http://www.freerepublic.com/tag/subprime/ en-us Sat, 5 Jul 2008 19:29:15 GMT Focus Forum 15 http://www.freerepublic.com/focus/f-news/2041192/posts How did the U.S. financial crisis happen? A review of the road to ruin reveals a course littered with more villains than heroes. No, it’s not the Great Depression, but the United States is facing a nasty economy-wide retrenchment following the excesses of the 2000s, with no easy way to dance through it. Think 1979 to 1982, when then U.S. Federal Reserve Chairman Paul Volcker exorcised consumer price inflation from the economy. The difference today is that the inflationary explosion has been absorbed by prices of assets—houses, stocks and bonds, office buildings—rather than by the prices of things you buy... Foreign Policy http://www.freerepublic.com/focus/f-news/2041192/posts#comment Sat, 5 Jul 2008 19:29:15 GMT http://www.freerepublic.com/focus/f-news/2039316/posts Signature home loan of Golden West eliminated amid housing bust SAN FRANCISCO (MarketWatch) -- Wachovia Corp. said on Monday that it won't offer mortgages with negative amortization features anymore, one of the main types of home loans offered by Golden West, the mortgage giant the bank acquired for $24 billion roughly two years ago. Wachovia Wachovia also said it's waiving pre-payment penalties on its so-called Pick-a-Pay mortgages, which allow borrowers to choose between several different monthly payments. The lower payment options increased the total amount owed on these mortgages, which is known as negative amortization. "For all new loan originations,... MarketWatch http://www.freerepublic.com/focus/f-news/2039316/posts#comment Tue, 1 Jul 2008 18:33:16 GMT http://www.freerepublic.com/focus/f-news/2035959/posts Uncovering the roots of the disastrous home mortgage bubble that popped last year will keep economic historians busy for decades. Yet, one factor has so far been largely overlooked: the bipartisan social engineering crusade to drive up the rate of homeownership by handing out more mortgages to minorities. More than a negligible amount of the blame for the mortgage meltdown can be traced back to multiculturalism: government-mandated affirmative-action lending, demographic change, illegal immigration, and the mind-numbing effects of political correctness. The chickens have finally come home to roost. About half of all mortgages for blacks and Hispanics are subprime, versus... Taki's Magazine http://www.freerepublic.com/focus/f-news/2035959/posts#comment Wed, 25 Jun 2008 02:08:48 GMT http://www.freerepublic.com/focus/f-news/2033651/posts More than 400 people have been arrested since March as part of a sweeping Justice Department crackdown on alleged mortgage fraud schemes. Ex-Bear Stearns execs could face criminal charges for misleading investors. More Photos The FBI said the schemes — 144 mortgage fraud cases, resulting in 406 arrests between March 1 and June 18 — caused $1 billion in mortgage losses and have contributed to the nation's housing crisis. The arrests, dubbed operation “malicious mortgage,” were announced Thursday along with the separate indictments of two Bear Stearns hedge fund managers on fraud, conspiracy and insider trading charges — the first... http://abcnews.go.com http://www.freerepublic.com/focus/f-news/2033651/posts#comment Fri, 20 Jun 2008 01:06:31 GMT http://www.freerepublic.com/focus/f-news/2033376/posts Two former managers at investment bank Bear Stearns have been arrested in New York over the collapse of the bank's hedge fund last year. Reports say Ralph Cioffi and Matthew Tannin will face charges in connection with their management of hedge funds that collapsed in June 2007. The bank's hedge funds bet on the high-risk sub-prime mortgage market in the US before it collapsed. Authorities in Brooklyn are due to give details about the case later. FBI spokesman Jim Margolis told the BBC the men faced criminal charges of "securities fraud related to their management of two Bear Stearns hedge... BBC News http://www.freerepublic.com/focus/f-news/2033376/posts#comment Thu, 19 Jun 2008 16:04:06 GMT http://www.freerepublic.com/focus/f-news/2033480/posts Former hedge fund managers Matthew Tannin and Ralph Cioffi have been arrested by the Federal Bureau of Investigation, charged with securities fraud and conspiracy in connection with their management of two Bear Stearns hedge funds which collapsed last summer, a bellwether event in the subprime and credit crisis. The two are the highest level executives charged in the subprime mess to date. ...... fox business http://www.freerepublic.com/focus/f-news/2033480/posts#comment