Empiric Student Property Share Discussion Threads

[briarberry] 28/8/2008 21:23

Computer maker Dell Inc. says its fiscal second-quarter profit fell 17 percent. Restructuring charges were partly to blame.

[briarberry] 28/8/2008 20:09

US retail group Sears has reported a 62% fall in second-quarter profits after it struggled to attract customers through its doors.

[briarberry] 27/8/2008 22:48

Bankruptcy filings surge 29%

By Ben Rooney, CNNMoney.com staff writer - Wednesday August 27

Bankruptcy filings surged 29% in the 12 months that ended June 30, according to government figures released Wednesday.

Total filings rose to 967,831 from 751,056 a year earlier.

Business filings jumped more than 41% to 33,822 from 23,889 in the year-ago period. Personal filings totaled 934,009, up 28% from last year.

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The American Bankruptcy Institute expects filings to reach 1.2 million this year, as problems in the housing market have "reverberated throughout the economy," he added.

[briarberry] 27/8/2008 19:54

WASHINGTON (AP) -- U.S. thrifts lost $5.4 billion in the second quarter and set aside a record amount ($14 billion) to cover losses from bad mortgages and other loans.

Data from the U.S. Office of Thrift Supervision released Wednesday show federally-insured savings and loan institutions posted their second-largest quarterly loss ever in the April-June period, after the $8.8 billion loss in the fourth quarter of last year. Heavily focused on mortgage lending, thrifts have been stung by mounting home-loan defaults.

..the Federal Deposit Insurance Corp. said the number of troubled banks and thrifts jumped to 117 -- the highest level since mid-2003.

[briarberry] 27/8/2008 15:43

global slow down...

Aug. 27 (Bloomberg) -- China Shipping Container Lines Co., the country's second-largest cargo-box carrier, said first-half profit dropped 45 percent after fuel costs surged and the global economic slowdown stunted demand.

China Shipping follows Orient Overseas (International) Ltd. and Neptune Orient Lines Ltd. in reporting lower profit because of higher fuel costs and slower demand in the U.S. and Europe. The company also said it's ``hard to be optimistic'' about the rest of the year because of the world economy and excess capacity in the global fleet.

[briarberry] 27/8/2008 15:35

oil

crude -0.1

gasoline -1.2

[briarberry] 26/8/2008 23:35

Home Prices Continue To Decline - Case-Shiller Index - the biggest annual decline on record...


The Case-Shiller 20 index showed that in the 12 months before June, American home values dropped 15.9 percent in the 12 months before June, the biggest annual decline on record.

All 20 cities measured by the Case-Shiller index reported annual declines in June, with seven cities showing price drops of more than 20 percent. A separate 10-city price index, which began in 1988, was off 17 percent, its worst annual reading ever.

Of the 20 cities surveyed in the Case-Shiller index, Las Vegas suffered the worse annual decline, with values dropping 28.6 percent in the last year. Prices in Miami fell 28.3 percent, and values in Phoenix dropped 27.9 percent in the same period.

Only previously owned, single-family homes are included in the Case-Shiller survey, which economists consider the most reliable indicator of home values.

[briarberry] 26/8/2008 23:29

DJ FDIC Insurance Fund Down To 1.01% Of Insured Deposits At End-2Q

(it's no wonder that Americans have been rushing to buy gold coins)

[briarberry] 26/8/2008 18:37

Fuzzy Numbers, from the gold fred, a video for lazy readers, nothing new but very well done...

[briarberry] 26/8/2008 16:01

China - signs of a slow down, plus more USD buying (global slow down???)...

Rule changes for commercial banks are acting as cover for exchange rate intervention, writes Ambrose Evans-Pritchard

China has resorted to stealth intervention in the currency markets to amass US dollars, using indirect means to hold down the yuan and ease the pain for its struggling exporters as the global slowdown engulfs the economy.
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China's PMI purchasing managers index fell below 50 for the first time in July, signalling an outright contraction in manufacturing output. Hong Kong's economy contracted 1.4pc in the second quarter.

"During the first half of this year, about 67,000 small and medium-sized companies went bankrupt throughout China, leaving more than 20m people out of work," said the National Development and Reform Commission. "Bankruptcies of textile and spinning companies have numbered more than 10,000. Two thirds are on the brink of bankruptcy."

House prices have already fallen 18pc in Guangzhou and 9pc in Beijing. Prices are now falling in cities that make up over half China's population.

