More Banking Bad news
Â· Citigroup, the biggest bank in the US, reported a 57% drop in third-quarter earnings from a year earlier, due in no small part to bad mortgages;
Â· Bank of America, the second-largest US bank, just reported a 32% drop in earnings, led by a loss of $527 million in revenues at its structured products division;
Â· J.P.Morgan, the third biggest bank in the US, has marked down $186 million in bad mortgages plus $339 million in debt-derivatives for June-Sept.;
Â· National City Corp. of Cleveland – the ninth-largest bank in the US according to Reuters – now projects mortgage-book losses of $160 million for Q3, “the high end of its previous forecast”;
Â· The leading US savings and loan, Washington Mutual (WaMu), says it expects a 75% drop in profits, with a new set-aside of almost $1 billion to cover bad debts and a hit of $410 million to its current lending portfolio;
Â· Sovereign, the No.2 savings and loan firm, has raised its bad-debt provision three times over to $155 million, adding another $35 million in mortgage- loan charges and writedowns;
Â· Some 170 investment bankers are losing their jobs at Credit Suisse after it warned of a 29% drop in operating profits;
Â· Nomura, Japan’s largest brokerage firm, says it expects to lose $621 million by shutting its US mortgage division after heavy losses taken over the summer;
Â· Merrill Lynch wrote down $5.5 billion in subprime and leveraged-loan losses for June to Sept., with around $4.5bn lost to bad home-loans alone
Think banks are soon going to go back to business as usual after some lame writeoffs? Think again. This lending mess is going to be to be with us long for a long time. That does not mean that demand for housing is that bad. The problem is people can’t get loans that make sense-especially if you are in Ca. jumbo territory.
The fed will continue to lower interest rates. But what good is that if no one will give them to you unless you have a 720+ fico score. How many people have that? Not many!!
This is a GREAT time to buy houses – ONLY IF YOU DON’T HAVE TO DEAL WITH BANKS!!! (unless you want to buy their junk)
Want to learn how to make serious money by taking advantage of this mess? You need to sign up for our Creative Financing seminar, “Show me the money”, taking place on Nov 10th.
These speakers will open your eyes to tools you never even knew existed. It’s a whole new world out there. Do you want to be part of it or do you want to walk away from the best money making situation in the last few years.
Step up and become a sophisticated investor that does not only rely on hard-nosed loss mitigators to get deals.
Our room is limited to only 300 so make sure you don’t get shut out.