jadziasman's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/281460/comments http://seekingalpha.com/article/142744-foreclosures-slow-still-near-record-highs?source=feed#comment-542946 542946
Most people who have mortgages are not self employed. It's easy to pay your mortgage while employed and nearly impossible to do so when not. The official unemployment rate is 9.4% but in reality it is much higher with the underemployed and those who have been unemployed so long they are no longer being counted.

Good paying jobs for the high school graduate are few and far between now and even college grads are having difficulty finding $20 per hour jobs as well.

Until new industries/services pop up that can pay the average joe more money, the economic doldrums will not abate. ]]> Thu, 11 Jun 2009 17:47:34 -0400
Most people who have mortgages are not self employed. It's easy to pay your mortgage while employed and nearly impossible to do so when not. The official unemployment rate is 9.4% but in reality it is much higher with the underemployed and those who have been unemployed so long they are no longer being counted.

Good paying jobs for the high school graduate are few and far between now and even college grads are having difficulty finding $20 per hour jobs as well.

Until new industries/services pop up that can pay the average joe more money, the economic doldrums will not abate. ]]> http://seekingalpha.com/article/142235-china-s-car-sales-jump-47-year-over-year-on-subsidies?source=feed#comment-539566 539566
Oh? Didn't you hear? Americans are the world's nouveau poor! Can't even get credit any more. Want to buy a new vehicle? Do you have the down payment? (eh -- wat's dat?) Used to be able to borrow 125% of the purchase price - not any more.

Hey, here's an idea - let them use the cash for guzzlers funds for the down payment! Who needs savings anyhow. Hyperinflation is just around the corner.]]> Tue, 09 Jun 2009 19:29:59 -0400
Oh? Didn't you hear? Americans are the world's nouveau poor! Can't even get credit any more. Want to buy a new vehicle? Do you have the down payment? (eh -- wat's dat?) Used to be able to borrow 125% of the purchase price - not any more.

Hey, here's an idea - let them use the cash for guzzlers funds for the down payment! Who needs savings anyhow. Hyperinflation is just around the corner.]]> http://seekingalpha.com/article/142258-indiana-pensioners-using-goverment-s-argument-against-it?source=feed#comment-539395 539395
Principles sometimes cost you principal.]]> Tue, 09 Jun 2009 16:42:56 -0400
Principles sometimes cost you principal.]]> http://seekingalpha.com/article/137453-the-myth-of-deleveraging?source=feed#comment-502736 502736
Was it really necessary to use such a vulgar comparison to make your point about China?

And - shame on you Seeking Alpha editors for publishing this article as written. ]]> Wed, 13 May 2009 17:52:11 -0400
Was it really necessary to use such a vulgar comparison to make your point about China?

And - shame on you Seeking Alpha editors for publishing this article as written. ]]> http://seekingalpha.com/article/136938-to-be-a-ford-dealer?source=feed#comment-499691 499691
Don't get me wrong. I want Ford to succeed and so do its secured bondholders. Auto sales need to get back to 12+ MM and soon.]]> Mon, 11 May 2009 20:36:48 -0400
Don't get me wrong. I want Ford to succeed and so do its secured bondholders. Auto sales need to get back to 12+ MM and soon.]]> http://seekingalpha.com/article/134287-chrysler-s-future?source=feed#comment-484750 484750 Location, location, location.

What's important in the auto business?
Product, product, product.

Chrysler ran out of it - it's that simple. They started to run out of "gotta have cars/trucks" when Daimler bought them. This freshly bankrupt company is still (or was until today) building cars that were once hot sellers (like the 300 and the really dated PT Cruiser) that have no matching buyers.

I was amazed (shocked) to see what a local Chrysler dealer has in its new inventory - there were about forty 300's equipped with 3.5L V6's on the lot priced over $30K . And - the dealer said Chrysler "forced" them to buy them. Too bad the dealer doesn't have the ability to "force" a customer into buying one. Perhaps the US govemment can help with that.

Bankruptcy was the best thing that could have happened to Chrysler. And in less than a few years from now - poof! gone! good riddance!
]]> Thu, 30 Apr 2009 18:37:59 -0400 Location, location, location.

What's important in the auto business?
Product, product, product.

Chrysler ran out of it - it's that simple. They started to run out of "gotta have cars/trucks" when Daimler bought them. This freshly bankrupt company is still (or was until today) building cars that were once hot sellers (like the 300 and the really dated PT Cruiser) that have no matching buyers.

I was amazed (shocked) to see what a local Chrysler dealer has in its new inventory - there were about forty 300's equipped with 3.5L V6's on the lot priced over $30K . And - the dealer said Chrysler "forced" them to buy them. Too bad the dealer doesn't have the ability to "force" a customer into buying one. Perhaps the US govemment can help with that.

