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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Zero Hedge

Global Markets, S&P Futures Flat With US Markets Closed For MLK Holiday

Courtesy of ZeroHedge View original post here.

US cash markets may be closed for Monday's MLK holiday, but US equity futures are humming and at last check they were unchanged from Friday's close at 3, 762 after earlier dropping as much as 20 points.

“Markets needed a breather or even a pull back to justify reflationary expectations,” said Ben Emons, managing director of global macro strategy at Medley Global Advisors.

Despite the dip, stocks remains just shy of...



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Phil's Favorites

Brexit: UK pound has not crashed yet, but here's why it will probably suffer in years to come

 

Brexit: UK pound has not crashed yet, but here's why it will probably suffer in years to come

The UK pound could face harder times ahead. Parlanteste/Shutterstock

Courtesy of Agelos Delis, Aston University and Christos Ioannidis, Aston University

The Brexit deal has failed to have any major effect on the exchange rate of the pound since Janu...



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Chart School

Why did selling SP500 volatility trades blow up?

Courtesy of Read the Ticker

Many have made their fortunes selling volatility premium and then losing it, that is because they are running down the lit fuse and not understanding that eventually the strategy blows up.

In the chart below periods marked with A, B, C, D are periods of chasing yield which was so great the selling of option premium became vogue. Yes, this strategy worked for a while and 'this time was different' worked, until it didn't.

Selling volatility work great during period gray A until the cycle ended at red A.
Selling volatility work great during period gray B until the cycle ended at red B.
Selling volatility work great during period gray C until the cycle ended at blue C.
Selling volatility work great during period gray D un...

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Biotech/COVID-19

The simple reason West Virginia leads the nation in vaccinating nursing home residents

 

The simple reason West Virginia leads the nation in vaccinating nursing home residents

By mid-January, only about a quarter of the COVID-19 vaccines distributed for U.S. nursing homes through the federal program had reached people’s arms. Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Courtesy of Tinglong Dai, Johns Hopkins University School of Nursing

The urgency of vaccinating nursing home residents is evident in the numbers. The COVID-19 pandemic has claimed the lives of mo...



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Politics

Trump supporters seeking more violence could target state capitols during inauguration - here's how cities can prepare

 

Trump supporters seeking more violence could target state capitols during inauguration – here's how cities can prepare

The FBI says armed protests are planned at all 50 state capitols ahead of President-elect Joe Biden’s inauguration. Paul Weaver/SOPA Images/LightRocket via Getty Images

Courtesy of Jennifer Earl, University of Arizona

Americans witnessed an alarming and deadly failure in planning and policing at ...



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ValueWalk

US Consumer Confidence Increases At Start Of 2021

By Refinitiv. Originally published at ValueWalk.

WASHINGTON, DC ‐ According to the Refinitiv/Ipsos Primary Consumer Sentiment Index, American consumer confidence for January 2021 is at 50.9, up 2.8 points from last month. The index fielded from December 25, 2020, to January 8, 2021.

Q3 2020 hedge fund letters, conferences and more

American Consumer Confidence Is Back Up In 2021

After a sharp 4‐point decline in December, American consumer confidence has returned to levels seen in September 2020 (50.6). The Current, Expectations, Investment, and Jobs sub‐indices all experienced ...



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Kimble Charting Solutions

Treasury Bond Yields At Make-Or-Break Decision Point Says Joe Friday

Courtesy of Chris Kimble

Treasury bond yields (and interest rates) have been falling for so long now that investors have taken it for granted.

But bond yields have been rising for the past several months and perhaps investors should pay attention, especially as we grapple with questions about inflation and the broader economy (and prospects for recovery).

Today we ask Joe Friday to deliver us the facts! Below is a long-term “monthly” chart of the 30 Year US Treasury Bond Yield.

Counter-Trend Rally In Yields Facing Strong Resistance!

As you can see, treasury bond yields have spent much of the past 25 years trading in a falling channel… but the coronavirus crash sent yields...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

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Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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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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