Dear Jim,

CMBS and pay-option ARMs are decimating financial companies’ balance sheets. Government players are fully aware but justify the white-wash as Manipulation of Perspective Economics.

The property headlined in this article reportedly sold for $5.4 billion in 2006 and is now valued at $1.8 billion. I only pray it’s a misprint.

Respectfully yours,
CIGA Richard B

CMBS Defaults Climb, May Worsen on Stuyvesant Town, Reis Says
By Hui-yong Yu

Nov. 2 (Bloomberg) — The rate of defaults and late payments on real estate loans sold as commercial mortgage-backed securities surged more than fivefold in the third quarter and may worsen with the potential default of loans on Manhattan’s biggest apartment complex, Reis Inc. said.

There are $3 billion of loans included in five CMBS issues backing the 2006 buyout of Stuyvesant Town-Peter Cooper Village, the New York-based real estate research firm said in a report today. CMBS bonds tied to the complex were downgraded by Fitch Ratings on Oct. 30 on concern that the sponsors of the Stuyvesant Town loan — Tishman Speyer Properties LP and BlackRock Realty — are likely to default.

“The property is nearing depletion of interest rate reserves and will be unable to make debt payments without capital injection,” Reis said.

About $26.64 billion of CMBS loans outstanding were 60 days or more past due last quarter, according to Reis. The default and delinquency rate rose to 4.52 percent from 0.8 percent a year earlier and 3 percent in the second quarter. Defaults may top 6 percent by year-end, the firm said.

The Tishman Speyer group acquired Stuyvesant Town in 2006 for $5.4 billion. The property is now worth about $1.8 billion, Fitch said.

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Jim,

Half of all US children don’t eat without assistance.

Too big to fail US Wall Street investment banks don’t get million dollar bonuses without assistance.

Respectfully,
CIGA Bernie

Half of US kids will get food stamps, study says
Posted on November 2, 2009 at 1:00 PM

CHICAGO (AP) — Nearly half of all U.S. children and 90 percent of black youngsters will be on food stamps at some point during childhood, and fallout from the current recession could push those numbers even higher, researchers say.

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Jim,

"It never was my thinking that made the big money for me. It always was my sitting."
–Jesse Livermore, Reminiscences of a Stock Operator

Livermore suggests that making money, big money, you have to be right and sit tight. This is the kiss of death for most traders and investors. Often being right is doing something that the masses deem foolish, stupid, unpatriotic, you name it. To be right, investors face isolation, ridicule, and labels. This pressure is simply too much for most individuals. The drive for social acceptance from group is very strong in humans. It’s easier for the psyche to get slaughtered as a group than stand alone and be right. Even those that have the discipline to stand alone and be right, it is often very hard to sit tight long enough to make the really big money.

CIGA Eric

Seven Trading Lessons from a Legend
Quint Tatro  Oct 29, 2009 2:15 pm

The late Jesse Livermore is considered one of the best traders of all time. His exploits have been chronicled in several books, with the most widely read being Reminiscences of a Stock Operator by Edwin Lefevre, originally published in 1923.

Livermore was wealthy and broke several times over during his tumultuous life, which ended in his suicide. His ability to make and lose millions garnered him many lessons which the trading community have enshrined over the decades since his death. Yet these lessons and rules remain as pertinent today as they were in the early twentieth century.

We’ll take a look at several of his trading rules to remind us why we must have a plan in place before trading a dollar of our hard-earned money.

(I must give credit to the Lefevre book mentioned above, as well as Jesse Livermore: World’s Greatest Stock Trader by Richard Smitten, for the following ideas.)

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