MichaelZZ's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/222506/comments http://seekingalpha.com/article/177875-the-truth-about-goldman-and-aig-becomes-clearer?source=feed#comment-803802 803802
1. GS was probably most responsible for the run-up of the price of crude to $147 via promotion and manipulation.
2. GS was probably greatly responsible for the mortgage woes (see my thoughts following this short litany).
3. GS appears to have paid off Warren Buffet to obtain his ability to promote (see my thoughts).
4. We, the People, paid GS $13 billion through AIG. Why wasn’t this investigated?
5. GS appears to view itself as the De Beers of the securities markets.
6. Mr. Henry Paulson (Treasury Secretary, Bush Administration and ex-CEO of GS), panicked around the middle of September 2008, and “educated” Congressional leaders that we were in the middle of a financial crises.
Interestingly, after reaching a high of $250.70 on October 31, 2007, GS’s common stock fell to under $86 on September 18, 2008.


Regarding 2, above:
Billions and billions (Carl Sagan) of years ago…, well, maybe 30-40 years ago,
financial institutions would loan funds for the purchase of homes and would
collect the funds over a period of years. The concept of selling those loans
(mortgages) was developed to enable these institutions to recycle the funds for the
purpose creating more loans with the proceeds from selling the mortgages to other
institutions and investors.
Via competition, these institutions began lowering the requirements for purchasers
of residential properties, e.g., whereas the standard down payment was 20%, that
requirement was reduced through competition to 15%, to 10%, and, in some cases,
no down payment was required.
Enter the Goldman-Sachs and its collective “creativity”.
Is it possible (simplistic, but an interesting roadmap):
a. GS went to Countrywide to promote the concept of stimulating the creation of
additional mortgages that GS will package and sell as securities?
b. GS attempts to sell the packaged securities and met with a head-wind insofar as the securities were not rated.
c. GS went to the rating agencies, S&P, Moodys, etc. to obtain a rating, but were told they couldn’t receive a good rating unless the securities were “insured”.
d. GS finds an insurer (a subsidiary of AIG) to obtain “insurance” for the packaged mortgages. GS sells the idea to the insurer that GS is willing to pay a fee as a cost of doing business. Further, it may have been that GS sold the insurer to believe that defaults would be almost non-existent and that the fees were “found money” for the insurer. The insurer bought into this sales pitch based upon greed. Thus, these securities (bonds) were given investment grade ratings by S&P, Moodys, etc., and the result was a flood of sales of these bonds (CDO’s – Collateralized Debt Obligations).
e. GS, knowing that these highly rated CDO’s were risky, and after they sold these CDO’s, went out and purchased CDS’s (Credit-Default Swaps). They no longer had any insurable interest, but still expended funds to purchase these CDS’s. Why? Perhaps they knew that it was only a matter of time before the CDO’s would collapse? Those who purchased the CDO’s were the one’s who should have been advised to purchase the CDS’s. There should be a serious investigation into GS as to why it purchased these CDS’s.
f. After the collapse, the insurer did not have the funds to pay off, thus We, the People, via our President came to its aid by injecting more than a hundred billion dollars into AIG to enable the payments to GS and others.

Regarding 3, above:
In the middle of 2008, Berkshire Hathaway (Warren Buffet) purchased $5 billion
of preferred stock from GS. The dividend rate is 10%!! As a “kicker”, GS granted BRK long-term warrants to purchase 143,000,000 shares of GS @ $135.00 per share. Why would GS have made such an apparently desperate deal with Mr. Buffet?
Shortly thereafter, Mr. Buffet was constantly on CNBC, promoting TARP.

Is this good circumstantial evidence?
What would a rational reader conclude?
Where are our investigative reporters?
What should a citizen/taxpayer conclude?

mz
07/05/09]]> Sun, 13 Dec 2009 12:02:59 -0500
1. GS was probably most responsible for the run-up of the price of crude to $147 via promotion and manipulation.
2. GS was probably greatly responsible for the mortgage woes (see my thoughts following this short litany).
3. GS appears to have paid off Warren Buffet to obtain his ability to promote (see my thoughts).
4. We, the People, paid GS $13 billion through AIG. Why wasn’t this investigated?
5. GS appears to view itself as the De Beers of the securities markets.
6. Mr. Henry Paulson (Treasury Secretary, Bush Administration and ex-CEO of GS), panicked around the middle of September 2008, and “educated” Congressional leaders that we were in the middle of a financial crises.
Interestingly, after reaching a high of $250.70 on October 31, 2007, GS’s common stock fell to under $86 on September 18, 2008.


Regarding 2, above:
Billions and billions (Carl Sagan) of years ago…, well, maybe 30-40 years ago,
financial institutions would loan funds for the purchase of homes and would
collect the funds over a period of years. The concept of selling those loans
(mortgages) was developed to enable these institutions to recycle the funds for the
purpose creating more loans with the proceeds from selling the mortgages to other
institutions and investors.
Via competition, these institutions began lowering the requirements for purchasers
of residential properties, e.g., whereas the standard down payment was 20%, that
requirement was reduced through competition to 15%, to 10%, and, in some cases,
no down payment was required.
Enter the Goldman-Sachs and its collective “creativity”.
Is it possible (simplistic, but an interesting roadmap):
a. GS went to Countrywide to promote the concept of stimulating the creation of
additional mortgages that GS will package and sell as securities?
b. GS attempts to sell the packaged securities and met with a head-wind insofar as the securities were not rated.
c. GS went to the rating agencies, S&P, Moodys, etc. to obtain a rating, but were told they couldn’t receive a good rating unless the securities were “insured”.
d. GS finds an insurer (a subsidiary of AIG) to obtain “insurance” for the packaged mortgages. GS sells the idea to the insurer that GS is willing to pay a fee as a cost of doing business. Further, it may have been that GS sold the insurer to believe that defaults would be almost non-existent and that the fees were “found money” for the insurer. The insurer bought into this sales pitch based upon greed. Thus, these securities (bonds) were given investment grade ratings by S&P, Moodys, etc., and the result was a flood of sales of these bonds (CDO’s – Collateralized Debt Obligations).
e. GS, knowing that these highly rated CDO’s were risky, and after they sold these CDO’s, went out and purchased CDS’s (Credit-Default Swaps). They no longer had any insurable interest, but still expended funds to purchase these CDS’s. Why? Perhaps they knew that it was only a matter of time before the CDO’s would collapse? Those who purchased the CDO’s were the one’s who should have been advised to purchase the CDS’s. There should be a serious investigation into GS as to why it purchased these CDS’s.
f. After the collapse, the insurer did not have the funds to pay off, thus We, the People, via our President came to its aid by injecting more than a hundred billion dollars into AIG to enable the payments to GS and others.

Regarding 3, above:
In the middle of 2008, Berkshire Hathaway (Warren Buffet) purchased $5 billion
of preferred stock from GS. The dividend rate is 10%!! As a “kicker”, GS granted BRK long-term warrants to purchase 143,000,000 shares of GS @ $135.00 per share. Why would GS have made such an apparently desperate deal with Mr. Buffet?
Shortly thereafter, Mr. Buffet was constantly on CNBC, promoting TARP.

Is this good circumstantial evidence?
What would a rational reader conclude?
Where are our investigative reporters?
What should a citizen/taxpayer conclude?

mz
07/05/09]]> http://seekingalpha.com/article/161845-capacity-s-comeback-strongly-indicates-recession-s-end?source=feed#comment-682009 682009 He was spot on.
I am sure there were many others that offered good information, but his pragmatism leaped off the page.

We cannot solve a problem until and unless we understand the cause of the problem. This is so basic, it should be viewed as being redundant. I am being redundant because it appears that our "leadership" (collectively) does not understand the root cause of our economic malaise.

ROOT CAUSE: Greed. Pervasive greed.

I will address two critical macro subsets of this greed:
1) The massive shift of wealth from the middle class to the ultra wealthy (top 1/10th of 1%) during these past 27-28 years. The beginning was enabled by the March 30, 1981 event regarding John Hinckley. Prior to the attempt upon the life of President Reagan, his tax cuts were absolutely DOA.
The coup de grace was delivered by President Bush’s tax legislations of 2001 – 2003. The largest (2001) was set up by Alan Greenspan’s testimony before Congress in 2000; he appeared to be extremely concerned as to what we, this Nation, would do once the national debt was repaid; would the government begin to buy up common stocks, et cetera.

2) The massive shift of manufacturing to offshore sites.
As Mike from NYC pointed out, when we purchase items manufactured offshore, most of the energies go offshore, i.e., those energies are not recycled within our economy, thus do not produce the jobs that would be produced if those energies remained within our economy.

There are pragmatic solutions to both of the above.
Those interested can e-mail me @ mikiesmoky@roadrunner.com

mz 09/17/09

The following are Mike from NYC’s comments:

·
o Mike from NYC:
o Comments (25)
o Follow
"Notice on the graph that the recovery in CU after the last two recessions was much more gradual than it was in earlier recessions. This mirrors the prolonged “jobless recoveries” we had following those downturns. I suspect the same thing will happen this time around.

Note that we never fully recovered in terms of CU during the last economic expansion, and that the peak was not that much higher than the worst we saw during the 1990 recession. Still, it is nice to be headed in the right direction."

I read the responses and NO ONE has mentioned the outsourcing of industrial production, especially that of consumer products, to China and elsewhere.

The USA will never see the rise in CU as we did in years gone by prior to about the mid 90s when American companies exited the USA and marched to China and other low wage countries. When Americans go shopping, if and when the recession ends (that is, the 'real world' recession not just numbers or that on Wall Street), they won't be putting Americans to work other than in sales jobs. Buy a TV, an air conditioner, a pair of pants, a power tool, and it won't put one American factory worker to work. It won't cause the expansion or renovation of factories putting architects, engineers, construction workers, machine manufacturers and everything else that makes a factory tick, back to work.

