Geithnerbabble Private Investment Blahblah Blah Zzzzz
by ilene - July 26th, 2010 1:08 pm
Geithnerbabble Private Investment Blahblah Blah Zzzzz
Courtesy of Jr. Deputy Accountant
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha.
Ya think, Timmy?
WSJ:
Treasury Secretary Timothy Geithner said the economy has now recovered sufficiently for government to begin to make way for private business investment.
Mr. Geithner’s comments on Sunday, which echo previous sentiments expressed by President Barack Obama, reflect a turning point in the government response to the worst economic downturn since the Great Depression, a period marked by deep federal intervention in the financial, housing, auto and other industries.
“We need to make that transition now to a recovery led by private investment,” Mr. Geithner said Sunday on NBC’s “Meet the Press.”
Mr. Geithner hit two Sunday talk shows, delivering the Obama administration’s message that the economy was recovering, but warning that high unemployment would continue to linger.
“I think the most likely thing is you’ll see an economy that gradually strengthens over the next year or two, you’ll see job growth start to come back, investments expanding … but we’ve got a long way to go still,” Mr. Geithner said.
Times like these you begin to wonder if Geithner was really just hired to serve as this administration’s weasel.
Check out On Wall Street, crime pays very well via the socialists at WSWS:
Treasury Secretary Timothy Geithner, appearing on several Sunday morning interview programs, endorsed Feinberg’s contention that he had no authority to halt the bonus payments—without noting that the Obama administration had insisted that Congress not enact any legally binding restrictions on executive pay and bonuses. In other words, the “pay czar” was impotent because the White House wanted it that way.
On NBC’s “Meet the Press,” Geithner was asked how he could justify a situation where those whose financial operations caused the present economic slump were raking in seven- and eight-figure salaries and bonuses, while ordinary people are struggling to survive. He made no real answer, only pointing to the financial reform legislation signed into law last week by Obama as though it provided a solution.
Squirm, mother&^**ker, squirm. Geithy still doesn’t have an answer on Fannie and Freddie and probably won’t for the foreseeable future. Let’s just talk about the government stepping back instead.
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DiggWhat Does The Financial Reform Bill Do Other Than Being Completely And Utterly Worthless?
by ilene - July 15th, 2010 6:44 pm
What Does The Financial Reform Bill Do Other Than Being Completely And Utterly Worthless?
Courtesy of Michael Synder at The Economic Collapse
Is it possible to write a 2,300 page piece of legislation that accomplishes next to nothing and is pretty much completely and utterly worthless? The answer is yes. Barack Obama has been trumpeting the Dodd-Frank financial reform bill as the "biggest rewrite of Wall Street rules since the Great Depression", but the truth is that after the Wall Street lobbyists got done carving it up, the bill that was left was so watered down and so toothless that it essentially accomplishes nothing except creating even more government bureaucracy and even more mind-numbing paperwork.
The bill is so riddled with loopholes for the big banks that it is basically the legislative equivalent of Swiss cheese. The Democrats in the Senate were ecstatic when they announced that they had secured the 60 votes needed to pass this legislation, but when they are asked about what the financial reform bill will do, most of them are left stammering for some kind of cohesive response. The sad truth is that most of them probably don’t understand the bill and none of them will probably ever read the entire thing.
So will the financial reform bill do any good at all?
Well, yes.
A very, very small amount.
Essentially, it is kind of like going over to the Pacific Ocean and scooping out a couple of cups of water.
That is about how much good this bill is going to do.
But U.S. Senate Majority Leader Harry Reid is making this sound like this is some kind of history-changing legislation….
"We’re cleaning up Wall Street."
Oh really?
Charles Geisst, professor of finance at Manhattan College recently had the following to say about this absolutely toothless bill….
Like health-care reform, this bill is being drawn up to grab headlines but its details betray it as nothing more than a slap on the wrist for Wall Street. It is true that Wall Street can commit grand theft and apparently get off with nothing more than community service.
The truth is that most of us never expected the U.S. government to truly take on Wall Street. The relationship between the two is just way too cozy for that to happen.
So does the financial reform bill actually accomplish anything?
Yes.
Let’s take a look…
Hussman Blasts Geithner, Bernanke, Keynes; Why Keynesian Stimulus Always Fails
by ilene - July 7th, 2010 2:55 am
Hussman Blasts Geithner, Bernanke, Keynes; Why Keynesian Stimulus Always Fails
In his latest post, John Hussman takes a well deserved swipe at illegal Fed operations, Geithner, Bernanke, and Keynesian stimulus.
Please consider a few snips from Implications of a Likely Economic Downturn.
