Whos Making Money

One of the great things about flying first class is that you often get to meet some interesting people. During the early eighties, I found myself on a flight from Los Angles to New York sitting next to an unknown, aspiring, young director named Oliver Stone, who was on his way to pitch a new film idea to potential investors.

Over six hours I enjoyed one of the most interesting conversations of my career, covering jungle combat in Vietnam, the ins and outs of movie making, and the harsh realities of Hollywood style accounting. The movie he was pitching turned out to be the 1987 industry cult classic, Wall Street.

The film sparked one of the greatest guessing games of all time, with everyone attempting to identify the real people behind the fictional characters. The villain, Gordon Gekko, was easy. That was Ivan Boesky, a risk arbitrageur who became the target of one of the first high profile insider trading case. Other links with reality were more obscure, and many real life traders on the floor of the NYSE simply played themselves as extras.

In the sequel, it is much easier to play who’s who, thanks to the financial crash that seems like was happening only yesterday. Gordon Gekko, released from federal prison, this time turns into legendary hedge fund manager John Paulson, whose character turns $100 million into $1.2 billion in a matter of months through buying up cheap credit default swaps on subprime debt. Hank Paulson and Tim Geithner are easy to pick out in a crucial meeting at the New York Fed. The chairman of “Keller Zabel” (Bear Stearns), one “Louis Zabel” (Ace Greenberg), throws himself in front of a train on the Lexington line. Well, this is fiction, after all. The $2 dollar/share sale price gave it all away.

Many people played themselves. The whole CNBC crowd was there, their descriptions of the crash so realistic that I thought it might be archival footage. So were Warren Buffet, Nouriel Roubini, Jim Chanos, and other notables. In fact, Chanos managed to get Stone to change the original script, switching the bad guy role from a hedge fund to Goldman Sachs (GS), known as “Churchill Schwartz,” as it should be. They are easily identified as the Wall Street firm that took out a big short in housing debt just before the crash.

Shia Labeouf does an outstanding job playing Jake Moore, an aggressive, razor sharp, earnest young investment banker. I have known so many like him over the years, both working for me and at competitors, that his performance really rung true. Michael Douglas, who has aged dramatically, seemed to be simply replaying the same role that he has in countless earlier films. To understand their characters, several actors opened up online trading accounts and did quite well in the market, with Shia alone reportedly booking some $20,000 in profits.

There are a few minor flaws in the film. It could have used more editing. There is a mention of “50% leverage” of subprime debt, when the correct figure was 50 times. The Chinese government investor doesn’t act like a real person from the People’s Republic, but as an American with a bad accent. No one has yet figures out the true meaning of Eli Wallach’s repeated bird calls.

In this incredibly target rich environment, Stone seems to take aim at so many enemies, That even an insider myself got confused. However, these are trivial complaints. If you want to have a hoot, go see the film, but expect to provide a simultaneous translation about all of the different instruments and strategies if you bring any non financial types with you.

Not wanting to spoil the ending, I’ll say no more, except that you can buy the original wall Street movie from Amazon by clicking here at http://www.amazon.com/Wall-Street-Charlie-Sheen/dp/B00003CXDB/ref=sr_1_2?s=dvd&ie=UTF8&qid=1285432060&sr=1-2

And thanks to Oliver’s advice, I never got involved in financially backing a film project, despite countless invitations to do. It was the best trade I never did.

To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.

Glenn Beck vs. Fox <b>News</b>: &#39;Tension&#39; Between Beck &amp; Network

Glenn Beck appears on the cover of this weekend's New York Times Magazine in a lengthy profile written by Mark Leibovich. In the profile, Leibovich touches on tensions between Beck and Fox News, the network that catapulted him to ...

Meg Whitman&#39;s Housekeeper -- &#39;Explosive&#39; Allegations | TMZ.com

The housekeeper and Allred will hold a news conference today in Gloria's office at 11 AM PT, "to tell how she suffered as a long-time, Latina household employee in Meg Whitman's home." We're told the housekeeper will be filing a legal ...

Media companies invest in <b>news</b> startup, Ongo - Lost Remote

The New York Times, Washington Post and Gannett have each invested $4 million in a yet-to-launch startup called Ongo, described as a “consumer service for reading and sharing digital news and information from multiple publishers.” ...

benchcraft company scam
benchcraft company scam

Glenn Beck vs. Fox <b>News</b>: &#39;Tension&#39; Between Beck &amp; Network

Glenn Beck appears on the cover of this weekend's New York Times Magazine in a lengthy profile written by Mark Leibovich. In the profile, Leibovich touches on tensions between Beck and Fox News, the network that catapulted him to ...

Meg Whitman&#39;s Housekeeper -- &#39;Explosive&#39; Allegations | TMZ.com

The housekeeper and Allred will hold a news conference today in Gloria's office at 11 AM PT, "to tell how she suffered as a long-time, Latina household employee in Meg Whitman's home." We're told the housekeeper will be filing a legal ...

Media companies invest in <b>news</b> startup, Ongo - Lost Remote

The New York Times, Washington Post and Gannett have each invested $4 million in a yet-to-launch startup called Ongo, described as a “consumer service for reading and sharing digital news and information from multiple publishers.” ...

benchcraft company scam benchcraft company scam

One of the great things about flying first class is that you often get to meet some interesting people. During the early eighties, I found myself on a flight from Los Angles to New York sitting next to an unknown, aspiring, young director named Oliver Stone, who was on his way to pitch a new film idea to potential investors.

Over six hours I enjoyed one of the most interesting conversations of my career, covering jungle combat in Vietnam, the ins and outs of movie making, and the harsh realities of Hollywood style accounting. The movie he was pitching turned out to be the 1987 industry cult classic, Wall Street.

The film sparked one of the greatest guessing games of all time, with everyone attempting to identify the real people behind the fictional characters. The villain, Gordon Gekko, was easy. That was Ivan Boesky, a risk arbitrageur who became the target of one of the first high profile insider trading case. Other links with reality were more obscure, and many real life traders on the floor of the NYSE simply played themselves as extras.

In the sequel, it is much easier to play who’s who, thanks to the financial crash that seems like was happening only yesterday. Gordon Gekko, released from federal prison, this time turns into legendary hedge fund manager John Paulson, whose character turns $100 million into $1.2 billion in a matter of months through buying up cheap credit default swaps on subprime debt. Hank Paulson and Tim Geithner are easy to pick out in a crucial meeting at the New York Fed. The chairman of “Keller Zabel” (Bear Stearns), one “Louis Zabel” (Ace Greenberg), throws himself in front of a train on the Lexington line. Well, this is fiction, after all. The $2 dollar/share sale price gave it all away.

Many people played themselves. The whole CNBC crowd was there, their descriptions of the crash so realistic that I thought it might be archival footage. So were Warren Buffet, Nouriel Roubini, Jim Chanos, and other notables. In fact, Chanos managed to get Stone to change the original script, switching the bad guy role from a hedge fund to Goldman Sachs (GS), known as “Churchill Schwartz,” as it should be. They are easily identified as the Wall Street firm that took out a big short in housing debt just before the crash.

Shia Labeouf does an outstanding job playing Jake Moore, an aggressive, razor sharp, earnest young investment banker. I have known so many like him over the years, both working for me and at competitors, that his performance really rung true. Michael Douglas, who has aged dramatically, seemed to be simply replaying the same role that he has in countless earlier films. To understand their characters, several actors opened up online trading accounts and did quite well in the market, with Shia alone reportedly booking some $20,000 in profits.

There are a few minor flaws in the film. It could have used more editing. There is a mention of “50% leverage” of subprime debt, when the correct figure was 50 times. The Chinese government investor doesn’t act like a real person from the People’s Republic, but as an American with a bad accent. No one has yet figures out the true meaning of Eli Wallach’s repeated bird calls.

