outtafavr

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    • Tue Sep 30th 01:25 AM | Rating: 0 0
      Commented on:
      Dollar Goes Down Along with Bailout Plan
      Dollar Bears:

      Have you ever thought of borrowing dollars and spending them as taking a short position against the dollar? Isn't there an expectation of easily acquiring dollars later to use for repayment? Can what we see now be a bit of a short squeeze going on as debtors sense present and future difficulty in acquiring dollars?

      Your only hope is that "Helicopter Ben" helps 'em out. Otherwise, this could be the mother of all short squeezes unraveling.
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    • Sat Sep 13th 12:00 PM | Rating: 0 0
      Commented on:
      Rethinking Fannie, Freddie and Mortgages
      This is an excellent article. The author is a very brave man. In discussing the reason for Fannie/Freddie's existence, he refers to housing being subsidized by taxpayers. There's more to it than that. The GSEs were used to manufacture a hot economy. So many jobs were created in the process of building and selling all those houses. This was all done with cheap money borrowed by the government in disguise as GSEs, blazing a $10 trillion path to nowhere. For 70 years everyone was fooled. The giant "DEAD END" sign is now visible to many, including David Merkel.

      Allowing the GSEs to fail would cause immense pain to the economy and our financial system. Short term pain would turn into long term gain and result in a much more rapid return to prosperity and overall financial health. This society could never be courageous enough to cause any pain for itself. The GSEs, the government, and the economy, all being one in the same, are destined to die a very slow agonizing death.
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    • Wed Sep 10th 19:01 PM | Rating: 0 0
      Commented on:
      Roubini Attacks Bailout, But Misses Boat on Regulation
      I mentioned socialist and class envy, and the next two posters appeared in that exact order! Awesome fellas! Thanks for your misguided input!
      View article »
    • Wed Sep 10th 14:54 PM | Rating: 0 0
      Commented on:
      Roubini Attacks Bailout, But Misses Boat on Regulation
      I'm afraid there is no way to dismantle the current system in an orderly fashion. The system is currently on life support and I believe there is substantial risk that the end may involve significant disruption.

      Meanwhile, the socialist/class envy/every man a king/utopians (User 256999 this is you) remain at the helm. Even Dr. Roubini is afraid to take them on, but Michael Shedlock is not.

      Many thanks to you, Michael, for your excellent analysis. Hopefully, those who construct the next system will have similar insight into America's sins of the past.
      View article »
    • Thu Jul 31st 17:15 PM | Rating: 0 0
      Commented on:
      The True Nature of Fan and Fred
      Only time will tell which side is ultimately correct about FNM and FRE. Recent history has not been kind to FNM/FRE proponents. The bitterness in the responses of "DCBill" and the other GSE shills remind me of a female bison defending her calf's dead bloated carcass from hungry wolves.
      View article »
    • Thu Jul 24th 16:05 PM | Rating: 0 0
      Commented on:
      25 Ways to Tell a Banking System Is Unsound
      Norm, your soothing comments about what deposits are "at risk" and which are not must be based on the value of bank collateral and the strength of the economy to create and support jobs, so fine Americans like yourself can keep that mortgage payment current. I personally believe the collateral and the economy will no longer live up to your expectations in an environment where banks no longer sling the easy money, like there's no tomorrow. Reckless lending is what created those spectacular asset prices and the robust economy. Welcome to tomorrow.
      View article »
    • Thu Jul 10th 14:26 PM | Rating: 0 0
      Commented on:
      Fannie and Freddie: When the GSEs Go, So Goes the Dollar
      To the author, I would just state that lower bond prices/higher interest rates will attract capital to the US, boosting the dollar. The credit crisis is about a shortage of capital in our markets at prevailing interest rates. Adjusted for risk, returns are negative, resulting in the flight of capital, a weaker dollar due to exchange imbalances. When rates rise to levels that adequately compensate for risk, capital will flow into this country once again, credit markets will be functional again, and the dollar will be strong again. The problem is that a substantial adjustment to our rates will be necessary, the sooner the better. The government's only strategy is to delay the inevitable.

      BS Detector, you need to study pyramids, ponzies, and multilevel marketing schemes. The collateral you have so much faith in has an inflated value because of the $5 trillion FNM and FRE threw at it over decades past. That money is gone. The base of the pyramid just gets bigger and bigger. Another $10 trillion will be needed to keep the triangle intact. Where will that money come from? New issuance of agency/treasury(same thing?) debt? Please see my first paragraph above. Without dirt cheap interest, low/no down payment mortgage loans available from FNM/FRE/Uncle Sam, how much will all those precious US dwellings be worth?

      islandcreek, so much for your experience and perspective. This time it is indeed very different. For your sake, I hope you are one of the very very few Americans with some money in the bank.
      View article »
    • Wed May 21st 14:51 PM | Rating: 0 0
      Commented on:
      Scoping the Mortgage Crisis
      The article addresses consequences of lending past. The larger issue is future lending. Will lenders continue to compound mistakes of the past? How will the mighty US consumer borrow to fund conspicuous consumption next year?
      View article »
    • Tue May 20th 14:11 PM | Rating: 0 0
      Commented on:
      Priceline.com's Price Is Right
      I was a long time investor in PCLN. I sold recently to pursue other alternatives, and also to reduce my exposure to long investment positions. A longer term issue I currently have with PCLN involves airline carriers. PCLN depends on travel being a volumn business, which is the current unsustainable business model of the carriers. How long can airlines continue to lose billions? Airline business models must be overhauled. The future of air travel (and possibly all travel) is higher prices/less competition, less congestion, and only affordable to aristocrats. Energy prices say the masses can no longer afford air travel.
      View article »
    • Thu Apr 24th 19:26 PM | Rating: 0 0
      Commented on:
      Treasury Yields and the Dollar
      Does the fed determine interest rates? Historically, they have. The high interest rates suggested in this article would fly in the face of history. In light of weakness and potential disaster in the U.S. economy, will Uncle Sam's lenders be satisfied with miniscule returns? It may depend on investment alternatives to U.S. bonds at the time. It may also depend on Uncle Sam's appetite for borrowed cash. If there's one thing we know about America and Americans, they love to borrow and spend other people's money. My guess is that America's appetite for borrowed money in the future will exceed foreigner's willingness to lend. That means higher interest rates. The fed will sit and watch. Their "target" rate will be laughable! Higher interest rates would give much needed support to the dollar. Is now the time for this new beginning? Those charts above say it could well be!
      View article »
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