Tack's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/157675/comments http://seekingalpha.com/article/179827-why-interest-rates-will-almost-certainly-rise-in-2010?source=feed#comment-820957 820957
We can all debate the timing, but rate increases are inexorable, over time. That's the unavoidable effect of monetary inflation, as economies and societies have experienced almost unabated for centuries. It's an immutable fact of existence with fiat currencies.

The notion that neither public sector nor private firms can tolerate a slow, gradual increase in rates, as the economy strengthens is, likewise, alarmist and not realistic. We've seen the economy booming with 7, 8 and 9% interest rates, but now, the thought of 0.5% brings blind fear. This is more hysteria than reason.

Already, we're seeing many billions of TARP being repaid to the government, with interest, when only months ago the conventional wisdom was that this would be with our children for generations and be unlikely to be repaid, ever. It's precisely this kind of Jimmy-Carteresque "Malaise" thinking that poses a danger, if there is one, not the income and balance sheets, or future outlooks, of corporate America.

As Sir John Templeton would be trumpeting, if he were still with us, "the four most dangerous words in the English language are 'this time it's different.'" It's not different.

We will recover. The world will not end.


On Dec 24 07:31 PM tuckfinitee wrote:

> derryl is right. Interest rates won't rise until there is significant
> inflation to reduce the value of the debt.
>
> By the way Mr. Wizard do you still think the gov is run like Sotheby's
> or are you coming around to the crime syndicate model.]]> Thu, 24 Dec 2009 20:34:26 -0500
We can all debate the timing, but rate increases are inexorable, over time. That's the unavoidable effect of monetary inflation, as economies and societies have experienced almost unabated for centuries. It's an immutable fact of existence with fiat currencies.

The notion that neither public sector nor private firms can tolerate a slow, gradual increase in rates, as the economy strengthens is, likewise, alarmist and not realistic. We've seen the economy booming with 7, 8 and 9% interest rates, but now, the thought of 0.5% brings blind fear. This is more hysteria than reason.

Already, we're seeing many billions of TARP being repaid to the government, with interest, when only months ago the conventional wisdom was that this would be with our children for generations and be unlikely to be repaid, ever. It's precisely this kind of Jimmy-Carteresque "Malaise" thinking that poses a danger, if there is one, not the income and balance sheets, or future outlooks, of corporate America.

As Sir John Templeton would be trumpeting, if he were still with us, "the four most dangerous words in the English language are 'this time it's different.'" It's not different.

We will recover. The world will not end.


On Dec 24 07:31 PM tuckfinitee wrote:

> derryl is right. Interest rates won't rise until there is significant
> inflation to reduce the value of the debt.
>
> By the way Mr. Wizard do you still think the gov is run like Sotheby's
> or are you coming around to the crime syndicate model.]]> http://seekingalpha.com/news/market_currents/post/38877?source=feed#comment-820645 820645

On Dec 24 01:26 PM battman wrote:

> Oh wow. I'm totally shocked. Another GM negotiation that may end
> up all for naught.
> Thank the good lord the government found it in their hearts to pump
> in the necessary funds to keep this model of success and leading
> edge company from going broke. Now we can all look forward to every
> car maker having financial trouble, not just GM and Chrysler.
> It's a Christmas miracle!!!!]]> Thu, 24 Dec 2009 13:57:16 -0500

On Dec 24 01:26 PM battman wrote:

> Oh wow. I'm totally shocked. Another GM negotiation that may end
> up all for naught.
> Thank the good lord the government found it in their hearts to pump
> in the necessary funds to keep this model of success and leading
> edge company from going broke. Now we can all look forward to every
> car maker having financial trouble, not just GM and Chrysler.
> It's a Christmas miracle!!!!]]> http://seekingalpha.com/article/179488-top-ten-reasons-why-the-yield-curve-will-flatten-hint-this-is-a-different-sort-of-recession?source=feed#comment-819172 819172
One camp believes that we're headed for an accelerating sustained recovery, where the massive infusion of printed dollars into the money supply cannot lead to anything other than inflation, as the government will be hesitant and lackluster in its removal of excessive stimulus.

The other camp remains convinced that the outlook is negative and that recent gains in the economy and markets will be unsustainable. Should this occur, we would re-enter a recession and reduction of monetary velocity that matched or exceeded the first crisis.

