| | Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern
| ^TrInItY^  
Forum Administrator
8/6/2007 9:00 PM
Report abusive post | Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern
| Quote |
The impact of this is global
-
By Aaron Kirchfeld
Aug. 6 (Bloomberg) -- Frankfurt Trust, the mutual fund manager of Germany's BHF-Bank, stopped withdrawals from a fund after clients removed 20 percent of their money since the end of July amid concern about the U.S. subprime loan debacle.
The FT ABS-Plus fund, which includes residential mortgage- backed securities and collateralized debt obligations, halted redemptions on Aug. 3, the Frankfurt-based company said today. The 160 million-euro ($221 million) fund has a ``small exposure'' to subprime investments, spokesman Holger Ullrich said.
Defaults on U.S. housing loans to borrowers with patchy credit histories have reached a 10-year high, driving down the value of bonds backed by mortgages. Union Investment Asset Management Holding AG, Germany's third-largest mutual fund manager, said on Aug. 3 it halted redemptions from a fund holding subprime mortgages after clients withdrew about 10 percent of the assets in the past month.
``The situation for the asset-backed securities and CDOs market has gotten much worse in the last few days because of the U.S. real estate crisis,'' making it difficult to secure fair prices, the company said in a statement on its Web site.
Fulfilling rising redemption requests would have forced Frankfurt Trust to sell the securities far below their ``fair'' value, the company said. It is closing the fund to withdrawals and new investments for an unforeseen period ``in the interest of investors.'' Clients had withdrawn about 40 million euros since the end of last month, Ullrich said.
Sal. Oppenheim Jr. & Cie KgaA, Germany's largest independent bank for the wealthy, acquired BHF-Bank from ING Groep NV, the biggest Dutch financial-services company, for 600 million euros in December 2004.
To contact the reporters on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net
Last Updated: August 6, 2007 07:53 EDT
[link to www.bloomberg.com]
Few will listen,
Of the few who listen, fewer still will understand,
Understanding does not mean believe,
Of the handful who believe, most may not know what to do,
Those who even know, how many will actually do ?
And the rare ones who have done it.......
Need not listen to you anymore.
|
| Anonymous Coward
User ID: 275222
8/6/2007 9:04 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
it is a "WORLD" economy ... what did you expect? |
| Anonymous Coward
User ID: 273680
8/6/2007 9:04 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
and the president of Bear Sterns got the ax as well...
by this time next year houses will be 40% cheaper as only old fashioned 20% mortgages to people with good credit will be available.. all of the marginal buyers will be flushed out of the buying pool as no one will buy the crap that has been lent over the past 4 years any longer.. got gold?
[link to www.banknet360.com] |
| Anonymous Coward
User ID: 273680
8/6/2007 9:07 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
sorry meant to say 20% or more downpayment mortgages.. the zero down stuff that drew so many buyers into the market and inflated prices is history.. it is impossible to resale to anybody now.. no financial institution wants to be a bag holder on this crap.. |
| Anonymous Coward
User ID: 273680
8/6/2007 9:08 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
and this..
REAL ESTATE
Housing's ills imperil condo deals
Florida developer Cay Clubs expanded rapidly in the Keys and elsewhere. Now some of its buyers fear that they will sink with the housing market.
Posted on Sun, Aug. 05, 2007
Digg it del.icio.us reprint or license print email
BY DOUGLAS HANKS
dhanks@MiamiHerald.com
Horacio and Patsy Parra at home in Castle Rock, Colo., expect foreclosure in on their Orlando condominium after a lease-back agreement soured.
JACKDEMPSEY/AP
Horacio and Patsy Parra at home in Castle Rock, Colo., expect foreclosure in on their Orlando condominium after a lease-back agreement soured.
* Developer active in Florida has a cash crunch
Horacio and Patsy Parra cashed out two retirement accounts last year to buy an Orlando condominium they couldn't afford.
At the time, they weren't worried. The developer, Cay Clubs Resorts & Marinas, agreed to lease back the $307,000 unit for 15 percent of the sales price -- enough cash to cover the mortgage for nearly two years.
But the Parras now expect to lose their unit to foreclosure, they say, because Cay Clubs owes them about $40,000 in unpaid rent.
