Mark in SF's Comments

The Toxic Assets Plan - Yes, It's a Subsidy

Mon, 23 Mar 2009 03:00:42 -0400

"You keep hearing the term "private investors" that is going to be Goldmans Sachs......any bets????? "

Yep. They will bid as high as they can get away with. Buy calls and equity in Citibank, then proceed to tunnel 100's of billions of taxpayer money in to Citibank using the 3% investment. Then they will let the private/public SIV burn, and end up with all the taxpayer cash.

The Toxic Assets Plan - Yes, It's a Subsidy

Mon, 23 Mar 2009 02:57:46 -0400

"If there was any value to be found in this bad loan paper, private investors would have sniffed it out long ago."

Yep. Why isn't buffet buying up this stuff for 1/2 it's "real" value.

Sad fact is we now live in a oligarchy. The rich are bailed out under they guise of "rescuing the economy". The only upside would be if the rich are then asked to pay for it by a 70% tax rate over $1M. I might put my pitchfork away if I'm not going to be asked to bail out some $10M net worth person that had an AIG CDS insured wealth management fund at Goldman.

The Geithner Plan FAQ

Mon, 23 Mar 2009 02:43:25 -0400

Paul: "Seems like on this site, we have a lot of bitter GOP supporters who would claim the plan is a failure no matter what."

I voted for Obama. Krugman voted for Obama. We all hate the Geithner plan. It a blatant handout to banks, that obfuscated just enough so to public can't really get it.

The Geithner Plan FAQ

Mon, 23 Mar 2009 02:41:14 -0400

GEITHNER PUT.

How to avoid it? What's to prevent some hedgee bidding face value, and letting the private/public SIV crash and burn? So long as are LONG in some other hedge fund on the bank they are handing the taxpayer cash over too, they are golden.

Smells like an invitation to tunneling to me. It stinks and makes me sick to my stomach.

Where Are Jim Rogers, Marc Faber and Doug Casey Investing Their Money in This Market?

Tue, 03 Mar 2009 19:48:27 -0500

I think Rogers if full of it. Every time I've seen him over the last 5 years he says he recently bought some more of XYZ commodity. If he's such a commodities bull why wasn't he already heavily invested? Is he dollar cost averaging or something?

Face it. People like Rogers are rich "Financial Celebrities" who have their groupies. Networks like CNBC have them on to boost viewership, and the Financial Celebrities get to have their egos stoked. It's not at all clear that his fortune was not primarily the luck of having been with Soros when he was cleaning up in the currency markets.

Inflation: Demand Destruction and Wealth Erosion Trump Money Growth

Sat, 21 Feb 2009 21:48:37 -0500

Tetrapod: "Monetary inflation is the change in the ratio between money-supply and GDP"

Amazing how often I hear this. Just spend 1/2 an hour studying the economic history of post 1990 Japan, and you'll see this is not true. Monetary base tripled 1990-2005, and every other money supply measure vastly increased as well. Yet inflation never gained traction. If you want to really understand what's going on, look at the ratio between DEBT in private sector and GDP.

Let's Have Inflation

Mon, 19 Jan 2009 20:10:19 -0500

Yes!! Let's reward imprudent home buyers and by making their debt burden go away. Brilliant!!

Let's punish savers and and the prudent that that did not get involved in the bubble!!

Let force the world to bail on the dollar as a reserve currency!!

Oh, and while were at it, let's wipe out pension funds, insurance reserves, and all the corporate savings accumulated over the last decade!!

I love it!!

A Deflationary Spiral? Not Likely in the U.S.

Wed, 14 Jan 2009 03:14:10 -0500

"I know that I am way out of my league here - but what would happen if we suddenly declared all debt forgiven? Instead of pouring trillons into the banks to stimulate lending - imagine what would happen to the economy if the american consumer and business had not debt - no credit cards, mortage, car payment, ect... Talk about a stimulus. As a small business owner, lack of debt would certainly allow me to hire more people and start new projects. "

Mr. B, turn it around: Imagine if all savings were wiped out. All pension funds. All insurance company reserves. Social security reserves. Your companies cash holdings. What do you think savings are? It's all somebody else's debt.

