Posts tagged Don
Krugman: Bankers Without a Clue
Jan 15th
Krugman: Bankers Without a Clue
… the bankers’ testimony showed a stunning failure, even now, to grasp the nature and extent of the current crisis. And that’s important: It tells us that as Congress and the administration try to reform the financial system, they should ignore advice coming from the supposed wise men of Wall Street, who have no wisdom to offer.
There is much more in the piece, but that is the crux. The bankers are apparently clueless, or if they have any inkling about what happened, they will not say it. The first morning of hearings were a waste of time.
The question now is will the Financial Crisis Inquiry Commission be a waste?
I’ll try to help … first, start from the bottom, not the top. Don’t interview any more bankers or heads of regulatory agencies, at least not yet.
1) Regulators: My first suggestion is that the Commission start interviewing – in private – the field examiners at the Fed, FDIC, OCC and OTS. There is no need to publicly embarrass any examiner. The various Inspector General reports on bank failures would provide a starting point (see Eric Dash’s article in the NY Times: Post-Mortems Reveal Obvious Risk at Banks).
Ask the examiners what they saw and when – according to the Inspector General’s reports, the field examiners were warning about lending problems in 2002 and 2003.
Follow the trail. Did this information generate warnings inside the organizations? If so, why wasn’t action taken? Was the action blocked by political appointees?
And more background:
2) Understand the originate to distribute model. Understand the entire process from the perspective of each participant from independent mortgage broker to Wall Street firms to investors, and the role of credit agencies, automated underwriting, and other “improvements” in the process.
Put points 1 & 2 together. That is a start.
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The Beauty of the Short Sale Transaction (No Folks, I’m Really Not Kidding)
Jan 15th
Please welcome our newest writer, Melissa Zavala, Broker/Owner of Broadpoint Properties, who is a Short Sale Expeditor that has become so well known for her work in pre-foreclosure sales that her expertise is sought out by industry professionals. Melissa brings with her a fascinating background, having earned a BA and Masters in English from Northwestern University and was a Senior Editor at McDougal Littell before her work as an Educational Consultant at Harcourt. Upon leaving the educational publishing world, she chose to work with her husband in the real estate industry and has since become a recognized expert in short sales.
Melissa will be showing agents how to prepare for the changing world of real estate and you will see her passion for her work as you learn how to navigate the tricky waters of short sales. Please welcome her in comments!
Almost everyone complains about a short sale: the sellers, the buyers, and even the agents.
Everyone rants about some aspect of the transaction. The biggest complaint by far is that it takes too long for the bank to generate lien holder approval. By then, buyers are tired, frustrated, and have, quite possibly, moved on. Sellers are just “over it” and possibly considering other options. Agents are extremely frustrated by the process, particularly given how much energy and work a typical short sale transaction entails.
But, I say . . . bring your short sales here! Short sales are truly a blessing in disguise. They are an ideal opportunity to polish your listing skills by taking more listings than ever before. Plus, you have the added benefits of helping others and re-familiarizing yourself with state and local contracts.
When you take a listing on a short sale transaction, the traditional seller stalls and objections are gone.
Long gone are the listing appointments where you sit on the clients’ sofa for a “chat” about the list price. A few years ago, sellers began to use the Internet to investigate the home’s value and then met you with that price when you walked in the door. Well, despite the fact that the seller may still not concur with your value, the list price is not a hot button topic any longer. Since the seller will not walk away with any money in a short sale, it is far easier for sellers and their agents to come to agreement on the list price.
Also long gone are the conversations about commission and how So-and-So with Down-the-Street Realty will be willing to accept 4% commission so that Mr. Seller can net a little more money. Since the commission is paid by the bank out of the net proceeds, this discussion of commission is now a moot point
Short sale listings are also easy to find. You’ve heard of the “six degrees of separation” theory, right? Well, almost everyone knows someone who knows someone who is having trouble making ends meet. There must be someone out there in your sphere of influence who could use your help today—someone who might need to participate in a short sale.
Don’t be that agent in the office whose attitude makes the plants wilt.
This current economic climate has created a unique opportunity for you to challenge yourself, obtain more listings, and polish your skills so that you can become a master listing agent.
While it is extremely upsetting that folks must give up their homes, there has never been a better opportunity to help someone out of a jam. If you can help the client and he or she is happy with your service, you will receive referrals for life.
What better way could there be then to start off the year with a few short sale listings?
