Dig Deep

8 Important Facts About the Federal Reserve

John Polomny.... The credit markets are loosening? 1) Unless you work in the credit industry (I do) it's a rather unqualified statement make. 2) Check the latest Flow of Funds report 3) Check the latest Senior Loan Officer Opinion Survey 4) Ask someone like me on the front lines of credit what's up.... That's just to start. Do not assume credit is flowing based on anecdotal and archaic indicators that bear no relevance in this current environment. Credit has tightened to the point of absurdity and in doing so, the lending industry has made this crisis far deeper, wider and long-lasting than it ever would have been with moderation rather than over-reaction. Contrary to popular - uninformed - opinion, taking away all credit from the bad, stupid, irresponsible American public was not, and is not the answer.

Oh, and by the way, mark my words well.....the 2nd half of 2009 - the timeframe I am now hearing more and more as the point things will start to improve - will turn out to be the lowest point yet for many reasons yet to unfold to the media, analysts and public who by now have had enough of the ride down and are grasping for any signs of life to make it seem like the bus is turning around and create a self-fulfilling prophecy.


On Jan 18 04:43 PM John Polomny wrote:

> Uh yes. The FED is buying $500 billion in MBS. Somebody owns them
> and they will take that money and spend it or invest it in corporate
> bonds. municipal bonds, or whatever. The FED can continue to expand
> its balance sheet and buy assets. Libor and the TED spread are both
> comng down so the credit matkets are lossening not tightening. Go
> to the St. Louis FED website and look at the data.

How to Solve the Excess Supply in Housing

The banks stopped lending and that's that. They shot themselves in the foot, and the bullet ricocheted into all of us. SOOO, people can't refinance out of a bad situation, as they had always been able to before. AND, new buyers can't enter the market because they can't get financing. And the people in bad situations can't sell, and foreclosures rise, and banks tighten further, and home prices fall, and foreclosures rise, and people empty their life savings in a desperate attempt to keep their home, and foreclosures rise, and people live on credit cards to try to keep their home, and foreclosures rise, and unemployment keeps rising, and foreclosures rise....get the picture. This is not a correction, it is a collapse. Please spare me your ignorance if anyone wants to say :we've been through this before". PLEASE, do some real research before spouting a pat answer like that which I have heard over and over again (it's false, by the way).

And, please stop saying things like "people who couldn't afford their house anyway"....that is truly a small segment of the problem. A small segment. There are a lot of people who can't afford their houses now, for a lot of reasons, but to say that homeowners brought this problem on themselves, and the rest of us, is really and truly a profession of ignorance about the facts of this crisis.

Oh, by the way, not everyone who takes out an Adjustable Rate Mortgage (ARM) is trying to beat the system, buy more house than they can afford, etc. That's like saying everyone should only buy bonds, and not stocks, commodities, etc. There are diferent vehicles for different people for different objectives. Not all subprime loans were taken out by idiots or put in place by predatory lenders. Same reason. Problem is: because banks stopped lending and home values dropped like a rock (your opinion of home values is irrelevant) these people got stuck and then of course their housing expenses got too high. They were never supposed to be in these loans when they adjusted. They wouldn't have been if, oh I don't know, if the banks hadn't stopped lending and home values hadn't dropped like a rock. Say what you want, no one saw this coming, not on the scale it currently is. Think you did? Think again....

(BTW...I've been in the real estate and finance industry for years, and have made it an obsession to study this global crisis deep, real deep, so strap your boots on if you want to go toe-to-toe.)

GM Job Loss: Bogus Economics

Since I lost my job in the financial sector (and my home, life savings, and credit---don't spout your opinions to me about the crisis, I'll punch you in the face) I have spent pretty much every waking moment when I am not looking for a job (which, by the way if you hadn't noticed: there aren't any, unless you want to work at Dunkin Donuts) researching every aspect of this global disaster, far more I assure you than anyone you see on the evening news, CNBC, and CERTAINLY Mr. Conerly. The grossly opinionated mis-informed cavalier comments and attitudes I see running rampant are truly terrifying. At the risk of offending someone, I cannot even fathom having taxpayers (read American public) weigh in on something so profoundly important, something that will affect all of us for a long time to come, that in reality: THEY KNOW NOTHING ABOUT!!! I don't want my future, or my kids future, determined by Bertha from Iowa (OR Mr. Conerly!!) who just doesn't want to pay higher taxes, which is what she thinks, but all she really wants is to not lose any more money, 'cause things are tight, but could lose everything if the proper actions are not taken because they are pre-empted by folks just like Bertha. It is impossible to educate the masses in any cohesive manner at all, let alone in the timeliness demanded of our current situation.
The foreign automakers will just absorb 2-3 MILLION employees, suppliers and dealers?? Ummm, when? How? At what cost to the National and Global economies in the meantime? And, oh, what about the hundreds of communities and micro-economies entirely dependent on the auto industry?? Plant closes, town closes. Gee, how many states are going to end up filing bankruptcy due to systemic economic failure? Oh, here's another one...how many more foreclosures will be spurred by this, on top of the already increasing rate, which is the HEART of this whole mess??? Wow, you really are a brain-trust. A perfect example of why pencil pushing book worms and MBAs don't know a damn thing about business in the real world. Right Rick Wagoner?? Thanks B-school losers for destroying our economy.