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Showing posts with label financial. Show all posts
Showing posts with label financial. Show all posts

8/24/11

Restoring Ourselves

Reconstructing America as a shining city on a hill...

When I was a kid growing up on Bermuda, a British island about 700 miles off the coast of North Carolina, there were symbols that were emblematic of America. It was a different world in the fifties and sixties than it is now. There was another view of the United States then and with the island's unique history of being British but having played some role in the American Revolution generally the British and American population got along. There were certain hallmarks that represented America for reasons that made sense at the time. Pan American Airways, American Express, the Stars and Stripes at the US Consulate and Coca-Cola. Those symbols also represented ideals that America stood for just as much as the Statue of Liberty does.


Sometimes I wonder now what the perception of our country is to the rest of the globe. My gut tells me it's McDonalds, Mickey Mouse and Reality TV shows and rampant consumerism. This is disappointing to me but not a surprise. The global view of "America as a shining city on a hill" is already tarnishing to some but not to others who want to immigrate here because they still see the gleam of American Exceptionalism. Those are people who will help us help ourselves just as immigrants have from the beginning. When I emigrated here in 1968 the country was rife with strife but that is not what I was looking for or saw. It was the chance for reinvention, opportunity to be who I wanted to be, liberate myself from the tiny limited, although paradise-like, island I came from and invigorate my life.

We are a country now of several generations that have never known a really bad time economically, socially and politically. We are not prepared for what is going to happen to us psychologically due to the disruption of our way of life. The death of consumerism, personal financial problems, troops returning from war, structural unemployment, lack of social and medical services, alcohol and drug abuse are a few things that come to mind. We are in desperate need of reconstructing ourselves. In The Sense of Beauty Santayana wrote "The only kind of reform usually possible is the kind from within; a more intimate study and intelligent use of the traditional reforms." He also noted "Nothing enhances a good so much as to make sacrifices for it." Our problems, individually and as a country will not be solved by politicians and bureaucrats in government nor medical doctors and scientists with medicinal cures. They will only be resolved by recalling our ideals and working from within ourselves and reaching outward to help each other.

3/25/11

Thinking Out Loud

There is no going back in time...

Life is not going back in America to the way it was pre-2007 no matter how much the Federal Government, The Federal Reserve and US Treasury, Congress and their lackeys on Wall Street and friends along the Boston to DC corridor pretend nothing has changed. The financial world has it backwards, their ego is not allowing them to recognize a very clear simple fact, that can easily be figured out by watching the Stock Market and their flunkies at the Wall Street Journal, the New York Times and on CNBC. The Federal Government, the Fed, Treasury and FDIC are propping them up and Wall Street financiers and bankers are castrated servants.

The actual working real private sector and American people know this. It is only a matter of time before the facade crumbles and the Northeastern so-called elites Masquerade Ball will be over. The show will go on for the rest of the country but without them. How and when this will happen is not yet determined but that it will, much sooner than many realize, is just as certain as a Ponzi scheme eventually reveals itself. Politically and socially two seemingly opposing sides are signalling the same message. Ron Paul and Dennis Kucinich may differ politically on fundamental responses but both agree on the inappropriate actions of the Federal Reserve and the banking system. The Tea Party coalition and unionists heartily disagree over basic policies, but are in the same league in believing that the current two political parties are engaging in business as usual, being unresponsive to constituent demands.

What will spur the fall? Anything can happen but three things stand out as the source of a breakdown of the system as we know it. Money cannot continue to be printed without having any intrinsic value and the debt crisis of governments all around the world will eventually reach a stalemate exacerbating a currency crisis. The chain of supply for essential parts and goods has been disrupted by the tragedy in Japan and will worsen with the war on Libya. Also, the war on Libya is only the outward manifestation of festering full blown disputes and conflicts in the entire Middle East, that will not be resolved diplomatically or easily and not without further battles.

12/30/10

Economic, Social and Geopolitical

Mortgage Foreclosure Tsunami...

