This is no big deal, and not at all different, and you have to be a real movon.moron to worry about banks starting to go under which would herald something worse than a recession.
I'm going to buy today.
“Everything points to a lot more bad news to come,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Virginia. “If Fannie and Freddie are vulnerable, it means no one is absolutely safe.”
Mortgage Fears Send Global Shares Down
By CHARLES DUHIGG and DAVID JOLLY
NEW YORK — As U.S. home prices decline and Washington struggles to end the economic malaise, Wall Street is starting to send a sobering message: The worst is yet to come.
One of the strongest warning signs came as the week began, when shares of the most important U.S. mortgage companies, Fannie Mae and Freddie Mac, plummeted. After falling almost continuously over the past month, in just one day Freddie Mac tumbled another 18 percent and Fannie Mae lost 16 percent amid concerns that the companies would need to raise billions of dollars in fresh capital.
With renewed prospects for turmoil in the financial markets, global stocks fell Tuesday from Sydney to Stockholm.
“Across the board, there are probably more write-downs to come,” Florian Esterer, a fund manager at Swisscanto Asset Management in Zurich, said. Investors need to look beyond the subprime problems, he said, and consider the decline in the quality of home-equity loans, credit card debt and commercial real estate — problems associated with the end of a “traditional credit cycle.”
Banks seem to be “in denial” about the degree of problems, he said: “I think there is much more pain to come than they are telling you.”
Fannie Mae and Freddie Mac are the largest U.S. buyers of home mortgages, and traditionally the government’s backstop for the housing economy. But with the plunge Monday, each of these “government-sponsored enterprises” has now lost more than 60 percent of its market value this year. The declines, along with a falling stock market and growing unease about the possibility of more losses at big banks, reflect a growing consensus among investors that the current housing slump will last longer, and prove more severe, than initially feared.
As a result, investors are signaling that they are far from convinced that any enterprise — even ones with the strongest backing — can successfully navigate these choppy waters, and that those who do survive will pay dearly.
In Asia, the Tokyo benchmark Nikkei 225 stock average fell 2.5 percent. The Hang Seng index in Hong Kong fell 3.3 percent, and the S&P/ASX 200 index in Sydney fell 1.4 percent.
Mitsubishi UFJ Financial, the largest publicly traded Japanese bank, fell 3.4 percent in Tokyo, while its rival Mizuho Financial fell 3.7 percent.
In London morning trading, the FTSE 100 index was down 2.7 percent, while the DJ Euro Stoxx 50 index, a barometer of euro zone blue chips, was down 2.3 percent. The DAX in Frankfurt fell 2.4 percent, while the CAC 40 in Paris also fell 2.4 percent.
UBS, the Swiss banking giant whose shares have fallen 58 percent this year, fell 4.5 percent in Zurich. Its crosstown rival, Credit Suisse fell 4.8 percent. HSBC Holdings, the biggest European bank, fell 2.6 percent in London.
Oil company shares fell as crude oil slipped. Royal Dutch Shell, the largest European oil company, fell 2.6 percent in London. BP dropped 2.7 percent.
“Everything points to a lot more bad news to come,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Virginia. “If Fannie and Freddie are vulnerable, it means no one is absolutely safe.”
Representatives of Freddie Mac and Fannie Mae declined to comment on their stocks’ performances Monday. Freddie Mac closed at $11.91, the company’s lowest price since 1994. Fannie fell to $15.74, its lowest level since 1992.
The stocks’ dips were part of a broad decline in U.S. financial shares. Shares of Bank of America and JPMorgan Chase fell more than 3 percent.
The decline in Freddie Mac and Fannie Mae comes at a delicate time for the financial markets. In coming weeks, many of the world’s largest financial institutions — including Citigroup and Merrill Lynch — will report results that investors worry will be disappointing.
Lehman Brothers, which some on Wall Street worry might run into trouble like Bear Stearns, continues to struggle to restore confidence among investors. Lehman’s share price fell almost 8 percent Monday
http://www.nytimes.com/2008/07/09/business/worldbusiness/09markets.html?hp=&pagewanted=print
I'm going to buy today.
