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09
02
2010
Closing Bell: The Selling Bias Becomes Clearer (CTIC, CIT, SAP, HAS, UPS, STJ)Posted by: admin in Stocks Money News
Filed under: CIT Group (CIT), United Parcel’B’ (UPS), Hasbro Inc (HAS)
Here were today’s closing bell levels: Dow 9,908.39 -103.84 (-1.04%) Top Day Trader Alerts Continue reading Closing Bell: The Selling Bias Becomes Clearer (CTIC, CIT, SAP, HAS, UPS, STJ) Closing Bell: The Selling Bias Becomes Clearer (CTIC, CIT, SAP, HAS, UPS, STJ) originally appeared on BloggingStocks on Mon, 08 Feb 2010 16:20:00 EST. Please see our terms for use of feeds. Permalink | Email this | Comments
Filed under: Management, Bank of America (BAC), CIT Group (CIT), Options, Technical Analysis
Due to his controversial past, the decision to elect Thain wasn’t an easy one. After shelling out a small fortune to tart up his office digs at Merrill Lynch — and doling out lofty bonuses amid the bank’s hasty takeover by Bank of America (BAC) — Thain became something of a poster boy for Wall Street excesses. Continue reading John Thain Takes the Top Spot at CIT Group John Thain Takes the Top Spot at CIT Group originally appeared on BloggingStocks on Mon, 08 Feb 2010 11:00:00 EST. Please see our terms for use of feeds. Permalink | Email this | Comments
08
02
2010
Do Loan Modifications Make Things Worse By Increasing Principal BalancePosted by: admin in mortgage industry
The debate in the last months has centered on how the Government and lenders were not doing enough to get troubled borrowers into a loan modification. However, a recent report might indicate that this has actually a good thing for borrowers! A report released last week by the State Foreclosure Prevention Working Group disclosed that about 72 percent of the loan modifications carried out in October ended up owing more. This is because lenders will add missed mortgage payments with interest to the modified loan. Therefore, although loan modifications may reduce monthly payments they sink borrowers further into debt. This does seem an oxymoron, to help troubled borrowers by increasing the size of their loan. Supporters of the scheme say that this is necessary evil for lenders to be able to afford the modifications and allow borrowers to afford their mortgage payments and keep their homes. But is this even true? Reports show that the number of borrower that foreclose after completing a mortgage modification is much higher when their mortgage balance was increased or left unchanged. This is because borrowers have little incentive in staying with a house that is worth less than their mortgage. If this is the case they will often simply walk away from their mortgage with means considerable costs for lenders. This is called the underwater effect. Borrowers that own homes that are worth less than their mortgages have little hope to regain equity and are seen by their owners as a liability instead of an investment. Studies show that the best way to reduce foreclosure rates, a nuisance for both borrower and lenders is to reduce, even if only a little, the principal balance of the loan. But is it the government’s job to force lenders reduce the principal of loans? This is of course the big debate. On one side you will have those that feel most borrowers had it coming. “I knew I couldn’t afford it, so I kept on renting. Why should they get bailed out for borrowing irresponsibly?” seems to be a common opinion. The logic of the argument is hard to fault. On the other hand there is the moral argument that the Government has a responsibility towards troubled families that could end on the street, which from a pragmatic point of view might even cost society more in handouts. The other question is why even try and stop foreclosures? Many view them as a natural outcome of a financial crisis and that the market will normalize itself after going through the “normal” post crisis period. Many feel that the best move underwater borrowers can make is to simply walk away from their mortgages. When asked about the morality of breaking the mortgage contract most will say banks had it coming when they started lending irresponsibly. If your mortgage is underwater this is a good question to ask yourself. Is it really worth it for you to stay with your mortgage? Or would it make more sense to simply walk away, take the hit on your credit score and carry on with your life? The answer will depend on how much you have invested in your home, financially and emotionally.
