The Obama Administration is throwing out long standing rules of capitalism and finance. Why would investors want to lend companies money in the form of bond purchases if their senior status becomes impaired at the whim of a president? I see the UAW comes out of this with a big chunk of cash, equity and benefits, what a surprise.-Lou
Senior Chrysler Creditors Revolt
As Maria Bartiromo just reported on CNBC, a group of senior Chrylser's lenders made up of firms that didn't take TARP funds have issued a statement saying that they have been shut out of direct contact with the government during the negotiations.
Instead, they have been forced to negotiate through JP Morgan, which they view as having a conflict of interest.
Here's the statement:
As of last night’s deadline, we were part of a group of approximately 20 relatively small organizations; we represent many of the country’s teachers unions, major pension and retirement plans and school endowments who have invested through us in senior secured loans to Chrysler. Combined, these loans total about $1 billion. None of us have taken a dime in TARP money.
As much as anyone, we want to see Chrysler emerge from its current situation as a viable American company, and we are committed to doing what we can to help. Indeed, we have made significant concessions toward this end – although we have been systematically precluded from engaging in direct discussions or negotiations with the government; instead, we have been forced to communicate through an obviously conflicted intermediary: a group of banks that have received billions of TARP funds.
What created this much-publicized impasse? Under long recognized legal and business principles, junior creditors are ordinarily not entitled to anything until senior secured creditors like our investors are repaid in full. Nevertheless, to facilitate Chrysler’s rehabilitation, we offered to take a 40% haircut even though some groups lower down in the legal priority chain in Chrysler debt were being given recoveries of up to 50% or more and being allowed to take out billions of dollars.
In contrast, over at General Motors, senior secured lenders are being left unimpaired with 100% recoveries, while even GM’s unsecured bondholders are receiving a far better recovery than we are as Chrysler's first lien secured lenders.
Our offer has been flatly rejected or ignored. The fact is, in this process and in its earnest effort to ensure the survival of Chrysler and the well being of the company’s employees, the government has risked overturning the rule of law and practices that have governed our world-leading bankruptcy code for decades.
We have a fiduciary responsibility to all those teachers, pensioners, retirees and others who have entrusted their money to us. We are legally bound to protect their interests. Much as we empathize with Chrysler’s other stakeholders, the capital is just not ours to contribute to their cause by accepting a deal that is outside the well established legal framework and cannot be rationalized as being commercially reasonable.
We are continuing to discuss our position with the United States Treasury. We have made a proposal which we earnestly believe is fair and would appropriately recognize our legal position.
As President Obama implied yesterday, it is likely that Chrysler will have to file Chapter 11 whether or not all lenders agree to any particular proposal. Chapter 11 is often used to help implement an agreed deal and dispose of unwanted legacy liabilities. We are hopeful and optimistic that we will reach a positive resolution of our issues so that all stakeholders will move forward together to implement Chrysler’s “quick trip” restructuring in an un-contested proceeding. Our Group will never initiate a bankruptcy filing on Chrysler – that is a decision for the Company and the Administration to make.
As we all appreciate, laws are the foundation of our economy and society. Despite recent travails, our country remains the economic envy of the world and the United States remains a vital engine of global growth. The rule of law made it that way. We urge that people remember this and not succumb to unproductive and unwarranted finger pointing.
Sincerely,
The Committee of Chrysler Non-Tarp Lenders
Thursday, April 30, 2009
Illegals Heathcare Costs Explained
This should make all taxpaying Americans angry. This is the reason why, those of us that actually pay for insurance and medical services, pay so much. This is happening in hospitals accross the nation.-Lou
Volcker Says the U.S. Economy Is ‘Leveling Off’
The economy is "leveling off at a low level". So does an airplane just before it crashes into the ground and kills all onboard. I like Paul Volker, he is a straight-shooter and probably the smartest (and least listened to) member of the Obama's financial team. I agree with Volker, the economy will not show any real and sustainable growth for at least two years.-Lou Volcker Says the U.S. Economy Is ‘Leveling Off’
April 29 (Bloomberg) -- The U.S. economy is “leveling off at a low level” and doesn’t need a second
Volcker, head of Obama’s Economic Recovery Advisory Board, said the 6.1 percent decline in first-quarter gross domestic product reported by the government today was “expected.” More recent data show the contraction in housing, business spending and inventories has slowed, and stimulus spending is only just beginning to hit the economy, he said.
Still, with the financial system functioning only by “the grace of government intervention,” the economy is “in for a long slog” before a recovery takes hold, Volcker said on Bloomberg Television’s “Conversations with Judy Woodruff” airing May 1 at 6 p.m. Government help will continue, and the administration won’t let any banks fail, he said.
“I’m not here to tell you the economy is going to recover very strongly in the short run,” Volcker said. “There is reason to believe that it should be leveling off, at a low level.”
While Volcker suggested the economy may not need a second stimulus, he said growth isn’t likely to pick up markedly for several years.
‘Take a While’
“I do not think there are grounds for great optimism,” Volcker said. “It is going to take a while, I think, to have a strong recovery.”
That will keep the government involved in the financial system, and the administration will provide the capital needed to keep banks afloat, he said.
“There’s a visible commitment by the government to support these so-called systemically important institutions at this point,” said Volcker, 81, who was Fed chairman from 1979 to 1987. “So they’re not going to go under in the sense of ceasing operations or even interrupting operations. It’s a question of how much support they’re going to need.”
Read More:
Chrysler Chapter 11 Reportedly Imminent
It's a sad day when one of America's industrial icons goes bust. GM is most likely to follow in the weeks ahead. UAW contracts have weighed down the U.S. auto industry with higher pay and benefits than their competition and this is the ultimate result. Although the stock market is having an historic bear market rally, I find it hard to commit serious capital to this market in light of the news of the day. Use this rally to lighten up on risk positions, the next wave down may be fast and furious. Let's see how the market handles the release of the bank "stress tests" next week.-LouChrysler Chapter 11 Reportedly Imminent
Talks between the Treasury Department and lenders to keeping U.S. automaker Chrysler out of bankruptcy broke down late Wednesday, making it all but certain the company will file for Chapter 11 protection Thursday, the Wall Street Journal reports, citing people familiar with the discussions.
All the pieces are in place to get Chrysler through the court quickly, perhaps in a matter of weeks, say administration officials.
The talks with Chrysler's lenders broke down after the Obama administration's automotive task force worked to persuade several hedge funds and other lenders to accept a deal to reduce Chrysler's debt, said people involved in the talks, the Journal reports.
According to people familiar with the matter, the Treasury raised its most recent offer to lenders on Wednesday by $250 million to $2.25 billion in cash for the banks and hedge funds to forgive $6.9 billion in Chrysler debt.
The Journal reports JPMorgan Chase, Chrysler's largest lender, gave the other 45 banks and hedge funds 90 minutes Wednesday evening to vote on the deal. A large number of the funds voted no and wouldn't budge, paving the way for an all but unavoidable trip to bankruptcy court, said people close to the talks.
Read More:
Wednesday, April 29, 2009
Chinese Want Gold Not Dollars
This collection of April 2009 Real Money Perspective news stories underscores what China, the #1 dollar holder, is doing to protect wealth from a dollar decline and rapid rise in the cost of living. If you have your wealth denominated in dollars take heed. As the ancient Chinese proverbs says; “Dig the well before you are thirsty.”
1) BUY PHYSICAL GOLD NOW:
China's building gold reserves - now over 1,000 tons: "A Chinese official has confirmed that the country has quietly built up its gold reserves by 75% since 2003. It is now the world`s fifth biggest holder of gold with more than 1,000 tons held," reports Mineweb. GATA.org reports that China is in the process of buying 4,000 tons of gold.
