Friday, December 18, 2009

Jingle Mail, Jingle Mail...

Jingle all the way to Wall Street!

Morgan Stanley has decided to turn in the key on 5 San Francisco high rises, because these five buildings are about 50% in The Red.

http://www.zerohedge.com/article/morgan-stanley-abandons-5-san-francisco-office-towers

Jingle Mail is where a homeowner is so upside down on a loan that they simple walk away from the home and mail the keys in to the bank.

I don't know who Morgan Stanley stuck with these keys, but there will no doubt be a serious hit to somebody's CRE MBS (Commercial Real Estate Mortgage Backed Security). Ouch...

How freakin' stupid is Morgan Stanley? If they are mailing in their keys, then what is to stop all of those Millions of homeowners currently with Negative Equity?

According to the Wall Street Journal today, here are the current percentages of homeowners with Negative Equity (WSJ) (keep ion mind that these are 2008 numbers and 2009 are far worse)-

California 31%
Nevada 27%
Arizona 24%
Florida 22%

http://online.wsj.com/article/SB126100260600594531.html#project%3DSTRATEGIC_DEFAULTS_0912%26articleTabs%3Dinteractive

Do you wonder why people are angry with Wall Street when they pulling stunts like this? Check out he Huffington Post today -

If Morgan Stanley Walks Away, Why Shouldn't You?

"To the extent that Morgan Stanley is leading by example, the securities colossus is sending an unlikely message to underwater homeowners: Walk away."

"In Thursday's Wall Street Journal, John Courson, the head of the Mortgage Bankers Association, played up the moral argument against walking away, telling the paper: 'What about the message they will send to their family and their kids and their friends?'

'It highlights the double standard we have in this country,' White says. 'Businesses strategically default all the time and, in fact, they should -- they're obligated to maximize profits and minimize losses. But so should homeowners.'"

The collective greed of Wall Street is staggering. This makes them so deaf to their public image and is such an albatross around Obama's neck.

Now you have Citigroup, Wells Fargo and BofA repaying TARP, not because it helps their shareholders (See Citi down -14% in 3 days on a massively dilutive sales of stock) but because it allows then to get out from under the Pay Czar. The bankers are doing whatever they can to make as much money as they can and the public is getting pretty upset about it - check Obama's Poll numbers.

2010 will be a referendum on Washington's conduct towards Wall Street. So expect the anti-Wall Street rhetoric to pick up in Washington after the Health Care socialist-wealth-transfer-scam is passed or shelved.

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