Delayed and forestalled Double Dip will occur in 2011

 http://www.youtube.com/watch?v=Ze9MyGB2tBc


Reference:
"Home Prices Are Still Too High" by Peter D. Schiff WSJ (subscription required) http://online.wsj.com/article/SB10001424052702304173704575578190261574342.html

"Dr. Doom Predicts Another $1 Trillion In Housing Losses" [Nouriel Roubini] NYT
http://dealbook.nytimes.com/2010/12/06/dr-doom-predicts-another-1-trillion-in-housing-losses/?ref=foreclosures

"US mortgage foreclosures rise sharply" FT.com (subscription required)
http://www.ft.com/cms/s/0/3825f4b8-1387-11e0-a367-00144feabdc0.html#axzz19iRnoxL6

10/16/10

Quality

Is a well thought out process that is followed through...

Banks and mortgage companies lent money for real estate without thinking out the consequences of not following a quality process in handling of documents. The result is deeper than "robo-signing" of documents and improper affidavits and notarizations due to the way the loans were originally securitized, which was in a manner contrary to the way property has been legally transferred and titled since the beginning of the United States. Lenders created their own process and procedures, without regard to established law and legal procedures or seeking sanction from the legal system to do so. To state that property rights as we understand them is at stake is an understatement.

The lenders want everyone to believe that the problem can be resolved as easily as it was created. They want to get out from under the loans processed in a system that had no quality control as quickly as they made the loans without proper procedures. It will not be as easy as that since the financial world has now tangled with the legal world. Unwinding "Mortgagegate," by the very nature of property law and legal procedures, requires a quality process and that takes time. How much time is yet to be determined but it is clear it will not be as fast as the financial institutions would like.

How this proceeds makes me think of the entwined, everlasting legal case, Jarndyce vs. Jarndyce in Charles Dickens' novel Bleak House.


[FORECL]
graphic from WSJ "Mortgage Damage Spreads" 10/16/10

10/14/10

Term of the Day: Foreclosure Mills

Thinly disguised forged document preparers...

Foreclosure Mills: "Law firms that specialize in quickly processing thousands of foreclosures on behalf of lenders."

"Document Mess Hits Fannie, Freddie"
WSJ 10/14/10

10/11/10

Deleveraging and Insolvency

The Real Estate and Mortgage Foreclosure problem is unresolved...

Unwinding will take years but we can rise above while resolution is occurring.

It seems to me that if the major banks and mortgage companies are placing moratoriums on foreclosures due to affidavit and auditing problems on tens of thousands of foreclosures already processed, the problem must be deeper than currently being admitted. Truth is bubbling to the surface. The banks and mortgage companies have been trying to get out of these loans as quickly as they got into them, without proper procedures, due diligence and documentation. Rationally, this situation will take years to unwind and cannot be sped up no matter how much financial institutions and the government try to force the process. The implications cannot be understated.

Essentially this quagmire throws the entire real estate industry into chaos and ultimately threatens the entire financial and banking system. The mortgage business as we know it will require an overhaul, at the very least. I don't think it is at all dramatic to state this, only time will tell exactly how it plays out. In the long term I'm not sure it's a bad thing, it is an opportunity to reshape these businesses back into more natural and free markets. There is plenty of blame to go around that can be affixed later, the important thing now is to fix the problem. The big players have been gambling on a fantasy accounting game for several years now, where everyone pretended that houses and commercial property were still worth in real life what was owed to the lenders on paper. The reality is that gap makes the lenders insolvent.

As the slang saying goes: "Da Nile isn't just a river in Egypt."

Now is truth telling time and recognition that there can be no further delay in dealing with the substantial readjustment of the value of what real estate, and subsequently other property and currency, is factually worth. This is a tough, difficult process that a lot of people are not prepared for but the longer it is delayed, the more pain there will be when it inevitably reaches a coda.

It is the end of the world as we knew it but not the end of the world, rather the beginning of a new one. History has many examples of such periods and humanity always rises to the occasion. I wouldn't paint a pretty picture on the heartache and burn this will cause a lot of people nor would I say that it will be impossible to work through it. How we face up to the situation as a people and endure while grappling with the problem will be a testament to our character as a country. I believe there are enough people with the mettle to forge a path for all of us to get through and rise above what difficulties may come.

9/1/10

Real Estate Bubble Chart

We have not reached bottom...


Don't be fooled by the psychology of the market. People are clinging to the hope of a real estate recovery. We are not yet at the bottom.

from Irving House Blog

We are on the verge of a global currency crisis, stock market crash, bank failures, government insolvencies and it's not the bottom for real estate. The best way to face multiple crisis is to look straight at them with clarity and no fear. It is the only option for resolution, which will take effort, time and creative thinking.