Bankruptcy was the best thing that could have happened to Chrysler. And in less than a few years from now - poof! gone! good riddance!
]]> http://seekingalpha.com/article/131009-chrysler-looking-for-a-miracle-to-survive?source=feed#comment-464210 464210
That miracle would be called the U.S. taxpayer.

Even if the Fiat deal falls through, it's unlikely that Obama will pull the plug immediately.

As Michael Scott said on the next to most recent episode of "The Office" - 'Everyone deserves a second second-chance.'

Bank on it.




]]> Wed, 15 Apr 2009 17:54:30 -0400
That miracle would be called the U.S. taxpayer.

Even if the Fiat deal falls through, it's unlikely that Obama will pull the plug immediately.

As Michael Scott said on the next to most recent episode of "The Office" - 'Everyone deserves a second second-chance.'

Bank on it.




]]> http://seekingalpha.com/article/129203-why-isn-t-mcdonald-s-targeting-the-fish-crowd-during-lent?source=feed#comment-450116 450116
You have your Old and New Testament celebs, you've got Mohammad, Buddha, the list goes on and on. Collect them all. It could start a new Beanie Babies craze.

And no - I'm not an atheist. I don't believe God doesn't exist.

]]> Thu, 02 Apr 2009 19:26:04 -0400
You have your Old and New Testament celebs, you've got Mohammad, Buddha, the list goes on and on. Collect them all. It could start a new Beanie Babies craze.

And no - I'm not an atheist. I don't believe God doesn't exist.

]]> http://seekingalpha.com/article/129213-bear-market-over-not-so-fast?source=feed#comment-450101 450101
I agree with the prediction of 450-550 S&P. There's just too much uncertainty with commercial real estate, Alt A and option ARMs, consumer and government debt and the "managed" bankruptcies of GM and Chrysler. It won't take much bad news to make the market plummet again.

Once the S&P does hit 500, I'll get the chance to ride the next bear rally. When will the S&P hit its next new high? Oh, 2015 or thereabouts.]]> Thu, 02 Apr 2009 19:11:46 -0400
I agree with the prediction of 450-550 S&P. There's just too much uncertainty with commercial real estate, Alt A and option ARMs, consumer and government debt and the "managed" bankruptcies of GM and Chrysler. It won't take much bad news to make the market plummet again.

Once the S&P does hit 500, I'll get the chance to ride the next bear rally. When will the S&P hit its next new high? Oh, 2015 or thereabouts.]]> http://seekingalpha.com/article/128420-the-administration-doesn-t-like-what-gm-and-chrysler-have-to-sell?source=feed#comment-445849 445849
Sure, the upper management of GM should have seen this coming and made the necessary changes (beginning in 1973). But, there's a lot of blame to share in the USA.

Our wasteful ways with energy have brought these once great auto corporations to their knees. Forget about global warming, it's the competition for dwindling resources from emerging competitor nations - and we're going to lose. Fuel conservation will be forced on us. When the dollar devaluation really hits - sometime in the next five years, gasoline will hit $8 to $10 per gallon. The US will be much like Great Britain, a former powerhouse fighting a perpetual recession.

We will be the ones riding the bicycles, mopeds and motorcycles. Who knows - maybe our citizens will lose some weight and our health care costs will decrease.


]]> Mon, 30 Mar 2009 22:04:24 -0400
Sure, the upper management of GM should have seen this coming and made the necessary changes (beginning in 1973). But, there's a lot of blame to share in the USA.

Our wasteful ways with energy have brought these once great auto corporations to their knees. Forget about global warming, it's the competition for dwindling resources from emerging competitor nations - and we're going to lose. Fuel conservation will be forced on us. When the dollar devaluation really hits - sometime in the next five years, gasoline will hit $8 to $10 per gallon. The US will be much like Great Britain, a former powerhouse fighting a perpetual recession.

We will be the ones riding the bicycles, mopeds and motorcycles. Who knows - maybe our citizens will lose some weight and our health care costs will decrease.


]]> http://seekingalpha.com/article/126272-target-s-folly?source=feed#comment-428492 428492
Are you shorting Target's stock? ]]> Mon, 16 Mar 2009 20:03:58 -0400
Are you shorting Target's stock? ]]> http://seekingalpha.com/article/121682-the-question-of-gm-s-future?source=feed#comment-398150 398150
GM is a multinational corporation with more of its sales outside its home market now than within it. Same as Toyota, Honda and VW.