Jenny Craig- Inching you closer to a perfect body and heath
Jan 15th
I have been trying to get my weight under control, but bad eating habits and no desire to exercise can be a horrible combination. So when my weight rose up to an all-time high, I had to do something. I tried many different types of diets, including the Protein Power Plan, regular dieting and exercising. When everything failed, I decided to join a weight loss program. I called Jenny Craig because it was the closest to my house. The woman at Jenny Craig was very nice and friendly. She answered my questions, except for cost, and I liked her enough to go in for a consultation.
The consultation went very well. The program focuses on eating well and gaining a healthy attitude towards food. The keystone to the Jenny Craig diet is its prepackaged meals. For the most part, these are frozen breakfasts, lunches, dinners, and even desserts. The food contains 50% to 60% carbohydrate, 20% to 25% protein, and 20% to 25% fat.
Don’t think that you’re limited to eating just Jenny Craig food. You can also plan “dining out” days with your consultant. Just this past weekend, a friend came in from out of town, and I was able to eat out and still have it work in my diet.
I feel healthy and I’m losing weight. If you are willing to lose weight then I will suggest you to join Jenny Craig, because it changed my life completely.
WH’s Romer on Street Bonuses – "Simply Outrageous"
Jan 15th
I’m feeling a bit like a puppet on a string. I got sucked into watching
the bank big shots get grilled by Congress. At one point I thought they
were actually squirming a bit. Even that new guy, what’s his name from
BoA? He had nothing to with any of this. He still looked he was doing
the bowing and scraping thing.
At the same time the Boss gathers all of the financial troops (was
Volker there?) onto a stage and announces Beaucoup new taxes on the
nasty bankers.
A one two punch. It looked impressive. I think it was just show.
The big banks have a gajillion of tax loss carry forwards and plenty
more losses to take as they please to minimize taxes. Don’t look for
this to add a dime to the till until after the next presidential
election.
As for that squirming and tough questions stuff, I think it was just an
act. The “Boys” had to do a lay down on this one. They wanted to look
beaten, taxed, and humbled. They had to. They had no other choice.
There are two powerful reasons for this theatre. The first is there is
a very high level of awareness of how much dislike America currently
has for it’s financial institutions. That is a troubling development.
If you walk down that road it ends up in a very bad place. We most
certainly are ‘walking’ at this point. They question is, does the
‘tongue-lashing’ and ‘big new taxes’ get anyone to turn around and go
the other way?
The second reason is that it was intended to blunt the criticism that
will surely follow when the banks provide the full details on 2009
compensation.
Last Sunday Christina Romer, the Chair of the President’s Economic Advisors was on “This Week”. Their words
STEPHANOPOULOS: ““Do you see any sign that the big banks are
going to demonstrate the kind of fundamental constraint the president
has called for?
ROMER: I sure hope so, because, you know, the American people…
STEPHANOPOULOS: But you’re shaking your head, “No.”
ROMER: ……the idea that, as the financial system heals, they just go back to business as usual is — is simply outrageous.
Well Ms. Romer did not get her wish. The banks are paying out a record
$145 bil. This will cause a stink. The theater looked good, for a few
days at least. But it isn’t going to work for long.
So much for form, we need some substance.
Don’t bet on the housing "rebound" continuing
Jan 15th
Spotted over at The Big Picture, a sobering view of the U.S. housing market from Laurie Goodman of the Amherst Securities who collected all the current mortgage delinquency data and determined that a total of 7 million homes are likely to default over the next year or so.
The probability of a borrower recovering after missing one payment (25 percent) or two payments (5 percent) is shockingly low, at least when you look back a few years. As I recall, about 90 percent of homeowners who received a notice of default (after the third missed payment) avoided foreclosure back when home prices were still going up and unemployment was much lower. Obviously, those two factors have made a world of difference.
Of course, the GSEs are on the hook for most of these losses and Laurie has an even more sobering estimate of what that will cost – $448 billion (see this item at TBP for details).
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Low Interest Pay day Loans
Jan 15th
The industry of pay-day loan ceaselessly grows, making them one of the biggest companies in the world of lending, the tenet of low interest payday loans is being introduced to their borrowers. In several instances, their radio, TV, the Net and even the e-mail advertisements highlight the low interest loans. They may even present the best deal ever made in readies advance industry.
With this contemporary development in the sector of financing, more people are now considering of obtaining New Mexico low interest pay day loans for their immediate and urgent money deficit. You need to understand that their business lies with the interest they impose for each approved loan application.
So when you fail to pay your need on the given particular date a congruent rate or charges is incurred therein. The longer the payment term is, the bigger the total cost would be. This would suggest that if you sum up the total interest you pay for longer terms it might be more costly.