Fueled by investors' hunger for resort condominiums, Cay Clubs vaulted from a small start-up in late 2004 to a major developer whose 14 properties and marinas include eight in the Florida Keys. The firm, whose billboards dot the Overseas Highway, says it manages nearly 3,000 condominium units and more than 900 boat slips.
Now, the nationwide real-estate downturn has brought a cash squeeze that forced Cay Clubs to lay off dozens of workers, slow redevelopment plans, and ask roughly 140 buyers like the Parras to wait for their rent checks.
The 'money is just not available to make the necessary payments and continue to maintain Cay Clubs' long-term viability during this down market,'' Chief Executive Dave Clark in May wrote to condo buyers awaiting lease-back checks.
Clark says Cay Clubs' finances have improved since then. It has sent rental checks to about 20 buyers to cover one or two months' worth of mortgage bills. The company hopes to refinance its debt, and a pending merger with a publicly traded holding company would bring an additional $47 million this fall. ''Our problems are fixable 100 percent,'' he said.
But on Friday, Cay Clubs disclosed that this year's sales slowdown forced it to accept less lucrative terms for the planned merger with Key Hospitality Acquisition, regulatory filings say. Clark and his top deputy, David Schwarz, agreed to receive 46 percent fewer shares in the new company -- a loss of $197 million in value based on Friday's share price.
The troubles that the Clearwater company faces symbolize wider concerns about South Florida's battered condominium market. Real-estate analysts say too many developers depended on investors who stretched their bankbooks buying condominiums during the housing boom on the assumption that others would buy or rent them only a year or two later.
Faced instead with anemic demand for real estate, those investors are left scrambling to pay the bills, said Jack Winston, a condominium analyst with Goodkin Consulting in Miami. 'It's the same people: `Hey, let's invest in some real estate! We'll flip it. . . .' Then, all of a sudden, they find they have to reach into their pocket every month to cover the mortgage. And it's a shock.''
STRATEGY WITH A TWIST
Clark, the former head of a development company that built the Mariner's Club in Key Largo, launched Cay Clubs in 2004 with the goal of creating a chain of luxury vacation spots in soughtafter destinations.
Instead of shouldering the development costs alone, Cay Clubs adopted a familiar strategy in South Florida: selling off rooms in resorts as condo-hotel units to individual buyers, who could then share in the rental revenue. That financing mechanism helped others, such as Miami's Four Seasons hotel, Key Biscayne's Ritz-Carlton and the new St. Regis in Fort Lauderdale.
But Cay Clubs gave the strategy a twist: The developer would contract to rent units back from buyers for two years, refunding as much as 15 percent of the sales price upfront. In those two years, construction crews would convert the property -- typically an apartment complex or budget motel -- into a top-tier resort, according to sales materials.
Condominium converters often lease apartments back from buyers to free the new owners from serving as landlords. The programs aren't common among condo-hotel developers, but more projects are turning to the tactic as a way to woo buyers in a cold market, according to the National Association of Condo-Hotel Owners. The group lists 13 Florida condo-hotel projects offering lease-back programs, mostly in the Orlando area.
`FREE APPRECIATION'
Ricky Stokes, a top seller for Cay Clubs, touted the lease-back arrangement in a May 2006 online presentation as providing ''virtually two years of free appreciation'' because, for most buyers, it would cover ownership costs for 20 months. Stokes did not respond to interview requests.
Company executives said about 90 percent of Cay Clubs' buyers chose to sign a lease with Cay Clubs. They included the Parras, full-time landlords who have acquired 20 houses and apartments within a half-hour's drive of their Castle Rock, Colo., home.
Last summer, they accepted an invitation to a Stokes Web talk from a company called the National Association of Women Real Estate Investors.
''This developer has put together an unheard of package for investors,'' read the e-mail from NAWREI, which received finder's fees for Cay Clubs sales. ``Immediate equity. . . . Guaranteed rental income. . . . Anticipated appreciation.''
Even with their large real-estate holdings in Colorado, Patsy Parra says she and her husband do not have the extra income to handle another mortgage payment.
But they took out four loans to buy two Cay Clubs units: the one in Orlando and another in a planned Las Vegas hotel. They counted on 20 months of lease-back payments to cover the $4,500 in monthly costs for both. After that, the Parras needed appreciation gains to make the investment work.
''I'd have to refinance to get the next five or six months of payments,'' Parra said. ``They were supposed to be very valuable.''