GM sold the most cars world wide for the past 77 years only to be overtaken by Toyota in 2008. To imply that this manufacturer can be liquidated without serious disruption to the world economy is simplistic to say the least.

In fact, it is somewhat perplexing how GM could continue to be the top seller while shrinking as much as it has in the past 25 years. True, its competitor's have grown while it hasn't so its world share has dropped nevertheless it's still in the top two (for now).

To allow GM to fail now would be a huge mistake. Sure, it will need to borrow large sums but GM won't just sit on the money like the banks have done - will it? That money will be used to pay its employees, suppliers, its local governments, and most importantly - the bondholders of GM debt who have had the misfortune of either holding on it for too long or made the mistake of buying it the past few years. It will keep one important segment of the economy on life support until the Great Deleveraging ends.

And - It would be nice if they could sell more 'gotta have' vehicles at a decent profit too but maybe that's wishing too much.]]> Sat, 21 Feb 2009 20:47:19 -0500
GM is a multinational corporation with more of its sales outside its home market now than within it. Same as Toyota, Honda and VW.

GM sold the most cars world wide for the past 77 years only to be overtaken by Toyota in 2008. To imply that this manufacturer can be liquidated without serious disruption to the world economy is simplistic to say the least.

In fact, it is somewhat perplexing how GM could continue to be the top seller while shrinking as much as it has in the past 25 years. True, its competitor's have grown while it hasn't so its world share has dropped nevertheless it's still in the top two (for now).

To allow GM to fail now would be a huge mistake. Sure, it will need to borrow large sums but GM won't just sit on the money like the banks have done - will it? That money will be used to pay its employees, suppliers, its local governments, and most importantly - the bondholders of GM debt who have had the misfortune of either holding on it for too long or made the mistake of buying it the past few years. It will keep one important segment of the economy on life support until the Great Deleveraging ends.

And - It would be nice if they could sell more 'gotta have' vehicles at a decent profit too but maybe that's wishing too much.]]> http://seekingalpha.com/article/121682-the-question-of-gm-s-future?source=feed#comment-398126 398126 Sat, 21 Feb 2009 19:55:56 -0500 http://seekingalpha.com/article/111005-the-fed-funds-target-rate-is-an-exercise-in-futility?source=feed#comment-331479 331479
The danger in this strategy is that interest rates are liable to be in the 7 to 8% range in 2011 making the mortgages unaffordable for those with high loan to value ratios or inadequate incomes to cover the higher payments.

Although inflation is never desirable, it might be the medicine needed at this moment in time no matter how bad it tastes.

]]> Tue, 16 Dec 2008 19:35:53 -0500
The danger in this strategy is that interest rates are liable to be in the 7 to 8% range in 2011 making the mortgages unaffordable for those with high loan to value ratios or inadequate incomes to cover the higher payments.

Although inflation is never desirable, it might be the medicine needed at this moment in time no matter how bad it tastes.

]]> http://seekingalpha.com/article/110113-saudis-try-to-re-invent-the-internal-combustion-engine?source=feed#comment-325942 325942
ICE's can run on gasoline, diesel, ethanol, natural gas, and other less easy to store fuels such as hydrogen or wood chips - just kidding. Some even run on plain water (LOL!!!!).

CO2 emissions decrease as fuel economy increases (If I may be allowed to state the obvious and I will). However, achieving 50+ mpg currently requires certain sacrifices that many consumers aren't going to be willing to make (driving slower is one) - especially now that gasoline has become "affordable" once again (at least until early April 2009 anyway).

High fuel economy can only be achieved in the following progressively more expensive ways - small light vehicles with small gasoline or diesel ICEs, vehicles with turbo or supercharged gasoline or diesel ICEs, hybrid ICE vehicles (Prius), plug in hybrid with auxiliary ICE (Volt) or fully electric (Tesla).

The first on the list is the most likely choice for consumers in the progressively poorer first world industrialized nations and those in the up and coming emerging Asian powerhouses. The rich can buy whatever they want and will continue to do so no matter where they live.

So generally speaking, it will be tiny econoboxes or Ferrari's for everyone.

]]> Wed, 10 Dec 2008 20:03:45 -0500
ICE's can run on gasoline, diesel, ethanol, natural gas, and other less easy to store fuels such as hydrogen or wood chips - just kidding. Some even run on plain water (LOL!!!!).

CO2 emissions decrease as fuel economy increases (If I may be allowed to state the obvious and I will). However, achieving 50+ mpg currently requires certain sacrifices that many consumers aren't going to be willing to make (driving slower is one) - especially now that gasoline has become "affordable" once again (at least until early April 2009 anyway).

