Saturday, October 23, 2010

Still going

Still battling Stage 4 colon cancer. Dr. Gonzalez has been a big help. Thank GOD for people who think out of the box, or in this case, out of the syringe.

Wednesday, March 31, 2010

Job 33

Cancer free as of December 11, 2009. Ain't GOD good? There's more I could say, and I probably could have said it when I found out, but, I've got a life to live...for Christ.

Sunday, April 26, 2009

Hi All,
I want to start this off by apologizing to some of you for informing you this way of the news. I would have liked to have called you all and spared you the shock, but as we all know, there are only so many hours in a day and actually I can reach a lot more of you this way.
Besides, somehow, someway, it always seems like everyday I'm running one of my kids to soccer / track / full contact astronomy practice. In the snow. Uphill. Both ways.
With that said, it is with some sadness that I have to inform you all that I have cancer.
Colon Cancer. Stage 3B. Malignant.
I’ve been debating writing about this for several months, but given the tremendous amount of people I’ve run into the last couple of months with similar “trials”, I’ve decided to let everyone know. Maybe it can help you, or someone you know.
On Friday, June 27TH, 2008, after 3 months of feeling like wasabi marinated roadkill, I had my appendix, cecum, 12" of my ascending colon (that’s on the right side, Rio Lindo), and 18 local lymph nodes removed due to the perforation of my appendix which was spewing "junk", causing my temperature to spike up to 103.7̊plus(!), creating an abscess above my right hip that was moving towards my spine (!!), and, as rumor has it, it was also the hiding place for Madoff’s billions. I know nothing about that, your Honor, and as per instruction of counsel, I assert my fifth amendment right to a run-on paragraph, grammarian felony charges be damned.
By the way, I'll answer the question before it's even asked and say no, there is no colostomy bag / stoma / man purse, double negatives notwithstanding. C'mon, we're all adults and I'm pretty sure a bunch of you Hannibal-Lecter’s-in-training were curious, right ;-) There is, however, a nice scar going up the center up my six pack (pfft, I kill me).
As some of you may know, there are 4 stages of cancer. Stage 1 is the least severe and curable, while Stage 4 is serious, and unfortunately with some types like Pancreatic, fast moving and fatal. See Patrick Swayze.
I’m one half step away from Stage 4. Stage 3 is when it moves into the local tissue, organs and lymph nodes. Stage 4 is when it decides to traverse the Suez / Panama Canals (take your pick) and move to other distant, major organs. After the surgery, there were still some cancer cells hangin’ around like dropouts who still hang around the school (doy) and which is why there is still more work to be done. That’s the bad news.
The good news. I’m fine. Because... ...I’m not doing chemo OR radiation.
Because quite simply, they don’t really work with a number of cancers, especially when the cancer moves. This is not my opinion. Reading between the lines of National Cancer Institutes statistics (which are doctored to begin with, DON’T. GET. ME. STARTED!!!) tells you that you have a 50-50% chance of remission, not a cure. Also, when I asked the surgeon who opened me up and found my car keys if he thought the chemo would work, he said quite bluntly “Nobody knows.” Thank you Dr. Jindal for your honesty, I appreciate it.
By the way, the oncologist that I was going to go with said pretty much the same thing, ‘cept he tried to pretty up the numbers by stating I had a better than 50-60% chance of remission, but “...I could be off, 10-20%”. Of course, he never clarified as to whether it was up or down, but by that time I was too disgusted to inquire. Besides after I stated that I planned on looking into alternative therapies, he reacted as if I said something about him personally, which in effect I did. Apparently, “stealing” $50-60k out of the “revenue stream” by going alternative makes one a little edgy, ‘specially when it’s a threat to their “industry” and the bonafide cures can no longer be suppressed. Unless your Tom Daschle. But that’s another story, for another day...
An aside: this same oncologist planned on using an “aggressive” protocol of chemo and radiation, simply because I’m young (41 yesterday, SILENCE!) and because I’m fairly healthy (paradox, anyone?). Natalie Cole had this same aggressive protocol tried on her for Hepatitis C (Hep C, why?), and look where it got her. From CNN:
Cole said she underwent chemotherapy in an aggressive way to fight the virus. Within four months of getting chemotherapy, both of Cole's kidneys failed.
My heart goes out to Ms. Cole, but I rest my case.
