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Asia Pacific central banks and financial chiefs kept a tight watch on money markets and attempted to reassure investors on Thursday as fears of a worsening global credit storm gripped the region.
Australian mortgage lender RAMS Home Loans Group said on Thursday it had extended the refinancing period for A$6.17 billion (US$5.1 billion) in maturing notes, slicing its share value in half.
The asset-backed commercial paper market is effectively becoming closed for some issuers, including companies that originate mortgages. For instance, dealers in the commercial paper market are currently quoting Countrywide Financial's 30-day commercial paper at a yield of 12.54%.
So we are finally approaching the mythical "correction" phase: the S&P 500 is 9.5% off its historic high of July 19, close to the 10% that is considered a "correction."
Thornburg Mortgage's president told CNBC Wednesday that the residential mortgage lender is still having having problems raising financing but has begun to "turn the corner" and hopefully "by next week it will be pretty much back to business as usual."
Wall Street is bracing for a weaker opening, joining a sell off in stock markets around the world. Europe's major markets were lower after a selling spree across Asian markets, sparked by credit fears.
The Philippine peso and Singapore dollar led the losses in Asia on Wednesday as investors extended their aggressive sales of risky assets on fears U.S. credit market woes were spreading overseas.
Shares of Mitsubishi UFJ Financial Group, Macquarie Bank and other large banks in Asia tumbled on Wednesday, hit by renewed concern about their exposure to the high-risk U.S. subprime mortgage market and turmoil in global credit markets.
More credit problems surfaced in the financial sector on Tuesday, battering stocks and fueling worries that things will get worse before they get better. "The market is still jittery," said Stephen Porpora, managing floor broker with William O'Neil. "Everybody's looking for the next shoe to drop in this subprime problem."
Thornburg Mortgage's president told CNBC that the mortgage lender is having problems raising financing but has "no intention" of filing for Chapter 11 protection. In an exclusive interview, Larry Goldstone said: "We've been able to meet all of our obligations. We've been rolling over and financing our portfolio. It's been an amazing struggle to get that done."
The task of watching literally thousands of headlines go by each day in search of breaking news can be mind-numbing. In order to preserve sanity and still do the job well, any good newsperson will develop a mental filtering system. ... But every so often, you find it’s time to readjust the radar.
Countrywide Financial, the largest U.S. mortgage lender, said on Tuesday it funded a lower amount of home loans in July than in June after tightening lending standards, but added more than 1,100 employees as smaller rivals folded.
The U.S. Federal Reserve took the unusual step of refraining from undertaking an openmarket operation so far Tuesday, in the aftermath of last week's substantial infusions of liquidity into the banking system.
Stock in structured-finance firm Coventree lost more than half its value Tuesday after it said various Coventree-sponsored trusts could not fund maturities of Canadian asset-backed commercial paper due to what it called a "market disruption."
CNBC's Bob Pisani reports on what traders are telling him before the market opens: The European Central Bank for a fourth day needed to add extra cash into the overnight lending market. But the action is working. Overseas markets are largely calm.
The European Central Bank lent banks 73.5 billion in extra funds on Tuesday, topping up their coffers for one week to help ease tensions in the euro-zone credit markets.
Santander has 2.2 billion euros ($3 billion) of exposure to high-risk loans in the United States through its auto financing business Drive, ABC newspaper said on Tuesday, quoting the Spanish bank's annual report.
Australian mortgage lender RAMS Home Loans Group said on Tuesday it could be negatively impacted if current volatility in global debt markets continued, sending its shares down 20%.
It takes more than good credit to get a mortgage these days. Lenders across the country, stuck with piles of loans investors wouldn't buy, are jacking up rates and imposing stricter requirements on even the most creditworthy borrowers. And once again, to close a deal, home shoppers often have to put down their own money, prove what they say they earn, as well as show a track record for payment.
Private equity firm Kohlberg Kravis Roberts said in a regulatory filing that weak debt market conditions could cut into its investment returns, and confirmed it is the subject of a U.S. Department of Justice probe for anti-trust violations.