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ceo/cfo
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作者：ceo/cfo 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
Wall Street's titans had been serving up gold-plated earnings for so
long that standing back and whistling at their income statements became a
quarterly ritual. But lately, the subprime mortgage fiasco has taken
off some of the sheen.
Bear Stearns is a leading underwriter of mortgage bonds, and many
observers surmised that if toxic subprime sludge were to sicken Wall Street,
then the company would be among the first to exhibit symptoms. And so
it was. Bear recorded a 33% skid in second-quarter earnings, as revenue
in its crucial capital-markets arm dropped 9.7% and fixed-income
revenue within the unit dropped 21%. Bear noted that fixed-income results
were harmed by mortgages, notably the "challenging market conditions" in
the subprime and so-called near-prime spheres. The subprime mortgage
market has been going down in flames since early this year, as the
weakening housing market finally yanked the carpet out from under buyers with
shaky credit, leading to a tide of delinquencies and foreclosures. A
Bear Stearns hedge fund is trying to unload large amounts of its mortgage
securities, and though its holdings represent but a sliver of the
overall market, it's still a potentially troubling sign for the
mortgage-backed securities market. Bids on the bonds were expected by 10 a.m.
today, and people familiar with the situation told The Wall Street Journal
that if the sale isn't a success the fund ultimately could be shut
down. Bear's shares sank by 1.3% this morning.
But if misery adores company, Bear is by no means alone in its mortgage
woes. Goldman Sachs Group, which has made a habit of blasting analysts'
forecasts to smithereens, came up with only a modest beat this morning,
as earnings for its second quarter increased 0.9%. Goldman also was
tripped up by weakness in its fixed-income business amid the mortgage
turmoil. Much as with Bear, investors worried that Goldman would take a
serious hit from mortgage matters. Like its brethren, Goldman gobbles up
mortgages of all types and bundles them into securities. The bank was
also a big lender to some subprime-mortgage shops that have since given
up the ghost. Goldman Finance Chief David Viniar noted in a conference
call that the investment-banking giant faced difficult comparisons with
a year-ago, but was also quite frank about the outlook on subprimes. "I
continue to believe we have not seen the bottom in the subprime
market," he said. "There will be more pain felt by people." Goldman's shares
were also hit hard, falling by about 2.7% by midday.
Another sign of weakness in mortgages came from Freddie Mac, which
swung to a loss of $211 million during its first quarter as it took a hit
in its derivatives portfolio and got squeezed by widening credit
spreads. Freddie Mac, a massive government-sponsored enterprise, has been
regaining its financial footing after an accounting scandal that forced it
to restate some $5 billion in earnings, and these results were its
first regular statement in five years. But the return wasn't exactly
pretty. Freddie's credit costs more than tripled from a year ago to $193
million, as it beefed up its credit-loss provisions amid the declining
quality of mortgages from 2006. Freddie said that those loans "exhibited
higher transition rates from delinquency to foreclosure and higher loan
loss severities associated with slower home price appreciation and
higher unpaid principal balances." As if to underline it all, the Mortgage
Bankers Association said that late payments and foreclosures on
adjustable-rate subprime mortgages shot to a record during the first quarter.
With mortgage rates likely to climb thanks to the recent jump in bond
yields, more pain could be on the way for such borrowers -- and others.
Indeed, Freddie reported that the average rate on a 30-year fixed
mortgage hit 6.74% a week ago, its highest level since July 2006.
作者：ceo/cfo 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
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