High fuel economy can only be achieved in the following progressively more expensive ways - small light vehicles with small gasoline or diesel ICEs, vehicles with turbo or supercharged gasoline or diesel ICEs, hybrid ICE vehicles (Prius), plug in hybrid with auxiliary ICE (Volt) or fully electric (Tesla).

The first on the list is the most likely choice for consumers in the progressively poorer first world industrialized nations and those in the up and coming emerging Asian powerhouses. The rich can buy whatever they want and will continue to do so no matter where they live.

So generally speaking, it will be tiny econoboxes or Ferrari's for everyone.

]]> http://seekingalpha.com/article/107113-ugly?source=feed#comment-311265 311265
This time, they don't have a list but it does not take a rocket scientist to figure out that if you sit around all day with nothing to do while your co-workers are doing the same nothing, it becomes obvious that there will be fewer and fewer people doing nothing until those few that are left start doing something.

Ever heard of SAP? At SAP, providing superior services and support through your solution life cycle is just ... SAP employs more than 51800 people in more than 50 countries.....blah blah blah. Every day, my "work" hours are entered into this system. Guess how long it will take before they find out something has changed? Answer- pretty damn fast.

Maybe the company is willing to ride out this storm and keep us all safe and dry. Uh huh, and maybe I work for a non-profit corporation NOT!



On Nov 20 07:07 PM Muzie wrote:

> "I'd wager you really don't have any hard data to know you're going
> to know you're job but you're preparing for it. "
>
> Gah. Let me rephase that.
>
> I'd wager you really don't have any hard data to know you're going
> to get fired from you're job but you're preparing for it]]> Thu, 20 Nov 2008 20:07:21 -0500
This time, they don't have a list but it does not take a rocket scientist to figure out that if you sit around all day with nothing to do while your co-workers are doing the same nothing, it becomes obvious that there will be fewer and fewer people doing nothing until those few that are left start doing something.

Ever heard of SAP? At SAP, providing superior services and support through your solution life cycle is just ... SAP employs more than 51800 people in more than 50 countries.....blah blah blah. Every day, my "work" hours are entered into this system. Guess how long it will take before they find out something has changed? Answer- pretty damn fast.

Maybe the company is willing to ride out this storm and keep us all safe and dry. Uh huh, and maybe I work for a non-profit corporation NOT!



On Nov 20 07:07 PM Muzie wrote:

> "I'd wager you really don't have any hard data to know you're going
> to know you're job but you're preparing for it. "
>
> Gah. Let me rephase that.
>
> I'd wager you really don't have any hard data to know you're going
> to get fired from you're job but you're preparing for it]]> http://seekingalpha.com/article/107113-ugly?source=feed#comment-311238 311238
Confidence has been lost on a massive scale. Oil consumption has not dropped enough in the US in just 4 months to justify a 60% correction in its price. Just as the crude oil price bubble inflated too rapidly, it has burst even more quickly.

Stating the obvious - the financial crisis has spread to the real economy. The Detroit 3 are on the ropes and many are cheering for their demise. Thousands are being terminated from their jobs (in the US anyway) - many of them college graduates. Many are being foreclosed on - some not due to taking on too much debt either.

I work for a multi-national company. My company has not reduced head count yet but soon will and I might be one of these heads. Hopefully the new adminstration in D.C. will find a way to restore confidence. If it happens later than sooner, so be it.

I have lived a safe, pampered life the past 51 years and you won't find me complaining if I must endure some hardships.

Lady Liberty has been very good to me and I will re-join the military to defend her if I am allowed the privilege to do so.


]]> Thu, 20 Nov 2008 18:55:45 -0500
Confidence has been lost on a massive scale. Oil consumption has not dropped enough in the US in just 4 months to justify a 60% correction in its price. Just as the crude oil price bubble inflated too rapidly, it has burst even more quickly.

Stating the obvious - the financial crisis has spread to the real economy. The Detroit 3 are on the ropes and many are cheering for their demise. Thousands are being terminated from their jobs (in the US anyway) - many of them college graduates. Many are being foreclosed on - some not due to taking on too much debt either.

I work for a multi-national company. My company has not reduced head count yet but soon will and I might be one of these heads. Hopefully the new adminstration in D.C. will find a way to restore confidence. If it happens later than sooner, so be it.

I have lived a safe, pampered life the past 51 years and you won't find me complaining if I must endure some hardships.

Lady Liberty has been very good to me and I will re-join the military to defend her if I am allowed the privilege to do so.


]]> http://seekingalpha.com/article/106411-john-hussman-the-market-is-not-in-uncharted-territory?source=feed#comment-308471 308471
Future sales and earnings are the usual reasons, right? And, considering that dividends are becoming more rare these days, price appreciation of stock is the only return an investor receives on what is typically the riskiest of all investments. I don't remember seeing spectacular sales or earnings results from any sector other than financials or commodities recently.

