For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
Joined: Mar 18, 2005 Posts: 2570 Location: Minnesota
Posted: Wed Jul 23, 2008 1:06 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
I have a coworker that's closing on a house tomorrow, he told me today that he's waiting on approval from HUD (even though his mortgage is thru WF and he is NOT a first time home buyer)...It would seem that HUD has to approve EVERY home loan now.
Has anybody heard of this? _________________ Quis custodiet ipsos custodes.
Posted: Wed Jul 23, 2008 1:26 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
AlexdeLarge wrote:
"The notion some neo-cons seem to have that the US could take on China militarily is laughable at best"
No neo-con worth his salt would ever suggest such a thing. The US cannot militarily confront China anymore than China can confront the US. It will be a proxy war.
Why do you think we invaded Iraq first?
i don't think that's quite accurate. in my opinion, we could clean their clock in the air and on the sea. so, it really depends where you take them on and what the circumstances are. for example, big naval engagement for control of the seas... we win, and control of the seas is a very very big deal.
on the other hand, i agree that no one wants such a confrontation, and that a war by proxy is the most likely scenario if it comes down to it.
Joined: Oct 23, 2004 Posts: 5496 Location: New Jersey
Posted: Wed Jul 23, 2008 4:17 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
shortonoil wrote:
Micki said:
Quote:
If you had scrolled up a few posts you woul have seen the same + similar news from LA Times.
It has since then popped up in quite a few sites.
Not sure how many of these base their articles on the one and same source though.
Quote:
Washington Mutual: "We have a check-hold policy that takes into consideration a variety of factors, for example, the amount of the check and the state where the check originated," she said.
Quote:
Wells Fargo & Co. did express concern about people creating fraudulent IndyMac checks, but said it is following the same guidelines it applies to all bank checks, which can include a hold on the check.
Micki, all of these links essentially quote from the same sources, verbatim. There is no explanation in any (that makes any sense) as why some of these banks don’t want to process the FDIC, Indymac checks. The only conclusion, since they are not all delaying processing these checks, is that many banks do not have the cash reserves to handle them without first receiving the funds from the FDIC.
I would conclude that these banks have not been re-liquefied by the FED’s money pump, and are still on very thin ice.
The FDIC has not yet sold off portions of IndyMac and does not appear to have paid off the FHLBB (see below). Since the FHLBB has cliam to just about all the good assets of IndyMac, the FDIC would have to start using its reserves to pay off IndyMac's debts. I am not sure if that has happened yet either.
So there does appear to be some reason to doubt the checks written by the FDIC.
And this is just the first failure of many more to come.
Quote:
National Mortgage News
July 21, 2008
Volume 32; Issue 41
IndyMac Reverse Loans in Limbo
Brad Finkelstein
PASADENA, CA Among the things placed in limbo by the failure and government takeover of IndyMac Bank FSB here is the reverse mortgage business the parent company was planning to build its future around and the sale of the retail mortgage origination branches it had closed.
A research report by Friedman Billings Ramsey, said the failure, the second largest by asset size in American history, could be the costliest.
The Federal Home Loan Bank of San Francisco said it has $10.1 billion in outstanding advances to IndyMac, which are protected by a perfected security interest in $21.6 billion of mortgage loans and mortgage-backed securities. This takes precedence over the FDIC's claims on the thrift's assets.
"Subject to the terms of its agreements with IndyMac Bank, the Federal Home Loan Bank of San Francisco will work with the FDIC in its administration of the assets and liabilities of the new institution," the FHLB of San Francisco said in a statement.
The rating agency said it thinks uninsured depositors could receive even more funds as they have priority over unsecured creditors of IndyMac. But those holding "non-deposit obligations" and preferred shareholders will have minimal to no recovery.
Joined: Oct 23, 2004 Posts: 5496 Location: New Jersey
Posted: Wed Jul 23, 2008 4:23 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
The SEC has been very effective is stopping short selling in financial stocks.