In this incredibly target rich environment, Stone seems to take aim at so many enemies, That even an insider myself got confused. However, these are trivial complaints. If you want to have a hoot, go see the film, but expect to provide a simultaneous translation about all of the different instruments and strategies if you bring any non financial types with you.

Not wanting to spoil the ending, I’ll say no more, except that you can buy the original wall Street movie from Amazon by clicking here at http://www.amazon.com/Wall-Street-Charlie-Sheen/dp/B00003CXDB/ref=sr_1_2?s=dvd&ie=UTF8&qid=1285432060&sr=1-2

And thanks to Oliver’s advice, I never got involved in financially backing a film project, despite countless invitations to do. It was the best trade I never did.

To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.

benchcraft company scam

Glenn Beck vs. Fox <b>News</b>: &#39;Tension&#39; Between Beck &amp; Network

Glenn Beck appears on the cover of this weekend's New York Times Magazine in a lengthy profile written by Mark Leibovich. In the profile, Leibovich touches on tensions between Beck and Fox News, the network that catapulted him to ...

Meg Whitman&#39;s Housekeeper -- &#39;Explosive&#39; Allegations | TMZ.com

The housekeeper and Allred will hold a news conference today in Gloria's office at 11 AM PT, "to tell how she suffered as a long-time, Latina household employee in Meg Whitman's home." We're told the housekeeper will be filing a legal ...

Media companies invest in <b>news</b> startup, Ongo - Lost Remote

The New York Times, Washington Post and Gannett have each invested $4 million in a yet-to-launch startup called Ongo, described as a “consumer service for reading and sharing digital news and information from multiple publishers.” ...

benchcraft company scam bench craft company rip off

Glenn Beck vs. Fox <b>News</b>: &#39;Tension&#39; Between Beck &amp; Network

Glenn Beck appears on the cover of this weekend's New York Times Magazine in a lengthy profile written by Mark Leibovich. In the profile, Leibovich touches on tensions between Beck and Fox News, the network that catapulted him to ...

Meg Whitman&#39;s Housekeeper -- &#39;Explosive&#39; Allegations | TMZ.com

The housekeeper and Allred will hold a news conference today in Gloria's office at 11 AM PT, "to tell how she suffered as a long-time, Latina household employee in Meg Whitman's home." We're told the housekeeper will be filing a legal ...

Media companies invest in <b>news</b> startup, Ongo - Lost Remote

The New York Times, Washington Post and Gannett have each invested $4 million in a yet-to-launch startup called Ongo, described as a “consumer service for reading and sharing digital news and information from multiple publishers.” ...

bench craft company rip off bench craft company rip off

Glenn Beck vs. Fox <b>News</b>: &#39;Tension&#39; Between Beck &amp; Network

Glenn Beck appears on the cover of this weekend's New York Times Magazine in a lengthy profile written by Mark Leibovich. In the profile, Leibovich touches on tensions between Beck and Fox News, the network that catapulted him to ...

Meg Whitman&#39;s Housekeeper -- &#39;Explosive&#39; Allegations | TMZ.com

The housekeeper and Allred will hold a news conference today in Gloria's office at 11 AM PT, "to tell how she suffered as a long-time, Latina household employee in Meg Whitman's home." We're told the housekeeper will be filing a legal ...

Media companies invest in <b>news</b> startup, Ongo - Lost Remote

The New York Times, Washington Post and Gannett have each invested $4 million in a yet-to-launch startup called Ongo, described as a “consumer service for reading and sharing digital news and information from multiple publishers.” ...

benchcraft company scam

personal finance and budgeting

It's hard to beat an excel spreadsheet for quickly shifting between a granular and top-level view of your personal finance situation. Here's reader Lauren's account balance spreadsheet she made to keep track of her expenditures, past, present, and future, and itemize her budget.

Download Lauren's Budgeter (XLS)

1. Scroll to the current month.

2. Enter your current balance in the "Starting Balance" box at the top left.

3. Enter your credits and debits on the appropriate dates they will hit your account. Use positive numbers for money getting added credits, and negative numbers for when it's getting taken away.

4. The green "Total" will change to reflect your total overall balance.

Use it as is, compare it to your own, or mod to fit your own needs.

Lauren says it's "quite nifty," and also uses it as a calendar.

Here's the excel code for the totaler for those who like to look under the hood:

TODAY();_8_10)

+SUMIF(_9_10d;"

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full big white booty

Middle East Countries Race for Nuclear Power

(Sept. 24) -- Nations in the Middle East, rich in oil, natural gas and volatile politics, are pursuing nuclear power with a headlong vigor that gives some analysts pause.

Apple&#39;s MobileMe <b>News</b> details how iWork for iPad works with iDisk

The details were posted on MobileMe News, the blog of the MobileMe team. Windows users can point a browser to me.com/idisk and upload existing Microsoft Office documents. Once the documents are in the cloud, they can be opened from the ...

The American Spectator : Good <b>News</b>

Hard to avoid the good news these days. A few days back we learned that the war in Iraq was over. Well, sort of, anyway. The President explained that U.S. troops were done with combat but would remain in a support and advisory capacity. ...

Middle East Countries Race for Nuclear Power

(Sept. 24) -- Nations in the Middle East, rich in oil, natural gas and volatile politics, are pursuing nuclear power with a headlong vigor that gives some analysts pause.

Apple&#39;s MobileMe <b>News</b> details how iWork for iPad works with iDisk

The details were posted on MobileMe News, the blog of the MobileMe team. Windows users can point a browser to me.com/idisk and upload existing Microsoft Office documents. Once the documents are in the cloud, they can be opened from the ...

The American Spectator : Good <b>News</b>

Hard to avoid the good news these days. A few days back we learned that the war in Iraq was over. Well, sort of, anyway. The President explained that U.S. troops were done with combat but would remain in a support and advisory capacity. ...

big white booty

Middle East Countries Race for Nuclear Power

(Sept. 24) -- Nations in the Middle East, rich in oil, natural gas and volatile politics, are pursuing nuclear power with a headlong vigor that gives some analysts pause.

Apple&#39;s MobileMe <b>News</b> details how iWork for iPad works with iDisk

The details were posted on MobileMe News, the blog of the MobileMe team. Windows users can point a browser to me.com/idisk and upload existing Microsoft Office documents. Once the documents are in the cloud, they can be opened from the ...

The American Spectator : Good <b>News</b>

Hard to avoid the good news these days. A few days back we learned that the war in Iraq was over. Well, sort of, anyway. The President explained that U.S. troops were done with combat but would remain in a support and advisory capacity. ...

managing your personal finance

A lot of people are unemployed in this country, 14.9 million as of the latest BLS release a couple of days ago, and for some of those people, this has become what is coyly referred to as ‘the entrepreneurial moment’, the ‘ah-ha’ light-bulb realization that if they don’t create a job for themselves, there will be no job, no income, no mortgage payment, no groceries, no light, no heat, no gas for the car, nuthin’. Since 2008, over 5 million jobs have been lost, many of which will never, ever come back.

Welcome to Labor Day, 2010.

Some of these ‘lost’ jobs have been outsourced overseas. Some have just been cut. Some companies are using their cash to invest in technologies which will insure that they will never have to hire these folks back, at least not with the skills that they had when they were given a cardboard box and five minutes to empty their desks and get out the front door.

If there are people out there who have or are considering building their own ‘life raft’ it would surprise absolutely no one; though for some folks, entrepreneurship is so scary, they can’t imagine anything other than hiring on to someone else’s deal, no matter how horrible it is.

