Fitz919

'Too Big to Fail' Has Gotten Much Bigger

Reckless lending is what got us in this mess....and it can never get us out. Lending in the form of liar loans, where the lender does no due dilligence is not even a sound business practice. If you create a stable interest rate for everyone, then the next question is: How much money does the borrower have for a downpayment, and how much does he make? Once that has been established, a simple formula will tell you the maximum dollar amount you can borrow. Some flexibility in the term of the loan would be another good option. Getting people into homes they can actually afford has nothing to do with credit scores. Punishing people with higher interest rates is what loan sharks and credit card companies do.

Often times people are trying to get into a home, and at the last second the libor rate, or prime rate moves, or something beyond your control effects your credit score, and you suddenly can't get the home.

Look at the far reaching global effect our mortgage market has had.
It took down the world. A stable mortgage system will work, and it doesn't require that every dollar comes from Uncle Sam, or the Chinese.

Oh, and by the way, when the Fed raises interest rates, it causes inflation. And when the Fed raises interest rates too much, it causes a feedback loop that crushes the economy, and once crushed, inflation is once again abated.

A proven inability to pay ones debts and obligations will be obvious in ones credit history, and should be taken into account by any lender. FICO scores are more voodoo than reality when you take into account all the nonsense credit card companies are pulling to justify bumping up your interest rates.

This isn't rocket science guys, this is basic math and 4% fixed.

'Too Big to Fail' Has Gotten Much Bigger

Consider this....Mortgages and Loans at fixed rates don't reset. This is the solution. Subprime, Alt A, Option Arms, And Obama's Mortgage Rescue Plan, all have mortgages that reset their interest rates. It's idiotic to have the loan on your most valuable asset to have the interest rate reset in 3, 4, or 5 years. This is where the solution to our economic crisis rests. All mortgages could be written at 4% fixed for the next 7 years, and all refinances at 4% fixed for the next 7 years, and we will have a real recovery. If we made all mortgages in the U.S. 4% fixed permanently we would have financial market stability.

More Green Shoots Push Markets Up

When we know all the numbers are "cooked", and all the cooked numbers are "spun", it comes as no surprise that the market goes up when the economy goes down.

The FDIC Is Broke. Now What? (Part II)

I am so glad to see this new evidence of the mark to market scams.

The FDIC says it will have to pay 3.7 Billion just to cover deposits in the 5 banks that failed Friday. I knew they were broke.

Will the U.S. Economy Go Bankrupt?

People were leveraged, Financial institutions were leveraged, and now the Fed and the Treasury are seriously leveraged, which means "we the people" are leveraged again. And by the way...the FDIC isn't leveraged....it's virtually broke. 77 banks have failed so far this year, and just last Friday the FDIC said it will have to pay out 3.7 Billion just for the failures on Friday.

It's time to sing kum-bah-yah, and pass the koolaid, this party is over.

Ginnie Mae CEO Resigns: We Saw It Coming

77 bank failures so far this year, 5 on Friday, including the 6th largest ever. FDIC expects it will pay out 3.7 Billion to cover deposits, just for the 5 that failed Friday. The FDIC is really close to being broke, so they are just going to have to figure out where to print more money. We've maxed out in the U.S. last year, so some of our greenbacks are now being printed in Switzerland. I bet we could get the Chinese to print money for us.

Oh, and why did all those banks fail? Bad loans of all descriptions.

Fannie....Freddie........ all the same sinking ship.

PPIP Program: Investors Have Mixed Sentiments

The PPIP may be undersubscribed, because the major players, aren't certain they'll be able to capture the windfall and actually get away with it. As always, the devil is in the details, and the Govt is not providing enough detail at this point. The major players could be running the risk of having their pay and bonuses restricted if they participate. They could also get a cell next to Madoff if they get caught running a PPIP scam.

PPIP Program: Investors Have Mixed Sentiments

With mark to market relaxed, the holders of illiquid toxic assets can now inflate their value on their books, and show profits which don't actually exist but are reported as profits just the same...thus the geese laying golden eggs analogy. Since the holders of these assets do not want to sell them, the investors in the PPIP program won't be able to buy them.

