CDO blowup beginning now too...yawn....print biatches
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JPMorgan, Bank of America May Write Down Buyout Loans (Update3)
By David Mildenberg
Oct. 5 (Bloomberg) -- JPMorgan Chase & Co. and Bank of America Corp., the biggest arrangers of U.S. leveraged loans, may write down the value of their holdings by a combined $3 billion in the third quarter after surging mortgage defaults halted credit markets, analysts at Sanford C. Bernstein & Co. said.
JPMorgan may have to write down holdings by about $2 billion, and Bank of America's markdown may be about $1 billion, Bernstein analysts Howard Mason and Michael Howard wrote in a note to investors today. Bank of America, the nation's second- largest bank, and JPMorgan, the third biggest, shared 30 percent of the market for U.S. leveraged buyouts this year, according to data compiled by Bloomberg.
Rising defaults on subprime loans to the riskiest borrowers in the U.S. have roiled financial markets in the past three months, leaving banks with losses on mortgages and a backlog of about $370 billion in loans to fund buyouts. Merrill Lynch & Co., the world's largest brokerage, today reported its first quarterly loss in six years and said the outlook for the rest of 2007 remains unclear amid ``continued challenges'' in credit markets.
Capital markets-related losses ``will tend to fall into three buckets: negative marks on leveraged lending, negative marks on warehouse loans including subprime and losses in credit- trading,'' wrote the Bernstein analysts, who have ``market perform'' ratings on Bank of America and JPMorgan.
Citigroup Forecast
JPMorgan gained 9 cents to $47.34 at 12:50 p.m. in New York Stock Exchange trading. The shares have declined 2 percent this year, compared with a 6 percent decline in the 24-member KBW Bank Index. Bank of America, which has declined 1.2 percent this year, rose 37 cents to $52.77.
Citigroup Chief Executive Officer Chuck Prince said on Oct. 1 that earnings will return to ``normal'' in the fourth quarter after the New York-based company reported it would take $5.9 billion in credit and trading losses on loans and mortgage-backed securities in the third quarter.
``The stock market is at an all-time high, which is telling us that the outlook remains better than some had forecast,'' said Gary Townsend, an analyst at Friedman, Billings, Ramsey & Co. in Arlington, Virginia. ``We haven't changed our fourth-quarter numbers and so far the news has been encouraging, based on what we heard from Chuck Prince.''
Friedman Billings has an ``outperform'' rating on Bank of America and doesn't rate JPMorgan.
Merrill's Writedowns
Bernstein didn't change its fourth-quarter earnings estimates for the two banks, and reduced its 2008 earnings per share outlook for Charlotte, North Carolina-based Bank of America by 2.8 percent. Both banks are scheduled to release their third- quarter results later this month.
Merrill said today it will report a third-quarter loss of as much as 50 cents a share because of writedowns on LBO loans and debt securities. Merrill is the second Wall Street firm after Switzerland's UBS AG to disclose a quarterly loss because of the market shakeout. Only Citigroup, the largest U.S. bank, has reported a bigger credit loss, though it still expects a profit.
JPMorgan, based in New York, may mark down loans it made to finance leveraged buyouts by about $1.4 billion, the same as Citigroup, the Bernstein analysts said. The bank may say the value of mortgages and other debt it is waiting to parcel out fell by $700 million, the analysts said.
Bank of America may report a $700 million decline in the value of leveraged loan commitments and a $300 million decline in debt it is waiting to resell, the analysts said.
Boost Reserves
Unlike Citigroup, JPMorgan and Bank of America aren't likely to substantially boost their reserves for potential losses on credit cards and other consumer loans, the Bernstein analysts said. Citigroup increased its reserves by $2 billion, compared with expected build-ups of $200 million at JPMorgan and $100 million at Bank of America, the analysts said.
``At least so far Bank of America has said their consumer credit quality is holding up reasonably well,'' Townsend said. ``There are differences in underwriting standards at different banks.''
Citigroup Chief Financial Officer Gary Crittenden is conducting a detailed review that is prompting reserve increases independent of the credit environment, Mason said in an e-mail. ``In contrast we believe JPMorgan and Bank of America need reserve-up only to the extent the credit environment has deteriorated,'' he said.