There's absolutely no question that the current steepness will be flattened because there's absolutely no question that the question about the economy will soon be answered, one way or the other. So, either the top end of the curve collapses, if the economy fails, or the bottom end rockets up, if the economy gains strength.]]> Wed, 23 Dec 2009 13:55:07 -0500
One camp believes that we're headed for an accelerating sustained recovery, where the massive infusion of printed dollars into the money supply cannot lead to anything other than inflation, as the government will be hesitant and lackluster in its removal of excessive stimulus.

The other camp remains convinced that the outlook is negative and that recent gains in the economy and markets will be unsustainable. Should this occur, we would re-enter a recession and reduction of monetary velocity that matched or exceeded the first crisis.

There's absolutely no question that the current steepness will be flattened because there's absolutely no question that the question about the economy will soon be answered, one way or the other. So, either the top end of the curve collapses, if the economy fails, or the bottom end rockets up, if the economy gains strength.]]> http://seekingalpha.com/news/market_currents/post/38746?source=feed#comment-817961 817961

On Dec 22 06:53 PM Alex T wrote:

> Is this guy for real? What are his credential in forecasting?]]> Tue, 22 Dec 2009 20:00:14 -0500

On Dec 22 06:53 PM Alex T wrote:

> Is this guy for real? What are his credential in forecasting?]]> http://seekingalpha.com/news/market_currents/post/38578?source=feed#comment-814532 814532 Sun, 20 Dec 2009 11:41:12 -0500 http://seekingalpha.com/news/market_currents/post/38569?source=feed#comment-813690 813690

On Dec 19 02:38 PM HerrHansa wrote:

> Somalia and the shipping pirates have a free market system.]]> Sat, 19 Dec 2009 14:57:47 -0500

On Dec 19 02:38 PM HerrHansa wrote:

> Somalia and the shipping pirates have a free market system.]]> http://seekingalpha.com/news/market_currents/post/38569?source=feed#comment-813679 813679
The current government doesn't want to enforce the more-than-ample current laws on stock trading and corporate activities, they want to appropriate all the power and wealth and decide exactly who gets it and how much. They want your freedom, simple as that.

Many fine people died forming this country exactly to escape such confiscatory government. But, we seem hellbent on going there in a rush. No doubt, the very same people who whine and protest now, will then be carrying placards demanding freedom and liberty...if they're still permitted, that is.


On Dec 19 11:46 AM Machiavelli999 wrote:

> @Tack
>
> If anyone wonders why Obama is hesitant to put in force strong regulations,
> its because of people like Tack.
>
> People who see the world as either a free market nirvana or Soviet
> Union. I am not even sure why we had a Cold War because according
> to Tack we were a communist nation in the 50s, 60s, and 70s when
> we had strong bank regulation and had Glass-Steagel in place.]]> Sat, 19 Dec 2009 14:37:32 -0500
The current government doesn't want to enforce the more-than-ample current laws on stock trading and corporate activities, they want to appropriate all the power and wealth and decide exactly who gets it and how much. They want your freedom, simple as that.

Many fine people died forming this country exactly to escape such confiscatory government. But, we seem hellbent on going there in a rush. No doubt, the very same people who whine and protest now, will then be carrying placards demanding freedom and liberty...if they're still permitted, that is.


On Dec 19 11:46 AM Machiavelli999 wrote:

> @Tack
>
> If anyone wonders why Obama is hesitant to put in force strong regulations,
> its because of people like Tack.
>
> People who see the world as either a free market nirvana or Soviet
> Union. I am not even sure why we had a Cold War because according
> to Tack we were a communist nation in the 50s, 60s, and 70s when
> we had strong bank regulation and had Glass-Steagel in place.]]> http://seekingalpha.com/news/market_currents/post/38569?source=feed#comment-813418 813418
I mean governments are so smart and efficient, and just think of all those wonderful products, services and innovations they've provided over the years. Gosh, how I long for the dear, departed Soviet Union.]]> Sat, 19 Dec 2009 10:31:41 -0500
I mean governments are so smart and efficient, and just think of all those wonderful products, services and innovations they've provided over the years. Gosh, how I long for the dear, departed Soviet Union.]]> http://seekingalpha.com/article/178793-why-i-m-buying-citigroup?source=feed#comment-813280 813280
First, the technical: when any listed firm announces a huge new share issue (in this case, the largest ever), the shares immediately come under aggressive shorting because the shorts realize, correctly, that they can short with abandon, risk free, because the new-issue price will always be below the last close before pricing, and ample shares will be available at the new issue price to cover those short positions. Therefore, the pre-issue shorted prices are almost always driven disproportionately low by this effect and immediately begin recovery as the shorts exit.

