Rolfe Winkler

Walking Away….

February 29, 2008

The WSJ and the NYT each have articles running tomorrow highlighting the ease with which borrowers are walking away from their mortgages. Both are highlighting the services of, which for a $1000 fee will help borrowers do exactly that.

The Latest Borrowing Vehicle: your 401(k)

February 28, 2008

Can Americans be trusted to save for their own retirement? A data point released today suggests not. But first a quick primer on the two basic types of retirement plans: defined BENEFIT plans and defined CONTRIBUTION plans.

Sanity at last? Paulson rejects bailouts

February 28, 2008

Yesterday Barney Frank, chairman of the House Financial Services Committee and therefore a very powerful Democratic voice on the economy, was quoted as saying the government

“is not helping enough people. We’re not going to get out of this [credit] crunch until we stop this cascade of foreclosures.”

Fannie takes a dump

February 27, 2008

Fannie Mae reported earnings this morning. They’re not pretty:

The mortgage-lending giant reported net loss of $3.56 billion, or $3.80 a share, compared to year-earlier net income of $604 million, or 49 cents a share.

Bailout Watch, keep Congress on speed-dial

February 25, 2008

Over the weekend, the New York Times reported that Bank of America is floating ideas for a much larger housing bailout than has been imagined heretofore.

Credit Default Swaps, a hedge funder’s view

February 21, 2008

Received a fascinating e-mail from a former hedge-fund colleague that I want to share with all of you (with his permission of course!). Before I get to it, some introductory words:

Funny video

February 20, 2008

I don’t think it takes an econ major to appreciate the humor here. (Hat tip to CR for this one. )

Is anyone immune?

February 19, 2008

To date, three banks I can think of have remained largely unscathed by credit-related writedowns. Goldman Sachs, JP Morgan and Credit Suisse, while Lehman’s writedowns have been small relative to others. My hunch, and it’s nothing more than a hunch, is that none of these companies will escape without writing down anything.

Credit Woes ARE widening

February 19, 2008

Following up on last week’s post about trouble in the leveraged loan market, the WSJ is reporting tomorrow that the big banks may be forced to take $15 billion worth of writedowns on their leveraged loan portfolios.

The Subprime Primer

February 17, 2008

For a hilarious AND informative primer on the subprime debt bomb, check out this slideshow.

Credit Default Swaps–yet another shoe

February 16, 2008

…..that will drop, that is. A fascinating and very readable piece by Gretchen Morgenson in today’s NYT gives the lowdown on systemic risks posed by credit default swaps.

Bad News Keeps Piling Up

February 15, 2008

Bad news cascading its way through the market this morning. But equities still seem positively resilient at this writing, with the Dow off a mere 44 points. A taste of today’s news releases:

The New York Federal Reserve reported early Friday that its general business conditions index tumbled to -11.72, falling below zero for the first time since May 2005, from a reading of 9.03 in January. The index was well below the median forecast of 6.5 in a Dow Jones Newswires survey.

Time to call Congress

February 14, 2008

Folks, it’s time to dig up the phone numbers for your congressman and your Senators. According to the Journal “worried bankers are…urgently shopping proposals to Congress and the Bush administration that could shift some of the risk for troubled loans to the federal government.” That is, to taxpayers.

One proposal, advanced by officials at Credit Suisse Group, would expand the scope of loans guaranteed by the Federal Housing Administration. The proposal would let the FHA guarantee mortgage refinancings by some delinquent borrowers.

Buffett Bids to Back Bonds

February 13, 2008

There’s a fantastic editorial in today’s Journal regarding Warren Buffett’s offer to reinsure $800 billion of municipal bonds currently backed by monoline insurers like Ambac and MBIA.

NYT: Mortgage Crisis Spreads Past Subprime

February 12, 2008

On the heels of yesterday’s front page article in the Journal about widening credit woes, the NYT has a front page article of its own this morning noting that mortgage troubles aren’t limited to so-called subprime borrowers:

The credit crisis is no longer just a subprime mortgage problem.