Gtarras

On Primus Credit Mitigations

So, what is the future for Primus? do you believe they return to writing new business/generating revenue?

if they do, how profitable do you think it will be? they will have to post CSAs, how much of capital will this be tying up? will they need a high rating?

TIA. i'm actually interested in this stock and this platform. given the upcoming demand for risk management products, and wiped out competition (such as monolines, AIG etc), i 'm curious if there is bright future for Primus.

Eye on Unemployment: Should the U.S. Stop Immigration?

thanks Prospector for great insights
I realized this would be my 4th post in this thread, but I have to point out a mistake I made in the previous one:

I meant to point out that the number of Green Card LOTTERY winners in 2008 is roughly equal to the skilled H1-B visa appointees.

I am struggling to understand why H1-Bs seem to the the object of the attacks in the comments section. These highly educated and skilled folks represent a very tiny amount of the annual immigrant flow to the US, probably only in mid single digits percentile.

oh well..

On Aug 03 12:47 AM Prospector4 wrote:

> Good debate here. With the economy going the way it is, business
> immigration demand may not even be there if things get worse and
> if BRIC contries are comparatively better off recovering.
>
> As as been stated, we already have an H-1B cap, in place, and it
> makes H-1B issuance more of a lottery among those who spend an extra
> $1000 for Premium Processing. Its not a good deal these days.<br/>
>
> In a past life, I was employed in business immigration. US employers
> are finding H-1B/L-1 sponsorship to be a real cost burden. Legal
> fees (especially if sponsorship is for PERM /LPR support) are in
> excess of 14-20K in many cases.
>
> Consider that even if lawyers and HR reps search Watson Wyatt and
> other salary surveys to fish for H-1B prevailing wages that are
> slightly cheaper salary for a candidate - the savings would be MINIMAL
> compared to the cost of sponsorship. The immirgrant is if anything,
> more costly to the firm than a U.S. worker.
>
> Yet, even in the current downturn, many leading edge U.S. companies
> are upset about the H-1B cap. Why? 1. ) As Bill Gates would argue,
> the candidates have the skill set they need right away, and 2) many
> candidtates have built relationships with their employers during
> summer interships or one year of postgraduate work persuant to their
> EAD card. Think about the aggrivation of lawyers and clients and
> candidates when they ponied up $4000 in legal fees for an H-1B that
> didnt make the cutoff for the H-1B cap.
>
> For these reasons and others I dont think its necessary to furter
> limit H-1Bs. Anyone who suggests that the Chinese Exclusion Act
> was the right move may want to actually read how racist and shortsigted
> it was. Lets see how well our economy improves when we implement
> the "Highly-educated IT Workers from BRIC Countries Exclusion Act."
> Just dont feel bad when Asian countries implement the "Laidoff FIRE
> economy WASP Desk Jockey Exclusion Act."
>
> If you really want to improve the legitimacy of the temporary worker
> process in the US, start with the Department of Labor. They need
> to start enforcing H-1B prevailing wages (and checking that postings
> are in plain sight for U.S. workers), and make the PERM program for
> aspiring LPRs tougher on employers that to not take their mandatory
> U.S. worker recruitment efforts seriously. Many legitimate companies
> find that they can find really great U.S. candidtates through the
> PERM process.
>
> The CIS may also want to consider releasing the funds that were to
> be used to "train U.S. workers." When I was working in the field
> it was about $1500 per H-1B on top of the filing fees- hmmmm where
> did that money go?

Eye on Unemployment: Should the U.S. Stop Immigration?

one more stat: the number of immigrants entering the US via Green Card Program for 2008 is about 100K. Roughly same number as H1Bs issued.

Eye on Unemployment: Should the U.S. Stop Immigration?

Ok, lets says the H1Bs program is cancelled. what do you propose to do with the immigrants that enter the US via the "family sponsorship"? they account for 90% of all legal immigration and also compete for American jobs.

also, notice in the article you referenced that the vast majority of the jobs lost 1999-2009 is in manufacturing and other not-so-skilled sectors.


