Subprime

Home Equity Defaults Signal More Trouble for Homeowners, Lenders

By Jennifer Yousfi Managing Editor With default rates rapidly increasing, credit standards for home equity loans and revolving home equity lines of credits (HELOCs) have tightened, cutting off what was once a reliable source of capital for homeowners. Following the lead for first mortgage guidelines, lenders are tightening credit standards for home equity loans and […]

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Citigroup and Others Still Reeling from Subprime Aftershocks

By Jason Simpkins Associate Editor After an unyielding series of write-downs, losses, and layoffs, financial firms are still struggling to cope with the widespread fallout from the subprime mortgage meltdown. Now, with Goldman Sachs Group Inc. (GS) forecasting another heavy hit to Citigroup Inc. (C) and others in the fourth quarter, it appears the sector's […]

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Angry Investor Sues UBS over U.S.-Connected Subprime Write-Downs

By Mike Caggeso Associate Editor William Wesney, an upset UBS AG (UBS) shareholder, is suing the Swiss banking giant and its officers, arguing that investors were misled about write-downs related to the faltering U.S. subprime mortgage market. And he may not be alone. Reuters reported that Wesney is seeking class-action status on the suit, which […]

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Bush Announces Rate Freeze for Subprime Borrowers

By Mike Caggeso Associate Editor President Bush announced yesterday [Thursday] afternoon that an agreement made between the U.S. Treasury Department and lenders will secure interest rates for many subprime borrowers. The deal hones in on borrowers who will fall behind after their introductory "teaser" interest rates reset to higher levels – sometimes adding hundreds of […]

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Three Ways to Profit From the Next Phase of the Subprime Mortgage Mess

By Keith Fitz-Gerald Contributing Editor I've been telling you for months, now, that the subprime mess isn't over. But contrary to what you might be hearing in the mainstream news, the Four Horsemen of the Financial Apocalypse aren't thundering their way to our homes right now, either. In fact, savvy investors will have the chance […]

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The Merrill Lynch "Surprise" Fuels More Subprime Uncertainty

By Jason Simpkins Associate Editor Just one day after Merrill Lynch & Co. Inc. (MER) wrote off billions in bad mortgage loans and reported its biggest quarterly loss in 93 years, Wall Street analysts yesterday (Thursday) predicted there was still more bad news to come. Although it wrote off $8.4 billion of subprime mortgages and […]

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The Three Investments to Avoid and the One Stock to Buy to Profit from the Lousy Mortgage Market

By Martin Hutchinson Director of Global Investing Research The U.S. banking trio of Citigroup Inc. (C), J.P. Morgan Chase & Co. (JPM) and Bank of America Corp. (BAC) yesterday (Monday) announced that they were setting up a new fund – perhaps as large as $100 billion – to buy mortgage debt held in "Securitized Investment […]

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Firms Issue Mea Culpa for Botched Hedge Fund Markets Report

From Staff Reports A research report that concluded that $32 billion flowed out of hedge funds in July – leading analysts to think the controversial investment vehicles were a major cause of the global credit crisis that started in August – was wrong, the two firms that issued the report admitted yesterday (Wednesday). TrimTabs Investment […]

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Will Fed Rate Cuts Have an Inflationary Impact?

When Federal Reserve policymakers announced the half-a-point cut in interest rates last Tuesday, I was almost at a loss for words. As all of you know, I had projected reduction of 25 basis points, and by the time Tuesday’s meeting of the central bank’s Federal Open Market Committee (FOMC) rolled around, the market supported my […]

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Dropping Housing Prices, Rising Foreclosures Could Confirm Our Worst Fears

By Jason Simpkins Staff Writer In an interview that conveyed a deep sense of economic gloom last week, former Federal Reserve Chairman Alan Greenspan told Bloomberg News that the odds of a U.S. recession remain "somewhat more" than one in three. Home prices will likely drop further, disrupting consumer spending and undermining investor confidence, Greenspan […]

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What Nobody Will Say About The Subprime Mess

By Keith Fitz-Gerald Contributing Editor I've been waiting for a few weeks to see if anybody will say it – and, not surprisingly, nobody has. So I will.    The truth about who caused the subprime mess. In my humble opinion, it was the Fed. Sure there were contributing parties, so I’m not pointing the […]

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German Bank SachsenLB, Buffeted in Subprime Crisis, to Be Taken Over by Larger State Bank

From Staff Reports Germany's Landesbank Baden-Wuerttemberg will take over SachsenLB, the smaller public-sector German bank that helped the subprime LBBW will pay $342 million as an initial measure, said Guenther Oettinger, the governor of Baden-Wuerttemberg. He said SachsenLB's owners would transfer their holdings to LBBW. SachsenLB will be part of the state-run bank in early […]

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Where are the subprime bodies buried?

By Martin HutchinsonDirector of Global Investing Research  When the subprime mortgage crisis broke in February, I assumed (like most others) that its ill effects would be confined to obscure housing finance companies within the United States – a niche of the financial sector in which I had no interest in investing anyway. But the recent […]

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