Larry, Moe, and Curly get upbraided by the Warden - and the wacky hijinks contnue...

OT Just think how large the SG losses might have been if Ben hadn't cut the interest rate. IMO the Dow would have dropped 800+ without a cut (market was only down 500 because of the risk of a cut). Then another big drop in Europe Wednesday.

Maybe the FED knew a major European bank was going down unless there was immediate relief.

Good insight into how we got into the fix we are in:

America – A Bankrupt Empire by Justin Raimondo -- Antiwar.com

It isn't just housing. It's also the drain of empire.

Mae West to Societe Generale rogue trader:

Is that $7.2 billion in quarters in your pocket, or are you just glad to see me?

I hope Lockhart continues to step up to the plate in regard to fraud at Fannie; there is no way they should be given more cash to burn, and at the tax payers expense. This is criminal, but with the mafia in control, crime is not a problem with this current coup!

So does this mean they can refuse to take jumbo loans even if they're given the legal authority to do so?

Lockhart is putting his view of the imprudent decisions regarding FNM and FRE before the inevitable Debacle. BTW , supposedly the hedge fund in trouble is a quant fund located in Boston.... don't want to speculate on the name at this point.

Re: Please tell me how a responsible central banker can make such sweeping statements before an investigation has been completed, before any criminal charges have been filed.

They call that CIA/ Bush spi

if you dont like what pelosi is doing,

call her

here's the numbers

District Office - 450 Golden Gate Ave. - 14th Floor - San Francisco, CA 94102 - (415) 556-4862
Washington, D.C. Office - 235 Cannon HOB - Washington, DC 20515 - (202) 225-4965

Re: Maybe the FED knew a major European bank was going down unless there was immediate relief.

This is the retarded casino/lotto mentality that has destroyed America. The Europeans dont game the market like our Fed and it is criminal that they act like a hedge fund bail out machine which uses any mechanics available to keep the casino running for insider friends!!!

Immediate relief...can you please give any example of how a Fed cut has any immediate relief other than for daytraders to buy on the rumor and sell on the news? How can a slow moving event which may take a year to be factored in, can bring about immediate retarded relief???

Give this man the congressional medal of Honor

Good for OFHEO! Perhaps there will still be qualification standards, but there seems to be a huge risk that the government/GSEs will allow incredibly poor quality loans that the taxpayers will be forced to bail out later.

As a high earner who saves like a miser (with a view toward spending when I am not working so much), I am confronted with the reality that the government hates people like me. I pay huge amounts of taxes, which are going to give others (1) tax rebates that I will not see due to my income and (2) federal guarantees of risky loans that cause me to have to spend more to buy a home (or to rent while I wait for the correction that the powers that be are determined to prevent). The federal debt will go up, causing inflation, which will eat into my savings. The only way to even try to keep up with real inflation is to invest in markets or housing where prices are based on irrationality or government bailouts. There must be many who are also wondering why work so hard to get ahead and to stay ahead, only to see society protect the fools (or geniuses?) who live beyond their means. I can't believe I am growing to agree that our society is designed to keep the masses in perpetual debt slavery. It is clear the model of perpetual debt and consumerism must fail some day, but how long must we wait for that to occur? Until then, every financial move is based on guessing at how long the farce can continue and not on any fundamental wealth being created by our country. With every step in this progression of bailouts, throwing in the towel and living by the beach seems a more and more attractive escape from funding the charade.

I feel so ignored. I asked a serious question (in my little mind, anyhow) on the previous comment section and got no answer. I will keep using up comment space until somebody (starts with a "T", ends with "anta" - Toxic Santa!) tells me what I want to know.

If the GSEs are gonna buy up a bunch of formerly jumbo loans, won't they need new capital? Isn't that what OFHEO has already warned about? Can't maintain their share in the formerly conforming market and make a serious dent in formerly jumbos without more capital than they have now, can they?

Back to Islamic Mortgages for FHA:

The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba´ (interest). Amongst the common Islamic concepts used in Islamic banking are profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijarah).

Ok, so we are looking into a new twist on the Ownership Society, since the last method basically failed with the no-doc loans, thus we see The Ownership Society becoming a Joint-Ownership Society, where we will partner our fellow Americans with partners that will share in joint homeownership ventures which will be allowed to be taken off the balance sheets and packaged into joint ownership obligation funds (JOOF). These JOOFs will be available in exchange for Treasury vehicles which will be available to money markets and mutual funds. pensions, and hedges funds

George is calling, more later

Re: Another approach is Ijara wa Iqtina, which is similar to real-estate leasing. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid).