Sometimes, though, you don’t have any choice. One thing to remember, is that many of the most successful entrepreneurs in this country have not invented fuel cells, high tech photovoltaic films, high speed transit, a cure for cancer (or the common cold), or the answer for peace in our time. They are cleaning houses, making pizza, fixing computers/ipods/iphones/cars/furnaces/plumbing/household electric, managing other people’s systems, giving advice, making clothing for people who are outside the common size ranges in the stores.

Not exactly operating a basement boiler room financial situation, doing crazy financial stuff, or stirring up the pot on international finance.

At its most basic, it’s local; at its most interesting, it might even be regional. But it is still person to person; it’s still me doing business with you. Face to face. My hands and brain doing stuff to help you. Some of this is amazingly low tech – some of it is almost medieval.

This week’s fascinating story comes from the New York Times about a family of knife sharpeners who have thrown a new curve on this ancient of trades by providing two sets of knives to butchers, restaurants, food services (in Yankee Stadium, for heaven’s sake), and calling on a weekly basis to pick up the used set and providing the newly sharpened set.

Anyone who does any real work in a kitchen at all knows that your most important tools are a good set of knives and a good frying and sauce pan. With those three things, you can do almost anything (and yes, I have made cookies in the bottom of a frying pan; thank you for asking), but if your knives are dull, cutting anything becomes horrible work and you can injure yourself badly. “Every week, the company visits more than 800 clients and collects more than 8,000 knives to be replaced with freshly sharpened blades. The service costs $2.50 to $3.50 per knife.

The business started servicing mainly butchers and meatpackers, in territories handed down from father to son. To preserve the business for his children, Mr. Ambrosi expanded it to restaurants and even Yankee Stadium, in some cases deviating from long-held tradition. Many cooks and chefs take personal pride in their knives and their ability to maintain them, and would hesitate to release them to anyone else’s care. But sharpening a knife takes time and skill — and not every chef has both.”

Having a skill and honing (sorry) that so that you can provide something that someone else can not (or will not) do, whether it is being an electrician, a plumber, a welder, a knife sharpener, a shoe repair shop, a hair dresser, whatever it is – can make the difference in today’s international economy between being able to make a living for your family and holding your head in your hands. One of America’s biggest mistakes as far as education is concerned (and others might just argue with me) is that we “jumped the shark” in terms of absorbing people coming out of colleges.

Since the 1980s, kids coming out of college have had fewer and lower level opportunities. Jobs which absorbed high schoolers, now require a 2 or 4 year degree; job that required a college degree started to require a masters degree; some jobs which required a college degree and some internal training, now require advanced degrees – I even know of jobs that now require a legal degree to be hired which 30 years ago required a college degree and passing a test. So much emphasis was placed on going to college – and vocational training and the trades were so downgraded and derided that any family with a kid with two brain cells to rub together would not even THINK of encouraging that kid to go into the trades, unless the family was already in the business.

We’re now at a situation where companies, which shot themselves in the foot by sending skilled jobs overseas and now want to bring them back because costs overseas have risen and/or they are tired of their intellectual property being stolen and sold to others, can’t find the skills they want. Not to put too fine a point on this – those same companies have not done any training themselves; nor are they willing to do so. They got into the habit a long time ago of pushing the investment in training off on others. The government for one.

The other, which has willingly and consistently provided training in the trades for years are the unions. Organized labor. The Great Satan of the industrial world. The guys everyone loves to hate. The organizations which, according to many employers, stand in their way of succeeding in business.

But still, the organization which has kept skills alive in this country despite outsourcing, overseas sourcing, attacks from business and government, and general antipathy from great swaths of the American population in certain parts of the country.

So. On this frankly very sad Labor Day, 2010, I’d like to thank the American Labor Movement for remembering what America and Americans do best and what we need to do on an increasing basis if we are to put people back to work – or if we are to have businesses to call our own: Do stuff with our hands.

Thanks folks. You’re not perfection, but you’re willing to invest in Americans.

Happy Labor Day

Are you a fan of the GTD personal productivity system? Well if you like "Getting Things Done," here's GFD, Getting Finances Done, which shows you how to map David Allen's same principals to managing your personal finance and achieving your financial goals.

Applying GTD principles to your personal finances - Part 1 [Getting Finances Done]

government big white booty

<b>News</b> - Lindsay Lohan Going Back to Jail Until Oct. 22 - Celebrity <b>...</b>

Los Angeles Superior Court Judge Elden S. Fox revokes her probation for failing at least one drug test.

FARC commander &#39;Mono Jojoy&#39; killed - Colombia <b>news</b> | Colombia Reports

One of the FARC's most senior commanders, Mono Jojoy, was killed by Colombian state forces, several media said on Thursday. The news is not yet confirmed by the authorities.

Bad <b>news</b> for green technology | Watts Up With That?

Super magnet production has also been shipped over to China http://www.chinamagnet.in/i-News-229212/The-development-and-applications-of-Rare-Earth-Permanent-Magnetic-Materials-244616.html. Over the last 10 to 20 years companies have ...

<b>News</b> - Lindsay Lohan Going Back to Jail Until Oct. 22 - Celebrity <b>...</b>

Los Angeles Superior Court Judge Elden S. Fox revokes her probation for failing at least one drug test.

FARC commander &#39;Mono Jojoy&#39; killed - Colombia <b>news</b> | Colombia Reports

One of the FARC's most senior commanders, Mono Jojoy, was killed by Colombian state forces, several media said on Thursday. The news is not yet confirmed by the authorities.

Bad <b>news</b> for green technology | Watts Up With That?

Super magnet production has also been shipped over to China http://www.chinamagnet.in/i-News-229212/The-development-and-applications-of-Rare-Earth-Permanent-Magnetic-Materials-244616.html. Over the last 10 to 20 years companies have ...

big white booty

<b>News</b> - Lindsay Lohan Going Back to Jail Until Oct. 22 - Celebrity <b>...</b>

Los Angeles Superior Court Judge Elden S. Fox revokes her probation for failing at least one drug test.

FARC commander &#39;Mono Jojoy&#39; killed - Colombia <b>news</b> | Colombia Reports

One of the FARC's most senior commanders, Mono Jojoy, was killed by Colombian state forces, several media said on Thursday. The news is not yet confirmed by the authorities.

Bad <b>news</b> for green technology | Watts Up With That?

Super magnet production has also been shipped over to China http://www.chinamagnet.in/i-News-229212/The-development-and-applications-of-Rare-Earth-Permanent-Magnetic-Materials-244616.html. Over the last 10 to 20 years companies have ...

foreclosure search

Need-to-know No. 1: The fine print associated with the type of auction you're attending. If you plan to score your bargain-basement unit at the foreclosure auction on the steps of the county courthouse, consult with a local real estate attorney and make sure you conduct an exhaustive title search before you make your bid. It's possible to purchase one of these properties and still have to contend with other liens still on the property, like second (or third) mortgages, back property taxes and Homeowners Association (HOA) dues unpaid by the former owner.



Under the law in nearly half of the states, when you buy a place at the foreclosure auction, the former owner has anywhere from six months to a year after the auction to "redeem" their rights to the property, meaning they have the legal right to buy it back from you.



If you're buying the property at an auction of REO properties (Real Estate Owned by the bank), make sure you read 100% of the terms and conditions of the auction. Many auctions will allow you to get a property inspection -- go figure -- so you should. They will also often allow you to use a mortgage to finance your purchase, which the courthouse foreclosure auctions do not.



However, most of these REO auctions do take a non-refundable cash deposit from the auction winner, and do add some sort of "buyer's premium" on top of the winning bid -- some as high as 5%. That extra cash can make it tougher to get positive cash flow out of the place.



Get clear on the fine print before you buy at any property auction.