…. With regard to "stimulus" plans, my difficulty with last year’s policies is not so much an aversion to government spending as it is a rebuke of the notion that government spending is by its nature stimulative or beneficial to the economy. The issue is how this real value is used. Is it used to advance socially useful outcomes which private individuals, through some failure of coordination, could not achieve? Or is it used to defend bondholders, industries, and institutions with which the policymakers are most closely aligned?
The Keynesian view is that government spending is simply a monolithic letter "G." Keynes cared little about the productivity or lack thereof to which public resources were devoted, even writing " If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again… there need be no more unemployment." The only difference between Keynes and Tim Geithner is evidently that Geithner prefers to place the bottles a bit closer to Wall Street.
…Meanwhile, I continue to believe that both Bernanke and Geithner’s hands should be tied quickly. If we have learned anything over the past 18 months, it is clear that these bureaucrats can misallocate an enormous quantity of public resources with mind-numbing speed. The diversion of public resources to the bondholders of failing financials – to precisely the worst stewards of capital in society – is not stimulative, but ruthless. A second economic downturn should encourage the repudiation of the policies that Bernanke and Geithner pursued during the first.
Basic ethical principle dictates that policy makers should not burden ordinary Americans to pay the losses that well-informed bondholders voluntarily took when they lent money to failing institutions. From my perspective, it is urgent to recognize that Fannie Mae and Freddie Mac obligations are not legally obligations of the U.S. government, that its backing was always at best implicit, and that even the Treasury’s distressingly generous 3-year promise
…
British Petroleum…The Fannie Mae of Oil
by ilene - June 26th, 2010 4:47 pm
Howard Lindzon, last week, definitely bearish on BP and the southern coast of the U.S.
British Petroleum…The Fannie Mae of Oil
British Petroleum $BP is worthless. It may trade for 2-3 more years and even rally now that I have blogged my opinion (no position), but stop the insanity.
The American taxpayer owns it. Figures. No upside, all the downside.
My dog likes to dig holes and I am running around my backyard of my rental home filling them in. I have also set up a $40 cleanup fund for all the restaurants whose toilet seats I have peed on. You just can’t be too careful now that there is a small hole in the center of the earth. Protect your balance sheet people.
Back to $BP…for 99.9 percent of investors, there is no reason to do involve yourself with the company other than to send money to the clean-up efforts. If you have a 401k, your sh*tty mutual fund manager already owns the stock and is buying more. The good news is he did the same thing with homebuilding stocks.
My pal ‘The Fly ‘ sums it up well:
If you’re buying BP, you might as well cop some “jumbo” with that and smoke it up while you invest. That f^king stock is heading “Titanic” in a matter of 1 months time, no floating door included. Sure, you can “take a gamble” and hope that the news doesn’t hit when you are long. However, more often than not, plans such as that fail in spectacular fashion.
Folks, BP is destroying the entire Southern coastline of the Unites Steaks of America. ROFL. And you want to go long? That stock is going to $20, then $10, in my estimation. I will buy it then, as a form of BRITISH LOTTERY.
Yep.
We are a charitable nation…Fannie Mae $FNM (delisted and worthless), Freddie Mac $FRE (same) and Shittyank $C (oh so close) have pledged millions to the cleanup effort. That’s wierd seeing they are worth less than my dog’s turds. I too hereby pledge $1 bazillion to Green Peace. I shall tweet it and it will be fact.
Comical…yet sad.
This is Why You Shouldn’t Pay Your Mortgage
by ilene - June 24th, 2010 10:24 am
This is Why You Shouldn’t Pay Your Mortgage
Courtesy of Jr. Deputy Accountant
If you don’t, Fannie Mae won’t turn you in or tear your house down, they’ll just make it so you can’t get another one for seven years.
What’s seven years? Now’s a good time to rent, especially once new "homeowners" realize they can’t afford their mortgage payments and need a little help with the bills. Not that they care, it’s totally worth the $8000 tax credit I’m sure.
WSJ:
Fannie Mae said Wednesday it would "lock out" borrowers from getting a new loan for seven years if they default on a mortgage they could afford to pay.
The move represents the latest effort by the mortgage industry to prevent a new wave of losses that could result if more borrowers who can afford their monthly payments instead opt to "strategically" default on loans, because they owe far more than their homes are worth.
"Walking away from a mortgage is bad for borrowers and bad for communities, and our approach is meant to deter the disturbing trend toward strategic defaulting," said Terence Edwards, Fannie’s executive vice president for credit portfolio management.
That’s asking nicely but I don’t see a 7 year embargo on your non-mortgage-paying a*s as all that horrible of a punishment if they’re trying to be threatening about it.
Remember when you didn’t want to be the one guy on the block not paying his mortgage? Oh the humiliation. Now where’s the guilt and shame? Replaced by failing Obama administration programs, "free" money and a race to shed the debt and break free.