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Filed under: Major Movement, Earnings Reports, Good news, Hasbro Inc (HAS), Options, Technical Analysis
HAS opened this morning at $33.65. So far today the stock has hit a low of $33.53 and a high of $35.19. As of 11:40, HAS is trading at $34.99 up $4.18 (13.6%). The chart for HAS looks bullish and S&P gives HAS a positive 4 STARS (out of 5) buy ranking. Continue reading Hasbro Soars On Q4 Earnings 22% Above Estimates Hasbro Soars On Q4 Earnings 22% Above Estimates originally appeared on BloggingStocks on Mon, 08 Feb 2010 13:30:00 EST. Please see our terms for use of feeds. Permalink | Email this | Comments
Filed under: Products and Services, Internet, Marketing and Advertising, Technology
At the same time Yahoo (YHOO) has taken a different road. It chose to offer display ads on search pages. The ads component added to its revenue stream in 2009, making it number one.
Continue reading Google’s display ads to generate $1 billion Google’s display ads to generate $1 billion originally appeared on BloggingStocks on Mon, 08 Feb 2010 15:30:00 EST. Please see our terms for use of feeds. Read | Permalink | Email this | Comments
08
02
2010
Banking Solution to Financial Crisis is to Ignore Distress Inventory – California had 1,200 Foreclosure Filings Per Day in 2009 – The California Real Estate Foreclosure Machine. Countrywide Financial, WaMu, and Wells Fargo top Foreclosure List in Q4 of 2009.Posted by: admin in Real-estate newsEven in the best of times foreclosure is a financially traumatic event. And these are definitely not the best of times. Yet you wouldn’t know that by watching the financial cable shows. In that corner of the world, everything has miraculously improved and their solution to foreclosure is to simply ignore it. Those Alt-A and […] a Even in the best of times foreclosure is a financially traumatic event. And these are definitely not the best of times. Yet you wouldn’t know that by watching the financial cable shows. In that corner of the world, everything has miraculously improved and their solution to foreclosure is to simply ignore it. Those Alt-A and option ARMs lingering around festering a rotten mess in California, just pretend they aren’t there. Banks are in many cases even ignoring missed payments on homes and not preceding with foreclosure. So they are helping with HAMP right? Not really. Consider it a form of bailout inertia. Yet somehow those in the tiny realm of the world that ignore economic reality somehow now think that by doing nothing they are now solving the crisis. In fact, mark-to-market, that absurd notion that you don’t need to value assets at their current worth is somehow permeating through the entire housing market. If banks had to value assets at their current worth, the entire banking system would become insolvent overnight. So they choose to purposefully ignore the reality on the ground. And for those that think things have improved let me present to you exhibit A, California notice of defaults for the last few years:
Last year, as in the year that saw the stock market rally with the momentum of a bull stampede, California witnessed the largest number of notice of default filings ever. Worst year ever. California had 450,000+ notice of defaults filed in a year that supposedly saw recovery. Now this data does reflect the new world order where banks choose to ignore bad data and pretend Alt-A and option ARMs turning into platinum bars. How bad is this? 1,232 people per day in 2009 received a notification of default because they missed at least 3 mortgage payments in California. Now this doesn’t seem like a healthy market in my book. In fact, last year saw nearly a record amount of actual foreclosures, closely resembling 2008: Now just look at 2006. We went from nearly no foreclosures to quickly approaching 250,000 in 2008 and 2009. In other words, the market is horribly unhealthy. As in today. When I look at the California budget and our 12.4 percent unemployment rate it should be apparent that no housing market can boom when the real economy is floundering. Can we sell homes in the short-term? Of course. Can we get people into homes with low interest rates and tiny down payments? Absolutely. But did we not learn with the Alt-A and option ARM fiasco that getting people into a mortgage is only half the battle? Ideally you want people to have the ability to service the mortgage for years to come, not only for a short period of time. And that is largely where the California housing market has gone off track once again. I was listening to the radio and heard a mortgage broker empathically say, “we need to get mortgage rates back to the low 4% range to get housing going again!” I think globally we are far beyond ever seeing those ridiculous rates. The average 30 year mortgage rate for the past 40 years is 9 percent and a rate at that level would cause housing to come to screeching halt. A rate that was fine for many years and when households earned less income is now somehow unpalatable. It is hard to envision because our economy is running on the exhausted fumes of debt. Just think about every program we have done to keep housing propped up: -The Federal Reserve buying $1.25 trillion in mortgage backed securities to keep rates artificially low (coming to an end) -The home buyer’s tax credit (isn’t too much home buying what got us into this mess?) -Massive taxpayer subsidies on interest rate deductions (why penalize those who choose to rent?) -Foreclosure delays – HAMP and statewide moratoriums (refer to charts above to show success rate) -Banks stalling and massive build up of shadow inventory (the new mark to market stalling tactic) And after all of the above, foreclosures are still raging and homeowners are still unable to make their payments. Just look at the trend: California tried a foreclosure moratorium in 2008 and look what that did. Once that program was over the can was punted into Q1 of 2009 where HAMP was there to pick up the slack. Even with that, notice of defaults were still rising because of an unemployment rate of 12.4 percent. If you can’t pay your mortgage does it matter that your payment is $2,000 instead of $4,000? Many families and individuals are simply unable to pay their debt. There isn’t any gimmick to fix that. The only remedy to that is something called a job. Is our financial system so twisted that we think of jobs only after every measure above has been exhausted to create a transfer of wealth to Wall Street? And if we look at the top defaults in Q4 of 2009 we find a list of very familiar names:
