Empiric Student Property Share Discussion Threads

[briarberry] 12/8/2008 13:11

tax rebate cheques - the stimulus might be wearing off ?


ICSC-UBS reports a scaling back in consumer spending during the Aug. 9 week, down 1.1 percent from the Aug. 2 week for a year-on-year rate of 2.6 percent that's down 3 tenths in the week.

[briarberry] 12/8/2008 12:02

Oil = BTC + EIA Petroleum Status Report (3.35GMT)

These reports are going to be interesting for the next few weeks because I'm sure that there must now be supertankers sitting empty at the port in Turkey waiting for the BTC pipeline to be repaired

Although there's a delay to the bad news hitting due to the full tankers that are still in transit across the Atlantic etc

As Financial Sense says world demand destruction hasn't yet been high enough certainly not 500,000 to 800,000 barrels a day.

I remember when hurricanes Rita & Katrina hit the price of oil initially fell and the news said, don't worry there's no damage and then we heard reports of sunk rigs, leaking pipes, flooded refinaries etc.

Baku-Tbilisi-Ceyhan (BTC) oil pipeline
from

[briarberry] 12/8/2008 11:27

Aug. 12 (Bloomberg) -- UBS AG, Switzerland's biggest bank, reported a fourth straight quarterly loss on subprime-related writedowns and said it doesn't expect the ``adverse economic and financial trends'' to improve for the rest of the year.

The net loss was 358 million Swiss francs ($329 million) in the second quarter, compared with a 5.55 billion-franc profit a year before, Zurich-based UBS said today.

[briarberry] 12/8/2008 01:01

A financial system based on fraud is doomed to fail sooner or later...


Postponing a problem is very different from solving one. Yet Fannie Mae is going to extraordinary lengths to preserve capital -- even trying to forestall big losses by giving essentially free money to delinquent borrowers.

This is a temporary fix that could leave investors with a bad surprise down the road.

In Friday's second-quarter results, Fannie said it made $127 million in loans that allow delinquent borrowers to get current on their mortgages. That prevents Fannie having to repurchase the loans from mortgage trusts at face value and take an immediate charge based on market prices.

In the second quarter, the average markdown for such repurchased loans was 47% and resulted in an overall charge of $380 million. Without the special loans to delinquent borrowers, Fannie might have been forced to buy back 17,901 loans. That could have meant an additional charge of as much as $1.5 billion, based on the losses Fannie took on the mortgages it did repurchase.

Superficially, that isn't a bad trade. Fannie avoids a big extra charge by issuing just $127 million of new loans. The trouble? The special loans have their own cost. Fannie is already carrying the $127 million on its books at just $4 million, meaning it wrote the loans down to about three cents on the dollar.

In its second-quarter filing, Fannie said it expects such special loans "to continue to reduce the number of delinquent loans that we otherwise would have purchased" throughout 2008.

That may preserve capital. But it is really just postponing a problem festering out of investors' sight.

[briarberry] 12/8/2008 00:29

Every hour a store is closed as 4,975 go bankrupt (includes outlets of the same chain)...

Over the past 217 days, at least 4,975 stores have been closed. That's about store an hour, or 23 a day. So far we are nearly double the rate of 12 a day we saw in 2007. And I doubt my list is as thorough as the experts. The recession of 2008 is causing a tremendous shake out in retail. Retailers that survive this storm, will be able to take market share left up for grabs by the departure of nearly 5,000 stores.

[briarberry] 11/8/2008 22:02

Bumper EU Crop Could Lower Food Prices

Farm harvests of wheat, corn, and sugar beets could surge by 16% this year, helped by favorable weather

by Lucia Kubosova - BusinessWeek - Europe - August 11, 2008

According to a forecast by the Joint Research Centre, a scientific service for the European Commission, published on Thursday (7 August), the 27-nation bloc could see an increase of 16 percent in the total cereals harvest compared to last year, with some 301 million tonnes expected in 2008.

Experts suggest that both favourable weather and an increase in the planted area farmed should lead to hikes in production, with the best prospects for sugar beet, durum wheat and maize.

All four major wheat producers-Italy, France, Spain and Greece-are expecting better crops than last year. Along with favourable predictions for the US as the world's number one producer, this sends a "positive signal" towards future food prices, said a European Commission spokeswoman.