There is a 'price' to be paid for all the cheap products we buy as there is no free ride and we will witness the full blown effects of the American companies rush into cheap wage countries. We witnessed it during the last recovery, and it will be worse during this recovery - a JOBLESS recovery.

All of you people can recite theory after theory, point to your data and charts and the historicals, but you miss the big picture - common sense and the realization that things have changed far too rapidly during the past 15 years in the USA and it hasn't yet been accounted for in the data.

Maybe I'm the one who is crazy, but so far every prediction I made has come true - that the Dot Com craze was BS pushed by Wall Street, as well as the 'get rich through real estate' bubble pushed by Wall Street and such geniuses as Trump (who by the way is at it again). Flip this house!

Why work to get rich when Wall Street can do it for you - isn't that their premise?
]]> Fri, 18 Sep 2009 01:52:35 -0400 He was spot on.
I am sure there were many others that offered good information, but his pragmatism leaped off the page.

We cannot solve a problem until and unless we understand the cause of the problem. This is so basic, it should be viewed as being redundant. I am being redundant because it appears that our "leadership" (collectively) does not understand the root cause of our economic malaise.

ROOT CAUSE: Greed. Pervasive greed.

I will address two critical macro subsets of this greed:
1) The massive shift of wealth from the middle class to the ultra wealthy (top 1/10th of 1%) during these past 27-28 years. The beginning was enabled by the March 30, 1981 event regarding John Hinckley. Prior to the attempt upon the life of President Reagan, his tax cuts were absolutely DOA.
The coup de grace was delivered by President Bush’s tax legislations of 2001 – 2003. The largest (2001) was set up by Alan Greenspan’s testimony before Congress in 2000; he appeared to be extremely concerned as to what we, this Nation, would do once the national debt was repaid; would the government begin to buy up common stocks, et cetera.

2) The massive shift of manufacturing to offshore sites.
As Mike from NYC pointed out, when we purchase items manufactured offshore, most of the energies go offshore, i.e., those energies are not recycled within our economy, thus do not produce the jobs that would be produced if those energies remained within our economy.

There are pragmatic solutions to both of the above.
Those interested can e-mail me @ mikiesmoky@roadrunner.com

mz 09/17/09

The following are Mike from NYC’s comments:

·
o Mike from NYC:
o Comments (25)
o Follow
"Notice on the graph that the recovery in CU after the last two recessions was much more gradual than it was in earlier recessions. This mirrors the prolonged “jobless recoveries” we had following those downturns. I suspect the same thing will happen this time around.

Note that we never fully recovered in terms of CU during the last economic expansion, and that the peak was not that much higher than the worst we saw during the 1990 recession. Still, it is nice to be headed in the right direction."

I read the responses and NO ONE has mentioned the outsourcing of industrial production, especially that of consumer products, to China and elsewhere.

The USA will never see the rise in CU as we did in years gone by prior to about the mid 90s when American companies exited the USA and marched to China and other low wage countries. When Americans go shopping, if and when the recession ends (that is, the 'real world' recession not just numbers or that on Wall Street), they won't be putting Americans to work other than in sales jobs. Buy a TV, an air conditioner, a pair of pants, a power tool, and it won't put one American factory worker to work. It won't cause the expansion or renovation of factories putting architects, engineers, construction workers, machine manufacturers and everything else that makes a factory tick, back to work.

There is a 'price' to be paid for all the cheap products we buy as there is no free ride and we will witness the full blown effects of the American companies rush into cheap wage countries. We witnessed it during the last recovery, and it will be worse during this recovery - a JOBLESS recovery.

All of you people can recite theory after theory, point to your data and charts and the historicals, but you miss the big picture - common sense and the realization that things have changed far too rapidly during the past 15 years in the USA and it hasn't yet been accounted for in the data.

Maybe I'm the one who is crazy, but so far every prediction I made has come true - that the Dot Com craze was BS pushed by Wall Street, as well as the 'get rich through real estate' bubble pushed by Wall Street and such geniuses as Trump (who by the way is at it again). Flip this house!

Why work to get rich when Wall Street can do it for you - isn't that their premise?
]]> http://seekingalpha.com/article/152909-cash-for-clunkers-may-cost-up-to-45-354-per-vehicle?source=feed#comment-610917 610917 The program is naive and infantile.
If we, as a Nation, want to get serious, Congress would pass an additional gas tax of $3.00 per gallon.
An income tax credit of $1,200 per year would be given to any licensed driver, who is a citizen or has a valid green card, and has insurance.
The concept is that the government should not attempt to tell the manufacturers what cars to make. The government should stimulate the specifiers to tell the manufacturers the cars they want ot purchase, i.e., high MPG cars.
There should never be any tax credits other than the one described.

Michael Z]]> Sat, 01 Aug 2009 15:02:23 -0400 The program is naive and infantile.
If we, as a Nation, want to get serious, Congress would pass an additional gas tax of $3.00 per gallon.
An income tax credit of $1,200 per year would be given to any licensed driver, who is a citizen or has a valid green card, and has insurance.
The concept is that the government should not attempt to tell the manufacturers what cars to make. The government should stimulate the specifiers to tell the manufacturers the cars they want ot purchase, i.e., high MPG cars.
There should never be any tax credits other than the one described.

Michael Z]]> http://seekingalpha.com/article/116020-goggling-google?source=feed#comment-363702 363702
Did the owners (stockholders) not take a hit after buying common between $500 and $747?

If the employees are not being paid market wages, I suggest adjustments be made. My guess is that they are paid properly.

The "repricing" offers employees the incentive to allow the common price to drift lower, periodically, to enable this insidious concept.

There should be a shareholders' lawsuit and criminal actions initiated.

Ooooops! Perhaps its the "it's my company and I will do what I want" 'tude?

]]> Fri, 23 Jan 2009 00:10:18 -0500
Did the owners (stockholders) not take a hit after buying common between $500 and $747?

If the employees are not being paid market wages, I suggest adjustments be made. My guess is that they are paid properly.

The "repricing" offers employees the incentive to allow the common price to drift lower, periodically, to enable this insidious concept.

There should be a shareholders' lawsuit and criminal actions initiated.

Ooooops! Perhaps its the "it's my company and I will do what I want" 'tude?

]]> http://seekingalpha.com/article/106537-why-shorting-financials-is-a-logical-response?source=feed#comment-310179 310179
One cannot resolve a problem unless one understands the problem.

PROBLEM: Financial institutions have reduced their lending.
The problem results from the impaired equity portion of the balance sheets of these institutions, with the impairment caused by write-downs of their assets (loans).

Due to the losses they have taken, these institutions, by law, have had their maximum potential lending amounts reduced.
The amount they are able to lend is contingent upon the amount of their equity capital (EC), e.g., if an institution has an equity capital of one billion dollars and is able to lend up to 20 times its equity capital, it could lend up to 20 billion dollars.

After taking loan write-downs (losses) of two hundred million dollars, its EC would now be 800 million dollars, thus it would have its maximum lending authority limited to 16 billion dollars, i.e., a constriction of its legal authorization to lend.

This is the crux of the problem.

The institutions have funds, i.e., liquidity. But, without the legal authority to increase lending, they are sitting in stagnant water.

Those who say that one going to one’s ATM for a withdrawal may find a closed sign are, absolutely, lying or ignorant.

If one is a Representative or Senator and is lying, he or she should be Impeached and removed from Office.
Likewise, if that Representative or Senator is ignorant, he or she, apparently, is not, adequately, accepting his or her fiduciary responsibility of understanding a subject prior to advocating or voting for it, thus he or she should also be Impeached and removed from Office.

PAULSON PLAN: Purchase impaired mortgages from financial institutions with taxpayer funds.
Indeed, this would positively affect an institution’s EC, because the impairment (loss) would have been transferred to the taxpayers. This reversal of loss would be achieved by paying face price rather than market price, since if the market price were paid, there would be no effect upon EC.
This contemplated action is anti-capitalistic, immoral, and a method of stealing from taxpayers.
The taxpayers did not cause the capital impairment (this IS the problem, i.e., “It’s the balance sheet, stupid”).

Anyone involved with designing this scheme and voting for it should be incarcerated as co-conspirators to steal from the citizenry.
The scheme’s authors and those who advocate for it would be precipitating an admission that capitalism doesn't work, which is a lie.
Capitalism is the best economic tool ever devised, but as with any tool, it can be and has been abused.
Congress should accept most of the responsibility for creating the economic atmospheric conditions that enabled the abuse.
Further, any resolution of this financial phenomenon will not abate the underlying problems of the economy.
It is not the lack of lending that has damaged the economy. It is the economy, affected by greed, that has damaged the lending, but, of course, if appropriate corrective actions are not taken in regards to this financial phenomenon, our weak economics will be adversely affected.

If the Paulson plan were adopted, it would be the most massive SPE by multiples, the dollar would weaken, interest rates would go up, thus the decline in home prices would be exacerbated, and the EC would require further resuscitations.


BEST PLAN (Recapitalization):
1) Allow some institutions to go the route of Countrywide, Bear Stearns, IndyMac, and Washington Mutual. I, also, like the AIG model.

2) Most rational institutions will do what UBS, Merrill Lynch, Goldman Sachs (just recently with Warren Buffett) have done, i.e., they have raised additional EC, usually by selling preferred stocks.

Months ago, when Merrill sold 6 billion (as I recall the amount) dollars of preferreds paying 9%, I knew they were desperate, and that this was just an early domino.
Goldman Sachs, from what I have heard, is paying Buffett 10% for the preferreds. Keep in mind; this is after-tax money. The only reason for Goldman Sachs to take a desperate (GS also gave Mr. Buffett 43,000,000 warrants to purchases GS common @ $115 per share) action was because it knew it was experiencing an EC impairment and needed to raise additional EC.

Please keep in mind that pain is not all bad. It is a signal that something is wrong and indicates that the source of the pain (problem) must be determined, analyzed, understood, and finally the best alternative action must be taken.
We are experiencing pain regarding this financial phenomenon.

