Empiric Student Property Share Discussion Threads

[briarberry] 16/1/2007 00:05

US housing bust (2 more links if anyone can be bothered to read them)...






Ben Banky - will he be able to reflate one more time before the wheels fall off ?

[briarberry] 15/1/2007 21:39

GS, shows us how to make a profit even as the US goes into recession ?


MUMBAI: US-Based Goldman Sachs, one of the largest and oldest investment banks in the world, is set to commence stock broking operations and advisory services in India, having received the requisite licences.

The Economic Times India Jan 9. 2007




Jan. 10 (Bloomberg) -- NYSE Group Inc. and Goldman Sachs Group Inc. led a group of investors that agreed to buy 20 percent of the National Stock Exchange of India Ltd., tapping the world's second-fastest-growing major economy.

Goldman, the most profitable brokerage in Wall Street history, already owns a 7 percent stake in India's National Commodity & Derivatives Exchange Ltd. Goldman and the buyout firm General Atlantic were early investors in Archipelago and are currently among the top five shareholders of NYSE Group.

[briarberry] 14/1/2007 22:49

Heating oil, another cold snap in the USA, freezing rain across 3 states (edit 6 states)...





I heard there are a lot of shorts on heating oil ?

plus the commercials are long according to this:

[briarberry] 14/1/2007 21:17

The latest statistics from the Federal Bureau of Investigation confirm that mortgage fraud is on the upswing.











Tracks the movement of foreclosures in San Diego County (one housing hot spot)

[briarberry] 11/1/2007 00:44

credit crunch watch - 9 subprime mortgage lenders...

List of the defunct lenders (2 in top 20) about 1/2 way down the page,

[briarberry] 09/1/2007 23:27

kicking off the earnings season...


Jan. 9 (Bloomberg) -- Alcoa Inc., the world's biggest aluminum maker, said profit jumped 60 percent in the fourth quarter as metal prices gained.




AL

[briarberry] 09/1/2007 20:43

Oil & energy - Goldman Sachs have been up to their tricks again...


GSCI Cuts Energy Exposure (Again)

That mid-year (2006) halving of the gasoline weighting caught quite a few people by surprise. The timing -- slashing energy futures weightings 2 months before the mid-term elections -- was stunning to say the least. The GSCI changes had wide ranging impacts, leading (indirectly at the very least) to: Amaranth's implosion, a drop in CPI / inflation rates, the market rally since the July lows, and of course, GS's record setting Q3/Q4 profits (Hey, its nice to be the House).

Several observers have noted that January saw another rebalancing downwards of the energy exposure in 2007. Consider this from the NYPost:

"It might be a better idea to thank Goldman Sachs, not the weather, for the recent plunge in oil prices. While recent balmy temperatures have certainly played a role in last week's dip in oil prices, a lesser known, but equally powerful, move by Goldman at the start of the year might bear some responsibility as well.

Goldman cut the energy portion by as much as 50 percent in some of the sub-indexes that comprise the widely followed Goldman Sachs Commodity Index, tamping down moves to buy them by large investment funds who mimic Goldman's index.

The changes took effect this month and apply for all of 2007, a Goldman spokesman said. Crude oil futures plunged 9 percent Wednesday and Thursday to $55 a barrel, before settling Friday at $56.31. The two-day decline was the sharpest since December 2004.

The GSCI is influential because large institutional investors like pension funds and endowments invest according to its allocation model."

The only question this time around is how this move will impact the overall equity markets. The last time Goldie rebalanced, markets were deeply oversold. This time, they are overbought.




RBOB gasoline was weighted 2.35% just a few days ago, and now it's down to 2.1% - the weighting of gasoline was originally 7.3%!

[briarberry] 08/1/2007 21:16

Why investors have become addicted to the carry trade

From The Economist print edition - Oct 5th 2006

[briarberry] 07/1/2007 13:33

The USA knew Saddam was guilty because they sold him the chemicals !


Shaking Hands: Iraqi President Saddam Hussein greets Donald Rumsfeld, then special envoy of President Ronald Reagan, in Baghdad on December 20, 1983



By the summer of 1983 Iran had been reporting Iraqi use of using chemical weapons for some time.

