Thursday, March 19, 2009

Long Time

I can't believe I haven't updated this blog since July 2008. At that time, I was overseas for a while and had some free time in the morning, but since I've been back in the 'States I've been busy. I'll try and spend some time writing every day, but I'm not sure where to start.

Let's start with the bank failures. As predicted, some major banks have failed (WaMu, Wachovia) and mainly because of the mortgage mess. WaMu was well known for thier lax lending standards and aggressive expansion. Why WaMu sees a need to open a ton of branches in Florida is anyone's guess, I have noticed that Chase has shut many of them down. Wachovia was brought down by the Golden West acquisition.

Bank of America so far isn't choking the way I expected on Countrywide, but this is likely because of government help. Recently, BofA accounced they will retire the Countrywide name, which is a prudent considering they were one of the the largest offenders in subprime, liar's loans, etc.

Where do we go from here? Citi is in major trouble, BofA isn't far behind. There will be more failures. An upcoming wave of mortgage defaults will stress all the banks. We are just now seeing resets in 2007 issued loans, and all my sources tell me the only thing being issued then was fraud. Time will tell, but its' not smooth sailing ahead. It will get better, but there will be some pressures in the short term.

Oh, and oil is up to $50/brl today. See my post from July 13, 2008, and who would have thought oil moving up to $50 would ever happen again?