Second, the fundamental: at the time of Citi's new share issue their price had fallen to 0.52 times book value, versus over 1.0 times (WFC the highest at 1.35) for all the other three mega banks (JPM, BAC, WFC). From this, one must conclude one of two things: either 1) Citi's loans and mortgages are all orders of magnitude worse than its peers, and the large disparity is justified, or 2) Citi is relatively undervalued versus its peers.

It's hard to imagine that Citi's typical customers were/are much different from any of the other large banks, so #2 appears a more likely explanation and affords investors opportunity. With its very low nominal price, Citi could deliver huge percentage upsides versus its peers.


On Dec 18 11:46 PM The Lonely Value Investor wrote:

> I'm sorry, but did he answer the question? We all buy stocks we think
> will go up. Other than the notional value is low ($3) and could go
> higher, the question of "why" remains. Why will Citi go higher? Why
> is it worth more than its current price? Just curious...
>
> Would have loved to read a serious analysis on the subject.
>
> 205 followers?]]> Sat, 19 Dec 2009 08:27:56 -0500
First, the technical: when any listed firm announces a huge new share issue (in this case, the largest ever), the shares immediately come under aggressive shorting because the shorts realize, correctly, that they can short with abandon, risk free, because the new-issue price will always be below the last close before pricing, and ample shares will be available at the new issue price to cover those short positions. Therefore, the pre-issue shorted prices are almost always driven disproportionately low by this effect and immediately begin recovery as the shorts exit.

Second, the fundamental: at the time of Citi's new share issue their price had fallen to 0.52 times book value, versus over 1.0 times (WFC the highest at 1.35) for all the other three mega banks (JPM, BAC, WFC). From this, one must conclude one of two things: either 1) Citi's loans and mortgages are all orders of magnitude worse than its peers, and the large disparity is justified, or 2) Citi is relatively undervalued versus its peers.

It's hard to imagine that Citi's typical customers were/are much different from any of the other large banks, so #2 appears a more likely explanation and affords investors opportunity. With its very low nominal price, Citi could deliver huge percentage upsides versus its peers.


On Dec 18 11:46 PM The Lonely Value Investor wrote:

> I'm sorry, but did he answer the question? We all buy stocks we think
> will go up. Other than the notional value is low ($3) and could go
> higher, the question of "why" remains. Why will Citi go higher? Why
> is it worth more than its current price? Just curious...
>
> Would have loved to read a serious analysis on the subject.
>
> 205 followers?]]> http://seekingalpha.com/news/market_currents/post/38550?source=feed#comment-813093 813093
I'm breathless.]]> Fri, 18 Dec 2009 23:00:11 -0500
I'm breathless.]]> http://seekingalpha.com/news/market_currents/post/38564?source=feed#comment-813091 813091 Fri, 18 Dec 2009 22:57:21 -0500 http://seekingalpha.com/article/178677-how-the-citi-stock-offering-flopped?source=feed#comment-811878 811878
Personally, I vote for #2.


On Dec 18 04:30 AM Mr. Noatak wrote:

Please, straighten me
> out with my confusion and disorientation on this matter.]]> Fri, 18 Dec 2009 08:15:23 -0500
Personally, I vote for #2.


On Dec 18 04:30 AM Mr. Noatak wrote:

Please, straighten me
> out with my confusion and disorientation on this matter.]]> http://seekingalpha.com/article/178663-greece-concerns-are-misplaced?source=feed#comment-811540 811540
Dubai was already bailed out? Why? Well, it was rather simple in their case: 1) there was no way that the UAE was going to allow a default that would have seen UAE-based real property fall into the hands of western banks or otherwise be auctioned off unceremoniously to strangers, 2) there was also no way the UAE could refuse to pay and also refuse to properties to be foreclosed without destroying any future in the world financial community, and 3) Dubai/UAE borrowed euros and dollars, but the UAE is one of the world's largest holders of those currencies, so there was no local currency to be shorted to death, annihilating a rate of exchange into the borrowed currencies.

