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134 comments on DrumBeat: December 24, 2007

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Stoneleigh on December 24, 2007 - 9:58am Permalink | Subthread | Comments top

A Yuletide Finance Round-Up by ilargi has been posted at TOD:Canada.

With economic uncertainty steadily increasing as 2008 approaches, we would like to offer best hopes for peace and a Merry Christmas to all our readers.

Pain Street USA: '08 housing outlook
The forecast is for a longer, deeper home-price slump than previously expected, with double-digit declines in many markets.


The United States is deep in its worst housing slump since the Great Depression, and according to a new report, it's not going to get better any time soon.

In a new survey, Moody's Economy.com says many metro areas will record losses of 20 percent or more during the downturn, with the national median price for single-family homes dropping 13 percent through early 2009. Factoring in discount offers from sellers, the actual price decline would be well over 15 percent....

...."There has been a sea change in seller psychology since the subprime shock this summer," he said. "Sellers now realize they have to drop their prices to make a sale and prices are coming down very rapidly in some markets."

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mcgowanmc on December 24, 2007 - 12:14pm Permalink | Subthread | Parent | Comments top

From a tip, and up for discussion:

"Wamu to exit wholesale JAN 1. Was told by another LO that the word was leaked from a Rep and he was fired the next day. They keep asking for new rep and WAMU keeps blowing them off."

We know that Chase is interested in a western footprint, and WaMu (the largest U.S. savings and loan) is trading at almost rock bottom. If CW announces Jan. 1 they are OUT of wholesale, coupled with the WaMu $783 million downgrades issued tonight by Fitch, doesn't it look more and more like WaMu is done?

And, as quoted by Bloombu(e)rg, "Washington Mutual also plans to close WaMu Capital Corp., its broker-dealer business, as well as its mortgage banker warehouse lending unit." Regardless, we understand that WaMu has to spread $10 billion in mortgage-related write-offs in 2008, killing profits in every quarter.

http://implode-explode.com/forum/viewtopic.php?p=25576#25576

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musashi on December 24, 2007 - 3:43pm Permalink | Subthread | Parent | Comments top

Hard to say. I just rode from N CA to Phoenix following the scenic route through the Inland Empire and it looked to me that WaMu has a lot of exposure in what may be the worst area in the country as far as RE next to FL.

On the other side the big players that clean house early may have the best chance of survival.

What's their exposure to CC defaults?
What's their exposure to CRE ?
What's their exposure to HELOC's?

That's the kind of thing that will also leave big marks.

They all are making a big mistake by not withdrawing credit lines from the riskiest customers and areas. With CRE they are stuck contractually.

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Petrosaurus on December 24, 2007 - 12:19pm Permalink | Subthread | Parent | Comments top

Yeah, Moody's - the guys that rated everything AAA until it blew up. Not that I disagree, but after their recent prognostication performance record I'd expect them to be hiding under the couch for a while longer. And to a tenth of a percent two years on no less. Bizarre.

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musashi on December 24, 2007 - 3:24pm Permalink | Subthread | Parent | Comments top

Merry Christmas.

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134 comments on DrumBeat: December 24, 2007

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