[briarberry] 26/8/2008 12:05

Dead Men Walking (Never trust Wall Street)...

Let's use Lehman Brothers as the poster child of this sort of behavior. I wrote a piece last week that singled out National City, Washington Mutual and Lehman Brothers. Before the credit crisis started, Lehman, at the time known for its savvy timing, suddenly came to market for $5 billion of long-term bonds when they didn't need capital-or did they know something was awry as I suspect? Last year, with the Credit Crisis in its infancy, Lehman announced a $100,000,000 stock buyback. The shares, as you would expect, popped on the news, but of course no stock was ever re-purchased. As the stock began to sell off, they kept saying that capital was not needed.

Then, on June 9, 2008 they sold 143,000,000 shares at $28 per share. As hedge fund manager David Einhorn said, "They've raised billions of dollars they said they didn't need to replace losses they said they didn't have." In between was an enormous preferred stock deal-75,900,000 shares at $25 per share at a rate of 7.95%. Those shares now change hands at $15 per share for a yield of 13.1%. Its pretty hard to turn a profit when your cost of capital is greater than 10%.

During this time, in January, the company actually raised its common dividend by 15% year-over-year. They have written off north of $8 billion since the Credit Crisis began and when they release earnings (or lack thereof) next month, estimates are for another round of $2-4 billion of write-downs. They have reportedly been trying to shop $40 billion of impaired real estate and they are mired in all sorts of Alt A, sub-prime, CMBS and CDO's and CLO's.

The best part is that they said they "shrank their balance sheet" when in fact they were sold to an "off balance sheet subsidiary" that they own part of. The bonds weren't sold, they were just "relocated". I sure wish I could do that when I make a mistake. And lets not forget that the Federal Reserve opened up the discount window to primary/dealers so that they could off-load a bunch of nuclear waste on to the Fed's balance sheet, which now looks like one big hedge fund in drag. And then the SEC temporarily changed short selling rules for 'the Group of 19' (the GSE's and Primary Dealers) for a few weeks, resulting in a short squeeze, but their shares still hobble along at recent lows.

On Friday, there was a rumor that the Korean Development Bank would buy Lehman, but again that turned out to be hogwash. And if they wanted to raise debt, like they say, "lotsa luck". Their bonds trade around +500 basis points to treasuries but my guess is that even if they could get deal done, they would have to come in the 10% range, again, uneconomic.

So now we have the recipe and an example for "Dead Men Walking":

Common stock too low to issue new shares.
Preferred stock yield too high to issue new shares economically.
Issuing debt is uneconomic.
More write-offs coming in days to come.
Business trends are awful.
Denial.
Now that we have identified the "poster child", let's find a few more... Or sadly, more than a few.

Zions Bancorp
KeyCorp
Fifth Third Bank
Washington Mutual
National City
Regions Financial
General Motor/GMAC
Ford/Ford Motor Credit Co
Wachovia
CitiGroup

[briarberry] 25/8/2008 17:17

The next stage of the mortgage debacle is only starting to rear its ugly head and all early signs tell us that this is going to be even worse than the subprime mortgage collapse.

[briarberry] 25/8/2008 15:39

Are Americans finally waking up to the fact that their banks are in trouble ???


Aug. 21 (Bloomberg) -- The U.S. Mint suspended sales of its 1-ounce ``American Eagle'' gold coins.

It is the first time in two decades that the Mint halted sales of the coins, which are made of 22-carat gold from domestic mines.

In a memo to dealers dated Aug. 15, Cathy Laperle, a Mint official, said: ``Due to the unprecedented demand for American Eagle Gold One Ounce Bullion coins, our inventories have been depleted. We are therefore temporarily suspending all sales of these coins. We are working diligently to build up our inventory and hope to resume sales shortly.''

[briarberry] 25/8/2008 15:34

Inflation or Deflation? Part 1 (podcast)
Posted by commoditywatch on August 24th, 2008



Part 1 features:

James Turk of Goldmoney
Mish Shedlock of Global Economic Analysis
and Michael Hampton of Global Edge Investors

Part 2 with Dr Marc Faber and Bob Hoye will be out later this week.


