oldsuretyguy

New Mortgage Bankruptcy Bill Does Not Address Real Problem

To save the American homeowner and make this current mortgage disaster fair, we need bold steps to be taken immediately such as....the gov. should freeze and consolidate all mortgages in place so that no single borrower is at an advantage measured against any another borrowers. Give the mortgage borrowers a three month deferral on their mortgage payment, add to the loan principal a max of three months past due sums, drop all mortgage interest to a max of 1 1/2% for five years and 2% for the remainder of the loan. All utilities would reduce their charges by 30% and eat any unpaid sums. All previously foreclosed properties would revert to the gov. until prior homeowners would be restored to their homes at the above terms and any remaining homes sold and proceeds split between the various mortgage lenders(investors). Then you would see a real and immediate economic shot in the arm for the recovery and for our sagging real estate values.
The current banking/lending system gets no sympathy if they come out the loser since they are lending with little or no risk carrying next to a zero reserves.They take in a dollar and loan it out times nine to ten times its value and make interest off every loan. Additionally, they can run to the Fed window for short-term funds after they make a loan - sell the risk and take a profit from interest, fees and commissions. The system is broken and the players have no incentive to see rule changes as long as mortgage lenders can act like brokers.

Trust: The Biggest Casualty of 2008

Excellent article.

Trust: The Biggest Casualty of 2008

Maybe they paid with Debit Cards??

Trust: The Biggest Casualty of 2008

Maybe they paid with debit cards?!


On Jan 02 11:44 AM bobbobwhite wrote:

> Most posters here seem to think that all will return to normal after
> this economic "inconvenience&amp... has passed. However, the present
> debacle is not just an inconvenience as it is not something anyone
> under the age of 85 has any experience in seeing through, and it
> may well be the end of the American way all of us have known as a
> result. We have been taught to be perpetually optimistic in the face
> of everything working against us, as that is the largest part of
> the unique American attitude toward life that is so different from
> the way life is seen in so many parts of the world. Which view is
> more realistic and helpful in the long run? That is in serious question
> these days as the American way is put to its perhaps most severe
> test in its short world history.
>
> The concept and reality of trust is based in personal honor, and
> honor seems to be a rusty leftover from the past for most of our
> greedy citizens these days in our "buy it now and pay for it later,
> maybe" society. "Show me the money" has replaced duty, honor, commitment,
> and persistence in the declining America of today.
>
> PS: At the supermarket yesterday, I saw many typical Americans pay
> for their groceries with credit cards, but all the Asians paid cash,
> every single one. Anyone with a functioning brain should see a lesson
> in that.

In Madoff We Trust

Excellent article and well written.

Great Depression Not Imminent, But Inevitable

Those investment groups who previously relyed on CDS guarantees from unwilling insurers will no doubt have their wings clipped in the current CDS market. And, funding for legitimate projects will have to make their case through more traditional avenues of borrowing. The decline of CDS guarantees will probably have a major slowing effect in those various economies expecting CDS lending support. Is that bad? Probably not....... If the only way a financing program can be funded is through CDS support, then it's economic viability is probably questionable anyway. I believe that whole proposition of underwriting credit default swaps was launched without more than a short term return in mind and then quickly gained favor along with the derivative market. CDS's or credit guarantees from an insurance/surety perspective, proved themselves losers over 60 years ago and subsequently considered untouchable by legitimate underwriting companies and their reinsurers. But without regulatory oversight in this financial area, I mean why not sell CDS's to anyone that will buy them? Wouldn't this follow any normal business mentality particularly where you have a vast brokerage sales force with no skin in the game. But, of course this like a Madoff ponzzi scheme, only works in a growing economy and inevitability crash during an economic down turn. Several large prominent domestic insurers have experienced enormous underwriting losses from newly hired company jumping CEO's who have maximized short term corporate and personal profits by cutting costs and premiums and booking tons of unprofitable business. They leave and move their team to the next desperate company and create the same business model over again. Good money in this if you stay ahead of the nuclear winter left in your wake!