Citi's Flip-Flop on Mortgage Cramdowns: A Really Bad Idea

Wed, 14 Jan 2009 02:58:54 -0500

nino: " I do home loans and lend hard money. As of today, I do not do hard money loans at any price. "

Hey nino: I suggest you do not lend more money than a property is worth, if the only collateral is that property.

DUH!

Citi's Flip-Flop on Mortgage Cramdowns: A Really Bad Idea

Wed, 14 Jan 2009 02:54:44 -0500

This article is absurd. If someone someone has made a legitimate claim to bankruptcy, they will be walking away on the property anyway, leaving the bank with the collateral worth what their crammed down loan asset would have been worth.

In other words: The bank will take the hit in bankruptcy, or take the hit when they foreclose. What's the difference?

Citi's Flip-Flop on Mortgage Cramdowns: A Really Bad Idea

Wed, 14 Jan 2009 02:48:09 -0500

Ah... so cram downs, which are the norm for commercial property owners under bankruptcy, should not be for the common folk.

No, no, no.... somebody had got to be the debt slave.

Estimated Change in Home Prices

Wed, 14 Jan 2009 00:35:11 -0500

Griz: "I've been thinking of writing a book on "How to Live for Free" as a squatter in many of the vacant homes across Southern California; would anyone be interested in receiving a copy? "

Start a blog. I bet you'd get lots of traffic.

Are Home Prices Still Too High?

Mon, 05 Jan 2009 04:47:07 -0500

"People who jumped into houses with no risk"

Ask yourself this: What kind of idiot lends somebody money when they have no skin in the game? Of course they are going to default if it doesn't pan out for them. You says no-recourse is "bad enough" but that is what it means to be a SECURITIZED LOAN. This is what businesses do every single day when they can't meet obligations. It's capitalism 101.

What you fail to see is this: If it's not a cram down, it will be a 100% loss. The borrower will not pay. This is not Russia, but what you seem to want is 18th century England when we had debtors prisons.

On Jan 02 08:06 AM nobull wrote:

> The forced loan modifications by judges is what scares and disgusts
> me the most. Thats worse than Russia. People who jumped into houses
> with no risk had the option of walking away from a loss and sticking
> the bank with the loss with the loss. As if that wasnt bad enough,
> now they also get rewarded for it.

Option ARMs: The Banking Backdrop of 2009

Mon, 05 Jan 2009 04:31:02 -0500

I don't see how we will pull out of a recession before 2011. Housing clearly will not bottom before then, and the gov't seems hell bent on keeping that correction from happening quickly.

Option ARMs: The Banking Backdrop of 2009

Mon, 05 Jan 2009 04:13:10 -0500

the solution to the option ARM's is to REFINANCE the damn thing!!!!!11

@ishortyou:

you are *completely* missing the point. These loans will automatically refinance (recast) to a standard amoritizing 30 or 40 year loan. How is refinancing early going to help? I suppose it could for a lower rate. If they had enough equity, but... OOPS. That equity is gone.

U.S. Housing: A False Dawn Recovery in 2009?

Mon, 05 Jan 2009 03:36:04 -0500

@Bornstein

What are you suggesting? I bail out Alt-A borrowers?

Why will losing their homes mean losing their jobs? You're not making any sense.

In your report did you mention how many people LIED on their Alt-A loan applications?

U.S. Housing: A False Dawn Recovery in 2009?

Mon, 05 Jan 2009 03:25:07 -0500

@kunst
"We wouldn't stiff the rest of the world like that, would we? "

you are forgetting that most debt is owed to other (rich) Americans. The US goverment debt is just a small part of overall debt.

Those rich folk are not so keen on high inflation, I guarantee, as it means their wealth (and the common man's debt) goes away.

U.S. Housing: A False Dawn Recovery in 2009?

Mon, 05 Jan 2009 03:20:21 -0500

"compared to $140k at the beginning of the decade before the bubble began to inflate."

I disagree. This thing got started in 1996. Mid 00's was just when things got really, really frothy. There was plenty of speculation, assuming property always went up, interest only ARMS, etc before that.

