Countrywide Doubles Down

ABCNews (UK) reports on a pathetic attempt by Countrywide to call the bottom by pretending to bottom feed. Worse, it is working.

Countrywide acquires some assets of retail mortgage-exiting HomeBanc
Published on : Tue, 07 Aug 2007 14:06

LONDON (Thomson Financial) - Countrywide Financial Corporation and HomeBanc Corp announced today that they have reached an agreement whereby Countrywide will acquire some of the assets related to HomeBanc's retail mortgage operations, including five retail branches, and hire a significant number of HomeBanc's retail loan originators. Countrywide will pay no cash premium in the transaction.
...
'Countrywide is continuing to leverage the opportunities that are arising from the consolidating market,' said a spokesman.
'In light of the extraordinary difficulties existing in the mortgage market, we feel this agreement with Countrywide provides us with an attractive opportunity to transition a portion of our mortgage origination assets to a well-established and respected lender in this space,' said a HomeBanc spokesman.
As part of the transaction, Countrywide will acquire fixed assets related to five branches in Georgia, Florida and North Carolina and will assume the leases of those branches. Countywide will not acquire any other assets or assume any other liabilities connected with HomeBanc.

My gosh where to begin deconstructing this move? Doesn't matter what I think. The stock is up 6% on the news. Got that? Adding a bad lending arm to your suppsedly strong lending arms makes CFC stronger. Damn, let's talk about more upbeat items. Energy primer and bridge collapse later today.

That's Despicable

Bloomberg Reports:

Aug. 7 (Bloomberg) -- Bear Stearns Cos.' decision to liquidate two bankrupt hedge funds in the Cayman Islands instead of New York may limit creditors' and investors' ability to get their money back.
While most of their assets are in New York, the funds filed for bankruptcy protection July 31 in a court in the Caymans, where they are incorporated. The bank also used a 2005 bankruptcy law to ask a U.S. judge in Manhattan to block all lawsuits against the funds and protect their U.S. assets during the Caymans proceedings.

The real issue is that there is a crisis of confidence. This feeds into that perception and threatens to spread the contagion. At the very least we can expect a flurry of ill concieved protectionist legislation from a congress desperate to be seen as doing something.

Save The Planet by Driving

TimesOnline:

Food production is now so energy-intensive that more carbon is emitted providing a person with enough calories to walk to the shops than a car would emit over the same distance. The climate could benefit if people avoided exercise, ate less and became couch potatoes.

Transportation and food handling are constantly getting more efficient so this is unlikely to change. Maybe we can even get so efficient that biofuels become energy positive.

Echoes and Snapbacks

What The PacNorwesters and Phoenecians, Tuscans Vegans, et al don't see comong as a result of the recent credit seizure is the "Kalifornia Echo." You heard that term here first. There will be no more California Equity Locusts at all. None. Zip, zero, nada. They can't move because they can't sell AND they can't qualify themselves. Still in California = stuck in California. But wait, that's not all. "The Snapback" is coming. All those bridging Californians who bought PacNorWest, Great SouthWest before disposing of their overpriced, overleveraged SoCal POSes are going to have to choose and at least half will be forced to choose the Cali house as the one to save. Even then a vast number are going to lose it all but that's another story. All they'll leave behind besides keys, brown lawns, green pools and weeds is a vastly inflated property assesment basis for you locals to continue to pay. You are quite welcome.

Vegas is HOT

Ten thousand. Say it again so it sinks in; ten thousand empty houses. The San Diego UT reports that Vegas may not have been the boom town people thought.

Vegas housing slump continues

ASSOCIATED PRESS

August 5, 2007

LAS VEGAS – Analysts see no end in sight to a housing slump in Las Vegas, where home sales are off by 40 percent, prices continue to fall and home builders have sharply cut back on construction.

...

New homes sales through May were down 43.8 percent in Las Vegas from a year ago and resales were off by 34.7 percent, according to Home Builders Research.

...

The inventory of homes for sale on the Multiple Listing Service climbed to a record 23,642 in June, with about 40 percent of them sitting vacant.

...