Other buyers depended on the lease-back cash to pay their mortgages, too. ''I have clients that are filing bankruptcy because they can't afford their payments,'' said Gene Denton, president of Select Market Real Estate, a Colorado firm that sold Cay Club units through Internet presentations.
NAWREI wrote to Clark on June 7 that Cay Clubs owed members nearly $240,000 in back rent, leaving members ``facing personal financial hardship including bankruptcy.''
QUALIFYING FOR LOANS
Cay Clubs executives question how buyers unable to pay mortgages out of their pockets could have qualified for loans in the first place. A Cay Clubs spokesman noted that the Parras' mortgages bar putting their Orlando condo into a rental program.
Even so, the company makes no apologies for giving real-estate investors a place to spend their money.
''I think anyone who has been doing real estate in the last four years has been selling to investors, not end users,'' said Mike Matte, Cay Clubs' acting chief financial officer. ``I don't care what company you're talking about.''
Analysts largely agree, blaming the current nationwide housing slump on investors abandoning real estate this year. A July report from Fitch Ratings blamed a spike in rental vacancies across the country on ``investors who are biding their time before putting single-family homes back on the market.''
Clark, the chief executive officer, said Cay Clubs will be able to weather the downturn. Cay Clubs is negotiating with lenders to refinance its $87 million in loans and may sell off land to raise cash as it awaits the Key Hospitality merger scheduled for the fall. Meanwhile, spokesman Chris Brown said Cay Clubs is making ''Band-Aid'' payments to about 20 buyers, including about $4,000 to cover a month's mortgage payment for the Parras.
But Patsy Parra said Friday that she has no cash to pay the mortgage in July or August -- a scenario she said she never anticipated.
''When we first bought these condos, I thought everything was fine,'' she said.
``I never in my wildest dreams thought something like this would go wrong.'' |
| Omega
User ID: 27433
8/6/2007 9:08 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
stopped withdrawals from a fund after clients removed 20 percent of their money since the end of July amid concern about the U.S. subprime loan debacle.<<<<<<<
Hahahahahahahahahhahahahahahahahahh. See what happens????? You are shit outta fucking luck......
Nice find Trin........fuck that small caliber shit, move up.......... |
| Anonymous Coward
User ID: 273680
8/6/2007 9:10 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
and more.. I don't mean to spam the thread but this is going to get very bad.. very fast.. the MSM is starting to get a clue..
[link to www.bloomberg.com] |
| ^TrInItY^
Forum Administrator
8/6/2007 9:11 PM
| | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Nice find Trin........fuck that small caliber shit, move up.......... Quoting: Omega 27433
Few will listen,
Of the few who listen, fewer still will understand,
Understanding does not mean believe,
Of the handful who believe, most may not know what to do,
Those who even know, how many will actually do ?
And the rare ones who have done it.......
Need not listen to you anymore.
|
| Anonymous Coward
User ID: 273680
8/6/2007 9:12 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
What We're Hearing
By Paul Muolo
I'll put it bluntly: if you operate a non-depository mortgage firm (lender or servicer) and don't have a deep-pocketed parent or hedge fund as a sugar daddy you're likely to be out of business by year-end, probably sooner. In the 20-plus years that I've been covering residential finance I haven't seen a financial meltdown this swift since the S&L crisis of the mid-to-late 1980s. One subprime executive who closed his shop a few months ago told me, "This is a liquidity crunch the likes I have never seen." Meanwhile, the mudslide is rolling downhill from Wall Street to mortgage bankers, to loan brokers, and then the consumer. Nomura Securities is winding down its mortgage conduit and three major Wall Street firms are preparing to slash their mortgage desks and or conduits…
And consider this: On Friday, Wells Fargo had hiked its jumbo loan rate to 8%. (This is the same Wells Fargo that up until a few months ago was overstating its subprime correspondent purchases so it could garner bragging rights to being No. 1 in subprime.) Meanwhile, Countrywide Financial Corp., considered a bedrock of the industry, is tightening up requirements on warehouse credit doled out to its correspondents. (For the full story see the Monday edition of National Mortgage News. Don't subscribe? Call: 800 221-1809) …
In a short interview this past week, Countrywide CEO Angelo Mozilo told NMN that there will be just five "major" lenders left by the end of 2009…
It's also safe to say that 80/20 combos, stated-income loans and subprime payment-option ARMs are toast. As one lender put it: "There's no bid out there"…
