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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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#81
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Ed Huntress" wrote:
And it's not bad. But the Economist stuff this week is better. If you want I'll see if I can e-mail you the article(s). It's 10 pages of print. Could you send it to me also? Use my address please. Wes -- "Additionally as a security officer, I carry a gun to protect government officials but my life isn't worth protecting at home in their eyes." Dick Anthony Heller |
#82
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 15:14:07 -0700 (PDT), Too_Many_Tools
wrote: Did lenders have the option of not lending money to those who could not pay their loan obiligations? Or did they commint fraud with their depositor's funds? TMT ============= Major problem in perception here. With the demise of the *LOCAL* bank or S&L and their replacement with the national megabanks (possibly through a "stealth roll-up"), the people originating the mortgage, the agent for the buyer, the agent for the seller, the appraiser, etc. are *NOT* the same entity, and are likely part of a nationwide chain such that many to most of the people involved are not knowledgable of local trends and conditions. Everything was computer based off the FICA score. The old computer adage "garbage in -- garbage out" was totally ignored, and quantity was stressed over quality and service. Note that the bank, has little or no skin in the game at this point, AND DID NOT MAKE THE LOAN, except for possibly fronting the mortgage originator, and this is a limited exposure, with considerable collateral, i.e. the house. The new "mortgage" was bundled or aggregator with thousands of other mortgages by yet another "family", into a novel financial instrument called a CDO or MBO [collateralized debt obligation or mortgage backed obligation]. In general, these bundled mortgages are now actually owned by a trustee corporation domiciled in Aruba or another tax haven, and are beyond the reach of US law/regulation, although the actual aggregation was done by a major US financial firm. [Ain't globalization wonderful!] The bank still has minimal skin in the game at this point, the main exposure being a little front money for the MBO aggregator. The synthetic structured CDO was then "rated" by one of the major rating agencies such as Ambec, Moody's etc, as AAA investment grade (apparently after a long lunch with several pitchers of martinis). [Note that these agencies, if you will scrape enough dog poop together and spray it with gold paint, (and pay the fees) will certify the new gold ingot.] In many cases, the AAA investment rating was "insured" for 5 (or more years) years by the purchase of a CDS [credit default swap] that "insured/guaranteed" the [re]payment of interest and principal. The major problem is the CDSs are totally unregulated and unregistered, and the majority of guarantors are alien corporations in foreign jurisdictions, with no veriafiable/attachable assets. [Still little to no bank skin in the game, although bank profits (but not depositor returns) are mounting because of the service fees.] At this point things get strange. Everyone knew that their CDOs were as phony as a 3 dollar bill, but assumed that the other guys were "good as gold" (after all they had that CDS "guarantee"). The AAA investment grade CDOs/MBOs were then sold by the billions to hedge funds, pension funds, etc. In order to boost the return, the basic capital was leveraged by borrowing to the hilt, for example Carlyle Credit Corporation borrowed/leveraged from the banks and invested 32X their capital into AAA rated "securities." At this point the banks had huge amounts of their depositors [but possibly not their own] skin *OPERATIONALLY* in the game, but not on paper. In order to allow this kind of leverage (and keep the grift going), it was necessary on the part of the commercial banks to evade the 10% loan reserve / vault cash requirements, which they did using the Enron method of SPEs[ special purpose entities], SIVs [special investment vehicles], conduits, and several other scams. Unfortunatly, there is no US regulation on "leverage" in other than commercial banks. On a day in September 2007, some twit walked into a bank and wanted to cash a twenty dollar check on his account, but the bank didn't have that much cash on hand, and the dominos started to topple. As soon as the PSPEs/SIVs etc. fell, they went back on the bank's books, and it became apparent how badly the depositors were exposed. Note that in many cases, the depositors provided the money that was "amplified," which they then borrowed back to buy that new Hummer with a home equity loan... [O'Henry would have loved it] Were any laws and regulations broken in this convoluted and arcane chain? Apparently not, as each link in the chain was carefully sized on a "need to know" basis, to limit individual/organizational accountability, and maintain "plausible deniability." However note that for exactly this reason, both federal and state conspiracy statutes prohibit these types of operations under both criminal and civil law as well as the federal RICO act. That said, it is very unlikely that any of the major players will ever go to trial, do time or pay any fines [they got copies of the paperwork showing who got a "piece of the action" ], but a "Martha Stewart" and "Sam the Sweeper," or two will go under the wheels of the bus. Are we rich yet? Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
#83
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On 2008-03-24, Wes wrote:
"Ed Huntress" wrote: And it's not bad. But the Economist stuff this week is better. If you want I'll see if I can e-mail you the article(s). It's 10 pages of print. Could you send it to me also? Use my address please. send it to me too... thanks ichudov AT algebra DOT com i |
#84
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On 2008-03-24, Hawke wrote:
That's exactly why there is a long standing recommendation to limit mortgage payment to a small fraction of one's income. So it doesn't make much sense to say these people knew what the risks were. No one else did, either. But they were obviously imprudent. As were the lenders. Looks like there was plenty of investors who bought mortgage loans containing those crap loans, who did not even bother to think about their quality. i Why would you worry about quality if you thought they would only continue to go up? Apparently, the idea that they could actually decline never occurred to any of them. The recommendation to not borrow too much, has little to do with home values and everything to do with dealing with emergencies, loss of income, etc. The home prices can go up and you can still lose your home to a foreclosure. i |
#85
