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[Gailon Arthur Joy]

The losses keep mounting. We started with the premise this was limited to 14% of a the $800 Billion Dollar Sub-prime Market or One Hundred Twelve Billion ($112,000,000,000) dollars...yes sir, that is a big B!!!

But then we were told the comptroller of the currency had included those infamous Option Arms only sold to those A to A+credit borrowers but loaded in the most insidious negative Amortization schedule (putting many borrowers under water as the values drop and the rates have adjusted) in the list of troubled loans. These loans were booked by depository institutions, yup, those are banks, and they believe this could total an additional three hundred fourty Billion ($340,000,000,000) dollars in troubled or delinquent loans with no exit given the under water status of this batch of growing problems.

Now we have an analyst that is estimating the total cost to the US banking, Mortgage and Wall Street Conduits and Insurance Companies could cost us six hundred Billion ($600,000,000,000) Dollars. This does not include Commercial CDO's.  Since the entire market is Four Trillion and shrinking, that represents an astounding 15% of the housing market or nearly one in six mortgage dollars to be wiped out. That number is a much larger number than we experienced in the great depression, but we had very humane community banking and a lot of George Baileys in Bedford Falls Communities working together, not these heartless "serviced in India loans!!!"

Did you know that the economy's Gross Domestic Product grew 4.2% in the third quarter and dropped to a worrisome .6 or only 6/10th of one percent in the fourth and Christmas season quarter? Want to guess at where we are at just now at this point in the First Quarter? Wonder why the feds cut the discount to 3%? Wonder why they think they need to cut some more? DO you wonder if it will really help a whole lot? If you are 110% Loan to Market Value, you are stuck!!! And the more the rates go down the lower the dollar drops and the higher the cost of imported oil. Is this a conundrum??? Are we chasing our tails into a Depression? Ask your grandmothers and grandfathers what it was like and hunker down for the worst ride of our lives!!! 

Could this be an another example of 9 Testimonies fullfillment when the Grey Haired Prophet proclaimed the world's leading businessmen would be "struggling in vain to put business back on a sound footing" E.G. White

Think about it and then read 9 Testimonies if you wonder what you should be doing as events begin to unfold right before your eyes...

Gailon Arthur Joy

"Credit-crunch losses to total $600 billion
AIG is just one financial-services company of many that have been slammed by the credit mess over the past few months, and one expert says the total losses for the industry could reach $600 billion.

That's billion, with a "B."

Banks and brokerages companies together could lose $350 billion, more than half of UBS (UBS, news, msgs) strategist Geraud Charpin's eye-popping estimate; the group has written down $160 billion since the credit crisis started to squeeze the markets.

"We have to recognize the risk that the economy will suffer more damage than what consensus suggests. All the investment schemes that have been built on the basis of a strong and resilient economic backdrop have to be unwound/scaled down," Charpin wrote in a note to clients this morning.

UBS, Merrill Lynch (MER, news, msgs) and Citigroup (C, news, msgs) have already written down billions because of losses related to the meltdown of the subprime-mortgage market. "

Charley Blain of Market Dispatches

[Johann]

At appears to me that we must study much better prophecies and predictions of what is happening in this time before the return of Jesus, and  also keep a watch on how these predictions are being fulfilled right before our eyes.

[Gailon Arthur Joy]

Just had a meeting. Mortgage market is becoming more and more illiquid and just were working on solutions to keep open our secondary markets.

We have to add more investors as the pipeline is getting close to full with the group we have and the secondary is all but illiquid. Working on beefing up the group to four times its current level to just get us through the next two years at current levels. The return we have to offer is ridiculous, for federally insured mortgage backed securities.

Just found out that FNMA and FHLMC are not having success moving their portfolio and US Treasury has just made it clear they will not come to their rescue. US Treasury will only come to the rescue of the Ginnie Mae Loans (full faith and guarantee of the US Government).
Thank-God we are Ginnie Mae Lenders.

Also just got a news article the UBS auctioned off an $8Billion dollar portfolio of A+ rated US Mortgages and the best offer that came in was on $5.6Billion, or a 30% discount from face value. Hedge funds virtually quaked as they realized their holdings in A+ grade US Mortgages and have deteriorated in market value and were in default of their leveraged agreements, leading to margin calls. On the other hand, a hedge fund like Carlisle Capital has $22Billion and, figuratively speaking, owns the bank. I dare them to call their margins!!! One is Chase...yup if you have Chase Stock, it is sure to take a hit!!!

It is clear, all the kings men and all the kings horses may not be able to put humpty dumpty back together again!!!

DO They Struggle in Vain?

Gailon Arthur Joy

[bonnie]

I know there are many complex issues involved in this, but where is the responsibility of the home buyer?? Without their going in over their heads with what they saw as easy credit, perhaps this wouldn't be such a mess. Now the cry is,Government, what are you going to do about our overspending. Buying larger, more expensive homes than they could afford, the devil has caught up with them. What did they think automatic rate increases meant?? Everyone but them? Maybe a little more attention should have been paid to the fine print.  Did they wonder if their overtime ceased, who would pick up the tab?? Was unemployment insurance enough to cover their outrageously high house payment?
Maybe most have not been in a housing crunch before, but this should surprise no one that can think and remember. I wouldn't like to see anyone lose their home,but when they willingly sign on the dotted line that puts them in over their heads,this is a consequence of that.
My husband worked in the housing market for most of his life, family in the mortgage industry and real estate.Very little attention is paid by many buyers to a few months or a year down the road. Those that think they need it all right now, and can't do without three bathrooms and a bedroom for each child, two SUV's in the garage, complete with TV's so the little ones don't get bored.

We want nanny government to protect us from all our own foolishness. The bottom line is most home owners in trouble now, culd read and understand the fine print if they cared to read the documents throughly. How many foolishly borrowered against the equity in their homes and are crying now. Maybe a less expensive vehicle and using credit cards less would have been far more practical.
Most can cut back, just paying attention to unnecessary spending, or repairing instead of buying new.