Buy and hold if you must but be prepared to go really long. And, if the inflationistas are correct, you're never going to realize a true ROI - not in this lifetime anyway.

]]> Mon, 17 Nov 2008 21:47:03 -0500
Future sales and earnings are the usual reasons, right? And, considering that dividends are becoming more rare these days, price appreciation of stock is the only return an investor receives on what is typically the riskiest of all investments. I don't remember seeing spectacular sales or earnings results from any sector other than financials or commodities recently.

Buy and hold if you must but be prepared to go really long. And, if the inflationistas are correct, you're never going to realize a true ROI - not in this lifetime anyway.

]]> http://seekingalpha.com/article/105679-do-the-automakers-deserve-a-bail-out?source=feed#comment-304673 304673
Unfortunately there is no analgesic that will alleviate it.

You're probably too young to remember when the US was a cheap offshore resource for European nations burdened with expensive raw materials and labor. Later on (much much later) the NAFTA shafta was followed by the drip drip drip FLOOD of cheap Chinese imports.

As Carole King famously sang: "And it's too late baby, now it's too late. Though we really did try to make it".

]]> Wed, 12 Nov 2008 22:00:15 -0500
Unfortunately there is no analgesic that will alleviate it.

You're probably too young to remember when the US was a cheap offshore resource for European nations burdened with expensive raw materials and labor. Later on (much much later) the NAFTA shafta was followed by the drip drip drip FLOOD of cheap Chinese imports.

As Carole King famously sang: "And it's too late baby, now it's too late. Though we really did try to make it".

]]> http://seekingalpha.com/article/105550-dhl-gm-does-failure-have-consequences?source=feed#comment-304662 304662
How do you equate DHL and GM? You would have been much better off comparing DHL's ill advised purchase of Airborne to Daimler Benz's idiotic purchase of Chrysler. How in the hell did Daimler really expect that to work? Juergen Schrempf was the driving force behind that fiasco. The Deutsche Post purchase of Airborne was not as dumb but ended up with the same result - a big loss.

GM's woes are entirely different. GM has been losing market share since it peaked in the late 1950's. Instead of decreasing the number of brands it sold, GM did the opposite and INCREASED brands - Saturn, Geo, Saab, Hummer, etc. Had GM reduced its lineup to three brands - Chevrolet, Cadillac and GMC truck, it would have had the chance to focus on producing a full range of cars and trucks without the senseless rebadging of identical vehicles. Its dealer networks should have been cut back in the 1970's when the imports started to take market share. But that's all academic now. ]]> Wed, 12 Nov 2008 21:37:22 -0500
How do you equate DHL and GM? You would have been much better off comparing DHL's ill advised purchase of Airborne to Daimler Benz's idiotic purchase of Chrysler. How in the hell did Daimler really expect that to work? Juergen Schrempf was the driving force behind that fiasco. The Deutsche Post purchase of Airborne was not as dumb but ended up with the same result - a big loss.

GM's woes are entirely different. GM has been losing market share since it peaked in the late 1950's. Instead of decreasing the number of brands it sold, GM did the opposite and INCREASED brands - Saturn, Geo, Saab, Hummer, etc. Had GM reduced its lineup to three brands - Chevrolet, Cadillac and GMC truck, it would have had the chance to focus on producing a full range of cars and trucks without the senseless rebadging of identical vehicles. Its dealer networks should have been cut back in the 1970's when the imports started to take market share. But that's all academic now. ]]> http://seekingalpha.com/article/105679-do-the-automakers-deserve-a-bail-out?source=feed#comment-304568 304568
The UAW rank and file grudgingly approved a new contract in 2007 that takes away most of what they've gained in the past 50 years. Unfortunately, the new contract starts in 2010. It's unfortunate that the changes weren't made immediately.

Keep in mind that the old domestic auto industry has been shrinking for the past 30 years. Competition from the Asian and European transplants has increased quality and vehicle content while reducing price with respect to inflation. The D3 are producing better vehicles than they did in the 70's and 80's.

A bail out is not the answer. Loans to help stabilize the industry until the financial crisis is solved is what is needed. ALL of the Big Six automakers in the US had large decreases in year over year sales in October, not just the D 3. The problem won't be resolved until consumers regain their confidence. And no one knows how long that will take.

Look at the loan as a lifeline to keep the D3 afloat until the financial crisis levels off. Once everything has settled down, then pull the plug.

Accelerating the downward spiral we're already in will make it much more likely to cause a depression that even Helicopter Ben might not be able to save us from.






