Thursday, July 29, 2010

Just Facts Today, Please

Fact Number One:  Obama, will go down as the biggest lying snake-oil salesman to assume the throne in the Oval Office in my lifetime. Specifically, one of his PRIMARY campaign platforms was to make Government more transparent.  So what do we have with the Farcical Retardation Bill (Financial Reform Bill)? Obama going on The View to sing praises of his accomplishments and pat himself grandly on the back.

But let's examine this closely:  The SEC now has stated that this new "reform" legislation exempts the SEC from the Freedom Of Information Act:
The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from “surveillance, risk assessments, or other regulatory and oversight activities.” Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot...The SEC cited the new law Tuesday in a FOIA action brought by FOX Business Network.
That's some kind of reform!  Here's a link to the article I sourced, but this is all over the internet:  Obama = Less Transparency  I guess the SEC is trying to protect its most favorite and coveted porn-surfing sites.

Thanks Barak Hussein. Who's side are you on?  I could pontificate for hours on just how damaging and useless this new legislation is, but you can do your own due diligence.  Anyone who continues to support Obama either refuses to examine the facts or is just simply a complete idiot.  As the ultimate poster child for Affirmative Action, Obama sure has proven to be extraordinarily deceitful and useless.

Fact Number Two: The real estate market is in much worse shape than anyone in the industry or at the banks will admit. Check out this gem from today's Denver Post: "Nine condominiums atop the Ritz-Carlton, Denver will be sold at auction next month with minimum bids starting at less than half of their original listing prices...Only one of the project's 25 units sold before the remaining condos were foreclosed on in November. Here's the link to the article: Real Estate = Look Out Below.

This factoid ties into my blog post from a couple days ago in which I stated that banks were fraudulently pricing way too high their real estate assets stagnating on their balance sheets.  Only one unit out of 25 was sold, nine are being auctioned with the starting price less than 50% of the original offering price.  Make no mistake, the clearing prices, if these units move at all, will be well below the opening offer.  And that will leave 15 more foreclosed units still to go.   Wouldn't we all like to see where the lending bank has the mortgage paper on these properties priced?  Obama's new legislation will make it impossible to ever know.

There seems to be this myth that prices in the housing industry are stabilizing - a myth being propped up by the deceptive Case-Shiller 20 city housing price index.  This index is very limited in scope and it skews the data by only looking at "organic" conventional seller to conventional buyer transactions.  With foreclosures and short-sales making up roughly 50% of the total sales over the last 12 months, the C-S index is clearly overestimating the true price level of the market by ignoring half of the datapoints.

In fact, foreclosures rose in the first half of 2010 in 75% of 206 U.S. metro areas:  Foreclosure avalanche. This ultimately will further depress home values.  Unless the Government decides to start bulldozing entire communities, supply is rising much more rapidly than demand.

Moreover, 30-yr mortgage rates just hit a record low today, and yet the housing market is still in a downward spiral.  This underscores the point that the Fed is pretty much out of non-printing press "tools" with which to reinflate the economy.

For the record, Obama is the first President ever to go on daytime "chat" television.  To be quite frank, I believe his appearance on The View completely and utterly degrades the Office of the Presidency, is nothing more than a cheap campaign tactic aimed at garnering support from all of the desperate, pathetic housewives overdosed on Prozac who have no meaning in their life other than hanging onto every piece of garbage emitted from the mouths of Whoopi Goldberg and Barbara Walters, the latter of whom happens to be semi-comatose at this point in her life.  It's beyond disgusting. "Mighty fine day indeed to you too, Miss Daisy."


  1. Really? Daytime talk shows? What next? appearances on used car lot commercials?

  2. How many ways can one describe the corruption that embodies western power? I am sick of it. We need somebody to go Andrew Jackson and rout these bastards out.

    Joe M.

  3. For the record, Obama is the first President ever to go on daytime "chat" television. To be quite frank, I believe his appearance on The View completely and utterly degrades the Office of the Presidency, is nothing more than a cheap campaign tactic aimed at garnering support from all of the desperate, pathetic housewives overdosed on Prozac who have no meaning in their life other than hanging onto every piece of garbage emitted from the mouths of Whoopi Goldberg and Barbara Walters, the latter of whom happens to be semi-comatose at this point in her life. It's beyond disgusting. "Mighty fine day indeed to you too, Miss Daisy."


    Here here!

  4. he has to hit the talk soaps. no body in washington wants to be seen with him let alone having to listen to him.
    he'll be doing the greeting at a casino in vegas soon.



  6. I can keep the local Redneckistanians quiet by asking them which of Obummer's campaign promises he kept, even tho I get told to shut up fairly often. I'm glad I quit voting after the Farce Of 2000. IMHO there is no point to it, especially since we got 'them newfangled voting machines.'
    Do you think I'll get to see the Prez doing a stint as a MalWart greeter? I might actually go in one of those places to see that.

  7. Ok so here's where me being totally ignorant on bonds kills me...

    Rumor (not really I have read it a few times today) is a blnaket re-fi for all current FNM/FRE mortgages to 4.5%. Besides being a disgusting issue of moral hazard (whats that?) it seems this could have serious problems for the bond holders due to duration issues or something. Now we know the gov's aversion to bondholder haircuts, so is this the next bailout? Making those holders whole? Any ideas are welcomed.

  8. Hey GYC, do you have a link for where you read that? Would it be a refi for the actual mortgages or for the bonds issued by FNM/FRE. We need more info to assess this.

