Home Refinance Calculator: March 2011

Thursday, March 31, 2011

Mish's Global Economic Trend Analysis

Popeye Comments on Events in Japan
Fed Releases 895 PDFs in Response to Court Order; Fed Does Not Disclose Collateral for Loans; Why Secrecy is a Problem; FDIC's Role in the Mess
Geithner's Blatant Lies at the G20 Meeting; Four-Pronged Solution

Posted: 31 Mar 2011 04:14 PM PDT

I just received an email from Popeye regarding the nuclear crisis in Japan. It was a short message: "That's all I can stands and I can't stands no more." Popeye was upset over all the hype.

Yes, there is a catastrophe in Japan. Yes, the reactors are going to be unusable. And yes there is a huge problem regarding radioactive water.

Yet, any rational person could figure all of that out weeks ago.

So with each passing minute, someone, somewhere has to trump up something regarding the nuclear crisis in Japan to absurd levels.

As a prime example, please consider Who Are the Liquidators?

The prime minister of Japan has said that his government is "not in a position where we can be optimistic" about the Fukushima Daiichi Nuclear Power Plant.

Is there any logical conclusion to draw from that statement other than that a large chunk of Japan is going to be uninhabitable?

Blue Ribbon For Hype Award

There is no point in reading an article beyond such absurd hype. There are hundreds of logical possibilities and conclusions one might draw.

The first thing on my mind certainly would not have been that a "huge chunk of Japan was about to become uninhabitable".

I would have thought something along the lines "the Fukushima Daiichi Nuclear Power Plant is totally destroyed". However, I assumed that well over a week ago.

Note that the author did not even phrase his opinion as a "possibility" but rather as an inevitable "logical conclusion".

When you hit a sentence like that, you know the author is in competition for the blue ribbon for hype award. There is no point in reading further because the author has already completely discredited himself.

However, I do point out the site trumping up that "logical conclusion" has an appropriate name This Can't Be Happening.

Presenting hype as a forgone logical conclusion needs to stop.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Fed Releases 895 PDFs in Response to Court Order; Fed Does Not Disclose Collateral for Loans; Why Secrecy is a Problem; FDIC's Role in the Mess

Posted: 31 Mar 2011 10:06 AM PDT

At long last the Fed has responded to court pressure and the freedom of information act to release the names of banks receiving funds during the height of the crisis. The Fed packaged information into 895 individual PDFs and no doubt someone will compile a list soon.

Unfortunately, no one can really say what risks the Fed took because the Fed does not disclose what collateral it accepted for the loans.

Please consider Fed Releases Discount-Window Loan Records Under Order

The Federal Reserve released thousands of pages of secret loan documents under court order, almost three years after Bloomberg LP first requested details of the central bank's unprecedented support to banks during the financial crisis.

The records -- 894 files in PDF form that must be individually opened and read -- reveal for the first time the names of financial institutions that borrowed directly from the central bank through the so-called discount window. The Fed provided the documents after the U.S. Supreme Court this month rejected a banking industry group's attempt to shield them from public view.

"This is an enormous breakthrough in the public interest," said Walker Todd, a former Cleveland Fed attorney who has written research on the Fed lending facility. "They have long wanted to keep the discount window confidential. They have always felt strongly about this. They don't want to tell the public who they are lending to."

The central bank has never revealed identities of borrowers since the discount window began lending in 1914. The Dodd-Frank law exempted the facility last year when it required the Fed to release details of emergency programs that extended $3.3 trillion to financial institutions to stem the credit crisis. While Congress mandated disclosure of discount-window loans made after July 21, 2010 with a two-year delay, the records released today represent the only public source of details on discount- window lending during the crisis.

"It is in the interest of a central bank to put a premium on protecting its reputation, and, in the modern world, that means it should do everything to be as transparent as possible," said Marvin Goodfriend, an economist at Carnegie Mellon University in Pittsburgh who has been researching central bank disclosure since the 1980s.

"I see no reason why a central bank should not be willing to release with a lag most of what it is doing," said Goodfriend, who is a former policy adviser at the Richmond Fed.

The Fed documents released today show the central bank providing credit to borrowers large and small. A page described as "Primary Credit Originations, February 5, 2008" lists the New York branch of Deutsche Bank AG with a loan of $455 million from the New York Fed. On the same day, Macon Bank is listed with a $1,000 loan from the Richmond Fed.

Lending through the discount window soared to a peak of $111 billion on Oct. 29, 2008, as credit markets nearly froze in the wake of the bankruptcy on Sept. 15, 2008, of Lehman Brothers Holdings Inc. While the loans provided banks with backstop cash, the public has never known which banks borrowed or why. Fed officials say all the loans made through the program during the crisis have been repaid with interest.

The Fed was forced to make the disclosures after the U.S. Supreme Court rejected an appeal by the Clearing House Association LLC, a group of the nation's largest commercial banks.

Discount-window lending was not the largest source of the Fed's backstop aid during the crisis. Bernanke also devised programs to loan to U.S. government bond dealers, and to support the short-term debt financing of U.S. corporations.

Also consider Bernanke's Fed Responds to Pressure for More Transparency

For most of its 98-year history, the Federal Reserve has operated with all the transparency and enthusiasm for change of the Vatican. Now the ultra-secretive Fed is starting to change its ways, if somewhat grudgingly. Some of the new openness, such as Chairman Ben S. Bernanke's plan for quarterly press briefings, is the central bank's idea. Much of it comes under duress.