Their order sent out last week has greatly discouraged all kinds of short selling, not just naked short selling they obstensibly were trying to stop.
We'll see how well banks can raise capital. Brokers generally short sell short stock ahead of new issues so that they can buy the new stock when it comes out. But who will make a market in financials
now?
Quote:
AP Alert - Financial
The Associated Press
July 23, 2008
SEC Emergency Order Leads to Dramatic Drop in Short Selling of
Fannie Mae and Freddie Mac Securities
SEC Emergency Order Leads to Dramatic Drop in Short-Selling of Fannie Mae and Freddie Mac Securities
Business Intelligence Firm Reports 90 Percent Reduction
(http://www.s3.com)
According to market statistics analyzed by S3 Matching Technologies, the SEC's emergency order to enhance investor protections against "naked" short selling in 17 financial institution securities has reduced short sells by about 70 percent for the targeted symbols, and 90 percent of short selling of Fannie Mae and Freddie Mac securities. S3, which processes trades for the country's largest brokerages, compared short sells of Monday, July 14, prior to the SEC order, and Monday, July 21, the first day the emergency rule was implemented.
"Looking at the data from our clients," said Jack Holt, CEO of S3 Matching Technologies, "it seems clear the market responded to what regulators wanted. Short sells, 'naked' or not, have accounted for a little over 1 percent of our clients' total volume. 2/3rds of that short sell volume disappeared on the first day the rule went into effect. For Fannie Mae and Freddie Mac, it's more dramatic at 90 percent."
The SEC's emergency rule identified symbols critical to stability of the financial markets and ordered that the securities be delivered at the time short sells were settled. According to S3's Holt, analysis of his company's data shows the emergency rule appears to have all but eliminated the short selling of Fannie Mae and Freddie Mac securities, two institutions that many analysts feared were at risk of collapse.
"The short sell slowdown during the first day was very significant across the targeted symbols," Holt added. "While there is no way for data to reveal if a short sell is 'naked,' there's no doubt the SEC has put a rule in place that has drastically reduced short selling, especially with regards to the Fannie Mae and Freddie Mac mortgage institutions."
S3 Matching Technologies processes about 15 billion financial transactions daily and provides business intelligence reports on more than a million securities trade orders and stock options.
[no link] _________________ It's already over, now it's just a matter of adjusting.
Posted: Wed Jul 23, 2008 4:32 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
DantesPeak wrote:
So there does appear to be some reason to doubt the checks written by the FDIC.
I'm sorry. I guess I don't follow that. There's clearly enough money in the DIF to cover Indymac. Why would FDIC default on it's checks and leave depositors holding the bag? Even worse, why would it default on it's checks and leave WaMu holding the bag, when they're the next bail out?
The "official" explanation seems to me far more logical...that WaMu was afraid of people counterfeiting checks to try to take advantage of the chaos. Probably some regional manager overreacted, ended up in the news, got called to the carpet by his boss, and now has his resume up on monster.com looking for a new job. I also note that the original story was a one day thing. Though people keep quoting it, there's not been any further original news about the topic, which probably means it was sorted out last week. _________________ "I was born in a deep forest
I wish I could live here all my life
I am made from stones and roots
My home, these woods and roads
All my life I loved this sound
Of the woods all around
Eagles fly where the winds blow free" -Korpiklaani
Joined: Oct 23, 2004 Posts: 5496 Location: New Jersey
Posted: Wed Jul 23, 2008 4:51 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
smallpoxgirl wrote:
DantesPeak wrote:
So there does appear to be some reason to doubt the checks written by the FDIC.
I'm sorry. I guess I don't follow that. There's clearly enough money in the DIF to cover Indymac. Why would FDIC default on it's checks and leave depositors holding the bag? Even worse, why would it default on it's checks and leave WaMu holding the bag, when they're the next bail out?
