Rumours are floating about that JP Morgan will write down another $3 billion or so.
Might be a couple more to come yet??
Cheers
........Kauri
lingering talk of large losses at US financial institutions, including reports on BoA, Wachovia, Goldman Sachs and Morgan Stanley, look to be spurring selling.
Morgan Stanley writes off another $5.7 billion in addition to the $3.7 billion they already announced in November. That's a nice $9.4 billion in writeoffs in total for the fourth quarter. However they got a $5 billion injection from China which rather than be taken as a sign of how bad things are will probably be cheered by Wall Street.
Morgan Stanley writes off another $5.7 billion in addition to the $3.7 billion they already announced in November. That's a nice $9.4 billion in writeoffs in total for the fourth quarter. However they got a $5 billion injection from China which rather than be taken as a sign of how bad things are will probably be cheered by Wall Street.
WASHINGTON (AP) -- Mortgage application volume plummeted 19.5 percent during the week ending Dec. 14, according to the Mortgage Bankers Association's weekly application survey.
The trade group's application index fell to 653.8 from 811.8 the previous week.
Refinance volume tumbled 27.3 percent during the week, while purchase volume fell 10.6 percent. Refinance applications accounted for 53.2 percent of total mortgage applications, down from 57.6 percent during the prior week.
The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.
I can't wait to get some good deals on Repo'd homes!
US banks such as Citigroup, Merrill Lynch and UBS are facing a wave of multibillion-dollar class-action lawsuits, as law firms race to build cases against them on the basis that they did not reveal to investors the dangers lurking in their sub-prime mortgage-related investment portfolios.
The AP analyzed data representing about 325 million individual accounts held in trusts that were created by credit card issuers in order to sell the debt to investors -- similar to how many banks packaged and sold subprime mortgage loans. Together, they represent about 45 percent of the $920 billion the Federal Reserve counts as credit card debt owed by Americans.
Investors also are backing away from buying securitized credit-card debt
Among the trusts examined, Bank of America Corp. had the highest delinquency volume, with overdue accounts valued at $5 billion. Bank of America defaults in October were almost 200 percent higher than in October 2006.
Other trusts -- including those linked to Capital One, American Express Co., Discover Financial Services Co. and those containing "branded" cards from Wal-Mart Stores Inc., Home Depot Inc., Lowe's Companies Inc., Target Corp. and Circuit City Stores Inc. -- also reported striking increases in year-over-year delinquency and default rates for October. Most banks and other financial institutions holding credit card debt on their own books also reported double-digit increases in delinquencies.
Section 13 (3) allows the Fed to take emergency action when banks become "unwilling or very reluctant to provide credit". A vote by five governors can - in "exigent circumstances" - authorise the bank to lend money to anybody, and take upon itself the credit risk. This clause has not been evoked since the Slump.
Woops, they've done it again - they just can't help themselves those Yanks!
From the story above, what could be another sub-prime like disaster waiting to happen -
And sub-prime was 'only' 20% of the mortgage market, this sector is 45%.
So they have 'securitized' credit card debt too. Will this one be 'contained' as well?
"You're looking at more and more distress -- consumers desperately trying to preserve their credit lines, but there's nowhere else to go," said Robert Manning, director of the Center for Consumer Financial Services at Rochester Institute of Technology. "It's like a game of dominoes."
U.K. House Prices Fall the Most in Three Years, Hometrack Says
By Craig Stirling
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Dec. 24 (Bloomberg) -- U.K. house prices fell the most in three years in December, and the threat of more declines may cause the property market to seize up in 2008, Hometrack Ltd. said.
The average cost of a home in England and Wales slipped for a third month, dropping 0.3 percent to 175,200 pounds ($348,350), the London-based research group said today. The number of property transactions will fall 17 percent and prices will rise just 1 percent next year, Hometrack forecast.
Bank of England policy makers said this month that a drop in house prices seemed ``more pronounced'' than expected as they cut their benchmark interest rate for the first time in two years. Record debt, higher mortgage costs and the property market's worst performance since 1995 have discouraged homebuyers.
``The second half of the year has seen a major reversal in confidence,'' Richard Donnell, director of research at Hometrack, said in a statement. ``Just as the financial markets have faced a liquidity squeeze, so the housing market is in danger of facing its own liquidity squeeze.''
Prices increased 3 percent from a year earlier, the least in 18 months, Hometrack said. The average selling time for a home rose to 8.3 weeks, the most since the survey of real-estate agents and surveyors began in 2001.
Mortgage lender HBOS Plc said Dec. 5 that home values fell for a third month in November, the worst streak in 12 years. Estate agents and surveyors became the most pessimistic about house prices since at least 1998 last month, the Royal Institution of Chartered Surveyors said Dec. 13.
Lack of Homes
The number of property transactions will fall because uncertainty among sellers about the health of the market will cause a ``major lack'' of homes for sale in the first quarter, Donnell said.
``This will act as a support to prices, while also leading to greater price volatility in those markets where there is the greatest lack of supply,'' he said.
Citigroup Inc. has been less optimistic, forecasting that a ``toxic mix'' of overvaluation, record debt levels and prohibitive mortgage costs will probably lead to further price declines.
Britons face higher loan costs after contagion from the U.S. subprime-mortgage collapse froze lending between banks. That also led to a run on the deposits of mortgage lender Northern Rock Plc in September, the first on a British bank in more than a century.
Average Rate
The average rate offered by lenders on a mortgage for 95 percent of the price of a property, fixed for 24 months, increased to 6.44 percent from 6.42 percent in October, the Bank of England said Dec. 11. Total outstanding consumer debt is 1.4 trillion pounds.
The central bank cut the benchmark rate by a quarter point to 5.5 percent on Dec. 6 on concern about the prospects for economic growth. That may nevertheless not be enough to lure buyers back into the market, said Hometrack.
``Levels of market activity are likely to remain subdued over the course of 2008, especially over the first half of the year,'' Donnell said. ``Lower interest rates and continued growth in household incomes will help to ease affordability pressures but it is a trend that will need to run for a good 12 to 18 months.''
To contact the reporter on this story: Craig Stirling in London at Cstirling1@bloomberg.net
SAN FRANCISCO (AP) -- Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.
An Associated Press analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.
Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.
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