"The free-market system only works if it's fully informed," says Lynn E. Turner, who battled the Fed over disclosure issues while serving as the Securities and Exchange Commission's chief accountant from 1998 to 2001. "There's a lot of similarity between the Fed and an SUV with blacked-out windows."

The Fed says such calls threaten its core function: preserving market confidence by acting as a lender of last resort. Publicizing the names of discount-window borrowers could spark bank runs or discourage sick banks from seeking help until they are fatally compromised. "The full monty may not be a good thing," says Frederic Mishkin, a former Fed governor.

For the Fed, keeping information from investors is nothing new. Congress last year had to pry loose the details of $3.3 trillion worth of crisis-fighting programs that relied on the central bank's vault. In the late 1990s, the Fed successfully resisted the SEC's attempt to require banks to stop using hidden funds, or "cookie jar reserves," to smooth quarterly earnings, says Turner.

Some former Fed insiders say the public should routinely be clued in when private institutions tap the public purse, in the same way the SEC requires companies to inform investors of major financial events. "This should be material information. Investors should have the right to know," says Roberto Perli, a former Fed board economist who is managing director of International Strategy & Investment in Washington.

So what did we find out?

Not much, because the Fed did not disclose collateral.

Notice the misguided policies of the Fed and FDIC though. By preventing all bank runs for decades, the Fed instilled an artificial and undeserved confidence in banks.

It would be far better to disclose banks in trouble, let them go under one at a time quickly, rather than have a gigantic systemic mess at one time.

Secrecy, in conjunction with fractional reserve lending is an exceptionally toxic brew. Overnight trust can change on a dime, system-wide, and it did.

Moreover, by keeping poor banks alive (and my poster-boy for this is Chicago-based Corus Bank for making massive amounts of construction loans to build Florida condos), more money pours into failed institutions further increasing toxic loans.

Failure of FDIC

FDIC is a part of the problem. When the government guarantees deposits, everyone believes in every bank no matter how poorly they are run or what risks those banks poses. No one has any incentive to seek a bank with good lending practices. Instead they seek a bank that pays the highest yield because it is guaranteed.

Driving deposits to banks that take the most risk is no way to run a system. Yet, that is precisely what the FDIC does, up to the FDIC limit of course.

People look at FDIC as a big success because there was no crisis for decades. Instead, we had one gigantic crisis culminate at once, hardly a fair tradeoff for periods of artificially low problems.

FDIC is Fraudulent

No only is FDIC a problem, it is outright fraudulent to guarantee deposits that cannot possibly be guaranteed in a fractional reserve Ponzi-scheme system.

For further discussion of the problems with fractional reserve lending please see Central Bank Authorized Fraud; Fractional Reserve Lending Problems Go Far Beyond "Duration Mismatch"

Also see an excellent discussion on the Acting Man blog: Fractional Reserve Banking Revisited

Ending the secrecy is easy. Simply abolish the Fed. However, that not the only thing that needs to happen. For a look at solutions, please consider Geithner's Blatant Lies at the G20 Meeting; Four-Pronged Solution

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Geithner's Blatant Lies at the G20 Meeting; Four-Pronged Solution

Posted: 31 Mar 2011 01:52 AM PDT

Proving that he cannot find his ass with two hands and a road map, Treasury secretary Tim Geithner says inflexible currencies are biggest monetary problem.

Tightly controlled exchange rate regimes are the main flaw in the international monetary system and the solution is simple, U.S. Treasury Secretary Timothy Geithner told a G20 meeting on Thursday.

In a thinly veiled swipe at the Chinese hosts of the seminar of the Group of 20 wealthy and developing economies, Geithner said that countries should have flexible exchange rates and permit free flows of capital to be major players in the global currency order.

Both French President Nicolas Sarkozy and Chinese officials have said it is time to consider bringing the yuan into the basket of currencies that constitutes the SDR, which is currently restricted to the dollar, euro, yen and pound. Geithner suggested that certain conditions should be met first.

"We believe that currencies of large economies heavily used in international trade and financial transactions should become part of the SDR basket, and that to achieve this objective, the concerned countries should have flexible exchange rate systems, independent central banks, and permit the free movement of capital flows," he said.

Emphasizing that solutions to the global monetary system's problems rest at the national level, Geithner said the United States had made progress in fixing the policy mistakes that caused damage in the global financial crisis but still had work to do.

"We are committed to ... fiscal reforms that will reduce deficits as a share of the economy to three percent over the next several years so that we stabilize the ratio of debt to GDP at a level that will not threaten future economic growth," he said.

Lies, Lies, and More Lies

It is hard to know where to start disputing the lies. Clearly the US has shown no interest in fixing the budget deficit. Republican and Democrats are locked in a battle over $30 billion, an amount less than 1% of the budget, and a mere 1.875% of the $1.6 trillion deficit.

For more on the battle, please see Pissing and Moaning Over 1.875% of the Budget

More importantly, does anyone in their right mind think that had China floated the Yuan, we would not have had this global crisis?

Rampant credit expansion, unbridled central bank stimulus, deficit spending, and interest rates held too low too long is what created the crisis.

China still suffers from rampant credit expansion, and unbridled central bank stimulus, and interest rates held too low too long. The US and EU suffer from two of those. In addition, the EU has a myriad of problems stemming from a currency union but no fiscal union.