In the end, the Dubai rescue should have been seen as obvious.

Greece has serious economic problems, but, like Dubai, it has at least a couple of similar things going for it: 1) as a member of the EC, it is in the interest of the overall community to find a solution to sustain the economic partnership and not set a dubious precedent for the next weak link in the chain, whoever that might be. This is not much different than the U.S. bailing out NYC or a state; 2) like, Dubai, because Greece's currency is the same as its creditors, euros, nobody can destroy the situation beyond repair by shorting a Greek local currency into oblivion, so the game has been removed from traders, for the most part, and remains an internal issue of the EC.

My bet is that no default will occur, no matter what refinancing and stipulations may follow.

More than anything, what separates Dubai and Greece from past sovereign defaults is that they hold iand/or use internally the very same currencies in which they have borrowed. The fact that there's not some independent local currency to be targeted for decimation by traders and arbitrageurs cannot be underestimated when it comes to their staying power.]]> Thu, 17 Dec 2009 21:59:02 -0500
Dubai was already bailed out? Why? Well, it was rather simple in their case: 1) there was no way that the UAE was going to allow a default that would have seen UAE-based real property fall into the hands of western banks or otherwise be auctioned off unceremoniously to strangers, 2) there was also no way the UAE could refuse to pay and also refuse to properties to be foreclosed without destroying any future in the world financial community, and 3) Dubai/UAE borrowed euros and dollars, but the UAE is one of the world's largest holders of those currencies, so there was no local currency to be shorted to death, annihilating a rate of exchange into the borrowed currencies.

In the end, the Dubai rescue should have been seen as obvious.

Greece has serious economic problems, but, like Dubai, it has at least a couple of similar things going for it: 1) as a member of the EC, it is in the interest of the overall community to find a solution to sustain the economic partnership and not set a dubious precedent for the next weak link in the chain, whoever that might be. This is not much different than the U.S. bailing out NYC or a state; 2) like, Dubai, because Greece's currency is the same as its creditors, euros, nobody can destroy the situation beyond repair by shorting a Greek local currency into oblivion, so the game has been removed from traders, for the most part, and remains an internal issue of the EC.

My bet is that no default will occur, no matter what refinancing and stipulations may follow.

More than anything, what separates Dubai and Greece from past sovereign defaults is that they hold iand/or use internally the very same currencies in which they have borrowed. The fact that there's not some independent local currency to be targeted for decimation by traders and arbitrageurs cannot be underestimated when it comes to their staying power.]]> http://seekingalpha.com/article/178744-why-dick-bove-is-wrong-about-citigroup?source=feed#comment-811530 811530
This is completely classical price behavior for yet-to-be-priced pending share issues, so none of the recent action should come as a surprise or be seen as some kind of vote on operational issues. This type of shorting into -new share issue dates happens to firms all the time and is purely trader driven.

Once the shares are issued, the shorts collect their easy gains, and the shares will resume trading based on actual future expectations. Citibank has some challenges, for sure, but it appears to be a very nice bet at the current price and valuation metrics and could offer outsized percentage gains within the next two to three years. ]]> Thu, 17 Dec 2009 21:32:56 -0500
This is completely classical price behavior for yet-to-be-priced pending share issues, so none of the recent action should come as a surprise or be seen as some kind of vote on operational issues. This type of shorting into -new share issue dates happens to firms all the time and is purely trader driven.

Once the shares are issued, the shorts collect their easy gains, and the shares will resume trading based on actual future expectations. Citibank has some challenges, for sure, but it appears to be a very nice bet at the current price and valuation metrics and could offer outsized percentage gains within the next two to three years. ]]> http://seekingalpha.com/article/178677-how-the-citi-stock-offering-flopped?source=feed#comment-810777 810777
Overlooked, while all everybody's bellyaching about what "terrible" deal this was, is that at the offering price finally selected, the deal was oversubscribed by 17:1. That's a fantastically huge oversubscription and indicative of a couple things: 1) they wanted to be 100% sure the deal closed, but probably underpriced it; 2) typically, like all yet-to-be-priced new share issues --even more so in Citi's case-- the shorts bombed this thing into oblivion before the offering, knowing full well that more than ample shares would be available to cover, risk free. That's another reason why the deal was oversubscribed.