Names that will go down in infamy and will always be associated to the housing bubble are still causing problems today. The subprime and option ARM crusaders. They have littered California with these surprises and we know they are going off. Just look at those notice of defaults. You don’t get a notice of default for paying your mortgage on time. Yet the amount of foreclosures on the market does not even reflect what the NOD data is projecting. Banks are merely holding off the debt and pretending all will be well. But employment is still in the trough of this cycle. What industries are hiring large numbers of people? Or what industries are paying people enough for some of those inflated neighborhoods? No wonder why FHA insured loans with a 3.5 percent down payment are now the rage in California and all across the country. Now think of this. Of the 5,290,000+ homes with a mortgage in California 35 percent are underwater. 1,850,000+ homes are in a negative equity position. Walking away is now picking up steam because why would you continue making the payment on a home that is now so severely underwater? To keep the bank current? And the bulk of people not paying, those 450,000 NODs in 2009 got that way because of the economy. Now if home sales were booming because jobs were coming back and our real economy was growing then I can understand the trend to a certain degree. But if home sales are only going up because of gimmicks then we know this story all too well since we just lived it a few years ago. Hard to believe we are creating housing bubble 2.0 but this time, we may not have the same inflating power as we did in the last run.
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Filed under: Employees, Economic Data, Recession
Just this week the Labor Department reported January unemployment dropped to 9.7%. Continue reading Do Jobs Numbers Tell the Whole Story? Do Jobs Numbers Tell the Whole Story? originally appeared on BloggingStocks on Sat, 06 Feb 2010 09:40:00 EST. Please see our terms for use of feeds. Permalink | Email this | Comments
08
02
2010
How To Spot A Loan Modification Scam Before You Are A Victim Of It.Posted by: admin in mortgage industry
The media has been rife with horror stories of scam artists preying on one of the most vulnerable sectors of our population, troubled homeowners and their families. However, many homeowners just haven’t got the message so we shall revise a few of the signs that can help us spot a loan modification scammer. These leeches of society will ask for exorbitant fees from homeowners too worried or clueless to see they are paying a thief for something they could do for free. It must be said beforehand that, as in so many other industries, the many pay for the sins of the few, and that most loan modification agents are just trying to make a decent living providing a service. Scam Alert 1. Charging Upfront Fees. It is illegal in many states to charge upfront fees, or fees for services that have not been provided yet. Even for states where it is not illegal it is certainly a clear sign you are dealing with a potential scammer. Stay well away from any company that tries to charge you with upfront fees. Scam Alert 2. They Guarantee They Can Stop Your Mortgage From Foreclosing. This is another red flag for loan modification companies you don’t want to touch with a seven foot pole. Nobody can guarantee a servicer will provide a loan modification and stop a mortgage from foreclosing. Not even the Government has been successful at forcing servicers do that, it is unlikely your loan modification company downtown is going to be able to. The truth is that there are free loan modification counseling agencies that will provide you with all the information you need. We are used to paying for a good service and feel that the free option must be in some way of inferior quality than HAMP counselors. These counselors are not volunteers working out of charity; they are paid by the Government, just not by you. Scam Alert 3. They Ask You To Stop Paying Your Lender And Start Paying Them. It is amazing that anybody would fall for this, but we do. The companies will claim that you need to be behind in your payments in order to qualify for a certain loan modification or that they will take care of the payments or any other kind of bogus explanation. Don’t believe it. You do not need to be behind in your payments to get a loan modification you just need to have proof that you can’t afford the current payments. Work on your hardship affidavit, but whatever you do don’t stop making payments. It will only make things worse by further dropping your credit rating. What Should You Do? Your best option is to call your state’s HOPE hotline at 877-462-7555 and ask for your closest nonprofit housing counselor or check it out yourself here. Loan Modification Companies will tell you that you need their help to fill in forms and that nonprofit counselors don’t have your interests in mind like they do. It can be faster and easier to use a loan modification company if you can afford it. Just be careful you don’t become another mortgage modification scam statistic.