Japan has a debt to GDP ratio of 200% and growing and Keynesian clowns think the solution for Japan is to go deeper in debt. For that discussion, please see Window for More Idiocy is Always Open

Four-Pronged Problem

Central banks micromanaging interest rates
Factional reserve lending
No enforcement mechanism to solve trade imbalances
Rampant deficit spending in country after country

For a discussion of the problems with fractional reserve lending please see Central Bank Authorized Fraud; Fractional Reserve Lending Problems Go Far Beyond "Duration Mismatch"

Also see an excellent discussion on the Acting Man blog: Fractional Reserve Banking Revisited

When Nixon closed the gold window, the enforcement mechanism (settling trade deficits in gold) went out the window with it. That was the last check on fiscal sanity everywhere, and created a license for governments to spend, central banks to print, and trade imbalances to soar.

IMF SDR Non-Solution

Buffoons will be all over Geithner's and Sarkozy's statements predicting the end of the dollar and the beginning of the Yuan as a reserve currency. Forget about it.

Look at the four problems above. Does the IMF wet dream of SDRs (special drawing rights) fix anything? What backs SDRs? What is the enforcement mechanism for curing trade imbalances? Is the Yuan going to be a major reserve currency?

The answers are No, Nothing, None, No.

And "No Timmy Boy", tightly controlled exchange rate regimes are not "the" problem but rather an obscure symptom of the problem.

Giethner said the solution was not complicated. That depends on the meaning of "complicated".

Four-Pronged Solution

Institute a 100% gold-backed dollar
Kill fractional reserve banking
Abolish the Fed (Central banks in general)
Balanced Budget Amendments

Do those things and problems will go away. China will not be able to fix its currency, print like mad, and waste money on enormous property bubbles. Nor will any government be able to print like mad and get away with it.

Blaming the Yuan is like blaming pimples instead of blaming oily skin that causes pimples. China is nothing more than a convenient scapegoat for failed policies of the Fed, the Bush administration, and the Obama administration.

Unfortunately, governments do not want to fix the problems because they all want to print like mad and they all want to do what they want, when they want. Eventually however, the market takes matters into its own hands like it did with Greece.

Bear in mind I do not think it would be possible to implement my Four-Pronged solution big bang, but it certainly could be phased in over a number of years.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mortgage and Loans - Mortgage Refinance, Home Loans

How do you work with long term care insurance companies?
Unsecured Personal Loans Get The Key Facts
Do Payday Loans Contain Hidden Fees?
Auto Loans in Canada from Canadian Car Dealers

How do you work with long term care insurance companies?

Posted: 31 Mar 2011 02:42 AM PDT

I own an in-home elderly care agency, however, due to the fact that the services are expensive, most clients can’t pay out of pocket, so I need to begin billing their long term care insurance company.

I’m wondering, what is the process to begin working and getting paid from long term insurance companies?

Unsecured Personal Loans Get The Key Facts

Posted: 31 Mar 2011 01:59 AM PDT

An unsecured personal loan is a loan that can be taken out with no need to pledge an asset against the borrowing. This is the exact opposite of a secured private loan where an asset like a property is offered as collateral against the loan.

The difference of offering an asset against a personal loan has a big effect on the terms and conditions that a bank will offer you as a result of having a first charge against your asset. The most blatant difference is the size of the loan. It is rare to get an unsecured loan for an amount above 25,000 pounds. The risk is all with the bank if you go into arrears on the loan as they don’t have an asset they can claim the cash from. Guaranteed unsecured loans on the other hand, due to collateral being offered means the dimensions of the loan is pretty much uncapped provided the value of the house doesn’t surpass the size of the loan.

Another marked difference is the period of the loan. An unsecured loan rarely offers a maturity of more than 10 years. Banks usually lending on an unsecured basis are concerned to get their cash back as soon as practicable. A rather more typical time-frame would be between two and 5 years. Secured loans on the other hand, often secured against a property can have a fixed maturity of anything up to twenty-five years as the danger is known as lower even in the event of default, the bank will be well placed to get his cash back by the charge over the asset.

There are numerous sectors of the Long term loans for bad credit market. At one end you have high street banks lending to consumers who have a unblemished credit report. As a consequence they’ll be offered the most flexible terms apropos the rate offered, the period of the loan and the quantity of cash that they can borrow.

At the other end of the market you have got the payday sector. This is generally for those with an adverse credit history. These borrowers may have a bad credit score due to bankruptcy, a county court judgement ( CCJ ) or default or late payment on previous personal loans

As a result of this subprime credit history, they are frequently unable to borrow from good name high street banks and instead have to borrow from pay-day banks.

Due to lending to those with a bad credit history the subprime bank will have to guarantee his loan. This is done in one or two methods. Most vitally the size of the loan will be smaller compared to to those with a unblemished credit report. The interest rate will be much higher and if the loan isn’t repaid on time, the interest costs are punitive. Finally, the loans are for a particularly short duration as the bank wants to get his cash back as soon as practicable. Loans will rarely be longer than three months in length.
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Do Payday Loans Contain Hidden Fees?

Posted: 30 Mar 2011 07:21 PM PDT

There is a certain air of mistrust that surrounds payday loans. The perception is that they are a ripoff plain and simple, with sharks preying on vulnerable borrowers. However, this isn’t necessarily always the case, particularly when it comes to hidden fees. The vast majority of payday loan companies are bound by industry rulings when it comes to charging customers. This often means that any charges are clearly identified in all literature, including the website. Even if not evident on the first page you read, all fees should be factored in to your final quote before you accept or even complete the application.

