Wednesday, March 14, 2007

Great Cartoon

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Special thanks to London Yank for this.
Posted by Hale Stewart at 3/14/2007 08:39:00 AM

3 comments:

Robert D Feinman said...

The media is governed by a herd mentality. When there is a "story" everyone takes the same line.

At one time it was that Japanese management style was going to wipe out US industry. Instead the US boomed and Japan went into a decade long slump.

These days it is that China and India are going to eat our lunch.

Now we have the popping of the housing "bubble". I claim the dangers are overdrawn. I'm even willing to bet that the we are nearer the end of the crises than we are to the beginning. Just today there were the first signs that congress may intervene. This is what happened in the S&L failure and I think it will happen here.

I'm guessing that congress will create a capital pool that weak lenders can draw on to help tide them over their cash flow issues. There is also the possibility that some sort of payment restructuring will be set up for individuals as well to avoid foreclosure.

If I were an aggressive investor I'd be looking into buying shares in some of the beaten down mortgage lenders.

March 14, 2007 at 8:51 AM
LondonYank said...

Aw shucks, Bonddad, I'm blushing!

I thought it might interest you to see the latest rumour over at ftalphaville.com today: "it claims that a big US bank in a filing with the SEC has admitted that it has underestimated its exposure to the sub prime mortgage market by around 19 times"

My guess is that there is a huge amount of undisclosed, underreported, undercollateralised and undercapitalised lending out there. The whole banking sector has been loosening the regulations and compliance accounting for over a decade under deregulation and easy liquidity Fed conditions. When the shit hits the fan, the whole sector is going to get tight fast.

March 14, 2007 at 9:26 AM
Anonymous said...

I wouldn't buy mortgage lender stocks now. I'd wait awhile to see what happens.

Angelo Mozilo of Countrywide has been dumping his company's stock lately.

I'd wait until he returns before I'd buy...

March 14, 2007 at 11:48 AM

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