Neither JPMorgan nor Bank of America will report credit- trading losses, the analysts wrote. Bernstein rates the two banks ``market perform.''
Earnings Projection
JPMorgan may report earnings per share of 95 cents, less than analysts' consensus of 98 cents, and Bank of America may miss analysts' expectations with earnings per share of $1.05. The consensus forecast is $1.10, the analysts wrote.
Bank of America CFO Joe Price said on Sept. 17 that ``unprecedented dislocations in credit markets will have a ``meaningful impact'' on third-quarter results. The bank, which will report its earnings Oct. 18, won't comment further, spokesman Scott Silvestri said. JPMorgan spokesman Brian Marchiony declined to comment.
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Merrill pegs write-down at $5.5 billion
Quarterly loss may hit 50 cents a share on 'much more severe' fallout
By David Weidner, MarketWatch
Last Update: 2:17 PM ET Oct 5, 2007
PrintPrint EmailE-mail Subscribe to RSSSubscribe to RSS DisableDisable Live Quotes
NEW YORK (MarketWatch) -- Merrill Lynch & Co. became the latest and biggest casualty of the credit crisis Friday, warning that it will write down nearly $5.5 billion and report a loss when it announces third-quarter financial results.
Most of the write-down, $4.5 billion, comes as the firm marks to market the value of collateralized debt obligations, or CDOs, and subprime mortgages.
Merrill aid it also will take a $967 million gross write-down for underwriting fees, related to corporate and financial sponsor lending commitments, regardless of expected timing or closing. The net charge will be $463 million.
Merrill had $31 billion in commitments at the end of the third quarter, down from $53 billion at the end of June. The broker's warning is the latest in a wave of nearly $22 billion in industry write-downs and charges related to the weakened credit environment.
Merrill also said it expects to report a third-quarter net loss of 50 cents a share.
"Despite solid underlying performances in most of our businesses in the third quarter, the impact of this difficult market was much more severe in certain of our FICC businesses than we expected earlier in the quarter," said Stan O'Neal, chairman and chief executive, in a statement. FICC is short for fixed income, currencies and commodities.
"While market conditions were extremely difficult and the degree of sustained dislocation unprecedented, we are disappointed in our performance in structured finance and mortgages," he added. "We can do a better job in managing this risk, as we have done with other asset classes."
O'Neal noted that Merrill sees evidence of long-term growth in its businesses but that fourth-quarter revenue will be difficult to predict.
Third-quarter revenue is expected to rise 20%, the company said. Merrill is scheduled to report third-quarter results on Oct. 24.
Merrill's shares rose more than 2.5% to stand at $76.80 in afternoon trading.
Transparency's lacking, analyst says
Analysts cautioned that there may be more write-downs to come, not only from Merrill but many big banks.
"This is a multi-year problem, and the market, which has become very enthusiastic about these stocks, doesn't have a clue as to how deep the problems are," said Richard Bove, an analyst with Punk Ziegal & Co. "The write offs they are taking are the beginning of a process that will take at least a couple of years to work out. This is simply not a one-shot development."
One analyst was frustrated with Merrill's lack of detail. Merrill didn't say what its total exposure was for CDOs and subprime mortgages.
"This is bad news that partly related to write-downs on the highest-rated tranches of CDOs...inadequate hedging, and market changes which the company termed 'unprecedented,' " wrote Michael Mayo, an analyst with Deutsche Bank.
Merrill is the largest underwriter of CDOs, according to Mayo.
But Goldman Sachs analyst William Tanona was encouraged by O'Neal's statement that third-quarter revenue will be higher. Most of Merrill's other FICC businesses posted solid performances, he said.
"Merrill appeared to be aggressive in its marks with this announcement and is likely to have put the majority of the CDO dislocation behind it," Tanona wrote in a note to clients.
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JPMorgan, Bank of America May Write Down Buyout Loans (Update3)
By David Mildenberg
Oct. 5 (Bloomberg) -- JPMorgan Chase & Co. and Bank of America Corp., the biggest arrangers of U.S. leveraged loans, may write down the value of their holdings by a combined $3 billion in the third quarter after surging mortgage defaults halted credit markets, analysts at Sanford C. Bernstein & Co. said.