3) As a last resort, it would be appropriate for the government to establish a fund (call it the RTC 2.0 AKA Peoples' Financial Fund) and use those funds to purchase (just as have Mr. Buffett and others) preferred stock from institutions. The fund should follow Mr. Buffett’s lead and demand additional potential remuneration in the form of long-term warrants.
The stock would receive dividends and would have a convertible feature to convert to common stock, at the option of the fund.
Further, until certain parameters were met, the preferred ownership would assume voting control, thus the matter of executive compensation would be moot.
We either believe in capitalism or we don’t.

We will have displayed a pragmatic solution well within the parameters of capitalism.
The U.S. dollar will strengthen.
The next step would be to address the underlying economics with the basic problem being unbridled greed.
We should not have a "shot" stimulant as we did earlier.
We need to eliminate the largess given to the very wealthy, in error, by the Bush tax cuts, and to reduce taxes on the middle-class on a permanent basis.
This will have an immediate positive effect upon our economics and we will be on the path to a rational economy.

Michael Zitterman
Sherman Oaks, Ca.
dmzfinancl@aol.com
mikiesmoky@aol.com
818-988-2792

Concept: These institutions should have gone out and should be going out raising equity capital via common and preferred stock.
Taxpayers' Role: The taxpayers (a taxpayers' mutual fund) should offer funds by offering to purchase preferred stock with favorable conversation features, but with a reasonable buy-back, and substantial warrants to purchase common. These parameters should be more costly to the institutions than the "marketplace" to entice the institutions to raise the requisite funds from private sources, rather than the taxpayers, but the taxpayers would be there as a backstop.


]]> Wed, 19 Nov 2008 15:32:29 -0500
One cannot resolve a problem unless one understands the problem.

PROBLEM: Financial institutions have reduced their lending.
The problem results from the impaired equity portion of the balance sheets of these institutions, with the impairment caused by write-downs of their assets (loans).

Due to the losses they have taken, these institutions, by law, have had their maximum potential lending amounts reduced.
The amount they are able to lend is contingent upon the amount of their equity capital (EC), e.g., if an institution has an equity capital of one billion dollars and is able to lend up to 20 times its equity capital, it could lend up to 20 billion dollars.

After taking loan write-downs (losses) of two hundred million dollars, its EC would now be 800 million dollars, thus it would have its maximum lending authority limited to 16 billion dollars, i.e., a constriction of its legal authorization to lend.

This is the crux of the problem.

The institutions have funds, i.e., liquidity. But, without the legal authority to increase lending, they are sitting in stagnant water.

Those who say that one going to one’s ATM for a withdrawal may find a closed sign are, absolutely, lying or ignorant.

If one is a Representative or Senator and is lying, he or she should be Impeached and removed from Office.
Likewise, if that Representative or Senator is ignorant, he or she, apparently, is not, adequately, accepting his or her fiduciary responsibility of understanding a subject prior to advocating or voting for it, thus he or she should also be Impeached and removed from Office.

PAULSON PLAN: Purchase impaired mortgages from financial institutions with taxpayer funds.
Indeed, this would positively affect an institution’s EC, because the impairment (loss) would have been transferred to the taxpayers. This reversal of loss would be achieved by paying face price rather than market price, since if the market price were paid, there would be no effect upon EC.
This contemplated action is anti-capitalistic, immoral, and a method of stealing from taxpayers.
The taxpayers did not cause the capital impairment (this IS the problem, i.e., “It’s the balance sheet, stupid”).

Anyone involved with designing this scheme and voting for it should be incarcerated as co-conspirators to steal from the citizenry.
The scheme’s authors and those who advocate for it would be precipitating an admission that capitalism doesn't work, which is a lie.
Capitalism is the best economic tool ever devised, but as with any tool, it can be and has been abused.
Congress should accept most of the responsibility for creating the economic atmospheric conditions that enabled the abuse.
Further, any resolution of this financial phenomenon will not abate the underlying problems of the economy.
It is not the lack of lending that has damaged the economy. It is the economy, affected by greed, that has damaged the lending, but, of course, if appropriate corrective actions are not taken in regards to this financial phenomenon, our weak economics will be adversely affected.

If the Paulson plan were adopted, it would be the most massive SPE by multiples, the dollar would weaken, interest rates would go up, thus the decline in home prices would be exacerbated, and the EC would require further resuscitations.


BEST PLAN (Recapitalization):
1) Allow some institutions to go the route of Countrywide, Bear Stearns, IndyMac, and Washington Mutual. I, also, like the AIG model.

2) Most rational institutions will do what UBS, Merrill Lynch, Goldman Sachs (just recently with Warren Buffett) have done, i.e., they have raised additional EC, usually by selling preferred stocks.

Months ago, when Merrill sold 6 billion (as I recall the amount) dollars of preferreds paying 9%, I knew they were desperate, and that this was just an early domino.
Goldman Sachs, from what I have heard, is paying Buffett 10% for the preferreds. Keep in mind; this is after-tax money. The only reason for Goldman Sachs to take a desperate (GS also gave Mr. Buffett 43,000,000 warrants to purchases GS common @ $115 per share) action was because it knew it was experiencing an EC impairment and needed to raise additional EC.

Please keep in mind that pain is not all bad. It is a signal that something is wrong and indicates that the source of the pain (problem) must be determined, analyzed, understood, and finally the best alternative action must be taken.
We are experiencing pain regarding this financial phenomenon.

3) As a last resort, it would be appropriate for the government to establish a fund (call it the RTC 2.0 AKA Peoples' Financial Fund) and use those funds to purchase (just as have Mr. Buffett and others) preferred stock from institutions. The fund should follow Mr. Buffett’s lead and demand additional potential remuneration in the form of long-term warrants.
The stock would receive dividends and would have a convertible feature to convert to common stock, at the option of the fund.
Further, until certain parameters were met, the preferred ownership would assume voting control, thus the matter of executive compensation would be moot.
We either believe in capitalism or we don’t.

We will have displayed a pragmatic solution well within the parameters of capitalism.
The U.S. dollar will strengthen.
The next step would be to address the underlying economics with the basic problem being unbridled greed.
We should not have a "shot" stimulant as we did earlier.
We need to eliminate the largess given to the very wealthy, in error, by the Bush tax cuts, and to reduce taxes on the middle-class on a permanent basis.
This will have an immediate positive effect upon our economics and we will be on the path to a rational economy.

Michael Zitterman
Sherman Oaks, Ca.
dmzfinancl@aol.com
mikiesmoky@aol.com
818-988-2792

Concept: These institutions should have gone out and should be going out raising equity capital via common and preferred stock.
Taxpayers' Role: The taxpayers (a taxpayers' mutual fund) should offer funds by offering to purchase preferred stock with favorable conversation features, but with a reasonable buy-back, and substantial warrants to purchase common. These parameters should be more costly to the institutions than the "marketplace" to entice the institutions to raise the requisite funds from private sources, rather than the taxpayers, but the taxpayers would be there as a backstop.


]]> http://seekingalpha.com/article/106778-betting-on-goldman-s-future?source=feed#comment-310175 310175
One cannot resolve a problem unless one understands the problem.

PROBLEM: Financial institutions have reduced their lending.
The problem results from the impaired equity portion of the balance sheets of these institutions, with the impairment caused by write-downs of their assets (loans).

Due to the losses they have taken, these institutions, by law, have had their maximum potential lending amounts reduced.
The amount they are able to lend is contingent upon the amount of their equity capital (EC), e.g., if an institution has an equity capital of one billion dollars and is able to lend up to 20 times its equity capital, it could lend up to 20 billion dollars.

After taking loan write-downs (losses) of two hundred million dollars, its EC would now be 800 million dollars, thus it would have its maximum lending authority limited to 16 billion dollars, i.e., a constriction of its legal authorization to lend.

This is the crux of the problem.

The institutions have funds, i.e., liquidity. But, without the legal authority to increase lending, they are sitting in stagnant water.

Those who say that one going to one’s ATM for a withdrawal may find a closed sign are, absolutely, lying or ignorant.

If one is a Representative or Senator and is lying, he or she should be Impeached and removed from Office.
Likewise, if that Representative or Senator is ignorant, he or she, apparently, is not, adequately, accepting his or her fiduciary responsibility of understanding a subject prior to advocating or voting for it, thus he or she should also be Impeached and removed from Office.

PAULSON PLAN: Purchase impaired mortgages from financial institutions with taxpayer funds.
Indeed, this would positively affect an institution’s EC, because the impairment (loss) would have been transferred to the taxpayers. This reversal of loss would be achieved by paying face price rather than market price, since if the market price were paid, there would be no effect upon EC.
This contemplated action is anti-capitalistic, immoral, and a method of stealing from taxpayers.
The taxpayers did not cause the capital impairment (this IS the problem, i.e., “It’s the balance sheet, stupid”).

Anyone involved with designing this scheme and voting for it should be incarcerated as co-conspirators to steal from the citizenry.
The scheme’s authors and those who advocate for it would be precipitating an admission that capitalism doesn't work, which is a lie.
Capitalism is the best economic tool ever devised, but as with any tool, it can be and has been abused.
Congress should accept most of the responsibility for creating the economic atmospheric conditions that enabled the abuse.
Further, any resolution of this financial phenomenon will not abate the underlying problems of the economy.
It is not the lack of lending that has damaged the economy. It is the economy, affected by greed, that has damaged the lending, but, of course, if appropriate corrective actions are not taken in regards to this financial phenomenon, our weak economics will be adversely affected.

If the Paulson plan were adopted, it would be the most massive SPE by multiples, the dollar would weaken, interest rates would go up, thus the decline in home prices would be exacerbated, and the EC would require further resuscitations.


BEST PLAN (Recapitalization):
1) Allow some institutions to go the route of Countrywide, Bear Stearns, IndyMac, and Washington Mutual. I, also, like the AIG model.

2) Most rational institutions will do what UBS, Merrill Lynch, Goldman Sachs (just recently with Warren Buffett) have done, i.e., they have raised additional EC, usually by selling preferred stocks.