Charges might range anywhere from a fixed application fee to a charge for a same day transfer. In all likelihood the amount charged will be negligible, however this needs to be factored in by consumers seeking quick finances . Issues relating to the failure to repay a payday loan will also often trigger further fees. Again these should be clearly outlined to all customers before applying. Most lenders will stipulate that a standard charge is applied to your loan. Again, this isn’t likely to be a huge amount, but it will be subject to interest and will make it even more difficult to pay off in the coming month.

If you do fail to pay off a payday loan on the agreed date, your loan will rollover to the next month. As a consequence you will be forced to borrow more to cover all your existing debt with the lender, including interest and other fees. The financial impact of this will be substantial, with additional interest inflicting further punishment. Your next payday will automatically become the repayment date as and when other issues have been settled.

Hidden fees are extremely rare though, and if you have any mistrust of a lender, it may be best to look elsewhere or at least look into the company further. A little bit of research on their brand can unearth some pretty useful information from disgruntled customers or experts warning against using them.

The one piece of advice that should apply to any loan application, but more particularly payday loans, is to never pay an upfront fee. Unscrupulous companies will often demand money upfront. This is a rip-off and certainly shouldn’t be considered, even if you are in a really desperate situation. Unfortunately payday loans are largely for people who are suffering from financial problems and require cash urgently, which can lead to exploitation. However, this is why you should only ever use trusted lenders and read all of the fine print before committing to any financial contract. Being overzealous, even in the slightest, could end up with you paying far too much for a payday loan.

Hidden fees may not be standard practice, but that doesn’t mean that they don’t exist. So always be on your guard and don’t sign anything until you’re 100% sure that everything is as it seems.

Auto Loans in Canada from Canadian Car Dealers

Posted: 30 Mar 2011 11:59 AM PDT

If you have bad credit and are in the market for an auto loan in Canada, we have a dealership that can help you get a car loan. Our dealerships are all located in Canada and only work with Canadian citizens.

Wednesday, March 30, 2011

Mish's Global Economic Trend Analysis

Window for More Idiocy is Always Open

Posted: 30 Mar 2011 05:45 PM PDT

The Window for Idiocy is open. Then again, it always is. No matter how how many times a piss poor policy has been tried and failed, nutcases want to try it bigger and bigger, expecting different results.

Proposals to "fix" what ails Japan provide the perfect example. Please consider Japan Urged to 'Seize This Moment' or Face Another Lost Decade.

Japan begins forging a road map for recovery from its worst postwar disaster next month, a process that may determine whether it sheds the legacy of the 1980s bubble or has a third "lost decade" of stagnation and deflation.

Key to the result: whether the nation's companies end an aversion to borrowing, taking on debt to propel domestic investment and wage gains, and whether policy makers embrace a stimulus financed by Bank of Japan money creation, analysts said.

"The only time you can get things done is in moments of genuine crisis and catastrophes -- there's a small opportunity to do an extraordinary amount," Malcolm Gladwell, author of "The Tipping Point," who writes for New Yorker magazine, said in an interview with Bloomberg Television. "Japan -- a country whose politics were in deadlock and sluggish for many, many years -- I hope they can seize this moment and accomplish a lot."

"The window is not likely to be open for more than a few months" to set a "bold" course of action that changes the economy's direction, said Robert Feldman, head of Japan economic research at Morgan Stanley in Tokyo. Feldman's bold scenario envisages 40 trillion yen of total new spending, with no tax increases and 50 percent financing by the BOJ.

Because Japan is already in deflation, the risk of monetizing the debt is low, according to some analysts. Consumer prices, excluding fresh food, haven't sustained a 1 percent increase in sequential years since the early 1990s. BOJ board members identify stable prices as an inflation rate of around 1 percent.

Borrowing as a percentage of assets slid to an average of 43.7 percent last decade from 69 percent in the 1990s as companies de-leveraged. The figure stood at 42 percent at the end of March 2010, the most recent BOJ data available. Willingness to borrow again may help propel growth, said Richard Koo at the Nomura Research Institute Ltd. in Tokyo.

"There's been a debt-rejection syndrome, and we needed a shock to get out of it -- this may actually do it," said Koo, chief economist at the research arm of Japan's biggest brokerage. "Companies will have to borrow money because they've got to get themselves back in production."

"The instincts of the DPJ are on the cautious side; however, the DPJ is also practical, and realizes that it must support the economy and economic revival," said Feldman, who has analyzed Japan's economy since the 1980s bubble years. "After an initial period of caution, I expect a swing toward the bold scenario."

"The window is not likely to be open for more than a few months" says Robert Feldman. Ironically, his proposal is clear proof the window for idiotic ideas is always open.

For 20 years Japan was on a fool's mission to produce stimulus via Keynesian and Monetarist stimulus. The only thing those policies ever accomplished was to increase nation debt. Yet, Feldman wants to try again, hoping to spur inflation. When it does come, it will come in spades.

Analysts says that "Because Japan is already in deflation, the risk of monetizing the debt is low".

That is as silly as believing that home prices always go up.

The situation in Japan is so dire that if interest rates were to rise to a mere 3%, interest on the national debt would consume all revenues. That sure seems like a lot of risk to me.

