Credit Writedowns » cramdowns

More on Banks Making Shed Loads But Fannie And Freddie “Losing Money as a Matter of Policy”

Edward Harrison — Wed, 01 Feb 2012 20:30:01 +0000

Fannie and Freddie have already been nationalized and the government is already on the hook for hundreds of billions of dollars of losses as a result. Clearly, this makes it a lot easier to use the GSEs as vehicles to pump money into the economy because any incremental loss is completely obscured by the existing gargantuan losses. Fannie and Freddie can essentially become a giant stimulus slush fund for the Obama Administration as we head into the 2012 election

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I repeat: The Fed’s Permanent Zero rate policy is toxic

Edward Harrison — Fri, 27 Jan 2012 14:20:05 +0000

Permanent zero can work over the medium-term but the economy is dependent on employment growth and monetary policy doesn't drive that

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[PREMIUM] The Fed’s Rate easing and Obama’s Mortgage refi plan are bullish

Edward Harrison — Thu, 26 Jan 2012 19:30:41 +0000

Investors must still be worried about the fallout from the European meltdown. However, the situation in the US is looking much better than it did last week because of this aggressive policy response

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Obama’s mortgage relief and housing plan 4 Mar 2009
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News from around the web: 2009-08-06

Edward Harrison — Fri, 07 Aug 2009 01:59:30 +0000

Calculated Risk: Google Maps Shows Foreclosure Status You can get data on just about anything these days. Amazing maps. Almost scary. Fannie Mae seeks $US10.7b in aid after loss Here’s a thought: if Citi were in government hands and taking down writedowns like Fannie, what do you think the scale of losses would be? Confidence

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News from around the web: 2009-07-25 25 Jul 2009
News from around the web: 2009-07-20 20 Jul 2009
News from around the web: 2009-07-27 27 Jul 2009

Links: 2009-05-02

Edward Harrison — Sat, 02 May 2009 08:43:06 +0000

Berkshire’s Munger Favors ‘100% Ban’ on Credit Swaps – Bloomberg.com Berkshire Hathaway Inc. Vice Chairman Charles Munger said he supports an outright ban of credit- default swaps to prevent speculators from profiting on the failure of companies. The Mess That Greenspan Made: Mortgage lender blowback I was wondering when the man with a tan was

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Links: 2009-04-24 24 Apr 2009
Links: 2009-01-05 5 Jan 2009
Links: 2009-01-09 9 Jan 2009

Jon Stewart’s indictment of CNBC

Edward Harrison — Fri, 13 Mar 2009 11:38:48 +0000

Last night I featured a video from Jon Stewart that skewered CNBC, and specifically Jim Cramer. The video is quite funny as Jon Stewart's show is a comedy show. However, since that segment aired, Jon Stewart has decided to end the comedy and take a much harder and more serious tone on this issue. Today I would like to highlight last night's Jon Stewart interview with Jim Cramer because it is not funny. It is an indictment of CNBC, of Jim Cramer, and of the entire financial media as a complicit enabler of the most prolific credit bubble in history

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More Warren Buffett on CNBC 9 Mar 2009

Cramdowns are coming your way

Edward Harrison — Wed, 04 Mar 2009 13:10:53 +0000

Below is an interview with an expert on the issue of mortgage cramdowns. Basically, this issue is all about debt forgiveness for borrowers and writedowns for lenders. Lenders do not like cramdowns for that reason. See below for a view on cramdowns from Paul Van Valkenburg of the Mortgage Industry Advisory Corp. Warning: you should expect him to have a negative bias given who he works for. I actually like cramdowns. Van Valkenburg is looking at this from an investor's perspective and wants senior creditors not to be negatively impacted by the coming cramdown legislation. Nevertheless, I am posting this video because it is informative as to the impacts on mortgage-backed securities, mortgage servicing and housing

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Citi agrees to do cramdowns 8 Jan 2009
Cramdowns and refis won’t need appraisals 28 Jan 2009
Bank failures to surge in coming years 9 Jun 2008

Links: 2009-01-28 – blogger edition

Edward Harrison — Wed, 28 Jan 2009 21:01:00 +0000

Here are some worthwhile contributions from the econblgger world I think you should definitely read

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Links: 2008-12-16: the deflation edition 16 Dec 2008
Links: 2009-01-09 9 Jan 2009
Links: 2009-01-25 25 Jan 2009

Cramdowns and refis won’t need appraisals

Edward Harrison — Wed, 28 Jan 2009 20:10:15 +0000

In November, the U.S. federal agencies which oversee the banking system proposed new guidelines for real estate appraisals. One would imagine that these guidelines would be in keeping with the new more stringent regulatory frame of mind the financial services sector. This is not the case. In fact, the new proposal appears to entirely eliminate mandated written appraisals in connection with cramdowns and refis

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Citi agrees to do cramdowns 8 Jan 2009

