LTNs and MTNs

Even though only five or six people will read this, it's worth mentioning. One never knows. Coincidence is one of the secrets of life so, if just by pure dumb chance, the right person were to stumble across this blog post, we could end up with something worthwhile to do. Be that as it may, I have a buyer ready to purchase LTNs (which MUST be on Euroclear) or MTNs. Of course, I am just the intermediary but you cannot get to the buyer without me. Thank you so much. Enjoy the rest of your Sunday. 

Foreclosures

A foreclosure is a result of the acceleration of a debt that cannot be paid as agreed. If a bank asks for all its money all at once, foreclosure is almost inevitable. It is not a bankruptcy though. A bankruptcy comes as a result of every lender coming fast upon you demanding payment in full. I often wonder why people who are about to lose title to their property do not sell prior to foreclosure. Of course, if your mortgage is upside down (when you owe more than the property is worth), it would make little difference, no.? I often wonder what would happen if banks simply restructured every bad loan - dropped the interest rate and extended the term. Is 6% unmanageable? Drop the deal to 1%. Is thirty years not enough time? Extend the deal to fifty or sixty years. A hundred years from now, people will be looking back at how homes used to be financed and they will scratch their head in bewilderment. Foreclosures only happen when everybody wants their money NOW. I say: What's the hurry?

China again

From a Yahoo! News story: “BEIJING – China is calling for a new global currency to replace the dominant dollar, showing a growing assertiveness on revamping the world economy ahead of next week's London summit on the financial crisis. The surprise proposal by Beijing's central bank governor reflects unease about its vast holdings of U.S. government bonds and adds to Chinese pressure to overhaul a global financial system dominated by the dollar and Western governments. The world economic crisis shows the "inherent vulnerabilities and systemic risks in the existing international monetary system," Gov. Zhou Xiaochuan said in an essay released Monday by the bank. He recommended creating a currency made up a basket of global currencies and controlled by the International Monetary Fund and said it would help "to achieve the objective of safeguarding global economic and financial stability." Zhou did not mention the dollar by name. But in an unusual step, the essay was published in both Chinese and English, making clear it was meant for a foreign audience.” I told you so.

Doomsday

From a Yahoo! News story: "WASHINGTON – Congressional Republicans on Sunday predicted a doomsday scenario of crushing debt and eventual federal bankruptcy if President Barack Obama's massive spending blueprint wins passage."

It sounds a little scary. So what happens if the USA goes bankrupt? Any idea? Will China take over? What I would like to know is how many top flight American people already own property in Europe (just in case).

Scary

The market is down - much further than I ever thought it would go. 8,000 would be the bottom - so I thought not too long ago. It's right now hovering around 7,300. It is really scary to see how scared investors are. What are they doing? Buying gold and pharmaceuticals and bonds and nothing else? What if this really turns into a depression? Then, to make matters worse, there is plenty of uncertainty in the global political sphere - wars and conflicts all over the place - Israel, Korea, Pakistan, Iran, and Africa in general, just to name five. What do you do with so many belligerent nations? There is definitely a scarcity of good government. Sooner or later, some one will tire of all this confusion and insecurity and urge a joining of strong forces - the reunification of church and state. That's the only thing that will keep unruly people in line. Europe will make a sharp turn to the right and probably catch everyone by surprise. The U.S. will simply keep playing games. Buy a house in Europe or Brazil or Argentina and good luck.

The few

There is some sort of pattern about this. Cortez conquered more than 300,000 Aztecs with 400 Spaniards and a few thousand Indian mercenaries. Enron was brought low by the actions of fewer than a dozen men. President Nixon resigned and caused a crisis after the Watergate mess planned by a few men. Bernie Madoff caused the collapse of several financial entities by paying out much more than he was taking in, losing 30 billion in the process. Now, Wall Street has collapsed and many banks are insolvent due to the actions of a handful of men. The national economy is in dire straits because a few men thought there was no end to the flow of good money available for bad investments. What next? Will crops fail, too? Are the farms in the hands of a few? Pictures at 11:00.

