Wamoooooo, The FDIC’s largest

I used to have Great Western as my bank, which then turned into Washington Mutual, which apparently will now be JPMorgan Chase. WaMu was seized by regulators last night – not waiting for the typical Friday afternoon – and all of its deposits and most of its assets were purchased by JPM, although Chase didn’t take any WaMu debt. So any bond holders, hoping to reap those huge yields a few months ago, may be out of luck unless there are large amounts of cash available.

 

With this FDIC takeover (the largest one yet) and $1.9 billion sale to JPMorgan Chase, Chase became the biggest U.S. bank by deposits. You may recall that back in March, WaMu rejected a $4/share offer by Chase. Depositors may see little change today (I drove by last night to see if there was a padlock on the door, but nothing so dramatic had happened). This also leaves many small institutions (who probably sold them a good portion of the $19 billion in bad loans) scratching their heads, wondering why they’re still around while companies like IndyMac, Lehman, Merrill, and Bear are all gone.

Creating a First Impression

Make an Impact

Before your next meeting with a prospective client or potential referral source, take a long look in the mirror and ask yourself, “If I was a prospect, would I want to do business with this person?”

The image you create, and the way people perceive you, has a tremendous impact on your long-term success. What you say, how you dress, your level of preparation, and your enthusiasm all influence your potential customer’s perception. The old adage is true, “You never get a second chance to make a first impression.”

Evaluate your image and ask yourself a few simple questions:

When your client calls, how are they greeted? Is your receptionist both friendly and professional? Is your voicemail system prompt? Does your personal message portray your professionalism and exceed the caller’s expectations? How soon do you return calls?

When the client first enters your office, what impression are they given? How long must they wait to see you? Do you roll out the red carpet and offer a selection of beverages? Are you prepared for the meeting?

Do you follow up with a personal hand-written note card after every meeting? Begin your follow-up campaign by sending a thank-you note to the client showing your appreciation for the opportunity to meet with them.

Is your marketing collateral unique? Make sure you stand out from the competition with marketing materials that “WOW” the prospect, especially if their first impression of you will not come from a face-to-face meeting. People are naturally attracted to confidence. Knowing your product and being a student of your craft will result in a high level of self-esteem. This, in turn, projects a highly compelling and magnetic image.

Now, get back in front of that mirror and ask yourself the question, “Would I want to work with this person?” If the answer is still no, start diving into the areas of your image that need improvement.

FINAL $700B bail out???

Government Responds to Market Instability

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, and Securities and Exchange Commission Chairman Christopher Cox met with congressional leaders in Washington on Thursday night to create a plan to try and calm the roiling financial markets. Their announcement on Friday morning is changing the financial markets around the world. Here’s what they did:

• SEC temporarily bans investors from short-selling 799 financial companies.
• US Government guarantees money market funds.
• A plan to create legislation to remove devalued mortgage assets from companies’ balance sheets is currently in the works.

Additional Steps:

• Fannie Mae and Freddie Mac will increase their purchases of mortgage-backed securities.
• Secretary Henry Paulson, and Treasury will expand the MBS purchase program announced earlier this month to help facilitate mortgage availability and affordability.

SEC temporarily bans investors from short-selling 799 financial companies.
Short selling is a common trading method in which investors bet that the stocks will go down by “borrowing” shares at a higher price and selling them in the open market at a lower price. The SEC said short sellers “add liquidity to the markets during normal conditions, but recent unbridled short selling has contributed to the recent tailspin in the stock market.” The SEC has banned this practice for 10 days, which can be extended for 30-day increments.

On Wednesday, the SEC also banned “naked” short-selling, in which investors short the stock without actually borrowing it first.

On Thursday, Britain’s Financial Services Authority also temporarily banned short-selling for financial companies.

Hopefully, this will add another level of calm to the current financial crisis.

US Government guarantees money market funds.
The US Treasury said its decision to provide guarantees “should enhance market confidence and alleviate investors’ concerns about the ability for money market mutual funds to absorb a loss.” According to Treasury Secretary Henry Paulson, “Nearly $2 trillion in money market mutual fund assets will be covered by the guarantees.”

European Central Bank, Swiss National Bank and Bank of England also offered up more cash Friday – a combined $90 billion into money markets.

It should be noted that this does not include high-yield, enhanced type, or riskier money market funds.

A plan to remove devalued mortgage assets from companies’ balance sheets.
“Illiquid assets are clogging up our financial system, and undermining the strength of our otherwise sound financial institutions,” said Treasury Secretary Paulson. “As a result, Americans’ personal savings are threatened, and the ability of consumers and businesses to borrow and finance spending, investment, and job creation has been disrupted.”

To restore confidence in our markets and our financial institutions, the federal government will create a new vehicle to purchase this mortgage debt and provide a liquid marketplace.

