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Getting Ugly
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tt



Joined: 02 May 2007
Posts: 19

PostPosted: Fri Aug 03, 2007 8:39 pm GMT    Post subject: Getting Ugly Reply with quote

Wells Fargo, Bank of America and other major lenders have raised the rate for prime customers on a 30yr Jumbo to 8% from 6 and change last week. Most if not all lenders have done away with Alt-a , sub-prime and piggyback loans....good luck refinancing that ARM Laughing
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lurker
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PostPosted: Fri Aug 03, 2007 10:28 pm GMT    Post subject: Reply with quote

i've been lurking here for a week or two...much of the news the past week seems pretty apocalyptic. Buyers who have been patiently waiting things out (like myself) must be licking their chops, cackling with glee at some of these stories.
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admin
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PostPosted: Sun Aug 05, 2007 4:30 am GMT    Post subject: Reply with quote

I don't watch Cramer, so I don't know how typical this is, but check out his desperate flailing as he rants about how things are much worse than is being reported and how Bernanke needs to step in and save his Wall Street buddies' fortunes:

http://www.youtube.com/watch?v=rOVXh4xM-Ww

I think I might be starting to really like Bernanke. His recent testimony before congress helped in this regard too.

- admin
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tt



Joined: 02 May 2007
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PostPosted: Sun Aug 05, 2007 11:43 am GMT    Post subject: Reply with quote

admin wrote:
I don't watch Cramer, so I don't know how typical this is, but check out his desperate flailing as he rants about how things are much worse than is being reported and how Bernanke needs to step in and save his Wall Street buddies' fortunes:

http://www.youtube.com/watch?v=rOVXh4xM-Ww

I think I might be starting to really like Bernanke. His recent testimony before congress helped in this regard too.

- admin


It's a classic! Funny how in September '06 of he was pumping Indymac, Wells and the homebuilders. Then again, no one could have seen this coming Wink

"STOP TRADING Wednesday 9/20
Positive on Indymac (NDE) and positive on Wells Fargo (WFC); homebuilders have bottomed and oil going lower."
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SuperBreakout



Joined: 28 Jul 2007
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PostPosted: Sun Aug 05, 2007 11:54 am GMT    Post subject: Reply with quote

heh.. won't someone please think of the multi-millionaires...
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john p



Joined: 10 Mar 2006
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PostPosted: Mon Aug 06, 2007 2:51 am GMT    Post subject: Reply with quote

I really like Barney Frank and I think he did the right thing to press Bernanke a bit.

I'm missing what Bernake said that was great. Saying that we need more honest standards now is like the Minnesota Department of Transportation saying that they ought to do bridge inspections.

Bernanke saying that we need education... How can people afford education in today's economy. I think college tuitions have gone up faster in the last 7 year than in any other 7 year period.

Bernanke talks about how if you drop energy from the inflation index and use core it's only 2. something percent. It's like ignoring the elephant in the room.

What Bernake talks like is Mike Brown "Brownie you're doing a hell of a job" Brownie. He's obviously much more articulate but he has this attitude that "that's not my role" with very key, key components of the economy.

Creativity and problem solving is totally missing from the equation. Who does that on our behalf? The FED made this housing bubble by lowering rates so rapidly and when steam ran out, not putting in protective measures to protect from the predatory melt up.

Jim Cramer's show is about him acting crazy every night. Its like saying Frank Costanza had a melt down. What I think is right about Jim Cramer is that the FED's policy has created this 5000 pound angry hungry gorilla and it wants to eat. It seems that Bernanke is not trying to pose as the relief valve (in plumbing terms, water hammer) to relieve this shock to the system.

http://www.plumbingsupply.com/waterhammerarresters.html
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admin
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PostPosted: Mon Aug 06, 2007 4:28 am GMT    Post subject: Reply with quote

john p wrote:

I'm missing what Bernake said that was great.

...

He's obviously much more articulate but he has this attitude that "that's not my role" with very key, key components of the economy.


I was mainly referring to the man who could withstand the pressure from Cramer and his cohorts. That may just be imagined, though. Bernanke may pay as much attention to Cramer as I do (which is to say none).

As for the hearing, I think I was more impressed with what he didn't say than what he did say. He didn't offer up any easy answers to placate people, and he rightfully emphasized that much of the discussion is beyond the scope of what the Fed does. Yes, the discussion centered around very key components of the economy, but the Fed does not control most components of the economy. Maybe I was just happy to see someone in the administration acting competently and not saying something stupid - I am happy with consistent competence right now.