JPMorgan may have to write down holdings by about $2 billion, and Bank of America's markdown may be about $1 billion, Bernstein analysts Howard Mason and Michael Howard wrote in a note to investors today. Bank of America, the nation's second- largest bank, and JPMorgan, the third biggest, shared 30 percent of the market for U.S. leveraged buyouts this year, according to data compiled by Bloomberg.
Rising defaults on subprime loans to the riskiest borrowers in the U.S. have roiled financial markets in the past three months, leaving banks with losses on mortgages and a backlog of about $370 billion in loans to fund buyouts. Merrill Lynch & Co., the world's largest brokerage, today reported its first quarterly loss in six years and said the outlook for the rest of 2007 remains unclear amid ``continued challenges'' in credit markets.
Capital markets-related losses ``will tend to fall into three buckets: negative marks on leveraged lending, negative marks on warehouse loans including subprime and losses in credit- trading,'' wrote the Bernstein analysts, who have ``market perform'' ratings on Bank of America and JPMorgan.
Citigroup Forecast
JPMorgan gained 9 cents to $47.34 at 12:50 p.m. in New York Stock Exchange trading. The shares have declined 2 percent this year, compared with a 6 percent decline in the 24-member KBW Bank Index. Bank of America, which has declined 1.2 percent this year, rose 37 cents to $52.77.
Citigroup Chief Executive Officer Chuck Prince said on Oct. 1 that earnings will return to ``normal'' in the fourth quarter after the New York-based company reported it would take $5.9 billion in credit and trading losses on loans and mortgage-backed securities in the third quarter.
``The stock market is at an all-time high, which is telling us that the outlook remains better than some had forecast,'' said Gary Townsend, an analyst at Friedman, Billings, Ramsey & Co. in Arlington, Virginia. ``We haven't changed our fourth-quarter numbers and so far the news has been encouraging, based on what we heard from Chuck Prince.''
Friedman Billings has an ``outperform'' rating on Bank of America and doesn't rate JPMorgan.
Merrill's Writedowns
Bernstein didn't change its fourth-quarter earnings estimates for the two banks, and reduced its 2008 earnings per share outlook for Charlotte, North Carolina-based Bank of America by 2.8 percent. Both banks are scheduled to release their third- quarter results later this month.
Merrill said today it will report a third-quarter loss of as much as 50 cents a share because of writedowns on LBO loans and debt securities. Merrill is the second Wall Street firm after Switzerland's UBS AG to disclose a quarterly loss because of the market shakeout. Only Citigroup, the largest U.S. bank, has reported a bigger credit loss, though it still expects a profit.
JPMorgan, based in New York, may mark down loans it made to finance leveraged buyouts by about $1.4 billion, the same as Citigroup, the Bernstein analysts said. The bank may say the value of mortgages and other debt it is waiting to parcel out fell by $700 million, the analysts said.
Bank of America may report a $700 million decline in the value of leveraged loan commitments and a $300 million decline in debt it is waiting to resell, the analysts said.
Boost Reserves
Unlike Citigroup, JPMorgan and Bank of America aren't likely to substantially boost their reserves for potential losses on credit cards and other consumer loans, the Bernstein analysts said. Citigroup increased its reserves by $2 billion, compared with expected build-ups of $200 million at JPMorgan and $100 million at Bank of America, the analysts said.
``At least so far Bank of America has said their consumer credit quality is holding up reasonably well,'' Townsend said. ``There are differences in underwriting standards at different banks.''
Citigroup Chief Financial Officer Gary Crittenden is conducting a detailed review that is prompting reserve increases independent of the credit environment, Mason said in an e-mail. ``In contrast we believe JPMorgan and Bank of America need reserve-up only to the extent the credit environment has deteriorated,'' he said.
Neither JPMorgan nor Bank of America will report credit- trading losses, the analysts wrote. Bernstein rates the two banks ``market perform.''
Earnings Projection
JPMorgan may report earnings per share of 95 cents, less than analysts' consensus of 98 cents, and Bank of America may miss analysts' expectations with earnings per share of $1.05. The consensus forecast is $1.10, the analysts wrote.
Bank of America CFO Joe Price said on Sept. 17 that ``unprecedented dislocations in credit markets will have a ``meaningful impact'' on third-quarter results. The bank, which will report its earnings Oct. 18, won't comment further, spokesman Scott Silvestri said. JPMorgan spokesman Brian Marchiony declined to comment.
