THE LIES:
Housing to turn corner within months: Paulson
WASHINGTON (Reuters) - Treasury Secretary Henry Paulson said on Tuesday that America's housing market could turn a corner and begin recovering within months, but it will take longer to resolve all housing-related problems.
"Obviously, it will go on beyond months with some of the issues in the housing market, but I believe we can get to the point within months where we turn the corner on housing," Paulson said in a televised interview with Fox Business Network.
He said the corner would be turned at the point when home prices begin to stabilize and more buyers start to enter the market. He added that the role played by Fannie Mae and Freddie Mac was crucial to providing financing to potential buyers.
Treasurys lower on Plosser comments, drop in oil
NEW YORK (AP) — Treasury prices dropped Tuesday as Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank will need to boost interest rates "sooner rather than later" to fend off inflation.
"Inflation is already too high and inconsistent with our goal of — and responsibility to ensure — price stability," Plosser said in a speech to a group assembled by the Philadelphia Business Journal. "We will need to reverse course — the exact timing depends on how the economy evolves, but I anticipate the reversal will need to be started sooner rather than later."
Stocks Surge as Oil Plunges
Wall Street traded higher Tuesday as investors were encouraged by another sharp drop in oil prices and snapped up shares of undervalued financial companies.
The focus on higher oil's impact on the economy has been so intense that any notch lower breeds optimism that the commodities run-up might perhaps be nearing an end, analysts said. That means, for the moment, corporate earnings reports have lost some of their dominance of the market.
The market was looking at the long-term impact of somewhat cheaper energy -- and likely betting that company earnings would pick up if oil extends its decline.
"There's been so many people speculating about oil taking off and how to handle it, the whole economy has been focused on it," said Todd Leone, managing director of equity trading at Cowen & Co. "Just the fact that it has dropped -- a big move down -- helps out. There's the perception that this will get the economy going again."
Wachovia turnaround rallies banks
NEW YORK (MarketWatch) -- Shares of Wachovia surged almost 30% Tuesday and led to another rally in regional banking stocks after Wachovia said it would not need to raise new capital and a top analyst predicted a double-up of the company's stock.
"We are committed to a strong balance sheet and protecting and creating shareholder value. We have several initiatives as we have described under way to protect, preserve, and generate capital, and additional options are open to us," Chief Executive Officer Robert Steel said during a conference call with investors Tuesday. He also said the company wouldn't sell fresh shares.
Regulators Spin Public to Boost Fannie, Freddie
July 16 (Bloomberg) -- In his zeal to crack down on false market rumors, here are a couple of places for Securities and Exchange Commission Chairman Christopher Cox to start looking: the U.S. Treasury Department and the Office of Federal Housing Enterprise Oversight.
At least Cox didn't know what he was talking about back in March when he publicly vouched for the strength of Bear Stearns Cos.' capital, just days before the investment bank collapsed. Treasury Secretary Henry Paulson and Ofheo's director, James Lockhart, have no such excuse for the way they pumped Fannie Mae and Freddie Mac last week.
In a statement on July 10, with shares of Fannie and Freddie in a freefall, Lockhart -- their chief regulator -- said they ``are adequately capitalized, holding capital well in excess of the Ofheo-directed requirement, which exceeds the statutory minimums.''
Paulson, testifying that day in Congress, backed Lockhart's assurances on Fannie and Freddie. ``Their regulator has made clear that they are adequately capitalized,'' he said. Federal Reserve Chairman Ben Bernanke also weighed in, saying, ``they are well capitalized in a regulatory sense.''
What these men should have known -- must have known -- is that the government's capital requirements for Fannie and Freddie are a joke.
The two government-chartered mortgage financiers were so well capitalized that Paulson had to announce a government rescue plan for them three days later on July 13, a Sunday. That was the same day the SEC issued its warning against ``manipulation of securities prices through intentionally spreading false information.'' Whatever credibility Paulson, Lockhart and Bernanke had in the marketplace before last week, they just blew a big wad of it.
