TECHNICAL ANALYSIS

[C C]

simple...market movement

a bank BK'd the other day
not reported by news...
not since the depression has a bank BK'd
believe had something to do with this laterst drop in the market...
I think it sent shivers through the market

NEED TO PAY ATTENTION TO THIS POST SIMPLE...THIS IS SERIOUS

50 lending institutions a day are folding
not good news

From MarketWatch. “New Century Financial Corp. said late Friday that it’s facing a federal criminal probe and will likely breach a major lending covenant with its financial backers, bringing into question the survival of the second-largest U.S. subprime-mortgage lender.”
“‘Subprime lenders without deposits depend on their warehouse lines,” said analyst Zack Gast. ‘If New Century’s lenders do not grant the requested waivers, the company is likely to be forced to sell or shut down.’”

The lending buss. doesn't look good...this is serious simple

found the Warehouse bank that foreclosed...apparently there are 11 in the USA.... from what I understand

Lenders Direct Capital Corporation Announces Layoffs, Closure of Wholesale Lending Operations
they walked in that morning without warning & sent 50 people home
I wonder just how hungry these realtors are getting, seeing the easy subprime money is basically gone.

Here is a list of Mortgage Bankers closing doors to home lending......50 subprime lenders are going down a day
http://www.mortgagedaily.com/Index0107.asp

"Apparently they have 11 warehouse banks. These banks issue high interest rate lines used to temporarily house loans for sale. These lines are not meant for permanent portfolio holdings. Because of the massive amount of buy-backs from these lines, they are being used up for buy-backs requiring NEW cash in a trust account for essentially a security deposit, which we learned they are having to go back and ask for waivers on.

The problem is these 11 warehouse banks have been upping the lines to accommodate massive buy-backs for a year. We are just hearing about it now. They have thrown enough good money after bad money and most are giving lenders margin calls, not waiving margin requirements. At this point knowing that 5 of 11 have issued a margin waiver and 6 are still outstanding, it is first to collect collateral wins. The 11 warehouse banks have to get those scratch and dent loans that are currently sitting on their lines, try to make them right somehow for sale. The important item to note is the first person in to collect collateral on a margin call wins. They get in first position like a mortgage.

These lines are $1 billion a pop guys - it is not time to mess around. It is time to collect and salvage what you can especially now that it has become clear to everyone with blinders on that the housing market is not bottoming anytime soon.



cha-ching