I fully expect, now that the messy business is in the rearview mirror and that shorting doesn't seem to make obvious sense, that Citi's shares will begin a slow, steady climb and will offer patient investors above-average returns on a percentage basis versus most of the other big banks.


On Dec 17 11:14 AM Tom Armistead wrote:

> I think Citigroup did the right thing: there was a window of opportunity
> for weak banks to recapitalize with funds from real investors rather
> than the Federal government. It was imperative that they demonstrate
> access to capital markets, otherwise they were not going to make
> it.
>
> The price was paid by shareholders who were diluted. That's how it's
> supposed to work, the equity takes the losses when more capital is
> needed. Obviously short sellers were going to be on this thing like
> flies on a manure pile.
>
> The Citigroup offering was not very attractive and it may not be
> indicative of what other financial institutions that need to access
> the capital markets will experience.]]> Thu, 17 Dec 2009 11:58:23 -0500
Overlooked, while all everybody's bellyaching about what "terrible" deal this was, is that at the offering price finally selected, the deal was oversubscribed by 17:1. That's a fantastically huge oversubscription and indicative of a couple things: 1) they wanted to be 100% sure the deal closed, but probably underpriced it; 2) typically, like all yet-to-be-priced new share issues --even more so in Citi's case-- the shorts bombed this thing into oblivion before the offering, knowing full well that more than ample shares would be available to cover, risk free. That's another reason why the deal was oversubscribed.

I fully expect, now that the messy business is in the rearview mirror and that shorting doesn't seem to make obvious sense, that Citi's shares will begin a slow, steady climb and will offer patient investors above-average returns on a percentage basis versus most of the other big banks.


On Dec 17 11:14 AM Tom Armistead wrote:

> I think Citigroup did the right thing: there was a window of opportunity
> for weak banks to recapitalize with funds from real investors rather
> than the Federal government. It was imperative that they demonstrate
> access to capital markets, otherwise they were not going to make
> it.
>
> The price was paid by shareholders who were diluted. That's how it's
> supposed to work, the equity takes the losses when more capital is
> needed. Obviously short sellers were going to be on this thing like
> flies on a manure pile.
>
> The Citigroup offering was not very attractive and it may not be
> indicative of what other financial institutions that need to access
> the capital markets will experience.]]> http://seekingalpha.com/news/market_currents/post/38284?source=feed#comment-806976 806976

On Dec 15 01:39 PM Northern Dancer wrote:

> Judging by the number of thumbs downs my last comment got, I have
> to conclude that people would rather accept that the no shows were
> more due to weather than to any sort of in-your-face fascist stance.
> Perhaps you are right. On Sunday morning Edmonton was the coldest
> city on earth at -43 degrees. Yesterday it hit -46 and with a very
> slight breeze, the wind chill was -53. That's cold... trust me, I
> was in it.
>
> So maybe all you who slammed that comment were right to do so. None-the-less,
> it really worries me that people don't recognize what fascism is,
> or else refuse to admit that we're living in it. Cold weather aside,
> it's not elected government who's running America.
>
> .]]> Tue, 15 Dec 2009 13:53:24 -0500

On Dec 15 01:39 PM Northern Dancer wrote:

> Judging by the number of thumbs downs my last comment got, I have
> to conclude that people would rather accept that the no shows were
> more due to weather than to any sort of in-your-face fascist stance.
> Perhaps you are right. On Sunday morning Edmonton was the coldest
> city on earth at -43 degrees. Yesterday it hit -46 and with a very
> slight breeze, the wind chill was -53. That's cold... trust me, I
> was in it.
>
> So maybe all you who slammed that comment were right to do so. None-the-less,
> it really worries me that people don't recognize what fascism is,
> or else refuse to admit that we're living in it. Cold weather aside,
> it's not elected government who's running America.
>
> .]]> http://seekingalpha.com/article/178265-no-sign-of-slowdown-in-rising-u-s-cmbs-delinquency-rates?source=feed#comment-806972 806972
Imagine, 29-fold! 4.47% overall delinquency rates! Mon dieu!

Fact: the maximum default rates are now projected to occur in 2011 at around 5.5%.