]]> Wed, 12 Nov 2008 18:13:26 -0500
The UAW rank and file grudgingly approved a new contract in 2007 that takes away most of what they've gained in the past 50 years. Unfortunately, the new contract starts in 2010. It's unfortunate that the changes weren't made immediately.

Keep in mind that the old domestic auto industry has been shrinking for the past 30 years. Competition from the Asian and European transplants has increased quality and vehicle content while reducing price with respect to inflation. The D3 are producing better vehicles than they did in the 70's and 80's.

A bail out is not the answer. Loans to help stabilize the industry until the financial crisis is solved is what is needed. ALL of the Big Six automakers in the US had large decreases in year over year sales in October, not just the D 3. The problem won't be resolved until consumers regain their confidence. And no one knows how long that will take.

Look at the loan as a lifeline to keep the D3 afloat until the financial crisis levels off. Once everything has settled down, then pull the plug.

Accelerating the downward spiral we're already in will make it much more likely to cause a depression that even Helicopter Ben might not be able to save us from.






]]> http://seekingalpha.com/article/105071-aig-bailout-2-why?source=feed#comment-302405 302405 ABS).

Unwinding these derivatives and ABS' with the help of people like BlackRock's Larry Fink will take time but with the unlimited resources of the US and other central banks it will eventually get sorted out. Will it be "painful"? Does anyone doubt that the answer is yes?

I believe it's safe to say that the vast majority of US citizens have benefited from credit securitization and derivatives despite the drawbacks. And, since it is not practical or even possible for a Luddite solution for another fine mess they've gotten us into, we've all got to do our part to keep the good ship Liberty upright lest she capsize and we all drown like rats.

]]> Mon, 10 Nov 2008 18:18:15 -0500 ABS).

Unwinding these derivatives and ABS' with the help of people like BlackRock's Larry Fink will take time but with the unlimited resources of the US and other central banks it will eventually get sorted out. Will it be "painful"? Does anyone doubt that the answer is yes?

I believe it's safe to say that the vast majority of US citizens have benefited from credit securitization and derivatives despite the drawbacks. And, since it is not practical or even possible for a Luddite solution for another fine mess they've gotten us into, we've all got to do our part to keep the good ship Liberty upright lest she capsize and we all drown like rats.

]]> http://seekingalpha.com/article/103495-u-s-economy-is-the-glass-half-full?source=feed#comment-296500 296500
]]> Sun, 02 Nov 2008 15:18:06 -0500
]]> http://seekingalpha.com/article/103457-housing-update-underwater-loans-o-neil-s-plans?source=feed#comment-296276 296276
It rose out of the ashes of the Nasdaq bubble when the Fed reduced interest rates in hopes a producing a "soft landing" which did indeed occur during 2002 - 2003. Mortgage interest rates were artificially low in 2003 - especially for the newer mortgage products.

Home mortgage interest rates have been affordable for the past 8 years. Mortgage rates declined to present levels in June 2001. Providing the additional stimulus of ARM's and piggyback loans caused prices in overheated markets like California, Nevada and Florida to reach unsustainable levels by 2005. Sub-prime loans were the coup de grace.

Requiring a reasonable down payment represents a return to sanity. The down payment source must be either equity in the current home or drawn from real assets that the borrower possesses. Use of piggyback loans should not be permitted to bypass the private mortgage insurance (PMI) requirement.

It may be too late to save the real assets state and federal government - parts of which are already being sold off to hopefully the highest bidders, but there's still time to protect individual wealth and requiring real equity in homes, automobiles and businesses is a great starting point.

]]> Sun, 02 Nov 2008 10:16:01 -0500
It rose out of the ashes of the Nasdaq bubble when the Fed reduced interest rates in hopes a producing a "soft landing" which did indeed occur during 2002 - 2003. Mortgage interest rates were artificially low in 2003 - especially for the newer mortgage products.

Home mortgage interest rates have been affordable for the past 8 years. Mortgage rates declined to present levels in June 2001. Providing the additional stimulus of ARM's and piggyback loans caused prices in overheated markets like California, Nevada and Florida to reach unsustainable levels by 2005. Sub-prime loans were the coup de grace.

Requiring a reasonable down payment represents a return to sanity. The down payment source must be either equity in the current home or drawn from real assets that the borrower possesses. Use of piggyback loans should not be permitted to bypass the private mortgage insurance (PMI) requirement.

It may be too late to save the real assets state and federal government - parts of which are already being sold off to hopefully the highest bidders, but there's still time to protect individual wealth and requiring real equity in homes, automobiles and businesses is a great starting point.