I'm being treated by a doctor in Manhattan by the name of Nicholas J. Gonzalez. You can read more about him at, but basically the treatment protocol involves a radical change in diet (I’m now on a modified vegetarian one) and the consumption of dozens of vitamins, pancreatic enzymes (the main cancer killer) and trace minerals. This allows the body to fight the disease itself by building up the immune system and other systems which aid in the destruction of the cancer cells. With chemo and radiation, a.k.a, “poison-and-burn”, you wind up playing the "carcinoma whack-a-mole" by chasing down the disease as it moves, all the while your liver is being compromised from chemo’s inherent toxicity (the nurses administer the drugs with TWO pairs of gloves on each hand) and your immune system becomes weaker, and weaker, and weaker...
It’s not an easy protocol. I knew that going in and Dr. Gonzalez makes that abundantly clear. No more red meat (it creates too much acid and cancer loves that), no more dairy, white bread or processed anything and, drum roll: no more junk food. And yet strangely, like the Sirens of Sirenum Scopuli, every Wendy’s I pass, beckons, hoping to dash me amongst the rocks of dietary death. I know, I know, Bill Shakespeare, call your office.
Anywhoz, it’s been 7 months since I started the protocol and I feel...good. There are days when I feel OK, days I feel great (so great in fact that sometimes I feel like Superman, and then others where I just lend him my cape). But seriously, I feel good. Last Sunday, the 19TH, I transplanted 3 shrubs on my palatial estate (pfft) which wasn’t easy considering their roots when under the concrete staircase and THEN went for a one mile jog, which, had you seen me a year ago, is a miracle. After the surgery, I left the hospital weighing 195lbs., down from 230lbs. Now I’m back to 220lbs. (all muscle) and hoping to ratchet it down to 180lbs. It’s kind of hard to do though, when you have the appetite of a shrew.
You do know it’s NOT all muscle, right?
And now the best news.
It's been said that there are no atheists in a fox hole. Well, there are even fewer among cancer patients. I consider this to be one of the best things that has ever happened to me is because it's drawn me closer to God. Yeah, yeah, I know, that sounds cliche-ish and all, sort of like a deathbed conversion, but sometimes God has to give you that proverbial kick in the behind to get you to straighten up and fly right. Some people will say this is punishment from God for some past sin, but a closer reading of the Book of Job shows that belief to be incorrect. This is a test. This is only a test meant to glorify God. See John 9:3.
I hope this has been a benefit to you. If anything, please know that if I can be of any help to anyone, I’ll do my best to point you in the right direction. I’m not a doctor, I don’t play one on TV, but hey, there’s nothing better than helping a friend.
With that said, I’ll let God have the last word, from Job 33:4-28: The Spirit of God has made me, and the breath of the Almighty gives me life. Refute me if you can; Array yourselves before me, take your stand. Behold, I belong to God like you; I too have been formed out of the clay. Behold, no fear of me should terrify you, nor should my pressure weigh heavily on you. Surely you have spoken in my hearing, and I have heard the sound of {your} words: “I am pure, without transgression; I am innocent and there is no guilt in me. Behold, He invents pretexts against me; He counts me as His enemy. He puts my feet in the stocks; He watches all my paths.”
Behold, let me tell you, you are not right in this, for God is greater than man. Why do you complain against Him that He does not give an account [explanations] of all His doings? Indeed God speaks once, or twice, {yet} no one notices it. In a dream, a vision of the night, when sound sleep falls on men, while they slumber in their beds, then He opens the ears of men, and seals their instruction, that He may turn man aside {from his} conduct, and keep man from pride; He keeps back his soul from the pit, and his life from passing over into Sheol. Man is also chastened with pain on his bed, and with unceasing complaint in his bones; so that his life loathes bread, and his soul favorite food.
His flesh wastes away from sight, and his bones which were not seen stick out. Then his soul draws near to the pit, and his life to those who bring death. If there is an angel {as} mediator for him, one out of a thousand, to remind a man what is right for him, then let him be gracious to him, and say, “Deliver him from going down to the pit, I have found a ransom”; let his flesh become fresher than in youth, let him return to the days of his youthful vigor; then he will pray to God, and He will accept him, that he may see His face with joy, and He may restore His righteousness to man.
He will sing to men and say, “I have sinned and perverted what is right, And it is not proper for me. He has redeemed my soul from going to the pit, and my life shall see the light.”
Behold, God does all these oftentimes with men, to bring back his soul from the pit, that he may be enlightened with the light of life.

Sunday, January 27, 2008

At least SOMEBODY has some disposable income...

Foreigners gobbling up city properties

by Rich Schapiro - Daily News Staff Writer

January 20th 2008, 4:00 AM

Park Ave. Broadway. 42nd St.