Don’t just be lured by different fake announcement on low interest rates. Their advertisements can be attractive and catchy. You typically see these on poster advertisements, TV, radio, emails and other media means. They may present their best deal through the payment term they offer their clients and even present it by employing the once a year p.c. Rate ( APR ) computation. Getting confused as whom to trust your credit line? Just try to figure out which of these firms offers you the hottest deal and service for a New Mexico low interest pay day loans.
You may find in the newspapers and magazines that certain financing companies’ offers low interest payday loans to help their clientele resolve their immediate cash Problems. The comparison of the deal they offer for particular amount over particular period is sometimes known as best-buy tables.
fortunately , you continue to have other choices to explore. You can go for personal financing to offer you foundation for a good comparison. If info about their service isn’t that clear, giving you an imprecise idea about the method and its mechanics don’t go for it.
web becomes the handy partner of financing business and of the borrowers. Online application is available in their own portals. Just fill out all the required questions asked in the online application form. Some pertinent info will be asked from you. Given the chance to explore their site and the services they offer, you can now choose which of these sites is apt for your cash immediate wishes.
you’ll never have to fret about New Mexico Low Interest Payday Loans again! Visit us on the internet at Payday Loan cash Advance Loan to learn more.
This information has come from Dr Loans, the loans masters. Visit us for more information and research.
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Vote For The Year’s Stupidest Corporate Extinction
Jan 15th
When one considers the state of the modern American economy, the phrase “survival of the fittest” hardly springs to mind. Instead, we think of idioms like “too big to fail” and “zombie bank.” We think of Band-Aid fixes, public make-work schemes/scams, of borrowing demand and earnings from the future and assorted other conjuring tricks used by economists and politicians, all designed to ensure the survival of the weakest…at the expense of the fittest.
The nation’s largest insurer, for instance, remains but a coddled mass of inefficiency, even after hundreds of billions in taxpayer-funded cash infusions; and its flagship automotive companies still suckle desperately on Washington DC’s nanny-state teat. Ol’ Fannie and Freddie were gifted – on Christmas eve, no less – enough taxpayer juice to guarantee they will waste at least that much…and probably many times more…before all is said and done.
It seems that all a company needs to do to “earn” somebody else’s bailout cash is to display an unrivaled aptitude for first loosing their own. The more bereft of any real world capabilities an institution is, the more likely it will find itself the recipient of your tax dollars.
Thankfully, not all acts of corporate stupidity are noticed by Big Brother. Some reckless companies are actually, GULP, “allowed” to fail. Here at The Daily Reckoning, we like to pay homage to those institutions kind enough to remove themselves from the corporate gene pool. We are all better off without bankers who can’t count and automakers that can’t compete. It’s time to stand by the tar pit to cheer their timely demise.
With that in mind, we recently opened nominations for this year’s Daily Reckoning Financial Darwin Awards. In short, the Financial Darwin Awards recognizes the efforts of companies that, through unwavering dedication to idiocy, rendered themselves either financially castrated or entirely extinct.
Readers were quick to nominate the US Congress, the education system, the Federal Reserve (with separate nominations aplenty for its Helicopter-in-Chief), the “entire middle class of America” and even “the state of California.” There were also a few nominations for individual companies, among them Circuit City and the creatively named Linens ’N Things.
“Circuit City was a damn good electronics chain that was too stupid and slow to adapt to Wal-Mart’s entry into electronics,” observed one reader.
Chimed another: “I would give the award to Circuit City’s corporate managers for deciding that the best way to save money and ensure business survival was to get rid of their best salespeople. Aside from depriving the business of those people themselves, the decision also sent a message to the survivors: Stay mediocre or lose your job. (Well, they lost their jobs anyway, but it probably took a few months longer.)”
A reader from Down Under was kind enough to send through a small list of ill-fated morons…
“ABC Learning – ended up being bought out by welfare groups with Rudd federal government financial assistance… Storm Financial – the case of this company reads like a frenzy of stupidity and greed, combining into a black comedy… Timbercorp – the model of this business growing trees proved to be an abject failure… Opes Prime – another failed financial advisory…”
And still more…
“Don’t forget Washington Mutual,” writes another, “for forgetting the good banking activities that made them as large and well liked as they [once] were.”
Now, as much as we enjoy laughing at others’ stupidity, we enjoy profiting from it even more.
Nominations are still open for this year’s Daily Reckoning Financial Darwin Awards. If you’d like to cast a vote, please drop us a line at: dr@dailyreckoning.com
Vote For The Year’s Stupidest Corporate Extinction originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a “uniquely refreshing” perspective on the global economy, investing, and today’s markets.