*****
Fannie Mae To Deny New Mortgages To Deadbeats, Aka Strategic Defaulters
by ilene - June 23rd, 2010 3:34 pm
Courtesy of Tyler Durden
It is now time to short Apple: Fannie Mae has just announced that it will no longer condone the same kind of irresponsible behavior that the Obama administration will soon be trying hard to codify into law, namely strategic defaulting. According to Dow Jones, bankrupt GSE Fannie Mae, announced "it won’t back new mortgage loans for seven years for homeowners who walk away from their mortgages although they were able to pay or did not seek a workout in good faith with their lender." Terence Edwards, an EVP for Fannie, after having been a recipient of trillions in moral hazard (and having a job as a result), finds out that being on the receiving end of a total lack of integrity is not quite as pleasant: ""We’re taking these steps to highlight the importance of working with your servicer. Walking away from a mortgage is bad for borrowers and bad for communities." Oh, now they tell us.
More humor from Dow Jones, as the GSEs finally realize just how screwed they are:
Fannie Mae said it also will sue borrowers who strategically default on their loans to recoup the outstanding mortgage debt in jurisdictions that allow for deficiency judgments.
Strategic defaults are becoming more common, various studies show -- a Morgan Stanley report pegged them at 12% of all home-mortgage defaults in February, up from "insignificant levels" three years ago. Lenders fear borrowers who "walk away" will greatly increase the industry’s foreclosure-related losses, which already total in the hundreds of billions of dollars.
In addition, growing social acceptance of this behavior could have ramifications not only for personal credit histories and the health of neighborhoods, but also for the future of mortgage lending, according to those studying the issue.
One possible reason the numbers are rising is some homeowners’ belief that lenders aren’t aggressively pursuing those who default, according to a report by the Chicago Booth/Kellogg School Financial Trust Index.
Our advice: short AAPL now. The Generation 293,394,459 iPhone (to be released by December 2010 at the latest) may not be the marginal boost to EPS that all analysts who think Apple at a $1 qunitillion market cap is a screaming buy, as US consumers soon realize that the choice between a gizmo and a roof to sleep under is really not all that tough. Alas, Obama’s plan to force…
‘Call It $130 Trillion or So’
by ilene - June 16th, 2010 9:44 pm
‘Call It $130 Trillion or So’
Courtesy of Michael Panzner of Financial Armageddon
If you’ve ever had to deal with teenagers or IT workers, you know the drill: whatever they tell you something will cost usually turns out to be less — often much less — than you end up paying. Politicians, too, are especially good at this game, which is not surprising given that most don’t expect to be around when the final bill comes in. So, in theory at least, no one should be unsettled by the fact, as the following National Review commentary, "The Other National Debt," by deputy managing editor Kevin D. Williamson, reveals, that the amount of money we (and our ancestors) are currently on the hook for is around ten times what our leaders say it is — right?
About that $14 trillion national debt: Get ready to tack some zeroes onto it. Taken alone, the amount of debt issued by the federal government — that $14 trillion figure that shows up on the national ledger — is a terrifying, awesome, hellacious number: Fourteen trillion seconds ago, Greenland was covered by lush and verdant forests, and the Neanderthals had not yet been outwitted and driven into extinction by Homo sapiens sapiens, because we did not yet exist. Big number, 14 trillion, and yet it doesn’t even begin to cover the real indebtedness of American governments at the federal, state, and local levels, because governments don’t count up their liabilities the same way businesses do.
Accountants get a bad rap — boring, green-eyeshades-wearing, nebbishy little men chained to their desks down in the fluorescent-lit basements of Corporate America — but, in truth, accountants wield an awesome power. In the case of the federal government, they wield the power to make vast amounts of debt disappear — from the public discourse, at least. A couple of months ago, you may recall, Rep. Henry Waxman (D., State of Bankruptcy) got his Fruit of the Looms in a full-on buntline hitch when AT&T, Caterpillar, Verizon, and a host of other blue-chip behemoths started taking plus-size writedowns in response to some of the more punitive provisions of the health-care legislation Mr. Waxman had helped to pass. His little mustache no doubt bristling in indignation, Representative Waxman sent dunning letters to the CEOs of these companies and demanded that they come before Congress to explain
…
Fannie, Freddie “Mother of all Bailouts” may cost Taxpayers $1 Trillion
by ilene - June 15th, 2010 11:00 pm
Fannie, Freddie "Mother of all Bailouts" may cost Taxpayers $1 Trillion
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Courtesy of Mish
Please consider Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case.
The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.
“It is the mother of all bailouts,” said Edward Pinto, a former chief credit officer at Fannie Mae, who is now a consultant to the mortgage-finance industry.
The Congressional Budget Office calculated in August 2009 that the companies would need $389 billion in federal subsidies through 2019, based on assumptions about delinquency rates of loans in their securities pools. The White House’s Office of Management and Budget estimated in February that aid could total as little as $160 billion if the economy strengthens.
