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Posted
Oct 07 2009, 07:23 PM
by
Vad Yazvinski
Rating:
Money Blog: Top Stocks Blog - MSN Money
“Whenever you find yourself on the side of the majority, it is time to pause and reflect” -- Mark Twain
One of the main arguments "perma-bears" used in justifying why the recent stock rally is (and was) destined to fail miserably, has certainly been a widespread expectation of an upcoming collapse in the commercial real estate market.
Just yesterday the Wall Street Journal reported that "banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks that failed to set aside enough capital during the boom to cushion themselves when the bubble burst. 'Banks will be slow to recognize the severity of the loss -- just as they were in residential,' according to the Fed presentation, which was reviewed by The Wall Street Journal".
This is true. It has been clear for a while that hundreds of smaller banks heavily exposed to commercial real estate market are likely to fail or require more capital during the next 18 months or so. But isn't everyone expecting that at this point?
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Posted
Sep 01 2009, 06:26 PM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
When the century-old investment bank Lehman Brothers collapsed a year ago, it spawned not just a global financial firestorm but a cottage industry of insider accounts of where it all went wrong. Three major books have been published and more are on the way -- each proposing to tell us the darkest secrets of the world's worst-run brokerage. (My take on it: New column.)
Any endeavor that pits Type A personalities against each other in a battle for control of the public discourse is bound to be competitive, and one like this in which reputations are at stake will naturally be especially fierce. That makes the effort by Lawrence G. McDonald, a former vice president at Lehman, particularly compelling, as he was first out of the gate.
In a late-night conversation from his vacation in Paris, the former fixed-income trader told me that the book, "A Colossal Failure of Common Sense," took him and co-author Patrick Robinson one hundred and seventy-three 17-hour days to research and write -- including Christmas and New Year's. Not that anyone's counting. Because he was first off the starting line with a publishing contract and a plan, he managed to grab co-workers for interviews "at a golden moment of frustration," he says, a time when they wanted the bad apples at Lehman exposed. The bottom line is about what you'd imagine: An overmatched boss failed to listen to smarter underlings and drove the company into the ground. The details are amazing, which makes the read compelling even if you feel you know the whole story already.
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Posted
Jun 04 2009, 02:25 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Angelo Mozilo (pictured) co-founded Countrywide Financial 40 years ago and helped it become the country's largest mortgage lender. Countrywide is long gone -- having been swallowed up by Bank of America (BAC) last year -- but Mozilo's final years in charge are back in the spotlight now that federal regulators have charged him with fraud and insider trading.
Regulators say that Mozilo and two other execs pitched Countrywide as a quality lender that made good loans, but secretly began making riskier and riskier deals to keep up with competitors. It started matching the terms of any loan being offered in the market -- even those obviously risky subprime ones that would never have passed muster normally.
It was an unsustainable business model, the Feds say, and Mozilo knew it. Executives had been warned of the new credit risks they were taking on. Mozilo sent internal e-mails that said Countrywide was "flying blind," and that one of its products was "toxic," according to the complaint by the Securities and Exchange Commission.
Around the same time, Mozilo started unloading Countrywide stock.
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Posted
Oct 23 2008, 09:34 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
For anyone wondering where the billions of dollars in worthless mortgage-backed securities will wind up, look no further: The mirror.
Fannie Mae and Freddie Mac, the formerly quasi-public, now taxpayer-owned mortgage behemoths, are stealthily sopping up the worst of the structured mortgage debt Wall Street churned out during the boom.
In a story that barely made the back pages of the nation’s newspapers, the Federal Housing Finance Agency announced Fannie and Freddie will start purchasing $40 billion per month of “underperforming mortgage bonds.”
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Posted
Oct 16 2008, 06:09 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
Some say the definition of insanity is trying the same thing over and over again, expecting a different result. By that measure, voters should load up on straitjackets this November and drag everyone in Washington off to the nuthouse.
Despite overwhelming evidence that we're in the middle of a debt crisis, regulators insist they're wrestling a liquidity crunch. And all the while, a cancer continues to eat away at the guts of the economy: The housing market. Only when it stabilizes will the financial system and, by extension, the economy -- recover.
And yet, despite this widely recognized fact, the recent $700 bailout package contains little support for struggling homeowners. Even the $250 billion being dumped into banks will have only a minor effect on property values.
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Posted
Sep 22 2008, 01:51 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Watching Treasury Secretary Henry Paulson make the rounds of Sunday morning television shows to make his case for applying a trillion dollars' worth of CPR to the U.S. banking system, I was struck by the prosaic quality of his argument. You sure didn’t have the sense that he thought this was any big deal. I mean, it was almost the same tone as you’d hear on a recorded message of the day’s surf forecasts. Wake me when we’ve spent all our money.
The humdrum quality of technocrats like the former Goldman Sachs chief makes me wistful for the days of Franklin Delano Roosevelt. Now there was a guy who was mad as hell about the state of the banking system, and wasn’t going to take it anymore. And could he ever deliver a speech.
FDR’s Inaugural Address in 1933 – in which he excoriated bankers for their greed, selfishness and incompetence -- was his most famous, and you may be amazed to discover how relevant it sounds today. "There must be an end to speculation with other people's money!" he said.
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Posted
Sep 08 2008, 03:55 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Fannie Mae and Freddie Mac had their CEOs pushed out by the government over the weekend. They will get fat pay packages and can go on to live in massive homes and become high-paid consultants. The head of Washington Mutual was keelhauled Sunday. He was replaced by the head of commercial mortgage broker Meridian Capital Group.
The board and CEO of Wachovia are about to bring in a new CFO, hoping to get Carlyle Group's David Zwiener to take the job. He is likely to get a nifty pay package for signing on to a sinking ship.
The parade of comings and goings of executives at banks, mortgage companies, brokerages, and insurance firms does not appear to have had the intended effect.
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Posted
Aug 08 2008, 08:34 AM
by
Minyanville
Money Blog: Top Stocks Blog - MSN Money
This morning, Fannie Mae joined its smaller cousin Freddie Mac in announcing losses that exceeded Wall Street's already dour expectations.
The company lost $2.3 billion in the second quarter and plans to slash its dividend to a paltry $0.05 per share, down from $0.25, according to Bloomberg.
All eyes now turn to Paulson, who just weeks ago asked for -- and received -- a blank check from Congress to support the beleaguered government sponsored enterprises, should the need arise. He had hoped the mere existence of the backstop would calm Investors' nerves such that he wouldn't need to step in.
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Posted
Jun 24 2008, 01:05 AM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
If you're a GE shareholder, you've probably been pondering the idea since April 11, when the company shocked investors around the world by reporting a first-quarter profit decline that absolutely no one expected.
Since then, there's been chatter in blogs (See this from George Yared) and message boards about whether Immelt's tenure should end. Some posts are on MSN Money.
The New York Times noted on Sunday that Wall Street seems to have fallen out of love with GE. Douglas McIntyre, a Top Stocks partner blogger, says the company is in need of a major change in direction. "It's a dog of a stock," he wrote this week.
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Posted
May 12 2008, 07:12 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Based on the figures from the Bureau of Labor Statistics, U.S. unemployment was 5% in April. Those figures showed that 146.3 million Americans were employed in the civilian work-force and 7.6 million Americans were unemployed.
It should not come as a surprise to economists that the weakest parts of the economy last month were construction, manufacturing, and retail. The segments with some growth were healthcare and professional services. (For a complete list of jobs by sector visit 24/7 Wall St.)
The economy may be in a recession now. Some experts believe that growth will only slow modestly over 2008. Warren Buffett and George Soros have said that they think the downturn will be long and deep.
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