The names of these rarefied Manhattan boulevards conjure images of soaring skyscrapers and almost unfathomable luxury. And that's not just for New Yorkers.

Foreign investors covet buildings along the famed streets - seeing the towers as trophy properties known the world over.

As the dollar has continued to slump and the U.S. economy slows even more, an increasing number of international investors have bought big-name buildings across the city.

Dozens of foreign companies also have snatched up office space in many of midtown's iconic buildings.

"Offshore investors buy what they know," said Dan Fasulo, managing director of Real Capital Analytics, a real estate research company. "They want the postcard assets they can show off back home."

International firms spent a record $11.4 billion on commercial real estate in the city last year - more than double the previous year's total, Fasulo noted.

The biggest spenders were from the Middle East.

NY Daily News

Sunday, December 30, 2007

ok, NOW, I'm scared!

Wall Street's Next Crisis

Dec 17 2007

Now that the subprime shakeout is nearly over, another real estate mess looms, this time in commercial property.

by Jesse Eisinger

So far, the current credit crisis has zeroed in on mortgages for the less affluent. But easy credit was a sprawling millipede whose wobbly legs reached into the farthest corners of the financial markets. This is the year the other 999 shoes start to drop.

Any loan to any borrower can begin to seem subprime if there's too little down and too much debt. And that, unfortunately, brings us to the commercial-real-estate market.For the past several years, the market for commercial property—offices, malls, apartment buildings, industrial plants, warehouses, and the like—has enjoyed the very best of times. Prices soared, and lenders lent readily. Owners had no problem meeting their payments. By early 2007, delinquencies had fallen to record lows.

In their own way, however, commercial-real-estate loans were no less foolish than those made to home buyers with speckled credit. And as with the subprime mess, the reckoning will come. Just like what happened in other sectors already hit by the credit crunch, these loans will cause problems that will probably find their way beyond the obvious players in the commercial-real-estate market. Judging by the aspects of the credit crisis we've already seen, commercial-real-estate trouble will probably emerge sooner than people expect—and will be worse than they anticipate. Portfolio

Analysis: as a Commercial Real Estate Appraiser here in lovely NYC I speak from first hand experience when I say that what people are paying for rinky dink apartment buildings in Brooklyn is just a little too much for my comfort, stomach and most of all common sense. It seems the same yayhoo's who thought that finishing a Carlton Sheets or Ron LeGrand workshop qualified them as "house flippers" also qualified them as real estate "entrepeneurs" and therefore they can "MAKE IT BIG!" in multi-family investing. The most quoted, and hence, the least favorite thing I like to hear is "Hey, but it sold for 10 times rents!" SO!?!? What are the rents? What are the taxes? Expenses? INSURANCE!?!?! Vacancy rates? Neighborhood trends? Oh and most importantly, DEBT SERVICE?

When your "posh" Bed-Stuy / Bushwick / 'Billy Burg "gonna be condo one day" shack starts losing tenants because of the more than likely recession because the rents were too high from the git go you're gonna have a hard time paying YOUR mortgage let alone the building's mortgage.

Hint: WAIT! Keep your powder dry. Walk the streets of those neighborhoods that you're thinking of investing in. Use your EYES. Honestly assess the stability and quality of the neighborhood(s) your looking at. No cars on blocks? GOOD! But crackheads around the corner? NOT GOOD! Take a lesson from Warren Buffet: invest in something that is unpopular, cheap, but WILL rebound and most of all wait. Don't be Donald Trump.

Tuesday, December 4, 2007

Ever drop a hammer on your foot? What about an engine block?

Home prices see biggest drop in 25 years

Housing values fall 1.3 percent nationwide in the third quarter, according to a Freddie Mac survey.

NEW YORK ( -- National home prices showed their biggest quarterly drop in 25 years during the third quarter of 2007, said a report Tuesday.
Freddie Mac's (Charts, Fortune 500) home price index fell 1.3 percent on an annualized basis in the quarter, according to its survey of home purchases and mortgage refinance appraisals.

"The number of home sales fell during the third quarter, and the inventory of existing single-family homes for sale rose to 10.5 months by October, the highest level since 1985," said Frank Nothaft, Freddie Mac's chief economist.

It ain't over 'til the fat lady sings and dances and her pictures get plastered all over the Internet

Fannie Mae could face more losses

A look at the bonds it holds, and the extent to which Fannie has marked them down so far, indicates that it may see as much as $5 billion more in write downs. Peter Eavis reports.

(Fortune) -- Could Fannie Mae be the next large financial company to announce billions of dollars of market losses on bonds backed by distressed mortgages?

