Tuesday, February 18, 2014

The RETURN of SUBPRIME LENDING: “The Party is OVER and the banks are Scrambling to DELAY DAY OF RECKONING”

The Crisis Circle Is Complete: Wells Fargo Returns To Subprime
Wells Fargo “is tiptoeing back into subprime home loans again.”…Why what can possibly go wrong. Oh wait, we know: maybe the fact that Wells picked the absolutely worst moment to go in subprime - just as the broader housing market is about to take yet another steep plunge for the worse, as the recent foreclosure report from RealtyTrac confirmed, when it reported a dramatic57% increase in California foreclosure starts from a year ago…
But don’t worry, this time it’s different. Really
Subprime mortgages were at the center of the financial crisis, but many lenders believe that done with proper controls, the risks can be managed and the business can generate big profits.
Example: Gary Goldberg, a 63-year-old automotive detailer, was denied loans to buy a house near Rancho Cucamonga, California. Last summer he was forced to move into a trailer park in Las Vegas… in December, he moved into a 1,000-square-foot one-story home that he paid $205,000 for. His lender, Premiere Mortgage Lending, did not care about his bankruptcy or his subprime credit score. That is because Goldberg had a 30 percent down payment and was willing to pay an 8.9percent interest rate.
Naturally, once Wells opens the floodgates, every other bank will promptly follow…The straw on the camel’s back: just like last time, when this subprime bubble bursts, it will once again drag down Fannie and Freddie.
In short – the party is over, and the banks are once again scrambling to delay the day of reckoning as much as possible.
read all @
Industrial Production Declines, November and December Revised Lower; String of Unexpected Events Continues
This morning the Fed reported Industrial production declined. Moreover November and December were revised sharply lower.
 Industrial production decreased 0.3 percent in January after having risen 0.3 percent in December. In January, manufacturing output fell 0.8 percent, partly because of the severe weather that curtailed production in some regions of the country. Additionally, manufacturing production is now reported to have been lower in the fourth quarter; the index is now estimated to have advanced at an annual rate of 4.6 percent in the fourth quarter rather than 6.2 percent.
Market Groups
  • Consumer goods fell 0.5%, the first decrease in six months
  • Consumer durables down 2.6%
  • Consumer non-energy nondurables down 0.8%
  • Within consumer durables, the production of automotive products fell 5.1% and the output of appliances, furniture, and carpeting declined 0.6%
  • Clothing up 0.5%
  • Home electronics up 1.1%
  • Paper Products down 1.0%
  • Business equipment down 0.1%, a third consecutive decline
  • Defense down 1.0%, a fourth consecutive decline
  • Construction down 1.0% following loss of 0.6% in December
 
REPORT: EVERY BANK IN PORTUGAL IS REPORTING MILLIONS IN LOSSES!
ALL THE MAJOR PORTUGUESE BANKS ARE REPORTING TODAY LOSSES BY THE MILLIONS!!
BES – 517,60 MILLION € LOSSES
BCP – 740,00 MILLION € LOSSES
CGD – 576,00 MILLION € LOSSES
link (PORTUGUESE ECONOMIC NEWSPAPER) ->

No More Lies
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