Old Rick

Chart of the Day - Unemployment

The important number (as you have pointed out here before John) is the U6 rate that hit 17.5% for October.

Barney Frank: Name Names

I think you can be sure that Barney will profit somehow.


On Nov 04 09:45 PM Steven Hansen wrote:

> what triggered franks change of heart???
>
> follow the money. who will profit???

How Bloomberg Fabricates U.S. Housing Numbers

Mavericks, you probably have a 5/30 mortgage which is NOT the same as a 5 yr i/o mortgage. I've had 5/30 s several times in the past as a kind of play on interest rates. Your mortgage will not need to be refied after 5 as it will just go to the "index+2" (or whatever) interest rate and is good for another year. The 5 yr i/o OTOH needs a total refi and will start paying principal which was 0 on the i/o loan. The problem will be that the principal balance is now exceeding the value of the home, so there is probably an automatic default built in to the 5 yr i/o's
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On Nov 02 09:00 AM mavericks wrote:

> I'm going to take the other side of this argument since I own one
> of those 5-year adjustable loans and I've been paying interest only
> on 4 of those years. As it turns out, my payments will go DOWN next
> year if LIBOR stays where it is.
>
> Second, I would think it would be in a bank's best interest to rent
> out, either to the former owners or somebody else, the homes they
> foreclose upon and try and wait for home prices to recover before
> putting them back on the market. If this is the case, would these
> homes be considered "empty"? Just asking.
>
> Frankly, I think the tone of this article is a bit on the emotional
> side so that is why I'm questioning it.

How Bloomberg Fabricates U.S. Housing Numbers

Supporting data please??


On Nov 02 09:09 AM Rich S wrote:

> You guys all need to get a life. This author is totally whipped
> up over a variation of 50K. I would imagine that the people at Bloomberg
> are too busy being product members of society (unlike most of you
> ranters and ravers) that they consider 50k a rounding error and with
> the realm of reasonableness--but then most of you don't know what
> reasonable or sane is.

Were Fannie and Freddie the Real Enablers of the Housing Bubble?

It is even worse than that. In 2005, Johnson at Fannie initiated a stealth "bribery" (for lack of a better word) campaign to buyoff several Senators of both parties to scuttle the Hagel/Dole/McCain FNM/FRE reform measure (S.190 I believe). That measure was also backed by Bush (who favored greater oversight back in 2003) but, of note, it was opposed by BHO, a huge recipient of FNM/FRE bucks. You can read about it in the excellent NYT series, "The Reckoning", available on-line. Thus, the politicians were the real enablers of this mess that they now purport to want to clean up.


On Oct 28 08:14 AM Bruce Krasting wrote:

> Without F/F the insane things that happened in 2005 - 2008 would
> never have happened. The D.C. lenders are responsible for the mortgage
> mess.

Ten Stocks for the Next Ten Years

Innocex, while I'm not a fan of ALL of the picks herein, I think it's you that has much of this wrong. To wit:

1. There is no political will in the US or the UK to take on inflation a la Volker, Reagan, Thatcher in the early 80s. I don't see the super-Keynesians currently in the WH/Fed/Treasury having the guts to take rates to the double digits level that will be required. Just look at how Volker and Buffett have been marginalized by this group of yahoos (no offense to YHOO). Their responses have largely been to try to reinflate the credit bubble.

2. Gold/Silver are now far lower than their inflation adjusted highs reached in 1980. Gold would have to go over $2000 to beat July 1980. As far as Silver, who over the age of 50 doesn't long for the good old days of the Hunt Brothers! :-)

3. The sooner we marginalize the 2% of people (but 60% of the vocal volume) who constitute the "green circles", the better! We need Nucs, Yucca Mountain, CNG, Bakken oil, Tar Sands, ANWR, and expanded off shore drilling to break the Arab/Chavez/Putin oil cartel. Screw the green machine in favor of (not so) common sense. Wind and Ethanol are 2 of the greatest scams in recent history. CNG and new oil are gonna be the bridge to the urban/suburban electric vehicle. As you might guess, I think AGW is a redistributionist fraud, so keep that coal burning baby!!

