Both the direct hedge fund industry and the fund-of-fund industry have been under significant scrutiny in recent weeks and months. The Bernard Madoff scandal was clearly the most high profile event that has drawn this negative attention. In addition, David Swensen, the highly regarded Yale endowment fund manager recently expressed a harsh view of the
January 2009
Advance 4Q2008 GDP came in today at -3.8%. This is the first reading for the period, with the preliminary reading coming February 27 and the final reading in late March. Back in December, analysts called for -6% GDP for 4Q2008 and as recently as this week called for -5.5%. This -3.8% number is more favorable
This week was the fourth week of a mortgage bond purchase program by the Federal Reserve—here’s week 3. Beginning on January 22 and ending on January 28, the Fed bought $17b of mortgage bonds—below is a table breaking down the amounts for each coupon and maturity across the three agencies that issue mortgages: Fannie Mae,
“You can sleep in your car, but you can’t drive your house.” Ford lost many billion for 2008, and with the recent run-up in mortgage rates, maybe you can get a car loan at less than 6%. Because it seems that 30-yr conventional fixed-rates are up at the 6% level again, at the mortgage-banker level,
RATE UPDATE & LOCKING STRATEGY Rates have traded in a half-point range in the two weeks since my last report. This kind of volatility is standard right now as markets struggle to reconcile dismal economic news with massive government stimulus. It’s somewhat futile to display rates at the bottom of this report because they swing
New home purchases for December came in at an annual pace of 331,000, the lowest level on record. Only 23,000 Americans bought new homes in December. Supply of new homes is at 12.9 months. This news follows another report earlier this week on Existing Home Sales that showed an unexpected rise of 6.5% for December,
Below is a proposal from George Soros on how to bailout the banks. It’s on his website and recently ran in the Financial Times. His proposal weighs two ideas: (1) the ‘bad bank’ idea that’s been floating around which says that the FDIC leads an effort, modeled after the original TARP incarnation, to buy illiquid
The FT had a headline on their website this morning saying the economy could lost 50m jobs in 2009. Alarming to say the least, but not unrealistic considering the US alone lost 2.6m jobs in 2008. Here’s the full article, and below are a couple of excerpts. Earlier, the International Monetary Fund increased its estimate
Layoff Roundup The US Post office is requesting that they no longer delivery mail on Saturday’s as a way to save money. Makes sense to me. With all of these lay-offs (Kodak is shedding 3,000 jobs), closings (Starbucks is shutting down another 300 outlets, leaving ex-mortgage bankers with no choice but to drive farther for
The House of Representatives passed an $819b tax and spending bill today on a vote of 244-188, with 11 Democrats opposing it and zero Republican votes. Republicans claimed lots of special interest “pork” line items and a lack of tax cuts for their opposition. There is a Senate vote next week on a similar $900b
The FOMC said that they will keep buying mortgage bonds according to their $500b by June schedule and also said they will keep going if necessary. They left rates alone. Mortgage bonds sold off heavily after the Fed meeting, ostensibly because they also said they’d buy long-term Treasuries as well, which contribute to already diluted
The FDIC is increasingly looking like the candidate to run the ‘bad bank’ that would help to unwind bad assets still on bank’s books. This was the original intent of the TARP: FDIC Chairman Sheila Bair is pushing to run the operation, which would buy the toxic assets clogging banks’ balance sheets, one of the
The big news of the day, besides more bank earnings, is that a coach of a Texas high school got fired after beating another team in basketball 100-0. The coach would not apologize, since his girls played with honor and integrity (his words) in beating Dallas Academy, which has 8 girls on the team and
William C. Dudley was named today to serve as President and Chief Executive Officer of the Federal Reserve Bank of New York. His appointment by the Board of Directors of the New York Fed, succeeding Timothy F. Geithner who was sworn in as Secretary of the Treasury yesterday, was approved by the Federal Reserve Board
The S&P Case Shiller November 2008 report of existing home sales showed record year-over-year 18.2% price declines averaged across 20 major cities (see table below). Notable declines were Las Vegas -31.6%, Phoenix -32.9%, and San Francisco -30.8%. In November, prices in all 20 cities in the composite were down. Both the 10-City and 20-City Composites
Here’s your financial vocabulary lesson for today: “Liquidity” – When you look at your investments and wet your pants. More Firms Close Mortgage Broker Channel First Federal of California is the latest lender to close their wholesale channel to brokers. I imagine the following announcement prompted yet another round of rumors and calls to the
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