Need-to-know No. 2: Your numbers. Many a wanna-be investor thinks, "Hey -- it's a $50,000 condo. If I get $1,000 in rent -- I'll be making cash hand-over-fist." And there ends their cash flow analysis. Seasoned investors know, though, that there are always more line items to the story. If you're thinking about investing in even the cheapest of cheap condos, you still need to create a written cash flow projection, or pro forma, to see how feasible it is that the investment will actually pay off.



If you plan to finance your investment with a mortgage, you must factor in the mortgage payment, mortgage insurance (if you put less than 20% down), and closing costs. And, even if you are able to buy a cheap condo with cash, you still need to take into account the costs of HOA dues, property taxes, landlord's insurance, any utilities landlords pay in your neck of the woods (like water and gas), a property manager and repairs.



You should also include an allowance for long-term maintenance, possible special assessments by the HOA and vacancies -- every landlord deals with occasional months where no rental payments come in. And you should definitely have a chat with your tax adviser about the deductions you should factor in, and the income tax you may incur on the rental income.



Then, offset that -- on paper -- by the average rents being received by other landlords in the complex or the area. If you're only making $3.75 per month in the projections, you might decide that other investments are more sensible.



Need-to-know No. 3: Whether the HOA and the complex are healthy. Sacramento, Calif., real estate agent Stacey Wilson thought she'd scored, big-time, when she invested in a two-bedroom, two-and-a-half bath condo for $40,000 in September of 2009, especially since the place had gone for $175,000 in 2007. After closing, though, it quickly dawned on Wilson that the complex and the HOA were both broke.



"Take a look around and see whether things are in working order," Wilson advises prospective condo investors. "When things are broken, find out how long they've been broken." Wilson's complex has two pools and a sauna, but "none of them works -- and they haven't worked in years."



Also, Wilson's unit is in an HOA riddled with a sky-high rate of delinquent dues, so it can't afford to repair the pools and sauna, nor does it have the cash to replace the wood shake roofs on all the buildings. "We only have a couple of years of roof life left, and now the hazard insurance company is threatening to drop our coverage, because they see the wood roof as a fire hazard," Wilson explains. "It's really important to read every page of the HOA disclosures you get during escrow, and make sure they're solvent. If the HOA is broke, it can create a domino effect of problems."



Need-to-know No. 4: The landlord-tenant laws and restrictions of your city or HOA. Many urban areas, in particular, have rent-control and eviction-control laws that limit your ability to raise the rent, or to evict a tenant without having a particularly strong reason for doing so -- sometimes even requiring landlords to pay tenants to move out.



And because the percentage of owner-occupied units impacts the ability of an HOA's members to resell and refinance their homes (many banks won't offer mortgages in complexes with fewer than 75% of the units being owner-occupied), many HOAs put a cap on how many units can be rented out. If you're planning to buy the condo as a rental property, it behooves you to know how feasible and how desirable it is to be a landlord in that complex and town before you buy.



Need-to-know No. 5: Where goes the neighborhood. Wilson's foray into dirt-cheap condo investing turned into a true adventure when circumstances led to her moving into the property she thought she'd never live in. Turned out, the nighttime goings-on in her new neighborhood were unlike anything she ever expected from her exclusively daytime experiences in the area. Before investing in a discount condo, Wilson advises, act like someone house hunting for their personal residence, and "go by the place at night and on the weekends. You'd be surprised at how different a place can be at night."



The fact that a condo is so inexpensive might actually be a signal that the neighborhood may not be one you want to spend much time in, even as a landlord. Wilson says, with 20/20 hindsight, "If it's really cheap, it's probably not in the best place."

I think that if you trace HAMP to the source you will find this was an invention of the bureaucrats at the Treasury who fooled both the public (and probably Obama, perhaps the new Secretary) and even the banksters. If you read the implementing instructions it becomes clear this is a maze that few can find an ‘approved’ entry to or exit from. Just the ‘dictionary’ was 136 lines with 10 cells on an Excel spreadsheet (190kb). I was looking at the fifth revision.

HAMP did forestall a few foreclosures, but it took jumping through hoops. Only a small sum went to the service folks and the rules were changed quarterly. On the banks side they wanted it to work as it could put off the loss while it was in HAMP. It was badly implemented because it was like that pea and shell game. I got a headache reading through all the ‘rules’ and categories and realized this lacked a hard and fast rule. It was ‘optional’ for the bank and the borrower.

It is fair to blame the banksters for most of the failure, but the Treasury was most at fault and those folks who created it are the crats who are not swept away with a changed administration. These critters do either retire or seek jobs with those who must figure out the rules.

I’m giving Obama and maybe even Timothy a pass on this one.. they had a lot on the plate and let the crats do the chores. Congress is who I’ll blame.. they should have never raised the lending limits that Fannie and Freddie could provide as that’s what sent this bubble aloft. People have to have jobs that pay enough to pay these loans. They did not and even as we see from this tale.. people have tried and can’t due to a host of issues.. but folks… a $2,600@ payment is only part of home ownership. You need a net income of $10,000@ month to service such a debt. Clearly a lot of folks were to blame.

‘Wanting’ this house is not planning so as to afford it. People acted imprudently and now we’re ALL going to pay and pay and pay. The lawyers and banksters never pay, which is why they need to be REGULATED. That is worth getting angry over. Home ownership was never (after maintenance, taxes and insurance) going to appreciate more than 1-2% a year.. if you maintain and update. The whole idea of buying houses that will eat your income to the extent these folks have was NUTS.

Yes it was also a stall tactic, but that’s not a bad thing given the mess we’re all in. Congress are who we need to rail on. Fannie and Freddy need to go away. Local banking isolated from the ‘products’ is what we need back. They worked and worked with the borrower. Today the investors are detached and suckers too.

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"Katy Perry fans will still be able to view the video on You Tube," says a show rep.

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Aaron Brown said in an interview that he is unhappy with the current state of cable news. Brown, who was a prominent anchor on CNN from 2001-2005 and now teaches journalism at Arizona State University, spoke to the online website ...

&#39;Fox <b>News</b> Sunday&#39; to Host Kentucky Senate Debate - NYTimes.com

Jack Conway, Kentucky's attorney general and the Democratic candidate for Senate, and Rand Paul, the Republican nominee, have agreed to a live debate on "Fox News Sunday" on Oct. 3.

robert shumake

<b>News</b> - Katy Perry&#39;s Sesame Street Segment Cut Over Her Cleavage <b>...</b>

"Katy Perry fans will still be able to view the video on You Tube," says a show rep.

Aaron Brown: Cable <b>News</b> Is Too Political

Aaron Brown said in an interview that he is unhappy with the current state of cable news. Brown, who was a prominent anchor on CNN from 2001-2005 and now teaches journalism at Arizona State University, spoke to the online website ...

&#39;Fox <b>News</b> Sunday&#39; to Host Kentucky Senate Debate - NYTimes.com

Jack Conway, Kentucky's attorney general and the Democratic candidate for Senate, and Rand Paul, the Republican nominee, have agreed to a live debate on "Fox News Sunday" on Oct. 3.

Need-to-know No. 1: The fine print associated with the type of auction you're attending. If you plan to score your bargain-basement unit at the foreclosure auction on the steps of the county courthouse, consult with a local real estate attorney and make sure you conduct an exhaustive title search before you make your bid. It's possible to purchase one of these properties and still have to contend with other liens still on the property, like second (or third) mortgages, back property taxes and Homeowners Association (HOA) dues unpaid by the former owner.



Under the law in nearly half of the states, when you buy a place at the foreclosure auction, the former owner has anywhere from six months to a year after the auction to "redeem" their rights to the property, meaning they have the legal right to buy it back from you.