These three steps will not fix everything, but it’s a major step in the right direction for the overall health of our financial systems

It’s AIG….the FEDS own another company

Who is AIG (American International Group), and why should you care about them? AIG is a worldwide conglomerate made up of hundreds of businesses all over the world, although many of AIG’s subsidiaries wrote insurance of various types. They are believed to be the world’s largest insurer in spite of not being a household name here in the US. Interestingly, the plan was to have business cycles in some businesses offset cycles in others, giving AIG a steady stream of revenue. Smart. Lately, as we all know, AIG is bogged down in the mortgage crisis, since a) they insured many intra-bank and loans and mortgage securities, along with insuring complex mortgage debt derivatives, and b) some of its insurance companies own large mortgage-backed securities holdings. The Fed believes that the complexity of AIG ’s business, and the fact that it does business with thousands of companies around the globe, make its survival critical. The US government, thereby the taxpayer, loaned them $85 billion for two years and now owns 79.9% of AIG! (Along with 100% of Fannie and 100% of Freddie.) Taxpayers are all hoping for a rally in AIG’s stock!

Told ya another bank was next

Lehman Brothers will declare bankruptcy. The US Government decided that they did not want to back up Lehman’s $60 billion of bad real estate investments, nor did Barclay’s, nor did a plan to have all the major Wall Street firms pitch in $60 billion to purchase Lehman’s bad real estate assets and create what’s knows as a “Bad Bank” work out. (“Bad Bank” was chosen because the names Countrywide, Washington Mutual and IndyMac had already been taken.) Many investment banks worked over the weekend to figure out their exposure to Lehman Brothers, especially to their real estate investment portfolio.

Bank of America said it would acquire Merrill Lynch in an all-stock transaction worth about $50 billion. Bank of America has the most deposits of any U.S. bank, and has both theirs and Countrywide’s servicing portfolio, while Merrill Lynch is the world’s largest and most widely recognized brokerage – it certainly will create a monolithic global financial services giant. I don’t know if that is a good thing right now…

What Bank is next, Rates down

Lehman Brothers and Wamu are trying to go out of business but their shareholders just wont let them.   Quoting cnnmoney, ”On Wednesday, Lehman Brothers CEO Dick Fuld offered up a radical plan to save his beleagured firm. Today the capital markets are giving him the thumbs down. The firm’s announcement that it will sell 55% of its money management franchise, which includes Neuberger Berman, and spin off almost $33 billion in distressed real estate securities has clearly been interpreted as “too little, too late.”The stock took another beating on Thursday, falling $3.03, or 42%, to $4.22. “ 

When is a Chinese Bank going to come in and just buy them both out, or wait maybe it will be the government and our tax dollars.  In the meantime I’m going to stick with FHA and support the higher fees they are implementing so I can do my part to prevent a tax increase.

With rates down over 1/2 percent we saw a mini  refi boom.  Sure didn’t last though as the last 2 days rates were creeping back up.  I recommend getting on our rate watch, when rates get to your desired rate, we lock and refi at NO COST.

I want to take a minute to thank our veterans on this special day of remembrance.  My heart goes out to the family and friends of the people that were lost on 09/11/01.

Freddie/Fannie get help

As most of you know Freddie mac and Fannie Mae have been taken over by the Feds and in the meantime over nite rates have dropped from the sky.  Mr. Paulson’s plan offers the two mortgage giants plenty of security and investors some guidance.  The details are below according to The Mortgage Bankers Association:

Today, the U.S. government took a historic step to stabilize the U.S. mortgage markets and financial system by placing Fannie Mae and Freddie Mac in conservatorship.

 During a mid-morning press conference by government officials, they announced these key steps:

 ·        Conservatorship

Fannie Mae and Freddie Mac are placed into conservatorship immediately.  (No change in status for the Federal Home Loan Banks.)

 ·        GSE Portfolios

To promote market stability, the GSEs will be allowed to increase their MBS portfolios through the end of 2009.  However, starting in 2010 the portfolios will gradually be reduced at a rate of 10% per year through run-off, eventually stabilizing at a much lower size.

 ·        Treasury Preferred Stock Agreement

Treasury and the Federal Housing Finance Agency (FHFA) have established a Preferred Stock Purchase Agreement to ensure that each company maintains positive net worth.  These agreements are intended to provide security to GSE debt holders and MBS investors.  In exchange, Treasury receives a senior preferred equity share and warrants to protect taxpayers – common and preferred shareholders will bear any potential losses ahead of the government’s senior preferred shares.

 ·        Secured Lending Credit Facility

Treasury has established a new secured lending credit facility which will be available to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.  This facility is intended to serve as an “ultimate liquidity backstop.”  This facility will expire on December 31, 2009.

 ·        Treasury Program to Buy GSE MBS

Later this month, Treasury will be initiating a temporary program to purchase Fannie Mae and Freddie Mac MBS.  Such purchases will be made as appropriate.  The program will expire on December 31, 2009.

