I Should Know

27 Comments

    • ON: Wed Oct 8th 08:36 AM
      Commented on:
      @VIC: Bill Ackman on Wachovia
      I'm long on WF and I'm not sure if I want their offer to go through or not. The Feds aren't going to cover or buy 100% of Wachovia's toxic loans and they probably have the most in the country just behind WaMu at #1 and Countrywide (B of A) at #2. If the incompetent dopes at Citi take Wachovia at a price higher than the Wells offer, Wells will have the opportunity to come-in and take the whole shebang 18 to 24 months from now. Buying Wachovia will not make the Citi higher-ups any smarter; they couldn’t run a 7-11 effectively.
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    • ON: Tue Oct 7th 09:20 AM
      Commented on:
      Time to Hoard Cash - Cramer's Mad Money (10/6/08)
      The FDIC has a little less than 4/5ths of a cent on hand for every dollar of deposits and 1.25 cents for every dollar of insured deposits. There is approximately $45 billion in FDIC’s capital fund that would be used to payback or cover insured deposits totaling about $4.29 trillion. There is approximately $2.1 TRILLION in uninsured funds. I doubt that people would get a “warm & fuzzy” feeling if they new the facts and assessed the risk. Cash is king; real cash in hand.
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    • ON: Sat Sep 27th 09:07 AM
      Commented on:
      Worrying About Large-Deposit Bank Runs
      I pulled all of my money out of my three banks yesterday. Now I have to find a safe, secure place to stash this $145.95. Any suggestions??
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    • ON: Sat Sep 13th 08:29 AM
      Commented on:
      Foreclosures Actually Dropped (If You Don't Count Five States)
      Excellent and informative logic from this story. It reminds me somewhat of the below logical statement:

      “Outside of the killings, Washington has one of the lowest crime rates in the country. ” - - - Mayor Marion Barry, Washington, DC“


      View article »
    • ON: Sat Sep 13th 08:26 AM
      Commented on:
      Foreclosures Actually Dropped (If You Don't Count Five States)
      Comment by The Realist:

      Yeah, and if I don't count my belly I weight only 170 pounds.

      Who gets to decide what we arbitrarily strip from these numbers. Like S&P earnings minus financials? What does that mean?

      **********************...

      Come on now Realist, 170? You and I know it would be more like 175, 180 maybe. . .
      View article »
    • ON: Sun Sep 7th 09:00 AM
      Commented on:
      Bill Ackman's Letter to Paulson On Restructuring Plan
      A number of things here:

      Did Ackman really "send a letter on Friday"? If so, it will probably get there by Tuesday maybe Wednesday.


      I'm taking a guess that Paulson may be pretty busy over the weekend and this upcoming week and "may" not get too much time to peruse through his mail.


      I'll go out on a limb here and say that IF the letter makes it, and IF Paulson reads it, he will not give a rat's ass what Ackman has to say about this issue; neither do 99.9999999% of the world's population.




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    • ON: Sun Sep 7th 08:30 AM
      Commented on:
      Investing in the Housing Crisis Aftermath: Stock Picks and Pans
      woodchuck,
      You comments are right on target. They also gave me a good laugh this morning.


      Signed,
      Sir Ramjam Delilah Funkyboogaloo-Smythe
      Chief Academic Officer(Provost)
      Chulafinee City Community College
      View article »
    • ON: Sun Sep 7th 08:28 AM
      Commented on:
      Investing in the Housing Crisis Aftermath: Stock Picks and Pans
      woodchuck,
      You comments are right on target. They also gave me a good laugh this morning.


      Signed,
      Sir Ramjam Delilah Funkyboogaloo-Smythe
      Chief Academic Officer(Provost)
      Chulafinee City Community College
      View article »
    • ON: Fri Sep 5th 09:49 AM
      Commented on:
      The Reality of Real Estate and the Economy
      My personal disclosure: I spent 40 years in mortgage lending and real estate. Over this time, I held a variety of positions, licenses and been granted a variety of authorities in lending and real estate. As an Area Manager, I personally originated and or oversaw more than $20 BILLION in retail mortgage fundings. Over the past 6 years prior to my retirement, my area was funding in excess of $100 million per month in retail originated mortgages. I did my first conventional loan in 1965. I speak from my various experiences.

      FHA section 245(a) loans were very, very rare indeed; almost never used. There are several plans under this section with most involving some degree of "negative amortization" i.e., the payments are not sufficient to pay the interest due or pay off the loan within the required period of years. When given the option, borrowers almost always choose the lowest payment and, therefore, incurred negative amortization, not at all unlike the current toxic Option ARMs.

      Unlike the writer of the above article who stated “ I cannot recall the last time I had a borrower who actually met the published guidelines”, by far the vast majority of our borrowers either met or slightly exceeded normal and customary guidelines.

      The writers statement that “ . . in reality, in mid-2007, 60/65 was good enough, with other relevant factors, to get F/F’s highest level loan approvals” is absolutely ridiculous. Sure, EXCEPTIONS were made to normal underwriting guidelines for ratios, but they were few and far between. If the LTV was 70% or below, greater exceptions to the ratios would be made. If the bowers had significantly large cash reserves, an exception might be made.

