2 replies to this topic

[Islander]

Says 1700 spx by EOY. 4% FF rate. He says be invested.Hyman Invterview on Bloomburg News

Islander

[Cirrus]

It's worth checking out. The one problem I see with all of this is I think many are underestimating the affects of housing on the consumer. This is one of worst (on a national scale) housing debacles of the past 50 years. My guess is there's a real solid shot of at least a minor recession--whether the data comes out that way or not. Ya know--there's an election next year.

[normxxx]

[ Normxxx Here:   Ed says that a "financial accident" is normal at the end of a tightening cycle. But I wonder if the CBers are prepared to supply unlimited liquidity on the order of tens of Trillions of dollars. This may well be where the derivatives markets implode— to the tune of around $480 Trillion dollars. ]

The London Free Press

Big lenders freeze subprime

The move by two major lenders reflects difficulties with short-term loans.

By LAURA BOBAK, CP | Sat, August 25, 2007

TORONTO— Two major Canadian mortgage bankers say they have temporarily suspended subprime— or higher risk— lending in Canada, blaming the frozen market for asset-backed commercial paper, or short-term loans.

MCAP Financial, which provides mortgage financing through brokers, says it has temporarily stopped financing subprime loans through its Eclipse division, formerly known as MCAP Sub-Prime, adding all current mortgages will be honoured.

"Today's announcement has nothing to do with the real estate market here in Canada or the performance of the alternative lending programs," MCAP said in a memo to mortgage brokers.

"In fact, the Canadian real estate and mortgage markets continue to perform very well by contrast to the United States where the market is not strong and has resulted in the global credit crunch that is affecting us today. Some of the biggest Canadian financial institutions have been meeting to assist in stabilizing the commercial paper market. Until the market is back to normal, buyers of commercial paper are limited."

GMAC Residential Funding confirmed it too will no longer extend subprime mortgages.

"In response to a challenging mortgage market, GMAC ResCap continues to reduce its nonprime exposure and restrict originations of mortgage products with limited market liquidity," John Schipper, senior vice-president of mortgage lending and sales, said.

"While ResCap's Canadian unit, GMAC Residential Funding of Canada, has historically had limited activity in the subprime market, the company is also reducing its exposure to mortgage products with limited market liquidity. Residential Funding of Canada continues to offer insured, A-type mortgage products."

A third, smaller company, N-Brook, has made a similar announcement.