If you're buying the property at an auction of REO properties (Real Estate Owned by the bank), make sure you read 100% of the terms and conditions of the auction. Many auctions will allow you to get a property inspection -- go figure -- so you should. They will also often allow you to use a mortgage to finance your purchase, which the courthouse foreclosure auctions do not.



However, most of these REO auctions do take a non-refundable cash deposit from the auction winner, and do add some sort of "buyer's premium" on top of the winning bid -- some as high as 5%. That extra cash can make it tougher to get positive cash flow out of the place.



Get clear on the fine print before you buy at any property auction.



Need-to-know No. 2: Your numbers. Many a wanna-be investor thinks, "Hey -- it's a $50,000 condo. If I get $1,000 in rent -- I'll be making cash hand-over-fist." And there ends their cash flow analysis. Seasoned investors know, though, that there are always more line items to the story. If you're thinking about investing in even the cheapest of cheap condos, you still need to create a written cash flow projection, or pro forma, to see how feasible it is that the investment will actually pay off.



If you plan to finance your investment with a mortgage, you must factor in the mortgage payment, mortgage insurance (if you put less than 20% down), and closing costs. And, even if you are able to buy a cheap condo with cash, you still need to take into account the costs of HOA dues, property taxes, landlord's insurance, any utilities landlords pay in your neck of the woods (like water and gas), a property manager and repairs.



You should also include an allowance for long-term maintenance, possible special assessments by the HOA and vacancies -- every landlord deals with occasional months where no rental payments come in. And you should definitely have a chat with your tax adviser about the deductions you should factor in, and the income tax you may incur on the rental income.



Then, offset that -- on paper -- by the average rents being received by other landlords in the complex or the area. If you're only making $3.75 per month in the projections, you might decide that other investments are more sensible.



Need-to-know No. 3: Whether the HOA and the complex are healthy. Sacramento, Calif., real estate agent Stacey Wilson thought she'd scored, big-time, when she invested in a two-bedroom, two-and-a-half bath condo for $40,000 in September of 2009, especially since the place had gone for $175,000 in 2007. After closing, though, it quickly dawned on Wilson that the complex and the HOA were both broke.



"Take a look around and see whether things are in working order," Wilson advises prospective condo investors. "When things are broken, find out how long they've been broken." Wilson's complex has two pools and a sauna, but "none of them works -- and they haven't worked in years."



Also, Wilson's unit is in an HOA riddled with a sky-high rate of delinquent dues, so it can't afford to repair the pools and sauna, nor does it have the cash to replace the wood shake roofs on all the buildings. "We only have a couple of years of roof life left, and now the hazard insurance company is threatening to drop our coverage, because they see the wood roof as a fire hazard," Wilson explains. "It's really important to read every page of the HOA disclosures you get during escrow, and make sure they're solvent. If the HOA is broke, it can create a domino effect of problems."



Need-to-know No. 4: The landlord-tenant laws and restrictions of your city or HOA. Many urban areas, in particular, have rent-control and eviction-control laws that limit your ability to raise the rent, or to evict a tenant without having a particularly strong reason for doing so -- sometimes even requiring landlords to pay tenants to move out.



And because the percentage of owner-occupied units impacts the ability of an HOA's members to resell and refinance their homes (many banks won't offer mortgages in complexes with fewer than 75% of the units being owner-occupied), many HOAs put a cap on how many units can be rented out. If you're planning to buy the condo as a rental property, it behooves you to know how feasible and how desirable it is to be a landlord in that complex and town before you buy.



Need-to-know No. 5: Where goes the neighborhood. Wilson's foray into dirt-cheap condo investing turned into a true adventure when circumstances led to her moving into the property she thought she'd never live in. Turned out, the nighttime goings-on in her new neighborhood were unlike anything she ever expected from her exclusively daytime experiences in the area. Before investing in a discount condo, Wilson advises, act like someone house hunting for their personal residence, and "go by the place at night and on the weekends. You'd be surprised at how different a place can be at night."



The fact that a condo is so inexpensive might actually be a signal that the neighborhood may not be one you want to spend much time in, even as a landlord. Wilson says, with 20/20 hindsight, "If it's really cheap, it's probably not in the best place."

I think that if you trace HAMP to the source you will find this was an invention of the bureaucrats at the Treasury who fooled both the public (and probably Obama, perhaps the new Secretary) and even the banksters. If you read the implementing instructions it becomes clear this is a maze that few can find an ‘approved’ entry to or exit from. Just the ‘dictionary’ was 136 lines with 10 cells on an Excel spreadsheet (190kb). I was looking at the fifth revision.

HAMP did forestall a few foreclosures, but it took jumping through hoops. Only a small sum went to the service folks and the rules were changed quarterly. On the banks side they wanted it to work as it could put off the loss while it was in HAMP. It was badly implemented because it was like that pea and shell game. I got a headache reading through all the ‘rules’ and categories and realized this lacked a hard and fast rule. It was ‘optional’ for the bank and the borrower.

It is fair to blame the banksters for most of the failure, but the Treasury was most at fault and those folks who created it are the crats who are not swept away with a changed administration. These critters do either retire or seek jobs with those who must figure out the rules.

I’m giving Obama and maybe even Timothy a pass on this one.. they had a lot on the plate and let the crats do the chores. Congress is who I’ll blame.. they should have never raised the lending limits that Fannie and Freddie could provide as that’s what sent this bubble aloft. People have to have jobs that pay enough to pay these loans. They did not and even as we see from this tale.. people have tried and can’t due to a host of issues.. but folks… a $2,600@ payment is only part of home ownership. You need a net income of $10,000@ month to service such a debt. Clearly a lot of folks were to blame.

‘Wanting’ this house is not planning so as to afford it. People acted imprudently and now we’re ALL going to pay and pay and pay. The lawyers and banksters never pay, which is why they need to be REGULATED. That is worth getting angry over. Home ownership was never (after maintenance, taxes and insurance) going to appreciate more than 1-2% a year.. if you maintain and update. The whole idea of buying houses that will eat your income to the extent these folks have was NUTS.

Yes it was also a stall tactic, but that’s not a bad thing given the mess we’re all in. Congress are who we need to rail on. Fannie and Freddy need to go away. Local banking isolated from the ‘products’ is what we need back. They worked and worked with the borrower. Today the investors are detached and suckers too.

robert shumake

<b>News</b> - Katy Perry&#39;s Sesame Street Segment Cut Over Her Cleavage <b>...</b>

"Katy Perry fans will still be able to view the video on You Tube," says a show rep.

Aaron Brown: Cable <b>News</b> Is Too Political

Aaron Brown said in an interview that he is unhappy with the current state of cable news. Brown, who was a prominent anchor on CNN from 2001-2005 and now teaches journalism at Arizona State University, spoke to the online website ...

&#39;Fox <b>News</b> Sunday&#39; to Host Kentucky Senate Debate - NYTimes.com

Jack Conway, Kentucky's attorney general and the Democratic candidate for Senate, and Rand Paul, the Republican nominee, have agreed to a live debate on "Fox News Sunday" on Oct. 3.

robert shumake

<b>News</b> - Katy Perry&#39;s Sesame Street Segment Cut Over Her Cleavage <b>...</b>

"Katy Perry fans will still be able to view the video on You Tube," says a show rep.

Aaron Brown: Cable <b>News</b> Is Too Political

Aaron Brown said in an interview that he is unhappy with the current state of cable news. Brown, who was a prominent anchor on CNN from 2001-2005 and now teaches journalism at Arizona State University, spoke to the online website ...