The vast majority of Fannie Mae's mortgages are loans to borrowers with good credit, but over the past five years the government sponsored enterprise became exposed to mortgages that were made to people with poor credit -- subprime mortgages -- and to mortgages that were made with incomplete documentation of borrowers' income, called Alt-A mortgages in industry parlance.

One way that Fannie increased its exposure to subprime and Alt-A mortgages was to buy bonds backed with these types of loans. While these subprime and Alt-A mortgage-backed bonds are only a small proportion of Fannie's overall mortgage holdings, their combined value of $76 billion is almost double Fannie's $40 billion of capital, which is the net worth of a company and the last cushion against losses.

Losses are climbing on these loans as borrowers default, which has caused the market value of bonds backed with such loans to fall sharply. Investors are bidding down the value of mortgage bonds in anticipation that defaults will prevent many of the bondholders from being paid back in full.


Let My People Go!

Break Free From Brokerages

Punk Ziegel & Co.

IN THE PAST FEW WEEKS THE RATINGS on three brokerage companies were raised from Sell to Market Perform. Two of them have fallen in price since that time, one rose.

I now believe that the upgrades were premature and I am adjusting the ratings back to Sells on all three stocks [Bear Stearns, Goldman Sachs and Lehman Brothers]. I am also adjusting the earnings estimates for each of the brokers.

[Merrill Lynch and Morgan Stanley are also rated at Sell]

My position from this point forward is to aggressively buy the bank stocks and sell the brokers.

BARRONS (yeah, I know it's a subscriber service, but believe me, it's worth it weight in gold).

And no, I don't know if she's gellin', like Magellan, but her last name is Yellen

Fed's Yellen: Economy's Downside Risk Getting Worse

Federal Reserve Bank of San Francisco President Janet Yellen said on Monday that worsening financial conditions and weaker-than-expected economic data have raised downside risks to the economic outlook.

"Since the October FOMC meeting, financial conditions have deteriorated, and we have seen some unexpected softening in the economic data," she said in a speech to business leaders in Seattle on the U.S. outlook and monetary policy.

"These developments necessitate some rethinking of my growth forecast, and have highlighted the downside skew in the risks to that forecast."

On inflation, Yellen said consumer prices were expected to rise broadly in line with price stability, although there were some "notable upside risks" such as higher labor costs, a weaker dollar and rising energy prices.

She added that more economic data to be released ahead of the Fed's rate-setting committee's meeting on Dec. 11 would have to be incorporated into the outlook.


If it walks like a duck, quacks like a duck and flies like a hippo...

Hedge-Fund Nov. Losses Near Dot-Com Crash Levels

Hedge-fund investors suffered their worst month of investment performance since the bursting of the dot-com bubble, with intense volatility in global markets tipping every strategy into a loss, London newspaper the Times reported, citing preliminary figures from Hedge Fund Research (HFR).
The Global Hedge Fund Index worth $1.33 trillion lost 2.6 percent in the first 29 days of November, the Times said, despite many strategists predicting strong full-year profit for the sector.

The decline was last surpassed in April 2000, when HFR's Global Fund index down 3.9 percent after the value of Internet companies plunged. August's credit-market crunch caused a 2.55 percent drop in the index, the Times said.

Stock-market strategies were the hardest hit, with HFR's Equity Hedge index slumping more than 4 percent in November, while "event-driven" and convertible arbitrage strategies all generated losses, according to the London paper.


He was born at night, just not last night...

Deutsche Bank Chief Turns Down Chance at Citigroup

Dec. 4 (Bloomberg) -- Deutsche Bank AG Chief Executive Officer Josef Ackermann turned down an opportunity to pursue the top job at Citigroup Inc., the biggest U.S. bank, according to a person with knowledge of the matter.

The New York-based bank contacted Ackermann by telephone about two weeks ago to ask the Swiss-born manager if he'd be interested in becoming CEO, said the person, who declined to be identified because the talks were private. Ackermann will stay at Frankfurt-based Deutsche Bank, the person said.

Citigroup is seeking a replacement for Charles O. ``Chuck'' Prince III, who stepped down last month after the bank reported its first loss in 17 years. Ackermann, in five years at Deutsche Bank, raised profit 14-fold by expanding the securities unit, cutting more than 14,000 jobs and selling assets.



CDO Sales May Tumble 65% in 2008 on Subprime Slide

By Jody Shenn

Dec. 4 (Bloomberg) -- Issuance of collateralized debt obligations will tumble 65 percent next year, with ``little or no'' sales of CDOs made up of structured-finance securities such as subprime-mortgage bonds, JPMorgan Chase & Co. says.

