RatWatcher

The Race to Zero Interest Rates

Have to give a down thumb for this. Renegotiating the mortgage props the price, since the home stays off the market. Agree with you that prices must correct, but your tactic leads to the opposite result.


On Nov 27 09:06 AM Asbytec wrote:

> Agree. Don't prop up the housing market, but prop up families who
> will lose their homes, at least. And maybe renegotiate their home
> mortgages. Housing prices must correct.

The Good, The Bad, And the Ugly in Bank Loans

Absolutely on the money. Paying one's bills seems to be the sucker's move in this century.

On Nov 20 06:58 AM eternitus wrote:

> Amazing what happens when you give homeowners an incentive to default.
> Someone in Congress needs to read Freakanomics.

The Day After: Is the Honeymoon Already Over?

Nationalize retirement accounts = sell before he can! Pay 10% penalty to save the balance! Your IRA or 401K is in jeopardy here folks!

Hottest Potato in Washington: The Homeowner Bailout Plan

LOL that is the comment I zeroed in on also. My traditional IRA is already shared with Uncle Sam....he is a 15% investor in it. If my taxes are more than 15% in retirement, he will make more than me on the account. And I invest in him, thru treasuries. Why not partner up on the house, too? It's just another item in the portfolio.

'Distressed borrowers' couldn't care less who bails them out or how. When the time comes to pony up, even 25 years later, they'll fudge the paperwork and walk away just as they are now.

While there is a small chance we'll see some return on our bank investments, the likelihood of seeing a dime of homeowner bailout repaid is nearly zero. Homeowner bailouts are direct welfare, nothing else.

The Rise and Rise of the U.S. Dollar

"Anyone know when the Treasury bills from the $700 billion bailout are to be auctioned off? November?"

Do they need an auction? Direct swap of Treasuries for the preferred shares seems do-able. They can sit in the bank vaults as recapitalization.

Which Candidate Will Get to Spend the $700 Billion?

"No politician, except the eccentric Rep. Ron Paul, R-Tex., has gone after the Fed"

Considering he was right, does 'eccentric' matter? Is it even accurate in the context of this article?

Playing the Market in Difficult Times

Where should you put your money during these desperate times that we are just starting to experience?'

Hard as it is for a saver to say: just SPEND it. I'm getting that HDTV, a new computer, new bed....what the heck! I may as well demise in style. It can vanish on paper or pad my nest....

Note I will PAY, not buy on credit....lol

The Next Bull Market Could Be Rentals

"And who will profit from this bull market?
People who own rental properties!"

In a time when people cannot afford much, and there is a significant oversupply of units, rents can't safely be raised. A modest rent is far superior to a vacancy. 'Treading water' is a more likely outcome than profit, although if rent can cover PITI on the rental you can consider the 'P' portion as long-term profit, if / when underlying home value recovers.

Also, profit would depend greatly on whether the owner used the rental property as an ATM with a cash-out refi during the mania. A fixed-rate loan from, say, 1998 on the 1998 value may well have a cash-flow positive even with stagnant rents. Conversely, a 2004 cash-out refi based on overvalued property will likely have a PITI greater than rent that can be collected today.

And for simplicity I've left out maintenance, which in either case will come out of the owner's other incomes.

Profit, thus, is unlikely. Break-even is winning for rentals in this era.

The Glass Is Half Full

Bush. Commodus, Roman Emperor ~ 200AD. Rome was never the same afterward. $700B theft, 2008 AD. US never the same afterward.

Highly recommend review of 3rd century Rome to see where US is headed. Stunning to see such massive borrowing and revenue cutting in the same bill.

Get a list of all Wednesday's and today's 'aye's', and never vote for them again!

Moving the Deck Chairs on the Economic Titanic

"What will the morons in Washington do when they find out the market works better WITHOUT THEM? "

'Fix' it, of course, so it doesn't. They will start by taking equity and bank and insurance companies, buying paper neither they nor anyone else understand, and making a central economic czar in DC. We know how well that works too.

Don’t Blame Wall Street - At Least Not Completely

"The people that are being foreclosed, primarily those who initially received subprime mortgages, should never have been given a loan to buy a house. These people were renters and will become renters again."

Not so easily. They may get an apartment in a complex. Owners of single-family for-rent homes don't want these people, as they have record of not paying and then walking away. The 'investor' with one or two rentals understands risk management up close and personal, and can't take them as tenants.

What the President Didn't Say

As I posted on another article...not a word about bankruptcy protections for Main St.

Call the Treasury's Bluff

Yes, concur with the diversion theme. Wall St had to know there would be limits on comp, but you bid high and 'compromise' that away. Meanwhile, the equity stake is not even on the radar of Main St, at least so far. Likely because it's simpler to understand 'cut their pay' than the idea of equity vs. bondholding vs. pure gifting....the last being the primary intent of the TFT (Treasuries for Trash) program under consideration.

The Presidential Speech, in Context

There was not a single word about bankruptcy protections for the people. I've read that there's been a 'compromise'.....it's a scandal of its own there was ever an issue.

Imagine...panhandling from the homeless, and opposing any relief for their needs. What soulless people running PA Ave and Wall St.

You Can't Handle The Truth

In the below, substitute 'Republic' for 'Reich' and 'Treasury' for 'government'. A gold star for the first to recognize the source document, passed by a fearful democratic government to save themselves from unspecified but impending doom.
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In addition to the procedure prescribed by the constitution, laws of the Reich may also be enacted by the government of the Reich.

Laws enacted by the government of the Reich may deviate from the constitution as long as they do not affect the institutions of the Reichstag and the Reichsrat.

Laws enacted by the Reich government shall be issued by the Chancellor and announced in the Reich Gazette. They shall take effect on the day following the announcement, unless they prescribe a different date. Articles 68 to 77 of the Constitution do not apply to laws enacted by the Reich government.
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Paulson is a dangerous narcissist, Bernanke his enabler. Have no fear of the economy, as Main Street always recovers. But be very afraid of Herr Paulson.