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Everything You Need to Know About the Financial Crisis - Posted by Prieur du Plessis  – In this guest contribution Doug Diamond and Anil Kashyap of the University of Chicago bring us up to speed on where the financial crises stands today, what the government is doing and why, and the long-term prospects for the economy. – Investment Postcards from Capetown

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The Point of Maximum Pessimism - The time of maximum pessimism is the best time to buy. – Legendary Investor John Templeton – Yesterday Merrill Lynch released their monthly survey of fund managers for October.  The survey covered 172 fund managers with $531 billion under management.  Merrill called the survey “one of the most pessimistic” ever … – Top Gun Financial Planning

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Falling Gas Prices Will Save Consumers $156 to $188 Billion Annually -  Mark J. Perry – Carpe Diem

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start reading at “Comments and Outlook” – …  In the US, the Treasury and Fed have arranged a quarter trillion dollars in support for a select group of America’s biggest banks.  Why the panic bail-outs? The answer lies in the $55 trillion dollar Credit Default Swap … Banks and central banks are totally focused on the breaks to the credit ring when up to $400 billion of Lehman Brothers CDS obligations come due in the next week, with nobody at the teller window to pay up. …  What this means is that unspecified banks holding the Lehman CDS derivatives will get nothing, and then they will be unable to meet their obligations to other banks. At stake are the Money Market Funds on deposit in these banks. The entire system could collapse, so banks do not want to be in the position of lending to one another. The credit market has failed. … – Bill Cara – BillCara.com 

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Thirty Years of the U.S. 30-Year Mortgage – Paul Kedrosky – Lots of people noticing today that for various technical reasons, U.S. 30-year fixed mortgage rates are back to levels last seen when Freddie/Fannie were nationalized. But that said, and as the following figures shows, all the bleating about high rates looks fairly dubious, historically speaking and in nominal terms. – Infectious Greed

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Not All Fannie Mae & Freddie Mac’s Fault – Posted By: Dirk van Dijk, CFA – Zachs.com 

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Success of ISDA Settlement Protocol Series Continues, ISDA Launches Washington Mutual Protocol – The International Swaps and Derivatives Association, Inc. (ISDA) yesterday continues its successful series of credit default swap settlement (CDS) protocols with the launch of the 2008 Washington Mutual CDS Protocol. – riskcenter.com

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European regulators have moved to ease their mark-to-market accounting rules. Good for them. The U.S. should follow suit. Vernon Hill explains at bankstocks.com 

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Firms Jockey for TARP Contracts – Paul Jackson – While the U.S. Treasury is busy putting advisers and custodial agents in place to help manage the Troubled Asset Relief Program, more than a few industry firms are wondering what the U.S. government involvement in the mortgage space will mean for those that manage defaulted loans, as well as those that provide key services to the default management industry. We’ve heard from investors, hedge… -  housingwire

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Agencies announce decision on regulatory capital impact of Emergency Economic Stabilization Act of 2008 on Fannie Mae and Freddie Mac preferred stock – FR Board
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2009 CONFORMING LOAN LIMITS TO BE ANNOUNCED BY NOVEMBER 7; IMPLEMENTATION PLAN ESTABLISHED – OFHEO FHFA
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St Louis Fed Study:  Where’s the Smoking Gun? A Study of Underwriting Standards for US Subprime Mortgages – by Geetesh Bhardwaj and Rajeep Sengupta – Abstract: The dominant explanation for the meltdown in the US subprime mortgage market is that lending standards dramatically weakened after 2004. Using loan-level data, we examine underwriting standards on the subprime mortgage originations from 1998 to 2007. Contrary to popular belief, we find no evidence of a dramatic weakening of lending standards within the subprime market. … We show that while it is possible that underwriting standards in this market were poor to begin with, deterioration in underwriting post-2004 cannot be the explanation for collapse of subprime mortgage market.  – St. Louis Fed Paper

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Zillow lays off 25 percent of workforce – Most of 40 workers affected in Seattle – … in order to cut expenses in anticipation of a prolonged recession. – Inman News

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This guy is a legend in Chicago – Leo Melamed: Legend in his own futures is neither shy nor retiring – Hal Weitzman talks to the former CME chairman -  FT.com 
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Research Zeitgeist: Crisis Fallout – points to articles by: Floyd Norris NYT, OECD Study, Moodys and Fitch Warnings -  Research Recap