Posts Tagged ‘mortgage debt’

The Real Horror Story: The U.S. Economic Meltdown

The Real Horror Story: The U.S. Economic Meltdown

Courtesy of Michael Snyder at Economic Collapse 

economic meltdownThis October, millions of Americans are going to watch horror movies and read horror stories because they enjoy being frightened.  Well, if you really want to be scared, you should just check out the real horror story unfolding right before our eyes – the U.S. economic meltdown.  It seems like more bad news for the U.S. economy comes out almost every single day now.  Unfortunately, things are about to get a whole lot worse.  The mainstream media has been treating "Foreclosuregate" as if it is a minor nuisance, but the truth is that the lid is about to be publicly lifted on years and years of massive fraud in the U.S. mortgage industry, and this thing has the potential to cause economic chaos that is absolutely unprecedented.  Over the past several days, expert after expert has been coming forward and warning that this crisis could completely and totally paralyze the mortgage industry in the United States.  If that happens, it will be essentially like pulling the plug on the U.S. economic recovery. 

Not that there was going to be a recovery anyway.  The truth is that economic statistic after economic statistic has been pointing to incredible trouble for the U.S. economy.

For example, the U.S. government just announced that the U.S. trade deficit went up again in August.  According to the U.S. Census Bureau, the U.S. trade deficit was $46.3 billion during August, which was up significantly from $42.6 billion in July.

So how much coverage did this get in the mainstream media? 

Well, just about none.

We have gotten so used to horrific trade deficits that it isn’t even news anymore.

But these trade deficits are absolutely killing our economy.

How long do you think that the U.S. economy can keep shelling out 40 or 50 billion more dollars than we take in every single month?

If you look at the countries around the world that have become very wealthy, almost all of them have gotten that way by trading with the United States.

Meanwhile, many of our once great manufacturing cities are turning into open sewers.

Every single politician in the United States should be talking about the trade deficit.

But hardly any of them are.

Is it because Americans have all become so dumbed-down that we don’t understand these things anymore, or is it because we are so…
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Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds

Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds

Courtesy of Michael Snyder at Economic Collapse 

The foreclosure fraud crisis seems to escalate with each passing now.  It is being reported that all 50 U.S. states have launched a joint investigation into alleged fraud in the mortgage industry.  This is a huge story that is not going to go away any time soon.  The truth is that it would be hard to understate the amount of fraud that has gone on in the U.S. mortgage industry, and we are watching events unfold that could potentially rip the U.S. economy to shreds.  Many are now referring to this crisis as "Foreclosure-Gate", and already it is shaping up to be the worst thing that has ever happened to the U.S. mortgage industry.  At this point, it seems inevitable that some financial institutions will go under as a result of this mess.  In fact, by the end of this thing we might see a whole bunch of lending institutions crash and burn.  This crisis is very hard to describe because it is just so darn complicated, but it is worth it to try to dig into this thing and understand what is going on because it has the potential to absolutely decimate the entire U.S. mortgage industry.

The truth is that there was fraud going on in every segment of the mortgage industry over the past decade.  Predatory lending institutions were aggressively signing consumers up for mortgages that they knew they could never repay.  Many consumers were also committing fraud because a lot of them also knew that they could never possibly repay the mortgages.  These bad mortgages were fraudulently bundled up and securitized, and these securitized financial instruments were fraudulently marketed as solid investments.  Those who certified that these junk securities were "AAA rated" also committed fraud.  Then these securities were traded at lightning speed all over the globe and a ton of mortgage paperwork became "lost" or "missing". 

Then, when it…
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20 Signs That The Economic Collapse Has Already Begun For One Out Of Every Seven Americans

20 Signs That The Economic Collapse Has Already Begun For One Out Of Every Seven Americans

Courtesy of Michael Snyder at Economic Collapse 

For most Americans, the economic collapse is something that is happening to someone else.  Most of us have become so isolated from each other and so self-involved that unless something is directly affecting us or a close family member than we really don’t feel it.  But even though most of us enjoy a much closer relationship with our television sets than we do with our neighbors at this point, it is quickly becoming undeniable that a fundamental shift is taking place in society.  Perhaps you noticed it when two or three foreclosure signs went up on your street.  Or perhaps it got your attention when that nice fellow down the street lost his job, and he and his family seemingly just disappeared from the neighborhood one day.  The Census Bureau made front page headlines all over the nation this week when they announced that one out of every seven Americans was living in poverty in 2009.  Every single day more Americans are getting sucked out of the middle class and into soul-crushing poverty.   

Unfortunately, most Americans don’t really care because it has not affected them yet.

But this year, millions more Americans will discover that the music has stopped playing and they are left without a seat at the table.

Meanwhile, neither political party has a workable solution.  They just like to point fingers and blame each other.

The Democrats blame Bush for all the poverty and advocate expanding programs for the poor.  Not that there is anything wrong with a safety net.  But the "safety net" was never meant to hold 50 million people on Medicaid and 40 million people on food stamps.  The number of Americans on food stamps has more than…
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Mortgage Debt as a Percentage of Consumer Credit. You Have Officially Entered Hell.