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth: And it's not bad. But the Economist stuff this week is better. If you want I'll see if I can e-mail you the article(s). It's 10 pages of print. I regret having turned down the free prescription for The Economist a decade ago. If the article is online, point me to it. Otherwise, email is great. You have my real addy. (Say 'HI' to SWMBO for me.) OK, I just e-mailed it from _The Economist_ (and copied myself, to see what you're getting). They give you an ASCII file of the text and a link to the article with graphics. With The Economist, you always want the graphics. The trouble is, the 10-page "briefing" consists of 10 separate articles. The one I sent you is two pages long. I can send you the other nine, I think. Let me know if you like the first one and I'll give it a try. Will do. In the interim, what do you think about Warren Buffett's Chairman's Letter to Berkshire? Interesting, oui? I really like the Stumpf quote as well: “It is interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine.” from http://www.berkshirehathaway.com/2007ar/2007ar.pdf OK, I'm reading the letter now. Do you feel that Greenspan was wrong all this time? Now that I see (portions of?) what happened, I'm surprised that we never heard cautions from him. Or was that just the pick-'n-choose media's output? Does not compute. Yes, that one being so juicy, please email the other 9 post haste. Danke. -- Try not to become a man of success but rather to become a man of value. -- Albert Einstein |
#86
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed
Huntress" quickly quoth: OK, I just e-mailed it from _The Economist_ (and copied myself, to see what you're getting). They give you an ASCII file of the text and a link to the article with graphics. With The Economist, you always want the graphics. Reading on, I note the Wall Street, like our gov't hierarchy, has unbelievable jobs and titles. "Alan Johnson, a consultant who designs pay packages for Wall Street," And what do you do, sir? Oh, I design pay packages. thud -- Try not to become a man of success but rather to become a man of value. -- Albert Einstein |
#87
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Ignoramus14119" wrote in message ... On 2008-03-24, Wes wrote: "Ed Huntress" wrote: And it's not bad. But the Economist stuff this week is better. If you want I'll see if I can e-mail you the article(s). It's 10 pages of print. Could you send it to me also? Use my address please. send it to me too... thanks ichudov AT algebra DOT com i OK, there are 10 parts to the report, and I have to send the links and ASCII copy for each one separately. I just sent the "leader," which is sort of an editorial summary. But there's a chance I'll either run up against a limit by The Economist, or your spam filter may knock out most of the rest. So let me know if you don't get 10 messages between today and tomorrow, and I'll try something else. -- Ed Huntress |
#88
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Wes" wrote in message ... "Ed Huntress" wrote: And it's not bad. But the Economist stuff this week is better. If you want I'll see if I can e-mail you the article(s). It's 10 pages of print. Could you send it to me also? Use my address please. I sent you one of the 10. See my message to Iggy. -- Ed Huntress |
#89
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 21:12:54 -0600, with neither quill nor qualm, F.
George McDuffee quickly quoth: On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools wrote: There is a lesson to be learned here.... TMT March 20, 2008 The Affluent, Too, Couldn't Resist Adjustable Rates By JANE BIRNBAUM snip =========== They told him, "cheer up, things could be worse." He cheered up and sure enough.... ========== "Pay day" loans exacerbate housing crisis Sun Mar 23, 2008 8:15pm EDT A pay day loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 percent. The average borrower ends up paying back $793 for a $325 loan, according to the Center. OhmyBuddha! Whatever happened to usury laws? -- Try not to become a man of success but rather to become a man of value. -- Albert Einstein |
#90
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
Ed, thanks, I printed them, they look very well researched.
i On 2008-03-24, Larry Jaques novalidaddress@di wrote: On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed Huntress" quickly quoth: OK, I just e-mailed it from _The Economist_ (and copied myself, to see what you're getting). They give you an ASCII file of the text and a link to the article with graphics. With The Economist, you always want the graphics. Reading on, I note the Wall Street, like our gov't hierarchy, has unbelievable jobs and titles. "Alan Johnson, a consultant who designs pay packages for Wall Street," And what do you do, sir? Oh, I design pay packages. thud |
#91
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On 2008-03-24, Ed Huntress wrote:
"Ignoramus14119" wrote in message ... On 2008-03-24, Wes wrote: "Ed Huntress" wrote: And it's not bad. But the Economist stuff this week is better. If you want I'll see if I can e-mail you the article(s). It's 10 pages of print. Could you send it to me also? Use my address please. send it to me too... thanks ichudov AT algebra DOT com i OK, there are 10 parts to the report, and I have to send the links and ASCII copy for each one separately. I just sent the "leader," which is sort of an editorial summary. But there's a chance I'll either run up against a limit by The Economist, or your spam filter may knock out most of the rest. So let me know if you don't get 10 messages between today and tomorrow, and I'll try something else. I got 2 so far... thanks a lot... i |
#92
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On 2008-03-24, F George McDuffee wrote:
It's like grade eight bolts. You buy based on the certification/specifications. You expect counterfit grade 2 marked as grade 8 to come from a no-name Asian supplier, not Unbrako. Unbrako's bolts are socket head and they are not subject to grade 8, though I see your point. By the way, I have a boatload of Unbrako socket head cap screws. Approximately 800 lbs of them. i |
#93
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote: There is a lesson to be learned here.... TMT March 20, 2008 The Affluent, Too, Couldn't Resist Adjustable Rates By JANE BIRNBAUM snip =========== They told him, "cheer up, things could be worse." He cheered up and sure enough.... ========== "Pay day" loans exacerbate housing crisis Sun Mar 23, 2008 8:15pm EDT By Nick Carey CLEVELAND (Reuters) - As hundreds of thousands of American home owners fall behind on their mortgage payments, more people are turning to short-term loans with sky-high interest rates just to get by. snip "We're hearing from around the country that many folks are buried deep in pay day loan debts as well as struggling with their mortgage payments," said Uriah King, a policy associate at the Center for Responsible Lending (CRL). A pay day loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 percent. The average borrower ends up paying back $793 for a $325 loan, according to the Center. The Center also estimates pay day lenders issued more than $28 billion in loans in 2005, the latest available figures. snip The loans on offer have an Annual Percentage Rate (APR) of up to 391 percent -- excluding fees and penalties. All you need for a loan like this is proof of regular income, even government benefits will do. snip ======== for complete article click on http://www.reuters.com/article/busin...rpc=23&sp=true Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
#94
