kevincei

Watch the Big Three Banks for Market Answers

I would submit that there is a truth to the facts layed out by Roubini etc. Problem started with easy credt. There is a debt bubble. Every tom dicK and harry got overextended. CDS market is now threatening the solvency of all banks. In reality most of these banks are already insolvent and hence their inability to lend.
www.guardian.co.uk/bus...
Next storm is coming from Eastern Europe. Hungary and few other countries are teetering on collapse.
www.ft.com/cms/s/0/3e2...
South Korea is having severe debasement of their currencies. All of their banks have been downgraded as to their credit ratings. These were the banks who were trying to buy Lehman. Obviously any bank jumping to buy others are having a ton of problems themselves.

According to Roubini this is not a financial crisis. It is a global credit and debt crisis. We will never be able to lend ourselves out of this. It is probably criminal to pump bullishness and bring poor suckers into this stock market destroying wealth. The truth is there will not be any meaningful recovery of stocks for years to come. Only continued wealth destruction.
Waht is coming is worlwide deflation and destruction of debt. There is nothing out debt laden governments can do except to disrupt the normal market forces.
www.minyanville.com/ar...

What Will Fannie / Freddie Mean for Monday?

Financials own about 35billion of preferred shares. In addition to that many banks own common shares. They are obviously getting a big hair cut.
Government action may lower mortgage interest rates slightly. Yet they want to phase out in 2009 by 10percent annually. This means more tightening of the housing market at the time when more than 1 million more houses will be added to foreclosure list.
They are also tightenign lending standandards. People expect houses to fall another 10-15% and housing correction will only increase.
With global slow down and continuing credit crunch worsening with further losses to the banks stocks will hit a new low and then go into a panic crash in October.

Home Inventories Soaring? Not Exactly

The reality is beyond these numbers. Tom Brown actually had been bullish on the financials and housign a tad too early. Some of the facts known to common man but beyond the grasp of rich traders and hedge fund managers are going to keep housing market down for years to come. Many people are now waiting to put their houses on the market and waiting for higher prices. If prices were to go up for any reason (probably wont happen for two yrs) many people will put their houses on sale.
Today many californians are able to stay in a house for upto two yrs with the help of certain legal help without paying a cent in rent. These are owned by banks and banks are not getting a cent on their mortgage holding. The treand is increasing. Due to the nature of securitization of the mortgage paper there is a legal loop hole now becoming more and more prevalent thoroughout california and the rest of the country. This augments the losses to the banks exponentially and is well known to common people. I have about ten friends (close and persoanal) who are currently doing that. IF you doubt it just do a google search and find out.
With government stepping in housing will be fully regulated. No more hanky panky loans. Remaining banks owning common and preferred shares of FRE and FNM are going to get a big hair cut on those ownerships.
They are also getting a big hair cut on their revenue streams. By keeping the false accounting in books these cash strapped banks will only worsen the country's credit crisis. FDIC can help the situation by closing down all these zombified banks and letting healthy banks take over deposits.
Just like the japanese banking index dropped 90 percent of the bubble high this unwinding will continue. July fifteen low is not the real low. Real low will be about fifty percent below that according to my opinion and the opinons of many who were able to predict the exact downturn. Tom Brown was famous for coming against Whitney Meredith and calling her a liar. I really think Whitney Meredith spoke the truth and is still far more credible than Tom Brown