Aug. 23, 2007 (LPAC)--While much of the press today is announcing the financial crisis over, and "happy days are here again," some news has slipped through that shows that such articles are whistling past the graveyard, perhaps hoping to sell real estate futures there. Among the dissonances in the financial happy talk:
* Toll Brothers, the largest builder of luxury homes, announced on Wednesday that for its 3rd-Quarter ending in July, profit plunged 84.8%. The company's president said that the quarterly cancellation rate rose to nearly 24%, the highest in the 21 years the company has publicly traded.
* Mortgage-lending companies continue to announce job cuts. In addition to those reported yesterday (at Lehman Brothers' BNC Mortgage, Capital One Financial's GreenPoint, Accredited Home Lenders, HSBC), the following were announced in today's Wall Street Journal: 1st National Bank, of Scottsdale, Ariz.: 541 cuts; First Magnus Financial: 6,000 cuts; Countrywide Financial: 500 cuts.
* Bloomberg.com reported that "Coventree Inc. shares tumbled after the Canadian finance company said it has been unable to renew about C$4.89 billion ($4.64 billion) of asset-backed commercial paper." This failure to rollover its debt occurred six days after a group of banks and Canadian pension funds agreed to renew Coventree's non-bank asset-backed commercial paper until mid-October.
* Speaking of asset-backed commercial paper, Bloomberg.com reported that "Outstanding U.S. commercial paper fell 4.2 percent, the biggest weekly drop in at least seven years, as investors fled asset-backed debt and opted for the safety of Treasuries."
* The Paris hedge fund Capital Fund Management announced that it stands to lose 27% because of the collapse of the cash-management firm Sentinel Management Group. Sentinel has been charged by the U.S. Securities and Exchange Commission with misappropriating customer funds and then fraudulently reporting its problems were due to market chaos, and also of moving $460 million customers' funds into its own "house" accounts, part of which it used as collateral for a $321 million bank loan.
* General Motors said it has cut production at six plants that make SUVs in the Midwest, Canada, and Mexico, citing rising fuel cost.