Time To Bail Out WaMu?

Thu, 11 Sep 2008 04:30:21 -0400

"Washington Mutual has enough cash to buy all of it's stocks itself..."

What good is borrowed cash? It's all about the assets minus liabilities.

Oil: The Inconvenient Truth

Thu, 04 Sep 2008 03:34:34 -0400

Brian, you reference some article slamming Gore written by somebody that clearly has no clue about science?

"Let me illustrate. I estimate that this square in front of my face contains 100,000 molecules of atmosphere. Of those 100,000 only 38 are CO2; 38 out of a hundred thousand. That makes it a trace component. Let me ask a key question: how can this tiny trace upset the entire balance of the climate of Earth? It can’t. That’s all there is to it; it can’t."

Please pick up an introductory geology or meteorology textbook. Without that 380ppm trace CO2 the earth would be a big ball of ice. (C02 used to be 25% less before the industrial revolution, something the author conveniently ignores)

Roubini Now Says House Prices to Fall 30%

Wed, 09 Apr 2008 05:23:36 -0400

I'll buy a house when it makes sense to: when it's no longer much cheaper to rent. Homeownership has it advantages, but I'm sorry... at 50%+ premium like we *still* have in San Francisco is just not worth it, no matter what euphoria the NAR is trying to push on us. Half my friends want to 'buy on the dip' with new jumbo limits as a 'once in lifetime opportunity'. Amazing how many people are still smoking the crack.

The Fed Is Leaning Hard Into a Headwind

Fri, 28 Mar 2008 15:58:32 -0400

I'm guessing Purl Gurl is a homeowner? Yes of course rising *real* wages would be a good thing, and we can all cheer on measures taken to encourage that. That does not mean housing has sufficiently corrected. Home prices are not a matter of public policy, and any policy that seeks to prop up their value does NOTHING to promote real wealth or real increase in wages. I do share some of your outrage though about the greed being allowed free reign in our system.

The Fed Is Leaning Hard Into a Headwind

Fri, 28 Mar 2008 15:44:32 -0400

"If an agreement can be reached (the borrower receives some skin in the game, the lender doesn’t take too much of a hit), then both side will be better off"

'Receives' some skin in the game? LOL. I tend to think of 'skin in the game' as equity that was EARNED by actual work or investment, not a handout from a lender. Skin the game is what keeps people from taking too much risk for fear of loss. A hand out from a lender is just the opposite! It's rewarding taking on too much risk by getting a hand out! 'Receives skin in the game?!?' I'll have to remember that one.

Time To Short the British Pound?

Fri, 28 Mar 2008 05:31:36 -0400

Or do forex. Don't have to tie up lots of capital that way.

Reconsidering the Deflation Risk

Fri, 28 Mar 2008 04:04:02 -0400

In an economy in which 2/3 of GDP depends on “buy now,” the Fed will do everything in its power to prevent this from happening.

Yeah, but the fed does not have much power to prevent the inevitable. Remember pushing on a string? That takes a long long time to work, and it's not working at all right now. But they time it does a deflationary mindset will have set in pretty well. The only thing the fed can do to inflate over this debt mess is start actully printing lots of money (none of this swap/repo stuff), and flirt with the death of the USD. Not going to happen IMO.

Why I Don't Own Commodities

Thu, 27 Mar 2008 05:34:49 -0400

SD, deecee,
Just to be clear, the fed and other central banks are categorically *not* printing up lots of money. The commodities boom may have gotten a bit of a speculative kick from recent fed easing - maybe, but the rational for the commodities boom has very little to do with monetary debasement. It's just good old supply and demand.

The Fed is Deflating: 10 Reasons Why

Thu, 27 Mar 2008 05:03:06 -0400

This is a great article. I've been trying to explain to people why commodity prices increases, and the prices of items that are heavily dependent on commodities, does not constitute inflation - at least not the kind we associate with a y/y percentage like in the 70's. Also been trying to explain that the fed is NOT printing money (at least yet). I will refer them to this article, which does a better job of explaining than I've been able to do.