2) MAINTAIN STRONG BALANCE SHEET:
"Western analysts fail to recognize that the Chinese banking system is now the strongest in the world. Beijing now has almost $2 trillion in cash on hand and hardly any foreign debt. There is no doubt in my mind that China is going to turn back to the upside, before the U.S," reports Money&Markets.
Is China trying to buy out the Americas? "While the US is floundering economically, China is muscling its way in to American businesses via joint ventures and worldwide claims to natural resources. China is pushing toward a new Reserve Currency, moving the world away from a dollar-centric economy.
Even if China does not dump the dollar, in favor of some sort of new IMF currency, we’re still in deep trouble but in a different way than in 1929 when the Fed CONTRACTED the money supply, resulting in deflation. This recipe for inflation does not make the dollar look like a very good investment to China," says Swiss America CEO Craig R. Smith.
Read More:
GDP Falls Greater Than Expected 6.1%
GDP Continues to Freefall.
by Lou Scatigna
The U.S. economy contracted by a more than expected 6.1% in the first quarter. Economists surveyed expected a drop of only 4.6%. The steep drop in economic activity follows a slightly larger 6.3% GDP decline in the 4th quarter of 2008. The huge back to back declines were the largest in 60 years as it becomes apparant that the recession is far from over. Since 1947 the economy has not contracted more 4% in any back to back quarters.
Weak investment in housing and dramatic drop in inventories offset a 1.5% increase in comsumer spending (the bright spot). Companies aggressively cut workers and curtailed production in the quarter. The savings rate rose to 4.2%, the highest rate sine 1998.
Exports fell off a cliff, down 30% the most in 40 years as our trading partners, especially in Japan and Europe,experience recession in the economies.
Surprisingly, inflationary pressures rose in the first quarter according to GDP price guages. The PCE price gauge excluding food and energy rose 1.5%, after increasing 0.9% in the fourth quarter.
Second quarter GDP estimates will have to be lowered based on these numbers. The economy still has some very strong headwinds to deal with.
by Lou Scatigna
The U.S. economy contracted by a more than expected 6.1% in the first quarter. Economists surveyed expected a drop of only 4.6%. The steep drop in economic activity follows a slightly larger 6.3% GDP decline in the 4th quarter of 2008. The huge back to back declines were the largest in 60 years as it becomes apparant that the recession is far from over. Since 1947 the economy has not contracted more 4% in any back to back quarters.
Weak investment in housing and dramatic drop in inventories offset a 1.5% increase in comsumer spending (the bright spot). Companies aggressively cut workers and curtailed production in the quarter. The savings rate rose to 4.2%, the highest rate sine 1998.
Exports fell off a cliff, down 30% the most in 40 years as our trading partners, especially in Japan and Europe,experience recession in the economies.
Surprisingly, inflationary pressures rose in the first quarter according to GDP price guages. The PCE price gauge excluding food and energy rose 1.5%, after increasing 0.9% in the fourth quarter.
Second quarter GDP estimates will have to be lowered based on these numbers. The economy still has some very strong headwinds to deal with.
Loan-Modification Plan Revised to Address Second Mortgages
Loan-Modification Plan Revised to Address Second Mortgages
By RUTH SIMON WSJ
The Obama administration on Tuesday laid out new guidelines for its foreclosure-prevention program that aim to address one key stumbling block to its efforts to stabilize the housing market: how to deal with borrowers who have home-equity loans and other second mortgages.
About half of seriously delinquent borrowers have a second mortgage, according to Credit Suisse Group. Yet when the administration two months ago announced its $75 billion program to help stabilize the housing market, the plan drew criticism from investors who own mortgage-backed securities because it didn't address the question of second mortgages.
Investors, who include pension funds, insurance companies and hedge funds, say that rewriting the first mortgage without touching the second violates their rights, because second mortgages are supposed to be repaid second. They also say the original Obama plan created a conflict of interest, because many loans are serviced by big banks that also hold second mortgages -- and, as a result, have a financial interest in how these loans are handled.
Under the revised plan, mortgage-servicing companies that participate in the loan-modification program for second liens must automatically modify the second mortgage when the first mortgage is reworked. The government will share in the cost of reducing the interest rate on second mortgages for five years. As an alternative, it will pay holders of second mortgages to extinguish that debt.
Mortgage-servicing companies that modify second mortgages will receive an upfront payment of $500 and additional payments of $250 a year for up to three years for successful modifications of home-equity loans and other second mortgages. Borrowers who remain current on the modified loan would receive payments of $250 a year for up to five years that would be used to pay down the balance of their first mortgage.
The revised plan also encourages the use of the federal Hope for Homeowners program, which allows borrowers to refinance into a more affordable, government-backed loan, provided the investor who holds the mortgage agrees to a principal write-down.
Read More:
http://online.wsj.com/article/SB124091319810563169.html
By RUTH SIMON WSJ
The Obama administration on Tuesday laid out new guidelines for its foreclosure-prevention program that aim to address one key stumbling block to its efforts to stabilize the housing market: how to deal with borrowers who have home-equity loans and other second mortgages.
About half of seriously delinquent borrowers have a second mortgage, according to Credit Suisse Group. Yet when the administration two months ago announced its $75 billion program to help stabilize the housing market, the plan drew criticism from investors who own mortgage-backed securities because it didn't address the question of second mortgages.
Investors, who include pension funds, insurance companies and hedge funds, say that rewriting the first mortgage without touching the second violates their rights, because second mortgages are supposed to be repaid second. They also say the original Obama plan created a conflict of interest, because many loans are serviced by big banks that also hold second mortgages -- and, as a result, have a financial interest in how these loans are handled.
Under the revised plan, mortgage-servicing companies that participate in the loan-modification program for second liens must automatically modify the second mortgage when the first mortgage is reworked. The government will share in the cost of reducing the interest rate on second mortgages for five years. As an alternative, it will pay holders of second mortgages to extinguish that debt.
Mortgage-servicing companies that modify second mortgages will receive an upfront payment of $500 and additional payments of $250 a year for up to three years for successful modifications of home-equity loans and other second mortgages. Borrowers who remain current on the modified loan would receive payments of $250 a year for up to five years that would be used to pay down the balance of their first mortgage.
The revised plan also encourages the use of the federal Hope for Homeowners program, which allows borrowers to refinance into a more affordable, government-backed loan, provided the investor who holds the mortgage agrees to a principal write-down.
Read More:
http://online.wsj.com/article/SB124091319810563169.html
Bank of America May Need $70 Billion
Looks like the taxpayers will be stepping up to the plate again and again. Geithner says that most banks are well capitalized. That may be true by the numbers. Thousands of small community banks may be ok but if 10 of major money center banks are insolvent then it really doesn't matter how the rest of the banks are doing does it?-LouBank of America May Need $70 Billion, FBR Says
By David Mildenberg and Linda Shen
By David Mildenberg and Linda Shen
April 28 (Bloomberg) --
Bank of America should consider converting its preferred shares to common stock, including $27 billion in private hands “as soon as possible,” Miller wrote in a note to clients today. Miller said his firm’s versions of the stress tests were “somewhat tougher” than those performed by U.S. regulators.
Bank of America is among 19 lenders evaluating results of the formal U.S. stress tests. The Charlotte, North Carolina-based lender sold $45 billion of preferred stock to the Treasury’s bank rescue fund. Chief Executive Officer
“Most major banks will find it very difficult to raise that kind of capital in today’s environment, and we believe the first line of defense
The bank earlier this month reported that first-quarter profit more than tripled on gains from home refinancing. Lewis said he “absolutely” didn’t think the bank needed additional capital.
Lewis has come under fire for not telling shareholders that New York-based Merrill Lynch & Co. had a fourth-quarter loss spiraling toward $15.8 billion before they voted to approve the takeover of the brokerage in December.
Bank of America shares dropped 77 cents, or 8.6 percent, to $8.15 at 4:15 p.m. in New York Stock Exchange composite trading.