But, before everybody looks for a tall building with an open window, take note that this is not appreciably different than the last commercial realty recession in 1989-1992. What is different is that this time commercial-realty REITs and developers have seen their share prices decimated far beyond what appears reasonable from the above projections.

Also, during this recession, the commercial entities, having seen what happened to their residential cousins, have fortified themselves by selling assets, paying down and/or buying back debt, extending maturities, securing additional credit lines and raising capital. They appear to be in an excellent position to weather the storm, even make excellent value buys.

With the gradually improving economic conditions, it's the time to be assessing buying opportunities in this sector, not battening down the hatches.]]> Tue, 15 Dec 2009 13:50:59 -0500
Imagine, 29-fold! 4.47% overall delinquency rates! Mon dieu!

Fact: the maximum default rates are now projected to occur in 2011 at around 5.5%.

But, before everybody looks for a tall building with an open window, take note that this is not appreciably different than the last commercial realty recession in 1989-1992. What is different is that this time commercial-realty REITs and developers have seen their share prices decimated far beyond what appears reasonable from the above projections.

Also, during this recession, the commercial entities, having seen what happened to their residential cousins, have fortified themselves by selling assets, paying down and/or buying back debt, extending maturities, securing additional credit lines and raising capital. They appear to be in an excellent position to weather the storm, even make excellent value buys.

With the gradually improving economic conditions, it's the time to be assessing buying opportunities in this sector, not battening down the hatches.]]> http://seekingalpha.com/news/market_currents/post/38284?source=feed#comment-806734 806734 Tue, 15 Dec 2009 11:56:51 -0500 http://seekingalpha.com/news/market_currents/post/38280?source=feed#comment-806507 806507

On Dec 15 10:16 AM Tony Petroski wrote:

> Wow! Maybe Krugman was right. If we're going to grow at 2.4% with
> the current package of low rates and "high budget deficits," think
> of how easy it would be to triple the deficits and grow Chinese-style
> at 7.5 or 8.0%.]]> Tue, 15 Dec 2009 10:21:20 -0500

On Dec 15 10:16 AM Tony Petroski wrote:

> Wow! Maybe Krugman was right. If we're going to grow at 2.4% with
> the current package of low rates and "high budget deficits," think
> of how easy it would be to triple the deficits and grow Chinese-style
> at 7.5 or 8.0%.]]> http://seekingalpha.com/news/market_currents/post/38273?source=feed#comment-806414 806414
Contrary to hitting "home runs," which is what they had tried to do with high-spread risky loans, the banks need to hit a bunch of "singles," which will strike out a lot less, too, as compared to swinging for the fences.]]> Tue, 15 Dec 2009 09:42:27 -0500
Contrary to hitting "home runs," which is what they had tried to do with high-spread risky loans, the banks need to hit a bunch of "singles," which will strike out a lot less, too, as compared to swinging for the fences.]]> http://seekingalpha.com/news/market_currents/post/38212?source=feed#comment-806067 806067
For another opinion on this issue: truthandcommonsense.org/


On Dec 14 08:35 PM jpiretti wrote:

> The bill you speak of does not exist. Please cite date or name or
> number. You will not because you can't. There is a proposal called
> the The Frank-Dodd FHA Refinance Plan which proposes using the FHA
> under which lenders that chose to take part (no mandates) would agree
> to reduce the loan amount and refinance the mortgage at a lower interest
> rate in return for a cash fee. Refinanced loans would be guaranteed
> by the FHA, and the lender would have no further credit exposure
> if the borrower subsequently defaulted. That is not law and there
> is nothing in the past that you can cite. Stop repeating nonsense
> like a parrot. The only possible thing you could be referring to
> is mortgages through the CRA option. Again, if you choose to read
> the report, you will see that only 6% of the loans that could be
> identified as subprime, were sponsored by any govt. entity. 6% does
> not cause the problem when over 60% of the subprime loans in the
> last decade (mostly from 2004-2007) were written and sold through
> non-regulated non-bank entities (Countrywide). You are still completely
> wrong...read the report. It will be good for you.]]> Tue, 15 Dec 2009 03:57:18 -0500
For another opinion on this issue: truthandcommonsense.org/


On Dec 14 08:35 PM jpiretti wrote:

> The bill you speak of does not exist. Please cite date or name or
> number. You will not because you can't. There is a proposal called
> the The Frank-Dodd FHA Refinance Plan which proposes using the FHA
> under which lenders that chose to take part (no mandates) would agree
> to reduce the loan amount and refinance the mortgage at a lower interest
> rate in return for a cash fee. Refinanced loans would be guaranteed
> by the FHA, and the lender would have no further credit exposure
> if the borrower subsequently defaulted. That is not law and there
> is nothing in the past that you can cite. Stop repeating nonsense
> like a parrot. The only possible thing you could be referring to
> is mortgages through the CRA option. Again, if you choose to read
> the report, you will see that only 6% of the loans that could be
> identified as subprime, were sponsored by any govt. entity. 6% does
> not cause the problem when over 60% of the subprime loans in the
> last decade (mostly from 2004-2007) were written and sold through
> non-regulated non-bank entities (Countrywide). You are still completely
> wrong...read the report. It will be good for you.]]> http://seekingalpha.com/news/market_currents/post/38243?source=feed#comment-805661 805661
They would instantly become MetroPCS on steroids, a telecom killer. All the other carriers would be wise to buy some Depends, if that occurred. ]]> Mon, 14 Dec 2009 18:20:18 -0500
They would instantly become MetroPCS on steroids, a telecom killer. All the other carriers would be wise to buy some Depends, if that occurred. ]]> http://seekingalpha.com/news/market_currents/post/38212?source=feed#comment-805600 805600
We have seen the results.


On Dec 14 03:42 PM jpiretti wrote:

> Your completely wrong. The Dallas Fed did a study which showed only
> 6% of subprime loans came from the govt. guaranteed CRA banks this
> decade
> www.dallasfed.org/ca/b...
> while the vast majority came from unregulated non-bank entities such
> as Countrywide and Ameriquest. As far as who has taken the most Freddie
> and Fannie PAC money since 1989...here is the list
> 1) Blunt (R) MO
> 2) Bennett (R) UT
> 3) Bachus (R) AL
> 4) Bond (R) MO
> 5) Boehner (R) OH
> 5) Reid (D) NV tied
> Political liars will always list contributions from individuals that
> happen to work for Freddie/Fannie as part of the total, but PAC money
> comes with a lobbyest attached, not individuals contributions. I
> don't see Frank/Dodd on that list...just a bunch of hypocrites.
>
>
> On Dec 14 01:30 PM Tack wrote:]]> Mon, 14 Dec 2009 17:08:09 -0500
We have seen the results.


On Dec 14 03:42 PM jpiretti wrote:

> Your completely wrong. The Dallas Fed did a study which showed only
> 6% of subprime loans came from the govt. guaranteed CRA banks this
> decade
> www.dallasfed.org/ca/b...
> while the vast majority came from unregulated non-bank entities such
> as Countrywide and Ameriquest. As far as who has taken the most Freddie
> and Fannie PAC money since 1989...here is the list
> 1) Blunt (R) MO
> 2) Bennett (R) UT
> 3) Bachus (R) AL
> 4) Bond (R) MO
> 5) Boehner (R) OH
> 5) Reid (D) NV tied
> Political liars will always list contributions from individuals that
> happen to work for Freddie/Fannie as part of the total, but PAC money
> comes with a lobbyest attached, not individuals contributions. I
> don't see Frank/Dodd on that list...just a bunch of hypocrites.
>
>
> On Dec 14 01:30 PM Tack wrote:]]> http://seekingalpha.com/news/market_currents/post/38219?source=feed#comment-805348 805348
As things gradually improve, businesses will look to increase investments, and consumers will become less skittish about financing new homes, cars, etc., and we'll see the credit-contraction ratios change. This won't occur because, suddenly, the "big, evil banks" get a benevolent streak and start looking after the guys on main street; it will happen because demand will finally exceed paydowns.

And, when demand does increase, there's plenty (too much) liquidity in the system to service it.]]> Mon, 14 Dec 2009 13:56:30 -0500
As things gradually improve, businesses will look to increase investments, and consumers will become less skittish about financing new homes, cars, etc., and we'll see the credit-contraction ratios change. This won't occur because, suddenly, the "big, evil banks" get a benevolent streak and start looking after the guys on main street; it will happen because demand will finally exceed paydowns.