If housing prices drop further, the companies may need more. Barclays Capital Inc. analysts put the price tag as high as $500 billion in a December report on mortgage-backed securities, assuming home prices decline another 20 percent and default rates triple.
Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania, said that a 20 percent loss on the companies’ loans and guarantees, along the lines of other large market players such as Countrywide Financial Corp., now owned by Bank of America Corp., could cause even more damage.
“One trillion dollars is a reasonable worst-case scenario for the companies,” said Egan, whose firm warned customers away from municipal bond insurers in 2002 and downgraded Enron Corp. a month before its 2001 collapse.
Foreign governments, including China’s and Japan’s, hold $908 billion of [Fannie and Freddie] bonds, according to Fed data.
“Do we really want to go to the central bank of China and say, ‘Tough luck, boys’?
The terms of the 2008 Treasury bailout create further complications. Fannie and Freddie are required to pay a 10 percent annual dividend on the shares owned by taxpayers. So far, they owe $14.5 billion, more than the companies reported in income in their most profitable years.
“It’s like a debt trap,” said Qumber Hassan, a mortgage strategist at Credit Suisse Group AG in
…
Fannie And Freddie: We’ve Fixed Nothing
by ilene - June 14th, 2010 9:41 pm
Fannie And Freddie: We’ve Fixed Nothing
Courtesy of Karl Denninger at The Market Ticker
June 14 (Bloomberg) — The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.
Uh, how?
Remember, the government has funded $145 billion thus far. Where is the rest of the money going to come from?
This year, thus far, $730 billion has been borrowed by Treasury beyond tax receipts – and spent. $1.5 trillion, roughly, on an annualized basis.
Where will we find the other trillion dollars?
Neither political party
wants to risk damaging the mortgage marketwants to admit it has run a 20-year long Ponzi scheme, said Douglas Holtz-Eakin, a former director of the Congressional Budget Office and White House economic adviser under President George W. Bush.“Republicans and Democrats
love putting Americans in housesare both looking for ways to maintain that Ponzi for just one more day, and there’s no getting around that,” Holtz-Eakin said.
Now there’s a bit of truth. Oh wait – that was mine, not Holtz-Eakins 
“People all over the world think, ‘Where is the safest place I could possibly put my money?’ and that’s the U.S.,” Shiller said in an interview. “We can’t let Fannie and Freddie go. We have to stand up for them.”
…
Fraudulent ‘Flopping’ of Homes
by ilene - June 10th, 2010 11:58 pm
Fraudulent ‘Flopping’ of Homes
Courtesy of Larry Doyle at Sense on Cents
As day follows night, financial fraud follows economic distress. God forbid people try to make an honest living as opposed to seizing opportunities to make a dishonest buck. This financial artifice is on display in the short sales of homes throughout our country.
Bloomberg highlights this fraudulent activity in reporting, Banks Face Short-Sale Fraud as Home ‘Flopping’ Schemes Spread:
Two Connecticut real estate agents found a way to profit in the U.S. housing bust: Buy low, sell fast. Their tactic was also illegal.
Sergio Natera and Anna McElaney are scheduled to be sentenced in Hartford’s federal court in August after pleading guilty to fraud. Their crime involved persuading lenders to approve the sale of homes for less than the balance owed — known as a short sale — without disclosing that there were better offers. They then flipped the houses for a profit.
The Federal Bureau of Investigation, the California Department of Real Estate and mortgage finance company Freddie Mac have warned that such schemes may be spreading after a plunge in values left homeowners owing more than their properties are worth. The scams threaten to deepen losses for lenders that are increasingly agreeing to short sales as an alternative to more costly foreclosures.
How and why might a lender agree to a sale at an exceptionally depressed price? Kickbacks and payoffs. To whom and from whom? Brokers or agents who have a buyer willing to pay more for the home. Bloomberg highlights how Uncle Sam has overlooked the potential for this fraudulent ‘flopping’:
An Obama administration effort to boost short sales may increase incentives for fraud, Neil Barofsky, special inspector general for the Troubled Asset Relief Program, wrote in an April 20 report to Congress. The government, through its Home Affordable Foreclosure Alternatives Program, that month began offering as much as $1,500 to servicers, $2,000 to investors and $3,000 to homeowners who close short sales.
“It appears that the program may lack necessary antifraud protections,” Barofsky wrote.
While the Bloomberg article focuses on payoffs to appraisers, it would seem the fraud embedded in payoffs and kickbacks likely runs far wider than that. Other likely recipients for these payoffs and kickbacks?
1. The mortgage servicers are already being paid by Uncle Sam to expedite short sales. Might a little extra cha-ching provide even greater incentive for these servicers…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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