Lets start with another bank closing shop, and the FDIC has to assume the deposits:
First NetBank after the close last Friday, and now they could not even keep the closing of the Miami Valley Bank buried until after market close Friday. Well, you know banks losing all their capital on bad mortgage debt is soooooo August, so no big deal.
On macro level, both the Bank of England and the ECB held interest rates steady at their respective levels. While Benny Hill Bernanke is pulling the trigger on rate cuts like he's in some 1st person shooter game, the contingent oversees prefer stealth bailouts of troubled banks so as not to devalue their currency. I don't think this means good things for the dollar going forward, but hey, I'll just export my personal possessions to Canada and Europe and make a killing like all the US companies are going to, so its all bullish.
On the bailout front, this article has so many infuriating sentences in it I recommend reading after a few beers to chill you out:
Amongst the nuggets:
Federal Deposit Insurance Corp. Chairman Sheila Bair recommends that lenders should extend the "teaser" rate they offered on exploding ARMS from 6 months to forever to help out those poor souls facing foreclosure. I don't know about you, but if some moron speculator is going to get a mortgage at 3% fixed, I had better get one, as should we all.
A little later in the article we get another screen smasher also from Blair:
"Let's be honest about it: Hybrid ARMs were never made on the assumption that borrowers could continue to pay them back once the loans reset"
So there you have, a rare moment of honesty. Funky mortgage products were never intended as real loans, they worked well for two year cycles while homes appreciated 25% a year. Now things have changed and who should pay for the financial lunacy that occurred?
- Mortgage lenders offering products that are not intended to be paid back?
- Federal oversight officials that turned a blind eye to the practice?
- Retarded homedebters that are now stuck with a huge financial loss?
- Hedge funds and Wall Street that bought this crap?
If you answered YES to any of the above, you are really silly. The entity that will pay for it is YOU and YOUR CHILDREN and THEIR CHILDREN after a federal bailout to the tune of over 1 Trillion dollars after it is all said and done. Sounds fun.
I will post tomorrow night and we will see if I was right about tomorrow.