--------------------------------------------------------
Merrill pegs write-down at $5.5 billion
Quarterly loss may hit 50 cents a share on 'much more severe' fallout
By David Weidner, MarketWatch
Last Update: 2:17 PM ET Oct 5, 2007
PrintPrint EmailE-mail Subscribe to RSSSubscribe to RSS DisableDisable Live Quotes
NEW YORK (MarketWatch) -- Merrill Lynch & Co. became the latest and biggest casualty of the credit crisis Friday, warning that it will write down nearly $5.5 billion and report a loss when it announces third-quarter financial results.
Most of the write-down, $4.5 billion, comes as the firm marks to market the value of collateralized debt obligations, or CDOs, and subprime mortgages.
Merrill aid it also will take a $967 million gross write-down for underwriting fees, related to corporate and financial sponsor lending commitments, regardless of expected timing or closing. The net charge will be $463 million.
Merrill had $31 billion in commitments at the end of the third quarter, down from $53 billion at the end of June. The broker's warning is the latest in a wave of nearly $22 billion in industry write-downs and charges related to the weakened credit environment.
Merrill also said it expects to report a third-quarter net loss of 50 cents a share.
"Despite solid underlying performances in most of our businesses in the third quarter, the impact of this difficult market was much more severe in certain of our FICC businesses than we expected earlier in the quarter," said Stan O'Neal, chairman and chief executive, in a statement. FICC is short for fixed income, currencies and commodities.
"While market conditions were extremely difficult and the degree of sustained dislocation unprecedented, we are disappointed in our performance in structured finance and mortgages," he added. "We can do a better job in managing this risk, as we have done with other asset classes."
O'Neal noted that Merrill sees evidence of long-term growth in its businesses but that fourth-quarter revenue will be difficult to predict.
Third-quarter revenue is expected to rise 20%, the company said. Merrill is scheduled to report third-quarter results on Oct. 24.
Merrill's shares rose more than 2.5% to stand at $76.80 in afternoon trading.
Transparency's lacking, analyst says
Analysts cautioned that there may be more write-downs to come, not only from Merrill but many big banks.
"This is a multi-year problem, and the market, which has become very enthusiastic about these stocks, doesn't have a clue as to how deep the problems are," said Richard Bove, an analyst with Punk Ziegal & Co. "The write offs they are taking are the beginning of a process that will take at least a couple of years to work out. This is simply not a one-shot development."
One analyst was frustrated with Merrill's lack of detail. Merrill didn't say what its total exposure was for CDOs and subprime mortgages.
"This is bad news that partly related to write-downs on the highest-rated tranches of CDOs...inadequate hedging, and market changes which the company termed 'unprecedented,' " wrote Michael Mayo, an analyst with Deutsche Bank.
Merrill is the largest underwriter of CDOs, according to Mayo.
But Goldman Sachs analyst William Tanona was encouraged by O'Neal's statement that third-quarter revenue will be higher. Most of Merrill's other FICC businesses posted solid performances, he said.
"Merrill appeared to be aggressive in its marks with this announcement and is likely to have put the majority of the CDO dislocation behind it," Tanona wrote in a note to clients.
Washington mutual up on bullish news as well....so washington mutual, BOA, JP morgan, and merril all come out in the same day and basically say the CDO market is imploding and markets sky.....with tech shorts gettting squeezed to kingdom come....rimm 114 now...the ending to today was eeire as well....dow fell off quite a bit while techies held up and even ramped to close nasdaq 100 up 2%....hmm...
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AP
Washington Mutual 3Q Earnings to Tumble
Friday October 5, 5:11 pm ET
Washington Mutual Predicts Third-Quarter Earnings Will Fall 75 Percent
SEATTLE (AP) -- Washington Mutual Inc. said Friday that the weak housing market and the recent mortgage crunch will lead to a 75 percent drop in its third-quarter net income, making it the latest financial institution to warn investors it took a major hit over the summer.
WaMu, the nation's largest savings bank, reported net income of $748 million in the third quarter of 2006, meaning third-quarter 2007 net income is likely to be somewhere around $187 million.
The decline in third-quarter income will mostly come from rising provisions for loan losses and write-downs of mortgages Washington Mutual currently holds.
