hno:
Romo, I dont deal with kitco, but suppose you could if nothing local is available.
Best to find a local place handling volume and youll be fine.
Im surprised the market isnt falling more than it is.
Most people still have no idea how large these problems are and believe the housing market is going to recover in 6-18 months.
They couldnt be more incorrect.
Best to find a local place handling volume and youll be fine.
Im surprised the market isnt falling more than it is.
Most people still have no idea how large these problems are and believe the housing market is going to recover in 6-18 months.
They couldnt be more incorrect.
17 bil injected so far today, banks out to try to save countrywide for the time being
---------------------------------------------------------------
Countrywide taps $11.5 billion credit line
Thursday August 16, 10:35 am ET
By Jonathan Stempel NEW YORK (Reuters) - Countrywide Financial Corp. (NYSE:CFC - News), the largest U.S. mortgage lender, said on Thursday it drew down an entire $11.5 billion bank credit line as a global credit shortage limits its access to short-term cash.
The company said the unsecured credit line was provided by 40 large banks. It also said it has tightened its lending standards so most new home loans will qualify for purchase by mortgage companies Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News).
Shares of Countrywide fell $3.19, or 15 percent, to $17.90 in morning trading on the New York Stock Exchange. They began the year at $42.45.
The drawdown shows how liquidity strains have spread beyond subprime lenders to larger companies that made predominantly higher-quality loans. Countrywide this week said mortgage delinquencies have reached their highest level in more than five years. Dozens of smaller mortgage lenders have quit the industry this year, and many have gone bankrupt.
"The big question is, can Countrywide survive," wrote Paul Miller, a Friedman, Billings, Ramsey & Co. analyst.
He said if liquidity problems last more than a month, "Countrywide might be forced to sell assets at a deep discount, putting tremendous pressure on its book value and stock price.
"There is a scenario in which the current liquidity crises last for longer than three months and Countrywide is forced into bankruptcy; it will be ugly, but it can happen!"
Countrywide did not immediately return calls and an e-mail seeking comment.
RATING DOWNGRADES
Moody's Investors Service downgraded Countrywide's senior debt three notches to "Baa3," its lowest investment grade, and said a cut to junk status was possible. Fitch Ratings cut the debt to "BBB-plus," its third-lowest investment grade.
The drawdown of the backup bank credit line reflects "significant diminution" in liquidity and debt market access, analyst Philip Kibel wrote. "Difficult financial markets create potential challenges to Countrywide's franchise and leadership in the mortgage banking business, and further dislocations in the U.S. single-family mortgage markets."
Countrywide Chief Executive Angelo Mozilo has said his company not only expected to survive the industry shakeout, but would add market share as weaker rivals fell away.
The company's 5.8 percent notes maturing in 2012 fell 3.8 cents on the dollar to 86.2 cents, yielding 9.44 percent, according to Trace, the Financial Industry Regulatory Authority's bond pricing service.
The perceived risk of owning Countrywide bonds rose. Credit default swaps rose about 125 basis points (1.25 percentage points) to 625 basis points, or $625,000 per year for five years to insure $10 million of debt, traders said.
CONSTRAINED
Countrywide said more than 70 percent of the $11.5 billion credit line has a term of longer than four years, while the rest has a term of at least 364 days.
"Along with reduced liquidity in the secondary market, funding liquidity for the mortgage industry has also become constrained," Chief Operating Officer David Sambol said. "Countrywide has taken decisive steps which we believe will address the challenges arising in this environment."
The company said it plans to originate nearly all home loans in its Countrywide Bank unit by the end of September.
The $11.5 billion credit line was part of Countrywide's existing financing sources, Reuters Loan Pricing Corp. said. Countrywide has said it had $186.5 billion of liquidity as of June 30.
(Additional reporting by Joseph Giannone in New York, and Richard Barley and Natalie Harrison in London)
---------------------------------------------------------------
Countrywide taps $11.5 billion credit line
Thursday August 16, 10:35 am ET
By Jonathan Stempel NEW YORK (Reuters) - Countrywide Financial Corp. (NYSE:CFC - News), the largest U.S. mortgage lender, said on Thursday it drew down an entire $11.5 billion bank credit line as a global credit shortage limits its access to short-term cash.
The company said the unsecured credit line was provided by 40 large banks. It also said it has tightened its lending standards so most new home loans will qualify for purchase by mortgage companies Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News).
Shares of Countrywide fell $3.19, or 15 percent, to $17.90 in morning trading on the New York Stock Exchange. They began the year at $42.45.
The drawdown shows how liquidity strains have spread beyond subprime lenders to larger companies that made predominantly higher-quality loans. Countrywide this week said mortgage delinquencies have reached their highest level in more than five years. Dozens of smaller mortgage lenders have quit the industry this year, and many have gone bankrupt.
"The big question is, can Countrywide survive," wrote Paul Miller, a Friedman, Billings, Ramsey & Co. analyst.
He said if liquidity problems last more than a month, "Countrywide might be forced to sell assets at a deep discount, putting tremendous pressure on its book value and stock price.
"There is a scenario in which the current liquidity crises last for longer than three months and Countrywide is forced into bankruptcy; it will be ugly, but it can happen!"
Countrywide did not immediately return calls and an e-mail seeking comment.