 Other highlights:

·        On Monday, the GSEs are expected to resume normal business operations.

·        The U.S. government assumes control over the Board and management.

·        Current Fannie Mae and Freddie Mac CEOs are being replaced, but will stay on through a transition period.

·        Herb Allison will assume CEO duties at Fannie Mae, and David Moffett will assume CEO duties at Freddie Mac. 

·        There will be limited initial management actions – they will work with the current management team.

·        There will be no dividends paid on preferred or common stock.

·        All lobbying/political activity by the GSEs will cease.

 Next Steps:Today’s actions have significant implications for the future of the U. S. housing finance system.  Clearly, there will be robust policy debates over the long-term structure and role of the GSEs.  In anticipation of these discussions, MBA will be working with its members to develop policy options that ensure an efficient and stable housing finance system.

 Yours Very Truly,

John A. Courson

It’s about time Now go into Lehman Brothers and start getting this ENRON case started.

On a more positive not Thank you so much to or friend’s at JobFox our readers have gone up to 85 a day.  My promise to you all is “continue to advise.”

Recession-Proof Your Career

Each month, JobFox, a leading job research company, releases its list of the professions in greatest demand by recruiters and other employer agents. In the most recent report, JobFox added a twist, publishing a list of jobs that remain in high demand despite the current economic downturn. Jobs high on the list include sales reps, software developers, nurses, accountants and accounting staff, finance executives, and administration assistants. But this data, while interesting, doesn’t help you that much if your company is feeling the pinch and needs to take action. The truth is, in tough times, no job is necessarily secure. So instead of looking for, or switching to, these so-called recession-proof jobs (which could easily change in next month’s report), you’re much better off taking some simple steps to try and recession-proof your career. The following are a few tangible ways to help you avoid the chopping block in today’s tougher economy: Make yourself invaluable Go above and beyond your basic job responsibilities. This is more than just getting to work on time and not missing deadlines. It means volunteering for more responsibility. It means finding ways to generate revenues and utilize cheaper resources to complete your job with the same high standard. It also means having the kind of positive attitude that lifts morale and increases production. Remember, it’s a lot easier to lay off the whiners and the nay-sayers who pollute the work environment and promote failure than it is to “give the sack” to hardworking employees who are making a real effort to adapt and adjust to the clear challenges that the company is facing. Step into the limelight A great way create value is to be visible, to distinguish yourself in a positive way. Some people think that the best way to survive a downturn is to try and sink below the radar, to do your job well, but to stay out of the way. And while this might work for a little while, ask yourself this: Does your employer know how crucial your skills are to your company’s success? If you’re not sure, now is not the time to be a wallflower. Get involved, and show your company that they need you now more than ever. Improve your skills A great way to recession-proof your career is to update your skills. Take a few classes. Get that certification or advanced degree you’ve been thinking about. Let’s face it, in tough times, if your company sees your skill set as obsolete, they just might invest in someone who is better-trained. By improving your education, however, your career is much safer now and in the long run. Besides, even if these classes or degrees don’t help you keep your current job, your new education and skills could help you secure a new one if it becomes necessary, maybe even a better one! Networking vs. Not Working The best part about improving your education is the people you meet in the process. In an educational environment, you’ll meet tons of people in your field at various stages of their careers. Take advantage of the opportunity to learn from and to help these professionals. Join networking groups. Take calls from headhunters. Polish up your résumé. Find out what others in your field are doing, what their plans are, and share your plans with them. The time to start networking is not after you’ve been laid off, so don’t wait. This kind of preparation is more than just being cautious, it’s being proactive, which can provide, if nothing else, confidence in even the most desperate times. Surviving the storm The best way to survive a tough economy is to understand that each downturn is different and that, eventually, things will improve. In fact, there hasn’t been a recession yet that we haven’t overcome as a nation, and today’s market is no different. We will get through it, and we will continue to grow and thrive in the next upturn. And by being proactive now in our professional careers we can weather the storm and come out stronger on the other end. After all, when it comes to the economy, if there’s one thing you can count on it’s that everything is cyclical, from the financial markets to the job market to the real estate markets. As a mortgage professional, this is an important concept I’ve accepted and embraced a long time ago, and it’s how I’ve managed to continue to thrive in any market cycle. Did you know that, since 2005, more than 65% of professionals in my field have gone out of business? My company, however, has continued to grow based on the many referrals of satisfied clients who I’ve helped and continue to help reach all of their financial goals and needs as homeowners. If you or anyone you know could benefit from my unique mortgage services as well, please don’t hesitate to call me. We’ll take good care of them and provide them with the same great service we provide you. Also, if you have any more tips for recession-proofing a professional career during an economic downturn that I should add to my list, please share them. They will definitely come in handy in the future when the economy comes full circle.