The most amazing aspect of the government's capital requirements is that they let Fannie and Freddie count tens of billions of dollars of losses as capital, even though they don't qualify as equity. While it may be technically accurate to say that Fannie and Freddie are adequately capitalized by the government's measure, any assertion that they are adequately capitalized in real life just isn't true.
THE TRUTH:
Wachovia, other U.S. banks post dismal results
NEW YORK, July 22 (Reuters) - Wachovia Corp and Washington Mutual Inc led several large U.S. banks in posting weak second-quarter results on Tuesday, hurt by soaring losses from mortgages and other debt.
Wachovia reported a $8.86 billion loss, while Washington Mutual said it lost $3.33 billion. Two Ohio-based regional banks, Fifth Third Bancorp and KeyCorp, also posted losses. Southeast regional banks Regions Financial Corp and SunTrust Banks Inc each said profit fell.
Wachovia and Regions also slashed their dividends, while Wachovia, Fifth Third and KeyCorp incurred charges from their tax treatment of some lease transactions.
Lenders are suffering as the U.S. housing crisis deepens, making it harder for consumers, businesses and homebuilders to stay current on their loans.
"There is no easy fix," said Michael Nix, who helps invest $750 million at Greenwood Capital Associates LLC in Greenwood, South Carolina. "We have to see stabilization in housing and, until we see that, it's hard to get comfortable."
Bank shares nevertheless soared after Wachovia said it would not sell common stock to raise capital.
Rescue of mortgage giants could hit $25 billion
A federal rescue of troubled mortgage giants Fannie Mae and Freddie Mac could cost taxpayers as much as $25 billion, Congress' top budget analyst said Tuesday.
http://biz.yahoo.com/ap/080722/fannie_freddie_cost.html
http://biz.yahoo.com/ap/080722/fannie_freddie_cost.html
California foreclosures soar to 20-year high in second quarter
LOS ANGELES: Foreclosures in California soared in the second quarter to the highest level in at least 20 years, as many homeowners who bought at the height of the housing boom were unable to make mortgage payments, a real estate research firm said Tuesday.
In addition, the number of default notices — an indicator of possible future foreclosures — also jumped during the period between April and June, according to DataQuick Information Systems.
In all, some 63,061 California homes were lost to foreclosure in the second quarter — the most in any quarter since 1988, when the firm began tracking foreclosures.
In all, some 63,061 California homes were lost to foreclosure in the second quarter — the most in any quarter since 1988, when the firm began tracking foreclosures.
Investors question financial sector rebound
CHARLOTTE, N.C. (AP) — A surprisingly large second-quarter loss at Wachovia Corp. has quickly revived Wall Street's concerns that the financial sector still has a long way to go before it recovers from the year-old credit crisis.
Investors got a cold wake-up call when Wachovia, the nation's fourth-largest bank, racked up an $8.86 billion loss because of charges and reserves for bad mortgage loans. The Charlotte-based bank on Tuesday also cut its dividend for the second time this year and eliminated 10,750 positions.
After markets closed, Washington Mutual Inc. delivered a further jolt. It swung to a $3.33 billion loss in the second quarter as it boosted its loan loss reserve to more than $8 billion, betting on more soured mortgages.
Several regional banks also posted losses Tuesday or said their second quarter profit fell.
The banks' results were especially sobering for investors who last week sent stocks soaring after better-than-estimated reports from Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co.
Even Wachovia's crosstown rival, Bank of America Corp., managed to beat Wall Street expectations. The nation's second-largest bank by assets said Monday its second-quarter earnings fell 41 percent, hurt from the impact of the ensuing credit crisis.
Lies. The worst part of lies, is that people believe them. Pinocchio Paulson is the Prince of Deceit. Housing to turn corner in months? What a load of crap. Unless of course he means it is going to turn the corner and head down the next block. LOL! Ain't gonna happen Hapless Hank. Boast all you want about the "importance" of Fannie and Freddie to home buyers. Just don't look past the fact that the next home buyers are going to have to be "qualified home buyers", and thanks to you and your little cabal of cronies at the Fed, they seem to be disappearing quicker than honey bees. Without "qualified home buyers", there can't be a bottom in the housing market.
