This page has been archived and commenting is disabled.
The Fed Is Preparing QE 2.0, MBS-Only Edition
We all knew it would happen, and now the Fed is implicitly confirming it - Quantitative Easing 2.0 is on the docket, with a sole purpose of purchasing of MBS, reports Market News. As the private MBS market is dead and buried, much more on this coming in a post later today, the Fed can not afford to abandon MBS and the GSEs in March. If it does, it is game over for interest rates, mortgages, and the stock market. Period.
From Market News:
Fed officials, are prepared to contemplate
changes if need be, depending on conditions in the economy,
housing finance and in financial markets more broadly.
"Among the options that has been discussed, say people in a
position to know, is doing additional MBS purchases."
And, again, as all know, QE 2.0 only for MBS will be insufficient, as even if the 10 Year UST - 30 Year Mortgage spread goes to zero, Treasuries, especially the 10-30 year part of the curve, are set to explode courtesy of trillions in new treasury issues in the coming months.
Look for the dollar to renew its downward trajectory as this story picks up steam, even as events in Europe imply the euro is massively overpriced. Race to the bottom, 2010 edition, is back.
»
- 17000 reads
- Printer-friendly version
- Send to friend
- advertisements -
An apartment complex was bought at $10,000 per unit over “the market price” in Northwest Arkansas. The scuttlebutt is that the purchaser bought with a zero percent loan from the Government with the preconditions of it had to be bank owned and he had to pay what the bank had it on its books for. The rumor goes on that the loan required 8% from the investor and 8% free equity from the government and that it was NON-recourse.
The bank is very happy. The purchaser was happy. Non bank apartment owners … not so happy. Investors trying to purchase at “market price” not happy either.
So … will appraisers use this sale as a comp?
The real question --- How do I get that loan?
FHA, baby. Depends on who had the previous loan though. The name makes quite a bit of difference.
"The real question --- How do I get that loan?"
Well, first of all, you'll need to kick in five figures in contributions to your Senator's campaign fund and it wouldn't hurt if you did the same for you Congressman. I mean, if you can't pay, you can't play. Catch on. I'd put a smiley face here if only I were smiling.
This is how life works in a kleptocracy. We're seeing it in real-time, with a front-row seat. Those who have political connections and can get the in's are the ones who receive essentially free money, zero-risk.
So, they're on the hook for no interest, there's a loss-share between them and the "people." It's basically like how sports stadiums get built.
It will generate a cash-flow to the owner, who can basically extend his payment lifespan out over infinity and end up making money. But if you're not connected enough to get the deal done, fuck you. That's basically it.
Those who have a seat at the trough - I've said this before elsewhere - had a motherfucking BANNER year last year and the previous. I know a guy who was senior Clitton Admin WH staff and is now a lobbyist and he actually said that (in 2008) from his perspective, he couldn't see any kind of housing crisis. Everyone he knew was full speed ahead. That is the difference between connected and unconnected.
As a commercial appraiser I can tell you that I would not use it as a market comp. So, no, it would not be used as an indicator of value, or a comparable. Not to any appraisers that actually do the job right.
If everyone is talking about it being $10,000 over market, then it is not at market. To use it without talking to other market participants beyond the parties involved in that deal would not be correct. In speaking with other market participants (leasing agents, sale agents, developers, investors, etc) any decent appraiser should be able to determine that this was not a 'normal' transaction. In the absence of any other sales or indicators of value, one could use it, but downward adjustments would have to be made for the fact of non market terms. However, in that case it would also need to be supported by an income approach, which these days is the better indicator as one can build up cap rates from market information and current rates and apply that to the resultant NOI from any commercial operation based on its highest and best use.
However, I see a lot of appraisals that were done previously on property I work on and many of them are very weak. Some of those might very well incorporate that into their valuation as many just dont do the whole due diligence thing.
In addition, dont believe for one second that there isnt immense pressure on appraisers to hit values that the banks need. Even after finishing and turning it in you will get call after call after call asking if you looked tat this comp or that comp etc.. Unfortunately many of them are not credible comps, such as the one mentioned by the first poster.
Of course this is going to happen. All the talk of the FED backing off are ridiculous. If the FED stopped buying MBS at an inflated price, everything would collapse.