Months ago, when Merrill sold 6 billion (as I recall the amount) dollars of preferreds paying 9%, I knew they were desperate, and that this was just an early domino.
Goldman Sachs, from what I have heard, is paying Buffett 10% for the preferreds. Keep in mind; this is after-tax money. The only reason for Goldman Sachs to take a desperate (GS also gave Mr. Buffett 43,000,000 warrants to purchases GS common @ $115 per share) action was because it knew it was experiencing an EC impairment and needed to raise additional EC.

Please keep in mind that pain is not all bad. It is a signal that something is wrong and indicates that the source of the pain (problem) must be determined, analyzed, understood, and finally the best alternative action must be taken.
We are experiencing pain regarding this financial phenomenon.

3) As a last resort, it would be appropriate for the government to establish a fund (call it the RTC 2.0 AKA Peoples' Financial Fund) and use those funds to purchase (just as have Mr. Buffett and others) preferred stock from institutions. The fund should follow Mr. Buffett’s lead and demand additional potential remuneration in the form of long-term warrants.
The stock would receive dividends and would have a convertible feature to convert to common stock, at the option of the fund.
Further, until certain parameters were met, the preferred ownership would assume voting control, thus the matter of executive compensation would be moot.
We either believe in capitalism or we don’t.

We will have displayed a pragmatic solution well within the parameters of capitalism.
The U.S. dollar will strengthen.
The next step would be to address the underlying economics with the basic problem being unbridled greed.
We should not have a "shot" stimulant as we did earlier.
We need to eliminate the largess given to the very wealthy, in error, by the Bush tax cuts, and to reduce taxes on the middle-class on a permanent basis.
This will have an immediate positive effect upon our economics and we will be on the path to a rational economy.

Michael Zitterman
Sherman Oaks, Ca.
dmzfinancl@aol.com
mikiesmoky@aol.com
818-988-2792

Concept: These institutions should have gone out and should be going out raising equity capital via common and preferred stock.
Taxpayers' Role: The taxpayers (a taxpayers' mutual fund) should offer funds by offering to purchase preferred stock with favorable conversation features, but with a reasonable buy-back, and substantial warrants to purchase common. These parameters should be more costly to the institutions than the "marketplace" to entice the institutions to raise the requisite funds from private sources, rather than the taxpayers, but the taxpayers would be there as a backstop.


]]> Wed, 19 Nov 2008 15:30:33 -0500
One cannot resolve a problem unless one understands the problem.

PROBLEM: Financial institutions have reduced their lending.
The problem results from the impaired equity portion of the balance sheets of these institutions, with the impairment caused by write-downs of their assets (loans).

Due to the losses they have taken, these institutions, by law, have had their maximum potential lending amounts reduced.
The amount they are able to lend is contingent upon the amount of their equity capital (EC), e.g., if an institution has an equity capital of one billion dollars and is able to lend up to 20 times its equity capital, it could lend up to 20 billion dollars.

After taking loan write-downs (losses) of two hundred million dollars, its EC would now be 800 million dollars, thus it would have its maximum lending authority limited to 16 billion dollars, i.e., a constriction of its legal authorization to lend.

This is the crux of the problem.

The institutions have funds, i.e., liquidity. But, without the legal authority to increase lending, they are sitting in stagnant water.

Those who say that one going to one’s ATM for a withdrawal may find a closed sign are, absolutely, lying or ignorant.

If one is a Representative or Senator and is lying, he or she should be Impeached and removed from Office.
Likewise, if that Representative or Senator is ignorant, he or she, apparently, is not, adequately, accepting his or her fiduciary responsibility of understanding a subject prior to advocating or voting for it, thus he or she should also be Impeached and removed from Office.

PAULSON PLAN: Purchase impaired mortgages from financial institutions with taxpayer funds.
Indeed, this would positively affect an institution’s EC, because the impairment (loss) would have been transferred to the taxpayers. This reversal of loss would be achieved by paying face price rather than market price, since if the market price were paid, there would be no effect upon EC.
This contemplated action is anti-capitalistic, immoral, and a method of stealing from taxpayers.
The taxpayers did not cause the capital impairment (this IS the problem, i.e., “It’s the balance sheet, stupid”).

Anyone involved with designing this scheme and voting for it should be incarcerated as co-conspirators to steal from the citizenry.
The scheme’s authors and those who advocate for it would be precipitating an admission that capitalism doesn't work, which is a lie.
Capitalism is the best economic tool ever devised, but as with any tool, it can be and has been abused.
Congress should accept most of the responsibility for creating the economic atmospheric conditions that enabled the abuse.
Further, any resolution of this financial phenomenon will not abate the underlying problems of the economy.
It is not the lack of lending that has damaged the economy. It is the economy, affected by greed, that has damaged the lending, but, of course, if appropriate corrective actions are not taken in regards to this financial phenomenon, our weak economics will be adversely affected.

If the Paulson plan were adopted, it would be the most massive SPE by multiples, the dollar would weaken, interest rates would go up, thus the decline in home prices would be exacerbated, and the EC would require further resuscitations.


BEST PLAN (Recapitalization):
1) Allow some institutions to go the route of Countrywide, Bear Stearns, IndyMac, and Washington Mutual. I, also, like the AIG model.

2) Most rational institutions will do what UBS, Merrill Lynch, Goldman Sachs (just recently with Warren Buffett) have done, i.e., they have raised additional EC, usually by selling preferred stocks.

Months ago, when Merrill sold 6 billion (as I recall the amount) dollars of preferreds paying 9%, I knew they were desperate, and that this was just an early domino.
Goldman Sachs, from what I have heard, is paying Buffett 10% for the preferreds. Keep in mind; this is after-tax money. The only reason for Goldman Sachs to take a desperate (GS also gave Mr. Buffett 43,000,000 warrants to purchases GS common @ $115 per share) action was because it knew it was experiencing an EC impairment and needed to raise additional EC.

Please keep in mind that pain is not all bad. It is a signal that something is wrong and indicates that the source of the pain (problem) must be determined, analyzed, understood, and finally the best alternative action must be taken.
We are experiencing pain regarding this financial phenomenon.

3) As a last resort, it would be appropriate for the government to establish a fund (call it the RTC 2.0 AKA Peoples' Financial Fund) and use those funds to purchase (just as have Mr. Buffett and others) preferred stock from institutions. The fund should follow Mr. Buffett’s lead and demand additional potential remuneration in the form of long-term warrants.
The stock would receive dividends and would have a convertible feature to convert to common stock, at the option of the fund.
Further, until certain parameters were met, the preferred ownership would assume voting control, thus the matter of executive compensation would be moot.
We either believe in capitalism or we don’t.

We will have displayed a pragmatic solution well within the parameters of capitalism.
The U.S. dollar will strengthen.
The next step would be to address the underlying economics with the basic problem being unbridled greed.
We should not have a "shot" stimulant as we did earlier.
We need to eliminate the largess given to the very wealthy, in error, by the Bush tax cuts, and to reduce taxes on the middle-class on a permanent basis.
This will have an immediate positive effect upon our economics and we will be on the path to a rational economy.

Michael Zitterman
Sherman Oaks, Ca.
dmzfinancl@aol.com
mikiesmoky@aol.com
818-988-2792

Concept: These institutions should have gone out and should be going out raising equity capital via common and preferred stock.
Taxpayers' Role: The taxpayers (a taxpayers' mutual fund) should offer funds by offering to purchase preferred stock with favorable conversation features, but with a reasonable buy-back, and substantial warrants to purchase common. These parameters should be more costly to the institutions than the "marketplace" to entice the institutions to raise the requisite funds from private sources, rather than the taxpayers, but the taxpayers would be there as a backstop.


]]> http://seekingalpha.com/article/106370-gm-the-bailout-vs-bankruptcy-meme?source=feed#comment-308642 308642
1) Adjustments in pay - union and white collar

2) Strict control over management's salaries and bonuses

3) A massive, but rational, reduction in legacy responsibilities

4) A 100% loss for all common and preferred shareholders

5) At least an 80% loss for bond holders, other than GMAC holders, to be paid for with new common stock

6) An infusion of the People's funds in the form of preferred stock with "business-like&qu.... parameters, such as 10% dividends, a very healthy option to convert into new common, and a serious number of long-term warrants to purchase new common

7) Reduce obligations to suppliers by 30% with the reduced amount paid in new common

The above is a good starting-point of discussions



Michael Z.
Sherman Oaks
dmzfinancl@aol.com
mikiesmoky@aol.com ]]> Tue, 18 Nov 2008 06:12:15 -0500
1) Adjustments in pay - union and white collar

2) Strict control over management's salaries and bonuses

3) A massive, but rational, reduction in legacy responsibilities

4) A 100% loss for all common and preferred shareholders

5) At least an 80% loss for bond holders, other than GMAC holders, to be paid for with new common stock

6) An infusion of the People's funds in the form of preferred stock with "business-like&qu.... parameters, such as 10% dividends, a very healthy option to convert into new common, and a serious number of long-term warrants to purchase new common

7) Reduce obligations to suppliers by 30% with the reduced amount paid in new common

The above is a good starting-point of discussions



Michael Z.
Sherman Oaks
dmzfinancl@aol.com
mikiesmoky@aol.com ]]> http://seekingalpha.com/article/106494-general-motors-time-to-pull-the-plug?source=feed#comment-308641 308641
1) Adjustments in pay - union and white collar

2) Strict control over management's salaries and bonuses

3) A massive, but rational, reduction in legacy responsibilities

4) A 100% loss for all common and preferred shareholders

5) At least an 80% loss for bond holders, other than GMAC holders, to be paid for with new common stock

6) An infusion of the People's funds in the form of preferred stock with "business-like&qu.... parameters, such as 10% dividends, a very healthy option to convert into new common, and a serious number of long-term warrants to purchase new common

7) Reduce obligations to suppliers by 30% with the reduced amount paid in new common

