Saturday sniplets

Been a wild week. We have seen the housing bill continue debate in congress to the point that they are meeting today(yes a Saturday!) to get this bill done. The distinguished men and women of Congress know that they HAVE to do something going into an election year. People are hurting in the pocketbook and worried about the future.

I just want to remind people that all this points back to the obvious, this housing bubble. All of the below would not be a problem if the banks had any type of risk management that had teeth in the face of all the greed.

First we have a shocking announcement that Chrysler is going to stop offering leases. (Hat tip Calculated Risk)

Chrysler LLC has started telling dealers it will no longer offer auto leases through its lending arm Chrysler Financial, people familiar with the matter said Friday.
...
Chrysler's announcement also comes as Chrysler Financial has been trying to persuade more than 20 banks to renew a $30 billion credit facility -- backed by car loans, leases and loans to dealers -- that was issued by the auto-finance company last year when it was carved out of the former DaimlerChrysler AG. The debt represents a sizable chunk of Chrysler Financial's $70 billion portfolio in working capital. The higher financing costs could further complicate the attempt by private-equity firm Cerberus Capital Management LP to turn around the auto maker.

Chrysler Financial is likely to see its borrowing costs rise in early August when it rolls over about $30 billion of short-term debt backed by the loans and leases it makes. That, in turn, will make it harder for the company to offer low-interest loans to buyers and for dealers to hold inventory.

This is freaking scary. These guys are at the point they are practically giving cars away to move inventory. They have dealer lots all over the country full of cars no one wants. Honestly I expect the Big 3 to consolidate as automobile sales fall through the floor. I know many people who bought cars, trucks, boats and motorcycles with HELOC's propping up the industry. Now we have record repo's that are the effect off this credit orgy.


In local news we have a mixed bag of good and bad news on local banks.

Here is a somewhat confusing article about slowing foreclosures in Baltimore. It appears the O'malley drag out the foreclosure so that we pro-long bubble law, has made it harder for Realty track to track foreclosures in the state.

In the Baltimore region, however, foreclosures were down nearly 20 percent from the first quarter. They were up nearly 106 percent from a year ago. Data shows 3,389 area homeowners facing foreclosure. RealtyTrac said its data for Baltimore may not be as high as reported due to collection changes or improvements.

Retail has become something of a canary of consumer mood. The malls are slow and stores are starting to close. Locally, Boscov's who entered the market when it bought up several Hecht's when Federated and May department stores merged, is having problems paying bills and suppliers are cutting them off. The first quarter of 2009 should be interesting.


Finally one of the negative effects is the slowdown of urban renewal, something really needed in this city.

Eighteen months ago, Reservoir Hill was a prime example of the progress that cities across the country have made reclaiming blighted neighborhoods as a nationwide housing boom helped lure homeowners and chase away crime. Now the mortgage crisis threatens to reverse those gains as foreclosures multiply, house prices plunge and vacancies rise.

Have fun at those open houses this weekend.