]]> http://seekingalpha.com/article/102975-tug-of-war-between-deflation-and-inflation?source=feed#comment-294727 294727
Ain't deflation? Nothing to do with deflation?

Take a ride out to the Detroit area and experience the fear in person!

Watch the death spiral of at least two of the three domestic auto makers and their supplier base in real time!

Home prices are currently lower in the Detroit area than they were in 2000 with an expectation of further retrenchment to the mid 1990's or earlier.

Detroit is on track to becoming the first major city ghost town. If the taxpayer financed GM-Chrysler-Cerberus-G... "merger" goes through, at least 20% of the homes in the Detroit metro area will be REO's.

If that ain't deflation, what is?

]]> Thu, 30 Oct 2008 19:57:44 -0400
Ain't deflation? Nothing to do with deflation?

Take a ride out to the Detroit area and experience the fear in person!

Watch the death spiral of at least two of the three domestic auto makers and their supplier base in real time!

Home prices are currently lower in the Detroit area than they were in 2000 with an expectation of further retrenchment to the mid 1990's or earlier.

Detroit is on track to becoming the first major city ghost town. If the taxpayer financed GM-Chrysler-Cerberus-G... "merger" goes through, at least 20% of the homes in the Detroit metro area will be REO's.

If that ain't deflation, what is?

]]> http://seekingalpha.com/article/102998-regulations-and-markets-making-a-bad-situation-worse?source=feed#comment-294710 294710
'Should leverage have been allowed to be employed on the scale that it was? Clearly not. That is a specific issue that can be addressed.'

Clearly you understand the problem, yet you offer no solution other than to criticize an attempt to rein it in. Who's side are you on anyway?

Excessive leverage is always the problem. And it seems every time a speculative bubble gets close to its bursting point, common sense is thrown out the window.

Does it make sense to make a home loan to a borrower who has no proof of income and is permitted to buy a property with nothing down, which has just rapidly appreciated in value with an interest only 40 year term just to make the monthly payments affordable????

True, common sense varies with the situation and the times but it should be obvious when rational takes a holiday. Hence, there must be limit switches or circuit breakers in place to prevent an overload. Call them regulations if you will but there must be some and they must be enforced.

"It's always funny until someone gets hurt, then it's just hilarious".
The Late Great Bill Hicks]]> Thu, 30 Oct 2008 19:14:45 -0400
'Should leverage have been allowed to be employed on the scale that it was? Clearly not. That is a specific issue that can be addressed.'

Clearly you understand the problem, yet you offer no solution other than to criticize an attempt to rein it in. Who's side are you on anyway?

Excessive leverage is always the problem. And it seems every time a speculative bubble gets close to its bursting point, common sense is thrown out the window.

Does it make sense to make a home loan to a borrower who has no proof of income and is permitted to buy a property with nothing down, which has just rapidly appreciated in value with an interest only 40 year term just to make the monthly payments affordable????

True, common sense varies with the situation and the times but it should be obvious when rational takes a holiday. Hence, there must be limit switches or circuit breakers in place to prevent an overload. Call them regulations if you will but there must be some and they must be enforced.

"It's always funny until someone gets hurt, then it's just hilarious".
The Late Great Bill Hicks]]> http://seekingalpha.com/article/102591-how-much-longer-must-this-deleveraging-process-go-on?source=feed#comment-294612 294612
Outside.

My inspiration -- I just read "beautiful boy" - a story of a father's struggle (the author) with his son's meth addiction. It in are the three 'C's. It's advice Al-anon gives to the family members of alcohol and drug addicts to help them cope.

The three 'C's probably apply to those of us trying to cope with the financial mess caused by the greedy among us while we responsible ones did our best to live within our means and not over-leverage ourselves.

You didn't ---CAUSE--it.

You can't---CONTROL--it.

You can't---CURE---it.]]> Thu, 30 Oct 2008 16:55:57 -0400
Outside.

My inspiration -- I just read "beautiful boy" - a story of a father's struggle (the author) with his son's meth addiction. It in are the three 'C's. It's advice Al-anon gives to the family members of alcohol and drug addicts to help them cope.

The three 'C's probably apply to those of us trying to cope with the financial mess caused by the greedy among us while we responsible ones did our best to live within our means and not over-leverage ourselves.

You didn't ---CAUSE--it.

You can't---CONTROL--it.

You can't---CURE---it.]]> http://seekingalpha.com/article/102774-cds-the-less-you-know-the-worse-they-look?source=feed#comment-293938 293938
Using a network TV "news" magazine to support your argument is laughable.

Of course '60 minutes' will not cover this subject in the depth required. '60 minutes' exists to supplement 22 minutes of commercials.