The above is a good starting-point of discussions



Michael Z.
Sherman Oaks
dmzfinancl@aol.com
mikiesmoky@aol.com ]]> Tue, 18 Nov 2008 06:10:26 -0500
1) Adjustments in pay - union and white collar

2) Strict control over management's salaries and bonuses

3) A massive, but rational, reduction in legacy responsibilities

4) A 100% loss for all common and preferred shareholders

5) At least an 80% loss for bond holders, other than GMAC holders, to be paid for with new common stock

6) An infusion of the People's funds in the form of preferred stock with "business-like&qu.... parameters, such as 10% dividends, a very healthy option to convert into new common, and a serious number of long-term warrants to purchase new common

7) Reduce obligations to suppliers by 30% with the reduced amount paid in new common

The above is a good starting-point of discussions



Michael Z.
Sherman Oaks
dmzfinancl@aol.com
mikiesmoky@aol.com ]]> http://seekingalpha.com/article/106528-spending-production-slowing-happy-holidays-you-re-fired?source=feed#comment-308640 308640
1) Adjustments in pay - union and white collar

2) Strict control over management's salaries and bonuses

3) A massive, but rational, reduction in legacy responsibilities

4) A 100% loss for all common and preferred shareholders

5) At least an 80% loss for bond holders, other than GMAC holders, to be paid for with new common stock

6) An infusion of the People's funds in the form of preferred stock with "business-like&qu.... parameters, such as 10% dividends, a very healthy option to convert into new common, and a serious number of long-term warrants to purchase new common

7) Reduce obligations to suppliers by 30% with the reduced amount paid in new common

The above is a good starting-point of discussions



Michael Z.
Sherman Oaks
dmzfinancl@aol.com
mikiesmoky@aol.com ]]> Tue, 18 Nov 2008 06:08:02 -0500
1) Adjustments in pay - union and white collar

2) Strict control over management's salaries and bonuses

3) A massive, but rational, reduction in legacy responsibilities

4) A 100% loss for all common and preferred shareholders

5) At least an 80% loss for bond holders, other than GMAC holders, to be paid for with new common stock

6) An infusion of the People's funds in the form of preferred stock with "business-like&qu.... parameters, such as 10% dividends, a very healthy option to convert into new common, and a serious number of long-term warrants to purchase new common

7) Reduce obligations to suppliers by 30% with the reduced amount paid in new common

The above is a good starting-point of discussions



Michael Z.
Sherman Oaks
dmzfinancl@aol.com
mikiesmoky@aol.com ]]> http://seekingalpha.com/article/106490-general-motors-bailout-consider-other-alternatives?source=feed#comment-308639 308639
1) Adjustments in pay - union and white collar

2) Strict control over management's salaries and bonuses

3) A massive, but rational, reduction in legacy responsibilities

4) A 100% loss for all common and preferred shareholders

5) At least an 80% loss for bond holders, other than GMAC holders, to be paid for with new common stock

6) An infusion of the People's funds in the form of preferred stock with "business-like" parameters, such as 10% dividends, a very healthy option to convert into new common, and a serious number of long-term warrants to purchase new common

7) Reduce obligations to suppliers by 30% with the reduced amount paid in new common

The above is a good starting-point of discussions



Michael Z.
Sherman Oaks
dmzfinancl@aol.com
mikiesmoky@aol.com]]> Tue, 18 Nov 2008 06:06:41 -0500
1) Adjustments in pay - union and white collar

2) Strict control over management's salaries and bonuses

3) A massive, but rational, reduction in legacy responsibilities

4) A 100% loss for all common and preferred shareholders

5) At least an 80% loss for bond holders, other than GMAC holders, to be paid for with new common stock

6) An infusion of the People's funds in the form of preferred stock with "business-like" parameters, such as 10% dividends, a very healthy option to convert into new common, and a serious number of long-term warrants to purchase new common

7) Reduce obligations to suppliers by 30% with the reduced amount paid in new common

The above is a good starting-point of discussions



Michael Z.
Sherman Oaks
dmzfinancl@aol.com
mikiesmoky@aol.com]]> http://seekingalpha.com/article/104778-why-would-treasury-cut-aig-s-interest-payment?source=feed#comment-300695 300695
Your thought processes are contaminated by the concept of greed.

Can you figure that one out???

LOL]]> Sat, 08 Nov 2008 10:14:17 -0500
Your thought processes are contaminated by the concept of greed.

Can you figure that one out???

LOL]]> http://seekingalpha.com/article/103858-increased-government-investment-in-banks?source=feed#comment-298050 298050
In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

THE PARAMETERS OF THE FIRST TRAUNCH/TRANCHE OF THE $125 BILLION SHOULD BE CHANGED:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

CAPITALISM WILL BE ALIVE AND WELL.....................

]]> Tue, 04 Nov 2008 11:04:37 -0500
In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

THE PARAMETERS OF THE FIRST TRAUNCH/TRANCHE OF THE $125 BILLION SHOULD BE CHANGED:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

CAPITALISM WILL BE ALIVE AND WELL.....................

]]> http://seekingalpha.com/article/103858-increased-government-investment-in-banks?source=feed#comment-298042 298042
Larry Kudlow, about 10 days ago, interviewed Henry Paulson and asked the remarkably ignorant and inane question as to what the implications would be if these institutions used the funds from the preferreds to pay down debt.

An Accounting 1a student should know that would have no effect upon Equity Capital, i.e., cash and liabilities would be reduced.

Either this was a "set-up" question or Paulson is an example of the blind leading the blind, i.e., he is in over his head, since he made no response to correct Mr. Kudlow's "thinking".

Sad stuff!!!]]> Tue, 04 Nov 2008 10:57:42 -0500
Larry Kudlow, about 10 days ago, interviewed Henry Paulson and asked the remarkably ignorant and inane question as to what the implications would be if these institutions used the funds from the preferreds to pay down debt.

An Accounting 1a student should know that would have no effect upon Equity Capital, i.e., cash and liabilities would be reduced.

Either this was a "set-up" question or Paulson is an example of the blind leading the blind, i.e., he is in over his head, since he made no response to correct Mr. Kudlow's "thinking".

Sad stuff!!!]]> http://seekingalpha.com/article/103688-aig-cds-obligations-devouring-government-loans?source=feed#comment-297617 297617
Paraphrasing Isaac: Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

THE PARAMETERS OF THE FIRST TRAUNCH/TRANCHE OF $125 BILLION SHOULD BE CHANGED:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
dmzfinancl@aol.com
]]> Mon, 03 Nov 2008 17:35:13 -0500
Paraphrasing Isaac: Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

THE PARAMETERS OF THE FIRST TRAUNCH/TRANCHE OF $125 BILLION SHOULD BE CHANGED:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
dmzfinancl@aol.com
]]> http://seekingalpha.com/article/103666-bank-failures-and-lessons-of-government-action?source=feed#comment-297615 297615
Paraphrasing Isaac: Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

THE PARAMETERS OF THE FIRST TRAUNCH/TRANCHE OF $125 BILLION SHOULD BE CHANGED:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
dmzfinancl@aol.com
]]> Mon, 03 Nov 2008 17:34:18 -0500
Paraphrasing Isaac: Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

THE PARAMETERS OF THE FIRST TRAUNCH/TRANCHE OF $125 BILLION SHOULD BE CHANGED:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
dmzfinancl@aol.com
]]> http://seekingalpha.com/article/103635-how-aig-failed?source=feed#comment-297444 297444
In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

The parameters of the first traunch/tranche of $125 billion should be changed:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
dmzfinancl@aol.com]]> Mon, 03 Nov 2008 13:40:19 -0500
In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

The parameters of the first traunch/tranche of $125 billion should be changed:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
dmzfinancl@aol.com]]> http://seekingalpha.com/article/103231-wall-street-breakfast-must-know-news?source=feed#comment-297032 297032
Concepts:

1) One size does not fit all, i.e., each situation should be tailored for the borrower.

2) Responsibility should be resolved between the lender and the borrower.

3) No taxpayers’ funds should be involved.

4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states that he or she was unaware that the interest rate was to be reset.

The mortgagor has the option of the following alternatives:

The mortgagor will be allowed to wind the clock back to the time prior to the purchase with the information that the mortgage will be reset at the end of five years at a rate to be determined and explained that the rate may be significantly higher than the rate offered at the time of purchase.

1) Can agree to the purchase and will remain with the current situation.

2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan
at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.

3) Can terminate the potential purchase.

4) Can remain in the property, while making the same payments. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the rate reset information was given prior to entering into the mortgage, the mortgagor will vacate the premises and the mortgage will be cancelled, with no further obligation.

Any other encumbrance upon the property will be the responsibility of the mortgagor.

Further, the mortgagor will be responsible for any damages done to the property.

One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.

The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator", who will hold the 2nd) and the total would be paid to the "security" as a whole payment.

This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide", i.e., the negotiator.

If these logistics require some tweaking, so be it.


Michael Z.
Sherman Oaks
dmzfinancl@aol.com

]]> Mon, 03 Nov 2008 09:04:08 -0500
Concepts:

1) One size does not fit all, i.e., each situation should be tailored for the borrower.

2) Responsibility should be resolved between the lender and the borrower.

3) No taxpayers’ funds should be involved.

4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states that he or she was unaware that the interest rate was to be reset.

The mortgagor has the option of the following alternatives:

The mortgagor will be allowed to wind the clock back to the time prior to the purchase with the information that the mortgage will be reset at the end of five years at a rate to be determined and explained that the rate may be significantly higher than the rate offered at the time of purchase.

1) Can agree to the purchase and will remain with the current situation.

2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan
at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.

3) Can terminate the potential purchase.

4) Can remain in the property, while making the same payments. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the rate reset information was given prior to entering into the mortgage, the mortgagor will vacate the premises and the mortgage will be cancelled, with no further obligation.

Any other encumbrance upon the property will be the responsibility of the mortgagor.