On Aug 02 02:51 PM User 159730 wrote:

> I see the worthless foreign shills are here in force. Bringing in
> a million or more mediocre "highly skilled" workers on guestworker
> visas on the off chance that one of them might be another Einstein?
> That's a lousy bargain for the average American, and there already
> exists a visa for the Einstein level of talent - the O visa, and
> there is no cap. If you foreigners can't qualify for the O visa,
> then we sure don't need your sorry butts over here right now. I said
> a million on purpose, because the foreign liars and apologists want
> to make us believe that only a tiny number of gifted people are here
> on guestworker visas. The cap is a yearly cap, not a cumulative total:
> it was raised to 200K in 2000 and left there for three years, and
> many US institution are exempt from the cap, so it could easily be
> several million. Most ridiculous of all is the notion that H-1Bs
> create jobs, which you will often hear. We've had a decade now of
> H-1B labor market flooding, and an obvious net loss of jobs for American
> workers. If that claim were true, this article would not exist now.
> www.businessweek.com/t...
>
>
> It's time to stop the foolish experiment of bringing in a zillion
> guestworkers, hoping against hope that we will finally get lucky.
> A lost decade is about 10 years too long for this failed experiment.

Russian Government Set to Renege on ExxonMobil Deal. Big Surprise

if you dont know that yet, the US does not buy any oil from Russia (well, maybe 1-2%). It buys some natural gas, maybe in the teens % points of all nat gas supply.


On Aug 02 11:39 AM jerrydd wrote:

>
> Why deal with them at all? If everyone stopped they would diee off
> soon enough.
>
> What we need to do is become energy independent, not a technical
> problem but a political one or we'll become a 3rd world country soon.
>
>
> Best way is to put an oil, coal tax on them to make them pay their
> real, full costs or we will give all our treasure to Iran, Russia,
> oil dictators and terrorists.
>
> Vs a tax cut with the above paying most of it in lower oil prices,
> balance of payments costs, 35% drop in military costs and millions
> of new energy jobs. Your choice.

Russian Government Set to Renege on ExxonMobil Deal. Big Surprise

Craig
without knowing all of the details of the Russia-Exxon relationship, I, personally, will stay away from any conclusions. These are huge political issues we are talking about here, with big bucks involved. the project parties are engaged in a huge PR campaigns and whatever news hits the public is probably bull. little people like me are always misinformed.

Mortgages: More Support for Principal Reduction

i should have bought a house i could not afford!!! damn!!

Goldman Correlation Desk Profits from CIT CDS; Is Sallie Mae Up Next?

this better stop. i will be watching Sallie for coming weeks now. for how long are we going to allow these sharks to destroy businesses out of their greed??? its been all too familiar tactic recently- find a wobbly business driven by short term funding (stupid, maybe, but it worked for so long), preferably big, ie Lehman, CIT, drive up their CDS, cause panic, stop creditors from extending credit lines to the victim, kill their business. SEC, you have to stop this madness!!!!!!

Eye on Unemployment: Should the U.S. Stop Immigration?

David
there is a major point you fail to address here:

The vast majority of the current LEGAL immigration to the US is FAMILY BASED. if i remember it correctly, 90% of those roughly 1 million folks obtaining green cards are not necessarily the skilled labor folks that enter the country on H1-Bs, but relatives of the American citizens (wives, parents etc). Compare the 65K H1-Bs issued per year, and >1 million of Green Cards issued.

Add to that the illegal unskilled labor, and you will realize that the skilled labor folks represent probably only 3-5% of new immigrants to the US. A drop in the bucket. Interestingly enough, you focus on the skilled labor guys, and unswervingly so- they are the ones who contribute most to the economic power of this country. Ironically, because of huge backlogs, it takes them FOREVER to became permanent here (7-10 years), while family based folks get their permanent status in 2-3 years.

I think we are better of discussing the issue of "what kind of immigration this country needs". 100K SKILLED immigrants that currently enter the US workforce annually is not a number to complain about.

Are Investors in the Denial Phase?

LOL!!!


On Jul 24 12:57 PM thiazole wrote:

> Where have I heard that before? Oh yeah, now I remember:
>
> seekingalpha.com/user/...
>
> seekingalpha.com/user/...
>
> seekingalpha.com/user/...

Bill Miller: 'The Worst Has Passed'

I agree Ferdinand. Most people who leave comments on SA are bearish. I am curious if it has anything to do with the media. I know CNBC are bullish, but still the I would say the overall sentiment out there is very negative. Seems to me that pretty much everybody wants to sound negative. Republicans, so they can blame Obama, democrats, so they can seize the moment and socialize as much as they can, bankers, so they can acquire competition, funds, so they can win on there shorts etc etc. I think it would serve small investors well to do just the opposite, i.e., think positive.