At some point debt matters. I do not know when it matters, but to believe otherwise as Richard Koo, Robert Feldman, and Malcolm Gladwell proves that they have not learned a thing from history. It's really quite pathetic.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

How the CRA Fueled the Housing Bubble

Posted: 30 Mar 2011 09:47 AM PDT

President Obama wants to expand the Community Reinvestment Act. Thus it should be no surprise that a self-serving report by the Obama Administration concludes that CRA "greenlining" (forcing banks to lend to low-income neighborhoods) did not contribute to the housing bubble or the financial crisis.

Investor's Business Daily takes apart ACORN and the CRA in an editorial Community Reinvestment Act: Separating Fact From Fiction

In light of the Obama administration's stated goal of expanding the CRA, separating fact from fiction regarding this issue is of towering importance — to set the historic record straight and to prevent another financial calamity.

FICTION: Because the CRA was passed in 1977, long before the subprime crisis, it couldn't have caused the recent explosion in bad loans.

FACT: The toothless 1977 regulations fully expired in July 1997, when President Clinton rewrote them to toughen CRA enforcement as part of a crusade to close the "mortgage gap" between blacks and whites.

For the first time, banks were required to show results. One of the five performance criteria in the "lending test" — the most heavily weighted component of the CRA exam — was adopting "flexible lending practices" to address the credit needs of poor borrowers in "predominantly minority neighborhoods." Banks that didn't bend their underwriting rules risked flunking the exam.

Ex-Federal Reserve Board Gov. Lawrence Lindsey, a staunch CRA defender, acknowledges that the changes "did contribute to a downgrading of credit standards."

FICTION: "Many of these (CRA) loans were not very risky," the FCIC report claims.

FACT: Studies show that CRA loans have higher delinquencies and defaults and act as a major drag on bank earnings. In 2008, CRA loans accounted for just 7% of Bank of America's total mortgage lending, but 29% of its losses on home loans. Also, banks with the highest CRA ratings tend to have the lowest safety and soundness ratings.

FICTION: Only 6% of subprime loans were originated by banks subject to the CRA, so the vast majority of risky lending was not tied to the law.

FACT: Among other things, the figure does not count the trillions of dollars in CRA "commitments" that WaMu, BofA, JPMorgan Chase, Citibank, Wells Fargo and other large banks pledged to radical inner-city groups like Acorn, Greenlining and Neighborhood Assistance Corp. of America (NACA) after they used the public comment process to protest bank merger applications on CRA grounds.

All told, they shook down banks for $4.6 trillion in such commitments before the crisis, boasts a report by the National Community Reinvestment Coalition, or NCRC, the nation's top CRA lobbyist (which conveniently removed the report from its website during the FCIC hearings).

FICTION: "These loans performed well," the FCIC report maintained.

FACT: Brookings found that the loan commitments were set aside for low-income minorities with "marginal credit scores" and posed a higher risk. They were even riskier than regular CRA loans, because the banks delegated underwriting authority to the nonprofit shakedown groups, which had no experience judging credit risk.

NACA thinks traditional underwriting standards are "patronizing and racist." It advertises that anyone — "regardless of how bad your credit is" — can qualify for the mortgages it's arranged through special deals with banks. Not surprisingly, one study found that its delinquency rates were eight times higher than the national average.

Banks reported delinquency rates ranging from 5% to 50% on loans made pursuant to their merger-related commitments.

Yet the FCIC refused to investigate the more than 300 CRA agreements that banks and community organizers entered into before the subprime bubble burst.

Despite repeated requests by Commissioner Peter Wallison, the panel never examined the performance of the trillions in loan commitments.

Why would Chairman Angelides steer blame away from the CRA? Because he's a big fan of the CRA. And as California state treasurer, from 1999 to 2007, he steered billions in state funds into unsafe CRA mortgages securitized by Freddie Mac.

At the time, Greenlining advised Angelides on where to invest California state funds, even providing him with its own CRA report card on "good" and "bad" banks. He has also personally benefited from CRA projects brokered by his real estate development firms, according to "The Great American Bank Robbery."

As part of the CRA racket, Angelides should have been a witness in the crisis investigation, not its chief inquisitor. With the cover-up complete, he now hopes that CRA critics will go away.

"The debate about the role of the CRA should now be over as evidence presented in the commission's report is clear," Angelides declared earlier this month.

Sorry, sir, but the debate will end when the public has all the facts, not just your cooked report.

The CRA certainly did not cause the financial crisis. However, it did contribute to it.

Ironically, the very same people who insisted money be lent to people who could not afford houses are the very same people now bitching about those same "predatory loans".

Forcing banks to lend money is a piss poor idea. Piss poor loans help neither the lender nor the borrower. Yet, those who added fuel to the housing bubble have now whitewashed their role in the affair and beg for still more funds.

President Obama want to expand the CRA. Instead it should be added to the scrap heap of history along with Fannie Mae, Freddie Mac, HUD, HAMP, and thousands of affordable home programs all of which did anything but make homes affordable.

Now that home prices are falling, one might think the affordable home advocates would be happy. They are not. The hypocrites now want to prop up home prices on the belief that falling home prices hurt neighborhoods.