Further, the mortgagor will be responsible for any damages done to the property.

One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.

The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator", who will hold the 2nd) and the total would be paid to the "security" as a whole payment.

This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide", i.e., the negotiator.

If these logistics require some tweaking, so be it.


Michael Z.
Sherman Oaks
dmzfinancl@aol.com

]]> http://seekingalpha.com/article/102990-rescue-funds-fueling-buyout-deals-instead-of-loan-increases?source=feed#comment-294788 294788
Paraphrasing Isaac: Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

THE PARAMETERS OF THE FIRST TRAUNCH/TRANCHE OF $125 BILLION SHOULD BE CHANGED:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
dmzfinancl@aol.com]]> Thu, 30 Oct 2008 22:01:09 -0400
Paraphrasing Isaac: Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

THE PARAMETERS OF THE FIRST TRAUNCH/TRANCHE OF $125 BILLION SHOULD BE CHANGED:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
dmzfinancl@aol.com]]> http://seekingalpha.com/article/102574-what-to-do-with-a-dividend-freeze?source=feed#comment-294525 294525
In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

The parameters of the first traunch/tranche of $125 billion should be changed:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
Sherman Oaks, Ca.
dmzfinancl@aol.com
818.988.2792]]> Thu, 30 Oct 2008 14:42:14 -0400
In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

The parameters of the first traunch/tranche of $125 billion should be changed:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

Capitalism will be alive and well.

Michael Z.
Sherman Oaks, Ca.
dmzfinancl@aol.com
818.988.2792]]> http://seekingalpha.com/article/102595-tarp-vs-non-tarp-investing-with-uncle-sam-at-a-60-discount?source=feed#comment-293281 293281
Paraphrasing Isaac:
Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

The parameters of the first traunch/tranche of $125 billion should be changed:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

CAPITALISM WILL BE ALIVE AND WELL.....................

Michael Z.
Sherman Oaks
dmzfinancl@aol.com
310-479-7480 cell phone
]]> Wed, 29 Oct 2008 08:50:37 -0400
Paraphrasing Isaac:
Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

The parameters of the first traunch/tranche of $125 billion should be changed:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

CAPITALISM WILL BE ALIVE AND WELL.....................

Michael Z.
Sherman Oaks
dmzfinancl@aol.com
310-479-7480 cell phone
]]> http://seekingalpha.com/article/102331-as-the-sell-off-continues-investors-look-to-the-election?source=feed#comment-292333 292333
Paraphrasing Isaac:
Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

The parameters of the first traunch/tranche of $125 billion should be changed:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

CAPITALISM WILL BE ALIVE AND WELL.....................

Michael Z.
Sherman Oaks
dmzfinancl@aol.com
]]> Tue, 28 Oct 2008 09:52:02 -0400
Paraphrasing Isaac:
Objects in motion tend to remain in motion, objects at rest tend to remain at rest, and to change either condition, requires energy.

In this case, the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.

This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.

A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.

The parameters of the first traunch/tranche of $125 billion should be changed:

1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking

2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.

3) The conversion factor should be significant

4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants

5) The "fund" should be given seats on the Boards.

6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year

7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year

8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which will have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.

The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.

CAPITALISM WILL BE ALIVE AND WELL.....................

Michael Z.
Sherman Oaks
dmzfinancl@aol.com
]]> http://seekingalpha.com/article/102331-as-the-sell-off-continues-investors-look-to-the-election?source=feed#comment-292330 292330
Concepts:

1) One size does not fit all, i.e., each situation should be tailored for the borrower.

2) Responsibility should be resolved between the lender and the borrower.

3) No taxpayers’ funds should be involved.

4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states that he or she was unaware that the interest rate was to be reset. (OPTIONAL)

The mortgagor has the option of the following alternatives:

The mortgagor will be allowed to wind the clock back to the time prior to the purchase with the information that the mortgage will be reset at the end of five years at a rate to be determined and explained that the rate may be significantly higher than the rate offered at the time of purchase.

1) Can agree to the purchase and will remain with the current situation.

2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.

3) Can terminate the potential purchase.

4) Can remain in the property, while making payments equal to 120% of the old payments for the next five years, and, at the beginning of each subsequent 5-year period, the payments will be adjusted by another increment of 20% of the original payment. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the rate reset information was given prior to entering into the mortgage, the mortgagor will vacate the premises and the mortgage will be cancelled, with no further obligation.

Any other encumbrance upon the property will be the responsibility of the mortgagor.

The mortgagor will be given a moving allowance of $5,000 (OPTIONAL).

Further, the mortgagor will be responsible for any damages done to the property.

One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.


The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator"... who will hold the 2nd) and the total would be paid to the "security" as a whole payment.

This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide&quot.... i.e., the negotiator.

If these logistics require some tweaking, so be it.

Michael Z.
Sherman Oaks
dmzfinancl@aol.com
310-479-7480 cell
]]> Tue, 28 Oct 2008 09:50:33 -0400
Concepts:

1) One size does not fit all, i.e., each situation should be tailored for the borrower.

2) Responsibility should be resolved between the lender and the borrower.

3) No taxpayers’ funds should be involved.

4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states that he or she was unaware that the interest rate was to be reset. (OPTIONAL)

The mortgagor has the option of the following alternatives:

The mortgagor will be allowed to wind the clock back to the time prior to the purchase with the information that the mortgage will be reset at the end of five years at a rate to be determined and explained that the rate may be significantly higher than the rate offered at the time of purchase.

1) Can agree to the purchase and will remain with the current situation.

2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.

3) Can terminate the potential purchase.

4) Can remain in the property, while making payments equal to 120% of the old payments for the next five years, and, at the beginning of each subsequent 5-year period, the payments will be adjusted by another increment of 20% of the original payment. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the rate reset information was given prior to entering into the mortgage, the mortgagor will vacate the premises and the mortgage will be cancelled, with no further obligation.

Any other encumbrance upon the property will be the responsibility of the mortgagor.

The mortgagor will be given a moving allowance of $5,000 (OPTIONAL).

Further, the mortgagor will be responsible for any damages done to the property.

One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.


The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator"... who will hold the 2nd) and the total would be paid to the "security" as a whole payment.

This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide&quot.... i.e., the negotiator.

If these logistics require some tweaking, so be it.

Michael Z.
Sherman Oaks
dmzfinancl@aol.com
310-479-7480 cell
]]> http://seekingalpha.com/article/102047-overall-fundamentals-are-still-deteriorating?source=feed#comment-291869 291869 LOL).
Whereas the stock is selling around $110,000 per share, it has NEVER paid a dividend. The market is composed of all information and all types of buyers and sellers. Under what rational theory would you suggest that it is not rational to defer dividends?

Michael Z.]]> Mon, 27 Oct 2008 17:14:39 -0400 LOL).
Whereas the stock is selling around $110,000 per share, it has NEVER paid a dividend. The market is composed of all information and all types of buyers and sellers. Under what rational theory would you suggest that it is not rational to defer dividends?

Michael Z.]]> http://seekingalpha.com/article/101984-using-the-regional-banking-etf-to-play-bank-mergers?source=feed#comment-291359 291359 In this case the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.
This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.
A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.
The parameters of the first traunch of $125 billion should be changed:
1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking
2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.
3) The conversion factor should be significant
4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants
5) The "fund" should be given seats on the Boards.
6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year
7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year
8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.
The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.
Capitalism will be alive and well.

Michael Z.
Sherman Oaks
dmzfinancl@aol.com]]> Mon, 27 Oct 2008 09:10:08 -0400 In this case the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.
This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.
A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.
The parameters of the first traunch of $125 billion should be changed:
1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking
2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.
3) The conversion factor should be significant
4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants
5) The "fund" should be given seats on the Boards.
6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year
7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year
8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.
The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.
Capitalism will be alive and well.

Michael Z.
Sherman Oaks
dmzfinancl@aol.com]]> http://seekingalpha.com/article/102057-wall-street-breakfast-must-know-news?source=feed#comment-291357 291357 In this case the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.
This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.
A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.
The parameters of the first traunch of $125 billion should be changed:
1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking
2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.
3) The conversion factor should be significant
4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants
5) The "fund" should be given seats on the Boards.
6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year
7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year
8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.
The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.
Capitalism will be alive and well.

Michael Z.
Sherman Oaks
dmzfinancl@aol.com]]> Mon, 27 Oct 2008 09:07:54 -0400 In this case the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.
This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.
A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.
The parameters of the first traunch of $125 billion should be changed:
1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking
2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.
3) The conversion factor should be significant
4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants
5) The "fund" should be given seats on the Boards.
6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year
7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year
8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.
The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.
Capitalism will be alive and well.

Michael Z.
Sherman Oaks
dmzfinancl@aol.com]]> http://seekingalpha.com/article/102047-overall-fundamentals-are-still-deteriorating?source=feed#comment-291356 291356 In this case the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.
This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.
A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.
The parameters of the first traunch of $125 billion should be changed:
1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking
2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.
3) The conversion factor should be significant
4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants
5) The "fund" should be given seats on the Boards.
6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year
7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year
8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.
The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.
Capitalism will be alive and well.


