Tuesday October 7 Housing and Economic stories

TOP STORIES:

German Government to Fully Guarantee Private Accounts - (www.bloomberg.com) The German government offered to fully guarantee personal savings accounts in a bid to ease concerns about the stability of the nation's banking system amid the global credit crunch. ``Finance Minister Peer Steinbrueck said today that people in Germany will not lose a single euro of their savings because of this crisis, and that statement applies as of today,'' said his chief spokesman, Torsten Albig, in a telephone interview from Berlin.
Until now, private savings accounts, including the accounts of small, privately held companies, have been guaranteed by 180 banks in Germany, the BDB private banks group said on Oct. 2. The guarantees of the banks covered 90 percent of an account's balance to a maximum of 20,000 euros ($27,500), the group said.

German bank at risk of collapse - (www.bbc.co.uk) A top German bank is on the brink of collapse after a 35bn euro ($48bn; £27.2bn) rescue plan collapsed. Germany's second-largest commercial property lender, Hypo Real Estate, said a banking consortium had withdrawn their support for the deal. Correspondents say its failure will put further strain on financial institutions in other countries.

Hypo Real Estate Says Banks Withdrew Rescue Support - (www.bloomberg.com) Hypo Real Estate Holding AG, the ailing German property lender, said a 35 billion-euro ($49 billion) government-backed bailout plan collapsed as commercial banks withdrew their support. ``The intended rescue package involved a liquidity line to be provided by a consortium of several financial institutions,'' Hypo Real Estate said in a statement on the DBF newswire today. ``The consortium has now declined to provide the line. The group is now in the process of determining the consequences of this'' and ``alternative measures are being investigated.''

Iceland in talks on rescue plan for troubled banks - (www.marketwatch.com) A week after nationalizing one of its major banks, Iceland's government is said to be in talks with the central bank and leaders of its top pension funds to hammer out a plan to rescue its distressed banking industry, according to a media report. The talks are focused on a plan to inject as much as 10 billion euros ($13.8 billion) into Iceland's banking system from institutions including Nordic central banks and pension funds that are being asked to repatriate assets, Britain's Sunday Telegraph reported late Saturday. An announcement about the Icelandic government's plans is expected before European markets open Monday, the report said.

Phoenix Housing Market Sets New Record- For Most Foreclosures In A Week - (www.housingdoom.com) - "One dreary week in September set a new record for foreclosure notices in Maricopa County, with 2,210 notices outpacing sales in a three-county region, according to a Mesa data company. "

France To Buy 30,000 Homes. How Many Will U.S. Own? - (globaleconomicanalysis.blogspot.com) President Nicolas Sarkozy, grappling with the global financial crisis, has decided to directly support the French construction industry by buying 30,000 homes waiting to be built, the presidential palace said Wednesday

Fresh, Freightening Foreclosure Facts From MBA - They Nailed It! - (www.ml-implode.com) There is no doubt that the ooze is spreading from Subprime to Pay Options, Alt-A, Jumbo Prime and A paper. It is what it is. It is kind of funny that we have all of these names differentiating the paper grades at this stage anyway. It is all nonsense because after so many rounds of downgrades from the raters, values being off so much and between 2003 and 2007 the line between all paper grades becoming so blurred due to all sensibility and risk management leaving the mortgage sector, everything is likely several paper grades lower than its initial ratings anyway. At this point in time, they are all just ‘mortgages’

Market chaos batters hedge-fund star - (money.cnn.com) David Einhorn should be celebrating one of the best months of his career. Two companies whose stock he bet big against - Lehman Brothers and Allied Capital - suffered grave blows, with Lehman filing for bankruptcy and Allied shares plunging 60%. But Einhorn and his management team at Greenlight Capital, with $5 billion in assets, aren't trading high-fives these days. Instead, they're reeling from the most brutal month in hedge-fund history. Greenlight's $2.2 billion offshore fund lost 11.5% in September, according to HSBC's hedge-fund database. Another Greenlight fund dropped 12%, Bloomberg reports. Einhorn isn't alone in feeling the pain of the market's volatility. Kleinwort Benson lost 24.2% on its $220 million Greater Europe fund. Closer to home, Tiger Management alum Stephen Mandel's Lone Cypress fund was down 14.7%, a marked turnaround for a fund used to double-digit gains in the other direction. Hundreds of other European, multi-strategy and convertible arbitrage funds were decimated, with losses often above 20%, according to fund databases.

