Estimated write-downs, for collateralized debt obligations (CDO's), in billions.
Citigroup....$18.7
Merrill Lynch....$11.5
JP Morgan Chase....$3.4
Friday, December 28, 2007
Write Downs - CDO's
Goldman Sachs boosted the credit-crunch damage it thinks some Wall Street firms will suffer in the fourth quarter.
Citigroup....$18.7
Merrill Lynch....$11.5
JP Morgan Chase....$3.4
Citigroup....$18.7
Merrill Lynch....$11.5
JP Morgan Chase....$3.4
Thursday, December 27, 2007
Population up 1%
July 1, 2006 to July 1, 2007 - only two states, Michigan and Rhode Island, lost population. Louisiana regained some ground lost after Hurrican Katrina in 2005, and Nevada was the fastest growing state.
Overall, nearly a three million gain in US Population in one year. From 2000-2007, a 20 million increase or 7%. The largest state, California at 36.5 million or 12.6 million more than Texas.
With the housing downturn, fewer people are moving. That, combined with restrictive lending, and the increased supply of available homes. Home Prices are falling.
Home prices in 11 big metro areas see record drops in October. Making 2007 one of the worst real estate markets since the year the United States entered World War II. The S&P/Case-Shiller index fell in 17 of 20 cities. The biggest falls occurring in Miami 12%, Tampa 12%, Detroit 11% and San Diego 11%. Composite prices fell over 6%. Charlotte 4%, Seattle 3% and Portland 2% were the only cities in the positive - and that will likely end very soon.
Shiller expects composite prices to fall another 5-7% in 2008.
Overall, nearly a three million gain in US Population in one year. From 2000-2007, a 20 million increase or 7%. The largest state, California at 36.5 million or 12.6 million more than Texas.
With the housing downturn, fewer people are moving. That, combined with restrictive lending, and the increased supply of available homes. Home Prices are falling.
Home prices in 11 big metro areas see record drops in October. Making 2007 one of the worst real estate markets since the year the United States entered World War II. The S&P/Case-Shiller index fell in 17 of 20 cities. The biggest falls occurring in Miami 12%, Tampa 12%, Detroit 11% and San Diego 11%. Composite prices fell over 6%. Charlotte 4%, Seattle 3% and Portland 2% were the only cities in the positive - and that will likely end very soon.
Shiller expects composite prices to fall another 5-7% in 2008.
Wednesday, December 26, 2007
Berkshire to buy Marmon Holdings
Berkshire Hathaway, the conglomerate headed by billionaire investor Warren Buffett announced plans to buy 60% of manufacturing and services group Marmon Holdings for $4.5 billion.
Privately held Marmon is an international group of more than 125 businesses in sectors including cable, transportation services and industrial products. Its collective revenue totals about $7 billion. Berkshire Hathaway said it will acquire the remaining 40% through staged acquisitions over a five to six year period of consideration to be based on Marmon's future earnings.
Peer-to-Peer Lending
As the global credit squeeze leads banks to tighten their lending, a niche industry is emerging. The eBay of consumer loans, peer-to-peer lenders.
Default rates are lower for peer-to-peer loans than for other consumer loans. Typical loan amounts range from $8,000 to $20,000, mutiple lenders may fund a loan, each offering to lend $25 to $200 to a borrower. Rates average 10-16%. Lenders usually decide whether to lend money to a particular borrower - and at what rate - based on the borrower's credit score and existing debt. The decision is sometimes based on social factors as well.
Default rates are lower for peer-to-peer loans than for other consumer loans. Typical loan amounts range from $8,000 to $20,000, mutiple lenders may fund a loan, each offering to lend $25 to $200 to a borrower. Rates average 10-16%. Lenders usually decide whether to lend money to a particular borrower - and at what rate - based on the borrower's credit score and existing debt. The decision is sometimes based on social factors as well.
www.VirginMoneyUS.com
www.Prosper.com
www.Prosper.com
The popularity of such loans is skyrocketing!! 2005 saw $100 million in loans, 2006 that amount tripled, 2007 is estimated to have doubled that of 2006. The estimates call for further expansion, a 130% increase in 2008 followed by 100% increases in both 2009 and 2010. This will soon be on every available street corner in America.