The "official" explanation seems to me far more logical...that WaMu was afraid of people counterfeiting checks to try to take advantage of the chaos. Probably some regional manager overreacted, ended up in the news, got called to the carpet by his boss, and now has his resume up on monster.com looking for a new job. I also note that the original story was a one day thing. Though people keep quoting it, there's not been any further original news about the topic, which probably means it was sorted out last week.
I didn't say that the FDIC would default, just that there may be some doubt as to how fast their checks may clear due to the chaos.
Technically FDIC is a seperate entity, and that may require some internal FDIC authorization to commit funds to the new IndyMac that may never be repaid.
In the event of multiple bank failures at the same time, the FDIC would also require new Congressional approval to pay out funds if it has a capital deficit. _________________ It's already over, now it's just a matter of adjusting.
Posted: Wed Jul 23, 2008 4:59 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
DantesPeak wrote:
Technically FDIC is a seperate entity, and that may require some internal FDIC authorization to commit funds to the new IndyMac that may never be repaid.
Wouldn't they do that before they took control of the bank? That's their whole gig isn't it? Paying up when the bank doesn't have enough money. You think maybe they went into it without taking all the steps because of the run that was setting in?
Quote:
In the event of multiple bank failures at the same time, the FDIC would also require new Congressional approval to pay out funds if it has a capital deficit.
Yeah. I get that. Once the DIF becomes insolvent, we've entered a different paradigm, but that hasn't happened yet. _________________ "I was born in a deep forest
I wish I could live here all my life
I am made from stones and roots
My home, these woods and roads
All my life I loved this sound
Of the woods all around
Eagles fly where the winds blow free" -Korpiklaani
Joined: Dec 02, 2005 Posts: 6284 Location: Oil-addicted Southern Californucopia
Posted: Wed Jul 23, 2008 5:01 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
DantesPeak wrote:
...Their order sent out last week has greatly discouraged all kinds of short selling, not just naked short selling they obstensibly were trying to stop.
The irrepressible Kunstler on naked short selling, as only he can put it:
Quote:
The comprehensive bankruptcy of the United States, at every level, in all corners, atop each hill and mole-hill, and down not a few rat-holes, is preceding like some kind of hideous multi-media, inter-dimensional cosmic grand opera as produced and directed by the Devil. Every week, some bizarre new subplot is introduced by the stage managers, each turn and twist geared to produce maximum pain and carnage in the US economy, as if to foreclose any possibility of redemption on the way down...
...The howler of the week was the Securities and Exchange Commission's edict that Wall Street sportsters would be prohibited from trafficking in so-called "naked short" sales against a cherry-picked bunch of 19 banks and financial companies for the next two weeks. A cute trick, naked shorting is done by pretending to borrow a bunch of stocks, pretending to sell them high just before the share-price falls, pretending to buy them back at a lower price when the share price has fallen, and then pretending to return exactly the same number of lower-priced shares to the lender, pocketing the difference...
There's plenty more:
Pretend-O-Rama _________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
Joined: Dec 02, 2005 Posts: 6284 Location: Oil-addicted Southern Californucopia
Posted: Wed Jul 23, 2008 5:03 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Double post. Sorry. _________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
Joined: Mar 12, 2007 Posts: 885 Location: As close as I can get to the beginning of the pipe.
Posted: Wed Jul 23, 2008 5:07 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
We've seen this pyramid before in different forms; most recently Virgin Crude posted it within a LEAP article in another thread. Basically what the Fed is trying to do is let the red derivatives at the top of the pyramid go poof while trying to either bailout or unwind the securitized debt, depending on how friendly they are with the owner of the debt. They will have to do this by expanding the bottom of the pyramid (power and broad money) in order to at least square up the pyramid and reverse the instability. The longer that the Fed can draw out the process, the better.
The step today to guarantee F&F means that the US taxpayer and USD holders just ate a giant chunk of that green section of the pyramid. Talk about an unstable, hyperinflationary situation . . . . Oh the indigestion! _________________ "For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth; to know the worst and provide for it." --Patrick Henry
Joined: Oct 23, 2004 Posts: 5496 Location: New Jersey
Posted: Wed Jul 23, 2008 5:10 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
smallpoxgirl wrote:
DantesPeak wrote:
Technically FDIC is a seperate entity, and that may require some internal FDIC authorization to commit funds to the new IndyMac that may never be repaid.