Banker Bailout Bill Contains IRS Police State Provision - (www.ml-implode.com) - "The bailout bill also gives the Internal Revenue Service new authority to conduct undercover operations. It would immunize the ..

Hedge Fund Redemptions: Let the Bloodbath Begin - (www.seekingalpha.com) September 30 was the final day (end of the quarter) that investors in most hedge funds could request to redeem their money in December. If you've been following my posts on this matter, you know we're in for a rough ride. There have already been reports of massive redemption requests by investors. As of right now, redemption estimates are in the hundreds of billions. Nouriel Roubini, respected Professor of Economics at NYU, recently predicted this and said the run on hedge funds could last up to two years. Why are investors running to redeem their money you might ask? Well, maybe it’s because hedge funds have had a rough year just like everyone else. While there are some standout performers, the majority of funds have been on the losing side of things. Overall, the performance of hedge funds and fund of funds this year has been the most widely dispersed in six years. And, such dispersion is bound to cause redemptions. These redemptions cause hedge funds to sell out of their positions and raise cash. Increased selling in the markets can create increased volatility, in a time when we are coming close to testing historical levels of volatility. Citigroup analysts already estimate that hedge funds have around $600 billion in cash reserves in anticipation of redemptions.


OTHER STORIES:

Businesses Vacate at Fastest Pace in Years, Pressuring Landlords and Their Lenders - (www.ml-implode.com) - "Businesses are dumping office space at the fastest pace since the months after the Sept. 11 attacks, increasing the financial s...
Congressman Brad Sherman Against the Bailout Bill - (www.ml-implode.com) - " Same process as Iraq Debacle vote: 1) Create panic, 2) Block alternatives, 3) Herd the stampeding cattle"
The Wall Street Bust - (www.ml-implode.com) - Doug Noland sums up the expansion of credit, and the mess we're now in. After recapping recent market news, he reflects: The “...
Now Wall Street may shun $700bn bail-out - (www.ml-implode.com)
Germany: Hypo Rescue Collapses - (www.ml-implode.com)
Pressured to Take More Risk, Fannie Hit a Tipping Point - (www.ml-implode.com)
Quelle Surprise! Manhattan Real Estate Prices Drop Sharply - (www.ml-implode.com)
Bad Medicine - (www.ml-implode.com)
Bailout Bill Passes: Images of the day - (www.ml-implode.com)


Credit derivatives market faces $500bn mortgage settling test - (www.ft.com)
End of an Era on Wall Street: Goodbye to All That - (www.nytimes.com)
Smaller Hedge Funds Struggle As Money Pipeline Dries Up - (online.wsj.com)
Familiar Abuses Seen in Latest Finance Crisis - (online.wsj.com)
Depression of 2008 - (business.timesonline.co.uk)
Feeling Wall Street's pain, from Manila to Paris - (www.ap.com)
European Leaders Meet on Crisis, Focus on Oversight, Accounting - (www.bloomberg.com)
Shockwaves took Europe by surprise - (www.ft.com)
Markets call time on Iceland - (www.bbc.co.uk)
Exodus as UK savers shift to Irish safe haven - (www.ft.com)
Down hedge fund alley - (www.guardian.co.uk)
Treasury to Hire Asset Management Firms to Jumpstart Rescue - (www.bloomberg.com)
G-7 may consider coordinated rate cuts - (www.iht.com)
Mass. may seek a US loan as credit markets dry up - (www.boston.com)
California officials hope for easing of credit crunch - (www.latimes.com)
Why This 'Credit Crisis' Hits Everyone - (online.wsj.com)
L.A. could face $400-million budget deficit - (www.latimes.com)
Citigroup Says Judge’s Order Suspends Wachovia Deal - (www.nytimes.com)
Pressured to Take on Risk, Fannie Hit a Tipping Point - (www.nytimes.com)
Lehman Cash Crunch Caused by Lender JPMorgan, Creditors Say - (www.bloomberg.com)
A.I.G. Uses $61 Billion of Fed Loan - (www.nytimes.com)
For Two Longtime Bank Rivals in Charlotte, Competition Turns to Concern - (www.nytimes.com)
Lehman creditors seek to probe firm: report - (online.wsj.com)