A Questão Hipotecária Americana e seus Possíveis Desdobramentos

[The Mechanic]

Treasuries Rise on Sign Credit Losses Hurting Biggest Banks


Oct. 18 (Bloomberg) -- Treasuries rose for a fourth straight day for the first time since August on evidence credit market losses related to the housing slump are reducing earnings at some of the biggest U.S. banks.

The rally pushed two-year note yields down to the lowest in more than a month as Bank of America Corp. said third-quarter profit declined 32 percent. U.S. government debt prices increased as traders added to bets that the Federal Reserve will cut borrowing costs at its meeting this month.

``Everyone's jumping into a flight to quality and into the short end,'' said Michael Franzese, head of government bond trading in New York at Standard Chartered. ``Bank of America's report sent everyone into a tizzy. The marketplace is saying the Fed has to stem a recession, and the only way to do that is aggressively cut interest rates.''
The yield on the two-year note fell 8 basis points, or 0.08 percentage point, to 3.89 percent at 8:37 a.m. in New York, according to bond broker Cantor Fitzgerald LP. It's the lowest since Sept. 12. The price of the 4 percent security due in September 2009 rose 5/32, or $1.56 per $1,000 face amount, to 100 6/32.

Futures traded on the Chicago Board of Trade suggest 68 percent odds that the Fed will reduce the 4.75 percent target rate for overnight lending between banks a quarter-percentage point on Oct. 31, compared with a 54 percent chance yesterday.

The number of Americans filing first-time claims for unemployment benefits increased more than forecast last week, adding to concern the job market is softening.

Initial Jobless Claims

Initial jobless claims increased by 28,000, the most since February, to 337,000 in the week that ended Oct. 13, the Labor Department said today in Washington. The four-week moving average, a less volatile measure, rose to 316,500 from 310,500.

Treasuries rallied the most in five weeks yesterday after Standard & Poor's cut ratings on $23.4 billion of mortgage securities and Deloitte & Touche LLP said a structured investment vehicle of London-based hedge fund Cheyne Capital Management Ltd. will stop paying debts.

European stocks reversed earlier gains today, while U.S. stock-index futures also declined.

Manufacturing in the Philadelphia region may have slowed as orders and sales declined in October, a report by the Philadelphia Fed may show at noon.

The general economic index probably fell to 7 this month from 10.9 in September on rising credit costs and the slump in U.S. housing, according to the median forecast of 58 economists surveyed by Bloomberg News. Positive readings signal expansion.

Tudo aponta para que o FED se veja " obrigado " a baixar , mais uma vez, as Taxas de Juro pra "prevenir uma recessão" nos Estados Unidos .
Os Futuros da Chicago Board of Trade apontam para uma probabilidade de 68% de que assim seja .

Eu sempre gostei de minorias . E não estou a ver as coisas tão negras , que obriguem o FED a agir já nesse sentido . Porque eles tambem não podem começar a baixar muito as Taxas . Senão levam com a outra face da moeda .

Embora tudo aponte para o corte para os 4,75% , não seria uma surpresa pra mim que o FED se limitásse a manter esta percentagem . O corte de 0,50% justificou-se pela urgência de acalmar os Mercados que começavam a entrar por um caminho bastante perigoso . Não sêi se vão ceder agora , novamente .

Um abraço ,

The Mechanic

[Auditor]

Daqui a pouco os juros já estão a uma taxa de referência mais baixa que na Europa. Temos que ir viver para os States.

[The Mechanic]

Wachovia Net Drops 10% on Trading Losses, Writedowns (Update1)

By David Mildenberg

Oct. 19 (Bloomberg) -- Wachovia Corp., the bank that's spending more on acquisitions than its biggest U.S. rivals, said earnings dropped for the first time in six years after trading losses and writedowns for home loans.

Third-quarter net income fell 10 percent to $1.69 billion, or 89 cents a share, from $1.88 billion, or $1.17, a year earlier, the Charlotte, North Carolina-based company said today in a statement distributed by PR Newswire. The average estimate of 19 analysts surveyed by Bloomberg was $1.04.

Chief Executive Officer Kennedy Thompson spent more than $30 billion in the past two years to buy mortgage lender Golden West Financial Corp. and the A.G. Edwards Inc. brokerage firm, sparking investor concern that he overpaid at the peak of the housing and stock markets. Wachovia shares have declined 19 percent since the Golden West purchase was announced in May 2006, trailing Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three biggest U.S. banks.

``The market is telling you that there are going to be some difficulties in the near term,'' said Steve Gutch, the Rochester, New York-based research director at Clover Capital Management, which oversees $2.6 billion and owns Wachovia shares. ``A lot of the negative news is priced into the stock.''

Wachovia's third-quarter revenue declined 4.3 percent to $7.35 billion, and return on equity, a gauge of how effectively the company reinvests profits, was 9.6 percent, down from 14.85 percent a year earlier.

Credit Losses

The company's total provision for credit losses rose to $408 million from $108 million a year earlier. By comparison, Bank of America, also based in Charlotte, set aside $2 billion in the quarter to cover bad loans amid the worst U.S. housing slump in 16 years.

Wachovia shares, down 15 percent this year, fell 61 cents to $48.14 in composite trading on the New York Stock Exchange yesterday.

Wachovia said non-interest expenses increased to $4.37 billion from $4.05 billion a year earlier. The net interest margin -- the difference between what it pays to hold deposits and earns from loan interest -- narrowed to 2.92 percent from 3.03 percent a year earlier.

