I have regularly been informed that the Bay Area is immune to a mortgage meltdown and the housing prices are still humming along. The statistics and information appear to demonstrate a different story.
"Of the Bay Area's 236 ZIP codes, 25 are foreclosure hot spots - places where more than eight of every 1,000 homes were repossessed by lenders this year."
MORTGAGE MELTDOWN
NEIGHBORHOODS CRUMBLE IN WAVE OF FORECLOSURES
LOCAL TROUBLE ZONES: Epidemic repossessions hit several ZIP codes
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/10/14/MNVPSEMVQ.DTL
Tuesday, October 16, 2007
The Downside of taking 401K Loans
In the past, I have urged people not to take loans from their 401K plan. Raiding your 401K should be your avenue of last resort. Unfortunately an increasing number of people in the U.S. are taking loans from their corporate 401K plans. The following article outlines some of the significant negatives associated with this activity.
Cash-strapped Americans raiding their 401(k)s
http://www.chicagotribune.com/business/yourmoney/chi-ym-borrowing-1014oct14,0,5181066.story
Cash-strapped Americans raiding their 401(k)s
http://www.chicagotribune.com/business/yourmoney/chi-ym-borrowing-1014oct14,0,5181066.story
Nortel - The News Continues
Nortel continues to take it on the chin with negative news flow, even though some will view the current news of the $35M settlement with the SEC as trying to put the past behind them. The Bloomberg article is interesting in that it provides some solid information of the history of the financial dishonesty at Nortel.
Nortel Pays $35 Million to End SEC Accounting Probe
http://www.bloomberg.com/apps/news?pid=20601087&sid=aq4vfUmPByrU&refer=worldwide
Nortel Pays $35 Million to End SEC Accounting Probe
http://www.bloomberg.com/apps/news?pid=20601087&sid=aq4vfUmPByrU&refer=worldwide
Monday, October 15, 2007
In today's counter-intuitive news
Stock Options for CEOs Harm Company Results
http://biz.yahoo.com/rb/071012/column_lifting_ceo.html?.v=1&.pf=career-work
This may get the vote for today's very odd business article. It claims that "option heavy" CEOs under-perform CEOs with less options. 'Companies with "options-heavy" CEOs had an average annual shareholder return of 26 percent versus 36.5 percent for companies run by "options light" CEOs during the study period.'
One interesting point is that the study period was from 1993 to 2000, a time when the market was booming, and included 950 companies. The study did not focus on the tech sector, nor did it take a look at the impact of broad-based stock employee stock option plans implemented by many tech firms. It does however bring the immediate question to mind if broad-based employee stock option plans help or hinder the bottom line for shareholders.
http://biz.yahoo.com/rb/071012/column_lifting_ceo.html?.v=1&.pf=career-work
This may get the vote for today's very odd business article. It claims that "option heavy" CEOs under-perform CEOs with less options. 'Companies with "options-heavy" CEOs had an average annual shareholder return of 26 percent versus 36.5 percent for companies run by "options light" CEOs during the study period.'
One interesting point is that the study period was from 1993 to 2000, a time when the market was booming, and included 950 companies. The study did not focus on the tech sector, nor did it take a look at the impact of broad-based stock employee stock option plans implemented by many tech firms. It does however bring the immediate question to mind if broad-based employee stock option plans help or hinder the bottom line for shareholders.
Credit Market with the Jitters
The corporate credit market still appears to have a bad case of the shakes, to the point that investment banks coordinated by the Fed are preparing for a bail-out.
The sales of commercial corporate paper have suffered over the past few weeks due to the fear wrought by the subprime sector. Despite the contagion, commercial paper sales have increased during the past few weeks giving some the perspective that the possible crisis is in the rear view mirror.
However the rather large Structured Investment Vehicle (SIV) market, that is generally associated with lower quality corporate debt, appears to have come to a complete halt. These derivatives are backed by commercial paper, and are similar to the CDOs that have provided excessive angst in the subprime market. Generally the SIVs used short-term commercial paper with low interest rates to purchase longer-term mortgage-backed securities and other instruments with higher rates of return. A market arbitrage that bears resemblance to international interest-rate carry trades, but tends to blow up spectacularly when one of the underlying tenets alters
The banks would create a Super-SIV fund (Master Liquidity Enhancement Conduit or M-LEC) that would provide emergency financing to bail out SIV entities in order to prevent sell-offs. The Fed and Treasury hope that this will reassure investors in these vehicles and kick some life back into the commercial paper market.
