drpaul1139

Fannie and Freddie: Worthless?

You know one thing that I have not witnessed in these mortgage discussions is the challenge to the current design of the fixed rate mortgage instrument?

The word Quantum comes from the Latin "quantus", for "how much."

I know for a fact that when we use some simple observations from quantum physics we can get a dramatic and better fixed rate mortgage design favoring the buyers, while balancing the buyers, sellers, and the capital markets.

When this new fixed rate mortgage design is the case then we will get a private sector mortgage banker IPO where 44.4 US million mortgage holders will instantly gravitate to and we do not need government i.e. Fannie and Freddie involved in mortgage financing.

Why Comments Matter

I get the distinct impression that most journalist, perhaps about 99% are running away from the news because they are not equipped to handle it. This could be because of their general lack of business and economic knowledge, which covers most comments. Comments are generally of a better quality than junk email.

Yes comments are a great device for new views and ideas.

I would like to extend this comment observation to the CEO’s and executives of public companies who are woefully lacking in any type of online skills and I predict that when the next great things comes it will catch these executives totally off guard and they are doing disservices to their shareholders by hiding from the public.

I understand that when one is following a business plan that it is difficult to build and maintain the house when every passer by is giving directions. But in the war of business it is the CEO that is best equipped to evaluate that ‘that one bit of information’ that will save or expand the house.

It is absolutely amazing to me that the emails for decision makers are not prominently displayed, and yes please use-trusted gatekeepers as Fred does.
www.productequityvalue...

Summers’ New Model: Details, Contradictions, and Odd Assumptions

"Money and the economy are 2 separate systems"
Very astute observation! Let me add to this two system observation...

The Corporate - Banking Model Confusion

To date economic confusion starts with not being able to separate the corporate model from the banking model…because all banks are corporations but not all corporations are banks in the classical sense of the word banking.

To be sure a corporation is a bank in that its shares are freely converted to cash by the multiple value creation formula of x=(a*b)/c where X is stock price, A is revenue, B is earnings as a percentage of revenue, and C is a rate of return. Simple plug in $1 revenue and .63 earnings and .03 rate of return with 1 share and see X as $21 created.

And see that many corporations with lots of cash do lend money in order to protect its share value.

But the cash of the generic corporation obtained is from the customers buying things by the corporation.

The cash that the bank corporation obtains is from the customers depositing their money with a corporation specifically called a bank with a special charter to take in government insured deposits and then sell credit in the form of fiat currency creating debt with interest attached to the debt.

For those that are not students of banking, the fractional reserve aspect of banking further confuses the laypersons (well actually how can one be confused if one does not know?) and I suspect confuses all of the so-called experts especially since M3 has been taken our the 7 ways to measure how $1 in reserves can in fact turn into $300?

Interest is the revenue for the Bank Corporation and then earnings for the bank increasing the stock price for this special type of corporation.

The cash received from the generic, or the general corporation’s customers from the products and services are the revenue for the corporation and then earnings producing a stock price.

Both the generic corporation and the banking corporation have stock or shares.

To understand the ‘positive’ generic corporate model means understanding the three base components of the corporation:

1. Capital
2. Equity
3. Cash

To understand the ‘negative’ banking model (a special type of corporation) means understanding the three base components of banking:

1. Credit
2. Debt
3. Interest

Until we can understand the base meaning of a corporation and separate the functions of a special type of corporation called a bank by law then we can begin to solve this economic problem.

Look closely a see that the generic corporation model has three base components, but the bank corporate model has six.

What this says is that we need a new ‘extended’ consumption function in economics where the current consumption function states that ‘consumption is a function of income’ where now income from jobs are clearly shrinking, the new consumption function clearly must be tied to either the generic corporate model or the banking model for balance?

Consumption is currently tied to the ‘negative’ banking model of ‘credit’ in that in the US demand is credit driven which is unsustainable; somehow we must tie the new or extended consumption function to ‘capital’ in the generic corporate model.

This means that we need for the first time a precise definition of positive capital so that the capitalist system can work. To this day economic literature has not pinpointed how and why the concept of ‘positive capital’ is commingle with ‘negative credit’, and the running wild of its consequent debt and interest.