Tuesday, April 28, 2009
Consumer confidence soars in April
This is unexpected but welcomed news. The stock market reversed large losses on this news as well as the Case-Shiller Home Index which showed that although home prices declined again in February the decline was less than January's. Remember the market is judging that less bad is good.-Lou
Consumer confidence soars in April
NEW YORK (AP) -- Hopeful signs that the worst may be over for the economy boosted Americans' moods in April, sending a closely watched barometer of sentiment to the highest level since November.
The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November's 44.7 and well surpasses economists' expectations for 29.5.
Some encouraging news in areas like retail sales and housing have helped fuel a recent stock rally. Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record -- another sign the housing crisis could be bottoming.
Read More:
http://finance.yahoo.com/news/Consumer-confidence-soars-in-apf-15054028.html?sec=topStories&pos=main&asset=&ccode=
Consumer confidence soars in April
NEW YORK (AP) -- Hopeful signs that the worst may be over for the economy boosted Americans' moods in April, sending a closely watched barometer of sentiment to the highest level since November.
The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November's 44.7 and well surpasses economists' expectations for 29.5.
Some encouraging news in areas like retail sales and housing have helped fuel a recent stock rally. Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record -- another sign the housing crisis could be bottoming.
Read More:
http://finance.yahoo.com/news/Consumer-confidence-soars-in-apf-15054028.html?sec=topStories&pos=main&asset=&ccode=
Goldman Sachs Rigging The Market?
Some say that Goldman (Government) Sachs works on behalf of the federal government. They have been rumored to be deeply involved in manipulating the stock market, the bond market, the currency market and especially the gold market. Goldman has taken billions from the government, is it possible some of that taxpayer money is goosing the market? Don't you think that it smells a little fishy given that Geithner, Paulson and many others at the U.S. Treasury were Goldman executives? John Crudele is one of the few financial journalists who is actually doing his job.-Lou
QUESTIONS ABOUT GOLDMAN SACHS' ROLE IN MARKET
SOMETHING smells fishy in the market. And the aroma seems to be coming from Goldman Sachs.
As you probably already know, stock prices have been roaring for seven weeks.
This has created a historic rally despite the fact that the economy continues to be in serious trouble, banks are still wheezing under the heavy load of bad assets, workers are being laid off each month by the hundreds of thousands and nobody seems to have answers to our problems.
All these issues are well known and there's no reason to replay them here.
I told readers at the beginning of the year that the economy would start looking better -- although not necessarily performing better -- in the spring because of statistical aberrations coming from Washington.
And I even predicted that stocks would rally because of the perception that happy days were here again.
So -- a big rally.
Prices had been up as much as 25 percent since March 9. And they are still up 22 percent as of yesterday.
Read More:
The Government’s Forecast If Flu Problem Explodes: Two Million Americans Die
3-D Model of the Flu virusSobering government assesment of potential effect of major flu ouitbreak.-Lou
The Government’s Forecast If Flu Problem Explodes: Two Million Americans Die
Somewhere in the basement of a government warehouse, federal employees with too little to do have come up with estimates of the what the effects of an all-out flu pandemic would be. Like most estimates, these have a significant chance of being wrong. They draw on theoretic models which cannot do much to take into account the most recent advances in science and disease control.
According to the AP, which has gotten hold of documents put together by the federal government and large companies, the country would face devastation. The most important figure in the forecast is the number of people who would die. The information from the news service is “A full-scale pandemic — if it ever comes — could be expected to claim the lives of about 2 percent of those infected, about 2 million Americans.” Ninety million citizens would get sick. The economy would shut down. US economic output could drop 5.5%.
All of the frightening information almost certainly points to a remarkably unlikely case. The government’s ability to partially isolate major diseases geographically has improved since the SARS outbreak six years ago. Vaccines have become more effective and widely available. The Internet is a far superior way to spread detailed information to tens of millions of people than TV, radio, or newspaper ever were.
The press will deluge the public with reports about “worst case scenarios”. But, scenarios are all they are.
Source:
Google Swine Flu Map
Want to follow the spread of the dreaded swine flu? Here is google map page show worldwide cases.-Lou
http://maps.google.com/maps/ms?hl=en&ie=UTF8&msa=0&msid=106484775090296685271.0004681a37b713f6b5950&t=h&ll=19.311143,14.0625&spn=159.0842,360&z=2
http://maps.google.com/maps/ms?hl=en&ie=UTF8&msa=0&msid=106484775090296685271.0004681a37b713f6b5950&t=h&ll=19.311143,14.0625&spn=159.0842,360&z=2
Hyper-Inflationary Depression Ahead: John Williams
I like John Williams, he has reports the actual government economic numbers on his website http://www.shadowstatistics.com , not the fudged ones being released by the authorities. Read this interview, it is eye opening.-Lou
Cycle Revisited
Howard Ruff The Ruff Times
Apr 27, 2009
John Williams publishes the Shadow Government Statistics newsletter (www.shadowstats.com). He is an amazing professional economist with a great grasp of the real economy. He and I have arrived at the same conclusions about almost everything in the economy, despite the fact that we approach it from totally different directions: me from the fundamentals, and he from a real technical and numbers point of view.
............HJR: Right now, Obama is spending money – I won’t say like a drunken sailor, because a drunken sailor spends his own money – but he is throwing trillions of dollars at the economic downturn, assuming it will stimulate us out. My personal opinion is that they are only stimulating government growth, and some day the average person may get a job, but his employer will be Uncle Sam.
What is the end result of creating all this money and throwing it at the problem?
JW: It will not stimulate the economy. The cost of all this is inflation. We will see inflation levels not seen in our lifetime by as early as the end of this year. Eventually we will see liabilities of $65 trillion – more than four times U.S. GDP, more than global GDP. There will be a hyper inflation where the dollar becomes worthless, where the paper is worth more as wall paper than as currency.
HJR: They couldn’t even use the money as toilet paper because it is a bad absorber of water. So we will have hyper-inflation. How can we protect the value of our assets, assuming that people have some discretionary money? Should they buy growth stocks because they are cheap, assuming “buy low, sell high?” Or are there better alternatives?
JW: We are headed into a hyper-inflationary depression that will become a Great Depression. When hyper inflation hits, it will disrupt the normal flow of commerce and turn it into a Great Depression.
What about paper assets based on the dollar? You want to get into something like gold or silver –physical gold or silver, not paper. Perhaps get some assets outside the dollar. It’s a time to preserve your wealth and assets, not to start speculating on the stock market. There is a lot of volatility ahead. Over the long term, gold and silver are your best hedges.
Read More:
http://www.321gold.com/editorials/ruff/ruff042709.html
Cycle Revisited
Howard Ruff The Ruff Times
Apr 27, 2009
John Williams publishes the Shadow Government Statistics newsletter (www.shadowstats.com). He is an amazing professional economist with a great grasp of the real economy. He and I have arrived at the same conclusions about almost everything in the economy, despite the fact that we approach it from totally different directions: me from the fundamentals, and he from a real technical and numbers point of view.
............HJR: Right now, Obama is spending money – I won’t say like a drunken sailor, because a drunken sailor spends his own money – but he is throwing trillions of dollars at the economic downturn, assuming it will stimulate us out. My personal opinion is that they are only stimulating government growth, and some day the average person may get a job, but his employer will be Uncle Sam.
What is the end result of creating all this money and throwing it at the problem?
JW: It will not stimulate the economy. The cost of all this is inflation. We will see inflation levels not seen in our lifetime by as early as the end of this year. Eventually we will see liabilities of $65 trillion – more than four times U.S. GDP, more than global GDP. There will be a hyper inflation where the dollar becomes worthless, where the paper is worth more as wall paper than as currency.
HJR: They couldn’t even use the money as toilet paper because it is a bad absorber of water. So we will have hyper-inflation. How can we protect the value of our assets, assuming that people have some discretionary money? Should they buy growth stocks because they are cheap, assuming “buy low, sell high?” Or are there better alternatives?
