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Looks like all those option adjustable rate mortgages (ARMs) weren’t such a good idea after all: 1% teaser rates and loans that grow rather than shrink over time just aren’t meant for questionable borrowers buying overpriced homes. Newport Beach-based Downey Savings (DSL) the fifth largest originator of option ARMs was seized by federal regulators late Friday. The scraps were sold to US Bancorp (USB) for a song which included almost $10 billion in deposits. Pomona First Federal another Southern California lender highly levered to the real estate market was also taken over by Minneapolis-based US Bank. According to Bloomberg the 2 ...

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We are a few weeks into earnings season and it should be abundantly clear that financial institutions are firing on all cylinders.  In fact, financials are leading the broader market for the first time since 1993.  Yet, loan losses have been absolutely enormous.  What gives? The Great[More...]

"Just a few months ago China was preventing the economy from overheating; with amazing speed, the government has changed from jamming on the brakes to hitting the gas with both feet," says Jim Trippon. In The China Stock Digest, he says, "Chunghwa Telecom (NYSE: CHT), the big[More...]

I apologize for the recent lack of posts as I got rather caught up with travel and other activities during the holiday season.[More...]

In mid-August I predicted that “major” bankruptcies for 2008 would reach 225 (see Bankruptcies Revisited). Through October there had been 172 such bankruptcies, as reported by Bankrupctydata.com. That implied a pace of around 210 bankruptcies, well short of my prediction. At the time however, I suggested that the filing pace was likely to quicken in November and December as the economy deteriorated at a more rapid clip. Sure enough, the final numbers bear out my prediction. According to Bankruptcydata.com, “major” filings reached 231 in 2008. 231 bankruptcies falls far short of the 289 “major” bankruptcies in 2000 and 383 in 2001[More...]