On Jul 12 03:29 PM derryl wrote:

> Simon wrote,
> "Summers has commendably switched some of his rhetoric, so now he
> emphasizes nonfinancial technology development – presumably in the
> private sector – as the road to sustainable growth. And he rightly
> contrasts this with the financial engineering that brought us to
> this point. But does his model really offer the most plausible or
> appealing path from here to there?"
>
> Technologies can improve efficiency and productivity in the physical
> economy, but our problems at root are not physical. They are monetary.
> All of the workers, productive facilities and raw resources are still
> there ready to go to work producing goods and services. But nobody
> can do anything because everybody has too much monetary debt.
>
> Money and the economy are 2 separate systems. The best way to see
> this is to look at a bank balance sheet compared to a non-bank balance
> sheet. On a bank balance sheet your account balance--your money--is
> their liability. On a bank balance sheet your loan--your debt--is
> their asset. Bank assets and liabilities are the opposite of non-bank
> assets and liabilities.
>
> Banks alone have the right to create money. If the economy creates
> money it is called 'counterfeit'. You can produce all the goods
> and services you like but unless somebody has money to pay you for
> them you can never repay your money debt to the bank. You cannot
> solve a monetary problem with economic solutions. The solution must
> be monetary.

Why Economic Dogma Threatens Our Future Prosperity

This is a brilliant article!

It was obvious written out compassion and with comprehensive data to back up the compassion. Please permit a less than politically correct person to weigh in on this dead horse with an observations and a simple solution to credit, debt, and interest.

What Mr. Weigand is saying (and many of the brilliant comments) are that most Americans are economically stupid and we get the government that we have. I was not a fan of President Clinton but if I am not mistaken he left the country with $3 plus trillion in surpluses and the Republican administrations gave us trillions of dollars in debt, and now a new democratic president is giving us trillions of more dollars of debt?

And now we have a $14 trillion national debt, which is about 100% of gross domestic product and on average $90,322 for 155 million labor units? And as Jeff Nielson is pointing out for us which we all had better be aware of if we indeed want an immediate solution, and an immediate solution is possible when we are clear on the numbers.

“1% of the U.S. population holds more than 35% of ALL wealth - and 55% of ALL stock. And their grip on America's wealth grows stronger every year.

Meanwhile 80% of the U.S. population holds only 15% of total wealth (about 25% less than in other industrialized nations).” Jeff Nielson

Thanks Rob Weigand for the Article, thanks Jeff Nielson for these numbers…

To make a third contributions with solution numbers, what I will attempt to do here is get us out of this mess with some new economic thought so that all of the Americans without economic and political sophistication, and I doubt that they will ever gained these two will just shop and be happy and all is well.

The problem is not only the perceptions of reality but also no reality at all by all of us when it comes to the so-called capitalistic model.

Lets build this capitalistic 101 model from the ground up and we can solve this economic mess that we find ourselves in quickly and together. Presupposing one fundamental, undeviating, and permanent understanding about capital, indeed a mastery washing the mental slate clean of credit, debt, and interest which are the hindrance to both 100% employment and non debt driven consumption.

Capital should be the primary tool of a capitalist economic model. But we need to understand what capital is. Capital means to capitalize or the bringing in of cash value from the future for present use. The vehicle for bringing in capital from the future for present use is the public corporation by its ability to issue unlimited upside and unlimited downside ‘risk-reward’ shares where the earnings of the public corporation determines the up and down sides.

The earnings for the corporation starts from the labor units demand for products and services, spending called consumption, which is the revenue of the public corporations and then the earnings as a percentage of revenue driving share prices causing the equity to rise in value.

Equity is the differences between the revenue of the public corporation and the total value of the corporation called capitalization, notice that the concepts of credit, debt, and interest are nowhere in our descriptions of capital which is the foundation of capitalism?

Please! Lets be clear here. Look at that last sentence and see the connections between capital and equity the two pillars of capitalism.

Therefore any country with a stock market is practicing capitalism to the degree of the number of public traded companies, and the total value of its stock market exceed the countries gross domestic product.

What class of economics does credit, debt, and interest belong to? Creditism? It is this creditism that permits the 1% of the populations to control.

The perceptions that credit belongs in the lexicon of capitalism and that credit is free is a drug worst than ‘crack cocaine’. So the question is how do we end credit, and its three negatives of debt, interest, and unemployment?

As we see massive unemployment is triggered primary by the labor units inability to pay the interest on free credit. A critical number of unemployed brings the whole economy down traced solely to free credit, debt, and interest, which are the real cause of boom-bust-economic cycles, not the perceptions of something else. The total interest will never match free the credit, credit is a slave to interest.

Now mathematically when we ask what is the opposite of free credit then the answer is equity, free equity.

Permit me to explain.

The assumption is that a person will have a job to pay the debt with interest. But a job for most people will never keep up with the cumulative effect of interest. So a job is tied to the negative concept of credit.

