September 27, 2007
Most Read Stories (27-Sep-2007 10:20:21)
Here are the top five most read stories on the Bloomberg in the last day with selected excerpts (and my comments, if any, in italics).
As of 27-Sep-2007 at 10:20:21 (Beijing time):
- Las Vegas Home Devaluation Shows Residential Market May Drop 6%
- GM, UAW Reach Contract Accord, Ending 2-Day Strike
- Citic Surpasses Lehman, Schwab as Savings Lift Stocks
- Merrill Lynch May Write Down Assets by $4 Billion
- Goldman Names Forst Co-Head of Fund Unit With Kraus
“‘What we need more of in Las Vegas is home equity. It’s not that prices have plummeted, they’re down about 5 percent so far. But if you bought near the top with no money down, you’re under water.’”
I’ve never met anyone anywhere who has bought real estate with “no money down” … it’s a myth.
“GM sought to shift future retiree health-care obligations off its books through creation of a union-run fund called a Voluntary Employees’ Beneficiary Association, or VEBA, that it would help to finance.”
Now to solve the little problem of making cars that people want to buy.
“Founded just 12 years ago, Beijing-based Citic now has a market capitalization of $40.7 billion, or $8.8 billion more than Lehman Brothers Holdings Inc., $24.4 billion more than Bear Stearns Cos. and $16.4 billion more than Charles Schwab Corp., after more than tripling in 2007 … Investors in China have opened 46 million trading accounts this year alone, nine times 2006’s amount. Total accounts have swelled to 125 million. In the U.S., brokerages manage more than 83 million accounts.”
Not to be a party pooper, but what happens when the bubble bursts?
“Merrill may have to write down the value of mortgages, corporate loans and collateralized debt obligations by $4 billion.”
Oww.
“Assets under management rose 27 percent from a year earlier to a record $796 billion in the third quarter, Goldman reported last week. That figure includes about $40 billion in hedge funds.”
GS is an asset gathering dynamo.
September 27th, 2007 at 4:38 pm
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September 27th, 2007 at 9:41 pm
Hey Chairman,
GM’s Buick is quite popular in China, no? How about the new redesign Cadillac CTS- does that strikes your fancy a bit?
I think with Bob Lutz, their car design is moving in the right direction.
September 28th, 2007 at 12:44 am
“I’ve never met anyone anywhere who has bought real estate with “no money down” … it’s a myth.”
It is not a myth. Ever heard of a “silent second?”
At the height of the bubble, borrowers got a mortgage for 90% of the value, and a second mortgage for the remaining 10%. (or 85%/15%)
September 28th, 2007 at 2:41 am
I did that on one of my properties. What you have to pay for are all the closing fees. That’ll run you at least $8K.
September 28th, 2007 at 7:34 am
@yin: Yes, GM’s Buick is popular in China — it was a pre-Revolution status symbol and oddly still retains that cachet. VW has the biggest market share here, and the Japanese car makers kind of struggle because many people are unwilling to buy for Nationalistic reasons. The Cadillac CTS is ugly.
@Doug: I think those are also called “piggyback” loans; “no money down” may not be a myth but it has to be *extremely* uncommon.
@Tom: Who was the dumb lender who allowed you to do that?
September 28th, 2007 at 2:30 pm
my friend’s ex moved to LA two years ago, single mother, no job. She bought a $600k house for no money down, absolutely ZERO, and got an interest only loan.
The realtor got her a silent second and convinced her that she will make a fortune in couple of years when she sells.
September 28th, 2007 at 2:50 pm
Born2: I know I’m incredibly naive, but I’d still like to meet that kind of lender in person. Am I hanging around with the wrong crowd of bankers or what?
October 10th, 2007 at 10:49 pm
If you dont have any money to put down thats probably not a good sign……….