The key question remains regarding how much impact this event should bear over the broader stock market. Deteriorating credit conditions are normally very bad news for investors. Should the implementation of this SIV fund from the banks be taken as fair weather news to calm the seas or with a dose of fear?
Banks May Pool Billions to Avert Securities Sell-Off
http://www.nytimes.com/2007/10/14/business/14bank.html?_r=1&oref=slogin
Banks set plan to revive credit market
http://news.yahoo.com/s/ap/20071015/ap_on_bi_ge/banks_credit
The sales of commercial corporate paper have suffered over the past few weeks due to the fear wrought by the subprime sector. Despite the contagion, commercial paper sales have increased during the past few weeks giving some the perspective that the possible crisis is in the rear view mirror.
However the rather large Structured Investment Vehicle (SIV) market, that is generally associated with lower quality corporate debt, appears to have come to a complete halt. These derivatives are backed by commercial paper, and are similar to the CDOs that have provided excessive angst in the subprime market. Generally the SIVs used short-term commercial paper with low interest rates to purchase longer-term mortgage-backed securities and other instruments with higher rates of return. A market arbitrage that bears resemblance to international interest-rate carry trades, but tends to blow up spectacularly when one of the underlying tenets alters
The banks would create a Super-SIV fund (Master Liquidity Enhancement Conduit or M-LEC) that would provide emergency financing to bail out SIV entities in order to prevent sell-offs. The Fed and Treasury hope that this will reassure investors in these vehicles and kick some life back into the commercial paper market.
The key question remains regarding how much impact this event should bear over the broader stock market. Deteriorating credit conditions are normally very bad news for investors. Should the implementation of this SIV fund from the banks be taken as fair weather news to calm the seas or with a dose of fear?
Banks May Pool Billions to Avert Securities Sell-Off
http://www.nytimes.com/2007/10/14/business/14bank.html?_r=1&oref=slogin
Banks set plan to revive credit market
http://news.yahoo.com/s/ap/20071015/ap_on_bi_ge/banks_credit
Saturday, October 13, 2007
HingeFire Stock Screener has Arrived.
The first release of the HingeFire Stock Screener is available at http://www.hingefire.com/ Please register and download the tool.... and try it out! Note that this initial release is primarily focused on demonstrating the concept and getting feedback from users of what they want to see added to the tool. So in some sense current release is a "Proof of Concept" but still a very powerful tool for your investing.
What are the key advantages of the HingeFire screener? One is the ability to merge fundamental and technical screening in a single tool. Some investors tend to focus on fundamentals and others on technical indicators. We believe that all investors should focus on both in order to put the market edge in your corner. Fundamentals provide a good sense of the long term outlook for a stock while technical indicators help greatly with short-term timing for entries and exits.
Our team plans to add a lot of educational material to our site over time showing how you can win by utilizing a merged fundamental and technical approach to your stock selection. Over the upcoming months both the website and tool will be evolved significantly so please keep checking in.
Please see the User Guide for the tool at:
http://www.hingefire.com/download/HF-userguide.pdf
After you have used the HingeFire Stock Screener for a while, please take our user survey and provide our team with guidance regarding what you would like to see added to the tool.
http://www.hingefire.com/user-survey.html
All users who take the survey are added to a drawing for an iPod!
One of the benefits of being a HingeFire user is that you get to drive future development directions for the product. We look forward to your feedback! Either use the survey or contact us directly at support@hingefire.com with your suggestions.
Thank you for your support.
What are the key advantages of the HingeFire screener? One is the ability to merge fundamental and technical screening in a single tool. Some investors tend to focus on fundamentals and others on technical indicators. We believe that all investors should focus on both in order to put the market edge in your corner. Fundamentals provide a good sense of the long term outlook for a stock while technical indicators help greatly with short-term timing for entries and exits.
Our team plans to add a lot of educational material to our site over time showing how you can win by utilizing a merged fundamental and technical approach to your stock selection. Over the upcoming months both the website and tool will be evolved significantly so please keep checking in.
Please see the User Guide for the tool at:
http://www.hingefire.com/download/HF-userguide.pdf
After you have used the HingeFire Stock Screener for a while, please take our user survey and provide our team with guidance regarding what you would like to see added to the tool.
http://www.hingefire.com/user-survey.html
All users who take the survey are added to a drawing for an iPod!
One of the benefits of being a HingeFire user is that you get to drive future development directions for the product. We look forward to your feedback! Either use the survey or contact us directly at support@hingefire.com with your suggestions.
Thank you for your support.
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