Thu, 19 Jun 2008 19:37:03 GMT http://www.freerepublic.com/focus/f-news/2033145/posts The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist. A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion... Telegraph UK http://www.freerepublic.com/focus/f-news/2033145/posts#comment Thu, 19 Jun 2008 02:37:37 GMT http://www.freerepublic.com/focus/f-news/2033041/posts NEW YORK (MarketWatch) -- Amplifying on the discussion about increasing oversight of the global financial system, one of America's top banking regulators called for more restrictions on risk, liquidity and capital at investment banks. ... "It makes sense to extend some form of greater prudential regulation to investment banks as well as a process or protocol for dealing with a systemically significant investment bank approaching failure," Sheila Bair, chairman of the Federal Deposit Insurance Corp., said Wednesday. ... Big brokerage firms like Goldman Sachs Group, Lehman Brothers Holdings and Morgan Stanley are facing increasing calls that they should be regulated... MarketWatch http://www.freerepublic.com/focus/f-news/2033041/posts#comment Wed, 18 Jun 2008 23:28:11 GMT http://www.freerepublic.com/focus/f-news/2032588/posts Wall St rattled by inflation, credit crisis and weak housing sector Wednesday June 18, 2008, 7:37 am Wall Street investors have been rattled overnight by inflation fears, the credit crisis and the weak housing sector with its implications for economic growth. There has been a surge in business price inflation, with the Producer Price Index jumping 1.4 per cent in May, exacerbated by energy and food costs. Also in May, housing starts across America have fallen 3.3 per cent to their lowest level in 17 years. Investment firm Goldman Sachs has warned that US banks will collectively need to raise... ABC(Australia) http://www.freerepublic.com/focus/f-news/2032588/posts#comment Wed, 18 Jun 2008 01:33:54 GMT http://www.freerepublic.com/focus/f-news/2032155/posts 'India's GDP to grow at 9.5% in FY 09' Mumbai, June 16: India's real GDP is expected to grow at an impressive 9.5 per cent in FY 09, the Centre for Monitoring Indian Economy (CMIE) said in its monthly review in Mumbai. The Indian Economy is heading towards the fourth consecutive year of an over-9 per cent growth and like in the last five years, growth this year too was expected to be driven by capital investments happening in India, CMIE said. As per CMIE CapEx Service, projects worth Rs 3.4 lakh-crore are scheduled for commissioning in FY 09. This... Financial Express (India) http://www.freerepublic.com/focus/f-news/2032155/posts#comment Tue, 17 Jun 2008 07:43:16 GMT http://www.freerepublic.com/focus/f-news/2031811/posts NEW YORK -- Lehman Brothers Holdings Inc.'s fiscal second-quarter loss of $2.8 billion matched its preannounced forecast a week ago, in results Chairman and Chief Executive Richard S. Fuld Jr. said were "totally unacceptable." ...losses were caused "in hindsight" by poor choices in its plunge into making high-risk loans for leveraged buyouts and accumulating mortgages for packaging into securities. ... In a sign of how worried investors are about a company's ability to finance its operations with debt, Lehman boasted that its leverage ratio fell to 24.3 from 31.7 at the end of the first quarter and 28.7 last year.... Wall Street Journal http://www.freerepublic.com/focus/f-news/2031811/posts#comment Mon, 16 Jun 2008 15:50:46 GMT http://www.freerepublic.com/focus/f-news/2030587/posts In 2004, as regulators warned that subprime lenders were saddling borrowers with mortgages they could not afford, the U.S. Department of Housing and Urban Development helped fuel more of that risky lending. Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more "affordable" loans made to these borrowers. HUD stuck with an outdated policy that allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing. Housing experts and some congressional leaders... The Washington Post http://www.freerepublic.com/focus/f-news/2030587/posts#comment Fri, 13 Jun 2008 14:48:00 GMT http://www.freerepublic.com/focus/f-news/2029708/posts Politicians deploy righteous indignation like college students use credit cards—to excess and with abandon. For such seasoned performers, the emotion is easy to muster, and there are few upfront costs. Rail against powerful interests or the mendacity of your opponent on the stump, and the crowd goes nuts. But there are sometimes hidden costs in the fine print, interest payments not due for months, especially when the outrage is calculated for maximum political effect. And that outrage came back to haunt Barack Obama Wednesday when Jim Johnson, the man running his vice presidential search team, stepped down after the Wall... Time Magazine http://www.freerepublic.com/focus/f-news/2029708/posts#comment Wed, 11 Jun 2008 23:01:50 GMT http://www.freerepublic.com/focus/f-gop/2028650/posts <p>So this summer,there will be another confrontation. BillO lives on Long Island. I plan on chartering at least one bus - hopefully more - from New York City. We'll visit Bill with vets and Jews and African-Americans and peacefully set forth our grievances. We'll ask for an apology and suggest ways in which BillO might improve his behavior in the future.