Yesterday was a miserable day in the market with the Dow down 280 points in America. Lehman was the watch word of the day as worries about its solvency caused the stock to fall 45%. WaMu didn’t do much better. It was down nearly 20%. Overall, the financial services took a big hit in the states.
As Far as Frannie goes, Martin Wolf says that the UK should not replicate the U.S. bailout — read it. There is a very good article on how the GSE takeover will affect the U.S. budget deficit. Oh yeah, and Bill Gross’s Pimco made $1.7 billion off of the bailout.
In the UK, the consumer is really pulling back and this downturn is looking as nasty as the one in the early 1990s.
There was not a ton of good news out there yesterday (unless you’re Bill Gross). Oil did fall under $100 as I predicted. If you have a important positive story, we want to know. I do have a section on dream homes.
If you want a good laugh, check out the article about North Korea in my Odds & Ends section — supposedly Kim Jong-Il has been dead for 5 years. Kind of like the urban myth of Saddam Hussein and his many body doubles.
Dream homes
- What You Get for … $1 Million – NY Times
- La Jolla Tops List as Most Expensive Housing Market in Nation – Housing Wire (I’d live there)
- An American Interior With a Portuguese Facade – NY Times (I am very envious)
- For Sale in … Berlin -NY Times (not great shakes)
- Canadian housing starts jump, led by Ontario – Globe & Mail
Fannie-Freddie Fallout
- U.S. move triggers CDS default – FT
- Bail-out hands Pimco $1.7bn payday – FT (Bill Gross is very happy)
- U.S. Treasury Credit-Default Swaps Increase to Record, CMA Says – Bloomberg
- Mortgage Rates May Fall After Fannie, Freddie Rescue – Bloomberg
- Salesforce.com, Fastenal to Replace Fannie, Freddie in S&P 500 – Bloomberg
- McCain and Obama differ on mortgage crisis – FT (I prefer McCain’s concept, but I think Fannie and Freddie shouldn’t exist)
US
- Cost of U.S. loans bail-out emerging – FT
- U.S. may be vulnerable to sovereign funds: report – Reuters
- Budget outlook worsens on war, economy – Market Watch
- U.S. home sales ‘decline in July’ – BBC
- Dollar Trades Near 11-Month High Versus Euro as Crude Oil Falls – Bloomberg
Politics
- McCain & Miss Teen South Carolina – Stefan Karlsson (hmm…)
- Hillary backers come to defense of Palin – Politico
- Record Contradicts Palin’s ‘Bridge’ Claims – WSJ
- Obama vs. McCain: Why I’m Back on the Fence – Moderate Voice
UK
- U.S. housing solution is not a good one to follow – FT (Mr. Brown, you have been warned!)
- First-time buyers suffer as deposits climb – Telegraph
- Shell lands big gas deal in Iraq – Evening Standard
Financial Services
- Lehman Brothers to announce results Wednesday – Reuters
- Lehman stock drops 45% on capital worries – National Post
- Lehman Put on Watch for Possible Downgrade by S&P – Bloomberg
- Santander Said to Revive Talks on Postbank Purchase – Bloomberg (It looks like Deutsche has some competition)
- AIG shares plummet on fresh mortgage market concerns – Reuters (There is reason for concern)
- Wells Fargo to Take Hit on $480 Million of GSE Preferreds – Housing Wire
- BankUnited Sees Regulatory Capital Status Downgraded – Housing Wire
- Wachovia Cut to Underperform by Merrill – Housing Wire
- Downey Gets Cease-and-Desist from OTS – Housing Wire
Odds & Ends
- Dubai plans $200bn canal to bypass Strait of Hormuz – Times Online
- Big Mac entices the cash-strapped – Times Online
- KFC shoring up security for secret recipe – LA Times (my sister-in-law loves KFC)
- Kim Jong-Il ‘died in 2003’ – ABC Australia News