(thank goodness)

[briarberry] 11/8/2008 20:04

Aug. 7 (Bloomberg) -- U.S. consumers borrowed more than twice as much as economists forecast in June as the slump in real-estate prices prevented American homeowners from tapping into home-equity lines of credit.

Consumer credit rose by $14.3 billion, the most since November, to $2.59 trillion, the Federal Reserve said today in Washington. In May, credit rose by $8.1 billion, previously reported as an increase of $7.8 billion. The Fed's report doesn't cover borrowing secured by real estate.

[briarberry] 11/8/2008 14:37

Mortgage-Market Trouble Reaches Big Credit Unions
By MARK MAREMONT - August 11, 2008

Five of the nation's largest credit unions are reporting big paper losses on mortgage-related securities, a sign that housing-market distress is spreading even to the most risk-averse financial sectors.

The five corporates showing big mortgage-related losses, according to federal regulatory filings, are U.S. Central Federal Credit Union; Western Corporate Federal Credit Union; Members United Corporate Federal Credit Union; Southwest Corporate Federal Credit Union; and Constitution Corporate Federal Credit Union. Together, they reported about $5.7 billion in "unrealized" losses as of the end of May, the filings indicate. Unrealized losses happen when the market value of a security falls, even if it hasn't been sold.

[briarberry] 09/8/2008 20:22

Baku-Tbilisi-Ceyhan (BTC) oil pipeline cut in Turkey (BTC also runs through Georgia)

It was carrying 800,000 barrel per day (and that was due to increase to 1.2m barrels per day later this year)

The alternative routes for the oil carry less that half of that, And some of those alternatives are dependent on Georgia, which is being bombed.

So at least 500,000 barrels per day (probably much more) are offline to the markets for at least a couple more weeks, probably five weeks.

[briarberry] 08/8/2008 22:47

Money Market `Plagued' by Libor That Fed Can't Reduce (Update3)

The U.S. market for commercial paper, or short-term IOUs, backed by assets such as mortgages has shrunk 40 percent from its peak in July 2007. The amount borrowed in pounds between banks in the U.K. fell by 70 percent in June from a record in February 2007. The European Central Bank received $100 billion of bids for the $25 billion it offered to financial institutions on July 29, the most since the sales began in December.

The London interbank offered rate, the basis for at least $150 trillion of financial products, is within 0.06 percent of the highest since November 1999 compared with the Fed's benchmark interest rate. The largest financial companies have lost almost $500 billion from subprime-linked securities.

Banks are having to pay significant premiums to borrow cash.

The world's biggest banks and brokerages have reported $497 billion of writedowns since the start of 2007, according to data compiled by Bloomberg. Losses may rise to $1 trillion, Bill Gross, who manages the world's biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, said last month.

Commercial paper, typically due in nine months or less, has tumbled, especially for debt backed by assets such as mortgages and car loans. The U.S. asset-backed commercial paper market shrank to a seasonally adjusted $729.7 billion in the week ended Aug. 6, from a high of $1.22 trillion on Aug. 8, 2007, according to the Fed.

[briarberry] 08/8/2008 21:39

That buying pushed the dollar up almost 3% in the past week ???

Today's parting words from gold market analyst Ned Schmidt. He tenders an explanation for the dollar's rally that may not make the conventional headlines, but it is one you might want to take note of. "As is readily evident, the US$ has staged an incredible rally. That rally is one of the strongest to occur without some underlying causal event. In short, nothing readily apparent is happening around the world to cause such a move. Now, consider the weekly purchases of U.S. debt by official institutions, essentially central banks around the world. These numbers are reported weekly by the Federal Reserve, the depository for these bond holdings. In the week ending Wednesday, official institutions made the largest net purchase of U.S. debt ever recorded. They bought the annualized equivalent of $1.457 trillion. Those purchases created a shortage of dollars which created a massive short covering rally in the dollar. That buying pushed the dollar up almost 3% in the past week, or at a 320% annual rate."

[briarberry] 08/8/2008 19:18

The Swiss bank UBS has reached a $19.4 billion agreement to buy back bonds in the biggest settlement yet over claims that banks misled investors to buy auction-rate securities, the Massachusetts Secretary of State's office said Friday.

n a June lawsuit alleging fraud against UBS, Galvin said the company knew last fall the market was in serious trouble, and warned its larger clients, including the state treasurer's office. But it said it didn't tell its brokers or smaller customers, and continued to push the securities with "profoundly deceptive sales practices" in a scheme designed to reduce its own exposure to the market.