Islamic banking - Wikipedia, the free encyclopedia

This does seem to be the direction our society is taking under Bush, i.e, between NAR and Paulson, Fannie, etc, we see a push to get 40 year mortgages with zero down and Jumbos for $1 million, with less and less collateral, i.e, secured lending, thus we are going to become (thanks to these retards) not a homeownership society, but a rental society with greater debt obligations, and fewer opportunities to increase equity!

Think about my fellow Americans!!!

ac, pilgrim,

Bravo. About sums it all up.

Cheers,

Re: is that hail, or brimstone?

This is financial obligation hell

Mal -
Fortress is one name being thrown around but who knows. All "rumors" at this point.

isn't this raising confirming limit thing just bringing us one step closer to test the implied government support of Fannie and Freddie?

Are they going to securitize lower limit confirming and higher limit confirming separately?

BTW, if 20% down is still a requirement, who is able to afford to pay it, or who is going to Heloc the balance?

Isn't this bit of new quite interesting..but not shocking

Feds accused of gold-price manipulation

LFKAJ*

At first glance, I thought this was loans formerly known as junk

Nobel economist Joseph Stiglitz:

"The mechanism of monetary policy is ineffective in these circumstances. I'm not saying it won't work at all: it will help the banking system but the credit squeeze is going to go on because nobody trusts anybody else. The Fed is pushing on a string,"

Well I'm glad the middle class destroying actions of the Fed will help the BB&B. Article is worth a read.

Davos 2008: US slides into dangerous 1930s 'liquidity trap' - Telegraph

Cheers,

Yeah, this is good... people can't pay their loans now, so we'll raise the limits.

That just makes SO much sense.

Pilgrim--I'm in the same boat as you (high-earning miser) and have long since come to the same conclusions as you. But I've also come to the conclusion that it's better to be a government-hated miser than a government-loved spendthrift.

Actually i read it here...but i guess these guys are not reliable either...please.

Gold Anti-Trust Action Committee | Exposing the long-term manipulation of the gold market 

lama,

ROFL.

borkafatty,

I started looking into GATA's arguments in '97. They have a whole lot of stuff that COULD be manipulation. It could also be stupid decision (BoE sale in 2000), or something else.

Now, the people in GATA have a pay site which is very informative, with a number of experts in various fields. But as far as I'm concerned GATA has been blowing the same horn for over 10 years now, and have nothing new.

Cheers,

donna,

It makes all kind of sence. As ac said, hopefully we can borrow enough to pay of our debts...or something like that.

Cheers,

We're turning into a rich nation with the financial system of a 3rd world country.

Oh, you still think we're rich. How quaint.

We're rich the way Trump is rich - Millions in assets, Millionsx2 in debts.

Where's Energyecon?

From: Jeroen van der Veer, Chief Executive
To: All Shell employees
Date: 22 January 2008

Subject: Shell Energy Scenarios

Dear Colleagues

In this letter, I'd like to share reflections about how we see the energy future, and our preferred route to meeting the world's energy needs. Industry, governments and energy users - that is, all of us - will face the twin challenge of more energy and less CO2.

This letter is based on a text I've written for publication in several newspapers in the coming weeks. You can use it in your communications externally. There will be more information about energy scenarios inthe months ahead.

By the year 2100, the world's energy system will be radically different from today's. Renewable energy like solar, wind, hydroelectricity and biofuels will make up a large share of the energy mix, and nuclear energy too will have a place.

Mankind will have found ways of dealing with air pollution and greenhouse gas emissions. New technologies will have reduced the amount of energy needed to power buildings and vehicles.

Indeed, the distant future looks bright, but getting there will be an adventure. At Shell, we think the world will take one of two possible routes. The first, a scenario we call Scramble, resembles a race through a mountainous desert. Like an off-road rally, it promises excitement and fierce competition. However, the unintended consequence of "more haste" will often be "less speed" and many will crash along the way.

The alternative scenario, called Blueprints, has some false starts and develops like a cautious ride on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technical innovation provides for excitement.