I also went into the hearing having read a recent Economist article praising Bernanke. I think it was this one:

http://www.economist.com/opinion/displaystory.cfm?story_id=9516452

Cramer's speech just added a mythos to my existing impression of Bernanke which was a little on the favorable side of neutral before.

- admin
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SuperBreakout



Joined: 28 Jul 2007
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PostPosted: Mon Aug 06, 2007 11:42 am GMT    Post subject: Reply with quote

Found this "remix" of the Cramer video this morning:
http://www.youtube.com/watch?v=Pd5zAbDKZEg
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john p



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PostPosted: Mon Aug 06, 2007 12:28 pm GMT    Post subject: Reply with quote

It seems that we've devolved to a point where as long as the Administration doesn't do something completely stupid they're exceeding expectations. I do wish that they had some people sitting in a room with coloring books and crayons than to get them into the mix and create more nonsense.

Admin, it seems that you see Bernake as a goalkeeper and I see him as a potential goal scorer. You're right about the fact that he's not responsible for putting points on the scoreboard, but I do think he has a leadership role to offer what types of things have a positive impact, and because it seems that he's pretty smart, I'd hope he'd be creative to find a way to extend a greater benefit from his insight. I care less about how a person speaks, I mean Cramer acts like a mad man and Bernanke acts like a calm father figure; I pay attention to the words that come out of their mouth and until Bernanke can understand how forces behave and intertwine and actually get out in front of the problems, then he is just a reporter of data. We can set up a database to spit out a form report and have a news reporter with a tenor voice read it.

I need a day to digest the whole "value of silence" or "what he didn't say". Meatheads like me take longer for sophisticated things like that to sink in.

From my perspective, I don't see Bernake as being responsible for the correction in the housing market. I think that ran its course naturally. I think when it was apparent that it was going to correct, I think the FED could have come in and prevented the melt up.

What we need to learn from Cramer, Bernanke, and the engineers reporting on the bridges is this: What you say, when you say it, how you say it, and the words you choose matter. An engineer said on a TV. show that 7,000 bridges in the country were deficient structurally. The TV. guy was shocked by the charged term "structurally deficient". Then the engineer backed off the term and talked about the many shades of grey... It's like shit or get off the pot. Cramer acts so crazy and entertaining all the time, of course he's going to have deeper amplitude melt down after a day with a big, big loss, and if people know he's on TV. then he's now like a lobbyist. Whether Bernanke is being tugged along we'll never know, he's smart enough not to pose that way. I was in Faneuil Hall for lunch one day and the fire alarms went off. I started walking out and noticed that absolutely nobody was leaving except me (and it was pretty crowded). It's like people ignore alarms, signals, warnings and they need an authority figure to give them a written invitation. Bernanke needs to be that policeman or fireman that say's to people, "Hey everybody gets out of the burning building". Because there is so much incompetence, people must assume that a contractor inadvertently tripped the alarm....

Who’s role is it to bring financial leadership to represent the interests of the Nation? In a way, I might be more scared of a FED director that did offer his insight because that might be too controlling if they were no good. It’s like we need a group responsible. I think the leaders need to tinker with setting up a strong group to help damper these humungous ridiculous asset bubbles. Just like the City of Boston grew beyond its borders, so too did the role of the FED when the economy went global and much of which is based on the US dollar standard. What’s getting ugly is that when our top guy is starting to recognize that our historical metrics, our fundamentals are out of date. We have out of control energy prices so we need to change the index of inflation. The Senators were almost rude to Bernake, but in all fairness he doesn’t get that wages are part of inflation and if energy, housing, education costs inflate, so too do wages. If not we’ll continue to have deeper and deeper inequality. Admin, just ask yourself, if that was your job and you were the best of the best, wouldn’t you have more to offer a Nation that is desperate for competent leadership? I’m the biggest meathead on this website, and I know I’d try harder than what he’s doing.
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admin
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PostPosted: Mon Aug 06, 2007 1:12 pm GMT    Post subject: Reply with quote

john p wrote:
Admin, just ask yourself, if that was your job and you were the best of the best, wouldn’t you have more to offer a Nation that is desperate for competent leadership?


I don't know. Who's to say that the best of the best actually have answers? Frank's question of how to address the growing inequality of wealth seems like a potentially impossible question to me. Sure, Bernanke could step up and display some perceived leadership, but if he knows that it would only be for show then he may find that intellectually dishonest. I would have more respect for someone who admits that he doesn't have the answers and performs his assigned job well than someone who pretends to lead.

- admin
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john p



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PostPosted: Mon Aug 06, 2007 2:27 pm GMT    Post subject: Reply with quote

I agree, and I respect "I don't know" as a responsible response.

