Merrill swings to loss on huge mortgage hit Merrill Lynch, the nation's largest broker, reported a loss Wednesday for the third quarter and said its write-downs for bad mortgage loans and related securities was almost $8 billion, well above the firm's own previous estimate from just a few weeks ago. "These losses are relatively larger than those reported previously by other broker dealers and universal banks that have already reported," DBRS analysts said in a report Wednesday. "Merrill appears to have been much more exposed in its securitization businesses." Merrill holds the leading position in CDO securitization. The company reported a loss of $2.24 billion, or $2.82 a share, compared with a year-earlier profit of $3.05 billion, or $3.17 a share.
Home sales crater on credit squeeze Sales of existing homes and condos fell 8% in September to the lowest level in at least eight years, further evidence that the credit squeeze in mortgage markets is hurting home sales, the National Association of Realtors reported Wednesday. Sales of existing homes and condos fell to a seasonally adjusted annual rate of 5.04 million, the lowest since 1999, when the real estate group began tracking combined single-family and condo sales. The 8% drop was the largest monthly percentage decline in that period. Nationwide, sales of existing homes were down 19.1% in September compared with September 2006. Sales were much weaker than the 5.22 million pace expected by economists surveyed by MarketWatch.
Housing horror could hang around for years The bigger problems brought on by the mortgage meltdown may linger, if earlier price plunges in Texas, Los Angeles and Boston are any indicator. Lately I've been getting that déjà vu feeling. If you lived in Texas through the savings-and-loan debacle of the late 1980s, you probably have, too. If you didn't, listen up. What happened to houses in Texas back then may be the template for what happens across the country as the housing bubble pops today.Though the national index figures reflect the illusion we most favor -- a steady and virtually guaranteed rise in home prices -- a very different picture emerges when you examine price indexes by state or metropolitan area. Here are some examples.
Jim Rogers Shifts Assets Out of Dollar to Buy Yuan Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency. ``I'm in the process of -- I hope in the next few months -- getting all of my assets out of U.S. dollars,'' said Rogers, 65, who correctly predicted the commodities rally in 1999. ``I'm that pessimistic about what's happening in the U.S.'' Rogers, delivering a presentation late yesterday at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as platinum, gold, silver and palladium.
Bush is the biggest spender since LBJ George W. Bush, despite all his recent bravado about being an apostle of small government and budget-slashing, is the biggest spending president since Lyndon B. Johnson. In fact, he's arguably an even bigger spender than LBJ. “He’s a big government guy,” said Stephen Slivinski, the director of budget studies at Cato Institute, a libertarian research group. The numbers are clear, credible and conclusive, added David Keating, the executive director of the Club for Growth, a budget-watchdog group. “He’s a big spender,” Keating said. “No question about it.” Take almost any yardstick and Bush generally exceeds the spending of his predecessors.
Iraq, Afghan wars could cost US 2.4 trillion: report The total cost, including debt servicing, of the US wars in Iraq and Afghanistan could reach 2.4 trillion dollars by 2017, a report by the Congressional Budget Office found Wednesday. The report, by the body which provides non-partisan budget analysis for Congress, said higher estimates for spending for the wars could top out at 1.7 trillion dollars by the end of the next ten year period. Under the most intense scenarios of US military activity, a further 705 billion dollars could be added to the cost by interest payments, assuming the wars continue to be largely financed by government borrowing, the report said. The estimate contains estimated costs up to 2007 for military and diplomatic operations in Iraq and Afghanistan and other war on terror spending.
Turkish Planes Bomb Rebel Positions Turkish warplanes and helicopter gunships reportedly attacked positions of Kurdish rebels along its rugged border with Iraq on Wednesday, as Turkey's military stepped up its anti-rebel operations. Several F-16 warplanes loaded with bombs took off from an air base in southeastern city of Diyarbakir, private Dogan news agency and local reporters said. The warplanes and helicopter gunships bombed mountain paths in Turkey used by rebels to infiltrate from neighboring Iraq, Anatolia reported. On Sunday, Turkish helicopter gunships have penetrated into Iraqi territory and troops have shelled suspected Kurdish rebel positions across the border in Iraq, a government official said Wednesday.
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