Trading Now

Trading Now

Wednesday, November 4, 2009


ISM down 50.6 in October v 50.9% in September, but the market is going up. Why? Because the gangsters are buying the bank stocks to keep this market from falling 500points.

FHA targets high-default lenders
The Federal Housing Administration, which now covers about one-third of all new mortgages with its guarantee protection, is targeting lenders with high default rates. Some lenders are taking advantage of the FHA's services to offer lower down payments and somewhat lower underwriting requirements. FHA loans only require 3.5% down, and credit-score requirements are more flexible than those of lenders that do not make use of the agency's protection. National Public Radio (11/4)

*do you think the proverbial shoe won't drop? Wait Till Next Year. Remember that movie?
First CMBS sale via TALF on track as Fed's concern easesFederal Reserve officials had raised concern about a closely watched commercial mortgage-backed securities transaction, but the central bank indicated that its worry is easing. The deal is expected to be a test for the U.S. government's Term Asset-Backed Securities Loan Facility. The real estate industry is hoping the debt sale will lead to other similar deals. The Wall Street Journal (04 Nov.)

*The government of Goldman Sachs now has a new partner in Berkshire Hathaway. You didn't think Buffett would be stupid enough to pay a premium of $100 with no government carrot did you? The carrot? the Obama administration likely has promised BNI that their rail tracks will be leased by the fed government when we build our new high speed rail. How much do you want to bet that Berkshire will be the primary benefactor of that PORK?
Berkshire Hathaway seeks to buy tax credits from Fannie Mae
Berkshire Hathaway wants to purchase tax credits from Fannie Mae along with Goldman Sachs, sources said. The situation was already politically sensitive, and adding Warren Buffett to the mix makes it even more interesting. The Treasury Department, citing a lack of taxpayer benefits, may block the sale of Fannie Mae's tax credits. Goldman, Berkshire and other companies could use the tax credits, which are virtually worthless to Fannie Mae, to reduce their tax expenses. The Wall Street Journal (11/4)

Berkshire to buy U.S. railroad for $34 billion
Warren Buffett's Berkshire Hathaway plans to pay $34 billion buy the second-biggest railroad in the U.S., Burlington Northern Santa Fe. It will be the biggest acquisition in Berkshire's history. Assumption of debt brings the complex financing package to roughly $44 billion. Buffett said the deal is a big bet on the railroad's future. "I stretched on this one," he said. "I went to the last nickel." BusinessWeek (03 Nov.)

Chinese companies increase investment abroad
Investment overseas by Chinese companies increased 1% to $33 billion during the first nine months of 2009 compared with the same period last year, said Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission. "Today, we see Chinese companies, such as Lenovo and Huawei, both in developed markets and in many African countries," said Taffere Tesfachew of the U.N. Conference on Trade and Development. China Daily (Beijing)/Xinhua News Agency (04 Nov.)

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