Bloomberg - "Hedge Funds Reel From Margin Calls Even on Treasuries" (3-10-08)

"The hedge-fund industry is reeling from its worst crisis in a decade as banks are now demanding more money pledged to support outstanding loans even when the investment is backed by the full faith and credit of the United States. Since Feb. 15, at least six hedge funds, totaling more than $5.4 billion, have been forced to liquidate or sell holdings because their lenders -- staggered by almost $190 billion of asset writedowns and credit losses caused by the collapse of the subprime-mortgage market -- raised borrowing rates by as much as 10-fold with new claims for extra collateral."

Bloomberg - "TIPS' Yields Show Fed Has Lost Control of Inflation" (3-10-08)

"Bond investors have never been so sure that the Federal Reserve will lose control of inflation. They're so convinced that they're giving up yields just to buy debt securities that protect against rising consumer prices. The yield on the five-year Treasury Inflation-Protected Security due in 2012 has been negative since Feb. 29, and traded today at minus 0.17 percent. The notes, which were first sold in 1997, have never before traded below zero. Even so, firms from Deutsche Asset Management to Vanguard Group Inc., the second- biggest U.S. mutual fund company, say TIPS are a bargain."

Bloomberg - "John Galt Plan Might Save U.S. Financial System" (3-10-08)

"By late last week, events seemed to be spinning out of control. Credit spreads were blowing out, with tax-exempt municipal bonds out-yielding Treasuries by a record and the spread between Fannie Mae mortgage-backed securities and government bonds hitting a 22-year high. Treasury bill yields were collapsing (further). The U.S. dollar was sinking like a stone. And commodity prices, in their lofty ascent, had all the makings of a market unhinged from the fundamentals, which, after all, is the definition of a bubble."

Bloomberg - "Bear Stearns Shares Fall on Liquidity Speculation" (3-10-08)

"Bear Stearns Cos. denied that the firm lacked sufficient access to capital, after speculation about a liquidity crisis pushed the stock down 11 percent in New York trading, the most since the 1987 stock market crash. Bear Stearns, the second-biggest underwriter of mortgage- backed bonds, said in a statement that 'there is absolutely no truth to the rumors of liquidity problems.'' The shares declined $7.78 to $62.30 in composite trading on the New York Stock Exchange at 4:08 p.m., the lowest level since March 2003."

Bloomberg - "Ambac, Thornburg Reverse Last Week's Last-Minute Rise" (3-10-08)

"Ambac Financial Group Inc. and Thornburg Mortgage Inc. erased last week's last-minute surge that was spurred by transactions on the New York Stock Exchange totaling at least 10 million shares. Ambac, whose March 7 gain went from 0.5 percent to 28 percent with the trades, slipped to $7.29 as of 4 p.m. in New York. That's 23 percent less than its closing price last week. Thornburg, which swung from a 24 percent tumble to an 8.5 percent rally late on March 7, declined 60 percent today to 71 cents."

Bloomberg - "Bank of America Plans to Proceed With Countrywide Bid" (3-10-08)

"Bank of America Corp., the largest U.S. bank by market value, plans to press ahead with its $4 billion takeover of Countrywide Financial Corp., the mortgage lender under FBI investigation for possible securities fraud. The Federal Bureau of Investigation, based in Washington, is scrutinizing whether Countrywide officials misrepresented the company's financial position and the quality of its mortgage loans in regulatory filings, said a person with knowledge of the probe on March 8. Bank of America spokesman Scott Silvestri said the acquisition of Calabasas, California-based Countrywide remains on track."

Orange County Register - "Foreclosure sales 23% of fresh O.C. home deals" (3-10-08)

"Every two weeks Thomas calculates 'market time,' a benchmark of how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of last Thursday, it would take 8.14 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 8.46 months two weeks earlier and vs. 5.26 months a year ago."

Los Angeles Times - "Auction action: Big real estate auctions this weekend" (3-10-08)

"The auction schedule is heating up -- there are several big real estate auctions scheduled this weekend. Details: On Saturday at the Pomona Fairplex, Catalist Homes and DoveBid will auction 75 homes. You can see the inventory here. Registration opens at 8:30 a.m., the bidding starts at 10 a.m. Coverage note: It's likely I'll cover this auction. If you are heading to Pomona on Saturday to bid, I'd like to talk. Shoot me an e-mail at peter.viles@latimes.com."

Real Estate Journal - "Housing, Bank TroublesContinue to Deepen" (3-10-08)

"Two crucial barometers of the nation's housing market have worsened markedly in recent months, ratcheting up pressure on policy makers in Washington for action to stem the growing housing crisis and its widening impact on the nation's financial system. Among the latest trouble signals, the number of American homes entering foreclosure rose to the highest level on record in the fourth quarter of 2007. Meanwhile, homeowners' share of the equity in their homes fell to a post-World War II low."

Money News - "Hedge Funds Bet Big on Massive Foreclosures" (3-10-08)

"A major hedge fund may have attempted to manipulate the housing market by funding a consumer advocacy group whose work would potentially help the fund’s positions in the market. Shorting subprime mortgage-backed securities proved to be the winning ticket for Paulson & Co. which quadrupled its assets to $29 billion and became one of the 10 largest hedge funds last year. The fund’s bets against subprime mortgages pay off only if lenders with defaulted don’t recoup losses through foreclosure sales."