&#39;Fox <b>News</b> Sunday&#39; to Host Kentucky Senate Debate - NYTimes.com

Jack Conway, Kentucky's attorney general and the Democratic candidate for Senate, and Rand Paul, the Republican nominee, have agreed to a live debate on "Fox News Sunday" on Oct. 3.

foreclosure investing

Michael Burry became famous for selling their own toxic waste to the investment banks before the housing downturn. Bloomberg sat down with Burry this morning in a must see interview (video attached below):

On who is to blame for the financial crisis:

“My number one concern is that there has been a complete utter total abdication of personal responsibility though out our entire society. I don’t think anyone anywhere is taking blame themselves for what they did to contribute to the crisis. And again I think it gets back to that blame game. It is the most damaging thing we can do as a country is to blame a narrow set and not look within ourselves for what each of us did or didn’t do to the basic wrong that led to this mess.”

“From the borrower to the average broker all the way to the federal reserve through Congress, the President, several Presidents, I think that this has been coming for awhile and there has been a lessening of the credit standards over a period of time that ultimately led to the kind of blow off top that we have.”

On the current housing market:

“It’s an artificial market. There are a tremendous number of homes where the home homeowner, I think it’s between 2.5 to 3 million homes, where the home homeowner are more than 9 months past due and are not giving notices that they are past due and they’re just living there for free. I actually know one that has been there for a few years without having to pay anything. I think that Fannie and Freddie are basically being used as special purpose vehicles by our government to support the housing market. The private mortgage market is practically nonexistent; 96-97% of mortgages are flowing through Fannie and Freddie now. I think Fannie and Freddie are exercising a tremendous amount of power over the market by withholding properties from sale and not forcing foreclosure, the foreclosure process. I think that it would be best for the government just completely got out of the mortgage market and let the housing, because home prices are a function of income the leverage applied.

On what he is investing in agriculture, real estate and gold:

“I believe that agricultural land, productive agricultural land with water on site, will be very valuable in the future. And I’ve put a good amount of money into that. So I’m investing in alternative investments as well as stocks.”

“I think there is some value in real estate. You have to buy it right. It’s not in general, that’s the problem. I think that there are an awful lot of people out there looking to buy these distressed properties out there and so you need to find special situations. That is how I’ve invested from the beginning. I’m looking for these special situations, these unique ideas and that’s true in real estate too.”

“In my situation I’d rather go long on housing itself, real estate itself. Depending on how you structure it, in the real market, in the physical market, you can get some pretty good deals and I’ve done some of that too.”

“Paulson is big in gold and that is something is interesting to me and given how I see the world playing out. Other than that, I’m just saying, other than gold I haven’t really bought into the other

On the danger of having more power for the Federal Reserve:

“Well, I don’t feel that the economic theories and policies that got us into this mess are the same policies and theories that will get us out of this mess.  And more to the point, I don’t — I’m 100 percent sure that the policies and theories that got us into this mess won’t prevent the next mess from happening.

And that’s probably my biggest frustration with the whole process.  I don’t think that — I think with all the blame on Wall Street and all the focus on Wall Street — the increase — the perp walks for Wall Street — these things, in a lot of ways, are non — are not very productive.  I think it’s not very productive to blame a narrow set of individuals or a narrow set of institutions.

Nobody is taking time to blame anything that anybody in Congress did or the Fed did or the other businesses, you know, how the banks acted, how the mortgage brokers acted, how people acted, how borrowers acted.  There’s — there’s a lot of blame to go around.  And I think this blame game being oriented entirely toward Wall Street is — is not overall helpful.

On Goldman Sachs shutting down its proprietary trading business:

“I think that brokers should not trade for their own account in securities — and securities that are also available to their clients.  I just don’t think that’s pa — that should be done.  I think broking should be pretty boring — safe, boring, low return business.  And I think the same is true for banks.  They should be very safe, solid, indestructible businesses.  And so there are — some of these seemingly Draconian measures, I think, do need to be taken.”

Part 1 – Where is the accountability?

Part 2 – Burry buys gold and farm land

Source: Bloomberg TV

——————————————————————————————————————————————————

The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.

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Richard Green:

Is housing the best way for low-income people to build wealth?, by Richard Green:
I was thrilled to be invited to the Future of Housing Finance conference held at
the Treasury Department and co-sponsored by HUD this week. It was particularly
nice to be seated next to Self-Help's Martin Eakes, whom I have admired for some
time. Like Elizabeth Warren, Eakes long ago had insights into sub-prime lending
that I wish more of us had taken seriously.

At the conference, Martin worried about a conversation that emphasized the
need for robust underwriting standards for the mortgage market going forward.
The three most important standards are loan-to-value ratio, payment-to-income
ratio, and credit history. As Martin pointed out, African-Americans have less
wealth available for down-payment than others (even after controlling for
income), and have lower FICO scores than others, and therefore will be denied
access to credit at a greater rate than others if underwriting standards are
tough and uniform. Because much of the reason that African-Americans lack wealth
is because they have been systematically stripped of wealth for many
generations, policies that reduce access to credit disproportionately for
African-Americans violate fairness.

The events of the past six or seven years show that loose underwriting does
nobody any favors, either. Foreclosures are terrible things for the families who
experience them and for the communities that have large numbers of them. The
whole point of underwriting is to prevent default and foreclosure, and the
unpleasant fact is that downpayment and FICO are predictors of likelihood of
default.

In the era where almost all mortgages were self-amortizing, housing allowed
families to build wealth because mortgages were a form of forced saving. Those
who got a 20 year mortgage in 1960 owned their house free and clear in 1980;
households gained wealth not because housing was such a great investment, but
because they built equity, month after month. Housing was a particularly
attractive way for those of modest means to save, because they could live in the
very piggy bank they were building. In principle, however, these households
could have rented and taken the difference between a mortgage payment and a
rental payment and put it in another investment (a small business or the stock
market). But we know that in the absence of

nudges, people tend to save less.

Perhaps, then, the government could come at the savings issue more directly
by giving low-income people a nudge toward saving. Suppose it developed a 401(k)
type plan that matched the savings of those with below-median incomes at 2 to 1.
This would encourage savings that then could be used for a down payment or a
host of other investments (say a Vanguard index fund). This would cost taxpayers
money, but perhaps less than mortgage programs built on thin underwriting
standards. At the same time, getting people into the habit of savings could
produce other social benefits as well. I am not sure such a plan is practical,
but I think we do need to think about how we can help people who have been
denied wealth for generations how to start accumulating assets without relying
entirely on the housing finance system to do it.

We also need to ensure that when people with limited experience in such markets do participate in financial markets by buying houses, investing their savings, etc., they aren't steered toward products that are highly profitable for the originator, but not the best fit for the borrower/investor. It's my understanding that such behavior -- steering people into the wrong products -- explain part of the problems observed in subprime markets. Perhaps we need a consumer finance protection agency? And someone to lead it who understands these issues? However, it's not enough to simply provide advice about financial products. That will help, but some of this was fraud that needs to be prosecuted -- it won't stop otherwise.

Homosexual advocacy group not legitimately Catholic, military <b>...</b>

After receiving a letter from the group Catholics for Equality urging a change to the “Don't Ask, Don't Tell” policy, the Archbishop for Military Services responded, saying that the archdiocese's position is “clear.

Google <b>News</b> Now Eight Years Old

google-news-screenshot-old Google today announced on the official Google blog the eighth birthday of Google News. It's a huge milestone for the California-based search company, which launched the Google News service on the 22nd of ...

Scripting <b>News</b>: What kind of <b>news</b> system...?

And it's not okay that they're making a bid for exclusivity on the role of News System of the Future, and they can't even keep their servers running properly. Either you deliver the benefit of being the sole provider, or sorry (to ...

robert shumake

Homosexual advocacy group not legitimately Catholic, military <b>...</b>

After receiving a letter from the group Catholics for Equality urging a change to the “Don't Ask, Don't Tell” policy, the Archbishop for Military Services responded, saying that the archdiocese's position is “clear.