Square One

From the New York Times: “Speaking at a conference in New York in December, Walter M. Pressey, president of Boston Private Wealth Management, a healthy bank with a mostly affluent clientele, said there were no immediate plans to do much with the $154 million it received from the Treasury. “With that capital in hand, not only do we feel comfortable that we can ride out the recession,” he said, “but we also feel that we’ll be in a position to take advantage of opportunities that present themselves once this recession is sorted out.” The report on the TARP concluded that the Treasury’s top priority seemed to be to “stabilize financial markets” by simply giving healthy banks more money and letting them decide how best to use it. The report also said it was not clear how giving billions to banks “advances both the goal of financial stability and the well-being of taxpayers, including homeowners threatened by foreclosure, people losing their jobs, and families unable to pay their credit cards.” For Mr. Hope, the Whitney National Bank chairman, “the main motivation for TARP” was not more loans, but rather to safeguard against the “possibility things could get a lot worse.” He said Whitney would continue making loans “that we would have made with or without TARP.” “We see TARP as an insurance policy,” he said. “That when all this stuff is finally over, no matter how bad it gets, we’re going to be one of the remaining banks.” WHAT UNBELIEVABLE CYNICISM. Isn’t this the same kind of greediness that got us here? Now, thanks to the bailouts, China and the Middle East hold the mortgage on the entire country – first and second lien, as it were. The higher ups don’t care – they will just go live in Europe. (The woman is indifferent to all this. She is actually disillusioned too.)

Horse sense II

Okay, the credit emergency seems not to be over. Lots of people never saw it as a real emergency since the stock market seemed to be doing fine inspite of the delay in securing the 700 billion dollar injection of funds but there you have it. There is more to be done. More businesses to save. More jobs to create. It will be so much fun. Did Wall Street learn anything? Who knows? Just buy as many conservative shares as you can while they're still cheap. I think WAMU is about 4 cents. Is that cheap enough? We need an injection of plain old horse sense. That's what we need.

Money and Markets

Money and Markets has produced a free one-hour video which you (one of my eight readers) might be interested in, especially if you're looking forward to some day receiving payments from your 401K pension.

Here is what the banking experts behind Money and Markets say:
"We NAME NAMES — 198 of the big banks we believe are most likely to fail, the 197 strongest banks in America, and the most solid brokers as well ...
We give you the simple, step-by-step instructions for finding out how safe your bank is even if it's not one of the 395 named in the X-List report ...
And we give you the four crucial guidelines to follow when choosing a bank to trust with your money." There is, of course, tons of other useful financial information in the video. Buy stocks and plenty of them, but make sure you're investing conservatively. Do not worry about the stock market. It can only go up.

Spain

It pays to be conservative. Now, I hear that Spain is not having too much trouble dealing with the folding of Wall Street. Why not? Because they were very conservative in their lending practices. While banks in the U.S. and Europe were making loans while blindfolded, Spain was being judicious and careful. I think this photo was taken in Spain. The hemline indicates that the Spanish economy is doing very well. It can't go any higher, that's for sure.

Didn't I tell you?

Now - everyone is coming out and saying that the financial bailout of Wall Street was not meant as an economic stimulus - it was just a bailout of the banks. Now, if we behave ourselves, the banks will again start lending us some of our own money. Thanks a lot Congress. All this time, just as I said, the major investment banks were living from paycheck to paycheck.

High Finance again

We can now all relax. Uncle Sam has decided to bail out whoever got into hot water with all the sub-prime lending done in the last five years. AIG, Bear Stearns, Merril Lynch, Fannie Mae, Washington Mutual - you name it. The government can do it because it can either print money or issue bonds. Unfortunately, most of the bonds will be bought by foreign governments, not U.S. citizens. That's the scary part. The stock market is up so the hemlines will be going up too. It's not all gloomy news. Now, real estate has to pick up again, but builders need financing, too. It's up to the banks now. Please.

Lehman Brothers

Lehman Brothers is a New York based financial services bank which is about to go out of business, like Bear Stearns and Fannie Mae and Freddie Mac before it. That's what happens when you play fast and loose with money, just because you want to maximize profits (i.e., when you get greedy). Lehman had been around since 1850 and had been buffeted by bad turns of events - including bad management and the Great Depression - many times. It had survived by merging or striking deals with other firms - Goldman Sachs, E.F. Hutton, and American Express among others. Now this. It's up for sale if you're interested. I predict another Federal bailout. Who will bail out the Federals?

Hemlines and the Economy

They say hemlines are a barometer of the state of the economy - the better the economy, the higher the hemline. Evidently, that is no longer true, or someone forgot to tell this lady. The economy does not seem to be doing well, yet, hemlines are at an all-time high. Perhaps the opposite is now true? Who really knows? Common sense tells me that nobody really knows how the economy works. Predictions are useless - even when they come - I should say especially when they come - from the most knowledgeable economists. The other day, I was guessing that the Chinese and other countries had pressured the U.S. government to take over Fannie Mae and Freddie Mac and I was right. They were behind it. They sort of pulled the plug. I even heard someone say that if these two giant lenders had collapsed, the entire world economy would have come to a standstill. Maybe we're hanging by a thread (on a short hem) and don't know it?