Michael Z.
Sherman Oaks
dmzfinancl@aol.com]]> Mon, 27 Oct 2008 09:05:44 -0400 In this case the energy factor should be effected by Congress by legislating the appropriate fiscal adjustments, i.e., immediately (do not wait until 2010) repeal those portions of the Bush tax legislations for those with taxable incomes in excess of $200,000 (arbitrary, i.e., could be $225M, $230M) and legislate permanent tax reductions for those with taxable incomes under $80,000.
This will be the energy factor, which will prime the engine of our economy. The longer it takes to do this, the more problematic will be the results.
A one-shot stimulus package will not work, as the recipients will pay down debt or add to savings due to insecurities, whereas a permanent tax reduction will mean that they will see their net paychecks increase and will have greater confidence. Unless consumers increase their collective confidence and spend, the situation will become much graver.
The parameters of the first traunch of $125 billion should be changed:
1) Only those institutions who want the funds should receive, i.e., none should be coerced into taking
2) The dividend rate should be changed to, at least 11%, for the purpose to stimulate the institutions to attempt to raise capital from private sources. They would know that they have the backstop of the 11% preferreds.
3) The conversion factor should be significant
4) As in the case of the Buffett purchase of GS preferreds, there should be substantial long-term warrants
5) The "fund" should be given seats on the Boards.
6) All dividends, other than any preferred stock dividends should be deferred for one year and will be re-assessed at the end of the year
7) There should be a moratorium for any bonuses and this will be reevaluated at the end of the first year
8) Those institutions which do not accept the "fund's" requirements and eventually fail, and which have exacted bonuses will place in civil and criminal jeopardy those recipients of the bonuses. The punishments will include imprisonments and the return of the bonuses plus substantial monetary penalties.
The common shareholders will be adversely affected (much of which has already been reflected), but that is appropriate.
Capitalism will be alive and well.


Michael Z.
Sherman Oaks
dmzfinancl@aol.com]]> http://seekingalpha.com/article/101362-wachovia-hints-at-what-s-in-store-for-wells-fargo?source=feed#comment-289415 289415
Concepts:
1) One size does not fit all, i.e., each situation should be tailored for the borrower.
2) Responsibility should be resolved between the lender and the borrower.
3) No taxpayers’ funds should be involved.
4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states
that he or she was unaware that the interest rate was to be reset.

The mortgagor has the option of the following alternatives:
The mortgagor will be allowed to wind the clock back to the time prior to the purchase
with the information that the mortgage will be reset at the end of five years at a rate to
be determined and explained that the rate may be significantly higher than the rate
offered at the time of purchase.
1) Can agree to the purchase and will remain with the current situation.
2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan
at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.
3) Can terminate the potential purchase.
4) Can remain in the property, while making the same payments. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the
rate reset information was given prior to entering into the mortgage, the mortgagor will
vacate the premises and the mortgage will be cancelled, with no further obligation.
Any other encumbrance upon the property will be the responsibility of the mortgagor.
Further, the mortgagor will be responsible for any damages done to the property.


One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.
The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator", who will hold the 2nd) and the total would be paid to the "security" as a whole payment.
This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide", i.e., the negotiator.
I would have argued this concept during the negotiations between the various AG's and Bank of America regarding the CountryWide resolution. I think the cost would be much less than the eight billion dollar settlement
If these logistics require some tweaking, so be it.

Michael Z.
mikiesmoky@aol.com]]> Fri, 24 Oct 2008 08:29:57 -0400
Concepts:
1) One size does not fit all, i.e., each situation should be tailored for the borrower.
2) Responsibility should be resolved between the lender and the borrower.
3) No taxpayers’ funds should be involved.
4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states
that he or she was unaware that the interest rate was to be reset.

The mortgagor has the option of the following alternatives:
The mortgagor will be allowed to wind the clock back to the time prior to the purchase
with the information that the mortgage will be reset at the end of five years at a rate to
be determined and explained that the rate may be significantly higher than the rate
offered at the time of purchase.
1) Can agree to the purchase and will remain with the current situation.
2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan
at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.
3) Can terminate the potential purchase.
4) Can remain in the property, while making the same payments. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the
rate reset information was given prior to entering into the mortgage, the mortgagor will
vacate the premises and the mortgage will be cancelled, with no further obligation.
Any other encumbrance upon the property will be the responsibility of the mortgagor.
Further, the mortgagor will be responsible for any damages done to the property.


One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.
The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator", who will hold the 2nd) and the total would be paid to the "security" as a whole payment.
This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide", i.e., the negotiator.
I would have argued this concept during the negotiations between the various AG's and Bank of America regarding the CountryWide resolution. I think the cost would be much less than the eight billion dollar settlement
If these logistics require some tweaking, so be it.

Michael Z.
mikiesmoky@aol.com]]> http://seekingalpha.com/article/101712-p-b-vs-p-e-measuring-a-stock-s-value?source=feed#comment-289409 289409
Concepts:
1) One size does not fit all, i.e., each situation should be tailored for the borrower.
2) Responsibility should be resolved between the lender and the borrower.
3) No taxpayers’ funds should be involved.
4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states
that he or she was unaware that the interest rate was to be reset.

The mortgagor has the option of the following alternatives:
The mortgagor will be allowed to wind the clock back to the time prior to the purchase
with the information that the mortgage will be reset at the end of five years at a rate to
be determined and explained that the rate may be significantly higher than the rate
offered at the time of purchase.
1) Can agree to the purchase and will remain with the current situation.
2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan
at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.
3) Can terminate the potential purchase.
4) Can remain in the property, while making the same payments. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the
rate reset information was given prior to entering into the mortgage, the mortgagor will
vacate the premises and the mortgage will be cancelled, with no further obligation.
Any other encumbrance upon the property will be the responsibility of the mortgagor.
Further, the mortgagor will be responsible for any damages done to the property.


One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.
The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator", who will hold the 2nd) and the total would be paid to the "security" as a whole payment.
This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide", i.e., the negotiator.
I would have argued this concept during the negotiations between the various AG's and Bank of America regarding the CountryWide resolution. I think the cost would be much less than the eight billion dollar settlement
If these logistics require some tweaking, so be it.
]]> Fri, 24 Oct 2008 08:20:40 -0400
Concepts:
1) One size does not fit all, i.e., each situation should be tailored for the borrower.
2) Responsibility should be resolved between the lender and the borrower.
3) No taxpayers’ funds should be involved.
4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states
that he or she was unaware that the interest rate was to be reset.

The mortgagor has the option of the following alternatives:
The mortgagor will be allowed to wind the clock back to the time prior to the purchase
with the information that the mortgage will be reset at the end of five years at a rate to
be determined and explained that the rate may be significantly higher than the rate
offered at the time of purchase.
1) Can agree to the purchase and will remain with the current situation.
2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan
at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.
3) Can terminate the potential purchase.
4) Can remain in the property, while making the same payments. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the
rate reset information was given prior to entering into the mortgage, the mortgagor will
vacate the premises and the mortgage will be cancelled, with no further obligation.
Any other encumbrance upon the property will be the responsibility of the mortgagor.
Further, the mortgagor will be responsible for any damages done to the property.


One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.
The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator", who will hold the 2nd) and the total would be paid to the "security" as a whole payment.
This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide", i.e., the negotiator.
I would have argued this concept during the negotiations between the various AG's and Bank of America regarding the CountryWide resolution. I think the cost would be much less than the eight billion dollar settlement
If these logistics require some tweaking, so be it.
]]> http://seekingalpha.com/article/101661-greed-kills-and-other-observations?source=feed#comment-289407 289407
Concepts:
1) One size does not fit all, i.e., each situation should be tailored for the borrower.
2) Responsibility should be resolved between the lender and the borrower.
3) No taxpayers’ funds should be involved.
4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states
that he or she was unaware that the interest rate was to be reset.

The mortgagor has the option of the following alternatives:
The mortgagor will be allowed to wind the clock back to the time prior to the purchase
with the information that the mortgage will be reset at the end of five years at a rate to
be determined and explained that the rate may be significantly higher than the rate
offered at the time of purchase.
1) Can agree to the purchase and will remain with the current situation.
2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan
at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.
3) Can terminate the potential purchase.
4) Can remain in the property, while making the same payments. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the
rate reset information was given prior to entering into the mortgage, the mortgagor will
vacate the premises and the mortgage will be cancelled, with no further obligation.
Any other encumbrance upon the property will be the responsibility of the mortgagor.
Further, the mortgagor will be responsible for any damages done to the property.


One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.
The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator", who will hold the 2nd) and the total would be paid to the "security" as a whole payment.
This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide", i.e., the negotiator.
I would have argued this concept during the negotiations between the various AG's and Bank of America regarding the CountryWide resolution. I think the cost would be much less than the eight billion dollar settlement
If these logistics require some tweaking, so be it.

Michael Z.
mikiesmoky@aol.com]]> Fri, 24 Oct 2008 08:17:38 -0400
Concepts:
1) One size does not fit all, i.e., each situation should be tailored for the borrower.
2) Responsibility should be resolved between the lender and the borrower.
3) No taxpayers’ funds should be involved.
4) A mortgagor must sign a document, subject to perjury, whereby the mortgagor states
that he or she was unaware that the interest rate was to be reset.

The mortgagor has the option of the following alternatives:
The mortgagor will be allowed to wind the clock back to the time prior to the purchase
with the information that the mortgage will be reset at the end of five years at a rate to
be determined and explained that the rate may be significantly higher than the rate
offered at the time of purchase.
1) Can agree to the purchase and will remain with the current situation.
2) Can refuse the 5/25 loan as offered and opt for a conventional fixed rate loan
at a rate of the then-current rate, e.g., 7.25% and will have all payments adjusted to reflect that loan.
3) Can terminate the potential purchase.
4) Can remain in the property, while making the same payments. The lender or agent thereof will be given a lien on the property that will be equal to the accumulation of the difference between the contractual payments and the payments being made. Further, interest will accrue on this differential at the contractual rate.

If the mortgagor opts for option 3), and there is no significant evidence reflecting that the
rate reset information was given prior to entering into the mortgage, the mortgagor will
vacate the premises and the mortgage will be cancelled, with no further obligation.
Any other encumbrance upon the property will be the responsibility of the mortgagor.
Further, the mortgagor will be responsible for any damages done to the property.


One of the most critical factors is the business model of a CountryWide negotiating mortgages, and then having them bundled and sold as securities. That "model" stimulated the numbers, since the negotiators were no longer involved with these mortgages.
The logistics of my idea would be to have the funds consisting of two pieces (one, the payment from the mortgagor, and the second, the augmented payment from the "negotiator", who will hold the 2nd) and the total would be paid to the "security" as a whole payment.
This would place the responsibilities where they should be, on the mortgagor and on a "CountryWide", i.e., the negotiator.
I would have argued this concept during the negotiations between the various AG's and Bank of America regarding the CountryWide resolution. I think the cost would be much less than the eight billion dollar settlement
If these logistics require some tweaking, so be it.