“Thus far, this market is performing at a much higher level than the pundits suggest. What outside observers tend to miss – and sometimes even local analysts – is that this market is in the middle of a major transition. Things are changing and we think for the better,” he added.

Consumer Spending

Sorry to be so "econometric" this last week but that's where the stories have been. This coming week promises to get back on track with some juicy land use/planning/transportation tidbits. The recent financial turmoil is actually responsible for the impending rash of exurban problems long festering finally being discussed. There's a war about to break out that no one has any clue could even exist. Civil servants are massively overpaid and their positions are massively overmanned and to near an employee they'll swear the exact opposite. Now they are in for an interesting discovery; their pensions are not really pensions, they are a combination of vested assets and claims on future tax revenues.

But first we need to see why there will be a revenue crunch at the municipal level. Here is yesterday's and last six months of the RLX:


Consumer spending is 2/3rds of GDP, municipalities are not only seeing late property taxes but should be planning for drastically lower business and sales tax revenues. Another perfect storm is brewing and the current one hasn't even made landfall.

Gee Beav Ya Think?

Time to play another round. The rulez™ are easy. Listen to any of the talking heads this weekend and whenever they deign to explain to we idjits in blogland just why something bad happened imagine Wally's little brother Theodore explaining the painfully obvious. Then dope slap the television and shout "Gee Beav, Ya Think?"

Example: Stocks ended another volatile week with a sharp selloff on Friday amid worries about credit markets and a weakening economy. "Bears have control over the tape in the short term," said Alec Young of Standard & Poor's. "Investors are repricing risk and taking the stock market down a peg or two."

"Gee Beav, Ya Think?"

Somebody Send My Stomach Along Later

It's just like watching a soap bubble. You keep thinking it can't get any thinner or unstable then... pop! Looks like nobody wants to be in a market where Wells Fargo raises Jumbo Prime rates to 8% and Novastar appears to have ceased originating. (update: BJ corrected mytype)

Most readers are not going to find this topical... AT FIRST. Bear with the thought process. This is a remote laser focused temperature sensor.

Casey's Big Brother?

HSBC is an interesting case. They swear on their still living mother's grave that their exposure to the subprime mess is minimal. Check out the graph above. Somebody knows something and isn't talking. This is a volume chart, and in honor of that most omniscient chart god CalculatedRisk the chart is not offset from zero.

It gets worse. I mean come on. Volume? WTF is volume? I don't care. What I care about is the next datum. What percentage of HSBCs market cap is their subprime exposure? Ans: 20%.

Call the COPs

COPs are Certificates Of Participation. Municipalities and other government entities use them as bridge loans to spend money when they know revenue is imminent. The San Fransisco based dBusinessNews has an interesting article on the subject. Recommended reading offering rare insight into the process and way these COPs are evaluated. They do offer a note of caution:

Fitch balances these positive financial results with concern regarding the economic effects of the severe downturn in the residential housing market, which includes high rates of foreclosures, increased voluntary assessed value reductions by the assessor. The probable ancillary effects on the regional economy include reduced construction and real estate employment and declining permit fees and sales and property transfer tax revenues.

Other than that the article is generally upbeat. We'll follw this as it funds in a few weeks. Bets that they end up paying more than projected? Remember, I've talked about COPs before. These are weather birds for the local economic storms on the horizon.

Market Commentary

Read into it what you will.

AHeM

AP reports AHM is still halted pending "bad news."

Some of the company's financial backers want their money back because American Home Mortgage's investment portfolio has lost so much value.

The lender said it needs to keep its cash until the company gains a better grasp of how bad conditions in the mortgage market are going to become.

Those conditions include more missed payments on home loans, sagging home prices and less cash available to lenders.

Last trade $10.47 on Friday. Yahoo Finace is a decent place to check for news and such. Note the left bar where "blog news" has been added.

N.B. Using "nofollow" links as a test. Usually just clutters the desktop but feedback is requested.

Briney Breezes Freezes

[Missed it by that much.]

$510 Million Trailer Park Deal Hits Wall
Developer Backs Off $510M Deal to Buy Fla. Trailer Park, for Now

The Associated Press

BRINY BREEZES, Fla.
The would-be millionaires of Briny Breezes trailer park may have lost their big chance.

