Telegraph Blogs : Business : Ambrose Evans-Pritchard : October 2007

Telegraph Blogs : Business : Ambrose Evans-Pritchard : October 2007: "The sky has already fallen Posted by Ambrose Evans-Pritchard on 25 Oct 2007 at 12:36 Tags: Economics, Business, Goldman Sachs, us dollar, Subprime market, credit crunch, Global markets, Currencies If you are a bear, you must accept that you will always be wrong in polite society, and you will continue to be wrong all the way down to the bottom of recession. That is the cross that bears must bear. Night sky It's gone, whatever sceptical colleagues may say Over the last three months we have seen a rolling collapse of speculative debt and real estate across half the global economy, yet friends still come over to my desk at the Telegraph, with that maddening look of commiseration on their faces, and jab: “so when is the sky going to fall then, eh”? Well, excuse me. The sky has fallen. The median price of new homes in the US has crashed from a peak of $262,6000 in March to $238,000 in September. (Commerce Department). This is a 9pc drop nationwide. The slide in existing homes is catching up. They have come down from $229,200 to $211,700 in three months. (National Association of Realtors). Yet we have barely begun to see the default hurricane as Teaser rates contracted in 2005 and 2006 on floating mortgages kick up venomously over the winter, "

TRADING PLACES

TRADING PLACES: "TRADING PLACES TRADER: SAC MADE ME TAKE FEMALE HORMONES By PAUL THARP and RODDY BOYD CLICK TO ENLARGE CLICK TO ENLARGE PrintEmailDigg ItRedditPermalinkStory Bottom October 11, 2007 -- One of the world's richest and most secretive hedge funds is telling its traders to swallow female hormones to trade better, a lawsuit claims. The bizarre twist on how to get wealthy fast swept across Wall Street's trading desks amid ribald laughter and groans after revelations yesterday of the shocking claims involving SAC Capital. The firm, a powerful $10 billion hedge fund, is run by superstar trader Steven A. Cohen, one of Wall Street's most prolific players who regularly takes home $500 million a year. It was alleged that one of Cohen's top bosses at SAC chided traders for being too aggressive - and that they must use a soft feminine touch to score in their trading pitches. One junior trader claimed that the boss, Ping Jiang, a key producer at the big hedge fund, demanded that the young trader take female hormone pills to help erase his aggressive male ways so he could be more effeminate in his trading style. Eventually, the hormones caused the junior trader to start wearing dresses, avoid his wife's touches altogether and allegedly begin a sexual relationship with his boss, the trader claims."

Bloomberg.com: News

Bloomberg.com: News: "Foreclosures Doubled in September as Loan Rates Rise (Update5) By Dan Levy Enlarge Image/Details Oct. 11 (Bloomberg) -- U.S. home foreclosures doubled in September from a year earlier as subprime borrowers struggled to make payments on adjustable-rate mortgages, RealtyTrac Inc. said. There were 223,538 foreclosure filings last month, including default and auction notices and bank repossessions, an 8 percent decline from August. California had the most with 51,259 filings and Florida was second with 33,354. The national foreclosure rate was one for every 557 households. Foreclosures are deepening the U.S. housing recession by pushing more homes onto a market where sales and prices are dropping. There's a 10-month supply of unsold homes, the highest in at least eight years. As many as half of the 450,000 subprime borrowers whose mortgages will re-set through November may lose their homes because they can't afford the higher payments, according to a report by Credit Suisse Group. ``The truth of the matter is that borrowers are going into default as soon as they hit their adjustments,'' said Rick Sharga, executive vice president of marketing at Irvine, California-based RealtyTrac. The company sells foreclosure information and has a database of more than 1 million properties from 2,500 U.S. counties."

