Posts Tagged ‘mortgage-backed securities (MBS)’

Special Report: How the Government is Setting Us Up for a Second Subprime Crisis

How the Government is Setting Us Up for a Second Subprime Crisis

administration, treasury, federal reserve By Shah Gilani
Contributing Writer
Money Morning

Is the government creating another subprime-mortgage bubble?

The first time around, the three-headed federal serpent – the Bush administration, the Treasury Department and the U.S. Federal Reserve – used Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) to "legitimize" trillions of dollars worth of toxic financial waste known as subprime mortgages.

The result was the worst financial crisis since the Great Depression – a mess that was global in nature.

And we’re now headed for a repeat performance.

Some of the players may have changed since the first subprime-mortgage crisis, but the game apparently remains the same. With banks currently unwilling to lend, the new federal triumvirate of the Obama administration, the Treasury and the Fed are trying to inflate the moribund U.S. housing market. This time around, however, the FHA is the weapon of choice.

Obama & Co. are making an all-or-nothing bet that the U.S. economy will recover and bail out the housing market before the final bill for this ill-advised gambit comes due.

When this bubble bursts – and it will – U.S. taxpayers will be on the hook for more than $1 trillion in government-guaranteed debt.

Ginnie Mae: Fannie and Freddie’s Once-Quiet Cousin

As a direct result of the real-estate meltdown, U.S. banks have become reluctant lenders. And they’ve raised their loan standards considerably. Federal officials knew they had to keep the mortgage spigot open, especially to suspect borrowers, so they turned to their new "secret weapon" – the FHA.

The FHA has been cranking out new government-insured subprime loans, which it packages into government guaranteed securities for sale to banks. This frightening reflation of the subprime bubble is being engineered for two key reasons:

  • To put a floor under falling house prices.
  • And to let banks swap toxic Fannie and Freddie securities for new toxic debt that is 100% guaranteed by U.S. taxpayers.

The almost inevitable insolvency of the FHA could rapidly undermine the fragile recovery of the U.S. economy. And it could plunge stock prices and bank viability to new lows.

Why the FHA? That’s simple. In an era of increasingly stringent lending standards, the FHA’s standards are laughably lax.

Created by the National Housing Act of 1934, the FHA insures private mortgage…
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Zero Hedge

Greek Banks Crash Limit Down For Second Day; China And Commodities Rebound; US Futures Slide

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

After a lukewarm start by the Chinese "market", which had dropped for the past 6 out of 7 days despite ever escalating measures by Beijing to manipulate stocks higher, finally the Shanghai Composite reacted favorably to Chinese micromanagement of stock prices and closed 3.7% higher as Chinese regulators stepped up their latest measures by adjusting rules on short-selling in order to reduce trading frequency and price volatility, resulting in several large brokerages suspending short sell operations. At this pace only buy orders will soon be legal which just may send the farce of what was once a "market" limit up.

Elsewhere in Asia, equities traded mixed foll...



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ValueWalk

HHC: Game Over for the Save Our Seaport Folks......

By valueplays. Originally published at ValueWalk.

HHC: Game Over for the “Save Our Seaport” Folks……

This is classic Weinreb……..

The Save Our Seaport (SOS) folks have been throwing one objection up after another regarding $HHC ‘s plans to redevelop the dilapidated S. St Seaport area into something actually usable.  They’ve objected to a “mall” being put there but thankfully the folks in NYC realized a first class waterfront retail/dining/entertainment destination was far better for the city than a rotting pier falling into the East River after it was destroyed by Sandy.

Now they’ve decided that what has not been developed has to be “preserved” so as to not lose its cultural heritage.  I ne...



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Phil's Favorites

3D Printing an Ornate Bridge Over a Water in Amsterdam

Courtesy of Mish.

Every month, 3D printing possibilities get increasingly elaborate.

For example (with thanks to reader Tim Wallace for the links): The Goal of MX3D is to 3D print a steel bridge. Really.
With our robots that can “draw” steel structures in 3D, we will print a bridge over water in the center of Amsterdam. We research and develop groundbreaking, cost-effective robotic technology with which we can 3D print beautiful, functional objects in almost any form. The ultimate test? Printing an intricate, ornate metal bridge for a special location to show what our robots and software, engineers, craftsmen and designers can do.

The bridge will be designed by Joris Laarman. That process using new Autodesk software will be a research project in itself. It will sync with the tech...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Oils Drop Below $50 May Be Just the Start as Demand Swoons (Bloomberg)

Oil has fallen to a six-month low, and hopes of a quick rebound are fading as demand heads into an autumn swoon.

It is getting ugly in Canada (Business Insider)

“It’s an election about who will protect our economy in a period of ongoing global instability,” Stephen Harper, Prime Minister of Canada, announced on Sunday as he officially kicked off the campaign for the federal elections on October 19. He’d just asked Governor Gen...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.



Date Found: Friday, 03 July 2015, 07:15:03 PM

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Comment: Alasdair Macleod views on Greece and China. Excellent! youtu.be/62lucEzzZMk



Date Found: Tuesday, 07 July 2015, 02:39:22 PM

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Comment: POST GREECE 'NO' vote some bonds are being re priced for true risk. Massive ouch!



Date Found: Tuesday, 07 July 2015, 07:55:35 PM

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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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OpTrader

Swing trading portfolio - week of August 3rd, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Kimble Charting Solutions

Consumption and Yields suggesting lower interest rates ahead!

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

This chart looks at the yield on the 30-year bond. Yields rallied strongly from the first of February to the first of July (up 30%). This strong rally in yields hit dual resistance at (1) above, which was the 38% retracement level and the bottom of a rising channel, which both came into play as resistance. Once yields hit resistance a month ago, yields have been falling and bond prices moving higher.

Now yields are attempting to break steep rising support at (2) above.

Below is a very cool chart of the Personal Consumption Expenditure index on a year over year basis, shared by ...



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Sabrient

Sector Detector: Lackluster earnings reports put eager bulls back into waiting mode

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Corporate earnings reports have been mixed at best, interspersed with the occasional spectacular report -- primarily from mega-caps like Google (GOOGL), Facebook (FB), or Amazon (AMZN). Some of the bul...



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Digital Currencies

Gold Spikes Back Above $1100, Bitcoin Jumps

Courtesy of ZeroHedge. View original post here.

Gold is jumping after the overnight double flash-crash...testing back towards $1100...

Bitcoin is back up to pre-"Greece is Fixed" levels...

Charts: Bloomberg and Bitcoinwisdom

...

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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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About Phil:

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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