosures.
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