[briarberry] 08/8/2008 16:15

Fannie Mae posts a $2.3 billion loss as the biggest U.S. buyer of home mortgages says the struggling housing market and credit expenses again hurt its performance during the second quarter. Investors react negatively.

[briarberry] 07/8/2008 18:35

WSJ:Citigroup To Spend $5B-$6B To Put Securities On Balance Sheet

WSJ: Citigroup To Buy Out Securities Sold To Small Businesses

down 4%

[lbo] 07/8/2008 13:40

The boom in the Spanish housing market is in danger of turning into a bust, with many agents already reporting double-digit price falls, while others warn there is still worse to come.

Spain's official government house price index showed that the average cost of a home fell for the first time in more than a decade during the second quarter of the year, with house prices edging 0.1pc lower.

But there is some scepticism among estate agents and economists about the official figures, which are based on valuations rather than transactions.

Many agents claim they are already seeing sharper price falls, with property values plummeting by as much as 30pc during the past year in some areas of the country.

[briarberry] 06/8/2008 23:12

SAN FRANCISCO (Thomson Financial) - American International Group (AIG) late
Wednesday reported that it swung to a second-quarter net loss of $5.36 billion,
or $2.06 a share, from a year-ago net profit of $4.28 billion, or $1.64 a share.

[briarberry] 06/8/2008 20:34

Bill Gross says, don't worry that things have gotten worse the taxpayer will bail us bond holders out...


DJ Pimco Gross: Tsy Will Buy GSE Preferred Stk By End Of 3Q -TV

The U.S. Treasury will be buying preferred stock to refinance Fannie Mae
(FNM) and Freddie Mac (FRE) by the end of the third quarter, Bill Gross,
Pimco's co-chief investment officer, predicted in an interview on Bloomberg
Television Wednesday.

Gross said he was pleased with his company's investment in agency debt and
that he was suprised by the widening of spreads following the publication of
Freddie's unexpectedly poor results Wednesday, saying that the losses were
just a step towards the Treasury's eventual purchase of preferred stock in the
companies.

"A bondholder wants the Treasury to come in and inject capital at the
preferred level so the investments are secure," he added.

[briarberry] 06/8/2008 15:18

SHANGHAI, China (AP) -- China's central bank has loosened controls on lending to small- and medium-size companies hit hardest by credit limits and slowing exports, state media reports said Wednesday, the latest evidence of growing concern over an economic slowdown.



New Zealand is already in a recession, according to a new assessment by the country's Treasury.

[briarberry] 06/8/2008 15:07

Europe slowing down...

Sales in the 15-nation euro area fell 3.1 percent from a year earlier, the largest annual decline since the European Union's statistics office in Luxembourg began collecting the data in 1995.


German factory orders unexpectedly fell for a seventh month in June, 2.9% from May. Orders fell 6.1 percent from a year earlier.`This series of declines is unprecedented,'

[briarberry] 06/8/2008 13:50

Freddie Mac swings to $1.05 billion loss in 2nd-quarter, falls below estimates

NEW YORK (AP) -- Freddie Mac said Wednesday it swung to a second-quarter loss that was more than three-times larger than Wall Street expected as more homeowners fell behind on their mortgage loans.

Revenue fell to $1.69 billion from $2.34 billion.

[briarberry] 04/8/2008 13:08

The US Housing Bill is a gigantic gamble and if it fails, then the cost could be enormous. And I suspect that it will fail. (By Roger Bootle)


Interestingly, though, proposed legislation in America seems to offer such an escape. The plan is that banks will be offered the chance to take government guarantees on their mortgages at risk of foreclosure, provided that they agree to write down the value of the mortgage to 90pc of the current market value of the mortgaged property. At a stroke, the borrower is better off in that his debt is substantially reduced, and accordingly so are his mortgage payments.

The banks, while being forced to recognise reality, get relieved of future downside risk by the government. Moreover, if this succeeds in stabilising the housing market then arguably the government will not lose any funds at all, since the guarantees will not be called.

