TOP STORIES:
Video Unearthed Democrats in their own words Covering up the Fannie, Freddie Scam - (www.stockmarketimplode.com) - Shocking Video Unearthed of several idiots (Maxine Waters, D-CA, Gregory Meeks, D-NY) in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis. Nothing is really shocking anymore. Blatant corruption and bald-faced lies have become the status quo. They are also praising Ex-CEO Franklin Raines and intimidating the regulators who rightfully show concern with Freddie and Fannie accounting practices.
VARIOUS STATE, MUNICIPALITY, AND SMALL BUSINESSES BEING HURT BY CREDIT CRUNCH:
· Small Businesses Feeling the Chill - (www.nytimes.com)
· Louisiana, Chicago Suffer as Bond Market Shut, Projects Delayed - (www.bloomberg.com)
· Dallas-Fort Worth businesses feeling credit squeeze - (www.dallasnews.com)
· Credit crunch puts California governments in a corner - (www.latimes.com)
· Credit freeze puts businesses on thin ice - (www.latimes.com)
· California starts to feel crunch of tightening credit - (www.signonsandiego.com)
AND CNBC CONTINUES TO BE A CHEERLEADER FOR THE ECONOMY INCLUDING CALLING INVESTORS PANICKY BONEHEADS:
· Is This Really the Market Bottom? - (www.cnbc.com)
· Five Ways to Play This Wild Market - (www.cnbc.com)
· Panicky Investors Making Some Bone-Headed Moves - (www.cnbc.com) There is no shortage of bone-headed moves that panicky investors are considering—requiring their financial advisers to make timely interventions.The financial distress caused by the stock market’s wild gyrations has investors itching to DO SOMETHING. But that’s precisely what most financial advisers are counseling against. And they believe they are mostly winning the battle against rash investments decisions. Still, there is no shortage of bone-headed moves that panicky investors are considering—requiring their advisers to make timely interventions. Even otherwise savvy business people are not immune. Earlier this week, Jeffrey Sprowles, a Philadelphia-based financial advisor, had to talk a client out of selling his Schwab money market account—in which high six-figures was deposited—to buy Treasurys. “After I noted that he would be giving up something in excess of $50,000 per year if we followed his course of action he backed off,” Sprowles recalled. For Investors Strangely, the sell order came even after Sprowles had just reviewed the client’s holdings and told him that nothing was at risk. “Although I did suggest that this kind of action was in a category of self-fulfilling prophecy [of feared losses] I successfully resisted the urge to suggest he watch “It’s A Wonderful Life,” added Sprowles. He put out another fire when another business owner, who had been pleased with double-digit returns on her international and large cap value stocks, abruptly instructed him to liquidate and move into a mixture of gold and commodities. So far no clients have gone off the reservation, Sprowles said. Still, TV commentary by ‘experts’ including CNBC’s Jim Cramer predicting the Dow declining below 9,000 is tough to resist,” he says. “If the market doesn’t recover, I may have a different story to tell” about more rash moves, he added. Marc Schindler, a fee-only financial adviser in Bellaire, Texas, says he lost one client recently when the client decided to redirect his investments into foreign currencies through CD and money market accounts offered by a Florida bank. Knight Kiplinger advises against dumping "good stocks." Watch video at left.
SEC Extends Short-Selling Ban as Bailout Unfolds - (www.cnbc.com) U.S. securities regulators late Wednesday, extended an emergency ban on short selling in more than 950 financial stocks to give Congress time to finish legislation to rescue the financial system. The Securities and Exchange Commission said the ban would expire three business days after a federal bailout bill was enacted, and would last no longer than Oct. 17. The SEC emergency rules are part of a series of government measures designed to restore confidence in battered markets and the ailing financial system, which has been rocked by bank failures and fears of economic recession.