Bloomberg.com: Commodities

Bloomberg.com: Commodities: "Gold Rallies to 27-Year High, Silver Gains as Dollar Declines By Pham-Duy Nguyen Oct. 11 (Bloomberg) -- Gold rose to the highest price since 1980 as a decline in the value of the dollar boosted the appeal of the precious metal as an alternative investment. Silver also gained. The price of gold has rallied 17 percent this year as the dollar touched an all-time low versus the euro. Five of the past six bear markets for the U.S. currency have led to gains in gold, which has more than doubled since 2002. ``Gold is gearing up for another rally,'' said Paul McLeod, vice president of the precious-metals department at Commerzbank Securities in New York. ``It's moving with the dollar, but it's also gathering its own momentum.'' Gold futures for December delivery rose $10.80, or 1.4 percent, to $756.80 an ounce at 1:36 p.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest gain since Sept. 6. The metal earlier reached $759.30, the highest for a most-active contract since Jan. 22, 1980, the day after the price reached a record $873."

Two top US economists present scary scenarios for US economy; House prices in some areas may fall as much as 50% - Housing contraction threatens a bro

Two top US economists present scary scenarios for US economy; House prices in some areas may fall as much as 50% - Housing contraction threatens a broader recession: "US homes may lose as much as half their value in some US cities as the housing bust deepens, according to Yale University professor Robert Shiller. Meanwhile, Martin Feldstein of Harvard University says that experience suggests that the dramatic decline in residential construction provides an early warning of a coming recession. The likelihood of a recession is increased by what is happening in credit markets and in mortgage borrowing. Feldstein says that most of these forces are inadequately captured by the formal macroeconomic models used by the Federal Reserve and other macro forecasters. “The examples we have of past cycles indicate that major declines in real home prices — even 50 percent declines in some places — are entirely possible going forward from today or from the not too distant future,” Shiller said in a paper presented last Friday at the Federal Reserve Economic Symposium in Jackson Hole, Wyoming."

Six Reasons a Noted Economist Is Less Bullish - Markets - Economy - BSC

Six Reasons a Noted Economist Is Less Bullish - Markets - Economy - BSC: "Six Reasons a Noted Economist Is Less Bullish By Doug Kass RealMoney Silver Contributor 10/4/2007 12:38 PM EDT Click here for more stories by Doug Kass This blog post originally appeared on RealMoney Silver on Oct. 4 at 8:12 a.m. EDT. The Most Read Stories From TheStreet.com 1. Navteq Deal Guts Garmin 2. Top Rocket Stocks for the Week of Oct. 1 3. Apple's Mac Shows Muscle 4. Top 10 Short-Squeeze Computer Stocks 5. High Bar Hits RIM Sign Up Free Trading Center Charles Schwab Zecco.com Fidelity Investments E*TRADE FINANCIAL Global Forex TD AMERITRADE As we all know, contrary (bearish) thinking has its limitations, as the crowd usually outsmarts the remnants. What is significant, though, is when a previously bullish observer turns more cautious -- or vice versa. Such was the case this week, as Bear Stearns (BSC - Cramer's Take - Stockpickr) Chief Economist David Malpass grew less bullish on the economy. Malpass has been with the brokerage house for almost 15 years. Prior to his association with the firm, he held a number of economic roles in the Reagan and Bush administrations. I have always found Malpass to be a force of reason. Malpass believes that the August credit seizure 'marked a major downward inflation point in growth p"

Blog about US housing

Here is a blog about US housing bubble:
http://thehousingbubbleblog.com/?p=3530

Price growth stalls in 'prime' homes market: Financial News - Yahoo! Finance

Price growth stalls in 'prime' homes market: Financial News - Yahoo! Finance: "Price growth stalls in 'prime' homes market Friday October 5, 9:00 pm ET By Jim Pickard, Property Correspondent The surge in prices for 'prime' homes in central London that began a year ago is finally running out of steam, according to data published by estate agents Knight Frank. Price growth in the city's most exclusive markets fell to 1.2 per cent in September; its slowest rate since August 2006. Knight Frank's Prime Central London index, which includes areas such as Knightsbridge, Belgravia and Mayfair, is up by 36.5 per cent since this time last year."