  9. Yuppers:


    It looks like a fine mess. I would also point out this Kid Dynamite piece where Bernanke gets caught big time:

  10. Thanks. The only way that would work is if the Govt (i.e. the taxpayer)is willing to monetize the loss that would incurred by current MBS/REMIC investors. It's actually a really retarded idea.

    You got 14% of all mortgages in delinquency/forecclosure and another 25-30% underwater. Refi won't help either of those categories. And the savings most people would realize after-tax on a monthly basis might pay for a night out at Chuckie Cheese with the kids.

    That may be the dumbest proposal I've seen in a long time.

  11. I think you have the part I was thinking was the catch:
    "willing to monetize the loss that would incurred by current MBS/REMIC investors"

    When paired with the Dynamite story, its a bullseye!

  12. Will acceptance of this 'special deal' make all mortgages full recourse, just like the previous loan mod programs?

    Better talk to a lawyer before you accept any freebies from Uncle Sugar.

    I wonder if Kaskari thought of this plan this am while he was at his cabin in Washington State chopping wood. Apparently he came up with TARP in a couple days with Hank, so it is a possibility. Welcome to the Banana Republic.

  13. I am from India and a technology laborer. Worked on Wall st., worked at research lab in US. Had a mortgage. Citi was the Bank that time (pun intended) holding mortgage. After putting 30%-35% as downpayment, still had a tough time getting loan approved in 2000.

    Just wanted to share my experience.

    I am recently onto your blog. But after going thru similar market commentaries I am scared to come back to US on any assignments or if Green Card is offered.
    Because of people like you, recently moved my entire 401K to Sprott's PHYS. Although I am not sure I should be able to get anything back in future.

    Keep up the good work!!

  14. Hi India. Thanks for your feedback and your comment. As long as your stock account/401k is with a firm based in India, your investment in Sprott's PHYS is the best thing you can do other than actually buying physical gold/silver and safekeeping it yourself. Very smart move!

  15. Dave-

    I was curious about your comment "as long as you 401k is with a firm based in India"...

    Are you one who thinks the collapse will be so back that many brokers will go under and your holdings there will be in doubt? If so, do you have brokers you think would be on the safer side or just spread risk around? I'm with Vanguard mostly and have my trading cash at ThinkorSwim. My local bank is a pretty solid one (I keep my eyes on Bauer Financial's rating of this one), but I don't typically leave a lot of money there.

    My strategy is to go mostly the physical route, but something in the order or 30-40% of my portfolio. The other 60-70% will be in some sort of paper/electronic version of gold (CEF, PHYS, etc), with a % in miners (15-20%). I'm trying to figure out the best strategy on where to park this larger overall %.

    At some point soon (triple bottom forming now), will also be in TBT for a longer term swing, some oil/energy plays (nothing more than 5% position), perhaps 5% towards ags. Thanks for you time.

  16. If you have the ability to move your 401k from its current custodian, I would recommend rolling it over to an independent IRA/401k custodian. We use Sterling Trust. As other's also point out, the name of the game right now is to get as much of your wealth OUT of the U.S. financial system as possible. That's why I would recommend owning as much physical gold/silver as you can and safekeeping it a good private depository or at your home. Probably should do a little of both (home/depository).

    If you can stomach the 10% early withdrawal penalty, I would advise completely cashing out your IRA and moving it into physical. I did this in 2006, paid the 10% gas, bought gold at $550-600/oz. Am I better off? Let's see, I paid a 10% penalty but my proceeds are now up nearly 100%.

    I don't like CEF because you cant' take delivery and when you sell you end up with paper dollars.

    TBT is a good long term play but not yet. They will take the long bond even lower in yield.

    I like a 50/50 split between physical and miners.

  17. Dave-

    Just bit the bullet a month back on my IRAs (wife and I had both Roths and Traditional) and pulled all the funds out.

    I still have about 10% of my money in my Ind. 401K, but was going to close that account too...Crazy times that these thoughts even enter our minds, but we must think outside the box and make radical moves to protect ourselves.

    Who do you use as a broker to purchase you miners?

    Also, what do you mean by a private depository? Anyone in CO you could recommend?

  18. Dave and Jayhawk91,

    I cannot move 401K to India. There are no independent 401K custodians in India. My 401K custodians are Fidelity and Vanguard. That is why I said I have doubt if I can get anything back if situation go out of control in next 10-15 years. I doubt that things would go worse during next 10-15 years as maverick governments all thru out the world would continue with their extend and pretend games.

    Anyway I am planning to pay 10% and get everything back and convert into yellow metal.

    It's a misnomer that large percentage of Indians have knowingly invested in Gold. I find myself to be one among a lot of people who is buying the metal. In India still paper is king as interest rates are very high (7&-8%) compared to other parts of the world.

  19. Good move India. Pay the 10% penalty and buy the yellow dog and have it shipped to where you live in India.

  20. Jayhawk, ultimately in the worst case scenario no broker will be safe. But I use Fidelity and Schwab. Understand that you are taking a risk using any broker as a custodian for your money, but I think those two are less risky than most.

    The true hardcore goldbugs don't buy ANY paper assets, including stocks. I think we can all understand why. I like rolling dice for the possibility of the upside stocks bring, and am hoping I can time it right and get out of all paper before the fun begins.

    There are no bullion depositories in Colorado. In fact, the only ones I know of that can be used by individuals are the ones in Delaware. We use First State Depository (you can google their link). They have the best pricing and their customer service is outstanding.

    Obviously the other option is to just keep the stuff well-hidden at your house. The true hardcores only do that.