JW: We are headed into a hyper-inflationary depression that will become a Great Depression. When hyper inflation hits, it will disrupt the normal flow of commerce and turn it into a Great Depression.
What about paper assets based on the dollar? You want to get into something like gold or silver –physical gold or silver, not paper. Perhaps get some assets outside the dollar. It’s a time to preserve your wealth and assets, not to start speculating on the stock market. There is a lot of volatility ahead. Over the long term, gold and silver are your best hedges.
Read More:
http://www.321gold.com/editorials/ruff/ruff042709.html
Monday, April 27, 2009
Listen To This Week's Radio Show
Listen to this past Sunday's "The Financial Physician" radio show.
Listen Here:
How To Prepare For Flu Pandemic
Well thought out article on how to be prepared for a flu pandemic. It is smart anyway to have water and canned food stockpiled in case of any retail disruption.-Lou
Economics of a Flu Pandemic
The situation will be much like that in wartime. Government will concentrate on keeping key infrastructure operating. Power, sewage, water, emergency services and food distribution. Distribution of most goods through the system will be discontinued, since people can be asymptomatic and still carriers, it will be decided to keep any cross-country travel to a minimum. Most retail outlets will close, either voluntarily or by government fiat. Food will be trucked either into distribution centers or into supermarkets which agree to stay open and will be rationed out exactly as in wartime. As such a black market will certainly appear.
Preparations If you think that such a pandemic is likely to occur then the steps you should take are much the same you would take for any natural disaster. Because the banking system will likely be shut down during the crisis (and bank machines will likely not be restocked even if they do not go down due to loss of system personnel) you should have a stock of money at home to allow you to buy whatever you need which is available.
If you can arrange to have independent power generation, you should do so. You should have a good supply of canned food and water. Make your estimate of how much you need and double or triple it. Others will not have planned and you do not want to find yourself not being able to help friends, family and neighbors. In addition you will want to have tradeables available for the black market.
Money will be a poor second to having goods people want. In this regard stocking up on some medical items such as surgical masks and OTC medicines will be especially wise. I'm not encouraging profiteering, but you will need something you can trade which people want.
Badly.
Read More:
http://www.huffingtonpost.com/ian-welsh/economics-of-a-flu-pandem_b_191409.html
Economics of a Flu Pandemic
The situation will be much like that in wartime. Government will concentrate on keeping key infrastructure operating. Power, sewage, water, emergency services and food distribution. Distribution of most goods through the system will be discontinued, since people can be asymptomatic and still carriers, it will be decided to keep any cross-country travel to a minimum. Most retail outlets will close, either voluntarily or by government fiat. Food will be trucked either into distribution centers or into supermarkets which agree to stay open and will be rationed out exactly as in wartime. As such a black market will certainly appear.
Preparations If you think that such a pandemic is likely to occur then the steps you should take are much the same you would take for any natural disaster. Because the banking system will likely be shut down during the crisis (and bank machines will likely not be restocked even if they do not go down due to loss of system personnel) you should have a stock of money at home to allow you to buy whatever you need which is available.
If you can arrange to have independent power generation, you should do so. You should have a good supply of canned food and water. Make your estimate of how much you need and double or triple it. Others will not have planned and you do not want to find yourself not being able to help friends, family and neighbors. In addition you will want to have tradeables available for the black market.
Money will be a poor second to having goods people want. In this regard stocking up on some medical items such as surgical masks and OTC medicines will be especially wise. I'm not encouraging profiteering, but you will need something you can trade which people want.
Badly.
Read More:
http://www.huffingtonpost.com/ian-welsh/economics-of-a-flu-pandem_b_191409.html
Mexican Doctor: "There is a sense of chaos"
Here is some of the inside poop on what's going on in Mexico regarding the Flu. The country is close to full-fledged panic. Why do I get the feeling that the situation is much worse than has been disclosed by the authorities? -LouReaders in Mexico have been emailing the BBC describing the sense of fear gripping the country as a result of a flu virus outbreak, which has so far claimed more than 100 lives.
I work as a resident doctor in one of the biggest hospitals in Mexico City and sadly, the situation is far from "under control". As a doctor, I realise that the media does not report the truth. Authorities distributed vaccines among all the medical personnel with no results, because two of my partners who worked in this hospital (interns) were killed by this new virus in less than six days even though they were vaccinated as all of us were.
The official number of deaths is 20, nevertheless, the true number of victims are more than 200. I understand that we must avoid to panic, but telling the truth it might be better now to prevent and avoid more deaths.Yeny Gregorio Dávila, Mexico City
I'm a specialist doctor in respiratory diseases and intensive care at the Mexican National Institute of Health. There is a severe emergency over the swine flu here. More and more patients are being admitted to the intensive care unit. Despite the heroic efforts of all staff (doctors, nurses, specialists, etc) patients continue to inevitably die. The truth is that anti-viral treatments and vaccines are not expected to have any effect, even at high doses. It is a great fear among the staff. The infection risk is very high among the doctors and health staff.
There is a sense of chaos in the other hospitals and we do not know what to do. Staff are starting to leave and many are opting to retire or apply for holidays. The truth is that mortality is even higher than what is being reported by the authorities, at least in the hospital where I work it. It is killing three to four patients daily, and it has been going on for more than three weeks. It is a shame and there is great fear here. Increasingly younger patients aged 20 to 30 years are dying before our helpless eyes and there is great sadness among health professionals here.
Antonio Chavez, Mexico City
Read More:
Flu Panic Hits Stock Markets
This Flu thing is making me very nervous. Panic will set in quickly if this thing starts to get out of control. The last thing the world economy and financial markets need is a pandemic, what next locusts? I graduated college with a degree in microbiology, specializing in immunology (it's a long story) so I know something about viruses. This thing could just flame out in a few weeks or cases could skyrocket in exponential growth in very short amount of time. Reminds me of the book and movie "Outbreak", go rent it for a lift.
Flu Defense Tip: Fever is a defense mechanism to fight off viruses, they can't replicate when temperature is over 101 degrees. Studies show that you should not take anti-fever medicine to bring down the fever, you will feel better for a few days but the virus will replicate and your lungs will fill with fluid in a last chance desperate action to flush out the virus. All of a sudden your temperature rises and you die virtually overnight from viral pnemonia.-Lou
Airlines slump, dollar rises on deadly flu outbreak
LONDON (MarketWatch) -- A deadly swine flu outbreak that originated in Mexico took its toll on airlines and cruise operators across the globe on Monday as traders feared a repeat of the SARS epidemic that ravaged Asia.
Mexico City's streets were empty Sunday as an estimated 1,614 people in Mexico contracted the swine flu, killing 103 people.
The Mexican government has closed schools in Mexico City and nearby states, and the U.S. declared a public health emergency
Twenty Americans have caught the disease as well as six Canadians, and suspected cases were found as far as Israel and New Zealand. So far, all the deaths have been limited to Mexico.
The concern is that the disease reportedly has been transmitted not simply from pig to human, but from human to human.
"Given that the virus strain is apparently transmissible from human to human, a feature that none of earlier bird flu outbreaks displayed, there is reason for concern," said analysts from the Swiss brokerage Sarasin.
The swine flu dented markets worldwide, with futures on the Dow Jones Industrial Average shedding 152 points and the FTSE 100 down 0.9% in London.
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Sunday, April 26, 2009
My Book On Amazon.Com
I periodically Google my name to see what pops up (sometimes my blog posts are picked up and published elsewhere on the web). I was startled to find that my book is already on Amazon.com. Seeing it on Amazon made me a bit nervous since the book is less than half complete, Yikes. Publication date is November 20th.-Lou
Check it out:
Economic costs of a flu pandemic
Economic costs of a flu pandemic
(Reuters) - A new strain of flu has killed up to 68 people in Mexico and infected eight in the United States.
