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Tuesday, January 29, 2008

Subprime Wrecking Ball Continues to Swing

Subprime wrecking ball continues to swingItems of interest:

Countrywide Financial Posts Loss on Overdue Mortgages -- Countrywide Financial Corp., the mortgage lender that Bank of America Corp. plans to buy, lost $422 million in the fourth quarter, failing on its promise to return to profitability. The shares rose 7.4 percent as concern eased that Bank of America might renege on the takeover.

The net loss equaled 79 cents a share, compared with a profit of $621.6 million, or $1.01 a share, in the year-earlier period, the Calabasas, California-based company said in a statement today. The loss was more than twice the 28 cents predicted in a Bloomberg survey of analysts. [...]
Housing Wire: Countrywide’s Fourth Quarter: Ouch
Seeking Alpha:
Moody's CEO Wins the Blame-Shifting Prize -- Did you see what Raymond McDaniel, Moody's CEO, had to say in Davos last week about any blame the ratings agencies might deserve regarding the subprime mess? It's pretty shocking: "A lot of things could have been done better," he told a panel at the World Economic Forum. "Some are the responsibility of rating agencies, some of other participants in the market. In hindsight it is pretty clear to us there was a failure in some key assumptions supporting our analytics and our models. The key assumptions failed in part because the information policy, completeness and veracity feeding the work agencies were doing, was deteriorating." [Emph. added]

How pathetic. [...]
The Anasazi in TemeculaInfectious Greed:
The Anasazi in Temecula -- I got to thinking about the Anasazi while driving from San Diego to Palm Desert today. North of San Diego, a little southeast of Los Angeles, there is a city called Temecula. It has grown incredibly over the last 20 years, largely with people priced out of the L.A. and Orange County (and even San Diego) markets buying real estate there, and then enduring monstrous commutes.

You have to see it to believe it. Chaparral-clad high-desert hillsides are paint-gunned with subdivisions, most of which look alien, more like they fell from space [...]
Daily Reckoning:
U.S. Housing Stocks Down $2 Trillion -- A trillion here…a trillion there…pretty soon you’re talking real money.

U.S. stocks are down about 10% so far this year…that’s about $1.5 trillion lost. U.S. housing stock is said to be down about $2 trillion. And losses from subprime, credit cards, home equity lines, rogue traders…and hanky panky…probably add up to another trillion or so.

And let’s not forget the cost of the War Against Nobody in Particular – the war on terror…which costs a couple hundred billion.

And now, along comes…what’s this…a bi-partisan giveaway of tax rebates! Yes, it’s in today’s news. The Dems and the Reps have agreed to give taxpayers back some of their money. And Treasury secretary Paulson appeared in Congress telling them to get a move on. If they don’t get those checks out soon, it will be too late. [...]

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