      Yes, F/F both had relatively similar automated underwriting systems that most brokers and mom & pop mortgage lenders would use (<25% of all loan originations), but most loans were underwritten through big lenders’ proprietary automated underwriting systems. Some lenders such as Countrywide and Great Western stretched their guidelines to meet F/F guidelines, but most lenders such as Chase and Wells Fargo & Co used guidelines more in-line with normal and customary ratios of 28/36 or 30/38 or 40. The statement “In December, 2007 a 605 mid credit score was also good enough for the best that F/F had, at 100% LTV” may or may not be true; I very seldom had a loan approved with a credit score below 620, and if we did, we required at least a 10% down payment, usually more. Yea, we certainly missed out on a lot of business because we were more conservative and didn’t push the envelope on every loan whenever possible, but like most large respectable lenders, we tried to do the right thing for our customers, stockholders, and stakeholders. The vast majority of outstanding mortgages are NOT liar loans or subprime loans. They’re just not.

      And just as an FYI in reference to the thought that all these past due loans should be refinance at a lower rate and better turns at the taxpayers’ expense, on July 16, Moody’s Investors Service noted that 42 percent of subprime adjustable-rate mortgages modified during the first half of 2007 had become 90 or more days delinquent by the end of March 2008. That number was well north of 50 percent when looking at previously-modified loans 60 or more days delinquent.
      View article »
    • ON: Fri Sep 5th 08:45 AM
      Commented on:
      The Reality of Real Estate and the Economy
      Jimmy,

      EXCELLENT and 100% correct.
      View article »
    • ON: Wed Sep 3rd 09:27 AM
      Commented on:
      Option ARM Time Bomb About To Explode
      WaMu, Countrywide, Wachovia, Indy Mac, Downey, and Bear Stearns were/are among the largest Option ARM lenders. Option ARMs are literally worthless with no bids found for many months for these assets. Bank of America is now stuck with the loan portfolio previously originated and held by Countrywide. A great deal of these B of A loans are in California, Nevada, and Florida, states that have been hit hard by the housing crisis. WaMu “specialized” in Option ARMs starting in 2000; that was their biggest and primary product. Their entire sales force was addicted to this product because of the “easy sell” and higher commissions. The sales force turned many builders and real estate agents into Option ARM junkies.

      Even though there was great pressure put on senior management from the sales force at Wells Fargo Home Mortgage to do these loans, Wells Fargo elected not to do them. They said it was not a product that was good for their customers or good for the company. They did NO Option ARMS, NONE. Turns out they were right.
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    • ON: Mon Aug 25th 08:38 AM
      Commented on:
      Mortgage/Credit Trends [Housing Tracker]
      Jason, ditto.. .. . .

      Additionally, as an FYI to those interested in the Option ARM issue, Wells Fargo did ZERO Option ARMS, none. They didn't like the program and didn't think it was the right thing for their customer or bank. The sales field lost an opportunity to do 20% or more additional business during the Option ARM hay-days ('01 through '06) but the senior management stuck to their guns. Turns out they were right.
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    • ON: Sat Aug 16th 09:18 AM
      Commented on:
      Checking In on George Soros
      The above comments are correct; this article is full of discrepancies and incorrect data. This is just another example of the quality and value of 99.98% of these stock advisors/soothsayer/sn... oil salesman’s advice and recommendations.

      The vast majority of these so called financial advisors and “Strategic Wealth Builders” are gene-related to the Snake Oil salesman from the late 1800s and early 1900. Yea, there are a few great ones like Warren Buffett, but most of these guys make money off of trading stocks back and forth (usually churning) using somebody else’s money. IF you guys are so bright and smart (NOT the above commenters) why are you “selling, touting, and hawking” your advice at $39.95 a month when you could be making millions per day investing, buying, and selling based on your knowledge of the market. The advertisement I most enjoy is the one that professes that he turned $33,000 into $7,000,000 in less than two years. YEA, right. IF he did that, then he should be able to turn his $7,000,000 into $1,484,848,485 in the next 2 1/2 years or so and retire comfortably rather that pimp his DVD and book at $79 bucks apiece or so. The other thing is, if all these guys profess to never “take a haircut” why are so many bald??
      View article »
    • ON: Sat Aug 16th 09:16 AM
      Commented on:
      Checking In on George Soros
      The above comments are correct; this article is full of discrepancies and incorrect data. This is just another example of the quality and value of 99.98% of these stock advisors/soothsayer/sn... salesman’s advice and recommendations. The vast majority of these so called financial advisors and “Strategic Wealth Builders” are gene-related to the Snake Oil salesman from the late 1800s and early 1900. Yea, there are a few great ones like Warren Buffett, but most of these guys make money off of trading stocks back and forth (usually churning) using somebody else’s money. IF you guys are so bright and smart (NOT the above commenters) why are you “selling, touting, and hawking” your advice at $39.95 a month when you could be making millions per day investing, buying, and selling based on your knowledge of the market. The advertisement I most enjoy is the one that professes that he turned $33,000 into $7,000,000 in less than two years. YEA, right. IF he did that, then he should be able to turn his $7,000,000 into $1,484,848,485 in the next 2 1/2 years or so and retire comfortably rather that pimp his DVD and book at $79 bucks apiece or so. The other thing is, if all these guys profess to never “take a haircut” why are so many bald??
      View article »
    • ON: Sun Jul 27th 11:07 AM
      Commented on:
      A Very Cheap Shot on the WSJ Editorial Page
      I just re-read the WSJ editorial and I think it's right on target. What part is so incorrect that it should be called a "Cheap Shot"?
      View article »
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