Loan brokers in search of nonconforming financing are running scared. Visit the Grapevine at NMN's BrokerUniverse website to read the panic and anxiety. (If you want to escape the bad news check out Georgiana Lee's “Quality Time” column. It's the only “good news” that we have for you.) As one broker posted: "Looking for more lenders. We are a small brokerage in Vermont looking for lenders. From conforming, alt-A to subprime. If you are out there please contact me." BrokerUniverse's Grapevine can be found at [link to www.brokeruniverse.com]
On Thursday afternoon NMNOnline (MortgageWire) was the second news organization to report that American Home Mortgage would close. (Newsday posted the story on its website first.) We would've beat Newsday except that the internal e-mail sent by CEO Michael Strauss to employees began with "Dear Colleges." We saw the typo and just assumed it was phony. A source inside the company later explained to us that it was indeed a typo by Mr. Strauss…
How full blown is the subprime crisis now? Not only is the story on the network nightly news (a big deal) but Comedy Central's “The Daily Show” did an amusing piece on the subprime industry and how it caters to minorities. See last Wednesday's show on YouTube…
Another thing spooking the industry is the second-quarter loss posted by service provider/title insurance giant First American Corp. FA took a $342 million provision for losses in its title insurance division during the second quarter. The provision includes a boost to reserves, which reflects a change in the estimate for expected future losses from policy years 2004 through 2006. Some observers wonder why FA's loss is so large -- and the losses at some lenders (the ones still standing) have been so small…
More bad news: mortgage companies have cut their payrolls by nearly 46,000 employees since October, including 7,400 full-time positions in June, as the slowdown in mortgage originations, particularly subprime loans, is forcing a retrenchment…
Clayton Holdings, a mortgage analytics/consulting firm, earned just $500,000 on revenue of $43 million in the second quarter, noting that the industry's subprime securitization volumes fell by 42% during that time. However, it experienced strong growth in its “surveillance” business. Meanwhile, Clayton has been subpoenaed by the New York State attorney general as part of its investigation into subprime lending…
If you're a baby boomer working for Fannie Mae take note: On Aug. 10, Fannie employees 50 years or older who have been with the company for five years will have the option of staying with the GSE or taking a buyout package. Employees choosing the buyout will receive 26 weeks severance pay plus three weeks pay for every year of service…
Whole loan prices for payment-option ARMs -- not surprisingly -- have yet to rebound, according to BankUnited of Florida. In its recent earnings statement the depository said that during the second quarter it elected to hold POAs in portfolio rather than sell them into the secondary market. The lender said it deemed "these gain-on-sale margins" as insufficient. BU is a large originator of POAs…
Coming up: subprime lender Delta Financial Corp. will report its second-quarter financial results before the market opens on Wednesday…
California is on top again -- in home foreclosures, that is. According to RealtyTrac Inc., foreclosures in California jumped by 170% in the first-half to 104,572 units. Nationwide, lenders sent notices of default, scheduled auctions or repossessions on more than 574,000 properties during that time…
MORTGAGE PEOPLE: The PNC Financial Services Group named Diana Reid executive vice president and head of PNC Real Estate Finance. Ms. Reid will be responsible for units that specialize in portfolio and securitized lending, agency finance and other areas. NCB named Denise Urban assistant vice resident and assistant loan review manager for its risk management team.
DATA NOTICE: If you're trying to figure out where the mortgage market is headed and what the business will look like for the rest of the year you're in luck. NMN has just published the brand new Mortgage Industry Directory, which ranks the nation's top 400 lenders, 300 servicers, top 85 subprime and much, much more. The book also provides a special analysis on America's subprime crisis. To order, e-mail Rebecca.Keen@SourceMedia.com or Delores.Stokes@SourceMedia.com. Also now available: the brand-new Mortgage Broker Database, which ranks the nation's top 100 brokers and provides contact info for 2,000 active brokerage firms. For more info, e-mail Deartra.Todd@SourceMedia.com. According to the first-quarter edition of the Quarterly Data Report, 18.76% of all subprime mortgages are delinquent, based on unpaid principal balances. Ask Deartra about the QDR as well.
[link to data.nationalmortgagenews.com] |
| Anonymous Coward
User ID: 277817
8/6/2007 9:15 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Damn it who unpinned this shit!!