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote: ATT TMT Remember the extreme politesse and euphemisms the Japanese use when making public statements. This is *NOT* a mild message or observation, but a "get your head out..." directive.. ============ US can learn from Japan’s crisis By Michiyo Nakamoto in Tokyo Published: March 23 2008 22:05 | Last updated: March 23 2008 22:05 The US should inject public funds into its financial system, which is undergoing a worse crisis than that experienced by Japan during its non-performing loan crisis, according to Japan’s financial services minister. “It is essential [for the US] to understand that given Japan’s lesson, public fund injection [into the financial sector] is unavoidable,” Yoshimi Watanabe told the Financial Times. snip Although “it is very difficult for Japan to convey such a message to a foreign government...Japan could, for example, convey – through the G7 [meeting of finance ministers] or central bank governors’ meeting – Japan’s lesson and that we are prepared to take co-ordinated action if necessary”. to help resolve the situation, Mr Watanabe said. snip The remarks are the first public expression of concern by a Japanese cabinet minister that the impact of the current financial market turmoil could be much more serious than Japan’s experience during its “lost decade” of abnormally slow economic growth in the 1990s. == Mr Watanabe warned unless swift and appropriate action was taken by world leaders, the financial market turmoil could lead to a severe dollar crisis.== {cold shot to the heart here} snip =========== for complete article click on http://www.ft.com/cms/s/0/18972048-f...077b07658.html Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
#95
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 13:03:41 -0500, Ignoramus14119
wrote: snip Looks like there was plenty of investors who bought mortgage loans containing those crap loans, who did not even bother to think about their quality. snip ============ That was what the rating companies got the big bucks for. AAA was susposed to indicate minimal risk investment grade securities. The CDS was susposed to insure the [re]payment of interest and principal. It's like grade eight bolts. You buy based on the certification/specifications. You expect counterfit grade 2 marked as grade 8 to come from a no-name Asian supplier, not Unbrako. Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
#96
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 4:30*pm, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message ... On Mar 23, 1:46 pm, "Ed Huntress" wrote: "Larry Jaques" wrote in message .. . On Sat, 22 Mar 2008 23:58:10 -0400, with neither quill nor qualm, Wes quickly quoth: I'm not tracking you. The banks with the bad loans should not be taking the keys, they should be working on ways to float the loans until better times. The borrowers should be paying as much as they can and we ride this monster trying to stay clear of the ditch. I agree entirely. Putting that many people out on the street is assinine, especially when there is so little market left for homes. Bank repos are a major part of the problem. It is like a renter that doesn't have the full payment for rent so he doesn't pay anything instead of ponying up what he has. This whole thing seems to have a trailer trash mentality on honoring obligations. If I were the lender, I'd be keeping as much cash flow coming in as possible. I'm curious as to legalities why they could/would not do so. Wes? Ed? Anyone? I have no idea what legalities would be involved. But the lenders don't have the option of taking lesser cash flow, because they're unable to make their margin calls or their loan payments now. They're stretched out too thin on margins themselves. They need the money *now* to avoid bankrupcy. -- Ed Huntress- Hide quoted text - - Show quoted text - Did lenders have the option of not lending money to those who could not pay their loan obiligations? Or did they commint fraud with their depositor's funds? Which lenders? Private mortgage brokers don't have depositors. Most commercial banks sold the mortgages to people who knew what they were buying. After that, it gets kind of murky about who knew what, but most of those instruments were understood to be collateralized with mortgages, and that many of them were subprime. The people who bought *them* didn't have depositors, either, in the sense that you probably mean the term. -- Ed Huntress- Hide quoted text - - Show quoted text - If no depositors will be harmed, then why are we the American taxpayer bailing them out? TMT |
#97
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 4:32*pm, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message ... On Mar 23, 2:27 pm, "Ed Huntress" wrote: "F. George McDuffee" wrote in messagenews:ldhdu3di1epujg445blag40sbiljdae3dq@4ax .com... On Sun, 23 Mar 2008 15:15:05 -0400, "Ed Huntress" wrote: snip Starting with criminal charges for many in the finance industry. TMT I figured you were of that opinion. That's why we're lucky you aren't making the decisions. d8-) snip ========= Don't rush things. First the investigation, then the grand jury, then the indictment, the trial, and only then we hang them. I wasn't talking about TMT's remarks about criminal charges. I was talking about his opinion that "the Dems can't clamp down hard enough," in terms of financial regulation. There is enough, and there is too much. You know I've been an advocate of more regulation for over a couple of decades now. But I think it's too easy to do too much, and to kill the goose. -- Ed Huntress Ed...the goose is dying under the Republicans now. Either regulation with TEETH is put into place or you and I will soon be living under a bridge somewhere in the future when the financial system collapes. That is if the bridge doesn't fall down due to no maintainance under this Republican Adminstration... TMT Just so the teeth you're prescribing don't wind up bleeding the system out.. It wouldn't be hard, and you and I would pay big time for that, too. -- Ed Huntress- Hide quoted text - - Show quoted text - We are already paying big time. That taxpayer guarantee that Bush promised did not come free. Time to pass some damn tough laws ...and time to throw who we can in jail for fraud. TMT |
#98
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 5:57*pm, "Hawke" wrote:
"Wes" wrote in message ... "Hawke" wrote: It's clear that you don't understand why it's wrong to let all these people go into foreclosure. The only way you'll get it is if a bunch of them foreclose in your neighborhood. After you see what that does to the value of your home, if you have one, then maybe you'll see why it's not such a dandy idea to let millions of home go into foreclosure at the same time all over the country. What it'll do to home values across the country won't be pretty. Maybe, and I say maybe you'll get it when a house on your street is foreclosed on. But probably not. I'm never planning on moving. *20+ years and staying. *Actually if my property value went down, my property taxes would eventually have to drop. People that get overjoyed about increases in the value of their primary domicile are nuts. *It costs them money. Wes Do you plan on getting sick, losing your job, getting a divorce, or any number of other things that will change your life? I didn't think so. You probably think everything is just going to go along the way it always has. It won't. I wouldn't plan on being in the same place fifteen years from now if I were you. Something will probably happen to change your plans. But that doesn't have anything to do with the damage too many foreclosures in one year will do to the economy. It'll be better for everyone if this real estate downturn can be softened instead of letting it come crashing down at full speed. Hawke- Hide quoted text - - Show quoted text - I agree that the recovery needs to be done carefully. And those responsible for lending money irresponsibily should be investigates and if found guilty of fraud should be prosecuted. TMT |