Google <b>News</b> Now Eight Years Old

google-news-screenshot-old Google today announced on the official Google blog the eighth birthday of Google News. It's a huge milestone for the California-based search company, which launched the Google News service on the 22nd of ...

Scripting <b>News</b>: What kind of <b>news</b> system...?

And it's not okay that they're making a bid for exclusivity on the role of News System of the Future, and they can't even keep their servers running properly. Either you deliver the benefit of being the sole provider, or sorry (to ...

Michael Burry became famous for selling their own toxic waste to the investment banks before the housing downturn. Bloomberg sat down with Burry this morning in a must see interview (video attached below):

On who is to blame for the financial crisis:

“My number one concern is that there has been a complete utter total abdication of personal responsibility though out our entire society. I don’t think anyone anywhere is taking blame themselves for what they did to contribute to the crisis. And again I think it gets back to that blame game. It is the most damaging thing we can do as a country is to blame a narrow set and not look within ourselves for what each of us did or didn’t do to the basic wrong that led to this mess.”

“From the borrower to the average broker all the way to the federal reserve through Congress, the President, several Presidents, I think that this has been coming for awhile and there has been a lessening of the credit standards over a period of time that ultimately led to the kind of blow off top that we have.”

On the current housing market:

“It’s an artificial market. There are a tremendous number of homes where the home homeowner, I think it’s between 2.5 to 3 million homes, where the home homeowner are more than 9 months past due and are not giving notices that they are past due and they’re just living there for free. I actually know one that has been there for a few years without having to pay anything. I think that Fannie and Freddie are basically being used as special purpose vehicles by our government to support the housing market. The private mortgage market is practically nonexistent; 96-97% of mortgages are flowing through Fannie and Freddie now. I think Fannie and Freddie are exercising a tremendous amount of power over the market by withholding properties from sale and not forcing foreclosure, the foreclosure process. I think that it would be best for the government just completely got out of the mortgage market and let the housing, because home prices are a function of income the leverage applied.

On what he is investing in agriculture, real estate and gold:

“I believe that agricultural land, productive agricultural land with water on site, will be very valuable in the future. And I’ve put a good amount of money into that. So I’m investing in alternative investments as well as stocks.”

“I think there is some value in real estate. You have to buy it right. It’s not in general, that’s the problem. I think that there are an awful lot of people out there looking to buy these distressed properties out there and so you need to find special situations. That is how I’ve invested from the beginning. I’m looking for these special situations, these unique ideas and that’s true in real estate too.”

“In my situation I’d rather go long on housing itself, real estate itself. Depending on how you structure it, in the real market, in the physical market, you can get some pretty good deals and I’ve done some of that too.”

“Paulson is big in gold and that is something is interesting to me and given how I see the world playing out. Other than that, I’m just saying, other than gold I haven’t really bought into the other

On the danger of having more power for the Federal Reserve:

“Well, I don’t feel that the economic theories and policies that got us into this mess are the same policies and theories that will get us out of this mess.  And more to the point, I don’t — I’m 100 percent sure that the policies and theories that got us into this mess won’t prevent the next mess from happening.

And that’s probably my biggest frustration with the whole process.  I don’t think that — I think with all the blame on Wall Street and all the focus on Wall Street — the increase — the perp walks for Wall Street — these things, in a lot of ways, are non — are not very productive.  I think it’s not very productive to blame a narrow set of individuals or a narrow set of institutions.

Nobody is taking time to blame anything that anybody in Congress did or the Fed did or the other businesses, you know, how the banks acted, how the mortgage brokers acted, how people acted, how borrowers acted.  There’s — there’s a lot of blame to go around.  And I think this blame game being oriented entirely toward Wall Street is — is not overall helpful.

On Goldman Sachs shutting down its proprietary trading business:

“I think that brokers should not trade for their own account in securities — and securities that are also available to their clients.  I just don’t think that’s pa — that should be done.  I think broking should be pretty boring — safe, boring, low return business.  And I think the same is true for banks.  They should be very safe, solid, indestructible businesses.  And so there are — some of these seemingly Draconian measures, I think, do need to be taken.”

Part 1 – Where is the accountability?

Part 2 – Burry buys gold and farm land

Source: Bloomberg TV

——————————————————————————————————————————————————

The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

HTML clipboard

Richard Green:

Is housing the best way for low-income people to build wealth?, by Richard Green:
I was thrilled to be invited to the Future of Housing Finance conference held at
the Treasury Department and co-sponsored by HUD this week. It was particularly
nice to be seated next to Self-Help's Martin Eakes, whom I have admired for some
time. Like Elizabeth Warren, Eakes long ago had insights into sub-prime lending
that I wish more of us had taken seriously.

At the conference, Martin worried about a conversation that emphasized the
need for robust underwriting standards for the mortgage market going forward.
The three most important standards are loan-to-value ratio, payment-to-income
ratio, and credit history. As Martin pointed out, African-Americans have less
wealth available for down-payment than others (even after controlling for
income), and have lower FICO scores than others, and therefore will be denied
access to credit at a greater rate than others if underwriting standards are
tough and uniform. Because much of the reason that African-Americans lack wealth
is because they have been systematically stripped of wealth for many
generations, policies that reduce access to credit disproportionately for
African-Americans violate fairness.

The events of the past six or seven years show that loose underwriting does
nobody any favors, either. Foreclosures are terrible things for the families who
experience them and for the communities that have large numbers of them. The
whole point of underwriting is to prevent default and foreclosure, and the
unpleasant fact is that downpayment and FICO are predictors of likelihood of
default.

In the era where almost all mortgages were self-amortizing, housing allowed
families to build wealth because mortgages were a form of forced saving. Those
who got a 20 year mortgage in 1960 owned their house free and clear in 1980;
households gained wealth not because housing was such a great investment, but
because they built equity, month after month. Housing was a particularly
attractive way for those of modest means to save, because they could live in the
very piggy bank they were building. In principle, however, these households
could have rented and taken the difference between a mortgage payment and a
rental payment and put it in another investment (a small business or the stock
market). But we know that in the absence of

nudges, people tend to save less.

Perhaps, then, the government could come at the savings issue more directly
by giving low-income people a nudge toward saving. Suppose it developed a 401(k)
type plan that matched the savings of those with below-median incomes at 2 to 1.
This would encourage savings that then could be used for a down payment or a
host of other investments (say a Vanguard index fund). This would cost taxpayers
money, but perhaps less than mortgage programs built on thin underwriting
standards. At the same time, getting people into the habit of savings could
produce other social benefits as well. I am not sure such a plan is practical,
but I think we do need to think about how we can help people who have been
denied wealth for generations how to start accumulating assets without relying
entirely on the housing finance system to do it.

We also need to ensure that when people with limited experience in such markets do participate in financial markets by buying houses, investing their savings, etc., they aren't steered toward products that are highly profitable for the originator, but not the best fit for the borrower/investor. It's my understanding that such behavior -- steering people into the wrong products -- explain part of the problems observed in subprime markets. Perhaps we need a consumer finance protection agency? And someone to lead it who understands these issues? However, it's not enough to simply provide advice about financial products. That will help, but some of this was fraud that needs to be prosecuted -- it won't stop otherwise.

robert shumake

Homosexual advocacy group not legitimately Catholic, military <b>...</b>

After receiving a letter from the group Catholics for Equality urging a change to the “Don't Ask, Don't Tell” policy, the Archbishop for Military Services responded, saying that the archdiocese's position is “clear.

Google <b>News</b> Now Eight Years Old

google-news-screenshot-old Google today announced on the official Google blog the eighth birthday of Google News. It's a huge milestone for the California-based search company, which launched the Google News service on the 22nd of ...

Scripting <b>News</b>: What kind of <b>news</b> system...?