Exploring Madoff's Ponzi Scheme Will Unveil the Causes of This Global Monetary Crisis

I'm not sure why, but it's hard to shake the feeling that all of this is somehow being orchestrated into one final major financial disaster. Are the leaders of the Federal Reserve so naive as to think that the whole financial system cannot come crashing down leaving a tangled web of worthless financial products in one big smoking heap? But then who benefits? Certainly not the little guy. Today, any conservative ethical mandate at the center of our global banking system, if there ever was one, is long gone.
Without financial regulation, the order of the day is - figure out any way you can, create any kind of scheme, cobble together any type of financial junk and market it to the masses or some wealthy "friends" with no concern about who gets hurt. Banking reserves were supposed to be there to give some legitimacy to the banks position as a depository and lender. A 20% bank reserve made some sense, but not a 10% reserve and certainly not 0% reserve where the Fed is printing money and selling bonds at 0% interest.
Maybe the banking system should crash and like a phoenix arise in a new highly regulated depository format where the profit motive is gone. Why should anyone deposit money into a for profit banking system where now the only security is provided by the Gov. which is bankrupt? Shouldn't depositors be the ones making the decisions where their money is invested. If they want to gamble with their money, it's their business. But when the banks make the investment decisions, it's with your money. This whole thing stinks.

Save the Bailout Drama

Unfortunately, the troops won't turn against the politicians....they'll turn against us. Won't they!


On Dec 15 08:32 AM Eric W. wrote:

> They won't get it until there are riots and people withold tax money
> and troops turn against the politicians.

Our Economic Crisis: The Grand Experiment

Politics = Corruption. Every government on earth is corrupt by definition. We've given some of the world's worst despots a primer on corruption.


On Dec 15 10:25 AM xmplary wrote:

> We were told many things that were wrong. The politics here seems
> to be getting as corrupt as those of the 3rd world countries. Just
> look at the Illinois Governor for an example. Wall Street has become
> a place for even bigger and bolder scammers as well. If we can't
> count on the people that are supposed to represent us, who can we
> trust?

Our Economic Crisis: The Grand Experiment

Around the turn of the last century, our government leaders distrusted and were at odds with Wall Street bankers, ie Morgan, having just rescued the country from the robber barons. A few decades later a couple of banking acts were passed to protect the country from manipulative Wall Street banking behavior. Memory, however, is short and It would appear that when we (deregulate) fall asleep at the wheel and turn the entire US financial system over to the bankers....this is what we get. Too little regulation of the financial system and too many cronies in each others pockets for the mere citizen to get a fair shake. It takes a "melt down" as we are seeing now for things to change. By then, the very wealthy will have swallowed another large slice of the soft US underbelly at pennies on the dollar. Since the bankers control the US financial system, is it any wonder they got paid off first($700B) at taxpayers expense?

Should Fannie and Freddie Be Buying or Guaranteeing Investor Mortgages at All?

It is apparent to me that there exists a huge conflict of interest between the GSE management and the public interest. The efficacy of management operations and the organizational model filled by the GSE'S was brought into question during the House hearings this morningl. The former heads of Freddie Mac and Fannie Mae were dissected by House panel members determined to uproot the causes of the US housing mortgage crisis and establish blame if possible. The heads of the GSE's steadfastly argued that their rolls, as they saw them, over the past few decades had not been measurably altered. They also argued however, that because of drastic changes in market conditions they were required to change strategies to obtain market "balance" and to produce an adequate rate of return for their shareholders(and presumably their bonuses). There in lies the conflict of quasi public bodies driven by a profit motive wherein management personally benefited from the profits of the companies. The GSE heads admitted that their annual bonuses were consistently higher than their salaries!!! There is a need for a buyer of low and middle income mortgages but the GSE model is a failure because through greed and poor underwriting, they fueled the cycle of distressed loan origination, subsequent distressed loan purchases and mortgage backed securities sales(much of which was purched with recycled petro dollars). The Saudies can't be too happy about that......Oh wait a minute, we bailed out Wallstreet didn't we?!