You see Geithner's big PPIP program sounded good when it was announced, but will never function.

Remember when Paulsen got Congress to give him 700 Billion to buy toxic assets from banks, but instead he bought preferred shares.

Neither plan has done, or will do, what we were told it would do.

Remember, once mark to market was relaxed, previously toxic assets, became highly valued assets. If they do sell any of it, it will be a scam whereby they sell it to a partner and then get it back, or simply swap assets of equal value. The goal of that sortof scam is to suck up as much Govt and Private money as possible, and then keep it for themselves...both the cash and their original assets. You will notice that the folks who get to buy these assets, are also ones who already own them.


On Aug 10 09:49 PM Living4Dividends wrote:

> Fitz - If you hold an asset that you want to get rid of, you sell
> it. All mark to market does is make your books look better.
>
> Please explain why mark to market makes a difference to PPIP investors?
>
>
> On Aug 10 09:24 PM Fitz919 wrote:

Are Stocks Way Overbought?

Putting the charts aside....stocks are where they are because people have believed the Govt's word when they all said that a recovery would happen in the second half of 2009. The Govt then cooked up all sorts of ways to get people to believe it was going to happen, and that it is happening.

Was anyone impressed when the Unemployment rate moved from 9.5% to 9.4%? Sure they were, but they were wrong. The reason it fell was the huge number of Unemployed people who are still unemployed and will no longer be receiving checks. I watched the weekly continuing claims number falling for weeks

PPIP Program: Investors Have Mixed Sentiments

PPIP is a very shaky scam, and Pimco knows better than to get involved. Others will see the wisdom in Pimco's move, or simply sit back and watch for awhile before wetting their feet, or running for the hills. Geithner's big plan was DOA before it was even out the door, because mark to market rules were going to be relaxed. And with that single move holders of those troubled and toxic assets could begin raising the value of those assets on their books. Now nobody can sweeten the deal enough to get them to sell. They are geese laying golden eggs, and nobody would sell one of those.

Sorry Geithner, your big plan went bust....but you already knew that, it was all part of your scam to bring confidence back into the market.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

When Cash for Clunkers is gone, what will Obama's next idea be?

Super high carbon taxes for older cars, forcing people to scrap them or pay.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

You'd be surprised how much of a car is recycled, it's not just the metal.


On Aug 01 01:05 AM Alfredo Martinez wrote:

> 100% of cars aren't able to be recycled, and much of the scrap will
> end up in landfills.
>
> www.reuters.com/articl...
>

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

Cars don't end up in landfills, it's not allowed. Since they have a cash value as scrap metal, they get recycled, just like tuna cans and pop cans.


On Jul 31 06:08 PM Alfredo Martinez wrote:

> I never thought that this country would get so far off track that
> we would start using tax dollars to pay for people to buy a brand
> new car, then turn around and destroy the traded used cars and dump
> them in a landfill.
>
> This country is so screwed.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

It is being reported tonight in the news that 25,000 transactions have been completed and another 25,000 are in the pipeline. If you figure $4,000 per vehicle on average, and 50,000 vehicles in total, that comes to a grand total of $200 Million exactly. They were supposed to have $1 Billion to work with. So only 1/10th of the money has been spent, and another 1/10th is in process. So what happened to the other 80% of that Billion? I would expect that the 787 Billion Stimuls is being handled no better.

GDP Fell 1% in Second Quarter: Will the Economy Rebound Quickly?

These GDP numbers are quite strange. They generate a number for the quarter, and then they multiply by 4 to give us an annulized number, and then for the next few months they adjust the number, and then even a year later they go back and say the number way back then was way off too.

Does anybody else see how stupid this is?

Let's try to look at things differently. From the chart you see that everything always resets to zero for every new quarter. But in reality, each quarter starts where the old quarter left off. So lets divide the annulized quarterly numbers by 4 and see what we have, using just one starting point where the GDP number first went below zero and stayed there.

3rd Q -.625% -.625%
4th Q -1.35% -1.975%
1st Q -1.6% -3.575%
2nd Q -.25% -3.825%

We are being led to believe that the GDP number got better, when in reality it continues to get worse....at a slower pace.