Regardless of which route we choose, the world's current predicament limits our maneuvering room. We are experiencing a step-change in the growth rate of energy demand due to population growth and economic development, and Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.
As a result, society has no choice but to add other sources of energy - renewables , yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.

In the Scramble scenario, nations rush to secure energy resources for

In the Scramble scenario, nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. The use of local coal and homegrown biofuels increases fast.

Taking the path of least resistance, policymakers pay little attention to curbing energy consumption - until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility.

The other route to the future is less painful, even if the start is more disorderly. This Blueprints scenario sees numerous coalitions emerging to take on the challenges of economic development, energy security and environmental pollution through cross-border cooperation.

Much innovation occurs at the local level, as major cities develop links with industry to reduce local emissions. National governments introduce efficiency standards, taxes and other policy instruments to improve the environmental performance of buildings, vehicles and transport fuels.

As calls for harmonization increase, policies converge across the globe. Cap-and-trade mechanisms that put a cost on industrial CO 2 emissions gain international acceptance. Rising CO2 prices accelerate innovation, spawning breakthroughs. A growing number of cars are powered by electricity and hydrogen, while industrial facilities are fitted with technology to capture CO 2 and store it underground.

Against the backdrop of these two equally plausible scenarios, we will only know in a few years whether December's Bali declaration on climate change was just rhetoric or the beginning of a global effort to counter it. Much will depend on how attitudes evolve in Beijing, Brussels, New Delhi and Washington.

Shell traditionally uses its scenarios to prepare for the future without expressing a preference for one over another. But, faced with the need to manage climate risk for our investors and our grandchildren, we believe the Blueprints outcomes provide the best balance between economy, energy and environment.

For a second opinion, we appealed to climate change calculations made at the Massachusetts Institute of Technology. These calculations indicate that a Blueprints world with CO2 capture and storage results in the least amount of climate change, provided emissions of other major manmade greenhouse gases are similarly reduced.

The sobering reality is that the Blueprints scenario will only come to pass if policymakers agree a global approach to emissions trading and actively promote energy efficiency and new technology in four sectors: heat and power generation, industry, mobility and buildings. It will be hard work and there is little time.

For instance, Blueprints assumes CO2 is captured at 90% of all coal- and gas-fired power plants in developed countries in 2050, plus at least 50% of those in non-

Blueprints will not be easy. But it offers the world the best chance of reaching a sustainable energy future unscathed, so we should explore this route with the same ingenuity and persistence that put humans on the moon and created the digital age.

The world faces a long voyage before it reaches a low-carbon energy system. Companies can suggest possible routes to get there, but governments are in the driving seat. And governments will determine whether we should prepare for a bitter competition or a true team effort.

That is the article, and how I see our challenges and opportunities. I look forward to hearing how you see the situation (please be concise).

Regards
Jeroen van der Veer, Chief Executive

thanks CR&T for allowing this SPAM

Ella | 01.25.08 - 12:26 pm |

Misean,

The post you made last nite is dead nuts on. This is NOT about munis. This is about all the off balance sheet intems that will come onto the books as a result of downgrades. The unwind has to be controlled.

What would happen if a 1T capital call happened over the course of a few days?? Could the global economy handle it?? Hell I don't know and I don't want to find out.

The underlying contracts can be renegotiated but until then we are pretty much stuck...

I will confess to just bieng a dumb truck mechanic and willing to learn...

Chris

Re: SocGen does not want to get to the bottom of it. At least not in public. In fact they have been told not to discuss it.

Did you see how Northern Rock (Blackbird) is trying to shut media by censoring information; same deal with SocGen and this will be a trend in withholding info from Tanta, et al

bork, gata.org sent out a press release challenging Bill O'Reilly to a verbal duel. Please. Stick to actual news sources. if you're going to quote whackjobs, at least give us an update on batboy's exploits.

Misean | 01.25.08 - 12:37 pm |

Fooled ya...Friday is a good day to screw off at work(And get all my weekly paperwork done)...
The best part is my reporting managers office is 300 miles away...God I love my job!!!

Chris

Pilgrim- Kudos to you!

