Wednesday, April 18, 2007

Links of the day

Calculated Risk has posted some information from a press release by a Downey Financial (DSL). The shocker in there is this: "Neg am ARMs are down to a mere 81% of portfolio, from 92% a year ago." This company looks like a time bomb waiting to go off. The comment thread attached to the post has a good discussion of how this particular lender might be able to manage its loans without collapsing...

Google's Deal For DoubleClick Could Be The End Of Yahoo..."
Combined with AdWords, DoubleClick could give Google the ammunition it needs to kill Yahoo.

If Google had any one weakness when it came to fighting Yahoo, it was display advertising. Not anymore. This deal gives Google a straight shot into the world of online branding. Google has been working for the last several years to build relationships with Madison Avenue. Now Google can use DoubleClick to enhance these relationships.

Even more importantly, Google can combine its AdWords and contextual advertising technologies with DoubleClick's platform and backlog of data to deliver the most comprehensive, contextual, and behaviorally-driven online ad solution on the market"...

Homebuilders have low-profile obligations that force them to keep building... From "Breaking News", pg C16 of 3/28 WSJ...

"The top five(builders) have almost $13 billion in commitments to local authorities, having promised to build the necessary infrastructure for new housing developments. They back these commitments with surety bonds, which are pledges to pay a municipality a big slug of money if a builder doesn't finish a project. These surety bonds total between a quarter and a third of the book value of the leading home builders. Centex's $6 billion of surety bonds actually exceeds its book value, though it estimates it has just $2.5 billion of work left to complete. In a recent regulatory filing, Lennar revealed it had $1.8 billion of these commitments. However, they won't affect its balance sheet unless they are triggered.

The surety bonds make it tough for home builders to walk away from projects. With land prices falling, disposing of development land and dealing with surety bond commitments is costly. This leaves home builders with one option -- to keep building. But that's not appealing either, as home sales are falling and inventories keep rising. In more than one way, the builders have dug themselves a hole"...

"Lawmakers Resist Bailout of Subprime Borrowers"..."Democrats and Republicans have been careful to say they won't legislate a "bailout," which ostensibly would pay off the balance of delinquent loans to protect people's credit. While other legislative approaches are debated, Congress is pushing regulators and the industry into action."

"Testifying at a hearing in the House Financial Services Committee yesterday, Federal Deposit Insurance Corp. Chairman Sheila Bair said banks and investors contributed to the boom in subprime lending with exotic products and loose standards, so they should be held accountable now that times are tougher. "I think we should hold the servicers' and investors' feet to the fire on this," Ms. Bair said. "It was clear to investors that these were high risk. I think everybody needs to share the pain now."...this is very good news...

Just discovered a blog at WSJ.com called "The Numbers Guy"...it describes itself as
"
The Numbers Guy examines numbers in the news, business and politics. Some numbers are flat-out wrong or biased, while others are valid and help us make informed decisions. Carl Bialik tells the stories behind the stats, in daily updates on this blog and in his column published every other Friday in The Wall Street Journal. Carl, who holds a degree in mathematics and physics from Yale University, also cowrites The Daily Fix, a sports column on WSJ.com. He welcomes your comments at numbersguy@wsj.com."

From WSJ.com's Washington Wire:
" Distracted by violence in the Middle East, the U.S. isn’t paying enough attention to the region, losing its regional influence to a rising China and potentially weakening antiterrorism cooperation, the Singaporean prime minister cautioned in an interview.

In Southeast Asia, America has “many friends and many strategic interests,” Prime Minister Lee Hsien Loong told The Wall Street Journal ahead of talks with President Bush scheduled for early next month. Noting that the conflicts in Iraq and Afghanistan increasingly dominate Washington’s political agenda, Mr. Lee, 55, repeatedly stressed that the U.S. needs a closer engagement with Southeast Asia — a region of some 500 million people that includes the world’s most populous Muslim country, Indonesia, and some of the world’s most dynamic economies. America’s focus is elsewhere

Unlike the U.S, he said, China has been very skillful in increasing its economic and political clout across this area, which includes traditional U.S. allies like Singapore, the Philippines and Thailand, and valuable oil and mineral resources. “The Chinese are very active, assiduously promoting their relationship with Southeast Asia,” Mr. Lee said. “They’re very good at it.”...I agree with the Prime Minister's views :)...but it is not possible for any US Administration to make every region of the world top priority...it's important to recall that when President Bush was first elected his top priority was Mexico and Latin America, and that was knocked aside by 9/11...

1 comment:

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