“Everything points to a lot more bad news to come,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Virginia. “If Fannie and Freddie are vulnerable, it means no one is absolutely safe.”
Mortgage Fears Send Global Shares Down
By CHARLES DUHIGG and DAVID JOLLY
NEW YORK — As U.S. home prices decline and Washington struggles to end the economic malaise, Wall Street is starting to send a sobering message: The worst is yet to come.
One of the strongest warning signs came as the week began, when shares of the most important U.S. mortgage companies, Fannie Mae and Freddie Mac, plummeted. After falling almost continuously over the past month, in just one day Freddie Mac tumbled another 18 percent and Fannie Mae lost 16 percent amid concerns that the companies would need to raise billions of dollars in fresh capital.
With renewed prospects for turmoil in the financial markets, global stocks fell Tuesday from Sydney to Stockholm.
“Across the board, there are probably more write-downs to come,” Florian Esterer, a fund manager at Swisscanto Asset Management in Zurich, said. Investors need to look beyond the subprime problems, he said, and consider the decline in the quality of home-equity loans, credit card debt and commercial real estate — problems associated with the end of a “traditional credit cycle.”
Banks seem to be “in denial” about the degree of problems, he said: “I think there is much more pain to come than they are telling you.”
Fannie Mae and Freddie Mac are the largest U.S. buyers of home mortgages, and traditionally the government’s backstop for the housing economy. But with the plunge Monday, each of these “government-sponsored enterprises” has now lost more than 60 percent of its market value this year. The declines, along with a falling stock market and growing unease about the possibility of more losses at big banks, reflect a growing consensus among investors that the current housing slump will last longer, and prove more severe, than initially feared.
As a result, investors are signaling that they are far from convinced that any enterprise — even ones with the strongest backing — can successfully navigate these choppy waters, and that those who do survive will pay dearly.
In Asia, the Tokyo benchmark Nikkei 225 stock average fell 2.5 percent. The Hang Seng index in Hong Kong fell 3.3 percent, and the S&P/ASX 200 index in Sydney fell 1.4 percent.
Mitsubishi UFJ Financial, the largest publicly traded Japanese bank, fell 3.4 percent in Tokyo, while its rival Mizuho Financial fell 3.7 percent.
In London morning trading, the FTSE 100 index was down 2.7 percent, while the DJ Euro Stoxx 50 index, a barometer of euro zone blue chips, was down 2.3 percent. The DAX in Frankfurt fell 2.4 percent, while the CAC 40 in Paris also fell 2.4 percent.
UBS, the Swiss banking giant whose shares have fallen 58 percent this year, fell 4.5 percent in Zurich. Its crosstown rival, Credit Suisse fell 4.8 percent. HSBC Holdings, the biggest European bank, fell 2.6 percent in London.
Oil company shares fell as crude oil slipped. Royal Dutch Shell, the largest European oil company, fell 2.6 percent in London. BP dropped 2.7 percent.
“Everything points to a lot more bad news to come,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Virginia. “If Fannie and Freddie are vulnerable, it means no one is absolutely safe.”
Representatives of Freddie Mac and Fannie Mae declined to comment on their stocks’ performances Monday. Freddie Mac closed at $11.91, the company’s lowest price since 1994. Fannie fell to $15.74, its lowest level since 1992.
The stocks’ dips were part of a broad decline in U.S. financial shares. Shares of Bank of America and JPMorgan Chase fell more than 3 percent.
The decline in Freddie Mac and Fannie Mae comes at a delicate time for the financial markets. In coming weeks, many of the world’s largest financial institutions — including Citigroup and Merrill Lynch — will report results that investors worry will be disappointing.
Lehman Brothers, which some on Wall Street worry might run into trouble like Bear Stearns, continues to struggle to restore confidence among investors. Lehman’s share price fell almost 8 percent Monday
http://www.nytimes.com/2008/07/09/business/worldbusiness/09markets.html?hp=&pagewanted=print
Just a bump.