When dealing with misguided activists and self-serving fools you simply cannot win.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mortgage and Loans - Mortgage Refinance, Home Loans

Four Personal Budgeting Tips for all
How can you get an Insurance Business started in this economical disaster?
Getting a Commercial Loan Modification Approved by the Bank
Vacation And Credit Cards
Mortgage market and interest rate commentary for Thursday June 18, 2009
Mortgage market and interest rate commentary for Friday March 25, 2011
Mortgage or Loan Closing Costs – Negotiating Tips

Four Personal Budgeting Tips for all

Posted: 30 Mar 2011 12:48 AM PDT

Personal budgeting tips come from various sources. After a while it can be easy to get confused from all the advice on personal budgeting. The following is a simple list of things you should do to make personal budgeting less of a chore.

Remember that the simpler the approach you follow, the more likely you adapt this approach all throughout. In the end you want to be able to handle personal budgeting or you will have wasted your time setting up a complex system that does not work for you.

Tip 1: Assign estimates properly

One common flaw in budgeting is overshooting your expected income vis-à-vis your estimated expenses. You have to be honest. For any variations in your income and expenses, you have to ensure that your estimate can allow margin of errors.

Always underestimate income and over estimate expenses if in doubt.

Tip 2: Make it easy

You may find it more advisable to disaggregate your budget by category for purposes of organizing your data set for ready reference. Do not get not complex lists. Just go with income, expenses, extra expenses, debt and savings to start with. If you invest then add an investment category.

Your ability to make your presentation simple allows you to organize your figures better. It will make it easier to see what is happening and you will avoid getting confused by an overload of information.

Tip 3: Keep tabs on outgoings

Recording every cent of your expenditures for the course of two weeks can provide you an idea of your spending pattern. It is also the best way to mark overspending or unnecessary spending.

To reiterate, make sure you make a record of every cent of expenditure in your two week list. At the end go back and see where you can cut down and what needs changed.

Tip 4: Choose a recording period that works for you

Most of the time personal budgeting advice tells you to record on a monthly basis. However, you should be flexible since your case may warrant a different budgeting period like weekly. Do what works for your situation.

Consider your income and how you get paid as to how you maintain your budget.

So here are the 4 Personal Budgeting Tips. If you have teenager, you can also use the above tips to develop personal finance for teens. As you can see, personal budgeting should be personal. What works for one person may not work for someone else Design your budget so it works for you and as long as it works then it is good enough.

How can you get an Insurance Business started in this economical disaster?

Posted: 30 Mar 2011 12:12 AM PDT

Is everyone becoming an Insurance Agent now or are we the only ones left standing because of the industry that we are in? Not sure but Los Angeles, Ca is completely saturated with them and it’s making it extremely hard to build my book of business out here! Any good "unique" marketing tips?

Getting a Commercial Loan Modification Approved by the Bank

Posted: 29 Mar 2011 05:25 PM PDT

Commercial Loan Modification

Commercial Loan Review

A commercial loan modification is an alternative that property owners may be able to lean on in the event that they are experiencing difficulties in paying the monthly installments as a result of the declining economy. It is also possible for a number of businesses that own commercial real estate to request for changes to the loan terms as a strategy for minimizing their costs although it may be much harder for the owner to convince the lender or bank. It is only natural for the lending companies to be unwilling to grant the requests for the adjustments that would make the mortgage payments easier because these would only reduce their expected cash flow.

The primary business of financial institutions, such as banks, is to lend money so that the payments will serve as predictable cash inflow and these will then be reused for making more money, and so forth. It is understandable that the banks may not want to grant your request for a commercial loan modification because it will reduce their cash flows. The only effective strategy to boost the possibility that your request will be granted is to demonstrate to the financial companies that the move will serve their best interests. This situation may also be the same for companies that desire to dispose of the property by means of a commercial short sale where the financial institution will also have to agree to the smaller selling price that would usually be insufficient for paying the outstanding loan totally.

It is often advisable to hire a commercial loan review agent who has sufficient experience regarding the most effective strategies for persuading the banks. One example of such a technique is to thoroughly analyze the mortgage contract to determine if the bank had made certain moves that were actually against a number of laws. Research conducted by professionals have indicated that a substantial number of the banks and other lending companies have actually committed violations against some rules and regulations made by the government to prevent predatory lending practices that neglect the rights of borrowers.

If some of these violations are indeed present in the contracts, the company can use this knowledge to make it easier for the bank to agree to the requested modifications in the terms. This is understandable because these violations can make the mortgage provisions, such as foreclosure, ineffective. And even if the procedures for foreclosure have already been started, the court may ask the bank to stop such actions until such time that the court hearings on the violations have been finished. The lending institution may actually be asked by the court to return to the borrower the amounts that have been contributed. Violations that have been identified may be utilized in conjunction with the papers that demonstrate to the banking institution that the owner is incapable of making the payments for the time being. It can also be of assistance if you can demonstrate that the reduction of the amounts due or the provision of a certain grace period to allow the company to recover are actually advantageous for both bank and borrower.

For more information visit Commercial Loan Modification

Vacation And Credit Cards

Posted: 29 Mar 2011 05:15 PM PDT

Every single and just about every year, quite a few of us go on vacations. Holidays are a fantastic way to relax, and get away from the daily pressure of life. Over 50 percent of all American households consider their vacation in between April and September, meaning that they invest many income on travel (Best Credit Cards ). Whether or not it’s international or home travel, you can devote a fortune ahead of you actually notice it.

As we all know, traveling with money or checks isn’t constantly a smart decision. Leasing cars, traveling by air in airplanes, or checking into accommodations is a significantly less complicated process if you have a credit card. Also though you may decide to use your credit score cards for big acquisitions only, you’ll locate that the touring happening will be a much smoother process.