Federal Reserve Bank of Philadelphia President Charles Plosser is an inflation uber hawk. He has voted against all of the Feds recent rate cuts, and voted for a rate increase at the last Fed meeting. Bumbling Ben last week all but ruled out any "sooner rather than later" interest rate hikes when he back tracked on his recent flawed view of the nations growth prospects going forward. Only an idiot would buy the Dollar in the belief that the Fed is going to raise interest rates. And so what if they do. They are presently 225 basis points behind the ECB in interest rates. The Truths mentioned above should be all the proof one needs that rate hikes by the Fed are highly unlikely.
Financial companies are not undervalued, they are now grossly overvalued. This short covering rally precipitate by the SEC's threat to go after naked shorts in the 13 broker dealer stocks has spooked the shorts. The legitimate shorts will be back shortly, and they will have a fresh pool of overvalued stock to draw from to short these patsy banks further into the ground. Oil prices hardly "plunged" today. They were down $3. Weeeeeeeeeeeeeee! $125 Oil is hardly "going to get the economy moving", and you're dreaming if you think Oil prices are going to just roll over and go back to $60. It's unlikely Oil will EVER be below $100 again.
If the congress gives Paulson a dime to bailout Freddie and Fannie they should all be voted out at the poles this Fall. Did you know that every member of the House is up for re-election in November? Vote out the incumbents if you really want to see some change in the country.
The Truths. NOTHING was revealed today by anybody that supports a strong Dollar or lower Gold and Silver prices. In fact, ALL the news today only enhances support for a lower Dollar and much higher Gold and Silver prices. $25 BILLION to bailout the evil Mortgage Twins? That's wishful thinking. It would have to be over $1 TRILLION.
The banks have had unquestionably horrendous earnings. I don't care if they "beat the street". Nobody should. The Street is utterly clueless. Nobody with a brain buys stock in companies losing money like banks are right now, and with further losses in the pipeline for several quarters to come. Only shorts buy stocks in beaten down banks that "beat bogus estimates". They have to take their profits sometime, and then look to make more. Unfortunately a number of investors will be sucked into this bear trap and be crushed by it. I have no pity for them. Either have your money in cash or Precious Metals. It is really that simple.
The Asians have bid up Gold and Silver regularly overnight. They are delighted every morning as they awaken to the dumb Americans foolish take down of the Gold and Silver prices. They have also regularly Sold the Dollar on these pathetic European and American market bids. The Dollar is CRAP. The OPEC countries and the Russians rejoice with every drop in the price of Gold and Silver and rise in the Dollar as well. They can't wait to dump more Dollars and buy more Gold and Silver.
Patience in these markets is essential. Volatility is part of the game. Rest assured that Gold and Silver are poised to reach new heights in spite of every effort by those on the CRIMEX to thwart the relentless rise in the Precious Metals. The US Dollar is doomed to complete collapse, time is not on it's side.
A Golden Parachute with a Silver Lining
Since 1913 when the Federal Reserve first issued its debt based paper money in the US, the paper US dollar has lost 95 % of its value, a loss of 95 % over 95 years. Perhaps in five more years, 100 years after the creation of the Federal Reserve, the US dollar will have lost 100 % of its value—which means in five years the US paper dollar will be worth nothing.
Throughout history, no fiat money system has stood the test of time. All attempts to substitute paper money for gold and silver have ended in the total destruction and debasement of the currency.
This time will be no different. It is hubris to think otherwise but unfortunately the vast majority do—which is a clear sign they’re not thinking at all.
Throughout history, no fiat money system has stood the test of time. All attempts to substitute paper money for gold and silver have ended in the total destruction and debasement of the currency.
This time will be no different. It is hubris to think otherwise but unfortunately the vast majority do—which is a clear sign they’re not thinking at all.
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