Washington Mutual said its loan loss provision for the quarter will total $975 million. The provision exceeds net charge-offs -- loans written off as having no chance of being recovered -- by $550 million. Loss provisions, on top of paying current charge-offs, are used to cover future losses.
The company will also write down the value of various loans and portfolios by about $410 million.
Washington Mutual will write down by $150 million the value of $17 billion in loans that it was originally intending to sell, but instead moved to its investment portfolio after it could find no buyers in the secondary markets.
Another $150 million in write-downs will be taken in the company's trading securities portfolio. Washington Mutual will also take $110 million in write-downs on investment grade mortgage-backed securities it is holding to sell to investors.
Rising delinquencies and defaults among mortgages, especially subprime loans given to customers with poor credit history, have led to the near disappearance of investors willing to buy the loans in the secondary markets and forced lenders to reserve more cash for losses.
Washington Mutual is not the first financial institution to warn third-quarter profits would take a massive hit.
Citigroup Inc. said Monday its quarterly earnings would fall 60 percent from the previous year as it writes down more than $3 billion in securities backed by underperforming mortgages and loans tied to corporate bonds.
UBS AG and Deutsche Bank AG also said they would write off more than $3 billion in losses due to the declining mortgage market. UBS expects the write-down to leave the company posting a loss in the third quarter.
Shares of Washington Mutual rose 79 cents, or 2.2 percent, to close at $36.07 Friday.
----------------------------------------------------------
AP
Washington Mutual 3Q Earnings to Tumble
Friday October 5, 5:11 pm ET
Washington Mutual Predicts Third-Quarter Earnings Will Fall 75 Percent
SEATTLE (AP) -- Washington Mutual Inc. said Friday that the weak housing market and the recent mortgage crunch will lead to a 75 percent drop in its third-quarter net income, making it the latest financial institution to warn investors it took a major hit over the summer.
WaMu, the nation's largest savings bank, reported net income of $748 million in the third quarter of 2006, meaning third-quarter 2007 net income is likely to be somewhere around $187 million.
The decline in third-quarter income will mostly come from rising provisions for loan losses and write-downs of mortgages Washington Mutual currently holds.
Washington Mutual said its loan loss provision for the quarter will total $975 million. The provision exceeds net charge-offs -- loans written off as having no chance of being recovered -- by $550 million. Loss provisions, on top of paying current charge-offs, are used to cover future losses.
The company will also write down the value of various loans and portfolios by about $410 million.
Washington Mutual will write down by $150 million the value of $17 billion in loans that it was originally intending to sell, but instead moved to its investment portfolio after it could find no buyers in the secondary markets.
Another $150 million in write-downs will be taken in the company's trading securities portfolio. Washington Mutual will also take $110 million in write-downs on investment grade mortgage-backed securities it is holding to sell to investors.
Rising delinquencies and defaults among mortgages, especially subprime loans given to customers with poor credit history, have led to the near disappearance of investors willing to buy the loans in the secondary markets and forced lenders to reserve more cash for losses.
Washington Mutual is not the first financial institution to warn third-quarter profits would take a massive hit.
Citigroup Inc. said Monday its quarterly earnings would fall 60 percent from the previous year as it writes down more than $3 billion in securities backed by underperforming mortgages and loans tied to corporate bonds.
UBS AG and Deutsche Bank AG also said they would write off more than $3 billion in losses due to the declining mortgage market. UBS expects the write-down to leave the company posting a loss in the third quarter.
Shares of Washington Mutual rose 79 cents, or 2.2 percent, to close at $36.07 Friday.
I stole this posting from another site very interesting
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I've been playing with an online compound interest calculator. I put in an annual rate of 14%, compounded daily for seven years. It's amazing how closely some of todays prices match an inflation rate of 14% for the last seven years.
Some examples:
Gold was $275 in 2000. Compound it at 14% for seven years and you get $732.59
A gallon of gas was $1.10 in 2000. Compounded it comes to $2.93
Chicken leg quaters were $.35 cents in 2000. Compounded it comes to $.93 cents.
Milk was $1.80 in 2000. Compounded it comes to $4.80.