If a job is tied to the negative concept of credit, then purchases are tied to the positive concept of equity for public companies. As of this moment 99.99% of the economist have no ideal of the power of positive equity for public companies so we MUST take this equity matter into our own hands!

Why do I say this, how do we do this?

By this secret multiple value creation formula of x=(a*b)/c where X is stock price, A is revenue, B is earnings as a percentage of revenue, and C is a rate of return with 1 share outstanding ALWAYS creates more value for a public company than a non public company solely by the ability of a public companies to issue shares when X-A-B can be predicted.

Who creates the earnings for a public company causing the stock price to be multiples of revenue? The consumers.

Ok if the consumers are the ones who create the earnings for a public company where 1% currently own 55% of the equity then what percentage of the earnings and stock price of a public company can be attributed to the consumers?

When we can answer this question then we can replace free negative credit with free positive equity and we will have a new instant economic paradigm.

What we know now, from careful investigation of the multiple value creation variables for public companies, is that when 46% to 69% of the equity of new public corporations are given free to a precise number of customers simultaneous to the product or service purchases then the prices of the free shares are ALWAYS greater by 3, 5, 11, 20, and over 40 times the price of the product or services by x=(a*b)/c.

The determination of the precise number of customers prior to a new public company’s registration process and the giving of the free shares after the cash purchases-consumption of the new public companies products and services causes A revenue, B earnings, and X stock prices to be precise predictions.

The free giving of the 46% to 69% of the shares of a new public company is the sharing of the percentage of the multiple equity value created and attributed directly to the consumer’s purchases providing the stability of share prices for the remaining non-customer investors who pays cash directly for their shares.

This free sharing in exchange for cash purchases by the 46% to 69% customer-owners of new public corporations is called Product Equity Value©.
www.productequityvalue...

It is the free Product Equity Value© contained in each product or service that causes the global economy to become a willing, renewable, and stable one of equity driven demand consumption replacing unstable credit-debt-interest driven demand consumption.

This means that an average American spending just one third, or $12,000 with new public companies giving Product Equity Value© will have $138,000 in liquid savings an average PEV© ratio of 11.5 to 1.

Product Equity Value© will add a minimum of $21.39 trillion to a US stock market already valued at $19 trillion.

Hey folks! We are not taking about a perception or some far off event! We are talking about something that is in motion now and will be a reality for at least 14 million American in 2009-2010! Help make Product Equity Value© a reality and not a perception!

Learn all you can about it!

Paul Katchings
Business Engineer-Inventor
www.productequityvalue...

The President of the USA could end unemployment tomorrow with an Executive Order

Sir/Madam

If you can stop eating dog food, smoking pot, drinking no brand whiskey long enough for a lucid no rambling moment please genius you tell us where are the 15 million jobs needed in America?

Are you saying that all of the reports of business failures and people being made redundant with degrees are false reports?

Please tells us how you are going to solve this health care mess when 2 insurers controls 80% of the market?

Are you saying the 40 million Americans earning less than $20,000 per year can afford $3,000 insurance premium, $12,000 for housing, $3,600 for food (hopefully not dog food) to feed their families do not need medical insurance…or are you saying that they can find medical insurance if they would only look in the phone book?

Are you saying the American government is good enough to put Americans in uniform to go the Iraq, Afghanistan and God only know where else is not good enough to solve the medical crisis? What do you suggest? Are you suggesting that America just blow up the medical problem?

After you stop eating your third can of dog food genius, and put down your smokes, and illegal liquids please tell us where it is written in stone that the workweek should be 40 hours?

Perhaps you do not know that the workweek use to be 48 hours before the GOVERNMENT change it by an act to 40 hours?

Ok genius; please stop the mud slinging long if enough to give us a solution, any solution even a small one will help if this is not too mentally challenging...or are you saying look in the phone book?

Complaining about problems and the people who suggest them smacks of lots of jealousy and pent up rage hiding behind a moniker are easy solutions, children do this even when they becomes adults, put their hands over their faces, hoods over their heads, and pucker up their tongues…but solutions, decisions, responsibility, compassion for ones fellow man…

Gives us some solutions genius…


On Jul 05 02:40 AM teamlysol wrote:

> What kind of dope are you smoking? Go back to Europistan. That way,
> at least you'll be among friends when the unemployment rate rolls
> up to 16-18%.
>
> 'We' don't have a 'global' ANYTHING. Use your last 300 euros, buy
> an airplane ticket, and go back where you came from with your 35
> hour work weeks, your state-funded hospitals, and the rest of your
> european problems, and good riddance. People that want jobs find
> jobs, people that don't, come up with excuses. This is the United
> States, the employment office number is in the phone book, and if
> you were there instead of on the internet, you'd have a job of some
> kind by now. Yes, yes? Yes.