4. Can't disagree with you on this one except if my 3 gets done, you could safely short USO, but not my cup of tea.

Other than that Mrs. Lincoln, the play was great!!


On Oct 28 10:03 AM Innocex wrote:

> Poor advice in my opinion, bordering on terrible.
> 1. Inflation will be curbed eventually, it would be disastrous for
> any economy to leave interest rates so low. Australia already started
> raising them.
> 2. Gold and silver are at multiyear highs so picking them now is
> foolish.
> 3. Potash makes phosphate fertilizers and there is a huge backlash
> against phosphate in green circles.
> 4. Oil is too volatile for long term safe plays, it takes someone
> to daily monitor oil prices to make money this way.
>
> The only hedge that seems decent in the list is the agricultural
> one.

Hey! Washington! This is How It's Done

If you've never read the story, it is at www.foxnews.com/story/.... It's also discussed in the NYT series "The Reckoning"

Hey! Washington! This is How It's Done

The complication for doing "the right thing" in the U.S. is campaign money, i.e. bribery. Stealth money is how FRE killed the proposed Hagel/McCain/ Dole reform bill (S.190) in 2005. BHO (with Chris Dodd and Barney) was a huge recipient of FNM/FRE $$ in his massive 4 years in the senate. You can bet that ANY reform efforts that resemble the ING breakup would be met with huge money outlays from the big 7 to stop those efforts. We need Teddy Roosevelt in the WH, not Casper Milktoast, especially a Casper that bends over for GS/BAC etc.

Five ETFs for Climate Change Legislation

Do you have any ETF recommendations that might benefit from the revelation that AGW is a fraud?

6 Dividend Stocks for Current Income

On your KMP recommendation, note that Kinder has another issue (KMR) that pays dividends as quasi-stock splits thus avoiding the potential tax consequences of an LP and making it suitable for a tax favored account. The other advantage is that KMR trades at a slight discount to KMP while the dividend is essentially equal.

The Debt-Equity Clock Is Ticking - Morgan Stanley

I agree with the equity argument, but believe that most of the equity allocation should be 1) foreign or international (<20% US exposure) 2) be high quality with transparent balance sheets (rules out financials) and 3) pay dividends at around the same rate as long-term treasuries. I would also (and do) hold U.S. equities that are energy/commodity related. In regard to the foreign exposure, note the Niall Ferguson article in Bloomberg (quoted on Market Currents) predicting another 20% downside for the sawbuck.

Can We Add Some Inflation to Some Deflation and Claim Overall Prices Are Stable?

Larry, on top of export driven grain price increases, don't forget that the ethanol mandate monster is still among us. Those 2 factors combined could easily drive corn and soybeans back to the stratosphere.

Looking Back at Fiscal 2009

jdl51 sez:This is the final Bush budget. All of the deficit, aside from the $200 billion stimulus spending, are what's left of the Bush administration "fiscal responsibility". In other words, Obama is not responsible for this deficit and it's increased government spending.
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Wow! talk about not being able to remember history!! It was a year ago when the Dem majority split the 2009 budget in half with "the Bush budget" covering the 6 months to end of March when the second half Democrat/Obama budget could run the deficit up faster than Bush ever had. If you are going to write here, at least TRY to get your facts straight. BTW, I think that Bush and the GOP congress were complete fiscal failures as are Obama and the Dems. WE ARE TOAST!

Stock Market Bubbles

I'm currently reading Crash Proof 2.0 and I think Peter Schiff would add a #4 and he assign probabilities of 5% to your #2, 15% to your #3, and 80% to his #4. Also thanks for the disclosure on SDS. I've lost a bit trying to insure against the "coming decline" with SPX puts, but the decline is not coming soon enough. now thinking that it could be some time as the Govt continues to add liquidity so a longer term vehicle (SDS) is probably in order.

Feldstein Health Care Proposal

This is sure a better start than anything currently roaming the "hallowed" halls of Congress. Add to this idea some measure of tort reform and cross state line HI competition with some subsidization for pre-existing conditions and you can create a 55 page HCR bill that can be understood by a non-PhD semanticist. The biggest problem with the current efforts is trying to throw all the problems in one big bag and solve them all simultaneously. A common saying in engineering is "define the problem before you define the solution" .