tag:blogger.com,1999:blog-7982981413278241287.post4193842344307798578..comments2023-10-28T17:54:39.467-06:00Comments on The Golden Truth: Truth In ReportingDave in Denverhttp://www.blogger.com/profile/03016238915167131989noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-7982981413278241287.post-76299513212467989132013-02-01T11:11:19.645-07:002013-02-01T11:11:19.645-07:00No-money-down mortgages are back
Some affluent bu...No-money-down mortgages are back<br /><br />Some affluent buyers are getting the keys to their new home without putting a penny down.<br /><br />It’s 100% financing—the same strategy that pushed many homeowners into foreclosure during the housing bust. Banks say these loans are safer: They’re almost exclusively being offered to clients with sizable assets, and they often require two forms of collateral—the house and a portion of the client’s investment portfolio in lieu of a traditional cash down payment.<br /><br />In most cases, borrowers end up with one loan and one monthly payment. Depending on the lender and the borrower, roughly 60% to 80% of the loan can be pegged to the home’s value while the remaining 20% to 40% can be secured by investments. On a $2 million primary residence, for instance, the borrower could get a $2 million loan, which would require a pledge of assets in an investment portfolio to cover what could have been, say, a $500,000 down payment. The pledged assets can remain fully invested, earning returns as normal, without disrupting the client’s investment goals.<br />Some banks are using this product to lure in clients, such as BOK Financial’s offer, which is available to new physicians. To provide the loan, the bank must first receive proof that the borrower has cash or investments, like stocks or mutual funds, that equal 10% of the borrowed amount. (The company says it doesn’t seek a pledge of those assets but just wants to know that borrowers can meet their obligations over time.)<br /><br />http://www.marketwatch.com/story/no-money-down-home-loans-are-back-2013-02-01?<br /><br />whole economy runs on pledged assets...?whose balance sheet are those assets on?..hmmm..like margined accounts?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-76863864187031243482013-01-31T22:02:54.077-07:002013-01-31T22:02:54.077-07:00LOL. I stopped putting out price targets based on...LOL. I stopped putting out price targets based on timeframes a long time ago. Too much unpredictability with all the intervention. Unfortunately, the catalyst that enables real price discovery will probably be part of the same event that makes this country completely unlivable except for the PTBDave in Denverhttps://www.blogger.com/profile/03016238915167131989noreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-21879756074792160752013-01-31T22:00:00.048-07:002013-01-31T22:00:00.048-07:00Money Tsunami
Add modern derivatives, which enter...Money Tsunami<br /><br />Add modern derivatives, which entered the scene in a significant way only some 30 years ago, and the picture becomes even murkier. To demonstrate this, in slow motion, consider the creation of a credit default swap (CDS), and then a mortgage collateralized debt obligation (CDO). Assume an investor wants to be long the credit of IBM. The investor offers to sell to a dealer a CDS on IBM. The dealer purchases the CDS and either keeps it or lays off the risk by booking an offsetting transaction with someone else. Actual securities issued by IBM are not part of these transactions – the CDS is just a contract between the investor and the dealer. As IBM’s credit quality is perceived to change, the price of the CDS will fluctuate and money will change hands between the investor and the dealer (based on the “mark to market”). This position is basically a borrowing by the investor who now “owns” a security referencing the credit of IBM, and who has put up only a small deposit – a tiny fraction of the notional credit exposure that the investor is long. It also represents a highly-leveraged loan by the dealer. Although the investor/borrower does not receive the full proceeds of this “loan,” he or she bears the full risk of loss on the underlying asset. It is as if the investor borrowed money from the dealer, added a small amount of his or her own money, and purchased an IBM security with the total amount of money. Interestingly, such borrowings also have the effect of impacting the price of the actual underlying assets (in this case, IBM credit) due to arbitrage pressures. In effect, these transactions by investors and non-bank dealers represent many of the characteristics of the creation and dissipation of money, but they are outside the traditional and commonly-understood mechanics of fractional reserve banking. Most economists would not consider these transactions in the context of money supply, but we think that they are being mechanistic and not seeing the actual effects of the basically unlimited ability of private derivatives transactions to have many of the same effects as are caused by the creation and destruction of “money.”<br /><br />http://www.zerohedge.com/news/2013-01-30/elliotts-paul-singer-how-money-created-and-how-it-diesAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-70758557523977702562013-01-31T21:35:05.603-07:002013-01-31T21:35:05.603-07:00Harvey Organ reiterates your commentary, Dave, tod...Harvey Organ reiterates your commentary, Dave, today:<br /><br />"Today we had first day notice and what a surprise. We had a massive 1,391,000 million oz of gold stand or 43.26 tonnes of gold. I have been following the gold and silver comex data from the mid 1970's and I have never seen anything like this before. You will recall that this past December we had only 10 tonnes of gold delivered upon. Generally December is the biggest delivery month of the year. The comex is not a physical market. If one needs physical they generally head over to London at the LBMA and purchase the metal over there. The high amounts standing may mean that our gentlemen from Eastern persuasion are having difficulty finding metal and thus they are heading over to our neck of the woods to obtain this very valuable commodity."<br /><br />Question is, Dave, can we expect real price discovery in this environment? And when?Heads Uphttps://www.blogger.com/profile/13773337268505624781noreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-28772168480951056182013-01-31T21:23:22.439-07:002013-01-31T21:23:22.439-07:00The spin on the numbers and intervention in these ...The spin on the numbers and intervention in these markets is absolutely breath-taking. Bonds massively overvalued and gold and silver undervalued.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-19880608319864743022013-01-31T17:39:06.947-07:002013-01-31T17:39:06.947-07:00You hit that nail on the head re LME/ComexYou hit that nail on the head re LME/ComexDave in Denverhttps://www.blogger.com/profile/03016238915167131989noreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-81352659698430157942013-01-31T17:38:26.231-07:002013-01-31T17:38:26.231-07:00LOL. Is that really how you spell it? Thanks for...LOL. Is that really how you spell it? Thanks for the feedbackDave in Denverhttps://www.blogger.com/profile/03016238915167131989noreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-6181533733268833872013-01-31T15:33:28.294-07:002013-01-31T15:33:28.294-07:00It seems that pricing on the L.M.E. or the Comex i...It seems that pricing on the L.M.E. or the Comex is becoming almost irrelevent. The true value of gold and silver will be what you can obtain for it's true value. The value will be determined by the country(s) that control the most gold and silver. Thank You again Dave for your steady logic.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-76183909308657263632013-01-31T15:00:19.774-07:002013-01-31T15:00:19.774-07:00You are the snuffleupagus of financial bloggers, D...You are the snuffleupagus of financial bloggers, Dave. Not much gets by your nose, does it? Thanks for the info/insights, keep 'em coming.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7982981413278241287.post-47351827415663223942013-01-31T13:31:51.971-07:002013-01-31T13:31:51.971-07:00When it is proved the central bankers suppressed t...When it is proved the central bankers suppressed the gold price and let it go cheaply to China, I'd like to think there would be hangings. But Gordon Brown is still around so probably not.Dave in Phoenixnoreply@blogger.com