Mortgage Debt as a Percentage of Consumer Credit. You Have Officially Entered Hell.

Courtesy of Paco Ahlgren at Bottom Violation

mortgage, consumer, credit, debt, bernanke, fannie, freddie, housing, collapse, recoverySee the green part of the graph? That’s home mortgage debt up until 2008.

See the blue part? That’s consumer credit.

Call me mathematical, but what’s wrong with this picture? More importantly, what propaganda machine continues to succeed in preventing the breathing portion of humanity from recognizing that the government sponsored and encouraged lending in the home mortgage industry for decades, and this is what happened.

Stated another way: The government not only caused this, it encouraged it. This has nothing to do with market action. This is pure, politically-motivated manipulation. For those of you still so mind-numb that you remain skeptical, ask yourself this: why is the commercial mortgage market still solvent? Answer? Because it doesn’t have government sponsorship.

 


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Thursday – Bernanke’s BS Bounce Part II

Bernanke Bail-OutYay, more free money! 

Oh not for you (unless you are a banker) but for all of Ben’s best buddies as the Fed Chairman promised yesterday to maintain "exceptionally low levels of the federal funds rate for an extended period."  He can do this because, according to Bernanke:

Increases in energy prices resulted in a pickup in consumer price inflation in the second half of last year, but oil prices have flattened out over recent months, and most indicators suggest that inflation likely will be subdued for some time. Slack in labor and product markets has reduced wage and price pressures in most markets, and sharp increases in productivity have further reduced producers’ unit labor costs. The cost of shelter, which receives a heavy weight in consumer price indexes, is rising very slowly, reflecting high vacancy rates. In addition, according to most measures, longer-term inflation expectations have remained relatively stable.. the range that most FOMC participants judge to be consistent with the Federal Reserve’s dual mandate of price stability and maximum employment.

Bernanke CongressSee!  I bet you didn’t realize how well things were going, did you?  Oil going from $70 to $80 in 15 days isn’t inflation – it’s SUBDUED!  Up from $37 last February and March – SUBDUED – As in, DUED, where’s my money??? 

I mean come on people – he says it right here in one of the early paragraphs (before people start to nod off) – the cost of shelter (ie. your home’s declining value) is heavily weighted in the CPI and since your home is worth less (worthless?) and will remain so for some time – that offsets all the other nasty inflation that is eating into your paycheck.

Aside from the fact that this assumes your home is something you will be buying at a discount TOMORROW as opposed to something you overpaid for yesterday, the whole measurement that Bernanke uses to define success is ridiculous.  Housing makes up 42.7% of the CPI, Transportation makes up 17%, Food makes up 15% Medical Care is 6% and Clothing is 3.7%.  That’s 85.4% so we’ll call "other" 14.6%. 

Now, let’s say you, like most Americans, already own your home.  That means what you pay on a monthly basis doesn’t change.  Let’s say though, that the cost of Transportation goes up 20% (3.4 out of 100) and Food goes up 20% (3) and Medical…
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Original Sin

James Kunstler shares his view on the "original sin" committed against our country in the most recent crime spree. 

Original Sin

original sinCourtesy of James Howard Kunstler 

     In our history, the American nation committed obvious sins against select groups of people, and we’ve paid bitterly for some of that.  But now it’s our sins against the land itself that threaten to sink the USA as a viable enterprise.
     It’s odd, that in his otherwise excellent blow-by-blow account ("Eight Days," in the Sept 21 New Yorker Magazine) of the September 2008 Wall Street meltdown that left Lehman dead, and AIG croaking in a ditch, and the banking system in general functionally crippled, reporter James B. Stewart never got around to really describing the cause of it all — namely, the on-the-ground material catastrophe of American suburbia.
     It was the worthlessness of the tradable securitized debt associated with all those overpriced (and overvalued) chipboard and vinyl houses, smeared recklessly over the American landscape, that started all the trouble in the first place.  And it is our inability to come to grips with that underlying catastrophe that prolongs the resolution of the still-florid banking crisis — since the federal government is doing everything possible to prop up the failed capital equation of terminal suburbia, and to deny the obsolescence of that version of the American Dream and all the mechanisms for delivering it.
     The suburban project was not a conspiracy by the likes of Robert Moses, Walt Disney, Frank Lloyd Wright, and President Eisenhower to produce a living arrangement with no future.  It was the emergent, self-organizing result of special circumstances in a particular time and place: post World War Two America, with an immense supply of cheap oil, cheap land, and the industrial capacity to churn out all the necessary components for a car-dependent development pattern.  Suburbia was spawned out of a couple of persistent themes in American cultural history: 1.) that cities and city life were no good; 2.) and that the romance of settling the wilderness could be reenacted, at great profit, in all that space beyond the towns and cities. It would be silly to deny the appeal of this arrangement at its inception.  By the end of WW II, city life in the popular imagination was reduced to one potently awful image: Ralph Kramden’s apartment in "The Honeymooners" TV show.