Our economy is now dependent on continually loaning money to people who can't afford to pay back the loans. The FED is the only entity that can afford to do this. Any private sector bank would go under doing this.
If your assumptions are correct (nothing tells me otherwise) where does this stop? The questions is not more IF the Fed will continue to pump but How Much they will pump and when will the exercise become futile?
"Extend and Pretend to Infinity and Beyond!"
-Buzz-"Ben"-Lightyear
it's like Malloy contemplating his sucking stones...or perhaps not.....
Using our Visa to pay our MasterCard.
At what point does money cease to have meaning if we continue the bailout bubble path?
I've been saying for a while now that it doesn't stop. Then I get razzed by those saying don't worry it has to stop, sharp drop, etc.
It does not have to stop.
However, if it does not stop they we have to enter a new kind of financial parallel universe where this kind of thing can go on forever. I'm not sure what that looks like. A police state could do it. Or maybe some kind of wild collective psychosis. Something way out there, something so bizarre and edgy that nobody here can even imagine it.
I'm a fiction writer. Writing fiction is a psycotropic drug all its own. On a good day I can imagine some pretty crazy shit.
I can sense some pretty crazy shit coming, but it's not a fiction anymore.
cougar.
Agreed. Time to shift our thinking from "it can't get any more crazy than this" to something along the lines of "now that I acknowledge we're in the twilightzone, what are the outer limits that most people aren't looking for but I know admit is considered probable?"
I started down this line a few months ago, when the market began it's sidewards churn and it became obvious (finally to this fool) that we're at the beginning, not the end, and I needed to make a seismic adjustment to my thinking or be run over by the drug crazed mob. Adapt or die.
This is part of my explanation for the recent lack of many usual and veteran posters: no matter how much I read and comment, the sun just won't, go, DOWN! I can't sleep...
It's like musical chairs and you know the other two 12-year-olds only got to the end by pushing other kids off the chair. Fucken bastards. This one is mine.
What Chumba said.
CD - We are on tweaker time now. For those that do not know that time zone lemmie help ya out. Tweaker time = drive from LA to SF 8 hours + 17 hours to do tweak, 23 hours to flail in different neighborhoods that you thought were your own looking to score more tweak, 9 hours backtracking after a wrong exit looking for the right neighborhood, 3 hours spent inside various 7-11's looking for a coke & lime slurpie and another 5 hours spent looking around a Home Depot..... for what they forgot. After looking around their digs in LA ya discover 3 TV's, 5 microwaves and untold numbers of torch lighters in various states of disassembly, a garage full of goodwill and unopened letters, trashcans of mailers and catalogs. The tweakers left LA last spring and they still haven't arrived in SF. Except for the advance party that is still rolling at 101 Market Street (Janet's place).
Hope this helps some...
LOL,
I defer to the great Miles Kendig. Tweaker time it is. I saved this post to my hard drive and then backed it up on the portable hard drive under the category "Classic Kendig posts."
+1
Not a word wasted. Everything quite vivid.
Only a hard limit will stop them, like Oil prices or a FED audit.
Yup, no surprise to me, I have called this since Day 1.
Excuse my vulgarness, but if you are not buying gold on this news you are a fucking idiot.
I feel the next leg up coming, so it's time to return to...
GOLD BITCHES!!!
I am Chumbawamba.
As the "Zimbabwe Ben gang" is now virtually buying any asset which is still moving, one can comfortably invest in the stock market and expect a decent return. Simply amazing what is happening before our eyes but this will end for sure in a desaster.
Once more thanks to Tyler and his team for bringing us day by day all these interesting inputs you can read nowhere else !
Totally agree with all of the above, except I spell it "D-E-E-E-Z-A-S-T-E-R".
And be sure to "roll" that "R" at the end when saying it. :p
The final piece of the command economy is now in place. The Government has the ability to manage all "money" [credit] flows in and out of domestic dollar denominated assets, through primary (Fed, Treas, Fan, Fred), secondary (AIG, Goldman, Pimco), and backchannel elements. Not only do we buy our own debt and any and all toxic assets, we even run the equities markets!