#99
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 7:03*pm, "azotic" wrote:
"Hawke" wrote in message ... "Ignoramus14119" wrote in message m... Looks like there was plenty of investors who bought mortgage loans containing those crap loans, who did not even bother to think about their quality. i Why would you worry about quality if you thought they would only continue to go up? Apparently, the idea that they could actually decline never occurred to any of them. Hawke Faith based economic perpetual motion, true believers bought into the hype hook line and sinker. The next economic implosion may very well be the credit card industry as desperate people walk away from unsecured debt thru chapter 7 bankruptcy. Best Regards Tom.- Hide quoted text - - Show quoted text - It is not a "may"...it is a reality. And the bomb is ticking...on all that unsecured credit. TMT |
#100
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Larry Jaques" wrote in message ... On Sun, 23 Mar 2008 21:12:54 -0600, with neither quill nor qualm, F. George McDuffee quickly quoth: On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools wrote: There is a lesson to be learned here.... TMT March 20, 2008 The Affluent, Too, Couldn't Resist Adjustable Rates By JANE BIRNBAUM snip =========== They told him, "cheer up, things could be worse." He cheered up and sure enough.... ========== "Pay day" loans exacerbate housing crisis Sun Mar 23, 2008 8:15pm EDT A pay day loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 percent. The average borrower ends up paying back $793 for a $325 loan, according to the Center. OhmyBuddha! Whatever happened to usury laws? The financial sector didn't like them. Elect a George Bush and it gets what it wants. Pretty simple, really. They send their lobbyists to see republican congressmen, they pay them, they do what they want. Why else would they want republicans elected? Hawke |
#101
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 8:16*pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote: On Sun, 23 Mar 2008 15:14:07 -0700 (PDT), Too_Many_Tools wrote: Did lenders have the option of not lending money to those who could not pay their loan obiligations? Or did they commint fraud with their depositor's funds? TMT ============= Major problem in perception here. With the demise of the *LOCAL* bank or S&L and their replacement with the national megabanks (possibly through a "stealth roll-up"), the people originating the mortgage, the agent for the buyer, the agent for the seller, the appraiser, etc. are *NOT* the same entity, and are likely part of a nationwide chain such that many to most of the people involved are not knowledgable of local trends and conditions. * Everything was computer based off the FICA score. *The old computer adage "garbage in -- garbage out" was totally ignored, and quantity was stressed over quality and service. *Note that the bank, has little or no skin in the game at this point, AND DID NOT MAKE THE LOAN, except for possibly fronting the mortgage originator, and this is a limited exposure, with considerable collateral, i.e. the house. The new "mortgage" was bundled or aggregator with thousands of other mortgages by yet another "family", into a novel financial instrument called a CDO or MBO [collateralized debt obligation or mortgage backed obligation]. *In general, these bundled mortgages are now actually owned by a trustee corporation domiciled in Aruba or another tax haven, and are beyond the reach of US law/regulation, although the actual aggregation was done by a major US financial firm. [Ain't globalization wonderful!] *The bank still has minimal skin in the game at this point, the main exposure being a little front money for the MBO aggregator. The synthetic structured CDO was then "rated" by one of the major rating agencies such as Ambec, Moody's etc, as AAA investment grade (apparently after a long lunch with several pitchers of martinis). * [Note that these agencies, if you will scrape enough dog poop together and spray it with gold paint, (and pay the fees) will certify the new gold ingot.] *In many cases, the AAA investment rating was "insured" for 5 (or more years) years by the purchase of a CDS [credit default swap] that "insured/guaranteed" the [re]payment of interest and principal. The major problem is the CDSs are totally unregulated and unregistered, and the majority of guarantors are alien corporations in foreign jurisdictions, with no veriafiable/attachable assets. *[Still little to no bank skin in the game, although bank profits (but not depositor returns) are mounting because of the service fees.] At this point things get strange. *Everyone knew that their CDOs were as phony as a 3 dollar bill, but assumed that the other guys were "good as gold" *(after all they had that CDS "guarantee"). The AAA investment grade CDOs/MBOs were then sold by the billions to hedge funds, pension funds, etc. *In order to boost the return, the basic capital was leveraged by borrowing to the hilt, for example Carlyle Credit Corporation borrowed/leveraged from the banks and invested 32X their capital into AAA rated "securities." *At this point the banks had huge amounts of their depositors [but possibly not their own] skin *OPERATIONALLY* in the game, but not on paper. *In order to allow this kind of leverage (and keep the grift going), it was necessary on the part of the commercial banks to evade the 10% loan reserve / vault cash requirements, which they did using the Enron method of SPEs[ special purpose entities], SIVs [special investment vehicles], conduits, and several other scams. *Unfortunatly, there is no US regulation on "leverage" in other than commercial banks. * On a day in September 2007, some twit walked into a bank and wanted to cash a twenty dollar check on his account, but the bank didn't have that much cash on hand, and the dominos started to topple. *As soon as the PSPEs/SIVs etc. fell, they went back on the bank's books, and it became apparent how badly the depositors were exposed. Note that in many cases, the depositors provided the money that was "amplified," which they then borrowed back to buy that new Hummer with a home equity loan... [O'Henry would have loved it] Were any laws and regulations broken in this convoluted and arcane chain? * Apparently not, as each link in the chain was carefully sized on a "need to know" basis, to limit individual/organizational accountability, and maintain "plausible deniability." However note that for exactly this reason, both federal and state conspiracy statutes prohibit these types of operations under both criminal and civil law as well as the federal RICO act. *That said, it is very unlikely that any of the major players will ever go to trial, *do time or pay any fines [they got copies of the paperwork showing who got a "piece of the action" ], but a "Martha Stewart" and "Sam the Sweeper," or two will go under the wheels of the bus. Are we rich yet? Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). A question.... I keep hearing how "nobody" knows who owns these mortgages. Why? But at the same time, they do know gets the monthly mortgage payment. In my world if you know who is owed, you know who owns the note. The saying "follow the money" still holds true.... TMT |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 6:26*pm, "Ed Huntress" wrote:
"Larry Jaques" wrote in message ... On Sun, 23 Mar 2008 17:17:01 -0400, with neither quill nor qualm, "Ed Huntress" quickly quoth: "Larry Jaques" wrote in message . .. I had to google "margin call". I think I learned about it I way back in Civics class in high school and haven't needed it since. That's good. People who worry about margin calls are people who live with a lot of life-shortening stress. I figure I'm about as well off since I've never had excess cash to invest poorly. *g Drat, NYT threw away my identity. *I re-registered and will read that article now. Wow, 6 pages? *It's a biggie! And it's not bad. But the Economist stuff this week is better. If you want I'll see if I can e-mail you the article(s). It's 10 pages of print. I regret having turned down the free prescription for The Economist a decade ago. *If the article is online, point me to it. Otherwise, email is great. You have my real addy. *(Say 'HI' to SWMBO for me.) OK, I just e-mailed it from _The Economist_ (and copied myself, to see what you're getting). They give you an ASCII file of the text and a link to the article with graphics. With The Economist, you always want the graphics. The trouble is, the 10-page "briefing" consists of 10 separate articles. The one I sent you is two pages long. I can send you the other nine, I think. Let me know if you like the first one and I'll give it a try. -- Ed Huntress- Hide quoted text - - Show quoted text - Are these ten articles by the same geniuses who dreamt up this nightmare? TMT |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 9:12*pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote: On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools wrote: There is a lesson to be learned here.... TMT March 20, 2008 The Affluent, Too, Couldn't Resist Adjustable Rates By JANE BIRNBAUM snip =========== They told him, "cheer up, things could be worse." He cheered up and sure enough.... ========== "Pay day" loans exacerbate housing crisis Sun Mar 23, 2008 8:15pm EDT By Nick Carey CLEVELAND (Reuters) - As hundreds of thousands of American home owners fall behind on their mortgage payments, more people are turning to short-term loans with sky-high interest rates just to get by. snip "We're hearing from around the country that many folks are buried deep in pay day loan debts as well as struggling with their mortgage payments," said Uriah King, a policy associate at the Center for Responsible Lending (CRL). A pay day loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 percent. The average borrower ends up paying back $793 for a $325 loan, according to the Center. The Center also estimates pay day lenders issued more than $28 billion in loans in 2005, the latest available figures. snip The loans on offer have an Annual Percentage Rate (APR) of up to 391 percent -- excluding fees and penalties. All you need for a loan like this is proof of regular income, even government benefits will do. snip ======== for complete article click onhttp://www.reuters.com/article/businessNews/idUSN1045663120080324?fee... Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). By the same people who up to their chins in credit card debt....just waiting to default. TMT |
#104
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 9:26 pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote: On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools wrote: ATT TMT Remember the extreme politesse and euphemisms the Japanese use when making public statements. This is *NOT* a mild message or observation, but a "get your head out..." directive.. ============ US can learn from Japan's crisis By Michiyo Nakamoto in Tokyo Published: March 23 2008 22:05 | Last updated: March 23 2008 22:05 The US should inject public funds into its financial system, which is undergoing a worse crisis than that experienced by Japan during its non-performing loan crisis, according to Japan's financial services minister. "It is essential [for the US] to understand that given Japan's lesson, public fund injection [into the financial sector] is unavoidable," Yoshimi Watanabe told the Financial Times. snip Although "it is very difficult for Japan to convey such a message to a foreign government...Japan could, for example, convey - through the G7 [meeting of finance ministers] or central bank governors' meeting - Japan's lesson and that we are prepared to take co-ordinated action if necessary". to help resolve the situation, Mr Watanabe said. snip The remarks are the first public expression of concern by a Japanese cabinet minister that the impact of the current financial market turmoil could be much more serious than Japan's experience during its "lost decade" of abnormally slow economic growth in the 1990s. == Mr Watanabe warned unless swift and appropriate action was taken by world leaders, the financial market turmoil could lead to a severe dollar crisis.== {cold shot to the heart here} snip =========== for complete article click onhttp://www.ft.com/cms/s/0/18972048-f90b-11dc-bcf3-000077b07658.html Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). Japan can do what every other creditor will do...it will demand payment on the money they are owed by the United States. Are we ready to pay up? TMT |
#105
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Larry Jaques" wrote in message ... On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed Huntress" quickly quoth: snip In the interim, what do you think about Warren Buffett's Chairman's Letter to Berkshire? Interesting, oui? I hadn't read it, and I've still read only a couple of pages, but Buffett is always refreshing to read. I hope he keeps it up for a long time. I really like the Stumpf quote as well: "It is interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine." from http://www.berkshirehathaway.com/2007ar/2007ar.pdf LOL! Yes, that was a good one. OK, I'm reading the letter now. Do you feel that Greenspan was wrong all this time? Now that I see (portions of?) what happened, I'm surprised that we never heard cautions from him. Or was that just the pick-'n-choose media's output? Does not compute. I'm getting the impression that a lot of economists and finance experts thought that Greenspan let a lot of things slip by him that he shouldn't have. But I'm in no position to evaluate it. We know in hindsight that some of his decisions worked out very badly, but how good they were at the time he made them, I have no idea. Hindsight is easy. Economic theories always look better if they're based on things that happened in the past -- until the future catches up with them. It's like what you've read about climate models. Yes, that one being so juicy, please email the other 9 post haste. Danke. I sent off four so far, but I think I repeated one of them to you. Sorry. I'll get the rest out shortly. -- Ed Huntress |
#106