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07
02
2010
Loan Modifications, Loss Mitigation Incentives and Other Greedy GamesPosted by: admin in mortgage industry
Have you ever heard about having your cake and eating it? That’s what many mortgage providers are trying to do with loan modifications. How so? As it is well known the Government offers lenders incentives for processing loss mitigation actions. Loss mitigation action is code for loan modifications. What has been the result of the Government’s loan modification incentive program? Banks, lenders and servicer have of course gladly accepted these “incentives” for processing loan modifications. But what has been the result for borrowers? Mortgage Letter 2009-35 sent to all Government approved mortgagees on September 23rd 2009 provides a surprisingly honest picture. This letter is quite interesting as an exercise in stating the obvious and calling mortgagee providers thieves to their greedy faces. The second paragraph of Mortgage Letter 2009-35 is priceless: The recent economic slow-down has increased demand for loss mitigation actions, including but not limited to, loan modifications. Recent industry studies of these loan modifications revealed that borrowers who experienced an increased mortgage payment on a modified loan had a significantly higher re-default rate than borrowers whose loan modification provided a lower payment. If you thought loan modification research studies were a waste of time, think again. The Government has come up with a breakthrough. Borrowers in financial trouble are more likely to re-default on their mortgages when their monthly mortgages are increased! Shocking. I’m sure David H. Stevens, Assistant Secretary for Housing, the author of the letter, knew he was stating the obvious because the in the very next paragraph he hits the mortgage industry with a brutal honesty that is refreshing to say the least: FHA reviewed its recent insured loan modifications and found that, generally, they resulted in higher payments to the borrower. The higher payment was the result of not lowering the interest rate to the current market rate and/or not extending the term to the maximum of thirty years authorized under 24 CFR 203.616. Generally, the loan modifications simply capitalized the past due amounts and allowable charges and did not extend the term of the loan. May I personally congratulate Mr Stevens, or whoever writes his letters, on the construction of that paragraph. There is nothing we didn’t know there but it is nice when a Government official simply goes out on a limb and says it. So this is the picture: Banks provide loan modifications to troubled home owners which generally don’t reduce their monthly payments and simply add on the late charges and interest to the mortgage without even extending the loan term and get an incentive from the Government for their troubles. The above mentioned letter set out that these practices were to stop in a 30 day period from the date of the letter, that was the end of November 2009, and that any loan modifications where the interest rate was not reduced would not apply for a loan modification incentive. I guess it is a start.
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The stock market tried to make a comeback several times today, but the indexes closed down sharply on the day. We did not even have Washington D.C. open to bash the financial markets, but we had continued concern that banks were ceasing to trade with some emerging market banks that are in the nations of the PIIGS (Portugal, Italy, Ireland, Greece and Spain). 
John Thain — whom you may recall as the man who presided over the spectacular implosion of Merrill Lynch — is looking to have some new business cards printed up. Over the weekend, CIT Group (
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Jobless claims are big news in the financial markets and can cause the stock market to move; politicians to scurry looking for new programs and claim to be able to create or “save” a certain number of jobs.
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