Banks Push to Ease Accounting Rule - (online.wsj.com) A proposal contained in the Senate's revised financial-rescue bill reaffirms the SEC's authority to suspend "mark-to-market" accounting. The banking industry and a band of lawmakers have used the scramble to salvage the financial-markets rescue plan to give new life to an industry push to avoid billions in further write-downs with the stroke of a regulatory pen. A proposal contained in the revised financial-rescue bill the Senate considered Wednesday reaffirms the Securities and Exchange Commission's existing authority to suspend "mark-to-market" accounting. The language was meant to send a message to the agency to re-evaluate the issue. The practice, adopted in the aftermath of the savings-and-loan collapse in the 1980s, pegs the value of assets to their current market price, rather than the price paid for them. Banks have complained the strict application of mark-to-market rules has forced them to write down billions of dollars worth of mortgage-related securities, intensifying the squeeze in the credit markets. Critics of the proposed changes to the "mark to market" rules say gains created by easing the rules would be illusory and would delay resolving genuine doubts about the value of mortgage assets that has caused the recent crisis in confidence.
Auto Sales Slammed by Tightening Credit Market - (www.cnbc.com) Major automakers reported plunging U.S. sales for September on Wednesday—led by a 34 percent slide at Ford Motor—as an escalating credit emergency slammed a slumping industry and raised new doubts about when the world's largest auto market would hit bottom. "Consumers and businesses are in a very fragile place," Ford sales chief Jim Farley said. "An already weak economy compounded by very tight credit conditions has created an atmosphere of caution." Privately held Chrysler said on Wednesday its U.S. sales fell 33 percent in September to 107,349 vehicles because of a highly volatile economic environment and reduced fleet and lease volume. "The economy is going through a difficult restructuring, resulting in great uncertainty among consumers," Jim Press, Chrysler Vice Chairman and President, said in a statement.
Harvard Professor: Bankruptcy, not bailout, is the right answer - (www.cnn.com) The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk. Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared. This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle. Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government. The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable. In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.
And of course, Cramer as cheerleader for Wall Street: Cramer: Economy Naysayers Are 'Dead Wrong' - (www.cnbc.com) Cramer’s in disbelief over the, well, nihilism he’s hearing from market pundits these days. Rate cuts don’t matter. Buying mortgages won’t work. It’s too late for a stimulus package. Listening to them, you’d think the world were going to end tomorrow and there was nothing we could do about it. But that’s not how Cramer sees it. In fact, “these people are dead wrong,” he said, adding that such talk was “economy-destroying analysis.” He believes we should be throwing everything we can at this problem: rate cuts, tax cuts, rescue plans, home loans, you name it. “We can’t print money fast enough,” he said. And Wednesday’s rally in financials is proof that this stuff works. We’ve been here before, though. The U.S. didn’t do enough to stop the Great Depression, and we could find ourselves there again if we take the same approach. Not only does Cramer think we have to do anything we can to avoid a similar fate, but it would be “heartless and punitive not to try.”
President Jackson's Veto Regarding Bank of United States; July 10, 1832 - (www.yale.edu) The bill " to modify and continue " the act entitled "An act to incorporate the subscribers to the Bank of the United States " was presented to me on the 4th July instant. Having considered it with that solemn regard to the principles of the Constitution which the day was calculated to inspire, and come to the conclusion that it ought not to become a law, I herewith return it to the Senate, in which it originated, with my objections. A bank of the United States is in many respects convenient for the Government and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the Constitution, subversive of the rights of the States, and dangerous to the liberties of the people, I felt it my duty at an early period of my Administration to call the attention of Congress to the practicability of organizing an institution combining all its advantages and obviating these objections. I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country. The present corporate body, denominated the president, directors, and company of the Bank of the United States, will have existed at the time this act is intended to take effect twenty years. It enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange. The powers, privileges, and favors bestowed upon it in the original charter, by increasing the value of the stock far above its par value, operated as a gratuity of many millions to the stockholders. ……
Every monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people. It is due to them, therefore, if their Government sell monopolies and exclusive privileges, that they should at least exact for them as much as they are worth in open market. The value of the monopoly in this case may be correctly ascertained. The twenty-eight millions of stock would probably be at an advance of 50 per cent, and command in market at least $42,000,000, subject to the payment of the present bonus. The present value of the monopoly, therefore, is $17,000,000, and this the act proposes to sell for three millions, payable in fifteen annual installments of $200,000 each. It is not conceivable how the present stockholders can have any claim to the special favor of the Government. The present corporation has enjoyed its monopoly during the period stipulated in the original contract. If we must have such a corporation, why should not the Government sell out the whole stock and thus secure to the people the full market value of the privileges granted? Why should not Congress create and sell twenty-eight millions of stock, incorporating the purchasers with all the powers and privileges secured in this act and putting the premium upon the sales into the Treasury?
