Don’t worry, just a little bump - $70 is just around the corner. Short traders just keep making those margin calls, mortgage the house if you have to. Fortunes await you! PO is for pansies and doomers. At $70 short some more ..... it is going back to $22 .... the world is awash with oil ........ reality has nothing to do with it, its all in those charts!!!!!!!!!!
Joined: Mar 18, 2005 Posts: 2568 Location: Minnesota
Posted: Sat Apr 05, 2008 8:54 am Post subject: Re: Housing & Economic Collapse - In Progress
Dac Wrote: MBIA Loses AAA Insurer Rating From Fitch Over Capital
HOLY HELL that's bad! Sure we knew it was comming, but now all the thousands upon thousands of bonds insured by MBIA will get downgraded...pension funds (that only hold AAA rated bonds) will be forced to sell.
The snowball is rolling down hill _________________ Quis custodiet ipsos custodes.
Posted: Sat Apr 05, 2008 9:17 am Post subject: Re: Housing & Economic Collapse - In Progress
Snowball gaining momentum.
Question here, nothing else:
Is the contraction of money supply, vs FED and govt efforts then like my wife said about a garment label that said, "shrink resistant" ?
I asked what that could possibly mean, since the thing would either shrink, or NOT. She said, "Well, it's gonna shrink, but it doesn't WANT to!" _________________ Local fix-it guy..
Joined: Apr 12, 2007 Posts: 1162 Location: Central NC
Posted: Sat Apr 05, 2008 9:22 am Post subject: Re: Housing & Economic Collapse - In Progress
RonMN wrote:
Dac Wrote: MBIA Loses AAA Insurer Rating From Fitch Over Capital
HOLY HELL that's bad! Sure we knew it was comming, but now all the thousands upon thousands of bonds insured by MBIA will get downgraded...pension funds (that only hold AAA rated bonds) will be forced to sell.
The snowball is rolling down hill
Which is worse? Being forced to sell or changing the regulations so they don't have to sell but could opt to hold and take the losses?
Joined: Mar 18, 2005 Posts: 2568 Location: Minnesota
Posted: Sat Apr 05, 2008 9:28 am Post subject: Re: Housing & Economic Collapse - In Progress
Just one small example...ACA was a MUCH MUCH smaller bond insurer than MBIA. ACA was downgraded in December & the stench is still stinking up banks & the credit market in general. Here comes a whole new wave of writedowns because of MBIAs downgrade.
Quote:
Standard & Poor's (MHC) put the insurer under review, slashing its credit rating from A to CCC a month later. The downgrade forced the insurer to come up with more collateral to show it could pay potential claims, under the terms of its agreements with banks. ACA didn't have the funds to make good on those deals, prompting Merrill Lynch (MER), UBS, CIBC (CM), Australia & New Zealand Banking Group, and other clients to take big losses on the policies. Australia & New Zealand Bank said its bonds remain solid, even without insurance. UBS and CIBC declined to comment.
<snip>
What's more, Wall Street may face a fresh round of losses. That's because ACA also insured $43 billion worth of securities backed by risky corporate loans and bonds, like the ones used to fund the flurry of buyouts in recent years. Those investments could be the next in line to sour, a turn made more likely by the weak state of the economy. If those securities go bad, banks would have to take more writedowns, squeezing the credit markets even further.
Joined: Oct 23, 2004 Posts: 5410 Location: New Jersey
Posted: Sat Apr 05, 2008 1:52 pm Post subject: Re: Housing & Economic Collapse - In Progress
I am somewhat surprised that ACA has not yet declared bankruptcy, but the Fed and Treasury is still armtwisting behind the scenes to prevent a chain reaction financial meltdown.
Anyway, the auto and airline industry continues to suffer. More airline bankruptcies plus auto parts maker Delphi now having a difficult time coming out of bankrutpcy.
Quote:
Hedge fund derails $2.55-billion Delphi deal
End of investment hurts plans for supplier to emerge from bankruptcy
BY JEWEL GOPWANI • FREE PRESS BUSINESS WRITER • April 4, 2008
This morning Delphi Corp. lost a $2.55-billion investment, derailing a key financial deal and all but ensuring a longer stay in bankruptcy for the auto supplier.
The hedge fund Appaloosa Management LP made the announcement this morning as Delphi was in the process of closing on a $6.1-billion exit loan that it had struggled to assemble during the turbulent credit markets.
In a securities filing, the hedge fund said Delphi has breached an agreement it had with the investor group, including giving Delphi’s former parent, General Motors Corp., a larger role in the company, outside of the ordinary course of business, and proposing an equity structure that dilutes the interests of the investors, so their investment wouldn’t be worth as much as they had anticipated.
Posted: Sat Apr 05, 2008 7:20 pm Post subject: Re: Housing & Economic Collapse - In Progress
Wow, you go away for two months and this thread grows over 100 pages. I have been following the news of course, now to catch up on your commentary...
Iaato wrote:
Where's Twilight? You still skulking out there somewhere?
Yes, I have been busy. Our energy policy is still in the hands of complacent idiots but at least I have added to the canned meat store. Argentinians and Brazilians are cranking out some top notch stuff for nothing these days; the fruits of the first and best grass harvest of the dying Amazon if you want to be poetic. Thanks for the one-off glut of overproduction and offloading it here for £1/lb, guys! Looking forward to rejoining the debate. What a mess.
