IEHI Feed: The Mortgage Lender Implode-o-Meter

Bank deposits guaranteed for 3 years

Sun, 12 Oct 2008 16:13:18 GMT

"Australia will guarantee all bank deposits for three years and guarantee wholesale funding to Australian banks in an attempt to combat the global credit crisis, Australian Prime Minister Kevin Rudd said."

G7 poised to take joint action

Sun, 12 Oct 2008 15:53:56 GMT

"Finance ministers and central bankers from the Group of Seven leading economies agreed to take "urgent and exceptional" co-ordinated action in an effort to stabilise the global financial system as they left their meeting in Washington last night."

US Treasury waits in wings to save Morgan Stanley

Sun, 12 Oct 2008 15:50:38 GMT

"Morgan Stanley and Goldman Sachs, the last remaining independent investment banks, may receive cash injections from the American government as part of Treasury Secretary Henry Paulson’s plan to buy stakes in financial institutions. "

Treasury Trashes the Market, No Help from Ben

Sat, 11 Oct 2008 20:23:48 GMT

``Sickeningly, there’s likely to be little letup given the amount of supply that must be settled tomorrow and Monday and the certainty of more CMBs and various and sundry other forms of government paper raining down on the market next week. Another sign of the distress in the market was the explosion in the fee on TSLF swaps to 305 basis points. The market is simply coming apart at the seams, and I blame not the unwillingness of banks to lend to one another. I blame this cascade of Treasury supply. The US Government is exacerbating this mess.''

Paulson: Will Buy Equity "Soon"

Sat, 11 Oct 2008 20:22:02 GMT

``Paulson also seemed to say buying equity provided a bigger bang for the buck than buying troubled mortgage assets.''

Capital Flight is now being discussed

Sat, 11 Oct 2008 16:35:48 GMT

""Is this the beginning of the end for the dollar and the Treasury market? Is this the first sign of the bursting of the bubble in Treasury securities? That market, in a sense, represents the ultimate bubble as it exists at the whim and caprice of foreign investors, who have as participants in a Faustian bargain, financed our war(s) and our lifestyle so generously over the last decade. Maybe even that bizarre construct is crashing about us as we speak." "

Doug Noland is hopeful

Sat, 11 Oct 2008 16:28:28 GMT

"Doug Noland of Prudent Bear, author of the long-running Credit Bubble Bulletin weekly commentary that has foretold of the events now unfolding for many years, reflects on the future of the world and his four-month old child while Hoping There's Hope."

"Are Central Banks Making Libor WORSE?"

Sat, 11 Oct 2008 15:55:51 GMT

``Notice the huge spreads from bank to bank ... They suggest this is not a real market anymore. Real markets do not have this wide a variation. If it was a real market, these banks would have rates all similar to each other... Too much central bank liquidity has destroyed the inter-bank lending market.'' -- This was entirely predictable.

Fannie, Freddie to Buy $40 Billion a Month of Troubled Assets

Sat, 11 Oct 2008 15:16:44 GMT

This makes a lot of sense:

The Federal Housing Finance Agency, which placed the two companies in conservatorship on Sept. 7, directed them last month to start increasing their purchases of loans and mortgage-backed securities as the Treasury seeks to absorb underperforming and illiquid assets from financial companies.

It's really not all that surprising. After all, the U.S. government is the ultimate off-balance sheet place to stick toxic assets and now with Freddie and Fannie in "conservatorship", they can start sucking up more troubled assets sight unseen!

So in a sense, Fannie and Freddie are now the bailout that keeps on giving ... er taking ... whatever.

LIBOR defined, and why you care

Sat, 11 Oct 2008 15:08:06 GMT

"Since this is a credit market problem, the stock market is not the indicator you should be watcing. Google “TED Spread Bloomberg” That will bring up a chart that shows the spread of LIBOR vs. Treasuries. It hasn’t been this high since 1973. If the worldwide financial system is suffering a terrible fever then that chart is the thermometer. "

Gold prices getting fishier and fishier

Fri, 10 Oct 2008 21:58:33 GMT

The demand for American Gold Eagles is clearly not unprecedented. What's actually unprecedented is the suspension and allocation of Gold Eagle coins. Even amidst the booming demand of the pre-Y2K years, the US Mint never resorted to suspensions or allocation programs. Why is the US Mint having so much trouble keeping pace with demand this year?

Hank Paulson and Neel Kashkari star in "Mortages are Forever"

Fri, 10 Oct 2008 20:05:02 GMT

Coming soon to a bank near you, Hank Paulson and mini-Kash bring you:

Mortgages are Forever!

Hat tip to Rick for the inspiration!

(click the thumbnail above or here to see the full version)

Doctor asks federal judge to issue restraining order stopping bailout bill

Fri, 10 Oct 2008 19:57:35 GMT

"After reading Article I, Section 8 of the U.S. Constitution, I do not see where Congress has the legal authority to deprive its citizens of property in the form of taxation to effect the above act and bailout the troubled financial district," the complaint also states.

Global Melt Down Heats Up

Fri, 10 Oct 2008 17:44:49 GMT

" At this point the risk of an imminent stock market crash – like the one-day collapse of 20% plus in US stock prices in 1987 – cannot be ruled out as the financial system is breaking down, panic and lack of confidence in any counterparty is sharply rising and the investors have totally lost faith in the ability of policy authorities to control this meltdown."

Lehman Swap Auction Initial Results Show Payout of 90.25 Cents

Fri, 10 Oct 2008 15:47:24 GMT

"Sellers of credit-default protection on bankrupt Lehman Brothers Holdings Inc. would be forced to pay holders 90.25 cents on the dollar under initial results of an auction today, setting up the biggest-ever payout in the $55 trillion market."

AIG, Castigated for Resort Event, Plans Another One

Fri, 10 Oct 2008 15:43:38 GMT

"American International Group Inc., castigated by the White House, Congress and Barack Obama for hosting a $440,000 conference days after an $85 billion federal bailout, plans to hold another gathering for brokers next week. "

Roubini Discusses the Double D's, Deflation and Depression

Fri, 10 Oct 2008 15:37:38 GMT

"The financial market crisis has unfolded even quicker than Roubini expected (which is saying something), and the economist now thinks the Dow and S&P will suffer 50% declines from last October's peak vs. 40% previously."

AMERICAN HOME-Post Mortum

Fri, 10 Oct 2008 15:27:10 GMT

"American Home Mortgage Investment Corp. delivered to the U.S. Bankruptcy Court for the District of Delaware on September 30, 2008, an amended Chapter 11 plan of liquidation and disclosure statement. Subsequently, on October 8, 2008, the Debtors modified the Amended Plan, to reflect certain non-material changes."

How did GOP get $8 million from Wachovia?

Fri, 10 Oct 2008 15:25:34 GMT

"Wachovia Corp., a once-thriving financial giant now teetering on the brink of collapse, confirmed today that it was extending an $8 million loan to the cash-strapped National Republican Congressional Committee for last-minute activites to support GOP House candidates."

World Needs 1.5 Point Rate Cut to Avert Disaster, Roubini Says

Fri, 10 Oct 2008 15:17:22 GMT

"World financial officials should orchestrate rapid interest-rate cuts of at least 1.5 percentage points to help avert a depression, said Nouriel Roubini, the professor who two years ago predicted the financial crisis. "