Contrary to money or checks, credit score cards make dealing with your paperwork and receipts much less complicated. If you purchase something, information from which acquire should be made with your credit score credit card manufacturer, which you can constantly tumble back again on if a thing happens. Issues can go unsuitable devoid of notice, so you’ll always wish a backup plan or a thing to possess as evidence in the party of a disaster. With a credit card, all you want do is glimpse back again at your assertion and you’ll find anything that you purchased in one easy to discover location.

Credit cards are also significantly much easier to deal with and hold track of than cash. If you determine to go to a theme park or a resort, you’ll find which cash can be a bit bulky to take care of. Transporting a large overall amount of money can be tough to retain track of, even though it isn’t recommended. Credit score playing cards use up less space, and you can hold them in your pocket. Once you do pay for something, you don’t want rely through your money, simply hands more than your credit card and signal your receipt.

If you don’t possess any credit playing cards, you can constantly get them for holiday purposes only (Credit Score ). There are a lot of added benefits to getting credit score playing cards, in addition to the actuality of them becoming much easier to hold monitor of. There are many distinct credit playing cards out there to select from, which includes individuals that should give you cash back again or rewards when you make a buy. Cash back again is commonly a little proportion of which you commit, and is given to you at the end of the month.

Most credit score cards will offer you reward points for each dollar you invest, that can be redeemed with various merchants providing a variety of products. Although cash back again is always a stellar thing, many people locate reward playing cards to be just as good. You can enjoy your vacation, buy next to every little thing you wish, and know that the income you shell out will help you to buy various points which you may need once your holiday is more than. Truly, can you think of this as getting your cake and eating it to.

All in all, credit score cards can generate your holiday easier than ever ahead of. You can receive rewards and cash back with acquisitions you generate using your card. Though you may assume cash is the preferred way to go, there are a number of retailers who in fact prefer credit cards. They are a lot more professional, and much easier for you to manage than cash or checks (Debt Consolidation ). They are straightforward to get hold of as well, supplying you possess good credit. If you don’t have a credit credit card, you should glance into finding one before you take your following holiday. All you want do is look for your favourite manufacturer online and apply by means of their website – you’ll usually obtain a reaction in a matter of minutes.

Mortgage market and interest rate commentary for Thursday June 18, 2009

Posted: 29 Mar 2011 02:59 PM PDT

Mortgage market and interest rate commentary from Bruce Brown, CMPS with Pulaski Bank Home Lending and radio host of Dollars and Homes on KCMO Talk Radio 710 in Kansas City.

Mortgage market and interest rate commentary for Friday March 25, 2011

Posted: 29 Mar 2011 11:59 AM PDT

Mortgage market and interest rate commentary from Bruce Brown, CMPS with Pulaski Bank’s 1st Kansas City Home Lending and radio host of Dollars and Homes on KCMO Talk Radio 710 in Kansas City.

Mortgage or Loan Closing Costs – Negotiating Tips

Posted: 29 Mar 2011 09:33 AM PDT

best-refinance-home-mortgage-loan-rates.com “you will never make money.. faster than around a negotiating table” This is true for saving money too, when it comes to home loans or mortgages. When people (new buyers) come to the banks and lenders they come without any ‘power’ to leverage the other side need for a deal too. Homebuyers come weak and “beg” for the loan officer or mortgage broker to give them a mortgage at the best rates.. While its the loan broker who needs the deal too.. if you do not close.. he gets no fees.. In this short movie you will get tips on how to save money while negotiation with the bank. The tips are short and simple. You need to do them with every business encounter. You can save hundreds of dollars this way. Mortgage closing costs and fees, can sum up to a big cash payment.. you can reduce this by negotiating. When you negotiate you show you have other alternative, when you show the bank you are in a position to choose you have the ‘power’ (even when you don’t have other options..)

Tuesday, March 29, 2011

Mish's Global Economic Trend Analysis

Pissing and Moaning Over 1.875% of the Budget
Addicted to the Nanny State; Politicians are Like Pushers
March LPS Mortgage Monitor Report: 30% of Loans in Foreclosure have not made a Payment in Over 2 Years

Pissing and Moaning Over 1.875% of the Budget

Posted: 29 Mar 2011 10:21 PM PDT

Democrats and Republicans are horn-locked in a debate about whether budget cuts should be $30 billion or $60 billion.

Senate Majority Leader Harry Reid, says President Barack Obama's offer to accept a total of $30 billion in spending cuts for 2011 is "clearly in the same ballpark" with what House Republican leaders asked for.

The pathetic debate lingers on.

Please consider Budget Negotiations Stall Amid Charges of Inaction as U.S. Shutdown Looms

Republicans and Democrats in Congress traded charges over which party is stifling agreement on budget cuts needed to avert the first U.S. government shutdown in 15 years.

With no accord in sight on legislation to extend government spending past April 8, Senate Majority Leader Harry Reid, a Nevada Democrat, accused Republican leaders of trying to placate an "extreme minority" of their party by spurning an offer to reach a deal.

President Barack Obama's offer to accept a total of $30 billion in spending cuts for 2011 is "clearly in the same ballpark" with what House Republican leaders initially sought before their rank-and-file demanded deeper reductions, Reid said.