About $163 billion of new CDOs will be sold, down from an estimated $469 billion this year, according to a report yesterday from New York-based JPMorgan analysts led by Christopher Flanagan. The decline will occur with ``the very concept of securitization under pressure,'' the analysts wrote.

Securitization, or the packaging of assets into securities, has slowed amid losses on home-loan debt. Many mortgage-linked securities originally carried investment-grade ratings, only to be downgraded at an unprecedented pace following record homeowner foreclosures. CDOs are created by packaging pools of assets into new securities with varying risks. None were sold in the U.S. last week, according to JPMorgan data.

Losses for banks and brokerages from the credit-market seizure have totaled $66 billion, as companies including Merrill Lynch & Co. and Citigroup Inc., both of New York, took writedowns largely related to CDOs. Default rates on subprime loans, made to borrowers with poor credit, have reached records.


At least it will help with his handicap

Henry Paulson’s Mortgage Mulligan

The Bush administration, federal regulators, and major investment banks are “aggressively pursuing,” in the words of treasury secretary Henry Paulson, a plan to save some mortgage borrowers and their lenders from the consequences of their bad decisions. The deal is called “Hope Now.” It should be subtitled: “Worry Later.”

Part of the pact likely will call for mortgage lenders and their agents—including teetering mortgage giant Countrywide Financial and tottering financial-services giant Citigroup—to change the terms of, potentially, more than $100 billion worth of mortgages that they approved for home buyers over the past few years. In those cases, borrowers, often those who couldn’t afford high monthly mortgage payments or who didn’t have much money for down payments, took on mortgages that carried initial “teaser” interest rates. That is, instead of signing mortgages that required the same monthly payment for 30 years, the borrowers agreed to pay a super-low rate for one or two years, and then to pay a much higher one for the remaining 28 or 29 years. Investment banks then packaged and sold huge bundles of these mortgages to outside bond investors, providing the original lenders with more money to make more such loans.

For these deals to work after the teaser rates expired, the housing market could never falter, because few borrowers could afford the new, higher rates that they would have to pay in a few years. Both the borrowers and the lenders understood this risk, or should have, but they ignored it. They assumed that when the teaser rate came close to expiration, the borrower could simply refinance his loan, taking out a new mortgage with a similar teaser rate—which would buy more time for the borrower and also provide new fees to mortgage lenders and brokers. This scenario collapsed when the housing market started to decline, because a borrower can’t refinance a mortgage loan if his home is worth less than the amount of money he already owes.


Monday, November 12, 2007

Beginning O' The Week Heads-Up

Throw me a lifesaver, and not the Marx Brothers kinds. CNBC

Swing and a miss!!! WSJ

Fear, Greed and Speculation: what really runs the markets. BARRONS

You could also get a job at McDonald's. Their stock is worth more. CNBC

There's pain, there's big pain, and then there's just plain old imminent financial immolation.

But, on a positive note: Sinking Dollar, Rising Portfolio.

Thursday, November 8, 2007

Word Plays on Words

from the WSJ

SIV Rescue Plan Faces New Pressure

By Carrick Mollenkamp and David Reilly

A rescue plan for investment funds that are one source of credit-market concern is under new pressure after Moody's Investors Service said the funds were liquidating assets to meet financial commitments.

The rescue plan, led by Citigroup Inc., Bank of America Corp. and J.P. Morgan Chase & Co., is aimed at providing cash to the funds, known as structured investment vehicles, or SIVs. The plan is aimed at avoiding a forced fire sale of the SIVs assets...

Citigroup for the first time disclosed details about the SIVs it sponsor in third-quarter financial statements filed earlier this week with the SEC. The bank said that as of Sept. 30, the SIVs it was affiliated with had $83 billion in assets, following the sale of $19 billion in assets since July.

The three SIVs whose capital notes were placed on negative credit by Moody's are the largest of the seven SIVs Citigroup, and they have a combined $50 billion in assets. Of the seven SIVS, 7%, or nearly $6 billion, of assets are invested in U.S. mortgage-backed securities. However, the bank added that, "the SIVs have no direct exposure to U.S. subprime assets and have approximately $70 million of indirect exposure" through investments in collateralized debt obligations.

Translation: having no "indirect exposure" to U.S. subprime assets means, yeah, we're gonna get the flu, but hey, at least we won't die of frostbite!"

The more reports I read on this issue, the more I notice a pattern: little by little, the debt grows, the trouble worsens and more companies report losses (oh, and the more people get fired, too).