CDS are very risky to the sellers in a declining market since the the CDS seller's porfolio usually will contain instruments which need to be marked down after a speculative bubble pops i.e, the mortgage backed securities. The CDS seller's capital reserves then decrease and the ratings agencies then downgrade the CDS seller. Collateral calls on the CDS protection they sold follow the downgrade. Remember AIG? The reason the feds needed to rescue AIG was because AIG could not meet the collateral calls on all the CDS contracts they sold.

Why are banks buying CDS protection anyway? Right, you said it above. CDS' allowed banks to increase their leverage. You didn't say how. CDS' were being used as a substitute for capital instead of actual capital. Since the banks held the bonds and swapped the default risk to companies like AIG, this in theory changed the bonds into capital. If these CDS sellers could not meet their obligation to the banks, then the banks would have been seriously undercapitalized right?

It's not necessarily a zero sum game in a declining market, you might have to get the feds to bail you out.]]> Wed, 29 Oct 2008 22:00:19 -0400
Using a network TV "news" magazine to support your argument is laughable.

Of course '60 minutes' will not cover this subject in the depth required. '60 minutes' exists to supplement 22 minutes of commercials.

CDS are very risky to the sellers in a declining market since the the CDS seller's porfolio usually will contain instruments which need to be marked down after a speculative bubble pops i.e, the mortgage backed securities. The CDS seller's capital reserves then decrease and the ratings agencies then downgrade the CDS seller. Collateral calls on the CDS protection they sold follow the downgrade. Remember AIG? The reason the feds needed to rescue AIG was because AIG could not meet the collateral calls on all the CDS contracts they sold.

Why are banks buying CDS protection anyway? Right, you said it above. CDS' allowed banks to increase their leverage. You didn't say how. CDS' were being used as a substitute for capital instead of actual capital. Since the banks held the bonds and swapped the default risk to companies like AIG, this in theory changed the bonds into capital. If these CDS sellers could not meet their obligation to the banks, then the banks would have been seriously undercapitalized right?

It's not necessarily a zero sum game in a declining market, you might have to get the feds to bail you out.]]> http://seekingalpha.com/article/102591-how-much-longer-must-this-deleveraging-process-go-on?source=feed#comment-293843 293843
De-leveraging is detox. New stock market, housing and credit bubbles are relapses. The greedy person is just like the tweaker - neither can be cured of his/her addiction and almost everyone of them experiences numerous relapses and trips to rehab.

A tweaker's family usually will come to his/her rescue over and over again. Sometimes; sadly, he/she OD's.

Government regulation is meant to prevent greed from getting out of control. Lately, the regulations haven't been effective and detox is needed to fix the problem. Alan Greenspan decided the addicts could be trusted. Oops.

It's not possible to overdose on greed. Too bad.
]]> Wed, 29 Oct 2008 18:49:23 -0400
De-leveraging is detox. New stock market, housing and credit bubbles are relapses. The greedy person is just like the tweaker - neither can be cured of his/her addiction and almost everyone of them experiences numerous relapses and trips to rehab.

A tweaker's family usually will come to his/her rescue over and over again. Sometimes; sadly, he/she OD's.

Government regulation is meant to prevent greed from getting out of control. Lately, the regulations haven't been effective and detox is needed to fix the problem. Alan Greenspan decided the addicts could be trusted. Oops.

It's not possible to overdose on greed. Too bad.
]]> http://seekingalpha.com/article/102456-so-we-find-a-bottom-then-what?source=feed#comment-292819 292819
It is foolish to predict one and even worse to buy into what you believe surely must be THE one. The smartest move is to wait out the volatility and then carefully reinvest the bulk of your funds.

It's absolutely frightening to consider that 20% single day advances and declines could become common the next few months. Participants in 401K plans usually cannot direct their retirement administrator to invest their current month's salary contribution on a day of their choosing - even though in all fairness they should have this privilege.

If it wasn't for the fact that the Christian fundamentalists haven't been raptured, I'd say we are experiencing the Great Tribulation right now.


]]> Tue, 28 Oct 2008 16:53:58 -0400
It is foolish to predict one and even worse to buy into what you believe surely must be THE one. The smartest move is to wait out the volatility and then carefully reinvest the bulk of your funds.

It's absolutely frightening to consider that 20% single day advances and declines could become common the next few months. Participants in 401K plans usually cannot direct their retirement administrator to invest their current month's salary contribution on a day of their choosing - even though in all fairness they should have this privilege.

If it wasn't for the fact that the Christian fundamentalists haven't been raptured, I'd say we are experiencing the Great Tribulation right now.


]]>