Archive for January, 2010
While this report attempts to connect two dots in the headline, it proves to be somewhat of a bait-and-switch, with little proof of a UK home market recovery. Nonetheless, great investor sentiment and indication of upcoming flow:
"Lloyds Banking Group is selling $2.4bn of mortgage-backed bonds at yields less than it offered on debt issued four months ago, tapping investor demand spurred by signs the worst of the UK housing slump is over.
The sale includes 600m euros ($845m) of five- year notes that will yield about 125 basis points more than benchmark rates, said Sara Evans, a London-based spokeswoman at Lloyds. That compares with 170 basis points the bank paid on similar notes issued in September, according to data compiled by Bloomberg."
Standard & Poor’s and Moody’s Corp. won dismissal of a lawsuit seeking to hold them responsible for defrauding investors who bought about $100 billion of mortgage- backed securities.
At a hearing yesterday, U.S. District Judge Lewis Kaplan in New York said he would dismiss claims against the rating companies, spokesmen said. Lehman Brothers Holdings Inc., which was alleged to have once owned the bonds that were sold, is bankrupt and isn’t a defendant in the case.
Kaplan’s decision may have implications in other lawsuits pending against S&P and Moody’s in New York, California and other states. The judge said provisions of the securities law at issue in the case have never covered ratings companies, Moody’s lawyer James Coster said in an interview.
According to first estimates from Britain's Office for National Statistics , an 0.1 per cent expansion in the economy between October and December ended six straight quarters of shrinking output. That is well down on predictions by experts, who had forecast growth of 0.4 per cent.
Overall, the economy slumped 4.8 per cent last year, the biggest annual contraction since records began in 1949, and it has lost 6 per cent since the recession began in 2008.
It means the UK is the last of the major G7 economies to leave recession.
A third of Americans say Obama pays too much attention to the concerns of banks and financial institutions, the highest percentage for "too much attention" for any group asked about in the latest data from Pew Research Center.
Roughly another third say he's paying the right amount of attention, while 21% say he's paid too little attention to the concerns of banks.
Similarly, Americans are also divided on how much time Obama spends dealing with the concerns of business corporations: 25% say they get too much time, 21% say too little and 35% say about right.
On NPR, there's an interesting example of the predicament many homeowners now face. Thad Salter is an underwater homeowner who is actually one of the lucky ones: After swimming through red tape for a year, he was approved for a mortgage modification, which lowered the interest rate from 6.8% to 2% and cut his payment in half, but also extended the mortgage from 30 to 40 years. So what is Salter's current state of mind? He's tentatively staying put, even though he thinks it would be smarter to strategically default.
Homeowners face numerous hurdles trying to get their mortgage modified. In some cases, applications are rejected with little or no explanation. It’s impossible to independently verify if a homeowner qualifies because the Treasury has not disclosed the eligibility formula used by lenders — a complex set of calculations that housing counselors and consumer attorneys have dubbed “the black box.” Housing attorneys report that some lenders are ignoring the program’s guidelines altogether and moving to foreclose without properly reviewing mortgages for possible modification.
“It’s been a stubborn challenge," said a Treasury official, who agreed to an interview but requested anonymity. "But this is something that’s never been done before."