Although health officials have stopped short of declaring a pandemic, they expect to find more cases as the flu was spreading between people.
The severity and mortality rate of this new strain has not yet been scientifically established.
However, health experts have long warned that the next flu pandemic was overdue and urged countries around the world to prepare for the dramatic economic impact of such a catastrophe.
Below are estimates of economic costs of such a disaster:
* The World Bank estimated in 2008 that a flu pandemic could cost $3 trillion and result in a nearly 5 percent drop in world gross domestic product. The World Bank has estimated that more than 70 million people could die worldwide in a severe pandemic.
* Australian independent think-tank Lowy Institute for International Policy estimated in 2006 that in the worst-case scenario, a flu pandemic could wipe $4.4 trillion off global economic output.
* Two reports in the United States in 2005 estimated that a flu pandemic could cause a serious recession of the U.S. economy, with immediate costs of between $500 billion and $675 billion.
One report, from the Congressional Budget Office, said hospitals would have difficulty controlling infection and might become sources for spreading the illness.
A second report by New Jersey-based WBB Securities LLC predicted a one-year economic loss of $488 billion and a permanent economic loss of $1.4 trillion to the U.S. economy.
* SARS in 2003 disrupted travel, trade and the workplace and cost the Asia Pacific region $40 billion. It lasted for six months, killing 775 of the 8,000 people it infected in 25 countries.
Inflation In Our Future?
Click on Chart To EnlargeThis what the equivalent of printing money looks like. When this money which is now just sitting on deposit at the Fed begins to enter the economy, inflation will begin to take hold. And by the looks of this chart it will be a serious problem.-Lou
Historic Plunge in Auto Sales
Click on chart to enlargeThis is a chart of the percent change in auto sales year over year. Any wonder they are shutting Detroit down?-Lou
Busy Bank Closure Friday As Four More Banks Are Seized By Regulators
This Friday was the first time since the financial crisis began that four banks were seized on the same day. Look for this pace to accelarate as the year unfolds. I still feel that as many as 300 banks will fail this year. Is your savings within FDIC insurance limits? If not move the excess to another bank ASAP.-LouFour banks closed by regulators as credit crunch shakes out
SAN FRANCISCO (MarketWatch) -- Four banks in Georgia, Michigan, California and Idaho were closed by regulators Friday, costing the Federal Deposit Insurance Corp.'s deposit insurance fund nearly $700 million as the effects of the credit crisis continued rippling throughout the U.S. economy.
SAN FRANCISCO (MarketWatch) -- Four banks in Georgia, Michigan, California and Idaho were closed by regulators Friday, costing the Federal Deposit Insurance Corp.'s deposit insurance fund nearly $700 million as the effects of the credit crisis continued rippling throughout the U.S. economy.
Kennesaw, Ga.-based American Southern Bank marked the 26th bank failure of the year and the fifth in the state of Georgia, the FDIC said. Farmington Hills, Mich.-based Michigan Heritage Bank then became the 27th failure of 2009, followed by the closure of Calabasas, Ca.-based First Bank of Beverly Hills.
Alpharetta, Ga.-based Bank of North Georgia has agreed to assume American Southern Bank's deposits, the FDIC said in a statement. American Southern's one office will reopen as a branch of Bank of North Georgia on Monday.
American Southern had roughly $112.3 million in assets and $104.3 million in deposits as of March 30, according to the FDIC.
Bank of North Georgia has also agreed to buy roughly $31.3 million of the failed bank's assets, the FDIC said. The FDIC estimated the cost of American Southern's failure to its deposit insurance fund will be $41.9 million.
American Southern's collapse marks the 51st bank failure since the credit crisis began last year. During that time, an inordinate amount of the total bank failures have occurred in Georgia.
Saturday, April 25, 2009
Swine Flu Pandemic?
Just what the world needs, a viral pandemic. This is some scary stuff.-Lou
Swine Flu May Be Named Event of ‘International Concern’ by WHO
April 25 (Bloomberg) -- The World Health Organization is set to declare the deadly swine flu virus outbreak in Mexico and the U.S. a global concern, potentially prompting travel restrictions, said a person familiar with the matter.
An emergency committee of the WHO in Geneva will declare the outbreak “a public health event of international concern” in a 4 p.m. teleconference today, said the person, who spoke on condition of anonymity because the meeting is confidential. In response, WHO Director-General Margaret Chan may raise the level of pandemic alert, which could lead to travel restrictions aimed at curbing the disease’s spread.
“These levels of pandemic alert are all signals for action,” said Malik Peiris, a professor of microbiology at the University of Hong Kong, who has studied influenza viruses for more than a decade. “Raising the level of alertness to influenza, especially in returning travelers, would be a relevant thing to do.”
Human-to-human spread of the previously unseen H1N1 swine influenza in Mexico and the U.S. is heightening concern that the virus may spark a pandemic. At least 68 people have died and more than 1,000 have fallen ill with flu-like symptoms in the Mexico City region in the past month, Jose Cordova, Mexico’s Health Minister, told reporters yesterday. The government has shut schools and distributed face masks.
Sari Setiogi, a WHO spokeswoman in Geneva, declined to comment on the agency’s response, saying it will depend on the outcome of today’s meeting.
Closing Theaters
Mexico’s Social Security Institute shut all of the theaters and cultural centers it operates nationwide to avoid spreading the flu strain -- reminiscent of actions implemented during the 2003 SARS outbreak in Asia. Travel curbs imposed there damaged economies throughout the region, where that virus circulated most widely.
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Here is a great website on Pandemics and what you need to know:
Friday, April 24, 2009
Yield Rising In U.S. Treasury Market: Breakdown Ahead?
Click Charts To EnlargeOn top is a chart of the yield on the 30 year U.S. Treasury Bond, the bottom chart is the 10 year. Looks like the bond market is getting a little nervous that the Fed is monetizing 100's of billions of U.S. debt. If the 10 year takes out 3.1% and the 30 year takes out 3.85% we could see a bit of a scare in the U.S. Treasurey market. Rising rates is the last thing the Fed wants right now, but they may be unable to stop the popping of the only bubble that is left.-Lou
China's gold reserves jump, making nation No. 5 holder
China is not stupid. They know that the monetazation of the U.S. deficit will result in a lower dollar. Reserves flowing into gold is reserves not flowing into U.S. dollar denominated treasury bonds. This will only result in more purchases of treasuries by the Fed, a nasty cycle.-Lou
China's gold reserves jump, making nation No. 5 holder
HONG KONG (MarketWatch) -- China has boosted its gold reserves to 1,054 metric tons, according to a Friday report by Xinhua News Agency, which cited Hu Xiaolian, head of the State Administration of Foreign Exchange.
The increase makes China the world's fifth-largest holder of gold, just ahead of Switzerland, and among the six nations plus the International Monetary Fund that have reserves of more than 1,000 metric tons.
Hu said that China's gold reserves had risen by 454 metric tons since 2003 and that the total was being reported to the IMF per the organization's rules.
Hu said that China's gold reserves had risen by 454 metric tons since 2003 and that the total was being reported to the IMF per the organization's rules.
The comments are China's first public acknowledgement in more than five years that its gold reserves had increased.
The new figure is 76% higher than the 600 metric tons reported at the end of March, a level that had been unchanged since December 2002
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U.S. ready to release methodology for stress tests
Investors will be looking deep into each bank's stress test results. You would not want to be holding shares in banks that fair poorly when results are released May 4th. The results will most likely begin to seep into the market prior to the official release. Stock action in the banks will foretell how each bank did as Wall Street's insider trading culture takes advantage of privaleged, non-public information.-Lou
U.S. ready to release methodology for stress tests
WASHINGTON (MarketWatch) -- As the 19 largest U.S. banks pore over the preliminary results of stress tests conducted by government officials, the Federal Reserve is expected to publicly release its methodology for conducting the reviews Friday afternoon.