</p> Environmental Republican http://www.freerepublic.com/focus/f-gop/2028650/posts#comment Tue, 10 Jun 2008 02:16:22 GMT http://www.freerepublic.com/focus/f-news/2023198/posts    Another Step In The Wrong Direction May 29, 2008 Whenever the government intervenes to solve a free market problem the outcome is always the same...ten new problems are created and the original problem remains unsolved. And Democrat Senator Christopher Dodd’s “Federal Housing Finance Regulatory Reform Act of 2008” is no exception. According to Dodd, this legislation, “marks tremendous progress in my ongoing effort to help stabilize our markets and provide relief to hundreds of thousands of Americans who, due to no fault of their own, are struggling to keep their homes.” “Due to no fault of their own”? What is he talking about? I... dansargis.org http://www.freerepublic.com/focus/f-news/2023198/posts#comment Thu, 29 May 2008 21:37:31 GMT http://www.freerepublic.com/focus/f-news/2021943/posts BIRMINGHAM, Ala. — In 2002, a banker named Charles E. LeCroy arrived here with a novel pitch to ease taxpayers’ burden. Some Wall Street wizardry, he said, could lighten their load. ... Six years on, officials here are still struggling to untangle the financial web that Mr. LeCroy and his fellow bankers spun. Jefferson County is teetering on the brink of bankruptcy after a series of exotic bond deals that the bankers concocted went wrong ... During the last few years, Jefferson County entered into a series of complex transactions, called swaps, worth a staggering $5.4 billion. The accusations and... New York Times http://www.freerepublic.com/focus/f-news/2021943/posts#comment Tue, 27 May 2008 16:16:49 GMT http://www.freerepublic.com/focus/f-news/2019981/posts The Financial Times business newspaper reported Wednesday that Moody's wrongly assigned triple-A ratings to complex European debt products called constant proportion debt obligations, or CPDOs. Moody's said it rated 44 European CPDO tranches totaling about $4 billion. It said it also hired a law firm to conduct an external investigation into why the coding error in a computer model caused the products to be given a rating four notches higher than they merited. Forbes/cp, http://www.freerepublic.com/focus/f-news/2019981/posts#comment Fri, 23 May 2008 00:26:52 GMT http://www.freerepublic.com/focus/f-news/2018409/posts A bailout that wouldn't cost you a dime There's a way to keep buyers in their homes that's simple and fair, but lenders have persuaded Congress to set it aside. By Liz Pulliam Weston Congress is considering a plan that could prevent foreclosures for about half a million homeowners. The legislation, which passed the House earlier this month, would do the following: Allow strapped borrowers to refinance into more-affordable, federally guaranteed mortgages. Aid only homeowners, not investors or speculators. Require those homeowners to split any future home profits 50-50 with the government. Cost taxpayers an estimated $1.7 billion, according to... MSN Money http://www.freerepublic.com/focus/f-news/2018409/posts#comment Tue, 20 May 2008 00:52:08 GMT http://www.freerepublic.com/focus/f-news/2017004/posts Construction of new homes posted the biggest increase in more than two years in April. While it was a rare spot of good news for the housing market, analysts said it's far too soon to declare an end to the prolonged slump. The Commerce Department reported Friday that housing construction rose by 8.2 percent in April to a seasonally adjusted annual rate of 1.03 million units. Building of single-family homes continued to weaken, however. The growth came from a big jump in apartment construction. Analysts predicted the surprising rebound in April would be temporary given the headwinds builders are still... AP http://www.freerepublic.com/focus/f-news/2017004/posts#comment Fri, 16 May 2008 19:17:10 GMT http://www.freerepublic.com/focus/f-news/2016101/posts US