This is news we need!! |
| Anonymous Coward
User ID: 273680
8/6/2007 9:19 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
[link to www.sptimes.com]
Columns
Subprime problems ravage investors
By Helen Huntley
Published August 5, 2007
ADVERTISEMENT
Rising defaults in subprime mortgages have sent shudders through the financial market that reach all the way to a tree-lined street in northeast St. Petersburg.
Claudia Vinson Johnson's savings were decimated as risky mortgage-backed securities in her account were devalued and her investments were sold to meet margin calls. The broker who put her into the high-risk investments: Steven Shrago, her neighbor across the street.
"One day you wake up thinking you have a little bit of financial security and by mid afternoon, you have none," she said. To say the least, it's put a chill in a once neighborly relationship. Shrago, who didn't respond to attempts to contact him, keeps his blinds closed.
Johnson is one of dozens of clients of Brookstreet Securities Corp. who suffered huge losses in June on risky debt securities that were sold to them as safe investments. Brookstreet, which was based in Irvine, Calif., collapsed. The brokerage had 40 offices in Florida, including six in Pinellas County, one of which Shrago ran out of his home on Second Street N in St. Petersburg.
Only a few of those offices promoted the high-risk investments, but that was enough to bring down the company, said Coral Springs lawyer Scott Silver, who is representing Johnson and other Brookstreet investors.
The complex investments at issue are known as CMOs, which stands for collateralized mortgage obligations. Wall Street wizards create them from pools of mortgages that are sliced into different segments with varying degrees of risk. Brookstreet sold customers a particularly risky type known as inverse floaters that result in both interest and principal losses when market interest rates rise even slightly.
The investments show up on statements identified by the underlying mortgage security issued by government agencies such as Fannie Mae or by private companies with AAA ratings. It would take a sophisticated investor to recognize the risks.
Johnson, 63, said Shrago presented the investments as "government bonds at a discount. He said 'it's like putting money in a CD. It's government backed.' If he had been honest with me, I'd never have been in this position."
Silver said Brookstone marketed the CMOs to retirees looking for income and safety. When they signed on as clients, they were put in margin accounts through which they borrowed money to buy even more CMOs, pumping up the risk. Silver said he has 90-year-old clients with margin debts in the hundreds of thousands of dollars.
Johnson said she invested about $450,000 with Shrago and, at first, the CMOs appeared to do well. According to her statements, her account was worth $598,753 at the end of March. That was her equity, the difference between the about $1.3-million value of her securities and the $733,866 she owed in margin debt.
Johnson said she was worried about carrying such a big debt and asked Shrago repeatedly to get her off margin and sell the CMOs. "He'd say 'I'm working on it' and never did anything."
Between her May and June statements, the value of Johnson's account plummeted to $55,484 from $426,183. National Financial Services, the clearing broker that holds the accounts of Brookstreet customers, not only repriced them, but also sold off many of her securities at those lower prices to pay down her margin debt.
Since then, National Financial has sent Johnson notices asking her to add more money to her account. She said she doesn't know what her account is worth or even whether she has any equity left.
"There's no way to know until she gets her July statement," Silver said. "You can't go on Yahoo or Google and get a quote."
He said Johnson is better off than some Brookstreet customers because at least some of her money was in lower-risk investments. Some of his other clients have been wiped out and still owe National Financial thousands of dollars, he said.
How could they lose so much money so quickly?
Silver and Johnson blame National Financial, a unit of Fidelity Investments, for initially mispricing the CMOs, which allowed Brookstreet to sell them for more than they were really worth and increased the borrowing power of the accounts. The higher debts benefitted National Financial, which collects interest on the margin loans.
When fears of a mortgage meltdown roiled the financial markets, "it forced the clearing firms and other brokerage firms to recognize that they had improperly inflated the values of the bonds," Silver said. "June 25th was the moment of truth."
National Financial denies it did anything wrong.
"We're not responsible," said Adam Banker, a spokesman for Boston-based Fidelity. "National Financial has clear margin requirements in place and uses reputable firms to price securities held in brokerage accounts."
Silver and partner Darren Blum said they expect to file more than 50 arbitration claims against National Financial on behalf of Brookstreet clients.
Brookstreet and its customers and brokers weren't the only ones who made a bad bet on mortgage-related securities. Several hedge funds have collapsed as a result.
But for individual investors who thought they were following good advice from their brokers, the result is particularly painful.