Whatever happened to savings. CD rates are down because the fed wants the elderly to die of starvation, beg and cheat because as they lower the fed funds rate the ss check gets smaller and why they say inflation is tamed is because SS is tied to that also, if inflation goes up the SS has to pay more to that senior citizen who deserves it. What a great country, starve and lie to the people who built it and give money away to illegal immigrants, immigrant families hosting thier mother/father for a year and then become US citizens who then get to a ss check without ever paying into it. I saw that first hand with my neighbor.

I say everybody claim exempt and demand change. They will listen to us when we hold them by the balls. They have us by the balls now. We need a Subprime tea party! Our govt. is in shambles. Congressman are paid and supported by industry to vote according to their interests. Democracy and the great american dream are being squashed by the elite.

Disclaimer-I make real good money, have 800 credit and a down payment but they (the govt.) just lost me as a home buyer. I will be withholding all my taxes and will plead innocent of tax evasion based off me contracting the subprimeitis disease. This disease popped up after watching all the efforts to save lenders, banks and greedy borrowers from going underwater by the Govt., I believe it' derived from the holy water that Mr. Bush sells from his Crawford Ranch but distributes free to his admin.

Rant off- but this affect me and my daughter( her even longer) financially and emotionally as they have now begun the artificial propping of overpriced homes.
I quit! I gotta go and open my corporation in Nevada. Need to hide my money....

Bring the troops home and give them the money, they deserve it! We will have a positive net gain while saving young men/women from dying in an illegal war.

The beaches in Peru and Ecuador are looking better and better Pilgim!

Well than i might as well quote Ben, Bush, and all the other wackjobs..I mean its all one big nut job club...

Have any of you friggn people really read how friggn fannie does business?? Granted this is a very friggn old link, but this is the core and heart of where this current friggn systemic crisis was hatched:

Automated Valuation Models

In a move that has drawn fire from appraisers, Fannie Mae is allowing some mortgage lenders to forego appraisals on sales and refinancing for a $50 fee.

Appraisals are not being banished altogether, says Fannie Mae, but eliminated when adequate electronic valuation data is available. Most applications received through Desktop Underwriter, Fannie's automated underwriting system, require no appraisal or only an exterior inspection; very few need a complete appraisal.

Wait... did I just read that?????

Most applications received through Desktop Underwriter, Fannie's automated underwriting system, require no appraisal or only an exterior inspection; very few need a complete appraisal.

Ill stick to what i see with my own eyes...and that is manipulation across the board..do i believe 100% of what i read...no...do i believe 100% of what i see in front of me...yes i do...unless of course i have been drinking the night before.

bokafatty,

Let me be clear. I do not deny manipulation in any market, especially one as small as gold. What I am saying is that GATA has been making the same arguments for over 10 years and has come up with nothing new since their custodial gold find in 1998. That's a long time to keep tooting the same old horn. Give me some solid evidence for a change.

Cheers,

Re: I forgot. I heard that some of the money market funds were invested in this stuff.
Could be trouble there.

Some? I heard that some of the money market funds were invested in this stuff.

You would be hard pressed to find a money market not connected to this crap! You are aware of The Pension Protection Act and the relief granted to underwriters, to help you invest your money market funds in CDOs and derivatives,,,,right? That DOL granting of exemptions of prohibited actions by underwriters is not just a pension issue, most every money market out there is connected to derivatives and the only safe ones, if you believe The Fed isnt broke, are Treasury-linked money markets that just hold Treasuries; however, these money markets often have the right to invest in anything they want, regardless of what you think, so PLEASE for God's sake, read your current prospectus and look at holdings!!!

This whole bear scenario like the-housing-bust-will-detroy-the-economy and how we only have the choice between a severe recession and a Great Deproession was complete hogwash from the beginning. Now there are two choices for the bears:
a) Realize this was completely wrong and illogical from through and through
b) blame others (FED, politicians, banks etc.) to have sabotaged the depression and succomb to even more absurd conspiracy theories.

What's your choice going to be?

O-Joe

rich,

Yeah it's fishy. So is Jerome's new bedroom. If you get my drift.

Cheers,

Re: please call in the sheep dogs...the pack is running astray.

I think its time for guns and fences, probably SUVs and lots of hard liquor

What fund holdings would we look for specifically?

They can hide this stuff so well. Clever names, etc.

I have read some stuff by this little lady and she may have a few names for this stuff (Collateralized Debt Obligations & Structured Finance
by Janet Tavakoli):

Collateralized Debt Obligations & Structured Finance & Securitization

She used to work as a Goldman quant...I think? Been a few years??

