Henry Buttal

The Fed and Fannie Mae: Throwing Money Down a Black Hole

As long as politicians like Mr. Frank continue to deny there is a problem, the problem will not be solved.

As a by-product of the extreme conditions foisted by Mr Mozilo, Mr Frank, and others, I find that, as an independent business person, I can't refinance my mortgage.

Even with 50% equity, and demonstrated household income of six plus figure going back to the late 80's.

If I was a household of a pimp and a crack whore, I am sure that I could qualify for some program, and receive a government insured loan.

In Search of the Next Ad Network Breakthrough

Very nice summation.The dynamics of the ad markets right now point to a lot of old and new players trying to figure out the signal to noise problem in online advertising; a sticky problem before you throw in cookie life, privacy oriented NGOs, and a potential move from self-regulation to FTC stricter guidelines.

The ad agencies will have to continue to build new skills to help with these issues, or they will loose traction to newer players.

Beer, Free Markets and Emerging Economies

Great article, both entertaining and informative. Count me as a new follower.

Has Investing in America Become Passe?

Marks2002, Zhubajie -

You live in the U.S., and yet are blind to the advantages, even when your comments convey their very value. Zhubajie, your earlier comments say how wonderful that China's self-appointed, un-elected masters choose to execute the perps of financial fraud. And yet, don't forget, that same China power structure has executed people just because they had different religious orientation or wanted more freedom. Would you feel free to make your comments in a country like China?
Marks2002, I see the displays in Arizona and other places where open carry is legal as a healthy sign. The people complied with the regulations of their state, and behaved themselves. Sure, their behavior increased nervousness, but in the face of wholesale abandonment of the principles of accountability by member of our so-called House of Representatives, I can understand a few people might want to remind them of the right to bear arms. Don't forget, the unilateral, uncontrolled decisions by California officials (rinse, repeat, many times) are in large part what has led to an overburdened, indebted California government.

The U.S. is still in the top 3 countries by almost any metric; it is better off economically, socially, and from a perspective of freedoms. Is it as dominant as it used to be? No. But the press greatly exaggerates its demise in all facets.

What’s Really Going on with Apple, Google, AT&T and the FCC

My only comment is that it is easy to maintain your moral high ground, and claim you "do no evil", when you require the FCC to redact your statement. This, to me, undermines your whole pro-Google argument.

For obvious reasons, the carriers don't want VOIP rent seekers and free riders on there expenses network. They will fight it, and I am sure that Apple is required to fight it as well.

Marc Chandler's Compelling Perspective in 'Making Sense of the Dollar'

It is important to understand HOW the economic statistics is described and composed is as, if not more important, than the actual number itself. A bunch of the arguments above argue across different sets of number that are apples and oranges. The press tends to make it worse....for example, I am sure most of you have heard in the press that loans are being made to Brazilian oil firms of $10 billion by the U.S. government - terrible thing, right?

OK, how about this instead: The U.S. Export Import Bank, which exists to help fund and guarantee trade for U.S. corporations, is extending $10 billion in loans and guarantees to facilitate the PURCHASE AND EXPORT (hence ExIm) of at least $10B in U.S. products and services to Brazilian oil companies.

If you don't understand the details, you probably don't get the real picture!

Has President Obama's Mortgage Modification Plan Failed?

Good comment, Bender...

For those of you that actually READ the linked articles, a couple of things were made clear:
- Ocwen, and some of the others are making good faith attempts to rework loans
- Barney's blow up was last year (July 08), which makes for great politics, but lousy policy. While Barney Frank was blowing up at the banks like BOA, he should have been working with the GSEs, which based on historical evidence, he has influenced in their business operations. I thought it highly ironic that while Barney Frank was dramatically addressing BOA, the GSEs did not modify their waiver paperwork UNTIL JANUARY 09! Great job BF...

Irrespective of the who is president, the problems continue to be the key committee members in the (so called) House of Representatives. Frank and Rangel being two of the major problem children.

With the imminent failure of Guaranty Financial Group (GFG), the banking crisis is poised to enter a new phase: banks failing not due to the bad loans they made, but those they bought. Thousands of banks invested in similar securities backed by subprime mortgages, and analysts say the boomerang effect that killed Guaranty could cripple them too.

GFG was always a poorly run bank at best, despite its size. For many years it was a piggy bank for Temple Inland, and the lack of investment in service and information technology often showed.

