Now THAT's a loss...
* The company's net loss was an astonishing $1.47 billion, or $18.17 per share, compared with a year-earlier profit of $121.5 million, or $1.47 per share. Even if you exclude investment losses, you see the firm lost more than twice as much per share as analysts expected.
* Claims from bum mortgages skyrocketed to $1.35 billion from $187.3 million a year earlier. Cure rates are low, while loss severities are high.
* MGIC also said it has hired an advisor to help it look into boosting capital.
For some other interesting reading, check out "Fed Interest-Rate Cuts Fail to Lower Borrowing Costs" at Bloomberg. This quote sums things up rather well:
"It's the clogging up of the credit markets that worries me most,'' Harvard University economist Martin Feldstein said in an interview in New York. "The Fed has done a lot of cutting, the question is whether it's going to get the traction that it did in the past.''
And if you missed it, here's another gem "Americans Selling Homes See Prices Go Below Mortgage." A key excerpt:
"By the end of this year as many as 15 million U.S. households may owe more on their mortgages than their homes are worth, according to an estimate from Jan Hatzius, chief U.S. economist of New York-based Goldman Sachs Group Inc. That may fuel an increase in foreclosures, erode prices, and increase mortgage bond losses, he said in a Feb. 1 report.
"If borrowers who are underwater go into foreclosure, the properties are likely to be sold at discount prices and will further depress the price of housing,'' said Robert Engle, a Nobel laureate in economics who teaches at New York University's Stern School of Business in Manhattan. "It becomes a spiral.''