On Jul 24 09:31 AM Ferdinand E. Banks wrote:

> A lot of people in this forum don't want to hear what you have to
> say, Bill, but it certainly sounds sweet to me. I just hope that
> you know what you are talking about.

On Financial Engineering and Financial Innovation

thanks Tom, pretty interesting. as a financial engineer, I have never thought about your thesis that its all about justification of leverage, but come to think about it, its very close to being the truth.

any place to learn more about the "gearing"?


On Jul 22 07:55 AM Tom Armistead wrote:

> Financial Engineering is all about leverage: the probability theory
> and stochastic simulation is all window dressing, a scientific guess
> about how much leverage the architect of disaster can get away with.
>
>
> It does not matter how ornate or grandiose the construction, if excessive
> leverage is used the structure will topple when subjected to stress.
>
>
> There is a breakaway school of financial engineering who have found
> that "gearing" is better than leverage - look for great things when
> they have worked their theories out to fruition.

Rise of the Silver Surfer and Mortgage Insurance Wasteland

Mortgage guy explained it the best. The bottom line for these three companies is the fact that the amount of claims they have paid out over the past 1.5 years, which are as you know were horrible for anything mortgage related, were just slightly higher than the revenue they have generated.

The problem they face, and the reason the stock prices are beaten down so much (I believe), lies in the regulatory realm of things:

First of all, they have to build up reserves based on the delinquencies they have in their books. These cos have built the reserves that are in multiples of their annual claims paid (even for 08-09). The reserves drain their liquidity, so the market is concerned they wont be able to pay on their debt due in two-three years. Remember, it takes forever for them to pay claims after a borrower becomes delinquent (if they default).

Also, because of reserve build up, there is a concern they might be forced to stop writing business, because the amount of risk they take on vs. the capital they have (which is being more and more restricted by the reserve issue) is limited by the regulators. Thus, MGIC had to play the regulatory trickery with the new entity set-up.

I am not an investor in any of them, but back in previous life worked at one of them (12 years ago). I do find their situation fascinating though, as so many confluent factors are affecting their balance sheets and valuations. For example, if things start to turn around in the housing market, and MIs will be able to reduce reserves, watch out.

I do think they will survive, and so few analysts that upgraded MGIC in the past few days following their report.

On Jul 19 07:27 PM Economic Disconnect wrote:

> The Mortgage Guy,
> Thanks for the in depth comment. You clearly have a real understanding
> of this issue. I appreciate your input. Do you think both MTG and
> PMI go on, or will one win out?

Rise of the Silver Surfer and Mortgage Insurance Wasteland

As far as MGIC is concerned, you clearly have no clue how the insurance business works. Neither do the financial media people who write the headlines. Thats the reason you get shocked when you see the stock price charts in your piece. For example, you write :"MTG is basically done." Ahmmm. NO. I dont mean to be a smart ass, but this business is not easy to understand, especially the reporting and regulatory sides of it. maybe it'd make sense not to write about it in such an assertive way?

Big New Housing Problem: Mortgage Insurers Back Off

Ehhh, do you have a bone to pick with the MIs or something like that? Go ahead write to your Congressman, etc do whatever it takes to abolish the MI business. I dont care. I was making a point about the LTV>80 loan business, which you seem to be fine with. Jesus.

On Jul 16 02:07 PM vvvvviking wrote:

> To paraphrase your description (which is correct), MGIC, through
> a very kind decision by their regulator (who by the way allowed Ambac
> to do exactly the same thing), will shuffle what little capital they
> have around different companies and be allowed to lever up beyond
> what the law currently allows. Great solution - allow more leverage,
> at a time when unemployment is still rising, and many of their current
> borrowers are severely underwater. This regulation deserves to lose
> his job.
>
> As for your analogy, quite simply, it sucks. Just because something
> has been around for a long time, doesn't mean we should continue
> to allow it.
>
> Though I don't have a problem with >80LTV lending, or even 200LTV
> lending, as long as the fool lending the money is on the hook for
> the credit risk.
>
> the current MI/GSE/Lender menage a trois is broken, and it needs
> to be ended, now. the MI industry needs to be abolished.