In that case, why shouldn't we consider such a measure here? First, it is not quite what it seems. In fact, it is a gigantic gamble. If it works, then indeed the cost to the American Treasury will be zero. But if it fails, then the cost could be enormous. And I suspect that it will fail. The fundamentals are still running strongly against American house prices. Even though we learned last week that they have now fallen by 16pc over the past year, I reckon that they could plausibly have another 20pc to fall.

By Roger Bootle



(yeah it's just a massive reflate or die scheme, don't quote me but I guess it means buy gold)

[briarberry] 03/8/2008 20:39

Housing Bill, Freddie & Fannie (this seems to be the question on everyones mind)...

Now that Freddie & Fannie have officially got the job of remortgaging whats left of the US housing bubble, will their mortgage backed debt still sell to investors (foreign central banks), or will this debt now be seen as suspect (toxic waste) ?

If the Treasury has to prop Freddie & Fannie up, will the Treasury manage to sell enough treasuries to foreign central banks to raise the money. Especially now tax receipts are falling and deficit spending is increasing.

Or will the Treasury just electronically print the money and sink the USD ?


Foreign central banks still seem to be buying it so far...

Fed Foreign Holdings of Treasury, Agency Debt last week (ended 7/30) rose $14.2bn to a record $2.368 TN. "Custody holdings" were up $311bn y-t-d, or 25.4% annualized, and $358bn y-o-y (17.8%).

but the spread is still wide





Hank Paulson's Fannie Gamble
By LAWRENCE B. LINDSEY - WSJ

The legislation also creates long-term uncertainty with regard to the extent and form of government assistance. In effect, Treasury Secretary Paulson now has an open-ended mandate to bail out the nation's troubled housing finance market, the largest single capital market in the world.

If any other country announced that its finance minister could print unlimited debt to do something similar, financial markets around the world would dump both the country's debt and the country's currency. It may well be different because this is the United States of America. But certainly, to take such a risky and unprecedented step, a better crafted and considered piece of legislation should have been created.



July 30 – Bloomberg (Dawn Kopecki and Jody Shenn): "Fannie Mae, the largest U.S. mortgage-finance company, said its portfolio expanded at a 23% annualized rate in June, the fastest pace since 2003. The holdings rose by $12.7 billion to $749.6 billion... Freddie Mac last week said its investments swelled at a 33% annual rate to a record $792 billion."

Fannie and Freddie's combined Books of Business (retained portfolio and MBS guarantees) increased $40.3bn, or 9.3% annualized, during July to a record $5.241 TN. Combined Retained Portfolios expanded $34.1bn, or 27% annualized, for the month to $1.541 TN (2-month growth of $75.5bn!). Year-to-date, the combined Books of Business have expanded $249bn, or 10% annualized, with Retained Portfolios up $152 bn, or 16% annualized.


(It's a lot of money but I guess it takes the heat off the banks and Wall Street. The taxpayer has been suckered into giving Wall Street a backdoor bailout - reflate or die)

[briarberry] 03/8/2008 00:44

yes that should read August and not July




briefing haven't updated their chart yet


The $15.5 billion loss reported Friday is less than half of GM's record $39 billion loss in the third quarter of last year, but it brings GM's net losses since 2005 to $51.1 billion.

[briarberry] 03/8/2008 00:03

Shipping Costs Start to Crimp Globalization

The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costs. Big container ships, the pack mules of the 21st-century economy, have shaved their top speed by nearly 20 percent to save on fuel costs, substantially slowing shipping times.

The study, published in May by the Canadian investment bank CIBC World Markets, calculates that the recent surge in shipping costs is on average the equivalent of a 9 percent tariff on trade.

[briarberry] 02/8/2008 00:11

Roubini: Global Recession Watch

[T]here is now fresh evidence that at least a dozen major economies and some emerging markets are at risk of a recessionary hard landing.
...
[W]hile we will not experience a global recession we will get close to one as the US will have a severe recession, Japan is entering one, a third of Europe will go into a recession, the rest of Europe will have a severe growth slowdown, the rest of the G-10 advanced countries is sharply slowing down and a few emerging market economies are entering a recession. And if the advanced economies are sharply slowing down or entering a recession the idea that China, India, the other BRICs and emerging markets can happily decouple from these recession or sharply slowing economies is far fetched.