Most Recent Stingy News
|
|
| Subprime in sheep's clothing |
| 05/08/08 3:53 PM EST | Real Estate |
| "Unlike subprime folk with expired teasers who have been putting capital into their homes for months and perhaps years, many Alt-A borrowers with years left on their payment-lite teaser periods are going to wake up one day to homes that have hugely deteriorated in price and have little if any equity in them. That is the exact recipe for foreclosure that bank insiders and credit analysts are warning about. Mark Zandi of Moody's Economy.com estimates that, by the end of June, 21.0% of all first-mortgage holders in the United States, or 10.6 million homeowners, will have zero or negative equity in their homes. For now, Alt-A loans are performing better than subprime mortgages. The risk, however, is that generally well-heeled Alt-A borrowers will adopt the same flippant attitude to paying their debts as lenders did in evaluating them. An additional pressure: 23.7% of Alt-A loans were not taken out for primary residences are often considered investments and have a higher rate of foreclosure. Only 8.7% of subprime mortgages were for absentee landlords, according to the New York Federal Reserve Bank." |
| More Real Estate: Doubts raised on big backers of mortgages |
| Subprime outcomes |
|
| Doubts raised on big backers of mortgages |
| 05/06/08 11:26 AM EST | Real Estate |
| "As home prices continue their free fall and banks shy away from lending, Washington officials have increasingly relied on two giant mortgage companies - Fannie Mae and Freddie Mac - to keep the housing market afloat. But with mortgage defaults and foreclosures rising, Bush administration officials, regulators and lawmakers are nervously asking whether these two companies, would-be saviors of the housing market, will soon need saving themselves." |
| More Real Estate: Subprime outcomes |
| House prices decline |
|
| Subprime outcomes |
| 05/06/08 11:24 AM EST | Real Estate |
| "Our second point is that house price depreciation - negative house price appreciation(HPA) - is the main driver of foreclosures. The easiest way to see this is to look at aggregate data. Figure 1 shows that periods of exceptionally high HPA in Massachusetts, as in 2002-2004, are associated with exceptionally low numbers of foreclosures, while periods of negative HPA, such as 1989-1991 and 2005-2007, are associated with high foreclosure rates. Cash flow problems at the household level, driven by job loss, for example, play a role, but only when HPA is low. For example, in 2001, a recession generated a record high number of delinquencies, a sign that many households had problems making monthly mortgage payments. During this time, however, there was a record low number of foreclosures in Massachusetts. Thus, the phenomenal levels of HPA in the early 2000s enabled many borrowers to either refinance or sell to avoid foreclosure." |
| More Real Estate: House prices decline |
| You can't pay them enough to leave |
|
| Foreclosure woes require action |
| 05/06/08 10:51 AM EST | Markets |
| "Unemployment statistics, according to Bernanke, do not explain the increased delinquencies of many areas, including California, Florida and parts of Colorado, where foreclosure filings have increased even when unemployment generally have fallen. More revealing was the close correlation between declining home prices and high delinquency rates. On the home price decline map, states like California and Florida were drenched in red, indicating the worst losses. On the map revealing the highest foreclosure rates, the same states were also covered in red." |
| More Markets: One guy who has seen it all |
| Immoral hazard |
|
| Rewarding failure |
| 05/05/08 1:06 PM EST | Management |
| "You might suppose that the stars are in near-perfect alignment for major reform of CEO pay. The mammoth pay and disastrous performance of Countrywide Financial's Angelo Mozilo, Citigroup's Chuck Prince, and Merrill Lynch's Stan O'Neal should be enough to make the public furious. Each CEO departed with $100-million-plus compensation after misadventures with subprime mortgages. Now add the economic slowdown to the mix; ordinary Americans are worried about making ends meet while failed pooh-bahs rake it in. Then throw in one more element - a presidential election. Put it all together, and how could change not be imminent?" |
| More Management: Outdoing the Swiss Army knife |