"I'm not in good health so I can't go out and make that money again," said Johnson, who in the past has run a bookstore, a publishing company and a day spa. "I've always had low blood pressure before this and now it's sky high. I don't want to die over money."
Shrago, 47, and many other Brookstreet brokers have moved on and are now affiliated with Los Angeles-based Wedbush Morgan Securities.
Helen Huntley can be reached at hhuntley@sptimes.com or (727) 893-8230. Go to her MoneyTalk blog (blogs.tampabay.com/money) to read more about investments and personal finance.
[Last modified August 3, 2007, 22:41:19] |
| Anonymous Coward
User ID: 278538
8/6/2007 9:33 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Too many financial assets getting no bids. Nobody really knows what they are worth. So there value is technically zero. Goose egg. That's trouble with a capital T. |
| Anonymous Coward
User ID: 129568
8/6/2007 9:38 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
From what little I understand about this I have an observation. This is happening a lot quicker that I thought it would. |
| Anonymous Coward
User ID: 278538
8/6/2007 9:42 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
From what little I understand about this I have an observation. This is happening a lot quicker that I thought it would. Quoting: Anonymous Coward 129568
The black boxes crunch the numbers. When one of the key numbers is zero, they can't crunch. Black box trading accounted for significant volume. Only the old timers can game this market. I imagine some of them will become extremely wealthy if they don't peg out from heart failure. |
| Anonymous Coward
User ID: 278543
8/6/2007 9:59 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
And the fucking stock market goes up 287 points.What a slap in the face to the small investor.Why do those little investor assholes stay in the game with the 401k crap when they know that they can lose it all.Must be greedy little scumbags |
| ac
User ID: 78573
8/6/2007 9:59 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
The wall street goons have broadcast it loud and clear, via the Cramer rant, they want the Feds. to lower rates.
This isn't to save the housing market, but to give the markets a psychological jolt.
I don't see how the Feds. can lower rates without trashing the dollar. Of course this could be the real plan.
I suspect they will change the wording on their statement from neutral to accomodative. The spinners will get busy and there should be a rally tomorrow. If the Feds. say nothing new I suspect there will be a major sell off.
Either way, it doesn't look good for the economy as job layoffs are increasing and job creation is decreasing.
70% of our economy is connected to consumer spending which is slowing.
The ppt is losing control. Use any rallies to get out of dodge. |
| Anonymous Coward
User ID: 278538
8/6/2007 10:05 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
The Fed is in a quandary. There is, as you say, tremendous pressure to do something, but remember the Fed(in appearance) acts. It does not react. So how does Ben B act without appearing to react? We'll see. |
| October
User ID: 265279
8/6/2007 10:14 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
From what little I understand about this I have an observation. This is happening a lot quicker that I thought it would. Quoting: Anonymous Coward 129568
Indeed, AC. And this is just the beginning of the snowball's roll down that hill, imo...
 |
| Anonymous Coward
User ID: 276951
8/6/2007 10:16 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
The Fed is in a quandary. There is, as you say, tremendous pressure to do something, but remember the Fed(in appearance) acts. It does not react. So how does Ben B act without appearing to react? We'll see. Quoting: Anonymous Coward 278538
What we have here is a CONUNDRUM. |
| Anonymous Coward
User ID: 278538
8/6/2007 10:24 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Yes a conundrum...the US economy hangs in the balance and it will be determined by what color tie Ben chooses. |
| bump 4 jesus
User ID: 278551
8/6/2007 10:40 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
exactly as many of us have been pointing toward, a system that is based on a lie will eventually be exposed.
 4 Frankfurters
Peace to all |
| Anonymous Coward
User ID: 278538
8/6/2007 10:50 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
The more important question is what does the BOJ do on the 23rd? They are still deflating so most likely they stay the course. Which means Ben B can ease a tad and not kill the carry trade. |
| Anonymous Coward
User ID: 278538
8/6/2007 11:04 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
NEW YORK (MarketWatch) -- The euro hit a new high against the dollar on Tuesday, topping $1.37 amid concerns that problems in the subprime mortgage loan sector would spread to other parts of the U.S. economy. |
| Anonymous Coward
User ID: 208180
8/6/2007 11:09 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Yes a conundrum...the US economy hangs in the balance and it will be determined by what color tie Ben chooses. Quoting: Anonymous Coward 278538
Bernacke in effect gets to decide who is going to be left holding the bag. He can pass it to the foriegn lenders (read China) by lowering rates or leave it with "Joe Default" by keeping rates up.
