Comments on: Early Look at Q3 2009 Preliminary Bank Stress Test Ratings Show Improvement

By: When in doubt, do nothing - Steve Cook on Disciplined Investing - InvestorsInsight.com | Financial Intelligence, Advice & Research / Investment Strategies & Planning for Individual Investors.

Fri, 06 Nov 2009 14:43:34 +0000

[...] Preliminary bank stress test show improvement (medium): http://www.ritholtz.com/blog/2009/11/early-look-at-q3-2009-preliminary-bank-ratings-show-improvement…   Rate hike odds following the FOMC meeting (short): [...]

By: harold hecuba

harold hecuba — Fri, 06 Nov 2009 00:00:30 +0000

LOL come on why post such nonsense. just look at what fnm has just proposed. this is simply an attempt to hide the balance sheet and forestall inventory. when are people going to wake up. things have deteriorated not gotten any better since oct 2008. why in god’s name are we propping up assets that are destined to fall much further. when will anyone in this banana republic reALIZE WE ARE JAPAN. they said japan could not happen here. well it’s here and far worse. can anyone total the losses on MAIDEN LANE?

By: chartsandcoffee

chartsandcoffee — Thu, 05 Nov 2009 23:23:50 +0000

People talk about bailouts. What nobody talks about is that the government effectively took over most of the RMBS market years ago. This isn’t a new problem. It didn’t take a genius to know that concentrating all the mortgages into one entity without market forces limiting the GSEs ability to fund mortgages would be a disaster.

There is nothing worse than taking communism and capitalism and mixing them together. This is a textbook result.

RMBS is one example of why we are going nowhere. The same structure of the government owning 50%+ of the mortgages in this country is still in place. Now they’ve expanded the FHA program since borrowers can’t even meet Freddie/Fannie guidelines.

An analogy would be refusing to cut out a tumor that could cure a patient and instead providing the patient expensive drugs to limit the disease. Of course the patient ends up dying after spending years of pain taking expensive drugs. Instead, the tumor could just be cut out and with therapy the patient could move forward and get stronger.

http://www.chartsandcoffee.com

By: Steve Barry

Steve Barry — Thu, 05 Nov 2009 22:43:34 +0000

Fannie Mae posts $18.9 billion Q3 loss, taps Treasury

22 mins ago
NEW YORK (Reuters) – Fannie Mae, the largest provider of funding for U.S. home loans, on Thursday said it would again tap the Treasury to plug a net worth deficit after bad mortgages and foreclosure prevention efforts resulted in a $18.9 billion net loss in the third quarter.

Shares of Fannie Mae tumbled 7.1 percent after it reported results in extended after-hours trade.

Fannie Mae (FNM.P) (FNM.N) , which was seized by the government last year, said the quarterly loss stemmed from $22 billion in credit-related expenses, including charges on impaired loans it bought from mortgage-backed securities as it modified loans under President Barack Obama’s foreclosure prevention plan.

The company also boosted its provision for credit losses in future quarters.

Fannie’s regulator will request $15 billion from the Treasury under a senior preferred stock agreement, which will increase the total government support to $60.9 billion.

By: Mannwich

Mannwich — Thu, 05 Nov 2009 20:39:39 +0000

The banks can be the new slum lords! But why would anyone who’s living rent or mortgage-free agree to even pay rent at this point if they can just sit tight and enjoy a free roof over their heads?

By: Chris Whalen

Chris Whalen — Thu, 05 Nov 2009 20:38:39 +0000

Banks are operating real estate now. And yes, non-committal until I get to 7,000 units. Some of the biggest players in the industry are still out. That said, the good news is that the small-bank results don’t start with a “7″

By: chartsandcoffee

chartsandcoffee — Thu, 05 Nov 2009 20:27:01 +0000

Regarding banks, my prediction is that they will follow Fannie into operating real estate.

http://www.chartsandcoffee.com/2009/11/fannie-mae-to-rent-foreclosed-homes/

By: scepticus

scepticus — Thu, 05 Nov 2009 20:26:38 +0000

“”While it is __possible__ that the overall level of industry stress could rise or fall as we see the rest of the FDIC bank units report for Q3 in the next three weeks, we think that this __preliminary__ result confirms the general trend in the industry toward moderating __loss__ rate __increases__.”

__ emphasis mine.

A more non commital paragraph about bank capital positions is hard to imagine.