| A virtuous cycle |
|
| The siege of State Farm |
| 05/05/08 1:03 PM EST | Law |
| "For State Farm Insurance - the nation's leading auto and home insurer - coping with once-in-a-lifetime disasters is everyday business. Risk analysis is what it does, and its actuarial staffs are prepared for every eventuality. Almost. When Hurricane Katrina struck the Gulf Coast in 2005, it infamously brought a storm surge the likes of which the nation had never seen, causing more flood damage in one event than all the storms combined for as far back as there was data (37 years). Even that risk State Farm had anticipated. What it hadn't foreseen was that the storm surge would gut the home of a plaintiffs lawyer named Richard F. "Dickie" Scruggs, as well as those of his family, friends, and neighbors in Pascagoula, Miss. Scruggs was someone who could render all of State Farm's actuarial calculations irrelevant, because he had the power and know-how to force it to rewrite its contracts retroactively. He had been the scourge of Fortune 500 companies for two decades, precisely because he tended to change the rules of any game he chose to play." |
| More Law: My big fat IRS case |
| When OSC goes green, lawyers see red |
|
| Bear Stearns second brush with bankruptcy |
| 05/05/08 12:59 PM EST | Stocks |
| "Bear believed that if it failed to get a new agreement that reaffirmed JPMorgan's guarantee of Bear Stearns' obligations, Bear could have been cut off from JPMorgan's Fed-backed funding and forced into bankruptcy - an outcome that many investors assumed had been forestalled by the March 16 merger agreement. The dispute that nearly brought Bear down a second time turned on whether JPMorgan would stand behind Bear Stearns' massive credit default swap book and other liabilities. The firm's lack of access to other funding had Bear lawyers preparing for a possible bankruptcy the weekend before the revised merger agreement was unveiled." |
| More Stocks: New Bear Stearns bid |
| JPMorgan buys Bear Stearns for $2 a share |
|
| Woodstock for capitalists 2008 blog |
| 05/04/08 12:02 PM EST | Buffett |
| "A shareholder asked how one can correct one's mind set away from a crowd mentality. Mr. Buffett said to read and re-read Ben Graham's The Intelligent Investor. He specifically said that chapters 8 and 20 are most poignant, but that the lessons from the book are as relevant today as they were when he first read Graham's book when he was 19 years old. He also said there are basically three lessons to take away from the book: (1) Think of stocks as owning parts of a business, (2) Use the market to serve you rather than instruct you, and (3) Always require a margin of safety when investing. In today's environment, these principles are critical, and I especially think the second one is important to remember, as, in my opinion, it can help investors tune out the rampant noise in the market, helping them improve their investment temperament over time." |
| More Buffett: Updates from the annual meeting |
| Interview with Warren Buffett |
|
| Updates from the annual meeting |
| 05/03/08 4:33 PM EST | Buffett |
| "Qwest Center Omaha is filled to the rafters with Berkshire Hathaway shareholders. More than 30,000 people were expected to hear Warren Buffett and Charlie Munger talk about the holding company that includes brand names like Benjamin Moore paints and Dairy Queen ice cream stores." |
| More Buffett: Interview with Warren Buffett |
| Warren Buffett deal interview |
|
| Interview with Warren Buffett |
| 05/02/08 1:52 PM EST | Buffett |
| "CNBC's Becky Quick sits down with Warren Buffett to discuss the upcoming shareholder meeting, which starts Friday night and runs through Monday. Buffett refers to the annual event as "Woodstock for Capitalists."" |
| More Buffett: Warren Buffett deal interview |
| Meet the Buffetts |
|
| Warren Buffett deal interview |
| 04/30/08 8:07 PM EST | Buffett |
| "I think we're in a recession. I mean, a recession is defined in a certain way by the National Bureau of Economic Research, but I think it's defined by the man in the street a little differently than whether there have been two quarters of reported (negative) GDP growth. And incidentally, when GDP growth is below 1% a year it's really falling on a per capita basis because our population increases about one percent. So even though the National Bureau uses an absolute figure, it's up one-tenth they don't count that as a recessionary quarter, but the GDP per capita has gone down in a quarter where the gain is half a percent or something of the sort. We are in a recession, unless you want to stick strictly to the technical definition, which I really don't think has much meaning to the fellow who has lost his job or is facing a money-market fund that isn't paying him out, or whatever it might be." |