The median price for a home in Palm Beach County Florida was $145k in 2000. Compounded it comes to $386,273.57
http://www.moneychimp.com/calculator/compound_interest_calculator.htm
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I've been playing with an online compound interest calculator. I put in an annual rate of 14%, compounded daily for seven years. It's amazing how closely some of todays prices match an inflation rate of 14% for the last seven years.
Some examples:
Gold was $275 in 2000. Compound it at 14% for seven years and you get $732.59
A gallon of gas was $1.10 in 2000. Compounded it comes to $2.93
Chicken leg quaters were $.35 cents in 2000. Compounded it comes to $.93 cents.
Milk was $1.80 in 2000. Compounded it comes to $4.80.
The median price for a home in Palm Beach County Florida was $145k in 2000. Compounded it comes to $386,273.57
http://www.moneychimp.com/calculator/compound_interest_calculator.htm
UPDATE 1-Bear Stearns funds target of criminal probe-source
Fri Oct 5, 2007 5:14pm EDT
(Changes sourcing, adds comments)
NEW YORK, Oct 5 (Reuters) - U.S. prosecutors launched a criminal investigation into two mortgage-related hedge funds at Bear Stearns Cos. (BSC.N: Quote, Profile, Research) that collapsed during the summer, a person familiar with the investigation said on Friday.
The U.S. attorney in Brooklyn, New York and the U.S. Federal Bureau of Investigation have begun the probe, which is in the early stages, said the source who requested anonymity.
The news was first reported by the Wall Street Journal.
Bear Stearns was not immediately available for comment and U.S. prosecutors declined to comment.
The U.S. investment bank has been battered by the collapsed hedge funds and losses in its flagship mortgage business which led to the departure of its co-president Warren Spector.
Bear Stearns chief executive on Thursday said the brokerage would consider selling a stake in itself if a deal with a partner would create value but denied the bank needed a cash infusion.
Bear Stearns shares have lost more than a fifth of their value since the start of the year and the investment bank is being sued by a limited partner in one of the failed hedge funds.
The limited partner, Navigator Capital Partners LP, has argued the bank took only meager steps to prevent the fund's collapse.
Bear said in mid-July that two of its structured finance funds, the Bear Stearns High-Grade Structured Credit Strategies Fund and the High-Grade Structured Credit Strategies Enhanced Leverage Fund, had very little value. (Reporting by Paritosh Bansal, Lewis Krauskopf and Euan Rocha)
Fri Oct 5, 2007 5:14pm EDT
(Changes sourcing, adds comments)
NEW YORK, Oct 5 (Reuters) - U.S. prosecutors launched a criminal investigation into two mortgage-related hedge funds at Bear Stearns Cos. (BSC.N: Quote, Profile, Research) that collapsed during the summer, a person familiar with the investigation said on Friday.
The U.S. attorney in Brooklyn, New York and the U.S. Federal Bureau of Investigation have begun the probe, which is in the early stages, said the source who requested anonymity.
The news was first reported by the Wall Street Journal.
Bear Stearns was not immediately available for comment and U.S. prosecutors declined to comment.
The U.S. investment bank has been battered by the collapsed hedge funds and losses in its flagship mortgage business which led to the departure of its co-president Warren Spector.
Bear Stearns chief executive on Thursday said the brokerage would consider selling a stake in itself if a deal with a partner would create value but denied the bank needed a cash infusion.
Bear Stearns shares have lost more than a fifth of their value since the start of the year and the investment bank is being sued by a limited partner in one of the failed hedge funds.
The limited partner, Navigator Capital Partners LP, has argued the bank took only meager steps to prevent the fund's collapse.
Bear said in mid-July that two of its structured finance funds, the Bear Stearns High-Grade Structured Credit Strategies Fund and the High-Grade Structured Credit Strategies Enhanced Leverage Fund, had very little value. (Reporting by Paritosh Bansal, Lewis Krauskopf and Euan Rocha)
Housing ATM no longer available onto the CCs
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U.S. consumer credit rises in August
By Robert Schroeder, MarketWatch
Last Update: 4:04 PM ET Oct 5, 2007
PrintPrint EmailE-mail Subscribe to RSSSubscribe to RSS DisableDisable Live Quotes
WASHINGTON (MarketWatch) -- Outstanding U.S. consumer debt rose at an annual rate of 5.9% in August, pushed higher mostly by a hefty gain in credit-card debt, the Federal Reserve reported Friday.
