Daniel’s Comments (group member since Aug 16, 2007)

Daniel’s comments from the Is this a world wide monetary collapse? group.

from: The New York Times Oct 13, 2007

"The Man who won as others lost."

'Paul Tudor Jones II leans back in his chair and grins. The stock market is going to crash, and he knows it. “There will be some type of a decline, without a question, in the next 10, 20 months,” he says in his rich Memphis drawl. “And it will be earth-shaking; it will be saber-rattling.'

“The overvaluation of stocks is more extreme than the 1929 high,” said Robert R. Prechter Jr., an independent market forecaster in Gainesville, Ga., and a well-known follower of Elliott Wave theory, which examines the extent to which investor psychology creates stock market patterns. “Which tells me the next bear market will be the biggest in many years, probably since 1929-32.”

Click link below for more.

http://www.nytimes.com/2007/10/13/bus...

From the New york times Oct. 9, 2007

http://www.nytimes.com/2007/10/09/bus...

"A Bank bet on Condos"

"Javier Miglin may walk away from an $80,000 down payment on a condominium with water views in Miami. Randal Mills may give up a $130,000 deposit on a 15th floor condo on the Strip in Las Vegas. And in San Diego, Jeanette Graham would just like to meet the neighbors."

"The three seemingly unrelated predicaments have a common thread that leads to Chicago, and Corus Bankshares, which financed the construction of each condominium development involved."

from: Yahoo October 2, 2007

http://news.yahoo.com/s/ap/20071002/a...

Pending home sales index hits record low


"WASHINGTON - An index that forecasts near-term home sales fell in August to a record low as would-be homebuyers had difficulty getting mortgages. Economists said the housing market's woes show no sign of improving soon."

(Anyone buying a house today needs to put between a quarter or a third of the price down to get a mortgage in this tight money market.) DPF

Countrywide is the largest mortgage lender in the U.S.

Countrywide is virtually teetering on the edge of bankruptcy.

This following paragraph in the New York Times Sept. 30, 2007 gives you the pertinant facts of the Home mortgage problem :

". . . But according to Countrywide’s own data, it currently services almost nine million mortgages, with a value of $1.45 trillion. Of those, roughly 450,000 are delinquent. So providing home preservation assistance on the 39,582 loans amounts to just 8.8 percent of Countrywide borrowers who have fallen behind."

Read it all: http://www.nytimes.com/2007/09/30/bus...

from NEW YORK TIMES Sept. 14, 2007

. . . what was so ominous about the government’s report last week that businesses reduced total employment by 4,000 jobs in August and that payroll gains for previous months were being lowered. Another important labor market indicator — the share of the working-age population that reports holding a job — has fallen to its lowest level in nearly two years. And consumer spending, while it continues to grow, has slowed in recent months.

“Large numbers of people are leaving the job market,” said Jan Hatzius, chief United States economist at Goldman Sachs. “That is not just a sudden bout of laziness, but it’s a response to reduced labor market activity.”

Mr. Hatzius and his peers on Wall Street now put the risk of a recession at about one in three, which is significantly higher than earlier this year but far from a sure thing.

from THE NEW YORK TIMES September 4, 2007

. . .
In the coming months, more than $330 billion in leveraged buyouts are to be financed, including the acquisitions of the Texas energy giant TXU and the student loan provider Sallie Mae. Over the last two years, banks eagerly lent private equity firms money, collecting lucrative fees.

But beginning in late June, investors in the high-yield loans and bonds that are at the heart of buyouts began balking. The buyers, mostly institutional investors and hedge funds, demanded discounts and stricter repayment terms, leading many banks to withdraw debt offerings, including that of Chrysler.

NEW YORK TIMES (printed) September 3, 2007

WASHINGTON, Sept. 2 — . . .

Even as the chairman of the Federal Reserve vowed on Friday to act “as needed” to keep the economy from sliding into recession, some analysts and even some policy makers caution that the central bank’s main tool may be ill-suited to the problem it faces.

Money for subprime mortgages, for people with weak credit, has already evaporated. And the paralysis has spread to more traditional home loans, business loans and corporate borrowing for billion-dollar leveraged buyouts.


“The reason there isn’t a market for these credits is that people don’t know what price they should be trading at,” said Edward E. Leamer, professor of management at the University of California . . .

Over the next six weeks, more than $1 trillion worth of commercial debt is set to come due and will need to be refinanced, more than five times as much as came due since the disruption began one month ago.

from the NEW YORK TIMES September 2, 1007


Over the last 18 months, the Egglestons have watched one house after another on their street, Gardenview Drive, end up foreclosed and vacant. Although lawns are still tidy and empty homes are not boarded up and stripped as they are in inner-city Cleveland, the Egglestons say Maple Heights no longer feels safe after dark. Nor do they have the confidence they had when they moved in a decade ago that this is the ideal place to raise their 6-year-old twin girls, Sydney and Shelby. So, in May 2006, they put their home on the market in order to move closer to Mrs. Eggleston’s parents in another middle-class Cleveland suburb, Richmond Heights.

They have had no takers. Although they lowered the asking price to $99,000 from $109,000, no one has even come to look at it in more than six weeks. . .

It is a scene being repeated in cities and towns across America as loans that were made to borrowers with little or no credit history, many of whom could not even afford a down payment, fail in ever-growing numbers.

From the NEW YORK TIMES August 27, 2007

Home Depot was forced to drop the sale price of its commercial supply business by nearly $2 billion yesterday, according to people involved in the negotiations, one of the first big buyouts to be renegotiated as a result of the recent tightening of credit and problems in the housing market.

The refashioned deal cut the sale price roughly 18 percent, to $8.5 billion. Because the deal relies heavily on debt, investors and bankers have been watching it closely for signs of how new limits on credit could affect other large buyouts that are still pending and are worth nearly $400 billion collectively.


. . .That could put a damper on the buyout boom that has been a major factor in the runup in stock prices over the last few years.

From the NEW YORK TIMES August 24, 2007

WASHINGTON, Aug. 24 — . . .

Both the Bush administration and Democratic leaders in Congress agree that legions of homeowners could be overwhelmed in the next 18 months, as low teaser rates expire on more than two million adjustable-rate mortgages, causing monthly payments increase sharply.

More ominously, falling real estate prices and a pullback among mortgage lenders are expected to make it more difficult for overstretched homebuyers to either refinance their way out of trouble or simply sell their houses.

“This is really just the beginning,” said Karen Weaver, global director for securitization research at Deutsche Bank. “There’s a big wave of defaults coming over the next 12 to 18 months.”