| More Buffett: Meet the Buffetts |
| New advice from on high |
|
| Meet the Buffetts |
| 04/30/08 6:22 PM EST | Buffett |
| "Berkshire Hathaway's annual meeting happens May 3rd in Omaha and, once again, the company's billionaire chairman and CEO, Warren Buffett, will be in the spotlight. Last year, NBR brought viewers an interview with Buffett. This year, anchor Susie Gharib interviews Buffett's three children to find out what their father taught them about money and business." |
| More Buffett: New advice from on high |
| Warren Buffett - in 1974 |
|
| New advice from on high |
| 04/30/08 6:11 PM EST | Buffett |
| "Everyone will be delighted to hear the details of the minority interest in the Mars-Wrigley candy giant that was made public this week. They will hang on to every hint of the future for Berkshire's huge position in railroad stocks (already profitable) and its staged acquisition of Marmon Group, which owns and leases 94,000 rail cars that must be used to carry the increasingly valuable coal from coast to coast. Think replay of 19th century railroad magnate here without the watered down stock and internecine battles with ruthless competitors." [I was uncertain about linking this one because of its focus on capital gains. Include dividends, which have historically been a major source of profits for stock investors, and the record of past returns improves dramatically.] |
| More Buffett: Warren Buffett - in 1974 |
| Economy in a recession, will be worse than feared |
|
| Pay the taxman by midnight or else! |
| 04/30/08 6:10 PM EST | Taxes |
| "Today of course is T-day in Canada: the annual tax filing deadline. If you owe the Canada Revenue Agency income taxes for calendar 2007, the penalty and interest clock starts ticking at midnight: the moment April 30th turns into May 1st. If the CRA owes you there is less urgency but if you have a refund coming, the sooner you file your tax return the sooner you can cash the cheque and put your money to work." |
| More Taxes: Same price, but fewer tax returns |
| Curve balls raise red flags for CRA |
|
| Warren Buffett - in 1974 |
| 04/30/08 5:47 PM EST | Buffett |
| "Stay dispassionate and be patient is Buffett's message. "You're dealing with a lot of silly people in the marketplace; it's like a great big casino and everyone else is boozing. If you can stick with Pepsi, you should be OK." First the crowd is boozy on optimism and buying every new issue in sight. The next moment it is boozy on pessimism, buying gold bars and predicting another Great Depression." |
| More Buffett: Economy in a recession, will be worse than feared |
| Mars agrees to buy Wrigley |
|
| Fee-only must mean just that |
| 04/29/08 12:04 PM EST | Brokers |
| "Canadian financial planners should eliminate the ambiguity by scrapping the phrase "fee-only" when charging fees computed as a percentage of client assets. Instead, they should use the term "asset-based," which is far less confusing for clients." |
| More Brokers: Find the right broker for you |
| Beware: A 'safety net' full of holes |
|
| House prices decline |
| 04/29/08 11:54 AM EST | Real Estate |
| "House prices dropped 2.6 percent in February from a month earlier, after a 2.4 percent decline in January, the S&P/Case- Shiller report showed. The figures aren't adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of month-to-month. The group's 10-city composite index, with a history back to 1987, fell 13.6 percent in the 12 months ended in February, also the most on record. Nineteen of the 20 cities in the index showed a year-over- year decrease in prices for February, led by a 23 percent slump in Las Vegas and a 22 percent decline in Miami. Charlotte was the only area showing a gain with a 1.5 percent increase. Compared with January, homes in all 20 areas covered dropped in value." |
| More Real Estate: You can't pay them enough to leave |
| New-home sales in the U.S. plunge |
|
|
Stingy News Weekly
Article Archive:
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8
|
Submit a Story
Put the Stingy News on your webpage
|