The CDO/SIV/LBO "action" of 2006-2007 is going to result in the "bust" of 2008. 2009. 2010...

No, it won't be as bad as the Dot Com BOMB of 2001, but it will be close. Recession, yeah, the severity of which is yet to be seen. All of the (undisciplined) money that chased the dot com's, chased the oil and now the real estate market are going to meet their maker. The flight-to-quality buying Wednesday (gold, treasurys, etc.) is yet another sign that the smart money sees the storm and are taking shelter in brick houses rather than straw, i.e., stocks.

If you're an investor, whether it be stocks or real esate, here's what you should do: wait. PLEASE! Keep your powder dry. Just as a rising tide lifts all boats, so does an ebbing tide lower all boats. Not only should you be watching stocks, you should be watching sectors. You think "Tech" is gonna survive the coming storm? Doubtful. Remember, we now have a global economy (ugh, how I hate those words). What affects us, affects Europe, what affects Europe, affects Asia...and they bought a lot of our junk. Unfortunately we live in a consumer driven economy, and if people start losing their homes, losing their "ATM", how are they going to spend? And what do all the overseas manufacturers do with all of their inventory? Give it away like Crazy Eddie? The same with the banks. What do they do with all of those REO properties? Sell 'em for pennies on the dollar, in some cases.

And that's when you buy. If you've got any debt, knock it out. Free up your cash. That way, when you go and apply for a loan, all you'll have to supply is the money and not your DNA and / or your soul

Remember the phrase "Buy low, sell high"? Well consider Warren Buffet's advice: There are two rules to investing, #1: Don't lose money, #2: Don't forget rule #1. Both of these rules apply.

But more importantly, don't curse the darkness, light a candle. Or as I like to say, don't raise the bridge, lower the river...

I'm rambling, I'm tired, my eyes are bleedin' and I have an interview tomorrow. Cover me, I'm goin' in. Adieu.

Tuesday, November 6, 2007

Stop me if you've heard this before...

Credit Card Debt a $915 Billion Disaster-in-Waiting for Banks

Tuesday, November 6, 2007 8:14 PMBy: Newsmax Staff

Think the estimated subprime debt load carried by the big international banks is big, at $1 trillion?

How about this: Americans now owe nearly as much – a record $915 billion – on their credit cards alone.

And defaults and delinquencies in the credit card sector are piling up – which means big banks are on the hook, again. More sand in the gears for the global economy.

Credit card companies wrote off 4.58 percent in payments between January and May, almost a third more than in the same period in 2006, according to Moody's Investors Service. As a result, lenders such as Citigroup, Bank of America, and American Express, among others already reeling from the subprime mortgage disaster, are being further weakened.

I haven't had a credit card since September '06. I feel happier than a test subject in proctology school.


That's TRILLION with a "T"...

Markets fear banks have $1 trillion in toxic debt

By Sean O’Grady, Economics Editor

Published: 06 November 2007

A new phase in the credit crunch, one of “$1 trillion losses” seems to be dawning. The crisis at Citigroup and renewed doubts about some of the world’s leading banks disquieted stock markets on both sides of the Atlantic yesterday, with the fractious mood set to continue.

The FTSE 100 fell 69.2 to 6,461.4, with Alliance & Leicester (down 4 per cent) and Barclays (off 3 per cent, to a two-year low) singled out for punishment. In New York, Citigroup, down 4.9 per cent to multi-year lows, weighed on the Dow Jones index, which fell 51.7, or 0.4 per cent, to 13,543.4. Merrill Lynch, Goldman Sachs and Lehman Brothers also dropped on speculation they face more writedowns on top of the $40bn (£19bn) announced in the past four months.

Bill Gross, the chief investment officer of Pacific Investment Management, said US mortgage delinquencies and defaults would rise in 2008. “There are $1 trillion worth of sub-primes, Alt-As [self-certified] and basically garbage loans,” he said, adding that he expects some $250bn in defaults. “We’ve only begun to see the pain from rising mortgage payments,” he added. Brian Gendreau, an investment strategist at ING, commented: “Financials are 20 per cent of the S&P 500 and if that sector doesn’t do well all bets are off. People just don’t know what’s on the balance sheets.” Translation: now's a good time to get some MRE's, find a cabin...and pray.

from The Independent

Surely, you jest!? No, and stopping calling me Shirley.

playing games with shells

Deals With Hedge Funds May Be Helping Merrill Delay Mortgage Losses


November 2, 2007 12:28 p.m.