Here is an example of what I'd do/say as FED Director:

I'd start with a bottom up approach for a couple dozen of people who represent typical Americans. I'd do a personal finance profile and explain where each person is being squeezed and to what degree. I'd show how college tuitions have exploded in cost and show the regions where certain things seemed to be more in balance.

I'm sick and tired of the top down 50,000 foot view down. I want to see some bottom up perspective. I want someone to actually do the math and run the numbers for a monthly budget for typical Americans.

When he's done talking, those Representatives need to decide how to act. If it is all very unspecific it is difficult to get from pure to apply. If it is not his job to advice about how to adjust the sails to catch the wind, who job is it? My feeling is that we invest in people to be in roles. When a company sends a guy to field meetings with a client, they need to come back to the base camp with the information to disseminate to the team back in the base and to probe for new work. If they don't, it is a wasted investment because another person would beat the bush for work and guide projects and take good notes for the team. What I'm finding is that people in many industries lacking leadership to step up and provide solutions. It is risky to take a chance and offer something, but I admire someone who does try. What was that Matthew Broderick movie where the guy said "Hell I'd piss on a spark plug if I thought it would do any good"? I think Bernake's role could yield more.

A bottom up mentality is fundamentally grounded. The top down mentality is good for uplift (seeing a storm on a satellite). Ask yourself what storm did the FED ever protect us or warn us from. It seens to always be after the fact. At least Greenspan talked about the value of a "Pay-Go" strategy in governmental spending.

Many of the rich are switching political parties. The reason for this is that the power players in the Republicans care about the rich and nothing else. In order to be successful in a democratic context they need to get 49 percent to see things their way. So guys like Karl Rove target the easiest, cheapest 49 percent in our population. They target rednecks who aren't critical and who don't do their civic duty to question power and provide the essential checks and balances for a democracy to thrive. They used "nationalism" to paint anyone doing their civic duty in questioning the basis for the Iraq War as traitors. They threw out red meat to this 49 percent and offered them oversimplified solutions. They gave them the Terminator who invoked John Wayne to stir their sense of machismo and certitude.

Here's the big, big problem with that: In order to feed the machismo of this 49 percent, we need to spend and spend and spend and spend on a war that doesn't give us the best return on our investment. It redefines when and how we use our Military, and it breaks the trust that we will only use our men and women of uniform as a last resort to defend our Nation. The Republicans were against nation building before George W. Bush because it was costly and the rich didn't care about anyone poor, especially someone outside the country. Now we're stuck in a nation building situation and our own infrastructure is fatiguing.

How come Bernanke talked in great detail about lending standards but won't talk about the cost of the Iraq War? Why not talk about no-bid contracts to Halliburton? Sometimes what someone doesn't say is a bad thing too.
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john p



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PostPosted: Mon Aug 06, 2007 2:58 pm GMT    Post subject: Reply with quote

More thought:

I'd take a map of a composite of profiles say take 20 tradesmen from Fall River and monitor/survey their finances and create sort of a index like a stock index (Dow Jones) and look at a variety of composite benchmarks which are essentially financial profiles of typical Americans. Then, I would watch the drift over time. If I saw gaps start to take place, I'd report them.

Here's how the politicans can go from pure to applied: My wife's younger cousin asked about if there was a nursing school near where we lived in the South Shore. We said that she could live with us while she was in school. I told her to check out Bridgewater State because it's like 5-10 miles away. I guess Bridgewater State doesn't have a nursing school. Now I'm thinking, with the babyboom generation aging, why aren't public colleges pumping out more nursing school graduates? Bridgewater State has an Anthropology Major but no nursing program....

http://www.bridgew.edu/majors.cfm

To me, these are simple, basic, obvious alignments.
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admin
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PostPosted: Mon Aug 06, 2007 4:03 pm GMT    Post subject: Reply with quote

Isn't the identification of where the typical American is being squeezed already being done? There is certainly an awful lot of noise about rising health care costs - I would hope that is grounded by actual data. Identifying a problem is one thing, but formulating a viable plan to address it is a whole different level, and that's what Frank was asking Bernanke about. This isn't to say that I think Frank was wrong to ask - I'm glad that he seemed to be genuinely looking for an answer as opposed to asking leading question to garner support for an already formulated policy.

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john p



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PostPosted: Mon Aug 06, 2007 9:21 pm GMT    Post subject: Reply with quote

http://www.marketoracle.co.uk/Article1473.html
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john p



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PostPosted: Mon Aug 06, 2007 9:25 pm GMT    Post subject: Reply with quote

I'm not into the recommendations mentioned in the attached article above however...
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