Michael Z.
mikiesmoky@aol.com]]> http://seekingalpha.com/article/98647-lehman-s-lies?source=feed#comment-274856 274856
One cannot resolve a problem unless one understands the problem.

PROBLEM: Financial institutions have reduced their lending.
The problem results from the impaired equity portion of the balance sheets of these institutions, with the impairment caused by write-downs of their assets (loans).

Due to the losses they have taken, these institutions, by law, have had their maximum potential lending amounts reduced.
The amount they are able to lend is contingent upon the amount of their equity capital (EC), e.g., if an institution has an equity capital of one billion dollars and is able to lend up to 20 times its equity capital, it could lend up to 20 billion dollars.
After taking loan write-downs (losses) of two hundred million dollars, its EC would now be 800 million dollars, thus it would have its maximum lending authority limited to 16 billion dollars, i.e., a constriction of its legal authorization to lend.
This is the crux of the problem.

The institutions have funds, i.e., liquidity. But, without the legal authority to increase lending, they are sitting in stagnant water.
Those who say that one going to one’s ATM for a withdrawal may find a closed sign are, absolutely, lying or ignorant.
If one is a Representative or Senator and is lying, he or she should be Impeached and removed from Office.
Likewise, if that Representative or Senator is ignorant, he or she, apparently, is not, adequately, accepting his or her fiduciary responsibility of understanding a subject prior to advocating or voting for it, thus he or she should also be Impeached and removed from Office.

PAULSON PLAN: Purchase impaired mortgages from financial institutions with taxpayer funds.

Indeed, this would positively affect an institution’s EC, because the impairment (loss) would have been transferred to the taxpayers. This reversal of loss would be achieved by paying face price rather than market price, since if the market price were paid, there would be no effect upon EC.
This contemplated action is anti-capitalistic, immoral, and a method of stealing from taxpayers.
The taxpayers did not cause the capital impairment (this IS the problem, i.e., “It’s the balance sheet, stupid”).

Anyone involved with designing this scheme and voting for it should be incarcerated as co-conspirators to steal from the citizenry.
The scheme’s authors and those who advocate for it would be precipitating an admission that capitalism doesn't work, which is a lie.
Capitalism is the best economic tool ever devised, but as with any tool, it can be and has been abused.
Congress should accept most of the responsibility for creating the economic atmospheric conditions that enabled the abuse.
Further, any resolution of this financial phenomenon will not abate the underlying problems of the economy.
It is not the lack of lending that has damaged the economy. It is the economy, affected by greed, that has damaged the lending, but, of course, if appropriate corrective actions are not taken in regards to this financial phenomenon, our weak economics will be adversely affected.

If the Paulson plan were adopted, it would be the most massive SPE by multiples, the dollar would weaken, interest rates would go up, thus the decline in home prices would be exacerbated, and the EC would require further resuscitations.


BEST PLAN (Recapitalization):
1) Allow some institutions to go the route of Countrywide, Bear Stearns, IndyMac, and Washington Mutual. I, also, like the AIG model.

2) Most rational institutions will do what UBS, Merrill Lynch, Goldman Sachs (just recently with Warren Buffett) have done, i.e., they have raised additional EC, usually by selling preferred stocks.

Months ago, when Merrill sold 6 billion (as I recall the amount) dollars of preferreds paying 9%, I knew they were desperate, and that this was just an early domino.
Goldman Sachs, from what I have heard, is paying Buffett 10% for the preferreds. Keep in mind; this is after-tax money. The only reason for Goldman Sachs to take a desperate (GS also gave Mr. Buffett 43,000,000 warrants to purchases GS common @ $115 per share) action was because it knew it was experiencing an EC impairment and needed to raise additional EC.

Please keep in mind that pain is not all bad. It is a signal that something is wrong and indicates that the source of the pain (problem) must be determined, analyzed, understood, and finally the best alternative action must be taken.
We are experiencing pain regarding this financial phenomenon.

3) As a last resort, it would be appropriate for the government to establish a fund (call it the RTC 2.0 AKA Peoples' Financial Fund) and use those funds to purchase (just as have Mr. Buffett and others) preferred stock from institutions. The fund should follow Mr. Buffett’s lead and demand additional potential remuneration in the form of long-term warrants.
The stock would receive dividends and would have a convertible feature to convert to common stock, at the option of the fund.
Further, until certain parameters were met, the preferred ownership would assume voting control, thus the matter of executive compensation would be moot.
We either believe in capitalism or we don’t.

We will have displayed a pragmatic solution well within the parameters of capitalism.
The U.S. dollar will strengthen.
The next step would be to address the underlying economics with the basic problem being unbridled greed.
We should not have a "shot" stimulant as we did earlier.
We need to eliminate the largess given to the very wealthy, in error, by the Bush tax cuts, and to reduce taxes on the middle-class on a permanent basis.
This will have an immediate positive effect upon our economics and we will be on the path to a rational economy.



Michael Z
Sherman Oaks, Ca.
]]> Mon, 06 Oct 2008 13:27:13 -0400
One cannot resolve a problem unless one understands the problem.

PROBLEM: Financial institutions have reduced their lending.
The problem results from the impaired equity portion of the balance sheets of these institutions, with the impairment caused by write-downs of their assets (loans).

Due to the losses they have taken, these institutions, by law, have had their maximum potential lending amounts reduced.
The amount they are able to lend is contingent upon the amount of their equity capital (EC), e.g., if an institution has an equity capital of one billion dollars and is able to lend up to 20 times its equity capital, it could lend up to 20 billion dollars.
After taking loan write-downs (losses) of two hundred million dollars, its EC would now be 800 million dollars, thus it would have its maximum lending authority limited to 16 billion dollars, i.e., a constriction of its legal authorization to lend.
This is the crux of the problem.

The institutions have funds, i.e., liquidity. But, without the legal authority to increase lending, they are sitting in stagnant water.
Those who say that one going to one’s ATM for a withdrawal may find a closed sign are, absolutely, lying or ignorant.
If one is a Representative or Senator and is lying, he or she should be Impeached and removed from Office.
Likewise, if that Representative or Senator is ignorant, he or she, apparently, is not, adequately, accepting his or her fiduciary responsibility of understanding a subject prior to advocating or voting for it, thus he or she should also be Impeached and removed from Office.

PAULSON PLAN: Purchase impaired mortgages from financial institutions with taxpayer funds.

Indeed, this would positively affect an institution’s EC, because the impairment (loss) would have been transferred to the taxpayers. This reversal of loss would be achieved by paying face price rather than market price, since if the market price were paid, there would be no effect upon EC.
This contemplated action is anti-capitalistic, immoral, and a method of stealing from taxpayers.
The taxpayers did not cause the capital impairment (this IS the problem, i.e., “It’s the balance sheet, stupid”).

Anyone involved with designing this scheme and voting for it should be incarcerated as co-conspirators to steal from the citizenry.
The scheme’s authors and those who advocate for it would be precipitating an admission that capitalism doesn't work, which is a lie.
Capitalism is the best economic tool ever devised, but as with any tool, it can be and has been abused.
Congress should accept most of the responsibility for creating the economic atmospheric conditions that enabled the abuse.
Further, any resolution of this financial phenomenon will not abate the underlying problems of the economy.
It is not the lack of lending that has damaged the economy. It is the economy, affected by greed, that has damaged the lending, but, of course, if appropriate corrective actions are not taken in regards to this financial phenomenon, our weak economics will be adversely affected.

If the Paulson plan were adopted, it would be the most massive SPE by multiples, the dollar would weaken, interest rates would go up, thus the decline in home prices would be exacerbated, and the EC would require further resuscitations.


BEST PLAN (Recapitalization):
1) Allow some institutions to go the route of Countrywide, Bear Stearns, IndyMac, and Washington Mutual. I, also, like the AIG model.

2) Most rational institutions will do what UBS, Merrill Lynch, Goldman Sachs (just recently with Warren Buffett) have done, i.e., they have raised additional EC, usually by selling preferred stocks.

Months ago, when Merrill sold 6 billion (as I recall the amount) dollars of preferreds paying 9%, I knew they were desperate, and that this was just an early domino.
Goldman Sachs, from what I have heard, is paying Buffett 10% for the preferreds. Keep in mind; this is after-tax money. The only reason for Goldman Sachs to take a desperate (GS also gave Mr. Buffett 43,000,000 warrants to purchases GS common @ $115 per share) action was because it knew it was experiencing an EC impairment and needed to raise additional EC.

Please keep in mind that pain is not all bad. It is a signal that something is wrong and indicates that the source of the pain (problem) must be determined, analyzed, understood, and finally the best alternative action must be taken.
We are experiencing pain regarding this financial phenomenon.

3) As a last resort, it would be appropriate for the government to establish a fund (call it the RTC 2.0 AKA Peoples' Financial Fund) and use those funds to purchase (just as have Mr. Buffett and others) preferred stock from institutions. The fund should follow Mr. Buffett’s lead and demand additional potential remuneration in the form of long-term warrants.
The stock would receive dividends and would have a convertible feature to convert to common stock, at the option of the fund.
Further, until certain parameters were met, the preferred ownership would assume voting control, thus the matter of executive compensation would be moot.
We either believe in capitalism or we don’t.

We will have displayed a pragmatic solution well within the parameters of capitalism.
The U.S. dollar will strengthen.
The next step would be to address the underlying economics with the basic problem being unbridled greed.
We should not have a "shot" stimulant as we did earlier.
We need to eliminate the largess given to the very wealthy, in error, by the Bush tax cuts, and to reduce taxes on the middle-class on a permanent basis.
This will have an immediate positive effect upon our economics and we will be on the path to a rational economy.



Michael Z
Sherman Oaks, Ca.
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