Bid of $1.75 on eBay gets abandoned Saginaw home - (www.housingwire.com) - With a winning bid of just $1.75, a Chicago woman has won an auction for an abandoned home in Saginaw. Joanne Smith, 30, recently was the top bidder for the home during an auction on eBay, The Saginaw News reported. Her bid was one of eight for the home.
Mortgage Apps Plummet in Latest Week - (www.thetruthaboutmortgage.com) Mortgage application volume plummeted 23 percent on a seasonally adjusted basis for the week ending September 26, the MBA reported today. On an unadjusted basis, the home loan application index was off 23.4 percent compared to the prior week and 28.4 percent compared to the same period a year earlier. The big fall was led by a whopping 34.7 percent slide in refinance applications (so much for that rally), a 14.1 percent drop in FHA lending, and a 9.7 percent slip in purchase apps.
Down Payment Assistance Officially Dead, For Now - (www.housingwire.com) - Nonprofit groups, including giants such as Sacramento-based Nehemiah Corp. of America, are now either out of business or looking to other lines of business while they continue to lobby Congress to reinstate the controversial FHA program. Efforts to pass a bill that would reinstate DPA stalled in a House committee, however, as concern over a historic financial bailout package pushed down payment program concerns to the back burner in the past few weeks
OTHER STORIES:
Jim Rogers Calls The Bailout What It Is - (bloomberg.com)
Why The Bailout Is A Scam - (www.dakotademocrat.com)
Senate trying same $700B bailout scam! Protest to your Senator now! - (www.nytimes.com)
Senator Contact Info - (senate.gov)
A much cheaper and safer bailout plan - (www.denninger.net)
Atlanta Fed's Lockhart Assumes Bailout Plan Is Dead - (blogs.wsj.com)
Quotes on Failed Wall Street Bailout Vote - (dadtalk.typepad.com)
Goldman Sachs seeks to buy $50B of bank assets - (www.marketwatch.com)
A Year of Heavy Bank Losses - (www.nytimes.com)
Estimate your FDIC Insurance - (www.fdic.gov)
Banking Crash Hits Europe - (www.telegraph.co.uk)
Foreclosure Alley – Inland Empire in Riverside County CA - (calculatedrisk.blogspot.com) For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. SoCal Connected tracked down some surreal sights associated with the crisis, including a guy who started a business turning abandoned, dead lawns green - with spray-paint
Why propping up banks will not rescue a debauched financial system - (www.telegraph.co.uk)
Senate to vote on $700B gift to Wall Street on Wed - (hosted.ap.org)
Donald Trump doesn't feel the panic - (rightwingliberal.wordpress.com)
Ford sales plunge 35% - (money.cnn.com)
Factories mired in recession levels, jobs weak - (www.reuters.com)
Paulson Rescue Proposal Is `Crazy,' Predecessor O'Neill Says - (www.bloomberg.com)
Banking crash hits Europe as ECB loses traction - (www.telegraph.co.uk)
U.S. Heading for Slump, With or Without Bailout - (www.bloomberg.com)
Home prices plunge record 16.3 percent in July - (www.reuters.com)
The Bailout Defeat: A Political Credibility Crisis - (news.yahoo.com)
House Prices in 20 U.S. Cities Declined 16.3% in July - (www.bloomberg.com)
Time to foam the runway as house prices plummet to earth - (www.marketwatch.com)
Housing bust may not bottom till 2010 - (www.reuters.com)
Credit Strains Worsen; U.S. Stocks Surge - (www.nytimes.com)
Paulson Funds Keep Soaring Despite Turmoil - (www.ml-implode.com) - ``Paulson & Co.’s $9 billion Advantage Plus fund is up 19.44% this year, a tidy follow-up to last year’s 158.75% return, accordi...
In Option-ARM World, Only Two Large Lenders Remain - (www.ml-implode.com) - ``Of all the large lenders that wrote Option ARM, or so- called Pick-A-Pay mortgages, only two notable names - Downey Financial ...