5/12/10

Guidelines of Money

Personal finance and money have their own commandments...

If you're doing what you should be doing with money, then money will fall into place for you.

Everyone has their own relationship with money but it is important to understand that money has its own relationship and commandments that are outside of the individual. If you take control of your money, you will not feel out of control of money. The way you relate to money says a lot about you and what you value. Keep foremost in your mind the understanding that money is an illusion, especially today's money that is printed off presses with no real value, like gold or silver, behind it. The value of money can quickly change depending on economic, political and social circumstances, so it's critical to not let your values be based on the value of money.

That is not to say that having money is not important in our society. It clearly is. The problem comes when our concept of money is not clearly defined with our concept of ourselves. It is alright to like money but it shouldn't affect who you are. If that is clear, you will have the money you need (and probably more) because you are clear about managing the money you have, leveraging it to the best advantage, which then leads to comfort with money and the rest follows. That's because your mind is in the right place with it. You will have the things you need and be in a position to gain things you want.

Assessing the personal value of money:

1. Acknowledge that your personal values have to be enduring concrete values, not based on material goods but autonomous and existing separately of money.


2. There are intrinsic agendas in the world you exist in and how you relate to it and them. They should be consistent with your way of life and include monitoring your money and your attitude about it.


3. Money should not be the driver or the destination, it is the result of achieving something of real value.  If money is the only goal, misery follows.

A lot of people are in personal turmoil because of the relationship they've had with money and not understood what it really was worth and the damage it could do to them. Personal finances sooner or later, if not properly handled and misunderstood, eventually require reconciliation. How someone copes with that is dependent on their values, their willingness to reevaluate their affiliation with money and if they want to change. Money is fundamentally a relationship with things in the world and how you view things is important in understanding your relationship with money. There is nothing wrong with having things, whether your desires are modest or ostentatious, as long as you purchase them in an ethically correct manner.

It is a fact of life that some people have more money than others and it's not always due to what is fair, how hard one has worked or sometimes how well they've handled money. Nor does it have anything to do with your value as a person. Circumstances just are what they are and coming to terms with them in a harmonious way depends on harmony with personal values. There may be struggles with money but they can be relatively free of strife. Struggle is different from strife.

It's essential to control your money so it doesn't control you.


Enduring commandments of money:

1. Take charge of your finances, manage them yourself, never abdicate control. It is your money and peace of mind.


2. Live within your means: budget, monitor expenses, do bookkeeping and maintain records of your money. This does not have to be complex, it can be a notebook or an envelope system.


3. No debt is key. Exceptions might be a car, a house or property but only if it makes practical sense. Use credit sparingly; preserve your credit score.


4. Maintain a significant enough amount of savings for a backup and emergencies. Pay yourself first, preferably five to ten percent, or any amount, even if it's a few dollars or pocket change.


5. Avoid emotionally based financial decisions. If in doubt, don't do it, trust your instincts to avoid fear of finances and disastrous results.

We are entering three years of economic crisis and for most people, except the uber-rich, the end is at least three to five years away. Every indication is a second wave has started and it is even more important we take care of our money. If you are in a situation where you made money mistakes and it is causing you difficulty, own up to them and find relief in working towards solutions. Invest in your peace of mind by doing that and as much as possible, follow the commandments of money. Once resolved, following all of them will likely be easier due to lessons learned. If you are not in financial trouble and not following the guidelines of money...Start NOW!

4/20/10

Sgt Schultz: "I See Nothing"

We will be hearing that a lot out of Wall Street...

Pleading the Fifth:

"I assert my rights under the Fifth Amendment and refuse to answer on the grounds that it may incriminate (or be evidence used against) me."

more often...the Oliver North Version:

"On the advice of counsel I respectfully and regretfully decline to answer the question based on my constitutional rights."



Sgt. Schultz: "I did not even get up this morning."

I suspect a lot of us are wishing we did not get up upon hearing the not-so-surprising news about the Goldman Sachs allegations of fraud and that Merrill Lynch other large financial institutions are also likely culpable. It's enough to make one's head spin on how the whole system could collapse under the weight of corruption of these institutions and the regulatory agencies that allegedly watch them.

As outrageous as it seems, the bankers if called to testify in court or before Congress or regulatory agencies, do have the US Constitutional right to "plead the Fifth."
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