The overall increase of $12.2 billion was the highest since May, the Fed reported. It pushed total outstanding consumer credit to $2.47 trillion in August, up from $2.46 trillion in July.
Outstanding consumer credit rose by an upwardly revised 4.7% in July. It was originally estimated to rise by 3.7%.
August's data captures the impact of turmoil in financial markets that month, noted Ryan Sweet of Moody's Economy.com. "They provide further evidence that consumers did not pack it in following the events," he wrote in an email.
Revolving debt such as credit cards was the biggest driver behind the overall rise in August, the data show. That debt climbed by 8.1% in August, or by $6.1 billion.
In July, credit-card debt rose by a revised 7.4%.
Auto, student, personal and other forms of non-revolving debt climbed at an annual rate of 4.7%, or $6 billion, in August. In July it rose by a revised 3.1%.
The Fed's data don't include mortgages or other loans backed by real estate. End of Story
------------------------------------------------------------
U.S. consumer credit rises in August
By Robert Schroeder, MarketWatch
Last Update: 4:04 PM ET Oct 5, 2007
PrintPrint EmailE-mail Subscribe to RSSSubscribe to RSS DisableDisable Live Quotes
WASHINGTON (MarketWatch) -- Outstanding U.S. consumer debt rose at an annual rate of 5.9% in August, pushed higher mostly by a hefty gain in credit-card debt, the Federal Reserve reported Friday.
The overall increase of $12.2 billion was the highest since May, the Fed reported. It pushed total outstanding consumer credit to $2.47 trillion in August, up from $2.46 trillion in July.
Outstanding consumer credit rose by an upwardly revised 4.7% in July. It was originally estimated to rise by 3.7%.
August's data captures the impact of turmoil in financial markets that month, noted Ryan Sweet of Moody's Economy.com. "They provide further evidence that consumers did not pack it in following the events," he wrote in an email.
Revolving debt such as credit cards was the biggest driver behind the overall rise in August, the data show. That debt climbed by 8.1% in August, or by $6.1 billion.
In July, credit-card debt rose by a revised 7.4%.
Auto, student, personal and other forms of non-revolving debt climbed at an annual rate of 4.7%, or $6 billion, in August. In July it rose by a revised 3.1%.
The Fed's data don't include mortgages or other loans backed by real estate. End of Story
As the financial wiz you are tiz, you realize these are the companies that everyone expected to have huge profit losses due to the 'credit crunch' right? Im sure you also realize that its not going to tank any of these big boys and furthermore the fact they are now putting # to their exposure helps out the markets determine the true impact of the 'crisis' and looking at the markets-they dont seem to worried.
Lots of folks tell me the DJIA is useless and the S&P is what we should all be looking at....tell me how thats going.The funny part is looking at a technical chart of the S&P there still seems to be upside.:toast:
Lots of folks tell me the DJIA is useless and the S&P is what we should all be looking at....tell me how thats going.The funny part is looking at a technical chart of the S&P there still seems to be upside.:toast:
We're all guessing of course but 100 yen to the $ has gotta be the bottom end of the dollar, or 1.50 euros.
The euro is also reaching the stage where the dollar loses value too quickly, like its becoming a logarithm.
The PROBLEM is how far the dollar is going to bounce back.
Remember, other currencies aren't getting stronger, this is the dollar being tanked by your own government.
Instead of you paying taxes, your government is printing new $$$s and devaluing your savings.
Your own government is doing a Robert Mugabe job on America, and I don't see anyone except Ron Paul who plans on putting on the brakes.
The euro is also reaching the stage where the dollar loses value too quickly, like its becoming a logarithm.
The PROBLEM is how far the dollar is going to bounce back.
Remember, other currencies aren't getting stronger, this is the dollar being tanked by your own government.
Instead of you paying taxes, your government is printing new $$$s and devaluing your savings.
Your own government is doing a Robert Mugabe job on America, and I don't see anyone except Ron Paul who plans on putting on the brakes.
actually eek, it's still worth a dollar over here. And no, there has been relatively little inflation. And yes, the leaders of Europe and Japan are gravely concerned for their own economies by the decreasing of American trade deficits.
Travel abroad hurt big time. Buying Maximas or BMWs hurt big time. Buying American? no problemo