But:
The results will be the same either way. Finacial disaster. |
| Anonymous Coward
User ID: 278613
8/6/2007 11:14 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Frankfurt Trust freezes fund on investor fears
By Ivar Simensen in Frankfurt
Published: August 7 2007 02:54 | Last updated: August 7 2007 02:54
A German asset manager on Monday said it had temporarily shut a fund that invested in structured credit instruments after investors controlling a quarter of the assets asked for their money back amid market volatility.
The development is evidence that worries about the subprime mortgage crisis in the US are affecting sentiment towards funds with no direct exposure to the sector. It follows the multi-billion euro rescue last week of IKB, the Düsseldorf-based lender that had a high level of direct exposure to subprime.
Frankfurt Trust, which has €14bn ($19.2bn) of assets under management, said its fund FT-ABS Plus, which invested in asset-backed securities and collateralised debt obligations, would be frozen until further notice.
Weakness in the US subprime mortgage market prompted investors to demand back €40m from the €160m fund in the past two weeks, said the fund.
“In this extraordinary market situation there are increased desires to sell by investors in FT ABS-Plus,” said Frankfurt Trust, which manages about 50 funds.
The fund said prices for ABS and CDO tranches that had nothing to do with the US subprime mortgage market had been badly affected.
Meanwhile, the head of Dresdner Bank, which has more than €1bn of exposure to the US subprime market, played down the threat from the crisis. “The bursting of the property bubble in the US will not result in a destabilisation of the system,” Herbert Walter, chief executive of Dresdner Bank, told reporters.
Allianz, the Munich-based insurance company that owns Dresdner Bank, said last week it had a total exposure to the market of €1.7bn, most of which was at Dresdner Bank. Other German banks, including Commerzbank, have spelled out their exposure to the market to try to reassure investors that they are not vulnerable to further declines in the US property loan market.
IKB’s ability to raise capital in the market was dealt a further blow on Monday as Moody’s Investors Service downgraded the bank’s financial strength rating from C to D.
Moody’s said IKB’s ratings remained on watch for further downgrades. It would review “the extent the continued overall market instability may impact the bank’s profit and loss situation, despite the transfer of losses that are related to its portfolio investments”, before making a decision. The agency would also “re-examine the bank’s risk management capabilities and culture that have so far allowed it to be exposed to considerable market and liquidity risk”.
IKB on July 20 reassured investors that downgrades by Moody’s of several CDOs exposed to US subprime mortgages would have a limited impact on the bank’s results. Ten days later, it had to be rescued by its German banking peers.
[link to www.ft.com] |
| Anonymous Coward
User ID: 278538
8/6/2007 11:24 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Aug. 6 (Bloomberg) -- Singapore's stocks declined by the most in more than five months on concern losses in the U.S. mortgage market will slow expansion in the nation's largest export destination.
Oversea-Chinese Banking Corp. posted its biggest fall in almost six years, leading the decline among banks on concern they may incur losses on their credit investments because of defaults in U.S. subprime housing loans. Creative Technology Ltd. fell to an 11 year-low after reports showed U.S. employers added fewer jobs in July and growth in the service industries slowed. |
| Anonymous Coward
User ID: 278538
8/6/2007 11:32 PM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Yes a conundrum...the US economy hangs in the balance and it will be determined by what color tie Ben chooses.
Bernacke in effect gets to decide who is going to be left holding the bag. He can pass it to the foriegn lenders (read China) by lowering rates or leave it with "Joe Default" by keeping rates up.
But:
The results will be the same either way. Finacial disaster. Quoting: Anonymous Coward 208180
It depends on who is rescuing who. The last man standing will have all the marbles and effect will be able to say, "Anybody want to plAY?" The answer has always been yes. I don't see that changing. Poker anyone? |
| Anonymous Coward
User ID: 268412
8/7/2007 12:49 AM | | Re: Frankfurt Trust Halts Redemptions at Fund Amid Subprime Concern | Quote |
Financial markets are global. A rate cut would shock European investors as they haven't forgotten about INFLATION.
They all expect to see inflation in the US even without a rate cut, because it just doesn't add up. Only Americans would be stupid enough to cheer on a rate cut. |
| |
|