Merrill Lynch & Co., in a bid to slash its exposure to risky mortgage-backed securities, has engaged in deals with hedge funds that may have been designed to delay the day of reckoning on losses, people close to the situation said.

The transactions are among the issues likely to be examined by the Securities and Exchange Commission. The SEC is looking into how the Wall Street firm has been valuing, or "marking," its mortgage securities and how it has disclosed its positions to investors, a person familiar with the probe said. Regulators are scrutinizing whether Merrill knew its mortgage-related problem was bigger than what it indicated to investors throughout the summer.

from the WSJ

Why? Did they make bad loans too?

Senate Panel Probes 6 Top Televangelists

CBS News has learned Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, is investigating six prominent televangelist ministries for possible financial misconduct. Letters were sent Monday to the ministries demanding that financial statements and records be turned over to the committee by December 6th.

According to Grassley's office, the Iowa Republican is trying to determine whether or not these ministries are improperly using their tax-exempt status as churches to shield lavish lifestyles.

Yet ANOTHER way for people to excuse their lack of faith of in God. Thanks for the black eye, you bloodsuckers. BTW, how are those planes Mr. Hinn? Mr. Copeland?

from CBSNews

"Boy, when you die at the Palace, you really die at the Palace!"*

*Mel Brooks, "History of the World, Pt. 1"

They get you coming, and they get you going.

Dubious Fees Hit Borrowers in Foreclosures

As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers.

Because there is little oversight of foreclosure practices and the fees that are charged, bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures.

Bankruptcy specialists say lenders and loan servicers often do not comply with even the most basic legal requirements, like correctly computing the amount a borrower owes on a foreclosed loan or providing proof of holding the mortgage note in question.

Now you know why there's a Hell folks, and I'm not joking.

from the NYTimes

Sunday, November 4, 2007

Fear, Greed and Speculation: What really runs the market.

from the Wall Street Journal, with laser like analysis from yours truly...

Fresh Credit Worries Grip Markets

“"The situation is now more negative than in the summer," said Pete Nolan, a portfolio manager at Smith Breeden Associates in Chapel Hill, N.C. He said that "in many cases, the fundamentals are catching up" with investors' worst fears. The worry is that a huge financial edifice that is built on top of the now-shaky mortgage market could weaken, potentially causing lenders to tighten up on loans and slowing the economy. Translation: people (Wall St.) are now beginning to see how bad it really is...and they are scared.

In a recent report, analysts from J.P. Morgan Chase & Co. said they expect bank credit losses on mortgages and complex debt securities to continue well into 2008 as housing prices weaken further. As bank losses continue, we expect bank lending capacity to be reduced," they said, adding that banks will have to ration credit and are likely to favor lending to corporations over consumers…. Translation: Well into 2008? Try 2010! or '11! And bank "lending capacity"? Nil. Rationing credit simply means you'll be putting down 20% AND donating DNA

Besides the problems with banks and brokers, there was evidence of more problems in the mortgage market. Mortgage-servicing companies, which collect payments from borrowers, said delinquency and prepayment data were worse than expected. Translation: Cue the music! "...more problems in the mortgage markets" means IT'S BAD!! Delinquency and prepayment is worse than expected now, wait until 2008 when all those 2/5 ARM's break!

"Mortgages are still deteriorating at an accelerating pace, and that's scary," said Karen Weaver, global head of securitization research at Deutsche Bank AG. "We haven't come near a stabilization, and we expect things to get worse as the bulk of resets" of interest rates on adjustable-rate mortgages "have yet to come." The first line says it all.

The percentage of subprime mortgages -- those to home buyers with weak credit -- that were more than 60 days behind in payments topped 20% in August, up from 18.7% in July and 17.1% in June, according to the latest data from First American LoanPerformance. Like Ted Bundy once said, "add a zero" to that August number. No, he didn't say that, but you know what I mean.

Mark Zandi, an economist at Moody's, estimates that of the $2.45 trillion in especially risky mortgages currently outstanding -- including subprimes, interest-only loans, mortgages that exceed Fannie Mae lending limits and others -- as much as a quarter could suffer defaults in the months ahead. Total losses on these mortgages, he estimates, could reach $225 billion. That would hit bondholders hard, since the value of mortgage securities is driven by the performance of underlying mortgages. And it could make such bonds harder to sell in the future. Watch that $2.45 trillion and $225 billion go up in December. Watch!