Some details of the results of the stress tests, including potential losses, are expected to be made public on or around May 4.
However, the methodology to be released Friday could help investors and shareholders evaluate the financial condition of the banks. That could help divide banks into two categories -- financial institutions that will survive with little additional capital and those that will need more assistance.
Throughout the weekend and next week, banks are expected to discuss their preliminary results with regulators -- perhaps challenging some of the calculations -- before the Federal Reserve, Office of Comptroller of the Currency and other regulators provide their final conclusions.
Read More:
http://www.marketwatch.com/news/story/US-ready-release-stress-test/story.aspx?guid=%7BA0F3B386%2DD75B%2D4301%2D96DB%2D5315B135CB98%7D
U.S. ready to release methodology for stress tests
WASHINGTON (MarketWatch) -- As the 19 largest U.S. banks pore over the preliminary results of stress tests conducted by government officials, the Federal Reserve is expected to publicly release its methodology for conducting the reviews Friday afternoon.
Some details of the results of the stress tests, including potential losses, are expected to be made public on or around May 4.
However, the methodology to be released Friday could help investors and shareholders evaluate the financial condition of the banks. That could help divide banks into two categories -- financial institutions that will survive with little additional capital and those that will need more assistance.
Throughout the weekend and next week, banks are expected to discuss their preliminary results with regulators -- perhaps challenging some of the calculations -- before the Federal Reserve, Office of Comptroller of the Currency and other regulators provide their final conclusions.
Read More:
http://www.marketwatch.com/news/story/US-ready-release-stress-test/story.aspx?guid=%7BA0F3B386%2DD75B%2D4301%2D96DB%2D5315B135CB98%7D
Thursday, April 23, 2009
U.S. mass layoffs rise to highest on record
Still bleak economic news in the form of job losses. The economy will not begin to stabilize until we see the number of continuing claims begin to fall.-Lou
U.S. mass layoffs rise to highest on record
NEW YORK (Reuters) – Large-scale U.S. layoffs rose again in March, according to Labor Department data on Thursday, as the economy struggles with what many expect will be the country's worst post-World War II recession.
Last month witnessed 2,933 more mass layoffs, defined as affecting 50 or more workers, than February. This brought the total number of people who lost their jobs in this manner to 299,388, the highest on a record that dates back to 1995.
The U.S. job market has been under severe strain as a crisis first evident in housing spread to the rest of the economy, severely curtailing corporate profits and consumer spending.
Ongoing pain was evident across sectors, with the Labor Department also reporting another record for blanket layoffs within manufacturing.
Mass layoffs now total 31,414 since the start of the recession in December 2007, resulting in the loss of more than 3.2 million jobs. The monthly mass layoff numbers are compiled from establishments with at least 50 initial claims for unemployment insurance filed against them during a five-week period.
Separate data out on Thursday showed the number of continuing unemployment claims climbing to a new record of 6.14 million. Weekly initial jobless claims also rose again, to 640,000.
House panel approves new credit card rules
Congress finally doing something positive for the people. Credit card companies have been preying on the people during the most difficult time for American families since the Great depression. Charging 29.99% interest rates is outrageous.-Lou"The rules that go into effect July 2010 are very protective for consumers, we would only hope that legislation would go further," said Linda Sherry, director of national priorities with advocacy group Consumer Action.
The House bill would take actions such as:
The House bill would take actions such as:
Prohibiting rate hikes on existing balances, except in certain circumstances.
Requiring 45 days notice for interest rate increases and significant contract changes.
Prohibiting "over-the-limit" fees when cardholders have set their own credit limits.
Prohibiting "double cycle" billing, a practice in which interest is charged on debt that has already been paid on time.
Prohibiting fees for payments made over the phone or Internet.
Prohibiting payments from being applied first to a consumer's lowest interest rate balance.
Establishing standard definitions for terms such as "fixed rate" and "prime rate."
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Gm To Shut Down U.S. Plants For Nine Weeks
The U.S. auto industry is one big disaster. Few people are out shopping for new cars and many that are find it hard to get financing. Many people are buying late model used cars coming off lease. This is actually the smart way to buy cars since someone else ate the huge first year depreciation on the vehicle. In my book: "The Financial Physician: How To Cure Your Money Problems and Boost Your Financial Health" (coming to bookstores nationwide this fall), I have dedicated a whole chapter on the right way buy and finance a car. I will put exerpts from that chapter on this blog in the near future, stay tuned.-LouGM Planning To Close Most U.S. Factories For Up To Nine Weeks
General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, three people briefed on the plan said Wednesday. Analysts say the company could be seeing sales decline because of talk about a potential bankruptcy.
The exact dates of the closures are not known, but the people said they will occur around the normal two-week shutdown in July when changes are made from one model year to the next. None of the people wanted to be identified because workers have not yet been told of the shutdowns.
GM spokesman Chris Lee would not comment other than to say the company notifies employees before making any production cuts public.
One of the people briefed on the plan said details are still being worked out. Some of the closings could be staggered between mid-May and the end of July, but the exact number of plants to be idled has not yet been determined.
Another person said a few plants that make more popular models could remain open for part of the shutdown period, but at reduced assembly line speeds.
Thousands of workers could be laid off but would still get most of their pay because their United Auto Workers union contract requires the company to make up much of the difference between state unemployment benefits and their wages. UAW officials at several factories said they have meetings scheduled Thursday and Friday with plant managers and GM human resource officials to discuss production changes.
The shutdown could be catastrophic to many auto parts suppliers that already are near bankruptcy due to previous production cuts. During the shutdown, suppliers couldn't ship parts to GM and would lose critical revenue.
"It's one of those things we've been dreading for a long time," said Jim Gillette, director of financial services at auto-industry consultant CSM Worldwide in Grand Rapids. "It's as bad as its ever been."
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Wednesday, April 22, 2009
Democrats Move Closer to 'Fast Track' for Obama Health Care Plan
This is government out of control. Revamping the entire healthcare system and the minority party is rendered impotent in the debate. This "fast track" legislation jams down our throat left wing socialists policies that will have a long term effect on our country. Only 20 hours of Senate debate allowed? Just like the stimulus bill, no debate, no looking at the details and abracabra socialized medicine in the United States. The U.S. has it's first dictator. We are witnessing the destruction of America.-Lou
Democrats Move Closer to 'Fast Track' for Obama Health Care Plan
FOXNews.com
Wednesday, April 22, 2009
WASHINGTON -- Democrats moved one step closer Wednesday to using a controversial budget procedure to speed passage of President Obama's health care legislation.
House Democrats went on record again in favor of advancing the legislation while allowing only limited debate, which would hobble the ability of Republicans to wrest concessions on one of Obama's top domestic priorities.
By a 227-196 vote, the House affirmed Democrats' plans to move health care legislation under rules that block Republicans in the Senate from being able to slow progress of the legislation -- or even stop it, through a filibuster.
The vote came as senior House and Senate Democrats negotiated the issue in private talks on the 2010 budget. Republicans are passionately against the idea of putting health care on a "fast track," saying it is too important and too complicated to be rushed through Congress under rules permitting just 20 hours of Senate debate.
But the White House is insisting on having the fast-track process -- known as "reconciliation" under the arcane rules governing the congressional budget process -- available to them, though it claims a preference is for a bipartisan measure.
As a practical matter, passing health care measures under fast-track procedures would give Democrats far more control over the details of the legislation. It would reduce the influence of not only Republicans but also conservative Senate Democrats.
But it also would provoke howls of outrage from Republicans claiming that filibuster-proof reconciliation legislation is not intended to be used to pass sweeping measures such as Obama's health care overhaul, which they argue would drastically increase the size of government and the taxes needed to pay for it. It likely would mean that Republicans would abandon the health care effort and engage in scorched-earth tactics against it.