Last edited by Twilight on Sat Apr 05, 2008 10:41 pm; edited 7 times in total
Posted: Sat Apr 05, 2008 7:32 pm Post subject: Re: Housing & Economic Collapse - In Progress
Hm. Third class, huh? Well, nuthin' new to me. Been low class forever. But I kinda think my homemade raft might fare better than some of the first class lifeboats. _________________ Local fix-it guy..
Posted: Sat Apr 05, 2008 9:18 pm Post subject: Re: Housing & Economic Collapse - In Progress
patience wrote:
Hm. Third class, huh? Well, nuthin' new to me. Been low class forever. But I kinda think my homemade raft might fare better than some of the first class lifeboats.
Don't be so sure... Rocc missed it and now you are too! _________________ -Dac
Winners never quit and quiters never win, but those that never win and never quit are idiots.
Posted: Sat Apr 05, 2008 11:51 pm Post subject: Re: Housing & Economic Collapse - In Progress
This is not news, but it is well worth a read. I might have posted this here before, in which case I apologise, but it is a timely reminder of what lies ahead.
More new homes were built in Spain in the last five years than in France, Germany and Britain put together. Half the cement made in Europe ended up in Spain.
As we know from this article, as of the end of last year Spanish banks had parked over €62bn of MBS (nominally AAA, ha) at the ECB.
Now you can place the name of at least one town to that figure.
This is outright default material. I bet ongoing utility provision to those places costs more than the income stream obtained from paying tenants. Spanish banks own entire New Towns like Milton Keynes. They in turn are owned by the ECB. What happens to the collateral? You have to wonder how collection on this debt might look.
- Repayment on demand followed by national bankruptcy?
- Spanish cities rented back from an EU structure?
- Spanish cities owned by a mailbox in Hong Kong?
If anyone is wondering who is a Mad Max candidate for a failed state in the West, here you are. Spain, Portugal, Italy, these are the candidates. Not many people realise Spain and Portugal were poorer than the Soviet Union 30 years ago, but that is how far they have come and where their "support" is.
On reflection, I do not think anyone is going to be interested in seizing this kind of RE collateral before long. This is a monstrous liability, not an asset. It carries costs. It hosts no taxable economic activity, but carries an externally imposed legal humanitarian obligation to provide essential services. I would not be interested in owning the title to such a place unless the government was paying my expenses in full - in fact, even if I were the government. The value of a government financial guarantee from a Mediterranean country is looking more and more flimsy these days, but I am not just talking about private sector creditors' risk here. Ultimately governments themselves will find it temptingly convenient to disown the problem. In a glut of this size, abandonment of RE collateral is going to pay wherever it means avoiding utility connection, sanitation and demolition bills, and the same economic arguments are as relevant to a city or regional government as they are to a bank. It is possible that in only a couple of years they would no more give legal recognition to a place like this than they historically would have given to a shanty town. A quiet policy of neglect then, and no-one keeps a police station, fire station and hospital staffed for a district of derelict buildings.
Elsewhere, I am little bit surprised no-one seems to have spotted this heads-up. Something to bear in mind.
By the way, anyone notice the fireworks in Iceland? That was quite a light-show. Last report I saw was a threat of government intervention in the currency markets. You have to laugh at the futility of the gesture.
Posted: Sun Apr 06, 2008 2:36 am Post subject: Re: Housing & Economic Collapse - In Progress
big_rc wrote:
More from the law of unintended consequences. This whole thing is just so interesting (albeit terrifying) and is causing so much weirdness to go on. I guess it is cheaper to keep her these days.
That in fact may be a positive development.
Peoples will have a good thought before getting married at the first place and they will not break up their relations due to a different views about characters of some soap opera in TV.
Posted: Sun Apr 06, 2008 5:12 am Post subject: Re: Housing & Economic Collapse - In Progress
Twilight wrote:
As we know from this article, as of the end of last year Spanish banks had parked over €62bn of MBS (nominally AAA, ha) at the ECB.
I believe this is called a tripleplusgood credit rating in newspeak.
I knew Spain was in a world of pain but had not quite grapsed the size of it. Germany has three banks that are bankrupt but kept running by the states (their Landesbanks). Europe is not getting out of this unscathed but I dont really think they have quite the problems of the US.
Old Osama must think the wests banking regulaters were sent as a gift to him from Allah for 9/11 as a gift to compensate for the muslim world not backing his revolution.
Posted: Sun Apr 06, 2008 8:07 pm Post subject: Re: Housing & Economic Collapse - In Progress
dorlomin said:
Quote:
Europe is not getting out of this unscathed but I dont really think they have quite the problems of the US.
Quote:
Several members of the six-nation Gulf Cooperation Council (GCC) that includes Saudi Arabia are determined to meet a 2010 target to introduce single currency, the council's secretary general said on Sunday. "There is determination from a number of countries to complete monetary union by 2010," Abdul-Rahman al-Attiyah said at a central bank governors' meeting in Qatar's capital, Doha.
Europe is much more dependent on Middle Eastern oil than is the US. A unified Gulf currency will soon place the Euro on a roll of TP, much like the one, on to which the dollar is being spun.
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