Free Republic

Mortgage-backed securities—and the bankers who loved them—wreaked havoc last year, helping to pitch us into the deepest downturn since the Great Depression. Are you ready for a replay? Gird your loins. The signs are growing that there's a new Wall Street gold rush under way—for those complex bundles of mortgage loans that fueled banks' profits between 2005 and 2007. This year, prices for mortgage-backed securities are rocketing as federal stimulus dollars flood the market. But the difference with this "boom" is the center of gravity has shifted: from giddy, cowboy bankers to the Federal Reserve. The Fed is so eager...

Obama to announce new measures to boost lending for struggling small business owners WASHINGTON (AP) -- Amid misgivings over his spending blueprint, President Barack Obama has decided to provide billions of dollars in federal lending aid aimed at struggling small business owners.

Higher education can be a financial disaster. Especially with the return on degrees down and student loan sharks on the prowl. BY KATHY KRISTOF As steadily as ivy creeps up the walls of its well-groomed campuses, the education industrial complex has cultivated the image of college as a sure-fire path to a life of social and economic privilege. Joel Kellum says he's living proof that the claim is a lie. A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of...

Overview While it may look superficially similar to the recent implosions of such investment giants as Fannie Mae, Freddie Mac and Lehman, the takeover and bailout of AIG is quite different, and means that the market is entering the next and even more dangerous phase. What is driving the fall of AIG – and potential government losses that may far, far exceed the $85 billion bailout announced late on September 16th - is not mortgages or real estate (directly), but fears that AIG’s huge, global credit-default swap positions will unravel. The $62 trillion dollar credit derivatives market is 50 times...

PARIS (Reuters) - Private equity group Carlyle (CYL.UL) will look at ways to help investors who have lost money in Dutch-listed Carlyle Capital Corporation (CCC) (Amsterdam:CARC.AS - News), Carlyle co-founder David Rubenstein was quoted on Friday as saying. In an interview with France's Les Echos newspaper, Rubenstein said Carlyle had done all it could to help CCC, citing a $150 million credit line provided by its partners "no doubt at a loss" but wanted to try and make amends. "We are looking at all ways to help CCC investors who have lost their capital outlay. For the most part, these...

Americans giving up homes before other assets as credit bubble bursts By James Saft Published: March 6, 2008 LONDON: The way Americans go bust has changed fundamentally, and the implications for financial markets are both important and negative. In the more innocent days before the debt bubble popped, vulnerable borrowers tended to do everything they could to hang on to their houses. The result was that they would stop paying off their credit cards first, the car loans second and only last would they default on their mortgages. But for many Americans in the credit bust, especially an overburdened minority,...

On Monday morning, as fresh news of severe losses by the giant financial groups, UBS and Citigroup, revealed even more damage inflicted by this summer's credit squeeze, the reaction of stock markets was clear. They rallied. In Monday's trading, the Dow Jones Industrial Average, still the most widely watched index of the US stock market, managed to top the all-time peak itreached on July 19. This was broadly representative of the most important developed market indices. The US S&P 500 index and Germany's Dax index are within 1 and 2 per cent respectively of their mid-July highs. Neither the S&P...

/begin my translation [Outside Column] Europe's Credit Bubble More Dangerous Than China's If a private equity fund collapses, investors could lose part of their wealth, but if Europe's credit bubble implodes, it could completely wipe out many funds and banks in a blink Wolfgang Munchau, Columnist at Financial Times posted at 2007.06.08 14:29 / revised at 2007.06.09 04:39 Currently, there are two bubbles in the world. One is the bubble of China's stock market, and the other is Europe's credit bubble. Most people talk about the China's bubble, but in reality, the Europe's bubble is far more dangerous. The...

Exec warns of credit-bubble risks By Warren Giles and Mark Pittman Bloomberg News Article Last Updated: 05/10/2007 02:09:22 AM MDT Zurich - Bank of America Corp. chief executive Ken Lewis said a so-called credit bubble is about to break after six years of historically low interest rates and relaxed lending criteria. "We are close to a time when we'll look back and say we did some stupid things," Lewis said, speaking at a lunch at the Swiss-American Chamber of Commerce. "We need a little more sanity in a period in which everyone feels invincible and thinks this is different." Demand...

The problem isn't confined to urban areas — families in well-off communities are finding that a risky mortgage and some bad luck can put a home at risk. Pam and Nathan Weisel live in "The Preserve," a freshly painted subdivision carved from the farmland in Norwood Young America, Minn. For now. Three months late on their mortgage, with a foreclosure notice in hand, the Weisels and their six children don't know how much longer they can call The Preserve home. The couple was hard-pressed to pay their $1,841 monthly mortgage after Nathan lost his sales job and health problems kept...

(CBS/AP) Americans increased their borrowing in April at the fastest pace in 10 months as credit card spending and auto loans both picked up. The Federal Reserve reported Wednesday that consumer borrowing rose at an annual rate of 5.9 percent in April, a significant increase from a 0.8 percent gain in March. It was unclear, however, how long the rebound in borrowing would last given a decline in consumer confidence during May that was attributed to worries about soaring prices for gasoline and other energy products. The 5.9 percent rate of increase for overall borrowing was the biggest gain since...

How the Credit Bubble Boat will sink: by hitting the iceberg of inflation. Grab your life jackets... Yesterday, driving back from a horse show in Bath, we stopped for gas. Britain has gone metric in order to stay in harmony with her European trading partners, but she still lists distances in miles. Gasoline is measured out in liters, just as it is in France, but it is priced in pounds. The price for a liter of diesel fuel was 99.9 pounds. If we did the math right, this is equivalent to about $6.50 per gallon. By comparison, we read today...

The cash machine that sustained a world boom is about to close, and it's going to get ugly, says Ambrose Evans-PritchardOne by one, the eurozone, the Swedes, the Swiss and now even the Japanese, are turning off the tap of ultra-cheap credit that has flushed the global system for the past year, keeping the ageing asset boom alive. The "carry trade" - as it is known - is a near limitless cash machine for banks and hedge funds. They can borrow at near zero interest rates in Japan, or 1pc in Switzerland, to re-lend anywhere in the world that...

Bush prolongs the Greenspan agony By Peter Eavis 5/27/2004 People often look back and wonder what JFK would have done in Vietnam had he been around to direct the war he got the country into. It will be almost as interesting to see how Fed Chairman Alan Greenspan handles the credit bust that is the likely consequence of the easy-money policies he has implemented as head of the nation's central bank. There is a very high chance that the 78-year-old Greenspan will be around to deal with his own mess, after President Bush renominated him as Fed chairman May 19....