Recap: A new breed of investor is buying art - Yazzy's at www.williamverdult.com - Yazzy's at WilliamVerdult.com Features - Yazzy's | Williamverdult.c

Recap: A new breed of investor is buying art - Yazzy's at www.williamverdult.com - Yazzy's at WilliamVerdult.com Features - Yazzy's | Williamverdult.com Official Website, Orginals, Lithographs, : "Recap: A new breed of investor is buying art - Yazzy's at www.williamverdult.com Tow The MarkGOING, going, gone. Sotheby's set a record total for a contemporary art auction this month, raising $254.9m in one night, including the highest amounts ever paid for 15 individual artists. But within 24 hours that figure was smashed by Christie's, its rival, with a $384.7m buying binge, including 26 artist records. “There's a mood of speculation that I have never seen before in my 50 years in the business,” says Richard Feigen, a veteran Manhattan art dealer. An Andy Warhol piece, Green Car Crash (Green Burning Car I), fetched four times the previous high for a work by the mop-headed guru, set just last November. One way of looking at high art prices is as part of a global wave of liquidity that is pushing up asset prices everywhere. “From Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time,” says Jeremy Grantham of GMO, a fund-management group."

FT.com / World - Darling warns credit squeeze ‘will hit UK’

FT.com / World - Darling warns credit squeeze ‘will hit UK’: "Darling warns credit squeeze ‘will hit UK’ By George Parker and Chris Giles in London Published: October 4 2007 22:01 | Last updated: October 5 2007 12:03 Britain’s economy will be hit by the global credit squeeze, forcing the government to downgrade its growth forecasts ahead of a possible general election, the chancellor of the exchequer admitted on Thursday. Alistair Darling told the Financial Times the squeeze that started in the US would “undoubtedly” hit the British economy, leading to an expected cut to his 2.5-3 per cent growth projection for next year. Credit squeeze: What next? Mohamed El-Erian Q&A: Mohamed El-Erian answers your questions The slowdown will have an effect on Britain’s tight public finances, and the more gloomy economic outlook comes just as Gordon Brown, prime minister, decides whether to call a November election. Mr Brown’s aides spent Thursday playing down expectations of a snap poll, after this week’s highly successful party conference for David Cameron, leader of the opposition Conservatives, although they stressed that no decision had been taken."

FT.com / Companies / Financial services - N Rock borrows another £2.9bn

FT.com / Companies / Financial services - N Rock borrows another £2.9bn: "N Rock borrows another £2.9bn By Chris Giles, Gillian Tett and Jane Croft in London Published: October 5 2007 03:00 | Last updated: October 5 2007 03:00 Northern Rock borrowed another £2.9bn ($5.9bn) last week from the Bank of England, it emerged yesterday. Meanwhile, financiers close to Chris Flowers, the former Goldman Sachs banker, indicated yesterday that his buy-out group is intensifying efforts to bid for the stricken bank. Three weeks after Northern Rock went to the Bank for support, it owes nearly £11bn, equal to 45 per cent of its deposit base at the end of June. One bank analyst who did not want to be named said he was surprised that Northern Rock had reached this level of borrowing from the Bank so quickly. Analysts estimated that Northern Rock had £14bn of short and medium-term notes which need to be refinanced in the second half. It is possible that up to £2bn of retail savings deposits have also left the bank in the past three weeks. The scale of Northern Rock's debts to the Bank has not deterred Mr Flowers. His group, JC Flowers, is approaching senior British banking and former government figures to run the venture. The buy-out group has raised more than £15bn. In addition to this finance, Mr Flowers also plans to use money from a fu"

Fed's Kohn: housing, credit woes bode weakness ahead: Financial News - Yahoo! Finance

Fed's Kohn: housing, credit woes bode weakness ahead: Financial News - Yahoo! Finance: "Fed's Kohn: housing, credit woes bode weakness ahead Friday October 5, 9:41 am ET PHILADELPHIA (Reuters) - Federal Reserve Vice Chairman Donald Kohn said on Friday moderate growth should return to the U.S. economy after a period of weakness due to a prolonged housing slump and higher borrowing costs. ADVERTISEMENT click here 'Once we get through the near-term weakness caused by the extra downleg from the housing contraction and any spillover from tighter credit conditions, I am looking for moderate growth with high levels of employment,' Kohn told the Greater Philadelphia Chamber of Commerce. The Fed's half-percentage point interest rate cut was necessary to offset tighter credit conditions and encourage moderate growth but will not prevent further softness in parts of the economy, Kohn said. 'Our policy action will not be able to avert all of the weakness in the economy that may be in train for the next several months,' he said. 'In particular, housing markets are likely to remain depressed in coming months.' Some of the most disrupted financial markets have shown signs of improvement since the Fed's September 18 meeting, Kohn said. But recent market turmoil will raise the cost and constrain the availability of credit for households and businesses, even after market functioning improves, he said."

