Jimmy Lathrop

Why This Rally Is Unsustainable

I thought this was a very well-written and well-thought out article as opposed to the other 250-line jabberwocky posted by money managers looking to attract more hits to their websites. Thanks for contributing. I appreciate your article.

Why I Need a Government Bailout

I need the bailout to make up for losing all of my inherited money from a guy called Bernie. Waaah!

Will Insurance Companies Be Part of the Bailout?

The government is, essentially, pulling a Warren Buffet on Warren Buffet. As soon as I heard about this deal I dumped my BRK,B. Three months ago I thought HIG at 51 was a bargain. If the government is going to start getting involved with insurance companies, its over. If someone wants to make a case as to why any plan will not be dilutive to common shareholder interest in these companies, I urge them to make it.

Credit Crisis Review: ARMed for Failure

MichaelSchmichael - the answer is yes, because they are doing it now, or they are selling the loans to a GSE who will take the loss and let the American taxpayer bail them out until someone dissolves the GSE charters, which will not happen in the near future.

Credit Crisis Review: ARMed for Failure

Uh, speaking as someone on the frontlines? The banks are taking the haircut and writing down the principal, either through short sales or loan mods. It was a good theory though.

Credit Crisis Review: ARMed for Failure

I found this article to be a great summary of what brought us to this financial crisis. I disagree with the authors thesis that ARM resets will harbor future pain for borrowers. ARMs are being rewritten as we speak to avoid precisely the type of scenario outlined in the article.

Mortgage brokers have switched from underwriting loans to entering into "loan modification agreements". For a flat fee of $2500, they act as intermediaries between borrowers and loan servicers of loans who are either in default or on the verge of resetting.

So the real issue isn't when these loans trigger - because they are not going to trigger. The issue is that the servicers or the CMO trusts have to write down the principal amounts, creating on sheet balance losses. Careful investors will need to take closer look at balance sheets of financial companies to see how they "massage the numbers".