The Top Five Reasons The Bailout Interventions Are Making Things Worse - (www.ml-implode.com)
My letter to Chuck - (www.ml-implode.com)
ISM Implodes, GE Credit Default Swaps Soar, Ford Sales Plummet - (www.ml-implode.com)
Risk of Home Price Declines Intensifies in Q2 - (www.ml-implode.com)
Thornburg Mortgage Cuts Staff, Extends Exchange Offer - (www.thetruthaboutmortgage.com) This company seems to have 9 lives, and has been flirting with bankruptcy for several months. Thornburg announced yesterday it was cutting 29 positions in its sales and operations staff as it extended its exchange offer today for the eighth time. The majority of the job losses came from its headquarters in Santa Fe, New Mexico, though individuals throughout the country were affected as well. The company said it now employs roughly 156 professionals in its Santa Fe-based operations. The super jumbo mortgage lender is still working to complete its private placement of $1.35 billion in senior subordinated secured notes and warrants to satisfy its override agreement after receiving margin calls earlier this year.
More Leadership trouble at Mortgage Bankers Assoc. - (www.ml-implode.com)
Hope for Homeowners Program Launched - (www.ml-implode.com)
September's ISM Manufacturing Index "Screams Recession," Economists Say - (www.ml-implode.com)
Economic jitters sink Wall Street - (www.reuters.com)
Junk Bond Spreads Rise to Record on Default Concern - (www.bloomberg.com)
Treasuries Advance on Doubt U.S. Rescue Plan Prevents Recession - (www.bloomberg.com)
Oil Falls a Second Day on Stronger Dollar, Lower U.S. Fuel Use - (www.bloomberg.com)
How Risk Models Failed Wall St. and Washington - (www.washingtonpost.com)
Credit-Default Swaps Get Messier - (online.wsj.com)
Funds Try to Lose Ties to Lehman - (www.nytimes.com)
Millions held in hedge funds lockdown - (www.ft.com)
Mergers and Acquisitions `Frozen' Amid Credit Market Turmoil - (www.bloomberg.com)
Wachovia Limits Access to $9.3 Billion Fund for 900 Colleges - (www.bloomberg.com)
Home prices are forecast to slide for 2 more years - (www.signonsandiego.com)
Hedge fund blocks client withdrawals - (www.ft.com)
Sigma's Fall Could Worsen Market's Pain - (online.wsj.com)
SEC set to extend ban on short selling - (www.ft.com)
Big Deals Go Belly Up Amid Market Crisis - (biz.yahoo.com/law)
Financial Crisis: So much for tirades against American greed - (www.telegraph.co.uk)
U.K. House Prices Decline Most on Year Since 1991 - (www.bloomberg.com)
Latin America Economic Boom Threatened as Credit Freeze Deepens - (www.bloomberg.com)
Russian Oil Output Falls for Ninth Straight Month - (www.bloomberg.com)
Ambitions grow overseas to succeed Wall Street as global finance capital - (www.latimes.com)
Banks tighten squeeze on household credit - (www.ft.com)
U.S. weekly initial jobless claims rise 1,000 to 497,000 - (www.marketwatch.com)
Senate Approves Bailout - (www.washingtonpost.com)
Fed officials considering further rate cuts: report - (www.reuters.com)
Small Businesses Feeling the Chill - (www.nytimes.com)
Louisiana, Chicago Suffer as Bond Market Shut, Projects Delayed - (www.bloomberg.com)
Dallas-Fort Worth businesses feeling credit squeeze - (www.dallasnews.com)
Credit crunch puts California governments in a corner - (www.latimes.com)
Credit freeze puts businesses on thin ice - (www.latimes.com)
California starts to feel crunch of tightening credit - (www.signonsandiego.com)
More sellers are growing desperate as homebuying stalls locally - (www.seattletimes.com)
Goldman, Morgan Rewrite Playbooks - (online.wsj.com)
Momentum Gathers to Ease Mark-to-Market Accounting Rule - (online.wsj.com)
MBIA sues Countrywide Financial - (www.ft.com)
Turmoil Hits Newspaper Publishers - (online.wsj.com)
Economy forcing more car dealers to close - (www.sfgate.com)
36 Hours of Alarm and Action as Crisis Spiraled - (www.nytimes.com)
Hedge-Fund Guy Dips His Snout in Bailout Trough: Mark Gilbert - (www.bloomberg.com)
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