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 9:57*pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote: On Sun, 23 Mar 2008 13:03:41 -0500, Ignoramus14119 wrote: snipLooks like there was plenty of investors who bought mortgage loans containing those crap loans, who did not even bother to think about their quality. snip ============ That was what the rating companies got the big bucks for. * AAA was susposed to indicate minimal risk investment grade securities. *The CDS was susposed to insure the [re]payment of interest and principal. * It's like grade eight bolts. *You buy based on the certification/specifications. *You expect counterfit grade 2 marked as grade 8 to come from a no-name Asian supplier, not Unbrako. Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). And that is why the management at the rating companies are not sleeping at night. There has been fraud committed. Time to build more jails for bankers and their friends. TMT |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 6:09*pm, "Hawke" wrote:
"Ed Huntress" wrote: Sure, on a car. Not on a house. You could have asked any broker or banker, a year ago, what the chances were you'd get in trouble that way. They'd laugh you out of the place. First, they would tell you what I said above. They they'd tell you that once you'd made two or three years of payments, you'd qualify for a fixed-rate mortgage before the balloon came due on (what they might call) your "bridge" loan. Then you could look at all the statistics and see that they're dead right. Only they weren't, for the first time ever. Okay, try this. You buy a new house, the overall market does not go down but when you go to refinance the banks appraiser notices a crack house next door and doesn't think your house's market value is high enough to secure the loan. By your logic, the bank should forgive principle since the house is not worth far less than when it was originally purchased. First off, I haven't said what banks should do, or what the government should do. It's beyond my knowledge and I'm studying the subject right now . I do (or did) know how mortgages work, though, and the basic situation is not that hard to figure out. Secondly, every day you walk out of your door you're taking a chance that something really bad won't happen. That's true about your investments, your chances of getting hit by a truck, and so on. House buyers can't buy without some risk of some kind, and some go under and lose their houses all the time. But that doesn't cause the credit markets to dry up, nor does it cause average house prices to drop throughout the country (curiously, not in my town; prices took a one-month hiatus but now they're going up, but that's another story). Even if a few people get it all wrong and come up losers, the market usually isn't much affected by that. This time, we have a perfect storm: just as those people are getting in a bind, new mortgages are drying up, and prices have dropped enough that they're upside down on their mortgages. Nobody anticipated that. Not the experts, not the banks, and not the government. It's a crisis because there's no way out -- except that some of these crap mortgages were written in such a way that a home owner can just walk out of an upside-down situation and turn the keys over to the bank, with no further repurcussions. That amazes me, but that's what the papers say. The brokers are calling it "key mail." You open the bank's mail, and there are house keys in the envelopes. d8-) The bank loans money, the borrower agrees to pay based on the terms of the contract. Doesn't matter what the market is doing, you borrowed, you owe. Sure. Unless you can't, which is something that people and businesses sometimes face. It's what happens afterwards that's causing all the trouble. In a normal market, even during a downturn, most of those people would have been able to get out by selling their houses. Now there aren't enough buyers because the buyers can't get mortgages; prices are dropping, and the buyers who *can* get a mortgage are waiting it out. I would, too. This wouldn't have happened in the first place if the mortgage lenders hadn't fallen all over each other to give mortgages with practically no money down. That's bad banking. It's NOT necessarily bad borrowing. -- Ed Huntress- Hide quoted text - - Show quoted text - But...but...but...why do the banks get bailed out but not the borrowers? TMT If I'm reading Bush's proposals correctly, they're both going to get bailed out. -- Ed Huntress It's kind of what do you mean by bailed out. Bear Stearns stock was selling at 160 a share not long ago. Book value the week before the take over was 80 dollars a share. Price per share that J.P. Morgan is paying for the stock; two dollars a share. If you are a stock holder in Bear Stearns I think you would not see this as a "bail out" of any kind. One major stockholder just lost a billion in the deal. He's suing and doesn't want the deal to go through. It was a major gift to J.P. Morgan, but a bail out to Bear Stearns, I don't think so. Hawke- Hide quoted text - - Show quoted text - If it is not a bail out then why is the American taxpayer being made responsible for the loss by Bush? If you really think this is the last bailout to occur you have little grasp of what is coming. TMT |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools
wrote: TMT =========== The "enablers" of the CDO grift start to get sued. =========== Sentinel Management's Trustee Sues Auditor By MARIE BEAUDETTE March 22, 2008; Page A14 Sentinel Management Group Inc.'s court-appointed trustee has sued the collapsed money-management firm's auditor, accusing it of ignoring "blatant" violations of federal law allegedly committed by Sentinel's former executives. snip n a lawsuit filed with the U.S. Bankruptcy Court in Chicago, the trustee said accounting firm McGladrey & Pullen LLP and G. Victor Johnson, a partner at the firm, "substantially contributed to and caused hundreds of millions of dollars of losses" that caused Sentinel's August 2007 collapse. The lawsuit seeks $550 million. snip Sentinel collapsed in August amid the global credit crunch fueled by the crisis in the subprime-mortgage industry. It is facing lawsuits from its clients and the Securities and Exchange Commission. The firm managed about $1.4 billion for clients, including commodities brokers, hedge funds, financial institutions, pension funds and individuals. {I don't know how much "leverage" they were using. 30X seems to have been common, this would be 42 billion in "bets." } Mr. Grede has acted aggressively to recover money Sentinel's customers lost when the firm failed last summer. He has sued three of its former executives, claiming that they lied to customers about the nature of investments made on their behalf and that they used customer securities as collateral for a loan from Bank of New York. ==He also sued the bank itself, claiming it played a "pivotal role" in Sentinel's collapse.== ============= for complete article [registration required] click on http://online.wsj.com/article/SB1206...ome_law_middle Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mar 23, 10:16*pm, "Hawke" wrote:
"Larry Jaques" wrote in message ... On Sun, 23 Mar 2008 21:12:54 -0600, with neither quill nor qualm, F. George McDuffee quickly quoth: On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools wrote: There is a lesson to be learned here.... TMT March 20, 2008 The Affluent, Too, Couldn't Resist Adjustable Rates By JANE BIRNBAUM snip =========== They told him, "cheer up, things could be worse." He cheered up and sure enough.... ========== "Pay day" loans exacerbate housing crisis Sun Mar 23, 2008 8:15pm EDT A pay day loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 percent. The average borrower ends up paying back $793 for a $325 loan, according to the Center. OhmyBuddha! *Whatever happened to usury laws? The financial sector didn't like them. Elect a George Bush and it gets what it wants. Pretty simple, really. They send their lobbyists to see republican congressmen, they pay them, they do what they want. Why else would they want republicans elected? Hawke- Hide quoted text - - Show quoted text - Correct...and that is why I say this Administration is responsible. It happened on their watch. Time for them to pay the penalty. TMT |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Ignoramus14119" wrote in message ... Ed, thanks, I printed them, they look very well researched. That's why they charge $120/year for a subscription -- and they get it. d8-) I sent the rest. Let me know if you don't get 10. -- Ed Huntress i On 2008-03-24, Larry Jaques novalidaddress@di wrote: On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed Huntress" quickly quoth: OK, I just e-mailed it from _The Economist_ (and copied myself, to see what you're getting). They give you an ASCII file of the text and a link to the article with graphics. With The Economist, you always want the graphics. Reading on, I note the Wall Street, like our gov't hierarchy, has unbelievable jobs and titles. "Alan Johnson, a consultant who designs pay packages for Wall Street," And what do you do, sir? Oh, I design pay packages. thud |
#111
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Too_Many_Tools" wrote in message ... On Mar 23, 4:30 pm, "Ed Huntress" wrote: "Too_Many_Tools" wrote in message ... On Mar 23, 1:46 pm, "Ed Huntress" wrote: "Larry Jaques" wrote in message .. . On Sat, 22 Mar 2008 23:58:10 -0400, with neither quill nor qualm, Wes quickly quoth: I'm not tracking you. The banks with the bad loans should not be taking the keys, they should be working on ways to float the loans until better times. The borrowers should be paying as much as they can and we ride this monster trying to stay clear of the ditch. I agree entirely. Putting that many people out on the street is assinine, especially when there is so little market left for homes. Bank repos are a major part of the problem. It is like a renter that doesn't have the full payment for rent so he doesn't pay anything instead of ponying up what he has. This whole thing seems to have a trailer trash mentality on honoring obligations. If I were the lender, I'd be keeping as much cash flow coming in as possible. I'm curious as to legalities why they could/would not do so. Wes? Ed? Anyone? I have no idea what legalities would be involved. But the lenders don't have the option of taking lesser cash flow, because they're unable to make their margin calls or their loan payments now. They're stretched out too thin on margins themselves. They need the money *now* to avoid bankrupcy. -- Ed Huntress- Hide quoted text - - Show quoted text - Did lenders have the option of not lending money to those who could not pay their loan obiligations? Or did they commint fraud with their depositor's funds? Which lenders? Private mortgage brokers don't have depositors. Most commercial banks sold the mortgages to people who knew what they were buying. After that, it gets kind of murky about who knew what, but most of those instruments were understood to be collateralized with mortgages, and that many of them were subprime. The people who bought *them* didn't have depositors, either, in the sense that you probably mean the term. -- Ed Huntress- Hide quoted text - - Show quoted text - If no depositors will be harmed, then why are we the American taxpayer bailing them out? TMT So the economy doesn't tank. From all accounts, we got a very good deal. The best part is that we knocked $1.2 billion of the chairman's stock value down to a measly $11 million. Apparently that's half of what he paid for a NYC apartment last week. (That's one apartment, not a building.) He and the other top guys at Bear Stearns are apoplectic. It warms my heart. As I read the details of the deal, it appears we aren't likely to lose our $30 billion loan. As of late today, JPMorgan is offering to raise its offer to $10/share. -- Ed Huntress |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Larry Jaques" wrote in message ... On Sun, 23 Mar 2008 20:26:22 -0400, with neither quill nor qualm, "Ed Huntress" quickly quoth: snip OK, I'm reading the letter now. Do you feel that Greenspan was wrong all this time? Now that I see (portions of?) what happened, I'm surprised that we never heard cautions from him. Or was that just the pick-'n-choose media's output? Does not compute. Well, five years ago he said "derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." He's always been wary of this stuff. But he's also bought a bunch of credit derivatives, so he's hard to read on that one. -- Ed Huntress "Only when the tide goes out do you discover who's been swimming naked." -- Warren Buffett |
#113
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Too_Many_Tools" wrote in message ... On Mar 23, 10:16 pm, "Hawke" wrote: "Larry Jaques" wrote in message ... On Sun, 23 Mar 2008 21:12:54 -0600, with neither quill nor qualm, F. George McDuffee quickly quoth: On Fri, 21 Mar 2008 21:25:48 -0700 (PDT), Too_Many_Tools wrote: There is a lesson to be learned here.... TMT March 20, 2008 The Affluent, Too, Couldn't Resist Adjustable Rates By JANE BIRNBAUM snip =========== They told him, "cheer up, things could be worse." He cheered up and sure enough.... ========== "Pay day" loans exacerbate housing crisis Sun Mar 23, 2008 8:15pm EDT A pay day loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 percent. The average borrower ends up paying back $793 for a $325 loan, according to the Center. OhmyBuddha! Whatever happened to usury laws? The financial sector didn't like them. Elect a George Bush and it gets what it wants. Pretty simple, really. They send their lobbyists to see republican congressmen, they pay them, they do what they want. Why else would they want republicans elected? Hawke- Hide quoted text - - Show quoted text - Correct...and that is why I say this Administration is responsible. It happened on their watch. Time for them to pay the penalty. TMT Uh...you're a little late. It happened in 1980. 'You been asleep all this time? d8-) -- Ed Huntress |
#114
