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from Rolfe Winkler:
Evening Links 12-7
Update from this morning: Neel Kashkari joins PIMCO (Ishmael, Alphaville)
TARP cost estimate falls $200 billion (Somerville, Reuters) Even after this latest reduction, the administration still estimates TARP will cost $141 billion. We may be getting more back than we though, but we're not making money. Remember, the Fed still has north of $1.0 trillion or mortgage-backed securities on its balance sheet, the value of which is not clear.
Moody's links option ARM performance with subprime (Golobay, HousingWire) Option ARMs were generally considered "prime" loans based on the credit scores of borrowers. We learned last year, however, that credit scores are less indicative of default rates than negative equity. Negatively amortizing option ARMs, which allow borrowers to make a minimum payment that doesn't even cover interest, have seen their loan balances explode. With prices down, they're so far underwater it makes little sense to pay their mortgage...
Euros become currency of choice for drug cartels (Syal/Townsend, Guardian) Not an indication of the euro's strength versus the dollar, however. €500 notes are smaller than $100 bills and therefore easier to smuggle.
Does Dubai really owe $150 billion? (Arabianbusiness.com) The consensus estimate is that Dubai owes closer to $85 billion...
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The Wall
