make my way

The Band

Living In Our Vans - USA

Here comes the Bailout

STATE-BACKED loans for business are to be considered by the Government in September as efforts get underway to revive the flagging economy.

The Sunday Independent has learned that officials from the Department of Finance have been involved in talks, in recent weeks, with several of the country's major banks with a view to restoring liquidity in business lending.

It is understood that the introduction of State-guaranteed loans for businesses is among the measures under consideration as the Government looks for ways to revive economic activity in the wake of Ireland's property crash.

A source close to the negotiations stressed, however, that State-backed business loans -- should they be introduced -- would only be given where a sound business case was proposed by the prospective borrower.

"Effectively, the State, as well as the bank, will be lending money to business, so we have to be as sure as we can that we will get that money back. It belongs to the taxpayer," the source said.

The proposal is just one a range of measures currently being considered by Government officials as part of a stimulus package Taoiseach Brian Cowen is expected to bring to Cabinet in September for its consideration.

The Sindo

Clarke and Dawe's spin on the credit crunch

The Spiral

Back to the future

How Wall St. set us up for the fall-Nomi Prins

Desperate Households - USA

Property boom over in Spain

Jingle Mail

Economy of the living dead

The subprime monster won’t have completed its damage until the end of next June. ALT-A loans are in play to reset over the next three years. They are double the volume in dollars of subprimes. Now beginning for the next five years we have Option Arm pick-an-pay loans, whose dollar value is five times greater than subprime and ALT-A loans. $500 billion in ARMs will reset this year more than half of which will become foreclosures, far more than anticipated are simply walking away from their homes. The worst is ahead of us. Three to five years to the bottom and at least five years on the bottom after that. As we predicted bank losses will be over $2 trillion, plus in excess of $2 trillion in losses for Fannie and Freddie. Worse yet, interest rates are higher than a year ago and we forecast mortgage rates ½% higher by the end of the year.


What we have is systemic failure in our banking system; that is being drawn out as long as possible by the Fed, which is hoping for a miracle. All kinds of gimmicky is being employed by the Fed, banks, Wall Street and corporate America. As we said banks alone are looking at $2 trillion in losses. It is not only American banks that are in trouble. The ECB banks took down 40% of the toxic CDOs and SIVs. Housing markets in Spain, Ireland, England, Italy, Australia and New Zealand will take trillions in losses. The amount of money in US banks that is uninsured is more than $2 trillion. America will hit the wall some time within the next three years and when it does there will be no banking system left and what will be in the banks will be worth 50% or more less than it is today due to inflation. Gold is where it is because of de-leveraging and negative bullion borrowing rates. Take advantage of this great opportunity to buy more gold and silver related assets. We also warn you to remove any excess funds from banks and put them in gold and silver assets and Swiss franc government bonds.

The International Forecaster

Here we go again

Anyone get the feeling that the banking and credit crisis is about to get worse? We may be waiting a lot longer than the third quarter for the bleeding to stop.
J.P. Morgan seems to be taking one of the two strategies that have emerged during the crisis: hold onto the junk and hope the market turns. This is the same plan that's in place at Lehman Brothers Holdings Inc, and was in place at Bear Stearns Cos.
There's a technical term for the other strategy that's being employed at Merrill Lynch & Co. Dump it.
Merrill employed this strategy back on July 29 when it took a healthy haircut and accepted 22 cents on the dollar for about $30 billion in collateralized debt obligations that were stinking up the balance sheet. About the only good news the market took from this was that there was actually someone willing to buy it.
The point is that even though there are different strategies, there is a single truth: the books on Wall Street are still loaded with stuff that stinks.
Not everyone is holding their noses. Brad Hintz, the Sanford Bernstein analyst and former chief financial officer at Lehman, is among the best who have assessed the situation. He doesn't think the Alt-A loans and the subprime loans are going to be a problem. Most of that stuff has been written off. "After all, the marks can't go past zero," he wrote me in an e-mail.
'Impossible to hedge'
That doesn't mean Hintz is whistling like Frank Quattrone past the courthouse. He's worried about a couple of things: commercial mortgage backed securities, the kind J.P. Morgan copped to having $11.6 billion worth, and good old prime mortgages, which like the Titanic would never default and are now taking on water.
If the prime stuff goes, the whole system implodes and we're all sleeping in the park. The commercial stuff is more likely to fail.