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Phil's Favorites

Chart o' the Day: Unemployment Plunges

 

Chart o’ the Day: Unemployment Plunges

Courtesy of 

The guys at Bespoke Investment Group ask the question “Is this as good as it gets?” regarding the unemployment rate in this past week’s November Non-Farm Payrolls. It’s the lowest level for the indicator in 9 years.

They note that what went on economically, immediately following that August 2007 print, was not especially fun.

One dimension worth considering is the fact that Labor Force Participation is still much lower than is typical at this stage in an expansion. Wage growth, while good, is...



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Zero Hedge

All Eyes On Monte Paschi, Whose Bailout Is Now In Doubt, And Italian Bank Sector Contagion

Courtesy of ZeroHedge. View original post here.

As we noted last night, when we previewed the virtually assured "No" vote, we said that "a strong “No” vote will cause Prime Minister Renzi to resign, leading to political instability in Italy. Furthermore, a "No" vote is expected to kill a long-running attempt to rescue Italy's third largest and oldest bank, Monte dei Paschi, which has been desperate for a private sector bailout ever since it failed this summer's ECB stress test to...



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ValueWalk

Myth 5.4: Negative Growth Rates Forever? Impossible!

By Aswath Damodaran. Originally published at ValueWalk.

As you peruse discounted cash flow valuations, it is striking how infrequently you see projections of negative growth into the future, even for companies where the trend lines in revenues and earnings have been anything but positive. Furthermore, you almost never see a terminal value calculation, where the analyst assumes a negative growth rate in perpetuity. In fact, when you bring up the possibility, the first reaction that you get is that it is impossible to estimate terminal value with a negative growth rate. In this post, I will present evidence that negative growth is neither uncommon nor unnatural and that the best course, from a value perspective, for some firms is to shrink rather than grow.

]]> Get The Timeless Reading eBook in PDF

Get the entire 10-part s...



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Market News

Breaking News And Best Of The Web

Courtesy of John Rubino.

OPEC agrees to cut output. Oil jumps, stocks rise, gold falls. The political focus shifts to upcoming Italian, French and Austrian elections, all of which could go against the establishment. India’s war on cash may turn into war on gold. Political class still searching for an explanation (see “Best of the Web”). Trump’s cabinet takes shape, with mostly old and a few new faces.  

Best Of The Web

Trump, bonds, peripheries, China and Italy – Credit Bubble Bulletin

A new look – NYSE margin debt and the market – Financial ...



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Kimble Charting Solutions

Stock/Bond Ratio back at 2007 highs, different results this time?

Courtesy of Chris Kimble.

Below looks at the S&P 500/Govt Bond (TLT) Ratio over the past 12-years

CLICK ON CHART TO ENLARGE

The S&P 500/TLT ratio is now back at 2007 levels. Double Top or Breakout Time.

Do find this interesting at this time, bullish sentiment on $TLT now stand around the 10% level, which happens to be the same level it was in mid 2007!

Different this time???  Always fun friends!!!

...

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Members' Corner

ItalExit? A Catch 22?

Courtesy of Nattering Naybob.

Over at Philstockworld... High Finance for Real People - Fun and Profits... 

Pharm - There is an Italian Referendum on staying in the EU in 2 weeks. Wonder how that will work out?

The referendum has nothing to do with leaving the EU, that's what the MSM wants everyone to think. The ubiquitous "they" are trying to confuse and scare the Italians with a line of BS.

StJL - Probably not well Pharm! Although the procedure to get out of Europe would be a lot more complicated for Italy because they are also using the Euro. At this point, probably nothing more than leverag...

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Chart School

Semiconductors Hit Hard

Courtesy of Declan.

Internet troubles have limited me tonight, but the one chart I want to show is the near 5% loss in the Semiconductor Index.  Having escaped relatively unscathed from recent day's selling it was a whirlwind of action for the index today.


This had obvious consequences on the Nasdaq. The Nasdaq did relatively well to suffer just over a 1% loss.  However, there were 'sell' triggers for On-Balance-Volume and Directional Index. There was also an acceleration in the relative underperformance of the index to the S&P. ...

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OpTrader

Swing trading portfolio - week of November 28th, 2016

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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Digital Currencies

Largest US Bitcoin Exchange Is "Extremely Concerned" With IRS Crackdown Targeting Its Users

Courtesy of ZeroHedge. View original post here.

Last Thursday we reported that in a startling development seeking to breach the privacy veil of users of America's largest bitcoin exchange, the IRS filed court papers seeking a judicial order to serve a so-called “John Doe” summons on the San Francisco-based Bitcoin platform Coinbase.

The government’s request is part of a bitcoin tax-evasion probe, and se...



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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...



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Biotech

Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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All About Trends

Mid-Day Update

Reminder: Harlan 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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Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

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News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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