Wachovia is the last of the 10 biggest U.S. banks to report third-quarter results. Home foreclosures have forced banks to write down the value of mortgages and home equity loans. In addition, Citigroup, Bank of America and JPMorgan together wrote down more than $2.5 billion in loans for leveraged buyouts of companies.

Consumer Banking

In consumer banking, Thompson has shifted Wachovia's focus to the western half of the country to spur growth. The bank plans to open 21 offices in California this year, ending the year with about 160 in the state.

The $24.6 billion acquisition of Golden West added $125 billion of assets and 285 branches in 10 states. Wachovia has quadrupled its profit since the end of 2001 in part by taking over companies such as Birmingham, Alabama-based SouthTrust Corp. Since the start of 2006, Wachovia spent more on takeovers than Citigroup's $24 billion, Bank of America's $24 billion and JPMorgan's $3.3 billion, data compiled by Bloomberg show.

Mais um dia , mais um Banco com maus resultados ...


Um abraço ,

The Mechanic

[The Mechanic]

Merrill Charges Rise by $2.5 Billion, N.Y. Times Says (Update1)

By Bradley Keoun

Oct. 24 (Bloomberg) -- Merrill Lynch & Co., the U.S. securities firm that pushed into subprime lending last year, will add about $2.5 billion of writedowns to the $5 billion it disclosed earlier this month, the New York Times reported.

Merrill said Oct. 5 that it will post the first quarterly loss in six years after cutting the value of mortgages, asset- backed securities and loans for leveraged buyouts by about $5 billion. Analysts were estimating that New York-based Merrill would report a third-quarter loss of 45 cents a share later today, according to a survey by Bloomberg.

``It sends a very poor message to the marketplace that Merrill doesn't have a good handle on their risk,'' said William Fitzpatrick, a financial-services analyst at Johnson Asset Management in Racine, Wisconsin, which oversees $1.7 billion and doesn't own Merrill shares.

Even before any additional writedowns, the charge is the biggest in Merrill's 93-year history and the first major setback in Chief Executive Officer Stanley O'Neal's five-year tenure. A $7.5 billion cost also would exceed Citigroup Inc.'s $6.5 billion, the biggest reported by a bank for the third quarter. Merrill's failure to meet its own projection shows how the 56-year-old O'Neal misjudged the severity of the decline in the credit markets since July, after late mortgage payments from borrowers with poor credit histories surged.

Jessica Oppenheim, a Merrill spokeswoman, declined to comment after business hours.

Slumping Stock

Shares of Merrill fell 1.5 percent to $66.09 in German trading today. The report of further charges helped push the dollar lower against the yen.

Merrill's stock is the third worst in 2007 among securities firms after E*Trade Financial Corp., which had home-loan losses at its online bank, and Bear Stearns Cos., where two hedge funds lost $1.6 billion of clients' money. Merrill is down 28 percent in New York trading. Goldman Sachs Group Inc., the biggest securities firm by market value, has gained 12 percent. No. 2 Morgan Stanley is down 5.9 percent. All the companies are based in New York.

Merrill, the third-biggest securities firm, is the only one of Wall Street's five largest to report a loss from the credit contraction. Investor flight from subprime mortgage bonds and related debt left the company with inventories of loans and securities that had to be written down to depressed market prices.

``If you can't guide toward a reasonable expectation over two weeks, clearly you've got bigger problems,'' Fitzpatrick said.

`Serious Embarrassment'

Goldman reported a 79 percent increase in profit for the three months that ended Aug. 31 after betting on a drop in prices of securities tied to home loans. Morgan Stanley said profit from operations fell 7 percent in the quarter.

Merrill's results suffered from a ``weak September operating environment'' and didn't include a ``relatively strong June that the other brokers enjoyed,'' Sanford C. Bernstein & Co. analyst Brad Hintz wrote in an Oct. 1 note.

Earlier this month, Merrill fired Osman Semerci, the head of its fixed-income trading division, as well as Dale Lattanzio, one of Semerci's top U.S. deputies. Merrill also severed ties with Dow Kim, its former co-head of trading and investment-banking, who oversaw fixed-income trading until May, when he left to start his own hedge fund.

``This is a serious embarrassment for O'Neal,'' said James Ellman, president of San Francisco-based Seacliff Capital in San Francisco, which oversees more than $200 million.

LBO Loans

Merrill said in an Oct. 5 statement that it had about $4.5 billion of losses related to mortgages and other securities known as collateralized debt obligations, or CDOs. The firm also had to write off $100 million related to First Franklin Financial Corp., a home-lending company that Merrill bought for $1.3 billion on Dec. 30.

Investors' refusal to finance mortgages with a high risk of default has made subprime lending unprofitable, forcing more than 110 companies to close, file for bankruptcy or put themselves up for sale since the beginning of 2006. Current and former clients of San Jose, California-based First Franklin say the unit is now barely taking loan applications.

The credit markets also forced Merrill to write down the value of leveraged buyout loans that the firm had to make after investors refused to finance them. Those devaluations totaled $463 million, after underwriting fees, according to the Oct. 5 statement.

``We've got more skeletons to find out about, because the credit cycle has yet to play out,'' said Jon Fisher, who helps oversee $22 billion at Fifth Third Asset Management and doesn't own Merrill shares. ``This isn't over in just a year.''

Hoje é dia de Merryl Linch .

Resultados maaaaaaaaaaauus...

Um abraço ,

The Mechanic