Many expect the value of homes to continue to slip as well. Mr. Zandi puts the drop at 10%, from the market's peak in the fourth quarter of 2005 to its projected bottom in the fourth quarter of 2008. Such a decline would wipe out more than $2 trillion in home values. That's less than the $7 trillion in stock wealth wiped out by the tech bust that began in 2000, but still would represent a significant hit to the economy. I pray to GOD that I'm wrong, but me thinks we might get very, very close to $7 trillion. I think alot of investors, punch drunk and stupid from the Dot Com bust, needed to make up some losses and hedged on the housing market to "right their ship". When the hits just kept on coming, they let the record play, scratches be damned.

Because mortgages are bundled into securities sold to investors all over the world, the deterioration in mortgages' value is having a wide effect. Many of the more complex securities, known as collateralized debt obligations, or CDOs, are held by banks and brokerage firms.

They've been the cause of many of the big losses at those institutions. No, firing four of your top risk analysts and piling on the risk is the cause!!!

In CDOs, risk is portioned out to different groups of investors. Those willing to take the biggest risks buy securities with the highest potential returns, while investors who want more safety give up some return to get it. Already, the riskier "tranches" of CDOs have sunk dramatically in value. An index that tracks risky subprime bonds has fallen to a record low of 17.4 cents on the dollar, down 50% from August, according to Markit Group. In other words, a billion is now only worth 174 million. I don't even think the short traders get that kind scratch on a good day.

That decline, while worrisome, hit investors willing to take risk. But the recent turmoil stems from declines in the market for the safest securities. Rated triple-A, they should be affected by mortgage defaults only in extreme circumstances. An index that tracks triple-A securities is trading at 79 cents on the dollar, down from roughly 95 cents just a month ago. Good Lord, even the rich are suffering! Help us!

At the top are "super-senior tranches." It is a decline in value of these supposedly safe securities that is hurting many banks and brokerage firms. Because banks must value many of their securities holdings at the price at which they could be sold -- called marking to market -- many banks have had to report losses. As an appraiser, when I hear the words "could be sold" I automatically think "probably won't be sold" because sellers always list their "wares" higher in order to negotiating or "wiggle" room. So if these..."things" are marked at let's say 500 million, take off five-ten percent for negotiating, that leaves you with a value of roughly of 450-475 million bucks. In today's market. What will that be like in let's 1Q08?

In October alone, Moody's Investors Service, Fitch Ratings and Standard & Poor's downgraded or put on watch for downgrade more than $100 billion in CDOs and the mortgage securities they contain. In a glimpse of how much banks have at stake, UBS holds more than $20 billion of super-senior tranches of CDOs. They're among the reasons UBS, which reported a third-quarter loss of 830 million Swiss francs ($712.8 million), has warned that its investment bank is likely to face further losses in the current quarter.

"There was some widespread miscalculation when it came to estimating the credit risk and market risk of the super-senior tranches," notes Ralph Daloiso, managing director of structured finance at Natixis, a French banking group.

Specialized funds known as structured investment vehicles, affiliated with banks and independent managers, invested in the top-rated tranches of CDOs. Banks set up the funds as a way to derive income from securities held off their balance sheets. The SIVs borrowed money from outside investors by issuing short-term and medium-term notes, then used the money to pay for the securities. Now, though, investors' reluctance to lend to SIVs has raised concerns that the funds -- which hold some $300 billion in assets -- could be forced to sell en masse.

The SIVs are the focus of an effort by major banks to raise a rescue fund that could reach up to $100 billion. The intent is to calm markets by buying good, highly rated securities from the SIVs. But the fund is still weeks away from coming into operation. And the deterioration of even the most highly rated securities will make it increasingly difficult to differentiate between good and bad investments.

The large Wall Street firms weren't alone in believing triple-A-rated debt securities were safe. In the last few years, bond insurers such as MBIA Inc. and Ambac Financial Group Inc., as well as financial guaranty units of American International Group Inc., PMI Group Inc. and ACA Capital Holdings, aggressively wrote insurance on super-senior tranches of CDOs that were backed mainly by subprime mortgages. These companies effectively agreed to bear the risk of losses on these securities.

Shares of Ambac and PMI yesterday fell 19.7% and 11%, respectively, and along with MBIA hit new 52-week lows, on growing investor worry that they may need to hold more capital against the risk they are insuring and could be hit with sizable claims down the road.

Over the past two weeks, some of the insurers posted significant net losses for the third quarter because of adjustments on credit derivatives they used to provide insurance on the bonds. The bond insurers have said, however, that they don't expect actual losses from the CDO tranches they have insured.

Anywayz, you get the gist. If you want my advice, save your money. Buying oppurtunities will abound, whether in stocks or housing in 2009. That is of course if Armageddon doesn't pop.