A developer who agreed in January to pay $510 million for the waterfront trailer park town canceled the deal Monday because of a dispute with the community, though the company promised to try to work out the differences.
...
Ocean Land planned to turn the community of 488 trailers into about 900 multimillion-dollar condo units, a high-end marina and a 300-room luxury hotel. The proposal was scaled back from an earlier version, but Palm Beach County officials and area town leaders remained concerned about such a high-density development coming into the already cluttered coastline.
...
Some in the community had bought their homes for as little as $35,000. The deal to sell would make nearly every resident a millionaire.
...
Town of Briny Breezes: http://www.brinybreezes.com/

Ocean Land Investments: http://www.oceanland.com/

Positive Carry Update

Remember John Devaney from a previous post? Good news. His yacht "Positive Carry" and Aspen Aspen home are for sale.

According to the yacht broker's listing, the yacht has accommodations for 10 passengers in its five staterooms, along with space for a crew of seven. Its amenities include his and her baths in the master suite, and four guest bathrooms with Jacuzzi tubs and showers and cherry wood interior throughout.

It has two 2,250-horsepower engines and a range of 3,500 nautical miles.
...
The Aspen Times reported in November that he bought that house, for $16.25 million, and that property includes a 16,000-square-foot main house and carriage house which include 16 bedrooms, 18 full bathrooms, two fireplaces, three kitchens and two caretaker bedrooms with bathrooms.

Perhaps some enterprising reader can make a package deal offer on both?

Napalm In The Morning

Here I am waiting to see NASDQ stock American Home Mortgage Investment Corp to see just where the traders would chip it off on the open and disappointment. The cowards have halted trading. And what did these sweeties do that would cause investor anger? They suspended the dividend at 10PM Friday 2 hours before the legal deadline. No doubt it was a long weekend cleaning up the evidence. Now we don't even get the pleasure of expressing displeasure.
In premarket trading, the shares lost $2.68, or 25.6 percent, to $7.79. The shares have not traded below $8 since 2001.
Watch this space.

Florida Has Their Own Problem Children

The Tampa Tribune reports:
They turned the other way when settlement documents appeared peculiar. They didn't object to paying tens of thousands more for homes so other people could collect the money at closing. Altogether, 65 buyers made 303 property transactions over the past five years.

Of those transactions, 160, or 53 percent, resulted in foreclosure.
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When people talk about real estate always in demenad remember these types of transactions. There was not demand for these properties as homes only investments. Next we'll do the math to show why there might be more than 4 million extra houses right now.

Mission Failure Forward, Report To Follow

My "Mission to planet Earth" is a failure (forward). The inhabitants are on to me again. Access to lifegiving juices denied. Despite best efforts, none of their houses belonging to us. This Casey Unit intends to file a full report soon. I'll look into it. Requesting immediate escrow. Pick me up, I want to cahback... err... I mean go back to Caseyworld™. Make them stop being so mean mommyship!
---
And so it ends. Wimper snivel, point fingers, yadda, yadda. And just like last time the annoying dribble of edted last posts. Pardon while I don't hold my breath.

Countdown Update

Okay, What's gonna happen this week. Casey is taking down the blog. For real, no more do overs. Second, he will be going out on a high note. He'll claim any number of victories and declare himself rehabilitated. Promises to return as a success and all that are sure to be included.

It will be all spin and the haterz™ are going to let him spin. Then Aug 3rd when the Caseyworld™ Reality Distortion Field Effect™ is diminished the haterz™ will disseminate the truth.

So sit back and watch the show then the adults will discuss what really happens.

Opportunity Barks

The complicit, sycophantic, toadying Bakersfield Californian has an editorial scheduled to run in Sunday's paper. In it they waffle more than an IHOP. They more than anyone should be issuing mea cuplas over the rapidly unraveling David Crisp, Crisp & Cole, family empires. For years they've been pouring ink into puff pieces and steadfastly refusing to do any real journalism.
Juicy bit: "Crisp, who turns 28 this month, is not the only victim..."

But the good part is they are accepting comments. Go to their blog to read their pathetic position and express you opinion of their opinion.