It is a testimony to how easy it is to make money in banking, and how poor the GFG management was, that the entity ever existed at all, and then subsequently failed.

Downsizing the American Dream

Perhaps Thomas Sugrues' book will be better than his article, as he grossly neglects a number of economic factors that led to an increase in home ownership from the late 50's on.

That was the rise of the professional home builder companies, like Fox & Jacobs, who began to use standardization and mass production to bring quality housing to a greater number of Americans. Thus, it was capitalism that actually improved the opportunity for home ownership, even in the face of a huge rise in population and immigration. In the last fifty years, think how many new communities have sprung up, and with them new municipal facilities and schools.

It was only in the last 10 years when ANYONE, thanks in large part to the policies of the United States Government (pick those reps you want to blame), could get approved for a house substantially larger and better equipped than ever before, with little or no money down. Irrespective of whether they could actually afford it.

Capitalism keyed the rise, and the politicos ignorance of economics and the realities of income distribution cause the fall.

Charting Brazil's Economy

While I respect what Brasil has accomplished, I am concerned about the growth going forward. The manufacturing sector's exports is heavily propped up by a few companies like Embraer. The strong socialist/populist orientation of the constitution, coupled with an even bigger gap between haves and have nots than in the U.S. will eventually be an economic issue that Brasil will try to solve socially. Historically, this has meant taxing and tariffing. Brasilian's know how to get around much of the government regulations, but foreign companies are always eventually impacted by it.

A Deutsche Bank exec I met one time said it best - "all the involvement we have in Brasil looks great and starts strong, but ultimately doesn't work out the way we thought..."

Four Indicators for When to Exit the Rally

I think the mixed messages points to a retracement, but likely a mild one. I have been looking for 5 to 6%, with the market beginning to rise again within 60 to 90 days.

Of course, my assumption pre-supposes that a) growth of sales actually begins to occur in the companies that have had a downward spiral, and b) the absence of any real politically activity is a plus, and after the August break is over, Congress will still not embark on any radically new tactics to "help" their fellow Americans

Peter Schiff vs. the Fed

Irrespective whether Peter is right, or whether Peter gets elected, he will bring a fresh voice to the dialogue.

On top of that, it is a fresh voice that has demonstrated the speaker is willing to stand against the crowd on multiple occasions, teleprompter or no teleprompter; irrespective whether right or wrong, and that is refreshing.

Will it make a difference? Even with my the donation, I don't know, because its the wrong state so I can't vote.

But it can't hurt. So few of the elected now remember their country!

Caution Warranted Despite Full Spectrum of Bullish Indicators Worldwide

Prieur,

I have always enjoyed the Postcards; this time I would like to add to the cautionary voices:
1) 3 layoffs this week of people I know, 1 of whom had survived two cuts and moved to night shift
2) My main consulting client, which depended primarily on state and local government contracts (and was a revenue generator for the state and local governments) said even their business had started to turn down (the infrastructure money being redirected to gap coverage and ACORN initiatives) and
3)VCs that I know being unable to raise new funds, and the laying off associates.

This is only first person reporting, and may not reflect the larger statistical trends, so take it with a grain of salt. However, I do want you to know:
- sometimes I have been damned....
- and sometimes I have slamned...

But I am definitely, and have never been:

iamned..ed (no, down thumb, the lord strike me down if I amned....
Henry

July Nonfarm Payrolls: -247K vs. -300K consensus. June revised to -443K from -467K. Unemployment dips down to 9.4% from 9.5%, vs. 9.7% consensus.

I don't believe the numbers are being (excessively) gamed. Rather, I believe the issue is that a large number of "unemployed" are on the sidelines, but not officially on the roles.

My opinion may change if the next numbers suddenly show a gain in jobs....

Confidence Games and Ponzi Schemes: No Way to Run the World's Largest Economy

Tim,

Interesting chart on household assets. I am surprised to see the amounts are as high as they are show. I, for one, didn't escape the downturn as cleanly.

The Ponzi scheme can continue, but the new participants (victims) will not be given a choice of opting out. It will be called fairness, but it really is just redistribution of wealth.

And of course, it being the government, they can't even do it efficiently - witness the need for a transfusion to Fannie Mac.
So now you get a double whammy: lose your house, and pick an extra tax burden helping the GSEs!