Just a quick note. I was on Real Estate Radio USA today talking about RE BarCamp and REBlogWorld. If you missed it live, you can listen here.Share This

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Some excerpts: This is by far the worst financial crisis since the Great Depression Hundreds of small banks with massive exposure to real estate (the average small bank has 67% of its assets in real estate) will go bust Dozens of large regional/national banks (a’ la IndyMac) are also bankrupt given their extreme exposure to real estate and will also go bust

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“Double-digit increases in gasoline prices helped push up the consumer price index by 1.1%, in June, the biggest increase in 26 years, the Labor Department reported Wednesday.”

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There is a choice to be made: Either regulate the Banks, or leave it to the vagaries of the free markets to punish those who trade with, or place their assets in the wrong institutions. But for God’s sake, do not give us the worst of both worlds — do not allow banks the freedom to make horrific but preventable mistakes (i.e., only lending money to those who can pay it back), but then expect the taxpayers to foot the trillion dollar bill. That’s not capitalism, its not socialism, its not regulation, and its sure as hell isn’t what free markets are. Our language is insufficient to describe this hodge-podge system, other than to call it a random patchwork of quasi-capitalism, quadrennial-socialism, and politics as usual. Ideological idiocy is the only phrase I can muster that has any resonance with the daily insanity. Preach it, Barry!

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Its £4bn rights issue closes on Friday. With the new stock being offered at 275p it is safe to assume there will not be many takers. In fact the only acceptances are likely to be from those (mainly retail) shareholders who have already sent in their forms. What’s the likely take-up? On Tuesday, JPMorgan Cazenove suggested a figure of 60-80 per cent - a projection the house might want to revisit. Also see this piece about the likely overhang.

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“In his new book, author and ex-lender Richard Bitner owns up to some of his worst mistakes, offering an inside look at how his firm issued bad mortgages.”

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The title of the report says it all: “Issues Identified in the Commission Staff’s Examinations of Select Credit Rating Agencies” Issues? Really? We had NO clue…

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Reverse mortgages are available in two main flavors: FHA conforming and non-conforming, the latter is also known as a Jumbo Reverse Mortgage. An FHA conforming loan limit is the maximum amount of home value that is recognized in calculating the amount of money that will be lent on the home. Jumbos are considered by senior […]

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“One of the small consolation prize benefits showing up is that there are far fewer bad eggs entering the subprime delinquency pipeline at the front end.”

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“We were told in May that crisis was averted after the rescue of Bear Sterns. Then yesterday crisis was averted again by the bailout of Freddie and Fannie. Now we are hearing of rumblings of troubles in the Regional Banks:”

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