Freeconomics: Should Everything Be Free on the Internet?

Free

Well I did coined the term Product Equity Value© www.productequityvalue... and I am very happy to take this credit. I actually like ‘My Favorite Business Model’ better than the book ‘Freeconomics’ because it is more descriptive.

I am not particular happy with the way that FT is treating the concept outlined in Freeconomics and I would imagine that My Favorite Business Model’ would be treated the same then or now.

What we have here is a mere scratching of the surface of the exactly meaning of capitalisms which is free, not the free of buy one and get one free but the free in that x=(a*b)/c where x is stocks price and A is revenue, B is earnings as a percentage of revenue and C is a rate of return when A-B-C are controlled then this formula always produces multiple values of capitalization over revenue for public corporations.

We cannot forget something that we never knew, and we never knew what capital means exactly because if we knew what capital meant then this ‘free’ would be an existing reality and we would not have an economy driven by debt consumption as a model.

Lets agree once and for all that Capital should be the primary tool of a capitalist economic model. Capital means to capitalize or the bringing in of cash value from the future for present use. The vehicle for bringing in capital from the future for present use is the public corporation by its ability to issue unlimited upside and unlimited downside ‘risk-reward’ shares where the earnings of the public corporation determines the up and down sides.

The earnings for the corporation starts from the labor units demand for products and services, spending called consumption, which is the revenue of the public corporations and then the earnings as a percentage of revenue driving share prices causing the equity to rise in value.

Equity is the differences between the revenue of the public corporation and the total value of the corporation called capitalization…

There is nothing new here in this description we all know this…

Now notice that the concepts of credit, debt, and interest are nowhere in our descriptions of capital which is the foundation of capitalism?

It is this false inclusion of free credit access based on permissible unemployment, debt, and interest into the misunderstanding of capitalism that causes the US economy to be one currently driven by ‘negative’ unpredictable debt consumption by labor units rather than one of ‘positive’ predictive free equity driven consumption which solves the debt consumption problem and makes 100% employment permanent.

Lets be clear and stop wasting time… www.productequityvalue...

In a nutshell what we know now, from careful investigation of the multiple value creation variables for public companies, is that when 46% to 69% of the equity of new public corporations are given free to a precise number of customers simultaneous to the product or service purchases by the customers then the prices of the free shares are ALWAYS greater by 3, 5, 11, 20, and over 40 times the price of the product or services by x=(a*b)/c.

Would you buy a $30 product to have $600 worth of free tradable shares in an IPO? www.productequityvalue...

New Affordable FHFA Loan Program Sounds Like Predatory Lending

Excellent! Excellent!!!

Wow! I wish that the million of people caught in the present real estate trap and according to this article about to be trapped again had the financial wherewithal to read this article!

The future of Real Estate Financing

It must have dawned on us by now that there is something fundamentally wrong with the structure of the mortgage instrument. Its flaws have passed as normal practice for over 100 years. But no one has seriously asked why a buyer should pay 80% of a mortgage in 10 years and only have 7% equity to show for it.

Beneath the surface of a typical mortgage transaction is a disparity of over 1,000%! Imagine if a consumer had a $5,000 balance on a credit card and after 10 years and no new charges still owed $4,000! These examples share a common thread of suspicion. That thread is called usury.

The public complacency with the fundamental flaws can change By simply controlling “time,” we can achieve a fixed rate result for the home-buyer who will pay 245% less in monthly payments and gain 118% more in equity as compared with the current mortgage design. The home-seller will receive 100% and the bank will receive the same or greater return.

Why would I need to refinanced up to 125% loan-to-value when my fixed monthly payments are less, my principle is going down faster, and my equity is increasing by 118% over the current flawed mortgage design?

We have no storages of solutions to the many financial problems in my opinion. What we have is a shortage of people who have the fundamentals to understand the solutions for the purpose of introductions particularly when the solution goes against the flawed grain of reality.

Then of course a solution that changes the mortgage industry could bring the inventor nothing if he is not careful…

One day soon we will see a new mortgage instrument…in fact this could happen now if there was a way to get 14 million potential home buyers to signed up free on a web site in about 120 days or less so that a release of the new mortgage structure would actually get implemented?

www.productequityvalue...