Rep. Paul Ryan, R-Wis., warned that Democrats were preparing to use fast-track legislation "to jam through a government takeover of health care."
Republicans have a sympathetic ear among influential Senate Democrats like Finance Committee Chairman Max Baucus of Montana and Budget Committee Chairman Kent Conrad of North Dakota.
But Democrats say the Republican outrage is misplaced given the GOP's use of fast-track procedures to pass President George W. Bush's 2001 and 2003 tax cut bills.
Democrats Move Closer to 'Fast Track' for Obama Health Care Plan
FOXNews.com
Wednesday, April 22, 2009
WASHINGTON -- Democrats moved one step closer Wednesday to using a controversial budget procedure to speed passage of President Obama's health care legislation.
House Democrats went on record again in favor of advancing the legislation while allowing only limited debate, which would hobble the ability of Republicans to wrest concessions on one of Obama's top domestic priorities.
By a 227-196 vote, the House affirmed Democrats' plans to move health care legislation under rules that block Republicans in the Senate from being able to slow progress of the legislation -- or even stop it, through a filibuster.
The vote came as senior House and Senate Democrats negotiated the issue in private talks on the 2010 budget. Republicans are passionately against the idea of putting health care on a "fast track," saying it is too important and too complicated to be rushed through Congress under rules permitting just 20 hours of Senate debate.
But the White House is insisting on having the fast-track process -- known as "reconciliation" under the arcane rules governing the congressional budget process -- available to them, though it claims a preference is for a bipartisan measure.
As a practical matter, passing health care measures under fast-track procedures would give Democrats far more control over the details of the legislation. It would reduce the influence of not only Republicans but also conservative Senate Democrats.
But it also would provoke howls of outrage from Republicans claiming that filibuster-proof reconciliation legislation is not intended to be used to pass sweeping measures such as Obama's health care overhaul, which they argue would drastically increase the size of government and the taxes needed to pay for it. It likely would mean that Republicans would abandon the health care effort and engage in scorched-earth tactics against it.
Rep. Paul Ryan, R-Wis., warned that Democrats were preparing to use fast-track legislation "to jam through a government takeover of health care."
Republicans have a sympathetic ear among influential Senate Democrats like Finance Committee Chairman Max Baucus of Montana and Budget Committee Chairman Kent Conrad of North Dakota.
But Democrats say the Republican outrage is misplaced given the GOP's use of fast-track procedures to pass President George W. Bush's 2001 and 2003 tax cut bills.
Uncle Sam's low-rate guarantee
Uncle Sam's low-rate guarantee
Government's moves mean mortgage rates likely to stay down all year
CHICAGO (MarketWatch) -- Don't panic if you're trying to refinance and the process is taking longer than you thought: Conforming mortgage rates are likely to stay low for the remainder of the year, according to the Mortgage Bankers Association's chief economist.
With continued government support, rates should hold at their current level over the next six or seven months, said Jay Brinkmann, MBA's chief economist. That's a welcome prediction for the many homeowners who have had difficulty getting someone on the other end of the phone or have experienced long delays waiting to get to the closing table.
"It's unlike past refi waves, where it tends to be that interest rates take a big drop, but don't stay there very long," he said.
Thank Uncle Sam for that.
Read More:
http://www.marketwatch.com/news/story/No-rush-refinance-mortgage-rates/story.aspx?guid=%7BAF2BCC20%2D1180%2D4C85%2D8A0A%2DC66D900AE006%7D
Government's moves mean mortgage rates likely to stay down all year
CHICAGO (MarketWatch) -- Don't panic if you're trying to refinance and the process is taking longer than you thought: Conforming mortgage rates are likely to stay low for the remainder of the year, according to the Mortgage Bankers Association's chief economist.
With continued government support, rates should hold at their current level over the next six or seven months, said Jay Brinkmann, MBA's chief economist. That's a welcome prediction for the many homeowners who have had difficulty getting someone on the other end of the phone or have experienced long delays waiting to get to the closing table.
"It's unlike past refi waves, where it tends to be that interest rates take a big drop, but don't stay there very long," he said.
Thank Uncle Sam for that.
Read More:
http://www.marketwatch.com/news/story/No-rush-refinance-mortgage-rates/story.aspx?guid=%7BAF2BCC20%2D1180%2D4C85%2D8A0A%2DC66D900AE006%7D
Acting Freddie Mac CFO commits suicide
Sad story, little is known at this time why he did it.-Lou
Acting Freddie Mac CFO commits suicide
VIENNA, Va. -- The acting chief financial officer of Freddie Mac, David Kellermann, has apparently committed suicide, Fairfax County Police tell WTOP.
Fairfax County Police spokeswoman Mary Anne Jennings says Kellermann, 41, was found at his Hunter Mill Estates home Wednesday morning.
Jennings says police responded to the home after family members called police around 5 a.m.
"We were called from inside the house to come investigate an apparent suicide," Jennings says.
Because of legal ramifications, Jennings says she can't describe the nature of the suicide. Police on the scene tell WTOP Kellermann's body was found downstairs, but would not say exactly where.
Read More:
http://www.wtopnews.com/?sid=1657033&nid=25
Acting Freddie Mac CFO commits suicide
VIENNA, Va. -- The acting chief financial officer of Freddie Mac, David Kellermann, has apparently committed suicide, Fairfax County Police tell WTOP.
Fairfax County Police spokeswoman Mary Anne Jennings says Kellermann, 41, was found at his Hunter Mill Estates home Wednesday morning.
Jennings says police responded to the home after family members called police around 5 a.m.
"We were called from inside the house to come investigate an apparent suicide," Jennings says.
Because of legal ramifications, Jennings says she can't describe the nature of the suicide. Police on the scene tell WTOP Kellermann's body was found downstairs, but would not say exactly where.
Read More:
http://www.wtopnews.com/?sid=1657033&nid=25
Alan Keyes: Government Will Stage Terror, Declare Martial Law
Scary stuff out of the mouth of Alan Keyes. I have no comment except I hope he is wrong. Watch the video, sorry for the video and sound quality. Skip up to 1:30 that's when he starts talking-Lou
Alan Keyes: Government Will Stage Terror, Declare Martial Law
Former presidential candidate Alan Keyes has given perhaps his most dire warning yet, saying that the Obama administration is preparing to stage terror attacks, declare martial law and cancel the 2012 elections, which is why they are demonizing their political enemies as criminals and terrorists.
Keyes is best known for his performance during the 2000 Republican presidential debates, when he was accredited by many media outlets as being the clear winner during a series of debates with George W. Bush and John McCain.
"It's obvious that they will stop at nothing," Keyes told attendees of a reception in Fort Wayne, adding, "We may wake up one day and there's a series of terrorist attacks, the economy is paralysed....martial law will be declared everywhere in the United States and it won't end until the crisis ends."
Keyes said that Americans should be thankful if they even see another election in 2012, stating, "If we don't wake up and work to see that it happens, we will not see another election."
"The minute they think they can get away with it, they will end this system of government and that is their intention," added Keyes, noting that everyone acting as if the time we are in was just "business as usual" reminds him of the attitude of politicians in the Weimar Republic when Hitler was rising to power or eastern Europe when the Communists were taking over after the second world war.
Keyes said that because the majority of people are decent-minded, they believe others will play by the rules when this simply isn't the case, warning that this attitude will allow evil to take over before we can do anything about it.
"It is so clear hat we have now put a faction in place - they are not playing by the rules and they don't intend to play by the rules - if they were playing by the rules they wouldn't have tried to identify their opposition as criminals," added Keyes, making reference to the recent controversy surrounding the release of the MIAC and Homeland Security reports, which implied that Americans who exercise and are knowledgeable about their constitutional rights are a threat to law enforcement and potential domestic terrorists.
