Freddie CFO Suicide, Bank Earnings: Wells, Morgan, US Bank
“The acting chief financial officer of mortgage financier Freddie Mac, David Kellermann, was found dead Wednesday morning from an apparent suicide, police said. Authorities said there were no signs of foul play when officers were called to Kellermann’s home on Raleigh Hill Road shortly before 5 a.m., according to Fairfax County police spokeswoman Lucy Caldwell. “At this point there are no signs of foul play,” Caldwell said. “It’s under investigation. I don’t believe we have categorized it yet at this point.” Kellermann, 41, who also served as the company’s senior vice president, had been with the company for more than 16 years.”
Bank Earnings Roundup
Morgan Stanley posted its second straight quarterly loss and cut its dividend. Apparently trading business profits were more than overcome by real estate investment losses and a charge from the improving value of it own debt.
Wells Fargo said its first-quarter net income rose to $3.05 billion from $2 billion in the year-earlier period. Wells Fargo, busy merging pick-a-pay loans and Wachovia branches into their business channels, said its merger with Wachovia is on track. They had revenue of over $21 billion, up from $10.56 billion in the first quarter of 2008. In the latest quarter, Wachovia contributed $8.72 of total revenue. Also, Wells Fargo said the latest quarter’s earnings included a credit reserve build of $1.3 billion – the market hopes that it is enough.
U.S. Bancorp, one of the 10 largest U.S. banks, reported higher-than-expected quarterly earning. Their strong mortgage activity helped to offset losses from lease financing, construction and development loans, and credit cards. Like Wells, US Bank also put aside $1.3 billion for loan losses, $833 million more than a year earlier, as declining home prices affected both consumer and commercial loan portfolios.
Rate Update
We saw rates rise slightly yesterday as it became apparent that the stock market was improving. Look for stocks to improve again, although with no substantive news today rates are basically unchanged from yesterday afternoon. Keep in mind, which watching mortgage prices, that if “the market” believes that rates are moving down, you can expect higher coupon 30-yr mortgage prices to fare poorly relative to lower coupons. And that is what we are indeed seeing in mortgage prices.
Daily Humor
A seaman meets a pirate in a bar. The two men take turns boasting of their adventures on the high seas.
The seaman notes that the pirate has a peg-leg, hook, and an eye patch. He asks, “So, how did you end up with the peg-leg?”
The pirate replies, “We were in a storm at sea, and I was swept overboard into a school of sharks. Just as my men were pulling me out a shark bit my leg off.”
“Wow!” said the seaman. “What about your hook”?
“Well,” replied the pirate, “while my men and I were plundering in the Middle East, I was caught stealing from a merchant. I was arrested and my hand was cut off.”
“Incredible!” remarked the seaman. “How did you get the eye patch?”
“A sea gull dropping fell into my eye,” replied the pirate.
“You lost your eye to a sea gull dropping?” the sailor asked incredulously.
“Well,” said the pirate, “it was my first day with the hook…”