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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (56624)	3/23/2006 11:14:38 AM
From: John Vosilla	Respond to of 110194

GM Selling Majority Stake in Part of Finance Division to Investment Group; Shares Up DETROIT (AP) -- General Motors Corp. said Thursday that it is selling a majority interest in its commercial mortgage division for $1.5 billion in cash to a private investment group. In addition to the cash payment for a 78 percent stake in the business, GM said that GMAC Commercial Holding Corp. has also repaid $7.3 billion in intercompany loans as part of the deal. That would boost the total proceeds from the deal to almost $9 billion. ADVERTISEMENT The announcement comes a day after the world's biggest automaker and its major supplier, Delphi Corp., said they plan to offer buyouts to more than 125,000 hourly workers under an agreement with the United Auto Workers. Workers are expected to start leaving GM by June 1. GM is under enormous pressure to reverse its fortunes. It recently had to increase by $2 billion its reported 2005 loss to $10.6 billion. It has been losing U.S. market share to Asian automakers who are building cars that are among the most popular with American consumers. GM shares rose 23 cents, or just over 1 percent, to $22.24 in early trading on the New York Stock Exchange. The buyer group includes Kohlberg Kravis Roberts & Co., Five Mile Capital Partners and Goldman Sachs Capital Partners. GM said the deal for the commercial mortgage unit stake is separate from GM's announced plans to sell a controlling interest in the its overall finance business, General Motors Acceptance Corp. "This sale is good news for GMAC and provides GMAC with even greater liquidity," GMAC spokeswoman Joanne Krell said. GMAC Commercial Holding also announced that it has changed its name to Capmark Financial Group Inc. The name change will be fully implemented in the second quarter of this year. Capmark "will launch with an investment-grade rating," Krell said. GMAC said in August that it had agreed to sell a 60 percent stake in its commercial mortgage holding business to Kohlberg Kravis Roberts and the other partners, but no financial details were released at that time. The mortgage unit has a loan servicing portfolio of around $250 billion. biz.yahoo.com

To: russwinter who wrote (56624)	3/23/2006 11:20:40 AM
From: John Vosilla	Respond to of 110194

"This NRA housing data reported today is either extremely lagged, or totally without credibility. Totally uncollaborated by virtually every account coming out in the local press or the MBAA purchase index. Amazing that the cognoscenti would even trade on this." How were they able to get away with this? Been debating it on the housing crash board. Must have been a lot of deals in the pipeline from the fall that finally closed with many delayed into first quarter due to some tightening of credit conditions. Perhaps some folks also rushed in fearing the end of the toxic option ARM's. Evidence seems pretty compelling that buying interest is almost nonexistent in many markets outside of the midwest and oil patch..

To: russwinter who wrote (56624)	3/23/2006 1:48:49 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

realtor.org I am following only the non adjusted the numbers to see if I can make any sense out of the report. It appears that a mild Jan may have something to do with it. Inventory, in the mean time, is now at 3 yr high.

To: russwinter who wrote (56624)	3/23/2006 1:51:17 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

yahoo.reuters.com This is quite interesting to me. Could it be that the GSEs are finding fewer and fewer conforming loans to buy? Is that why there have been talks about trying to get into subprime markets? Is the nation of borrowers all migrating to the subprime category?

To: russwinter who wrote (56624)	3/23/2006 1:57:12 PM
From: Ramsey Su	Respond to of 110194

KBH - Feb qtr earnings and conf call notes My conclusion based on below: KBH is not offering incentives despite competitors' actions. They believe it is very limited and incentives were more like ploy to attract more traffic. Everything still "normal" since they already closed and only 7000 delieveries needed to make numbers for yr. Need to watch their continuous share repurchase at 2 million a quarter. Need to watch their margins because they are basically assuming no pressure. ================================== EPS $2.02 beating $1.97 consensus. 2 million repurchase this qtr, 2 million previous qtr. 8 million still authorized. Will cov 179k lots, 53% under option contract. 450 unsold inventory. 480 communities. Two coasts off the highs. Center of country stable. Texas is better today than yr ago. 7600 deliveries needed to meet earnings this yr. Cancellation reason - buyers not qualified but are seeing some after loan approval. Something they have not seen before. Most cancellations are land sales not finished homes? Not region specific. KB not focusing on incentive because of their good quality home? They think incentive game hurts everyone so they are trying not to do so and would like to see competitorsd stop. Ivy asked if no incentive, the infrastructure is geared for higher volume, with less orders, then work crew idled? KB said cost is 90% variable and 10% fixed, counting land as variable. (really?) Incentives - they do offer some but not broadbased incentives. When offered, they claim they are offering less than 1% incentives. Ivy asked how do they expect to meet sales target when competitors are offering the moon? KB said incentives are typically bait and switch by competitors. However, if general market goes down, then they would have to adjust also. Operating margins - Ivy asked why margins go down if price the same. KB answered that would be due to higher land cost basis. Earnings guidance based on margins holding. They do no accept contingent sales. Filtering process before building - need a finalized loan approval. So canc rate is usually before home building starts. Texas and Denver both improving. Southeast, not Florida, all good. Florida improving, Cal and NV both coming back. Wow, no weakness? Feb orders were flat yoy. Still believes inventory below norm for industry. (seems to contradict with all data right now with increases of immediate move-ins everywhere)