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"Too_Many_Tools" wrote in message ... On Mar 23, 6:26 pm, "Ed Huntress" wrote: "Larry Jaques" wrote in message ... On Sun, 23 Mar 2008 17:17:01 -0400, with neither quill nor qualm, "Ed Huntress" quickly quoth: "Larry Jaques" wrote in message . .. I had to google "margin call". I think I learned about it I way back in Civics class in high school and haven't needed it since. That's good. People who worry about margin calls are people who live with a lot of life-shortening stress. I figure I'm about as well off since I've never had excess cash to invest poorly. g Drat, NYT threw away my identity. I re-registered and will read that article now. Wow, 6 pages? It's a biggie! And it's not bad. But the Economist stuff this week is better. If you want I'll see if I can e-mail you the article(s). It's 10 pages of print. I regret having turned down the free prescription for The Economist a decade ago. If the article is online, point me to it. Otherwise, email is great. You have my real addy. (Say 'HI' to SWMBO for me.) OK, I just e-mailed it from _The Economist_ (and copied myself, to see what you're getting). They give you an ASCII file of the text and a link to the article with graphics. With The Economist, you always want the graphics. The trouble is, the 10-page "briefing" consists of 10 separate articles. The one I sent you is two pages long. I can send you the other nine, I think. Let me know if you like the first one and I'll give it a try. -- Ed Huntress- Hide quoted text - - Show quoted text - Are these ten articles by the same geniuses who dreamt up this nightmare? TMT Nope. -- Ed Huntress |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
"F. George McDuffee" wrote in message news On Mon, 24 Mar 2008 01:54:48 -0400, "Ed Huntress" wrote: I sent the rest. Let me know if you don't get 10. -- Ed Huntress ========== can you put me on the distro? Thanks AAackk! Now I have to go back and do it all again. g OK, George, for you, I'll do it. Anyone else is on their own. Is that your real e-mail address? If so, I'll have the articles e-mailed early today. -- Ed Huntress |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 21:18:40 -0700 (PDT), Too_Many_Tools
wrote: A question.... I keep hearing how "nobody" knows who owns these mortgages. Why? But at the same time, they do know gets the monthly mortgage payment. In my world if you know who is owed, you know who owns the note. The saying "follow the money" still holds true.... TMT ============ Finance is the art of passing money from hand to hand until it finally disappears. Robert W. Sarnoff http://www.infoplease.com/ipea/A0763145.html [Which ain't easy when you are talking about 3 to 5 trillion dollars, (and counting).] To start see http://en.wikipedia.org/wiki/Collate...ebt_obligation There are layers on layers on layers of "ownership" of these mortgages, which were first commingled/aggregated and then stratified. Any particular sub-prim, alt-a, NINA/(liar) [no income, no asset], etc. mortgage, along with thousands of others are generally owned "in trust" by a foreign domiciled alien corporation beyond the reach of US law, regulation, subpoena, etc. The ownership of the trust is split into several "tranches" or slices with different rates of return and risk. In theory, the risk of loss was to be born first by the highest return tranches, then next highest, etc. with the lowest risk slice to never have a default as these would all be absorbed by the lower priority tranches, hence the AAA rating, but only for the highest tranche, a point that was frequently overlooked or omitted when the CDOs were sold. Things get much more complicated at this point, as the shares in the "tranches" can be owned by individuals, corporations, hedge funds, private capital pools, pension funds, and nominally "independent" SIVs [special investment vehicles], SPEs [special purpose entities, conduits, etc. that were specifically designed to allow a commercial bank to buy and hold an interest in a "tranche," without having it appear on the banks books as a loan to avoid/evade the US loan reserve / vault cash requirements. In many cases the banks in turn had loaned money to the hedge funds, private capital pools directly, or had loaned money to individuals to "invest" in the hedge funds, private capital pools, etc. that bought shares of the tranches at several levels of risk in multiple CDOs. In many cases, these transactions were specifically designed to be impossible to trace to facilitate tax evasion and concealment of assets by "high net worth" clients. (Although if I was a banker, and one of my clients was named Gambino, Chaney, Bush or Corleone, I would be sweating bullets...) If things were not complicated enough to this point, many of these "shares" were pledged as collateral, generally through a "repurchase agreement" to raise money for additional "leverage." When the "great unwinding" started back in September, the value of these "securities" fell below the amount lent, so the banks [commercial and merchant] and other bank-like institutions made a margin call for addition collateral or cash, which was not available. These pledged "securities" were then seized (and sold, depressing the market) as the loans were in default, starting the current "death spiral." Thus it is difficult, possibly impossible, to determine the actual owner. FWIW -- this is not new except for scale. When IOS [Investors Overseas Service] collapsed in 1970 the same thing occurred. Rumors are that the CIA contract employee [spook] pension funds were involved and Robert Vesco made off with a 2.5 billion boodle bag of black money. For details of this pioneering effort in creative finance click on http://en.wikipedia.org/wiki/Investors_Overseas_Service and http://www.rinfret.com/vesco.html Note that IOS gave it big time in the shorts to the small European [mainly German] investors, but they still came back for more. First for the Argentinean dollar denominated bonds sold by the American banks, and then for the CDOs hawked by the American banks, proving again that humans are the only animals you can skin more than once. Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 21:20:32 -0700 (PDT), Too_Many_Tools
wrote: snip By the same people who up to their chins in credit card debt....just waiting to default. TMT =========== That's the next tsunami of CDOs to hit, although I don't know if it will be the credit card debt backed or the auto loan backed collateralized "securities." Run for the high ground while you can and hope the wave dosen't reach that high.... Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Mon, 24 Mar 2008 01:54:48 -0400, "Ed Huntress"
wrote: I sent the rest. Let me know if you don't get 10. -- Ed Huntress ========== can you put me on the distro? Thanks Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end? Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625). |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 21:26:42 -0700 (PDT), Too_Many_Tools
wrote: The financial sector didn't like them. Elect a George Bush and it gets what it wants. Pretty simple, really. They send their lobbyists to see republican congressmen, they pay them, they do what they want. Why else would they want republicans elected? Hawke- Hide quoted text - - Show quoted text - Correct...and that is why I say this Administration is responsible. It happened on their watch. Time for them to pay the penalty. TMT If the balloon had burst on the Demonrats watch..you would be shouting from the rooftops "everything is ok" Your partisanship is awe inspiring. And yes..it damned well could have happened on the Demonrats watch. Gunner |
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OT - The Affluent, Too, Couldn't Resist Adjustable Rates
On Sun, 23 Mar 2008 21:24:37 -0700 (PDT), Too_Many_Tools
wrote: There has been fraud committed. Time to build more jails for bankers and their friends. TMT Even the Democrat ones? Gunner |
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