Keyes said that the only solution was from the bottom up because our leaders "are so gutless that they won't even ask that the Constitution be enforced for clear, plain, absolutely unequivocal requirements," and respond meekly with "their lips shut and their hearts terrorized."
Keyes also warned of Obama's agenda to create a civilian security force and said it was part of the ultimate agenda to disarm American citizens and create a police state.
Keyes has been a vocal critic of Obama, warning that he is a radical Communist who is determined to destroy America, and that if his agenda is not stopped then the country as we know it will cease to exist.
Alan Keyes: Government Will Stage Terror, Declare Martial Law
Former presidential candidate Alan Keyes has given perhaps his most dire warning yet, saying that the Obama administration is preparing to stage terror attacks, declare martial law and cancel the 2012 elections, which is why they are demonizing their political enemies as criminals and terrorists.
Keyes is best known for his performance during the 2000 Republican presidential debates, when he was accredited by many media outlets as being the clear winner during a series of debates with George W. Bush and John McCain.
"It's obvious that they will stop at nothing," Keyes told attendees of a reception in Fort Wayne, adding, "We may wake up one day and there's a series of terrorist attacks, the economy is paralysed....martial law will be declared everywhere in the United States and it won't end until the crisis ends."
Keyes said that Americans should be thankful if they even see another election in 2012, stating, "If we don't wake up and work to see that it happens, we will not see another election."
"The minute they think they can get away with it, they will end this system of government and that is their intention," added Keyes, noting that everyone acting as if the time we are in was just "business as usual" reminds him of the attitude of politicians in the Weimar Republic when Hitler was rising to power or eastern Europe when the Communists were taking over after the second world war.
Keyes said that because the majority of people are decent-minded, they believe others will play by the rules when this simply isn't the case, warning that this attitude will allow evil to take over before we can do anything about it.
"It is so clear hat we have now put a faction in place - they are not playing by the rules and they don't intend to play by the rules - if they were playing by the rules they wouldn't have tried to identify their opposition as criminals," added Keyes, making reference to the recent controversy surrounding the release of the MIAC and Homeland Security reports, which implied that Americans who exercise and are knowledgeable about their constitutional rights are a threat to law enforcement and potential domestic terrorists.
Keyes said that the only solution was from the bottom up because our leaders "are so gutless that they won't even ask that the Constitution be enforced for clear, plain, absolutely unequivocal requirements," and respond meekly with "their lips shut and their hearts terrorized."
Keyes also warned of Obama's agenda to create a civilian security force and said it was part of the ultimate agenda to disarm American citizens and create a police state.
Keyes has been a vocal critic of Obama, warning that he is a radical Communist who is determined to destroy America, and that if his agenda is not stopped then the country as we know it will cease to exist.
Now Comes The Wave of "Prime" Delinquencies
A sobering article indeed. Mortgage delinquencies on prime borrowers rose 50% in a month? Yikes. This housing problem seems to be getting worse not better.-Lou
Fannie, Freddie Defaults Rise as Borrowers Cite Lower Income
April 21 (Bloomberg) -- Fannie Mae and Freddie Mac mortgage delinquencies among the most creditworthy homeowners rose 50 percent in a month as borrowers said drops in income or too much debt caused them to fall behind, according to data from federal regulators.
The number of so-called prime borrowers at least 60 days behind on mortgages owned or guaranteed by the companies rose to 743,686 in January, from 497,131 in December, and is almost double the total for October, the Federal Housing Finance Agency said in a report to Congress today.
The number of so-called prime borrowers at least 60 days behind on mortgages owned or guaranteed by the companies rose to 743,686 in January, from 497,131 in December, and is almost double the total for October, the Federal Housing Finance Agency said in a report to Congress today.
Of all borrowers who ended up in default, 34 percent told Fannie and Freddie they were earning less money, about 20 percent cited excessive debt as a reason for missing mortgage payments, and 8.1 percent blamed unemployment, FHFA
Fannie and Freddie are the largest U.S. mortgage-finance companies, owning or guaranteeing 56 percent of all U.S. home loans. Regulators seized Fannie and Freddie in September and forced out top management after examiners said the companies’ capital may be inadequate to weather the worst housing market since the Great Depression.
ETFs (Exchange Traded Funds) have grown by leaps and bounds the last five years. They have become a popular way to play sectors of the market. They are low cost and very liquid. They can be traded just like stocks are are used for both short term trading as well as part of a long-term core portfolio. There is an ETF for virtually every sector of the market. What I like best is the ability to short the market with short and ultra-short index funds. You can also diversify out of the U.S. dollar by buying foreign currency ETFs. Here is a partial list of the more popular ETFs.-Lou
Long ETFs (Bullish)
DIA Dow Jones Industrials
SPY S & P 500
QQQQ Nasdaq
XLF Financials
XLE Energy
USO Oil
XLK Technology
GLD Gold
SLV Silver
SHORT ETFS (Bearish)
SH S & P 500
DOG Dow Jones Industrials
PSQ Nasdaq
ULTRA SHORT (2 or 3 times short)
SDS S & P 500
SKF Financials
DXD Dow Jones Industrials
QID Nasdaq
DUG Oil & Gas
SCO Oil
FOREIGN CURRENCY
FXE Euro
FXF Swiss Franc
FXC Canadian Dollar
FXA Australian Dollar
FXY Japanese Yen
For more information on ETFs as well a complete list of funds go here:
http://finance.yahoo.com/etf
Long ETFs (Bullish)
DIA Dow Jones Industrials
SPY S & P 500
QQQQ Nasdaq
XLF Financials
XLE Energy
USO Oil
XLK Technology
GLD Gold
SLV Silver
SHORT ETFS (Bearish)
SH S & P 500
DOG Dow Jones Industrials
PSQ Nasdaq
ULTRA SHORT (2 or 3 times short)
SDS S & P 500
SKF Financials
DXD Dow Jones Industrials
QID Nasdaq
DUG Oil & Gas
SCO Oil
FOREIGN CURRENCY
FXE Euro
FXF Swiss Franc
FXC Canadian Dollar
FXA Australian Dollar
FXY Japanese Yen
For more information on ETFs as well a complete list of funds go here:
http://finance.yahoo.com/etf
Why Gold Owners Are Targets of the Government
A good piece by Gary North on how and why governments manipulate gold prices lower. His conclusion is that the owners of gold will win big in the end.-LouWhy Gold Owners Are Targets of the Government
If you own gold, you are in a war. You are under assault. You had better figure this out early.
There is a full-scale war against you. The politicians and central bankers who are conducting this war against you are determined to see that you lose money on your investment.
I have written a detailed report on this: The Gold Wars." You can download it free of charge here:
http://www.GaryNorth.com/GoldWars.pdf
The reason why you are under assault is because you have demonstrated by your purchase of gold or a gold-related investment that you do not trust the monetary policies of your nation's central bank. If you are an American, this means you do not trust the monetary policies of the Federal Reserve System. You have taken a step that confirms your lack of trust in the government and its central bank. If you think the government and the central bank will sit quietly, while millions of citizens buy gold as a way to hedge against government and central bank policies, you are terminally naive.
A PERPETUAL WAR
Governments and central banks for almost a century have done whatever they could to keep citizens from using gold as a way to hedge their economic futures against the taxation policies of the government and the inflation policies of central banks.
The war escalated a few days after the outbreak of World War I in August of 1914. At that time, central banks authorized commercial banks to cease redeeming paper money for gold at a fixed rate of exchange. For most of the world, that prohibition extended during the war, after the war, during the Great Depression, during World War II, up to today.
The United States government forbade American citizens from owning gold, beginning in 1933 and extending to the end of 1974.
Today, no government is restrained by a gold standard. No government, no central bank, and no commercial bank is required by law to redeem paper money or bank accounts for gold at a fixed rate of exchange.
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