And it's not okay that they're making a bid for exclusivity on the role of News System of the Future, and they can't even keep their servers running properly. Either you deliver the benefit of being the sole provider, or sorry (to ...

robert shumake

Homosexual advocacy group not legitimately Catholic, military <b>...</b>

After receiving a letter from the group Catholics for Equality urging a change to the “Don't Ask, Don't Tell” policy, the Archbishop for Military Services responded, saying that the archdiocese's position is “clear.

Google <b>News</b> Now Eight Years Old

google-news-screenshot-old Google today announced on the official Google blog the eighth birthday of Google News. It's a huge milestone for the California-based search company, which launched the Google News service on the 22nd of ...

Scripting <b>News</b>: What kind of <b>news</b> system...?

And it's not okay that they're making a bid for exclusivity on the role of News System of the Future, and they can't even keep their servers running properly. Either you deliver the benefit of being the sole provider, or sorry (to ...

Making Money Online With

Today, SocialVest is launching its online and in-store shopping platform that makes it easy for consumers to support non-profit organizations while making purchases. The free service works by rewarding users with cash back for purchases from retailers. Money earned by SocialVest users can then be donated to over one million registered non-profits with the service.

Here’s how it works. Consumers sign-up for SocialVest with their info and credit card details and can then start shopping in its online mall or at physical stores with whom SocialVest has partnered. The startup currently has partnerships with over 500 retailers including Target, Macy’s, Home Depot, Best Buy, Saks Fifth Avenue and Bloomingdales. When the user make a purchase at one of these stores using the registered credit card, SocialVest will give users a cash rebate ranging from 1% to 15% of qualifying purchase prices. Funds are accrued in users’ SocialVest accounts, and can then be pledged to any non-profit.

SocialVest has also partnered with Causes, and will be the exclusive registered credit card shopping partner for the community. The startup, which has raised $500,000 in seed funding, faces competition from CauseOn, Causeworld and Endorse For A Cause.

"Documents were scattered all over the room, and Love shared dozens of these documents with the reporters—property records, financial statements showing money being transferred from Love's account to other people's accounts, payment receipts, signatures she said were forged. The reporters huddled around Love's laptop and viewed a private website that served as a database for all of these documents, which she'd been collecting as evidence. Love would show them a document on paper or online and then say something like: 'Isn't it weird that [So and So's] signature is on that?' She did a lot of Googling, too, mostly of names and property addresses listed in the documents. This went on for about three hours."

—Following Courtney Love down the rabbithole.

Newsy: The Story Behind its Innovative <b>News</b> App

Today we're starting a new interview series on ReadWriteWeb, focused on product innovation on the Web. I'll be interviewing a number of startup founders over the coming weeks, ...

Pentax K-5 announced and previewed: Digital Photography Review

Pentax K-5 announced and previewed: Pre-Photokina 2010: Pentax has announced the latest member of its DSLR line-up, the K-5. The new model is based on the Japanese manufacturer's current flagship DSLR, the K-7. Body design and control ...

Fox <b>News</b> Poll: Coons Leads O&#39;Donnell By 15 Points In Delaware | TPMDC

The new Fox News poll of the Delaware Senate race shows Democratic nominee Chris Coons continuing to enjoy a double-digit lead against Republican Christine O'Donnell.

robert shumake

Newsy: The Story Behind its Innovative <b>News</b> App

Today we're starting a new interview series on ReadWriteWeb, focused on product innovation on the Web. I'll be interviewing a number of startup founders over the coming weeks, ...

Pentax K-5 announced and previewed: Digital Photography Review

Pentax K-5 announced and previewed: Pre-Photokina 2010: Pentax has announced the latest member of its DSLR line-up, the K-5. The new model is based on the Japanese manufacturer's current flagship DSLR, the K-7. Body design and control ...

Fox <b>News</b> Poll: Coons Leads O&#39;Donnell By 15 Points In Delaware | TPMDC

The new Fox News poll of the Delaware Senate race shows Democratic nominee Chris Coons continuing to enjoy a double-digit lead against Republican Christine O'Donnell.

Today, SocialVest is launching its online and in-store shopping platform that makes it easy for consumers to support non-profit organizations while making purchases. The free service works by rewarding users with cash back for purchases from retailers. Money earned by SocialVest users can then be donated to over one million registered non-profits with the service.

Here’s how it works. Consumers sign-up for SocialVest with their info and credit card details and can then start shopping in its online mall or at physical stores with whom SocialVest has partnered. The startup currently has partnerships with over 500 retailers including Target, Macy’s, Home Depot, Best Buy, Saks Fifth Avenue and Bloomingdales. When the user make a purchase at one of these stores using the registered credit card, SocialVest will give users a cash rebate ranging from 1% to 15% of qualifying purchase prices. Funds are accrued in users’ SocialVest accounts, and can then be pledged to any non-profit.

SocialVest has also partnered with Causes, and will be the exclusive registered credit card shopping partner for the community. The startup, which has raised $500,000 in seed funding, faces competition from CauseOn, Causeworld and Endorse For A Cause.

"Documents were scattered all over the room, and Love shared dozens of these documents with the reporters—property records, financial statements showing money being transferred from Love's account to other people's accounts, payment receipts, signatures she said were forged. The reporters huddled around Love's laptop and viewed a private website that served as a database for all of these documents, which she'd been collecting as evidence. Love would show them a document on paper or online and then say something like: 'Isn't it weird that [So and So's] signature is on that?' She did a lot of Googling, too, mostly of names and property addresses listed in the documents. This went on for about three hours."

—Following Courtney Love down the rabbithole.

robert shumake

Newsy: The Story Behind its Innovative <b>News</b> App

Today we're starting a new interview series on ReadWriteWeb, focused on product innovation on the Web. I'll be interviewing a number of startup founders over the coming weeks, ...

Pentax K-5 announced and previewed: Digital Photography Review

Pentax K-5 announced and previewed: Pre-Photokina 2010: Pentax has announced the latest member of its DSLR line-up, the K-5. The new model is based on the Japanese manufacturer's current flagship DSLR, the K-7. Body design and control ...

Fox <b>News</b> Poll: Coons Leads O&#39;Donnell By 15 Points In Delaware | TPMDC

The new Fox News poll of the Delaware Senate race shows Democratic nominee Chris Coons continuing to enjoy a double-digit lead against Republican Christine O'Donnell.

robert shumake

Newsy: The Story Behind its Innovative <b>News</b> App

Today we're starting a new interview series on ReadWriteWeb, focused on product innovation on the Web. I'll be interviewing a number of startup founders over the coming weeks, ...

Pentax K-5 announced and previewed: Digital Photography Review

Pentax K-5 announced and previewed: Pre-Photokina 2010: Pentax has announced the latest member of its DSLR line-up, the K-5. The new model is based on the Japanese manufacturer's current flagship DSLR, the K-7. Body design and control ...

Fox <b>News</b> Poll: Coons Leads O&#39;Donnell By 15 Points In Delaware | TPMDC

The new Fox News poll of the Delaware Senate race shows Democratic nominee Chris Coons continuing to enjoy a double-digit lead against Republican Christine O'Donnell.

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Hot Air » Great <b>news</b>: Incumbent sore loser to launch desperate bid <b>...</b>

Great news: Incumbent sore loser to launch desperate bid to keep power.

Last Look: Style <b>News</b> You Might Have Missed (PHOTOS, POLL)

Welcome to the Last Look, where we round up the Style scraps that didn't make it to our news page this week. Click through and catch up on what else happened since Monday!

<b>News</b> - Lindsay Lohan: Failed Drug Test Report Is &quot;Nuts <b>...</b>

After it's reported that she flunked a drug test and could go back to jail, she tells Us, "I'm fine"