WeezieBenobi

What Kind of Government Support Will Fannie and Freddie Get?

Kindly explain the reaction by the TNX when the rumor circulated about FNE/FNM having access to the Fed window.

The bond market was not amused.

Snuggling up to a New Position in Build a Bear Workshops

Put a fork in the business. It has several strikes against it: 1) positioning exclusively in malls. Malls are becoming the ghetto of retail. 2) as user 2lakes noted - it's a one trick pony. I have a 9 year old daughter and even she can get tired of bears, ponies, bunnies, etc. ad nausem 3) consumer discretionary spending is down and is only going to head south and buying fluffy teddy bears is about as 'discretionary' of a purchase as one can get.

United Health: Good Medicine for Your Portfolio

Shares are cheap because UHC has a poor reputation regarding its customer service. The customer acquisition model follows a pattern of a) lowballing premiums so employers jump on board b) offering abhorrent service to the point that key employees of said employer leave the company to go to other employers with better healthcare c) employer leaves UHC because they realize the point of offering healthcare is to retain employees.

Even the article in a recent Wall Street Journal mentioned the flight of 'disgruntled customers.' That's not an overstatement. They cut corners in their training and service to prop up ROE and have to cut their 'initial' premiums to entice new customers. This just creates a vicious cycle. Couple that with an uncertain political environment and it's no mystery why investors don't bite.

Housing Market Tracker - Even Mortgage Brokers Want to Stop Foreclosures

I agree with you gordon. I'd love to live in a $500K home too (in Austin, TX, you can get one heck of a home for that), but no, my husband and I got a home that has a payment that is only 13.8% of our income (that's mortgage, taxes and insurance all together, by the way) so that we can have a bit of breathing room and actually have a retirement savings, savings for our kid's college and 6 months savings in case of an emergency. I'm really p***ed that my taxes will go up and inflation through the roof, destroying all that I've worked for. I'm tired of being screwed for doing the right thing.

Jim Rogers: Fed Policy is 'Outrageous'

I've been reading a lot of this information and it's a great lesson. But how does one shore up their 401k which has relatively limited options. (Aside from the basic large/mid/small cap growth/value funds we have global, bonds and in one 401k, inflation linked bonds.) For my regular savings/investments which I have unlimited choices, it seems that some decent commodity and currency ETFs, with some global debt and stocks is a good mix. Can anyone recommend a decent portfolio to get someone through this? Thanks to anyone who has some sound ideas.

Great article, Keith, and thanks for taking the time to write it.

The Credit Bubble: Deregulation Gone Wild

"Free Markets"? Reminds me of Orwell's Animal Farm: "all Animals are equal, but some are more equal than others." And in case you're confused, most people here are equivalent to the horse.

Until there is some real teeth and real consequences (as in jail time, fines exceeding the payout and barring from the financial industry) this behavior will continue. Having Uncle Sam subsidize this lemonade stand isn't going to make the kids play fair.

Socialize the risk, but privatize the profits. The sad thing is that they're using the 'poor homeowner' and the 'average American' as the rally point; omitting that this bailout will do far more to impoverish the country than letting things go its natural way.

Housing Market Tracker - It's About Affordability, Stupid.

What I can't wrap my head around is that "...the average American can't afford an average home". Huh? Then who is purchasing these homes?

I will offer, from an admittedly basic understanding of economics and a good deal personal observation, that it is creative lending programs and government programs that are artificially increasing prices. The sub-prime mortgage mess is a prime example of this - creative lending and lax regulations allowed more buyers into a relatively limited, but highly demanded, market. Prices go up, financing becomes more creative, prices go up again... rinse and repeat.

But even before the current sub-prime debacle, I've always found special financing programs, FHA assistance and other government assistance for lower- (and yes, even mid-to-higher) income housing baffling. Years ago when I and my partner was looking for a house, we were priced out of bidding for one home by another couple who had less income but was getting a down payment subsidy. Well, if someone with a higher income was priced out, but another with a lower income got in, doesn't that indicate that perhaps there is something wrong?

A very clear indication that the programs are not just putting people in homes, but putting the very same homeowners in properties that realistically they can't afford, but are given the illusion they can.

Unfortunately, we're in a catch-22. If the mortgages went back to the standard 10/20% down for a fixed 15/30 year term and reasonable credit scores, then that would reduce the pool of buyers, reduce the demand for houses and drive down prices - sticking those who purchased recently (both those who could and those who could not) with an asset with a declining value, yet keeping this altruistic 'everyone has a right to own a home' without demanding that the buyer can afford the home, only props up prices and perpetuates this cycle.

Wal-Mart: What PR Won't Fix

Chungst and valueguy123 -
C'mon guys... Wal-Mart was adamant on their position regarding the repayment of the money from the start. They only caved in when they realized that this had become an enormous PR minefield. The regrettable thing here is that Wal-Mart wasn't the real evil here, but rather the idiot attorney who didn't bother to check the insurance policy, allowed a settlement on only $1 Million and took over half of it. Unfortunately Wal-Mart took the hit because it's reputation preceeded it. Life's unfair, karma's a b**** and so on.

As far as the charity goes... chutzpa anyone? I wonder what percentage of their employees (who'd life full-time hours but Wal-Mart's 'keeping costs down') rely on the charities that Wal-Mart contributes to? It's a PR shell game and people are starting to realize that there is nothing under any of the cups.

Wal-Mart: What PR Won't Fix

As much as I do agree with your comments, the sad truth is that evil is profitable. As long as the cost-cutting 'at all costs' mentality is the basis of the corporate culture, the consumers (who are quite brave, outspoken... even outraged... in the blogs or in the op-ed columns) keep on opening their pocketbooks, and the stockholders don't demand real change (apparently 5 years of stagnant stock performance is acceptable), then there's no reason to change from 'business as usual.'

As far as Google not 'being evil', I suspect that the target anthesis they had in mind was Microsoft, not Wal-Mart.