Talega Village Center
Opening first, the 46,000 square foot Ralphs Fresh Fare.
Within the next three months the majority of the remaining stores and restaurants located in the 103,000 square foot shopping center.
By the end of January 2008:
Within the next three months the majority of the remaining stores and restaurants located in the 103,000 square foot shopping center.
By the end of January 2008:
- Panera Bread
- Blue-Eyed Girl
- Talega Nail & Spa
- Bella Pilates
- V's Barbershop
- Favorite J's
- Eric Hanan
- Peet's Coffee & Tea
- Paper Annex
- Talega Cleaners
- Toba Salon
- A Fine Affair
- Sea Smoke
- The Little Gym
- Fairy Tales Children & Maternity Boutique
- Wild's Animal Supplies
- Sundried Tomato Cafe
- Maggie Moo's Ice Cream
- Juice It Up
- First Class Pizza
- Fitness Together
- Wells Fargo
- Verizon
- The Vine's Leaf
www.talegavillagecenter.com
Sunday, December 23, 2007
Option ARMS
Option adjustable-rate mortgages, which give borrowers a choice about how much to pay back each month. If they choose to make only the minimum payment on a regular basis, their loan balance can actually rise.
That is a problem, when home prices are falling. Merrill Lynch called option ARM's "ticking time bombs, that will start ticking louder next year. Estimates that losses could total $100 billion on top of the other $400 billion in losses on subprime and other mortgages."
With lending standards getting tighter, refinancing out of these option ARM's may be impossible.
In 2006, $255 billion of option ARM's were originated, up from $145 billion two years earlier. All of these loans are due to reset between 2008 and 2012. Peaking, in 2010-2011. A majority of those borrowers will owe more than their home is worth.
Example: Jirina Koy, a data operator and her husband, Savane, who is disabled, took out an option ARM in 2005 when they refinanced the mortgage on their 1,200 square foot home in Stockton, California, pulling out $60,000 in cash. Ms. Koy did not understand the terms of the loan, and that it carried a $12,000 prepayment penalty. Refinancing is not an option now. The balance on the loan has climbed to $357,000 from $336,000 while the value of their home has dropped to $250,000 or less. Their lender, Countrywide Financial Corp, has offered to freeze the interest rate on her loan at 5.25%, down from its current 8.5%, while requiring her to make payments of principal and interest.
That is a problem, when home prices are falling. Merrill Lynch called option ARM's "ticking time bombs, that will start ticking louder next year. Estimates that losses could total $100 billion on top of the other $400 billion in losses on subprime and other mortgages."
With lending standards getting tighter, refinancing out of these option ARM's may be impossible.
In 2006, $255 billion of option ARM's were originated, up from $145 billion two years earlier. All of these loans are due to reset between 2008 and 2012. Peaking, in 2010-2011. A majority of those borrowers will owe more than their home is worth.
Example: Jirina Koy, a data operator and her husband, Savane, who is disabled, took out an option ARM in 2005 when they refinanced the mortgage on their 1,200 square foot home in Stockton, California, pulling out $60,000 in cash. Ms. Koy did not understand the terms of the loan, and that it carried a $12,000 prepayment penalty. Refinancing is not an option now. The balance on the loan has climbed to $357,000 from $336,000 while the value of their home has dropped to $250,000 or less. Their lender, Countrywide Financial Corp, has offered to freeze the interest rate on her loan at 5.25%, down from its current 8.5%, while requiring her to make payments of principal and interest.