And, when demand does increase, there's plenty (too much) liquidity in the system to service it.]]> http://seekingalpha.com/news/market_currents/post/38217?source=feed#comment-805326 805326
That the market understands this is demonstrated by ING's recent performance. The Dutch government, unlike the U.S. government, mandated that ING must --not "may"-- repay loans and is requiring them to shed overseas operations to achieve this. In about a month, ING's share price has declined by over 50%.

As for Citibank: become efficient, profitable? Yes. Become smaller, retreating? No.]]> Mon, 14 Dec 2009 13:43:40 -0500
That the market understands this is demonstrated by ING's recent performance. The Dutch government, unlike the U.S. government, mandated that ING must --not "may"-- repay loans and is requiring them to shed overseas operations to achieve this. In about a month, ING's share price has declined by over 50%.

As for Citibank: become efficient, profitable? Yes. Become smaller, retreating? No.]]> http://seekingalpha.com/news/market_currents/post/38212?source=feed#comment-805304 805304
If lending terms returned to some classical requirement, like 20% downpayments and appropriate income qualification, there would be no disproportionate flows into real estate, nor would there be unbalanced risks. In such a situation, what entity provided the funding would be rather unimportant.


On Dec 14 01:04 PM Carlos Lam wrote:

> On Dec 14 12:56 PM Tack wrote:]]> Mon, 14 Dec 2009 13:30:51 -0500
If lending terms returned to some classical requirement, like 20% downpayments and appropriate income qualification, there would be no disproportionate flows into real estate, nor would there be unbalanced risks. In such a situation, what entity provided the funding would be rather unimportant.


On Dec 14 01:04 PM Carlos Lam wrote:

> On Dec 14 12:56 PM Tack wrote:]]> http://seekingalpha.com/news/market_currents/post/38214?source=feed#comment-805264 805264
Somehow, it never seems to work that way.]]> Mon, 14 Dec 2009 13:00:17 -0500
Somehow, it never seems to work that way.]]> http://seekingalpha.com/news/market_currents/post/38212?source=feed#comment-805254 805254
If mortgages are provided to responsible borrowers, who make 10-20% downpayments and have the ability to repay, then, there will be no unmanageable problems. If, however, 100% mortgages continue to be provided to unqualified borrowers, as yet another entitlement program for the "deserving," then, we'll have perpetual losses and all the accompanying problems.]]> Mon, 14 Dec 2009 12:56:53 -0500
If mortgages are provided to responsible borrowers, who make 10-20% downpayments and have the ability to repay, then, there will be no unmanageable problems. If, however, 100% mortgages continue to be provided to unqualified borrowers, as yet another entitlement program for the "deserving," then, we'll have perpetual losses and all the accompanying problems.]]> http://seekingalpha.com/news/market_currents/post/38206?source=feed#comment-805199 805199

On Dec 14 11:44 AM Harry Tuttle wrote:

> In other words, those who were bullish are still bullish.
>
> No much of an insight.
>
> Wall St. strategists are always bullish. I bet Abby Cohen still sees
> +20% upside (she always does)]]> Mon, 14 Dec 2009 12:21:40 -0500

On Dec 14 11:44 AM Harry Tuttle wrote:

> In other words, those who were bullish are still bullish.
>
> No much of an insight.
>
> Wall St. strategists are always bullish. I bet Abby Cohen still sees
> +20% upside (she always does)]]> http://seekingalpha.com/article/178033-dubai-offers-up-more-of-the-same?source=feed#comment-805073 805073
There's no way on this earth that the UAE was going to allow "infidel" Western banks to foreclose on properties in Dubai and be the landlords within the country. That left them with two alternatives: 1) default, but refuse to honor international law and permit foreclosures to proceed, or 2) bail out Dubai. As option #1 would have destroyed the UAE's ability to function in international finance, sensibly, they selected option #2.]]> Mon, 14 Dec 2009 11:21:29 -0500
There's no way on this earth that the UAE was going to allow "infidel" Western banks to foreclose on properties in Dubai and be the landlords within the country. That left them with two alternatives: 1) default, but refuse to honor international law and permit foreclosures to proceed, or 2) bail out Dubai. As option #1 would have destroyed the UAE's ability to function in international finance, sensibly, they selected option #2.]]>