The intelligence indicated that Iraq used chemical weapons against Iranian forces, and, according to a November 1983 memo, against "Kurdish insurgents" as well

Rumsfeld met with Saddam, and the two discussed regional issues of mutual interest, shared enmity toward Iran and Syria, and the U.S.'s efforts to find alternative routes to transport Iraq's oil; its facilities in the Persian Gulf had been shut down by Iran, and Iran's ally, Syria, had cut off a pipeline that transported Iraqi oil through its territory. Rumsfeld made no reference to chemical weapons, according to detailed notes on the meeting

Later in the month (March84), the State Department briefed the press on its decision to strengthen controls on the export of chemical weapons precursors to Iran and Iraq, in response to intelligence and media reports that precursors supplied to Iraq originated in Western countries.





Western firms look to Iraq oil bonanza
Published: Sunday, 7 January, 2007, 11:38 AM Doha Time

By Danny Fortson, Andrew Murray-Watson and Tim Webb

BAGHDAD: Iraq's massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days.

The US government has been involved in drawing up the law, a draft of which has been seen by The Independent on Sunday.

[briarberry] 07/1/2007 00:06

US payroll figures, potentially there are lot more people unemployed in the USA than the official figure, 4.5%, suggests...


Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers

Dec. 2006... 8%

NOTE: Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. For further information, see "BLS introduces new range of alternative unemployment measures," in the October 1995 issue of the Monthly Labor Review.




real unemployed figure is probably over 10%

[briarberry] 06/1/2007 23:18

subprime mortgage backed security prices, still falling, money going to money heaven...

[briarberry] 06/1/2007 22:35

Jan. 5 (Bloomberg) -- China told banks to set aside more money as reserves for the fourth time in seven months to prevent a rebound in lending and investment in the world's fastest growing major economy.

Banks must put aside 9.5 percent of deposits starting on Jan. 15, up from 9 percent, the Beijing-based People's Bank of China said today on its Web site.

China, which raised interest rates twice last year to reach 6.12 percent, wants to prevent cash generated by a record trade surplus from being channeled through bank lending into investments.

The central bank raised the reserve requirements by 0.5 percentage point in June, July and November after leaving them unchanged for more than two years. It estimates every increase of that size reduces the amount available for lending by 150 billion yuan ($19 billion).

[briarberry] 06/1/2007 22:29

credit bubble watch, could this be the final blow off stage in credit expansion ???


Worldwide, an abundance of liquidity has lured investors into riskier assets in search of higher returns. Though there is no agreement on how to measure liquidity, using the global supply of dollars as a proxy, The Economist estimates that in the past four years it has risen by an annual average of 18%, probably the fastest pace ever







The deluge of spare cash has two main sources. First, average real interest rates in the developed world are still below their long-term average. Second, America's huge current-account deficit and the consequent build-up of foreign-exchange reserves by countries with external surpluses has also pumped vast quantities of dollars into the financial system. A large chunk of Asia's reserves and oil exporters' petrodollars have been used to buy American Treasury securities, thereby reducing bond yields. In turn, low bond-market returns have encouraged bigger inflows into higher yielding emerging-market bonds, equities and property, especially in Asia. Liquidity has been further boosted by the use of derivatives, and by carry trades (borrowing in currencies with low interest rates, such as yen, to buy higher-yielding currencies).

[briarberry] 05/1/2007 14:12

THE EMPLOYMENT SITUATION: DECEMBER 2006

Nonfarm employment increased by 167,000 in December, and the unemployment
rate was unchanged at 4.5 percent, the Bureau of Labor Statistics of the U.S.
Department of Labor reported today. Job gains occurred in several service-
providing industries, including professional and business services, health care,
and food services. Average hourly earnings rose by 8 cents, or 0.5 percent, in
December.



and they only added 55K theoretical jobs, not bad...

[briarberry] 05/1/2007 11:08

Channel: Wall Street Examiner Radio - Date: 01/04/07

Description: Wall Street Examiner Roundtable, 1/7/07 Russ Winter, Lee Wheeler and Steve Northwood join Lee Adler to talk about the financial markets and the economy.

(12 mb)


Also from wallstreetexaminer.com, it's no wonder the markets don't match reality when Foreign Central Banks keep pumping money in. FCB buying has reached an extreme

[briarberry] 05/1/2007 10:29

TOKYO (XFN-ASIA) - Japan's monetary base fell for the 10th consecutive month
in December when it dropped by 20.0 pct from a year earlier to 90.466 trln yen,
preliminary data from the Bank of Japan showed.

[briarberry] 03/1/2007 17:05

recession watch, I'm guessing that this is the start of something, although it's still a bit early yet...