Saturday, December 22, 2007
Super SIV
Citigroup, Bank of America and JP Morgan Chase abandoned plans to create a "super SIV" fund that would bail out investments hurt by the subprime mortgage crisis. The move comes after the banks struggled to raise money for the fund.
The banks had been trying since September to set up a fund that would buy securities tied to mortgages and other assets that were controlled by banks in off-balance-sheet funds.
The banks had been trying since September to set up a fund that would buy securities tied to mortgages and other assets that were controlled by banks in off-balance-sheet funds.
Monday, December 17, 2007
Will Smith - Movie Star
"I Am Legend" marks his 11th #1 film and 6th in the past 6 years.
A look at the opening weekends (in millions):
A look at the opening weekends (in millions):
- I Am Legend, 2007....$75.4
- I, Robot, 2004....$52.2
- Men In Black II, 2002....$52.1
- Men In Black, 1997....$51.1
- Independence Day, 1996, $50.2
- Shark Tale, 2004...$47.6
- Bad Boys II, 2003....$46.5
- Hitch, 2005....$43.1
- Wild Wild West, 1999....$27.7
- The Pursuit of Happyness, 2006....$26.5
- Bad Boys, 1995....$15.5
Experts Picks for 2008 - Stocks
Merrill Lynch, Richard Bernstein
- Ecolab $51.39 ECL
- Bristol-Myers Squibb $28.08 BMY
- Torchmark $60.30 TMK
- Chevron $92.02 CVX
- Clorox $65.74 CLX
- Aetna, $57.85 AET
- Intel $26.29 INTC
- Raytheon $61.66 RTN
- Celanese $44.33 CE
- Travelers $52.69 TRV
- JP Morgan Chase, $45.20 JPM
- Nymex Holdings $127.85 NMX
- General Electric $36.91 GE
- Intel $26.29 INTC
- Marriott $31.49 MAR
- Berkshire Hathaway $4,525 BRK.B
Thursday, December 13, 2007
Mission Beach, San Diego
Noisy neighbors can now be fined $1,000.
A press conference was held at the southern tip of Mission Beach, San Diego Police Department Captain Boyd Long, Councilman Kevin Faulconer, code enforcement officials and community leaders.
The new program allows police officers to issue $1,000 fines per tenant responsible for the noise violation. The community wanted a tool to deal with houses that habitually cause problems. The program primarily targets college students and young people who rent near the beach and stay up late making noise.
According to police, more than 4,600 calls were received in 2006 for noise-related service.
As of August, the division has received 3,380 calls this year.
A press conference was held at the southern tip of Mission Beach, San Diego Police Department Captain Boyd Long, Councilman Kevin Faulconer, code enforcement officials and community leaders.
The new program allows police officers to issue $1,000 fines per tenant responsible for the noise violation. The community wanted a tool to deal with houses that habitually cause problems. The program primarily targets college students and young people who rent near the beach and stay up late making noise.
According to police, more than 4,600 calls were received in 2006 for noise-related service.
As of August, the division has received 3,380 calls this year.
Wednesday, December 5, 2007
Americans hungry for Smart car
Thousands of motorists want to be among the first owners of the fuel-sipping Smart car in the USA. Demand that is racing past production capacity. Smart, which reaches US dealerships in January, has received $99 deposits from more than 30,000 customers to reserve the two-seater and about 90% are placing full orders.
The 8-foot, 8-inch Smart ForTwo, which can park nose-to-curb, is being marketed toward urban drivers, college students and baby boomers who no longer need a large vehicle.
www.smartusa.com
Tuesday, December 4, 2007
Brad Pitt - New Orleans Homebuilder
Pitt's Plan, to erect 150 eco-friendly homes in the Lower 9th Ward. The neighborhood was largely destroyed when the levees holding back floodwaters broke in the aftermath of Hurrican Katrina in 2005.
