People often ask how many subprime mortgages are out there, how big the problem is, and why is it such a big deal. Today we shall look a a relatively small state by size. Connecticut had 71,000 subprime mortgages totaling $15 billion, with about 8 percent — or 5,680 totaling $1.2 billion — that were seriously delinquent as of March 31, 2007. New figures show the state has 77,000 active subprime mortgages totaling about $17 billion. Of those, about 15 percent — or 11,550 loans totaling $2.5 billion — were seriously delinquent and headed for foreclosure as of Dec. 31. These figures are just from one state.
Archive for » June, 2008 «
Republicans wearing blinders want four more years as they claim the United States has experienced eight years of growth. What’s up with that? Consumer confidence sank to its third-lowest level ever in June, according to a study released Friday by Reuters and the University of Michigan. Democrats look back to a balanced budget of years ago during the Clinton era, but it didn’t help Hillary Clinton. Americans had Bob Barr running for president who claimed to lick whipped cream from two women’s breasts (there are photos.) Ralph Nader is in the race too, but may be unsafe at any speed. Oil prices climb wildly as Americans are afraid of Nigerians and Mumar Gadfly (sic) of Libya. Rebates were a failure. “US consumer spending rose more than forecast in May as tax rebates drove the biggest gain in incomes in almost three years” claimed one article. Reality check for Bush: you gave out $78 billion as of today and consumer confidence is the third lowest ever recorded.
Category: Opinion
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Attorney’s General and others are piling on as they focus on Countrywide in the subprime debacle. Countrywide was not the only lender involved. Some insiders at HSBC claim HSBC (HSBC Finance) was just as bad. There’s no question that Countrywide made billions in high-cost loans to risky borrowers that have ended up in foreclosure. But the economic calamity known as subprime lending has become a political drama as regulators, public officials and prosecutors sift through the rubble to determine how much of it was an unavoidable disaster, how much a lack of personal responsibility and how much involved underhanded and even criminal conduct.
Category: Editorial
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Hedge funds may also face scrutiny. Routine SEC inspections during the subprime crisis have uncovered cases in which investment advisers, including hedge funds, didn’t live up to pledges to implement risk controls, a person familiar with the findings said. Lapses include failures to vigilantly track asset values, cap leverage and avoid concentrating bets.
Category: Government Positions
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Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135. Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters’ assessment at a hearing on proposed legislation to limit speculation in futures markets. Krapels said that it wouldn’t even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.
Category: Economic Impact
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