Replies to post #48498 on Rags to Riches

[BlackThought]

Mutual Funds See 23rd Sequential Outflow, As Redemptions Accelerate, Hit $80 Billion

Sorry CNBC (and Bob) but there is no way to spin this. ICI has just reported the latest in what is now a weekly farce: nobody wants a piece of this market. Nobody. Retail is out permanently, as was confirmed by the 23rd sequential outflow from domestic equity mutual funds, this time redeeming $5.6 billion, the highest since the beginning of September, right before the Fed full blown stock ramp intervention began. And that brings the total YTD mutual fund redemptions to $80 billion. Sorry bankers - no greater fool, no hot potato. The jig is up. Have fun selling AAPL at $50,000,000 to each other (and of course ENIAC) in subpenny increments. Everyone else will stick to bonds and gold. Lights out.

Weekly outflows:





http://www.zerohedge.com/article/paging-bob-pisani-mutual-funds-see-23rd-sequential-outflow-redemptions-accelerate-hit-80-bil#comments

[BlackThought]

Quantifying The Full Impact Of Foreclosure Gate: Hundreds Of Billions To Start

As people finally realize that there is no getting away from a self-imposed (or sent from above) foreclosure moratorium reality, the next question is the quantification of what the hit to banks will be. As bank stock shares are demonstrating today, it will be substantial and is already starting to be priced in. According to FBR's Paul Miller, as cited by Bloomberg, "faulty foreclosures may cost U.S. lenders $2 billion for every month that home seizures are delayed and the tab could reach $6 billion... Investigations of how banks are seizing homes may prolong foreclosures by as much as three months, at a rough cost of $1,000 per month for each property in the pipeline. The biggest firms likely need to add staff to comb through the files, costing them each $1 million a year." This is a very a modest estimate. More importantly, a separate study by SNL Financial has determined that the total amount of residential (not commercial) mortgages in foreclosure between directly serviced, and those serviced for others, for the big three banks alone (JPM, WFC, BAC) is nearly a quarter of a trillion dollars! And this number will soon surge. Keep in mind, as we disclosed yesterday, per JPM, the bank, which is a good proxy of the Big 3, keeps mortgages in the delinquent category for on average of 448 days before moving to foreclose (and 678 days in Florida and a stunning 792 days in New York). This means that banks, and especially regional banks, are about to experience the mother of all delinquency-to-foreclosure cliff events, as squatters now certainly will have no intention of ever paying down their mortgage. Which also means that the quarter trillion in foreclosed mortgages are about to explode by orders of magnitude. The hole could end up being as large as a trillion if one throws in the CMBS properties that are delinquent and in foreclosure ($61 billion in August per RealPoint). And poof, there goes the trillion dollars currently sitting in cash and doing nothing (as well as a generous helping of excess reserves) for now... but not for much longer.

Below is the SNL Financial estimation of properties in foreclosure direct and serviced for others. The number is a whopper. It also excludes all the regional banks which likely account for a comparable number cumulatively.

http://www.zerohedge.com/article/quanitying-full-impact-foreclosure-gate-hundreds-billions-start

[BlackThought]

CDS Rout In Financials Continues, As Equities Finally Smell The Foreclosed Coffee

First thing yesterday, when we first highlighted that CDS in mortgage fin names were blowing out, even as the moronic market was all giddy on JPM's earnings beat which was really a miss, we warned "be careful trading financial stocks: JPM's earnings were actually very bad, and so far only credit has figured it out. Equities, being traded now exclusively by Fed-frontrunning retards and virus-infested robots, are a little slow." Prophetically, the equity slowness has finally caught up with reality, and BofA and Wells stocks are tumbling. Alas, fins have much more to drop, especially if and when the RMBS and CMBS markets are gutted (incidentally that CMBX III-IV AJ is looking like a screaming short right here, right now). Below is that latest CDS fin rerack - it is a bloodbath.

* Bank of America Corp. 195.50 182.5 +13.00
* Citigroup Inc 176.50 165.5 +11.00
* Capital One Bank 86.50 80.3 +6.25
* Capital One Financial Corp. 114.50 107.5 +7.00
* JP Morgan Chase & Co. 97.50 90.5 +7.00
* Wells Fargo & Company 131.50 120.0 +11.50
* Ally Financial Inc. 447.50 390.0 +57.50
* Residential Capital, LLC 746.49 685.0 +61.49
* Goldman Sachs Group Inc 151.50 145.5 +6.00

and, last but not least,

* Block Financial LLC 557.50 522.5 +35.00

http://www.zerohedge.com/article/cds-rout-financials-continues-equities-finally-smell-foreclosed-coffee

[BlackThought]

Neener neener neener~~~