I want to thank President Bush for clearing up a few things this morning at his news conference: 1) that the mortgage industry is, “a more complex industry than we’ve had in the past” and 2) that “we shouldn’t bail out lenders, and so, in other words, that we shouldn’t be using taxpayers’ money…”
Dow up 40 points, S&P up 4 points since Treasury Secretary Paulson has been on talking about efforts to help homeowners who are facing mortgage resets. Nothing new here; but the image of Paulson talking about problems are helping the markets.
Mortgage industry executives worked Saturday to hammer out details of a homeowner rescue plan that would freeze interest rates on some U.S. subprime mortgages for up to seven years, but questions remained over how to avoid investor lawsuits and other legal challenges.
Today is a victory for bulls, and all sane, right-thinking people. All right, I'm exaggerating, but really I am very pleased with nothing happening. Why? 1) A big rally would have most certainly been sold off late in the day by bears fed up with the jubilant.
Stocks staged one of the biggest rallies of the year as hopes for a Federal Reserve interest cut boosted financial services companies for a second day, while falling oil prices eased concern about higher energy costs.
Fed Pres Donald Kohn moved futures 5 points up at 8 am ET by saying that if tighter credit conditions made credit more expensive and discouraged spending, it "would require offsetting policy action." This seems to imply more rate cuts, whether of the fed funds type or the discount rate.
Freddie Mac's planned sale of $6 billion in special stock to help shore up its battered finances will be closely watched by investors gauging the damage inflicted by the turmoil this year in the credit and housing markets.
Tuesday's market action was the mirror opposite of Monday's mayhem. The Dow rose 215 points, or 1.69%. Money poured into the financial stocks. The credit markets calmed down, and 10-year Treasury futures traded near record volume but in a fairly tempered way. The dollar rallied. All this started with news Abu Dhabi Investment Authority was investing $7.5 billion in Citigroup.
As suspected, Freddie Mac is floating stock. Offering $6 billion in preferred stock, but the bigger story is they are cutting their dividend 50% to 25 cents....and the stock is down fractionally.
Mortgage finance companies Fannie Mae and Freddie Mac will not be able to invest in loans valued above $417,000 next year, their regulator said on Tuesday, saying it will hold the current loan limit steady.
The comments of Fed officials this week could be the balm the markets need, but they could just as easily prove to be the source of more anxiety.
UBS Investment Research on Monday lowered its view of Fannie Mae and Freddie Mac to a 'neutral' rating from a 'buy,' citing an increase in U.S. mortgage losses and slipping value of their other home loan investments.
Freddie Mac, the U.S. mortgage finance company that stunned Wall Street with a $2 billion quarterly loss a week ago, plans to sell $5 billion of preferred stock in a deal to be launched as early as this week, the Wall Street Journal said.
A shareholder sued Freddie Mac, its chief executive and others on Wednesday, alleging the No. 2 U.S. home funding company did not take adequate steps to protect itself from problems in the mortgage industry.
Since I'm starting my holiday early today (I'll be back on Monday), I thought I'd provide you with an interesting take on all the Fannie and Freddie news from a good source of mine, mortgage consultant and former HUD official, Howard Glaser. What follows are this thoughts:
A rocking and rolling stock market, the U.S. dollar at record lows, and oil at record highs is setting the stage for an unusually, volatile Thanksgiving Eve in the markets.
The shrinking dollar skidded to a new low against the euro overnight though its off its lows as markets await the release of Fed minutes and its forecast later today. In the stock market, a spirited rally started to run out of steam by midday.
Freddie Mac, the No. 2 U.S. mortgage finance company, stunned Wall Street with a unexpectedly wide loss and plans to slash its dividend or use other means to raise capital to withstand a continuing downturn in the housing market.
Stocks closed higher after another volatile session, helped by a rally among energy shares as oil soared to a record high close of $98 a barrel.
I guess it shouldn’t be surprising, but the numbers for Freddie Mac's third quarter losses are really phenomenal. One analyst we called this morning said, “Freddie is a disaster,” and he said we could quote him on that. I won’t, but here’s what’s so striking to me.