Pitt says, "The goal here immediately is to see the community back, to see families hanging out again, kids riding their bikes in the street. I see nothing in our way right now other than financial support. I know this about the American spirit, we are there to help in a second. I hope that groundbreaking will start in the spring and that people will be moving in as early as summer. I find this place very special...unique. It'd be hard to picture America without it. Only a handful of families have returned to the Lower 9th Ward, which once had 5,000 homes."
The Make It Right Foundation needs $22.5 million to build all 150 homes. Pitt has pledged to match $5 million worth of donations, saying they have raised $2 million so far.
Under the initiative, residents will be able to buy a $175,000 home for $300 a month - or 30% of their monthly income (the maximum percentage one would pay).
www.makeitrightnola.org
Hotels
PKF Hospitality Research, 2008 forecast predicts that the average hotel room rate in the USA will go up about 5.3% in 2008, to just over $109/night.
Rates in the luxury segment will rise 6.6% to an average of nearly $309/night.
American Express Travel Forecast for 2008 paints a similar picture for hotel price increases next year: up 4-6% in the midmarket segment, up 5-7% in the higher-priced segments.
Rates in the luxury segment will rise 6.6% to an average of nearly $309/night.
American Express Travel Forecast for 2008 paints a similar picture for hotel price increases next year: up 4-6% in the midmarket segment, up 5-7% in the higher-priced segments.
Plan to Slow Foreclosures
Treasury Secretary Henry Paulson plans to unveil a plan being hammered out with the mortgage industry that's intended to slow the record number of homes falling into foreclosure and ease the damage from the housing recession.
Mark Zandi, chief economist for Moody's Economy.com says, "This is the most serious housing recession since the Great Depression". Zandi predicts that home prices, on average, will fall 7% more through next year.
Mark Zandi, chief economist for Moody's Economy.com says, "This is the most serious housing recession since the Great Depression". Zandi predicts that home prices, on average, will fall 7% more through next year.
At the Movies - Box Office
"Enchanted" continues to charm audiences and becomes Disney's third release this year to hold the top spot two weeks in a row.
- Enchanted
- Beowulf
- This Christmas
- Hitman
- Awake
- Fred Claus
- August Rush
- The Mist
- Bee Movie ($117 million)
- No Country for Old Men
Monday, December 3, 2007
Commodities go ka-ching
2007 percentage change:
Lead - up 78%
Wheat - up 73%
Heating Oil - up 58%
Soybeans - up 58%
Gas Oil - 53%
Crude Oil - up 45%
Gold - up 22%
Cotton - up 3%
Coffee - down 1%
Corn - down 1%
Lean Hogs - down 11%
Aluminum - down 13%
Sugar - down 17%
Nickel - down 21%
Zinc - down 41%
Commodity prices are jumping for a host of reasons. Two in particular: India and China, whose economies are racing. Also, much of Asia and the Third World in general are seeing dramatically higher standards of living. And, poor weather hurt this years world wheat crop. Rising demand for corn-based ethanol means not only that agriculture prices are more closely tied to oil prices, but that farmers are devoting more acreage to corn and less to other crops - a big reason soybean prices jumped bout $6 a bushel on futures markets last year to nearly $11 this year.
Lead - up 78%
Wheat - up 73%
Heating Oil - up 58%
Soybeans - up 58%
Gas Oil - 53%
Crude Oil - up 45%
Gold - up 22%
Cotton - up 3%
Coffee - down 1%
Corn - down 1%
Lean Hogs - down 11%
Aluminum - down 13%
Sugar - down 17%
Nickel - down 21%
Zinc - down 41%
Commodity prices are jumping for a host of reasons. Two in particular: India and China, whose economies are racing. Also, much of Asia and the Third World in general are seeing dramatically higher standards of living. And, poor weather hurt this years world wheat crop. Rising demand for corn-based ethanol means not only that agriculture prices are more closely tied to oil prices, but that farmers are devoting more acreage to corn and less to other crops - a big reason soybean prices jumped bout $6 a bushel on futures markets last year to nearly $11 this year.
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