FT.com / World / US & Canada - Dallas Fed chief warns on inflation

FT.com / World / US & Canada - Dallas Fed chief warns on inflation: "Dallas Fed chief warns on inflation By Krishna Guha in Washington Published: October 5 2007 01:57 | Last updated: October 5 2007 01:57 The president of the Federal Reserve Bank of Dallas has cautioned against ignoring the inflation represented by rising food and energy prices, revealing a continuing debate inside the US central bank over how best to evaluate price pressures. Richard Fisher on Thursday said the increases in food and energy prices over recent years could represent “longer-lived trends rather than transitory blips”. If this was the case “the arguments made for excluding food and energy prices” from core inflation, the Fed’s traditionally preferred measure, “would be on shaky ground”. The Dallas Fed chief cited Bank of England chief economist Charles Bean, who argues that core inflation captures the benefit of globalisation and the rise of China in the form of cheaper manufactured goods, but ignores the cost in terms of upward pressure on food and energy prices. Mr Fisher said he preferred the Dallas Fed’s trimmed mean measure, which excludes only those goods and services that rise most or least in a given month. On this measure, the underlying rate of US inflation is 2.1 per cent year on year, although Mr "

Merrill Takes a Mammoth Hit - News & Analysis - Brokerages/Wall Street - BSC - C

Merrill Takes a Mammoth Hit - News & Analysis - Brokerages/Wall Street - BSC - C: "Merrill Takes a Mammoth Hit By Mark DeCambre TheStreet.com Senior Writer 10/5/2007 9:24 AM EDT Click here for more stories by Mark DeCambre Merrill Lynch (MER - Cramer's Take - Stockpickr - Rating) said third-quarter profits will be wiped out by a huge writedown tied to this summer's credit crunch. The Most Read Stories From TheStreet.com 1. High Bar Hits RIM 2. Verizon Turns iPhone Killer Loose 3. Top 10 Stocks With Big Insider Buying, Buybacks 4. Top Dividend Stocks From Buffett, Soros and Icahn 5. Macau Stocks Get Mashed Sign Up Free Trading Center Zecco.com TD AMERITRADE Global Forex E*TRADE FINANCIAL Fidelity Investments Charles Schwab The New York-based brokerage firm said it expects to lose 50 cents a share for the quarter, reversing the year-ago $2-a-share profit and falling well short of analysts' $1.24-a-share profit forecast. Merrill will take $4.5 billion in writedowns on its holdings of collateralized debt obligations and subprime mortgages. It will also write off $967 million worth of leveraged lending commitments. The charges mean that Merrill has taken the biggest hit on Wall Street from this summer's turmoil in the credit markets. Last month's writedowns at rivals Goldman Sachs (GS - Cramer's Take - Stockpickr - Rating), Lehm"

Bloomberg.com: Worldwide

Bloomberg.com: Worldwide: "U.S. Payrolls Rose 110,000 in September; Jobless Rate at 4.7% By Joe Richter Enlarge Image/Details Oct. 5 (Bloomberg) -- U.S. employment accelerated in September and revised figures for August showed an unexpected gain, easing concern the economy was headed toward recession. Payrolls grew by 110,000 after an 89,000 increase in August, the Labor Department said today in Washington. Revisions added 118,000 workers to payroll figures previously reported for July and August. More jobs and rising wages will help consumers weather falling home values, sustaining the spending that accounts for more than two-thirds of the economy. The report may raise speculation that Federal Reserve policy makers won't need to lower interest rates again later this month. ``If the foundation of employment is still underneath us, then we have a good chance of nursing the expansion into the new year,'' Carl Tannenbaum, chief economist at LaSalle Bank in Chicago, said before the report. ``This will change the perception of the economy.'' The jobless rate rose to 4.7 percent from 4.6 percent the previous month."