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two pieces of very bullish fundamental news

Started by humble1 , Nov 02 2008 01:41 PM

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#1 humble1

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Posted 02 November 2008 - 01:41 PM

the good news:

chase's friday announcement of a "massive" effort to modify mortgages is a watershed event which shows that banks now realize "they can improve the values of their loan portfolios through mass modifications rather than foreclosures." the whole industry is expected to rush down this path. think about that: now banks see it AS IN THEIR INTEREST to do this. we all know banks only do what is in their interest and do that quickly. this is powerful, good fundamental news which will be a relief to credit and equity markets.

remember that bill gross and pimco, widely listened to, have said the root of all the troubles is the housing/mortgage crisis. whether or not that is entirely true, the belief that a solution is on the way will matter.

here's a bloomberg link:

http://stockcharts.com/h-sc/ui?s=$SPX...amp;a=154156380


the no news:

other than a small bank closing in florida, i don't see any real shockers over the weekend. now, THAT'S a change!


comments?

Edited by humble1, 02 November 2008 - 01:45 PM.

#2 underabigw

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Posted 02 November 2008 - 02:23 PM

Humble1,

I have to admit that the Chase news is astounding! Especially for anyone who has done consumer business with them in the past as I have. Never again!!!

In other words, this could mean that things are much worse than anyone knows and is actually an act of desperation by the banking industry.

UBW

#3 humble1

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Posted 02 November 2008 - 02:38 PM

ubw: you make a good point! but, please recall, they took over WAMU, the largest bank home lender, which was finito and was full of stinky, rotten loans. so, things were indeed very bad there and we all knew it and know it. we'll see if this really matters or is just a false hope for several months. either way ... i hope/believe it will help the "BIG RALLY NOW!!!!" gang. regards, H1

Edited by humble1, 02 November 2008 - 02:39 PM.

#4 selecto

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Posted 02 November 2008 - 04:07 PM

I think all Chase is doing is rewriting a bunch of crap, so they can get it off the non performing list.

#5 mmckee

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Posted 02 November 2008 - 05:13 PM

I think all Chase is doing is rewriting a bunch of crap, so they can get it off the non performing list.


Humble you may be right, but the assumption is that all these ' under water ' home owner's want help or qualitfy , FDIC sent letters tor 19,000 IndyMac browers -- so far %10 have responded.... Suprise, suprise ?? my guess is there is a disconnect between the banks. the Fed and the Treasury , no one knows the depth of liar loans or those just working the system... you make partical interest payments for x years and wake up with the accrued Intrest and principal tacked on the back side of your loan -- your home is upside down -- no way in @#$%$ can you make the paymentst -- your offered a chance to re-fi for 5 years with lower interest and principal payments.. nothing has changed --- 5 years later your still under water.. in the mean time the banks keep over valured assets on the books -- all a house of cards... my 2 cents..

#6 milbank

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Posted 02 November 2008 - 06:52 PM

I think all Chase is doing is rewriting a bunch of crap, so they can get it off the non performing list.


Bingo.

"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw

"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe

#7 Data

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Posted 02 November 2008 - 07:16 PM

it means that they expect the government to do another bailout. they're trying to avoid writing them down by going into forclosure.

#8 mike123

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Posted 02 November 2008 - 07:24 PM

it means that they expect the government to do another bailout. they're trying to avoid writing them down by going into forclosure.


What FDIC and the new housing bailing program they are going to do soon don't write down the principle. The trick is tax payers are quaranteeing the new mortgage. So banks does not lose anything except lower cash flow in the near future until the home owner defaults again six months down the road. By then banks gets all the principles back from the government and tax payers holding the bag. Watch out for the FDIC woman.

#9 nimblebear

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Posted 02 November 2008 - 08:24 PM

I think all Chase is doing is rewriting a bunch of crap, so they can get it off the non performing list.


Bingo.


you can only put so much lipstick on this pig. i agree with the bingo !
OTIS.

#10 milbank

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Posted 02 November 2008 - 08:57 PM

I just put up a thread with an article written by one of the only real, investigative, financial writers in the business, Gretchen Morgenson of the NY Times about the scam bank JPM has taken on, Washington Mutual, and their "boiler room" underwritings of mortgages. It will clarify what's behind JPM's actions.

"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw

"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe

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