Links: 2009-01-25

Edward Harrison — Mon, 26 Jan 2009 01:23:24 +0000

‘Drug money flowed into banks’ – Fin24 South Africa (This is a must-read article) California’s First Centennial Bank Shut by Regulator – Bloomberg.com (Another FDIC Friday night special) Older workers escaping the ax – MSN Money (Very heartening to see this trend, even if it is for legal reasons alone) Freddie Seeks Up to $35

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Links: 2009-01-09 9 Jan 2009
Links: 2009-01-05 5 Jan 2009
Links: 2009-01-11 11 Jan 2009

Links: 2009-01-09

Edward Harrison — Fri, 09 Jan 2009 16:25:37 +0000

The big news is the economy and President-elect Obama's reaction to it. The pundtitocracy has really been hammering him on his staff picks and the meat of his stimulus package. To be sure, there have been a few positive notes about Obama's plan and what he has to say, but there have also been a number of voices of skepticism. I would say in defense of Obama that he is trying to spend stimulus money, but only on things that are not wasteful and pork-barrel spending. I don't think his stimulus is enough but I appreciate his efforts to stop government waste. The first section below is dedicated to that theme. Beyond that, I also have a number of news items from around the web on the global economy. Soon it will be the weekend. So enjoy and have a great weekend

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Links: 2009-01-02 2 Jan 2009
Links: 2009-01-03 3 Jan 2009
Links: 2009-01-05 5 Jan 2009

Citi agrees to do cramdowns

Edward Harrison — Thu, 08 Jan 2009 21:32:39 +0000

After meetings with lawmakers, Citigroup has agreed to back legislation that would allow bankruptcy judges to alter the amount due on mortgage principal, so called cram downs. As it stands today, all other debtors including corporations have the cram down option available in bankruptcy court. However, changes to bankruptcy law have eliminated this option for mortgages, creating an impasse as house prices have dropped

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Merrill and Citi are the big losers this season 18 Jul 2008
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Confessions of an Austrian economist

Edward Harrison — Wed, 10 Dec 2008 13:45:08 +0000

My Austrian School background has been useful as a lens through which to view the credit bubble and crash. Central to this view is the precept that easy money is the problem and not the solution. However, as the crash has unfolded, I find myself parting ways with the Austrians. I have always felt the Austrians are more useful for their economic framework. But they leave me underwhelmed when it comes to solutions for when problems occur. Their "Let them eat cake" approach comes dangerously close to Andrew Mellon's draconian Depression era prescription and is more likely to end in a deflationary spiral and a worsening of the problem. And so it is today. If we are to find our way out of this crisis -- the worst in three quarters of a century -- it will not be the ideas of Ludwig von Mises or Murray Rothbard which will guide us. It is more the work of John Maynard Keynes and his followers that is likely to offer useful prescriptions. As much as I would like to look to the Austrian School in this crisis, I cannot. These are the confessions of a former Austrian Economist

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One on One with David Rosenberg, Chief North American Economist at Merrill Lynch 9 Aug 2008

Massive short covering at VW and massive losses for hedgies

Edward Harrison — Tue, 28 Oct 2008 13:00:00 +0000

I ran across a very disturbing news item today that is getting a lot of press in Germany. Apparently, the leveraged finance community is getting routed at the German Automaker VW. The crux of the situation is that Porsche, which controls VW, upped its stake in the company causing shares to rise. For whatever reason,

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Is the short covering rally over? 24 Jul 2008
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Crisis in Europe: an article I wrote in today’s Guardian

Edward Harrison — Thu, 02 Oct 2008 07:00:00 +0000

Below is an article I wrote that appears in this morning’s Guardian Newspaper in the UK. The crux of the article is that European politicians need to realise that their banks are not immune from the crisis that has hit the United States and that European banks are relatively under-capitalised. The Europeans need to come

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Danish banking crisis the worst in Europe 24 Sep 2008
Europe is next 18 Aug 2008

Lightning commentary round: I can’t stay away

Edward Harrison — Sat, 02 Aug 2008 01:07:00 +0000

You thought I was on vacation? Well, I am, but I want to make a few comments about the goings on today as a lot of data came out. Here is the lightning round in no particular order (sorry Cramer, I’m stealing your tag line) Thousands face sack in California: Should we have expected anything

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Alt-A: defaults lie ahead of us, not behind us

Edward Harrison — Thu, 19 Jun 2008 17:13:00 +0000

I am pretty well satisfied that the subprime mess has reached its pinnacle. While there may yet be many more defaults, much of the disaster in subprime is baked into the cake. It’s time to move on. But, move on to what? Most analysts say recovery, I say Alt-A. With nearly $400 billion in writedowns

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Student Loans: New Credit Crunch Casualty

Edward Harrison — Thu, 22 May 2008 14:30:00 +0000

The credit crunch has claimed the heads of many a financial market since it was prematurely marked as ‘contained’ to subprime loans. These markets include jumbo mortgage loans, Collateralized Debt Obligations (CDOs), asset backed securities, High Yield bonds, SIVs, the inter-bank market, commercial paper, money market funds, and the auction rate market. Now add Student

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