All of the following are examples of SPEs: Special Purpose Corporations (SPCs) which may or may not be Special Purpose Subsidiaries or captives; Master Trusts; Owners Trusts; Grantor Trusts; Real Estate Mortgage Investment Conduits (REMICs); Financial Asset Securitization Investment Trust (FASIT); Multiseller Conduits; Single Seller Conduits; and certain Domestically Domiciled Corporations

No need to worry about GWB re-blowing the bubble, because it just can't work. The problem is not and cannot be contained. It will play itself out, one way or another. It can't be swept under the rug or re-inflated. If the GSE's start eating bad jumbo loans, they will develop a very bad case of dysentery.

Let me put this another way. Consonant with the bubble, the Bushies claimed that they were an empire now and created their own reality. Well, that empire is crumbling and reality is biting us all on the ass. If the GSE's don't practice good business sense, a la OFHEO, then reality will bite them, real hard, and the whole world of GSE mortgage backed securities will scream like you wouldn't believe.

Relax and watch the horror movie.

Joe

Anonymous | 01.25.08 - 1:44 pm,

Awe screw all that. Just build a fascade in front of the actual house.

Cheers,

This looks fun:

We will issue the notes in book-entry or uncertificated form. Subject to certain limited exceptions, you will not receive a certificated security or a negotiable instrument that evidences your notes. Sumner Harrington Ltd. will deliver written confirmations to purchasers of the notes. Wells Fargo Bank, National Association will act as trustee for the notes.

The notes will be issued in book entry or uncertificated form only. Except under limited circumstances, the notes will not be evidenced by certificated securities or negotiable instruments. See “Description of the Notes – Book Entry Registration and Transfer.”

Anyone heard of CDIs ( certificated depositary interests)? Fannie could have unregistered

Both the original notes and the exchange notes are represented by one or more certificated depositary interests, or CDIs, as more fully explained in “Book-Entry, Form, Clearance and Settlement.”

Upon the global notes being credited to the account of The Bank of New York as the holder of 100% of the book-entry interests in such global notes in the records of Euroclear, The Bank of New York, as Book-Entry Depositary for the exchange notes, will create one or more certificated depositary interests, or CDIs, representing a 100% interest in the Book-Entry Depositary’s book-entry interests in the underlying global notes and issue them in the name of Cede & Co., as nominee of DTC.

The CDI Depositary will hold the CDIs as custodian on behalf of DTC.

We need more custodians, we need more cowbell!!! Bring on the transfers baby!

Hey anyone have any idea what is holding up the dollar...it is looking strong considering the free money drop from the sky....

This populist rhetoric of saving homes is sickening since on the back of this language they try to raise caps to $625,500. How do those in middle America feel about this? Our national median home price is roughly $223,800. Heck, even Southern California’s median home price is now near $400,000 and no county in Southern California is even over $565,000. Guess who called for higher caps last year:

“NEW YORK, Dec 5 (Reuters) - Countrywide Financial Corp’s (CFC.N: Quote, Profile , Research) chief executive called on the U.S. Congress to temporarily raise the maximum size of mortgages that Fannie Mae (FNM.N: Quote, Profile , Research), Freddie Mac (FRE.N: Quote, Profile , Research) and the Federal Housing Administration may buy or insure by 50 percent to $625,000.

In an opinion piece in the Wall Street Journal on Wednesday, Chief Executive Angelo Mozilo, whose company is the largest U.S. mortgage lender, said the increase from $417,000 should be implemented for up to a year.

He said this would go a long way toward alleviating a nationwide housing crunch, which analysts expect to pinch borrowers and lenders throughout 2008 and probably beyond.

“It should be enacted as part of a broader package of reforms to ensure that these linchpins of our mortgage system can aggressively support the housing market in a time of need, and that the appropriate controls and oversight are in place to protect taxpayers,” Mozilo wrote.

Mozilo had previously called for the cap to be raised to as much as $850,000.”....................

There you have it...proven mobsters at its finest...these junkies taking the playbook from..MOZILO...

Is it possible that the higher cap is to bail out all the second lien holders that are getting killed from the 0% down deals.....and in effect socialize the risk?

Thus is a state/local gov't budget bailout....remember the deficits?

Inspector Clouseau is on the case...film at 11!