Securities backed by credit cards, auto loans, and even what mortgage brokers thought were good credit risks in the housing market are all facing trouble ahead. De-leveraging-the selling of assets bought with credit-is taking place at the corporate and household level, even if it’s not always willingly. Necessity is the mother of liquidation. The New York Times reports that, “Bond investors first stopped buying private home mortgage deals, then shunned commercial mortgages.
August 14th, 2008 | Dan Denning | 9 comments | ContinuedAll Posts Tagged With: "debt"
Negative Equity Becoming the Norm in U.S.A.
U.S.-based real estate valuation company zillow.com says one third of Americans who bought a home in the last three years have negative equity. Many of the folks who bought at the top are facing the most brutal of double whammies. First, the last-in, first-out-in-the-street buyers had high loan-to-value ratios. That means that they borrowed 80%, 90% or even more of the value of the house. And now the value is falling, the second whammy.
August 13th, 2008 | Dan Denning | 1 comment | Continued
Everybody Wants Something for Free
Everybody wants something for free, and since I look and act like a real Earthling human, don’t I bleed, too? So who is the real victim here, you hateful bastards? But the desire for free stuff is pandemic, and Frosty Woodbridge at NewsWithViews.com talks about this very point when he says that “[The] U.S. Senate along with Obama and McCain protect the interests of 20 million illegal aliens that take jobs from American citizens! Has either man stepped up to stop 400,000 annual illegal alien…”
August 12th, 2008 | Mogambo Guru | 0 comments | Continued
A Sea Change In Our Love of Debt
Would it be such a bad thing if we\’re witnessing a sea change in the way people feel about debt? A sea change does not automatically denote death and decay. But it does suggest a transformation.
August 6th, 2008 | Dan Denning | 0 comments | Continued
Australian Credit Card Debt Grew by 9% in February
Total Australian credit card debt grew at 9% in February 2008, from $39.5 billion to $43.25 billion. Interest-bearing debt grew by 9% to $31 billion. Even worse, the average interest rate Australians pay on credit card debt leapt from 17.6% to 19.4%. Thanks to the rise in rates, credit card interest rates are 20% higher than this time last year. And it means, with current balances, Aussies are paying about $500 million in interest on stuff they already bought. Is it too late to buy into the Visa IPO?
April 18th, 2008 | Dan Denning | 4 comments | Continued
Hiding Level Three Assets Won’t Solve the Problem
assets that can’t be traded and which no one wants to buy are called Level Three assets, named for the part of the balance sheet on which they reside. The banks have stuck them there the way some people might stick a crazy Aunt in the attic to avoid being embarrassed in front of the neighbours.
April 14th, 2008 | Dan Denning | 0 comments | Continued
Why the Dollar is Falling: Recession Gets Priority Over Inflation
The feds, you’ll recall, are far more interested in fighting recession than they are in fighting inflation. That’s why the dollar is falling… about which, more in a minute. But in the battle between the feds and deflation… it appears that the feds are getting their derrieres kicked.
March 3rd, 2008 | Bill Bonner | 0 comments | Continued