slump to prop up India as next offshoring hotspot 14 May, 2008, 0750 hrs IST,Chiranjoy Sen, TNN BANGALORE: Belt-tightening by global technology giants—a fallout of US economic slowdown—is likely to reinforce India as the most preferred offshoring destination. Top technology firms are actively moving part of their workforce from the US, UK and European markets to lower-cost destinations. They cite availability of local talent, better delivery and conducive enviroment as key offshoring reasons. While they may not admit it, firms would be looking at stepping the gas on offshoring to curb bloating costs and to lift margins. Networking and... Economic Times of India http://www.freerepublic.com/focus/f-news/2016101/posts#comment Thu, 15 May 2008 00:37:08 GMT http://www.freerepublic.com/focus/f-news/2015830/posts The number of properties with a filing...declined 5 percent from March. California had the most properties facing foreclosure at 64,683, an increase of 112 percent from April 2007. The number of properties declined less than 1 percent from March. The state posted the second-highest foreclosure rate in the country, with one in every 204 households receiving a foreclosure-related notice. California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates, led by Merced, with one in every 66 households receiving a foreclosure notice. Yahoo http://www.freerepublic.com/focus/f-news/2015830/posts#comment Wed, 14 May 2008 15:41:40 GMT http://www.freerepublic.com/focus/f-news/2014475/posts America May Well Be Only Halfway through the House-Price Bust < SOUNDING more like a cartographer than central banker, Ben Bernanke this week showed off the Federal Reserve's latest gizmo for tracking America's property bust: a series of maps that colour-code price declines, foreclosures and other gauges of housing distress for every county in the country. The Fed chairman's goal was to show graphically that falling prices meant more foreclosures, and he went on to urge lenders to write down the principal on troubled loans where the house is worth less than the value of the mortgage. But the jazzy... The Economist http://www.freerepublic.com/focus/f-news/2014475/posts#comment Sun, 11 May 2008 19:04:21 GMT http://www.freerepublic.com/focus/f-bloggers/2013992/posts The subprime mortgage meltdown has cost the world 15% of its market capitalization, about $9 trillion. The primary culprit who caused all of this financial loss, pain and suffering is not the mortgage companies. Neither is it the overextended borrowers. It is our own federal regulations interfering with the free market. ... The unintended consequences of good intentions can do more economic harm than all the mean-spirited greed within capitalism. Part of the good intention was forcing banks to be good neighbors by making altruistic loans that discriminated in favor of underprivileged communities. Any attempts by banks to set higher... The Virginian http://www.freerepublic.com/focus/f-bloggers/2013992/posts#comment Sat, 10 May 2008 12:12:25 GMT http://www.freerepublic.com/focus/f-news/2013196/posts Former Federal Reserve Chairman Alan Greenspan said on Thursday that the worst of the credit crisis is over, according to attendees at a New York speech. Greenspan also said house prices still had a long way to fall and it was unlikely they would stabilize by year-end, according to meeting attendees who provided Reuters details of the speech delivered at the Alternative Public Strategies Conference. The attendees, who declined to be identified by name, said Greenspan mentioned that U.S. growth was likely to be sluggish for an extended period of time. The U.S economy is reeling from a housing-led slowdown,... Reuters http://www.freerepublic.com/focus/f-news/2013196/posts#comment Thu, 8 May 2008 19:35:36 GMT http://www.freerepublic.com/focus/f-bloggers/2011843/posts In a speech Monday night before the Columbia Business School’s 32nd Annual Dinner, Fed Chairman Ben Bernanke said that, “”About one quarter of subprime adjustable-rate mortgages are currently 90 days or more delinquent or in foreclosure.” He also said that, “Delinquency rates also have increased in the prime and near-prime segments of the mortgage market, although not nearly so much as in the subprime sector. As a consequence of rising delinquencies, foreclosure proceedings were initiated on some 1.5 million U.S. homes during 2007, up 53 percent from 2006, and the rate of foreclosure starts looks likely to be yet higher... NationalEconomist.com Blog http://www.freerepublic.com/focus/f-bloggers/2011843/posts#comment Tue, 6 May 2008 10:14:43 GMT