Wouldn't they do that before they took control of the bank? That's their whole gig isn't it? Paying up when the bank doesn't have enough money. You think maybe they went into it without taking all the steps because of the run that was setting in?
The National Mortgage News went on to say that IndyMac was negotiating to sell all its businesses, but essentially the FDIC took over in a panic, cancelled pending deals, and had not lined up another bank to buy what was left. _________________ It's already over, now it's just a matter of adjusting.
Joined: Oct 23, 2004 Posts: 5496 Location: New Jersey
Posted: Wed Jul 23, 2008 5:15 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Zardoz wrote:
DantesPeak wrote:
...Their order sent out last week has greatly discouraged all kinds of short selling, not just naked short selling they obstensibly were trying to stop.
The irrepressible Kunstler on naked short selling, as only he can put it:
Kunstler has quite an intuitive grasp of the situation.
Actually the Fed may have taken this play from the Bank of Japan playbook a few years ago, when a similar anti-short selling was ordered into effect for a month before banks closed out their fiscal year. Their stock market went up for that month and then promptly resumed a decline.
Take note. _________________ It's already over, now it's just a matter of adjusting.
Last edited by DantesPeak on Wed Jul 23, 2008 5:24 pm; edited 1 time in total
Joined: Oct 23, 2004 Posts: 5496 Location: New Jersey
Posted: Wed Jul 23, 2008 5:23 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Iaato wrote:
We've seen this pyramid before in different forms; most recently Virgin Crude posted it within a LEAP article in another thread. Basically what the Fed is trying to do is let the red derivatives at the top of the pyramid go poof while trying to either bailout or unwind the securitized debt, depending on how friendly they are with the owner of the debt. They will have to do this by expanding the bottom of the pyramid (power and broad money) in order to at least square up the pyramid and reverse the instability. The longer that the Fed can draw out the process, the better.
The step today to guarantee F&F means that the US taxpayer and USD holders just ate a giant chunk of that green section of the pyramid. Talk about an unstable, hyperinflationary situation . . . . Oh the indigestion!
Clearly the F & F bailout bill that appears near passage was intended to reduce the actual commitment of new Fed money to as low a level as possible. That's because the Fed balance sheet is already two thirds full of garbage and there not much room for more cr*p. So the Treasury bascially is just guaranteeing everything at F & F, hoping it won't have to pay out the losses -estimated to possibly exceed $100 billion even by the CBO. In addition, the Fed and Treasury are hoping that F & F debt holders don't want to exchange their F & F debt for Treasury debt or even Federal Reserve notes (dollars).
F & F have at least $2 trillion in interest rate derivatives outstanding and who knows how many trillions $ more of other kinds. The Treasury knows, as shortonoil said, that it would take 200 years to straighten that out in a failure so they are just going to let those upper level derivatives disappear, if possible. If necessary, they'll pay out a $100 billion or more not to see that. _________________ It's already over, now it's just a matter of adjusting.
Joined: Dec 07, 2005 Posts: 1741 Location: Australia
Posted: Wed Jul 23, 2008 5:35 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Specop_007 wrote:
I cant believe on a peak OIL website people are applauding the Chinese and commenting on their global strength.
How about the fact they heavily subsidize fuel costs which is really eating into their budget, or the fact that when the Olympics are over they will probably slash that subsidy and their economy will have a sudden halt because of energy costs?
Its like people think China is iummune to energy costs....
I'll re-iterate one more time. Yuan has room to appreciate consiredably. That will make all imports cheap(er) for Chinese. This includes oil. Once the government allows for this to happen, there is no need for subsidies. _________________ Lets take a ride, and run with the dogs tonight
In suburbia
You cant hide, run with the dogs tonight
In suburbia
- Pet Shop Boys
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