In Economic No Man's Land

The President of the USA could end unemployment tomorrow with an Executive Order!
Finally a permanent employment and consumption solution
Paul Katchings
All Rights Reserved July 2, 2009

A new flexible labor policy means dropping the mandated workweek to ‘0’ hours and then builds the model from the ground up.

For example a 15% reduction in the mandated 8-hour workday to 6.8 hours produces an instant -2% employment rate in the US instantly absorbing the 11,159,999 unemployed and creating a labor shortage of 3.22 million labor units.

The President of the USA could end unemployment tomorrow with an Executive Order.

More consumption will result from this new flexible labor policy but not necessarily to previous levels, and not by debt driven demand consumption as part of the two-prong solution.

This flexible labor policy example instantly solves the 100% employment problem.

Next we need three pieces of data to solve the debt driven consumption problem for the USA and the globe.

The three pieces of data are the population of the USA, the gross domestic product number, and the value of the US stock market.

To continue reading go here: www.productequityvalue...

The Weak Employment Situation Summary

I agree, “Nevertheless, it is hard to believe we could see a sustainable recovery without an increase in employment or wages”.

I do not see how the US will have this increases in employment or wages being saddled with an unsustainable debt driven consumption model?

Credit Cards: Higher Loan Losses Mean Higher Interest Rates

Forget Obama! Forget Government!

Are we waiting for Obama and Government to pay our mortgages and credit card debts?

Where is the American spirit of solutions and can do! All of this whining about what government should do is staring to sound like the whines of 3rd and 4th world citizens!

Listen to yourselves! You asked Obama to be the President to solve this mess and he gave the US $10 trillion in more debt, and more $trillions of debt is on the way!

Obama and government cannot solve this problem! Only new types of corporations started and owned by the consumers, structured for the consumers will solve this problem! This customer owned solution is immediate!

It is out responsibility to find the solution to this mess! We can keep going around and around and around…and this will keep the circle going…

But until we step out of the circle and find out and then see exactly what is the problem then we will keep taking in circles! We know that ‘negative-debt’ is the problem!

Now if we do not know how to ask the simple ‘positive-equity’ question then this is different story altogether!

Read the two articles and shift the focus, shift the energy into a positive-equity direction.

The death of credit, debt, boon-bust cycles and unemployment
www.productequityvalue...

How credit, debt, and interest is replace by equity
www.productequityvalue...

C’mon guy’s let’s question, learn and get with an ACTION solution that we consumers can all join in on…this is better than doing nothing but talking!

Could Venture Capital Destroy the World?

Who would have imagined that the next ‘killer application’ which venture capitalist are SO fond of searching for would kill venture capital, as we know it?

The Sarbanes Oxley Act is a Paper Tiger

www.productequityvalue... .

The Uneasy Relationship Between Debt, Democracy and Capitalism

“The Uneasy Relationship Between Debt, Democracy and Capitalism” is an excellent start in the right direct. But because of too many unqualified experts we do not define the problems correctly.

First we need to know exactly what capital, and capitalism is. When we do know then we know that credit, debt, interest, and unemployment are not parts of capitalism.

This is not an Uneasy relationship this is an undefined relationship.

Please read “Why the Capitalist Theory is no longer fundamentally flawed”

www.productequityvalue...

Here you will find the correct definition of capital, and capitalism, you will find the absolute replacement for credit, debt, interest, and unemployment now and not some far off ill-defined future…

My biggest problem with these posts is that people are sitting on their assets and taking unqualified snipes at reality! Find the solution and then join it! Do something when you find the right solution! Jump on it with both feet!

We all win with the precise prescription!

The Market Isn't Trying to Tell You Anything

I quite agree, the market is not telling us a dammed thing!

But the assumption that people are driving the market begs a question of what people when 1,200 institutions are the 66% market players?

The Sarbanes Oxley Act is a Paper Tiger

www.productequityvalue...

The Next Major Financial Crisis

The death of credit, debt, boon-bust cycles and unemployment!
It is on its way!!!

www.productequityvalue...

China's Stock Market Bubble Inflating

Eventually we all are going to need to get to the rock bottom of exactly what is occurring by learning what capital is and why it was flawed. In case we forgot, China closed its borders for the second time (great wall being the first) for 31 years so she is new at this capitalist game where many of her technocrats were trained in the west.

In case we all forgot, inflated stocks can do lots of good as currency in the hands of the right CEO’s in acquiring hard global assets on the cheap. So why would you want to tax gains from stock transactions when the number of your public companies and the value of your stock market is substantially less than your benchmark USA competitor?

The USA had better get real with a new economic reality fast or lose to this more determined and nimble competitor!

Please read this article:
www.productequityvalue...