Earlier I had written on the fact that banks may be foreclosing in a manner which will cause problems down the road. Today Reuters published an overview of the suits that banks are starting to disclose. The suits are coming from two directions: Firstly obviously from homeowners… And, secondly from the buyers of Mortgage Backed Securities (MBS), often big brokerages or banks themselves. . . . → Read More: Foreclosure gate: here come the class-action suits
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This is a great video by Christopher Whalen on Bloomberg. He is saying some of the things which are going to be working out over the next few years in the slow motion of foreclosures. The knock on effects will work out as a long downward pressure on asset classes, not a single Lehman like event: You guys in in the media have a very tough time. You’re looking for events. You’re trying to cover the news minute by minute. This is cancer. . . . → Read More: Foreclosure-gate is a ‘cancer’ The Fed has announced quantitative easing 2 known by the QE2 moniker. The expectations that this alone can raise the level of economic growth in the US is definitely overstated. The Financial Times however points at two other adverse consequences which may turn up in the next 12 months: …other countries are likely to counter what they view as an unnecessarily disruptive surge . . . → Read More: QE2’s like unintended consequences In which David S. Broder suggests it is both politically expedient and economically prudent to foster a war with Iran. I sincerely hope that the war parachute will not need to be used to halt this current free fall. . . . → Read More: War as the solution to our woes Rather than steering towards balmy waters, Captain Bernanke has set course towards the iceberg fields. Full speed ahead! . . . → Read More: QE2: A Titanic loss? In the mid 1970s when the US was the world’s #1 exporter with a positive world trade balance for 95 out of the previous 100 years, Sen. William Proxmire (D,WI), proclaimed that Americans living and working abroad served no useful purpose in creating American jobs by selling American exports. To him they were “…swathed in mink spending their tax evasion dollars at the gambling tables of Monte Carlo” and mounted a campaign to exterminate them by also subjecting US citizens living, working and taxed abroad to the same US taxation on their world-wide income as if they had never left our shores. . . . → Read More: Wake up: Jobs and exports are related to tax policy The U.S. government taxes expatriate citizens on their worldwide income regardless of where it is earned or where they live, making them the only people in the developed world who are taxed in both their country of citizenship and country of residence…these rules are getting tougher and the penalties more draconian by the year… experts see a declining foreign investment in America. . . . → Read More: Toxic Citizens Stimulating the Dead – stimulus checks of $250 were mailed to dead and jailed people – about $22million worth. Over half the payments to dead people were returned. Grave error. . . . → Read More: Stimulating the Dead The US actually ranks today, sixth in global innovation-based competitiveness; 11th among industrialized nations in the fraction of 25- to 34-year-olds who have graduated from high school; 16th in college completion rate; 22nd in broadband Internet access; 24th in life expectancy at birth; 27th among developed nations in the proportion of college students receiving degrees in science or engineering; 48th in quality of K-12 math and science education; and 29th in the number of mobile phones per 100 people. These are clear areas where we should positively WANT our government to get involved, and to spend money, but if the current climate of political divisiveness endures for the next 2 years in a hung Congress, or even for the next 6 years of a potential Obama second term, the consequences for America’s future will be dire. . . . → Read More: I thought we’re number 1! Nope, how about 20-something? In an article today on a Bond Frenzy the NY Times notes that the bond market snapped up inflation linked 5 year Treasuries with a negative yield. “Investors paid $105.50 for every $100 of bonds the government sold — agreeing to pay the government for the privilege of lending it money,” the NYT said. Why would investors snap these up? They have a . . . → Read More: Topsy turvy world for bond market and Fed |
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