U.S. ADP employment index down first time in nearly 4 years. U.S. Dec. ADP employment down 40,000




The ADP national employment report is computed from a subset of ADP records that in December 2005 covered 14 million employees at roughly 225,000 business establishments. ADP contracted Macroeconomic Advisors to compute a monthly report that would ultimately help to predict monthly nonfarm payrolls from the Bureau of Labor Statistic's employment situation. The ADP report only covers private (excluding government) payrolls at this time.

[briarberry] 01/1/2007 20:55

subprime - too many people know - short interest (in millions of shares) and days to cover (as of Dec 15)

Wells Fargo 26 - 3.3
New Century 11.5 - 8.7
Countrywide 28.3 - 6.9
Freemont 6.8 - 9.0
WM 24 - 7.5
Novastar 11.3 - 14

[briarberry] 01/1/2007 15:53

credit crunch, from post 626, I wonder if this has teeth or is it just more propaganda ?


Fannie Tightening Underwriting Standards

Fannie Mae has announced that, effective Jan. 30, borrowers must be qualified at "a fully-indexed rate that assumes a fully-amortizing repayment schedule" in order to qualify a loan for purchase by the government-sponsored enterprise. The GSE is also eliminating its "InterestFirst" interest-only loan product category and reclassifying it as a loan "feature" to be used with other mortgage products. In addition, Fannie will be permitting temporary buydowns for fixed-rate mortgage loans with an IO feature and making other changes to its IO underwriting. Fannie Mae can be found on the Web at




one comment (if this has teeth etc)

Maybe THE nail in the coffin. How many first time buyers would qualify based on the fully-indexed rate and a fully-amortizing repayment schedule??

[briarberry] 31/12/2006 22:28

Top Subprime YTD list, taken from the MBA's annual convention report(october '06). This was for end of Q2 (page 12 of report):

1. Wells Fargo - -
2. HSBC - - - -- -
3. New Century - -
4. Countrywide - -
5. Fremont
6. Option One
7. Ameriquest
8. WMC
9. Washington Mutual
10. CitiFinancial
11. First Franklin
12. GMAC
13. Accredited Home
14. BNC
15. ChaseHome Financ
16. Novastar
17. Ownit
18. Aegis
19. MLN
20. EMC
21. ResMae
22. FirstNLC
23. Decision One
24. Encore
25. Fieldstone

(warning: PDF 1.23mb)


credit crunch

[briarberry] 31/12/2006 22:25

recession watch... this could still be just a rumour, but it looks like another subprime lender may be closing down, #19 on the list below...

December 29, 2006
Re: Mortgage Lenders Network USA, Inc. Notification Letter VIA EMAIL/FACSIMILE
To Whom It May Concern
Please be advised that this communication is submitted to your attention in order to alert you to the fact that effective immediately Mortgage Lenders Network USA, Inc ("MLN") will regrettably no longer fund residential mortgage loans. This course of action has been necessitated as a result of a lack of available warehouse funds.
MLN will immediately take all steps necessary to attempt to place the loan transactions that were scheduled to fund with MLN as lender, with another properly licensed lender. Additionally, MLN will (a) ensure that all remaining loans in its pipeline that are scheduled to close will be transferred to another properly licensed lender to minimize any potential inconvenience to the Borrowers and (b) not take further loan origination applications at this time.
In order to provide its customers with the level of service expected from MLN, MLN will focus its efforts towards its residential mortgage servicing platform.
While we regret submitting this notification to you, we feel it is in the best interests of the customers and MLN to focus on the servicing platform at this time.
Mortgage Lenders Network USA, Inc.

[briarberry] 31/12/2006 17:58

2007 the housing bust will be big news next year, starting with Florida


summary for lazy readers :) :)

banks have taken on more risk than in prior property booms

subprime mortgages and exotic mortgages extented the boom well after the pool of buyers with good credit histories had been exhausted

reaching extremes: 2nd home buyers and speculators, flippers

reaching extremes: property inventories

reaching extremes: loans backed by property, no savings

bogus goverment figures that mask the real extent of the problem

ARM mortgages resetting in 2007

etc etc etc

[briarberry] 31/12/2006 17:42

From The Economist print edition - Dec 19th 2006

UK: Wage negotiations in early 2007 will be a tussle

The retail-prices index (RPI), a broader measure used as a benchmark in pay negotiations, rose by 3.9%-up from 2.4% in January. RPI inflation is now at its highest rate since May 1998. City forecasters expect that it will rise further to over 4% in the months ahead. If this occurs, then inflation will outstrip growth in average earnings for the first sustained period since 1995 (see chart).

[briarberry] 29/12/2006 20:01

old news, but a good summary of the subprime mortgage situation