MarketWatch

The future of financials is 'green'.

He's Back

Casey Serin Is Back online





Here is some background info on the Guy for those that did not follow the Trainwreck.
Caseypedia



TrueCasey.com


Escapemyhouse.com

It's all Good

Financial Crises Freeze

Global credit crisis- update.

Debt Monkey

Click on graph for larger image in new window.

6. Conclusions
In the years immediately before and after EMU membership,
Ireland experienced very high rates of growth in PSC. This was a
logical outcome in a situation of strong growth in real GDP and a
move to a regime which was seen as bringing about a permanent
reduction in real interest rates. While very rapid credit growth
naturally raises concerns about the stability of the financial
system, it may also have had beneficial effects in terms of real
economic growth. The challenge is in keeping the balance right.
The results from the benchmarking of Irish PSC against other
euro-area countries are, on balance, reassuring; Ireland is not an
outlier. The central comparison with the rest of the euro area, in
terms of the ratio of PSC to GDP, found that we are part of a
mid-ranking group of countries which includes Austria, Germany,
Luxembourg and Spain. Nor is the proportion of credit going to
households excessive. On the euro-area benchmark, Ireland still
ranks seventh in terms of the share of PSC accounted for by
households. This suggests that at the overall level risks in Ireland
are no greater than elsewhere. Some individual borrowers, and
perhaps lenders, may be behaving imprudently and
developments must be monitored, so as risks in these areas can
be identified.
A favourable position emerges in terms of the present cost of
credit to the household sector. Two factors influence this: first, in
Ireland a high proportion of personal credit is secured on
residential property; and, second, a large portion of lending for
housing is at variable interest rates at a time when short-term
interest rates are at historically low levels. This latter point
contains the ‘sting in the tail’. It means that the exposure to
interest-rate changes is greater here. If and when short-term
interest rates rise, the cost of household borrowing in Ireland
would be expected to increase more quickly than that in many
other euro-area countries.
The vulnerability of Irish households to higher interest rates is
amplified by the marked rise in the ratio of household credit to
personal disposable income in recent years. Aggregate personal
indebtedness is now approaching 100 per cent of disposable
Quarterly Bulletin Spring 2004
144
income and rising fast. The larger stock of personal debt means
that consumer expenditure will be more sensitive to fluctuations
in income, especially arising from unemployment and interest
rates. While the greater vulnerability of the Irish economy to
increases in short-term interest rates is not of immediate concern,
as debt levels increase in absolute terms so do the risks to growth
from either a tightening in monetary policy or a slowdown in
economic activity. Certain areas of the housing market have
been identified by the IMF as being particularly exposed to such
developments (IMF, 2003). This underlines the need for vigilence
and prudent lending practices if the beneficial effects of past
credit growth are to be retained.
The acceleration in the growth of PSC in recent months is also
of concern. Following modest growth in 2002, the annual
adjusted rate of PSC growth strengthened last year and reached
19.3 per cent in February 2004, over three times the euro-area
rate of 5.8 per cent. While our end-2003 position within the euro
area was comfortable, there is a limit to the extent that Ireland
can sustain rates of credit growth which are a multiple of the
euro-area average. If such differences were to persist, Ireland
could become an outlier within a few years.

Irish Central Bank

The Renegade Economist

Uk House Prices

The Crunch one year on

Northern Rock

A Bad Day at the Office

US Freddie Mac and the Housing market

Irish House Prices

Click on graph for larger image in new window.

Mr.Doom and Gloom

Whitney's Wisdom

Monkeys

Housing Lenders Fear Bigger Wave of Loan Defaults

The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.

Homeowners with good credit are falling behind on their payments in growing numbers, even as the problems with mortgages made to people with weak, or subprime, credit are showing their first, tentative signs of leveling off after two years of spiraling defaults.

The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.

The mortgage troubles have been exacerbated by an economy that is still struggling. Reports last week showed another drop in home prices, slower-than-expected economic growth and a huge loss at General Motors. On Friday, the Labor Department reported that the unemployment rate in July climbed to a four-year high.

While it is difficult to draw precise parallels among various segments of the mortgage market, the arc of the crisis in subprime loans suggests that the problems in the broader market may not peak for another year or two, analysts said.

New York Times

After the Bubble, Ghost Towns Across America