"Are they afraid to tell the extreme Tea Party members of their caucus that they're trying to find common ground with Democrats?" Reid asked yesterday at his weekly news conference.

Pathetic Performance by Both Parties

Quite frankly this is a pathetic performance by both parties. Moreover, I will flat out state the Republicans have only themselves to blame.

By offering a piss poor budget reduction of a mere $60 billion, they now look like the bad guys for not meeting the Obama half-way at $30 billion.

Just the Math Maam

Please do the math. $30 billion is a mere 1.875% of the budget. That is what everyone is pissing and moaning over.

If Republicans had any balls, and they clearly don't, they would have proposed cutting the budget by $300 billion. Then, a compromise at $150 billion would have been a mere 9.375% of the deficit.

It is is bad enough to argue over 9% of the budget, so what does it mean to bicker over 1.875% of the budget?

What it means is that neither party has the balls to fix a damn thing. It also means the Republicans can blame themselves for being placed in this absurd position.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Addicted to the Nanny State; Politicians are Like Pushers

Posted: 29 Mar 2011 01:27 PM PDT

Here is an email from reader Buck Novak in response to Misguided Views of Libertarian Economics and the Alternative "Regulation" Model

Buck writes ...

Hello Mish

I find it interesting that people who hate big corporations embrace the ever-growing nanny state. The reality is the nanny state is nothing but a gigantic corporation that hires those who would not be hired in the private workforce at prices far more than they are worth.

In many respects, government is no different than big business. Governments, like business want to grow. Bureaucrats always want more employees and bigger budgets.

The difference is the nanny state is run by politics not by profit. It is run for a political agenda.

If you want a perfect example of a corporation too big to succeed, it's the government.

Take a look at those protesting in Wisconsin, Illinois, Ohio and elsewhere.

Who is protesting government cuts? Why it's government employees. They protest for their benefit, not the benefit of the public at large and they want government to use even more force to take what it needs.

What does it take to stop the madness?

The Ever-Growing Nanny State

Through a process of extortion, coercion, and vote buying, a population too dumb to figure out what is really going on becomes addicted to the nanny state. The only ones who benefit are the politicians and the nanny employees. They are in bed with each other.

Unfortunately, misguided souls buy into the propaganda of the politicians and the public unions and clamor for more "nannyism" even though the process makes slaves out of everyone.

Students are especially prone to supporting the nanny state in return for student loans that make those same students debt slaves for life.

For more on the slavery aspect of public unions and collective bargaining advocates, please see

Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own You!

Collective Bargaining neither a Privilege nor a Right

There is one major difference between private business and the nanny business. Huge mistakes will eventually force big businesses out of business. However, the bigger the mistakes of the nanny state, the faster it grows. The current $1.6 trillion deficit should be proof enough.

Stopping the Madness

What does it take to stop the madness?

It takes people willing to be involved. It takes leadership from Congress. It takes politicians willing to stand up to the public unions whose mission it is to addict everyone on nanny drugs.

There is one other thing that would crash the nanny state: Force of the market.

Greece is the perfect example. Unless we want to become like Greece, we must take action to halt the nanny state now.

Politicians are Like Pushers

Public union employees and those addicted to the nanny state need an ever-increasing "fix". They are like drug addicts, and politicians are like pushers.

Think about drug addicts willing to do anything for their daily fix. Addicts will coerce, bribe, or steal to get what they want. Public unions are no different.

Those not addicted are not equally motivated. Indeed, no one is as motivated as a drug addict in need of a fix. Like pushers, politicians supply the "fix" in return for votes. Thus, overcoming inertia of the nanny state and its addicts is difficult.

I commend those like New Jersey Governor Chris Christie, Senator Rand Paul, Congressman Ron Paul, and Wisconsin Governor Scott Walker for their efforts to rein in the nanny state. It's not an easy process. Those addicted to the nanny state are willing to do anything to get their fix.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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March LPS Mortgage Monitor Report: 30% of Loans in Foreclosure have not made a Payment in Over 2 Years

Posted: 29 Mar 2011 02:57 AM PDT

Inquiring minds are reading the March 2011 LPS Mortgage Monitor.

There is a bit of good news in the report. Delinquent and Non-Current Rates are improving. However, the rates are still exceptionally high historically. Also, some of the foreclosure data is skewed by moratoriums and reworked loans.

On the other hand, option ARM foreclosures have increased dramatically over the last six months and 30% of loans in foreclosure have not made a payment for at least two years. 47% of those in foreclosure have not made a payment for at least 18 months.

Charts and Comments from the LPS Report

Delinquencies remain about twice the 1995-2005 average, foreclosure inventories are 7.8 times historical "norms".

30% of loans in foreclosure have not made a payment in over 2 years.

February Month-End Data: Conclusions

Delinquency rates resumed their decline after an increase in January and foreclosure inventories remain stable, slightly below historic highs.
Delinquencies continue to improve as new problem loan rates decline and cure rates increase.
Foreclosure start declines and foreclosure suspensions are reducing the upward pressure on inventories caused by foreclosure sale moratoria.
An enormous backlog of foreclosures still exists with overhang at every level:
There are three times the number of loans deteriorating greater than 90+ days delinquent as compared to foreclosure starts.
There are also three times the number foreclosure starts vs. foreclosure sales.
Foreclosure inventory levels are over 30 times monthly foreclosure sale volume.

There are 42 pages of charts and tables in the report. Inquiring minds will want to take a closer look.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List