Housing Bubble Bursting?

[Randolph Kinney]

Repeat of stock market crash of 1987 coming?

Greenspan Sees Echoes of 1987, 1998 Upheavals in Current Market Turmoil

Alan Greenspan, former chairman of the U.S. Federal Reserve, said forces behind current market turmoil are ``identical'' to previous economic upheavals, including the 1987 stock-market crash.

 

[moh malekpour]

Moh-

Correct me if I'm wrong, but the article doesn't say the stock price dropped $1.27/share. The article seems to say that the $80.5 loss is a $1.27 hit to earnings per share. If I am correct, should not the $1.27 loss be expressed as a negative number? Negative earnings = negative earnings per share, no?

Denis,
The article says loss but doesn't say loss on earning per share or loss on share price. If it is about the earning, it should be definitely negative becuse its earnings growth is -144.700 but if it is about the share price, it should be positive as long as it is above 0. Its share price was $38 few months ago and now is under $11. It is a big loss but still above zero. The company is big and has 47,548 millions shares outstanding.

 

[Randolph Kinney]

Recognizing the handwriting on the wall - must cut everything

Indymac CEO Pushes Dividend Cut

Indymac Bancorp Inc.'s top executive said he plans to recommend the company slash its quarterly dividend by 50% as the nation's second-largest independent home lender deals with the ongoing credit crunch.

The firm is also planning to cut some 10% of its work force in the coming months.

In a letter to shareholders and other Indymac stakeholders, Chairman and Chief Executive Michael W. Perry, said he intends to recommend the dividend cut to the company's board "given the current operating environment and our anticipated earnings performance."

Mr. Perry said a 50% drop in loan volume is expected.

Mr. Perry went on to say the company anticipates cutting its work force by roughly 10%, or about 1,000 employees, during the next several months.

In July, the firm announced nearly 400 job cuts, mainly in the company's mortgage operations and information-technology departments.

This quarter, the lender expects to sell 76% of the loans it produces, down from 90% in the second quarter and 96% in the first quarter.

 

[Randolph Kinney]

Countrywide one-ups IndyMac on layoffs

Countrywide Financial plans to cut up to 12,000 jobs: report

SAN FRANCISCO (MarketWatch) -- Countrywide Financial Corp. said late Friday that up to 20% of its employees stand to get laid off within three months, as the nation's largest mortgage lender slashes costs in a desperate attempt to stay financially afloat.

The Calabasas, Calif.-based company announced that it plans to reduce its workforce by 10,000 to 12,000 jobs, or up to 20%, mostly in areas impacted by lower mortgage-market origination volumes.

Countrywide is the latest company linked to housing to release a wave of pink slips. Companies in the mortgage and housing sectors have cut more than 80,000 jobs this year.

At the end of 2001, the year the Federal Reserve slashed interest rates to 1.75% from 6.5%, Countrywide had fewer than 18,000 employees on its payrolls. By the end of 2006, that number had tripled, to nearly 55,000.

 

[Randolph Kinney]

First American reports loss, layoffs - real estate bites

First American eliminating 1,300 jobs

First American Corp., a Santa Ana-based title insurer, said Tuesday it's cutting 1,300 jobs nationwide, or roughly 4 percent of its workforce, as real estate-related companies keep taking their lumps amid a housing slump.

First American also has implemented hiring and salary freezes. And it has eliminated certain "executive benefits," the company said.

Late last month First American reported a second-quarter loss of $66 million, citing a slowing housing market, a spike in loan defaults and mortgage fraud. That compares to a profit of $25 million a year earlier.

At the time, the company added $387 million to reserves for expected losses on title insurance policies and other claims.

It's too early to say if that was a big enough addition to reserves, McMahon said.

 

[Midwest Guy]

We love bad news!

 

[Randolph Kinney]

We love bad news!

It goes with the title of this thread.

Almost no one questions now whether there is a problem with real estate markets although there are a few markets that are increasing, most of the larger ones are declining. The symptoms are layoffs and related companies posting financial losses not to mention the lockup that has occurred in the credit markets.

 

[beowulf]

Think it's bad news now, wait til the banks start going belly up - I don't think even Bernanke can print enough money to cover what's coming next. Hope everybody's emptied their money market accounts by now.

 

[Midwest Guy]

Agreed, however every ailment put together and discusses in one place is pretty depressing!

It goes with the title of this thread.

Almost no one questions now whether there is a problem with real estate markets although there are a few markets that are increasing, most of the larger ones are declining. The symptoms are layoffs and related companies posting financial losses not to mention the lockup that has occurred in the credit markets.

 

[Greg Bell]

You need to purchase Ammunition , Canned Goods and Twinkies..