Letting the Reinflation Genie Out of the Bottle

From a purely observational perspective, how can this $700,000,000,000 windfall to Wallstreet produce any lasting benefit to the US middle class, many of whom are now unemployed or lack decent paying jobs? Only marginally...... since lack of good paying jobs significantly contributes to the current and worsening problem frustrating a lasting future US economic recovery.
Surely unregulated Wallstreet is to blame for producing lax credit and junk financial products that were gobbled up after the Dotcom implosion. But, won't just pumping gobs of cash and credit into our poorly regulated financial system leave us pretty much where we were eight years ago.... borrowing to exist and still buying the tons useless or carbon hungry junk flooding out of Asia and Detroit?
I think Americans are tired of our role in the international balancing act fostered by previous administrations passively allowing the exportation of our industries and jobs for increased profits and the growth of emerging nations. What we need is a little bit of selfish US job stimulation from a top-down, neutral public investment in new energy products that unshackles us from the gang of fossil fuel pirates sucking at out throats. This would be just the ticket to massive new US domestic job stimulation providing we don't export the business to the far east for development and production. We should demand that domestic energy development go forward and be put into the realm of a "critical domestic survival status" not exportable for foreign development or production! I'm not suggesting a Hooveresque solution to the current situation but a reasonable approach that will actually massively stimulate the US economy and provide decent paying jobs - of course at the expense of Exxon, Walmart, et al ---unless they want to jump on board. Can it work???
Did Microsoft crap in the woods? Translated: Did the personal computer simulate the economy and a new age? Yes it did and so can an explosion of new clean energy development. But, let's be realistic, unless our whole economy turns into a massively decimated wreck - to the tune of The Great Depression squared, do you really see this happening. NO! Why? Because gov. is "for sale", always for sale and would simply squash programs detrimental to their Wallstreet, Detroit, the Seven Sisters interests along with the myriad of other friendly imbedded leverage partners. Gov. has demonstrated this time and time again, ad nauseum.
So then, what's in it for us? Well okay, "if" we can sell our homes, pay off our credit cards and look for really, really cheap housing, along with a burger flipping job, then maybe, just maybe life will go on.... now of course, with the bankers owning the US at 10 cents on the dollar thanks to the $700,000,000,000 Wallstreet bailout.
Who was it, that said,... "It's not that I'm too cynical, it's just that I'm not cynical enough!!!" Amen to that.

Bernanke Edges Closer To the 'Real' Root Cause Of the Crisis

I agree with Mr.G that the root of the problem is lack of "good paying" jobs. Maybe the Unions should take a little of the heat here since this is why so much of our industry was farmed out to the third world. Our free market capitalistic greed created the decline in US industrial output and we were egar to exploit or create capitalism in Asia after Mao and this is where it has taken us. Runaway inflation in the '70ies because of inflated oil prices from a so-called oil shortage drove housewives into the workplace as US manufacturing jobs began to dissapear. This inflation looked good to many homeowners who realized significant increases in their real estate values even though their job related salaries stagnated. The Bush era liberated the Neo-cons, Wallstreet and his buddies, the business elites from the stiltifying rules and regs of past administrations. When Greenburg announced after the DotCom crash of '2000 that you can't expect to make money in the market for ten years, where was the money to go for big returns? How about the US housing market! What could be safer? Loans are guaranteed by US Fannie Mae, et al and housing prices always go up, don't they thus creating a significant cushion for the lender willing to lend at 100% loan to value?! Since this is such a safe harbor for US investment $$$, let's go one or two steps farther and create Credit Default Swaps that guarantee real estate loans so banks can take these loans off the books and can loan even more, Even sub-prime lending now makes sense....these loans are guaranteed and they can be bundled and sold as securities. Got to love it folks! It's Wallstreet gone mad. There's too much financial junk around that probably needs to be completely eliminated in favor of regulated shares in highly audited public firms. Put the brakes on Wallstreet and If you want to gamble just go to your neighborhood Indian casino.

Alternative Bailout Plan: Good and Bad Ideas

I'm not supportive of a plan that measurably benefits banks and the industries that got us into this mess. Maybe we should be looking to some new avenues for lending or credit creation. The country needs to see the Wallstreet "junk" dealers and "junk" financial products eliminated from the world financial scene. Much of this is unregulated and/or subject to regulatory avoidance. And where does public financing of Wallstreet stop? I hear that the finacial disasters looming on the horizon will be coming in waves like a sunami...... How much of this junk Treasury paper will the foreign markets buy? I think the world credit markets, if they're smart, may be getting close to saying "enough" and no longer willing to buy this nearly worthless Treasury paper. And then what?
Maybe then we will have to fall back on a redevelopment of our own manufacturing base. Oh My God, what a novel idea! Instead of just wheat, maybe we could export some new renewable energy products that would create US jobs, capital and profits instead of creating junk finacial products people were stupid enough to buy! Nah.....! That's way too logical and totally lacks the "fast-buck" appeal.......

Hedge Funds: The Next Shoe to Drop

Not sympathetic with the plight of any investment gimmick sold to those looking to profit. Good riddence to all of them. The world will be better off without them..........