RATING DOWNGRADES
Moody's Investors Service downgraded Countrywide's senior debt three notches to "Baa3," its lowest investment grade, and said a cut to junk status was possible. Fitch Ratings cut the debt to "BBB-plus," its third-lowest investment grade.
The drawdown of the backup bank credit line reflects "significant diminution" in liquidity and debt market access, analyst Philip Kibel wrote. "Difficult financial markets create potential challenges to Countrywide's franchise and leadership in the mortgage banking business, and further dislocations in the U.S. single-family mortgage markets."
Countrywide Chief Executive Angelo Mozilo has said his company not only expected to survive the industry shakeout, but would add market share as weaker rivals fell away.
The company's 5.8 percent notes maturing in 2012 fell 3.8 cents on the dollar to 86.2 cents, yielding 9.44 percent, according to Trace, the Financial Industry Regulatory Authority's bond pricing service.
The perceived risk of owning Countrywide bonds rose. Credit default swaps rose about 125 basis points (1.25 percentage points) to 625 basis points, or $625,000 per year for five years to insure $10 million of debt, traders said.
CONSTRAINED
Countrywide said more than 70 percent of the $11.5 billion credit line has a term of longer than four years, while the rest has a term of at least 364 days.
"Along with reduced liquidity in the secondary market, funding liquidity for the mortgage industry has also become constrained," Chief Operating Officer David Sambol said. "Countrywide has taken decisive steps which we believe will address the challenges arising in this environment."
The company said it plans to originate nearly all home loans in its Countrywide Bank unit by the end of September.
The $11.5 billion credit line was part of Countrywide's existing financing sources, Reuters Loan Pricing Corp. said. Countrywide has said it had $186.5 billion of liquidity as of June 30.
(Additional reporting by Joseph Giannone in New York, and Richard Barley and Natalie Harrison in London)
Moodys, a stock Ive been short for several weeks, should be more worried about their own house of cards, rather than downgrading after the fact.
They are some of the reason this subprime and real estate mess went so awry.
They graded what should have been junk subprime paper as AAA. They are guilty as all hell of negligence and fraud, and the public is soon going to demand congress take these thieves down.
Its a fucking joke that they are downgrading this morning.
They will have their asses in court a la Arthur Andersen & Enron.
Stay tuned.
One year chart of moodys below:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=mco&sid=0&o_symb=mco&x=0&y=0
Most i talk to about current market are shrug their shoulders and say this is a normal correction we were overdue for one blah blah, so things orderly for now. Panic will ensue eventually. Big boys getting out the door in an somewhat orderly fashion so far. As for bullion i wouldn't touch it right now (took a 14 dollar haircut so far today and gold stocks have been getting mauled). In the end everything gets liquidated in situations such as this once things settle down than will likely be a good time to enter the gold market. Short the markets and/or save your stash in CDs, money markets whatever, no reason to risk you capital on anything right now.
Bottom line since 2003 (whenever the markets bottomed) we've had years of everything going up in every market in every economy (except the dollar obviously). Now its time for everything down and I expect the dollar to hold up and not collapse as many are predicting.
That said i think the markets might near term bottom here might cover some shorts and play the volitility gonna be choppy ride down. Notice major media is talking about the markets on tv today quite a bit.
That said i think the markets might near term bottom here might cover some shorts and play the volitility gonna be choppy ride down. Notice major media is talking about the markets on tv today quite a bit.
decided to yank some of my shorts off the table looks like we may be bottoming near term (obviously leaving a bulk of them on for the duration), think we rally and whipe some of this bearish sentiment out of the market before the next swing down and major media keeping its eye on the markets way too closely, MSM usually the tell with the markets go figure. 
A lot of this mess can be put squarely on Jesse Jackson shoulders. He blackballed the mortgage companies and through race baiting forced lenders to lend to those who never were capable of paying the loan back. Now he blames the mortgage companies for given them bad loans. What a fukkin joker.
When lending in the future, do ya experts think that the companies will look less toward good credit ( like a 22 year old recent graduate who has established good credit over the years by making monthly payments on his credit card yet has never held a job) and more towards looking at what that person has or the co-signer has for collateral or maybe person making a large down payments (30-50%) on a home?
Also would think that there are a lot of loans out there that are good that may be going out with the wash, who will be buying these? Thanks to Jesse Jackson maybe those companies will be JP's little pot of gold ( until the signs of Jesus coming back become a little more clear to me, then it will be the real stuff ).
When lending in the future, do ya experts think that the companies will look less toward good credit ( like a 22 year old recent graduate who has established good credit over the years by making monthly payments on his credit card yet has never held a job) and more towards looking at what that person has or the co-signer has for collateral or maybe person making a large down payments (30-50%) on a home?
Also would think that there are a lot of loans out there that are good that may be going out with the wash, who will be buying these? Thanks to Jesse Jackson maybe those companies will be JP's little pot of gold ( until the signs of Jesus coming back become a little more clear to me, then it will be the real stuff ).
Well the companies that did wrong will no longer exist (several of the strictly subprime lenders already have gone under) the marketplace will take care of itself.
That said the higher ups of some of these companies that have been saying for a while everything will be fine soon at the same time have been dumping their stock like mad. Such as countrywide's CEO. Several will be testifying before congress before this is all said and done.
That said the higher ups of some of these companies that have been saying for a while everything will be fine soon at the same time have been dumping their stock like mad. Such as countrywide's CEO. Several will be testifying before congress before this is all said and done.