(The $100 billion tax rebate and the Housing Bill says to me that the Fed is planning to print their way out of this mess (and into another mess!). Although we'll just have to wait and see how much they can and are willing to print. I guess a lot depends on how many USdollars foreign suppliers are willing to take)

[briarberry] 24/8/2008 19:41

FNM & FRE

GRETCHEN MORGENSON

These government-sponsored entities guarantee or hold $5.2 trillion in mortgages and have been hammered by defaults across the nation. Fannie Mae's shares closed on Friday at $5, down from almost $70 a year ago. Freddie Mac fell to $2.61, which is down from about $65. Their heavily leveraged balance sheets magnify even a small rise in delinquencies.

[briarberry] 24/8/2008 19:15

GM, Ford Seek $50 Billion From U.S., Double Request (Update3)

By Jeff Green

Aug. 22 (Bloomberg) -- General Motors Corp., Ford Motor Co., Chrysler LLC and U.S. auto-parts makers are seeking $50 billion in government-backed loans, double their initial request, to develop and build more fuel-efficient vehicles.

The U.S. automakers and the suppliers want Congress to appropriate $3.75 billion needed to back $25 billion in U.S. loans approved in last year's energy bill and add $25 billion in new loans over subsequent years, according to people familiar with the strategy. The industry is also seeking fewer restrictions on how the funding is used, the people said today.

[briarberry] 24/8/2008 18:42

delinquencies for subprime loans in 2006 bonds climbed to 41.7 percent...


Mortgage Delinquencies for Loans in Securities Soar, S&P Says

By Jody Shenn

Aug. 21 (Bloomberg) -- Late payments on U.S. home loans underlying private mortgage bonds from 2005, 2006 and 2007 continue to soar, according to Standard & Poor's.

Total delinquencies for subprime loans in 2006 bonds climbed to 41.7 percent, based on July reports from trustees, from 34.2 percent in February, S&P said today. Late payments on so-called Alt-A loans rose to 21.5 percent from 15.2 percent, while prime- jumbo delinquencies increased to 4.5 percent from 2.9 percent, the New York-based company said in separate reports.

[briarberry] 23/8/2008 22:38

It's more than Fannie and Freddie (another 0.85 $trillion more)

by John Mauldin - August 22, 2008

Yet another crisis confronts us, as we will have to deal with the aftermath of a rather large number of bank failures over the next year, which is likely to overwhelm the ability of the FDIC to insure your bank deposits. Today we look at the banking system, the FDIC, and Freddie and Fannie. It's not pretty, but as realists we must know what we are facing.
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And what he sees is not pretty. There is a crisis brewing. He expects 100 banks to fail between now and July of 2009. Most of them will be small, but there will be a few large banks. The total assets of those banks he estimates to be $850 billion (not a typo!). Those are the assets the FDIC is going to have to cover when they take over the banks.

Take Washington Mutual as an example. There are problems there. Their debt now trades at 20%, which is worse than junk.

[briarberry] 22/8/2008 16:56

Buffett says FNM & FRE are too big to fail but others are saying that they're too big to bailout ? (only time will tell?)


Billionaire investor Warren Buffett said Friday he believes mortgage giants Fannie Mae and Freddie Mac are too big to fail, but shareholder equity in those companies could be wiped out.

[briarberry] 20/8/2008 22:33

Fannie Mae and Freddie Mac. The quasi-private mortgage agencies are in danger of being overwhelmed by losses on their holdings of mortgages and mortgage-backed securities (MBS). Ajay Rajadhyaksha of Barclays Capital estimates that Freddie's balance-sheet has a negative value of at least $20 billion when marked at market prices; Fannie is $3 billion in the red.

[briarberry] 20/8/2008 15:36

Crude stocks up + 9.4 million barrels

gasoline down - 6.2

[briarberry] 20/8/2008 14:58

so when will the Fed start buying Fannie ???



Aug. 20 (Bloomberg) -- Fannie Mae and Freddie Mac's success in repaying $223 billion of bonds due by the end of the quarter may determine whether they can avoid a federal bailout.

[briarberry] 19/8/2008 20:03

Just another false alarm ? Sooner or later we'll see a few more Bear Stearns...


The AA and A spreads have blown out by 150 basis points over the weekend! Something is blowing up.

[briarberry] 19/8/2008 19:40

I wonder where China will find support, it's nearly retraced the entire blowoff ?

[briarberry] 19/8/2008 15:46

The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.

Data compiled by Lombard Street Research shows that the M3 ''broad money" aggregates fell by almost $50bn (£26.8bn) in July, the biggest one-month fall since modern records began in 1959.