What an incredible coup. The German government of the 1920's could not have done it better. Welcome the Fascist States of America. We're beyond socialism now.
The general populace never even noticed.
The fait accompli is that the "middle class" is a stakeholder. They will acquiesce insofar as their wealth is 100% tied up in housing and the stock market.
Anyone who is aboard will go along with it. Those who are sitting on cash or have money in CDs or who lose their jobs...basically, you fall off the train.
The gov now manages most industrial activity through defense contracts, buys its own debt, buys its own mortgages, and manages the stock market via index futures and 0% loans to banks to buy said. This is inflation whether you LIKE IT OR NOT. Those who really thought that a deflationary priceless cash climate was going to come were true fools.
Their (Fed/USG) fear is total dollar collapse, not managed devaluation. Deflation leads to the former. Their hope is that they can control the latter.
I've taken to calling it the United American Socialist States - UASS. It goes well when identifying our leaders.
Ben Bernanke, Chairmen, Federal Reserve, UASS.
Barack Obama, President, UASS.
;)
In what way is purchasing MBS at more than the market price would be if the government wasn't pouring in trillions of dollars raising the price not simply handing money to the fools who originally bought the MBSs at too high a price?
Assuming the second program is half the size of the first then a total amount of 2 trillion will have been spent.
This equates to nearly $17,000 per home in America, or nearly $30,000 per mortgage..
If $17,000 had been sent as a check to every residential address in America I'm pretty sure the economy would see a much bigger impact and be much better off than it is now.
(I know this is assuming the value of the MBSs is zero, but even assuming a 30% loss, that's $10,000 a person that I would feel much more comfortable with as an equitable form of QE rather than seeing it ALL go to a tiny group who are already superrich)
I don't know how to tell you this, but the average Joe is dead last on the list of priorities, even after the selfish fat and lazy boomers self-entitled to anything.
Nothing but banks, corporations and incompetent self-preservationist facist government...
You rank last, and will always continue to do so until you start raising hell -- a lot of it for every politician you send to office (the bank).
FUCK THE USA, POWER TO THE STATES!
"fools" = Chinese, they were the ones buying agency MBS hand over fist in 2006.
This is all about cashing out our creditors, who take the money and turn it into hard assets.
While your scenario would indeed have made more sense, it would've resulted in huge inflation because the money would've gotten into the system immediately.
The bozos running the game now think they can nuance this to where the money goes in and comes back out when they deem that everything is "fixed". That's so cute that they think they're God.
Anyway, hyperinflation is in play. It's not here yet, at least not manifestly, but it's there and on the way to a corner near you.
I am Chumbawamba.
Dang 'Handle with care'.
I agree with what you said, but I had to read the first paragraph 4 times to decipher it.
It's like the old puzzle (add punctuation so the following makes sense):
"John while Mary had had had had had had had had had had had a better effect on the teacher"
regarding the roach quotes in the bloomberg article this morning, is he genuinely convinced shit won't hit the fan if the fed pulls support or is he challenging them to a game of chicken? or will a marginal rate hike really goose equities?
The Fannie and Freddie absurdity continues. The two entities that largely caused this mess are expanding more than ever, while their executives are now the highest paid bureaucrats in the world. Who will end this madness? And how? Or are we crazy to want to end the re-inflation of the housing market....? It may be more beneficial for America in the long-run, but in the long-run we're all dead.
in the long run there will always be somebody left to pick up the tab...unless...well you know.
Good thing the Fed has a lot of "tools" in its "toolkit" to drain all this liquidity when the time comes. Ha ha he he ho ho.
Yup, lots of "tools" at the Fed.
not only is there the issue of maintaining arbitrarily low interest rates but also the sovereign debt issue concerning default. the fed is buying up all of this crap to centralize ownership of property for settlement of debt with japan, china, and middle eastern countries - an exchange of treasuries for property. even though the paper is of dubious quality they still can extract the property - not a total loss.
the communist totalitarian future of america is now.
I can see it now, I'll be writing a check out each month to the Bank of China for my house payment.
Iceman Mishkin approves.
when was the last time there was a protest at the dc fed?
I've drunkenly unleashed my own personal amber waves upon the sides of the Fed building in DC many a time. Does that count :-P
You betcha' !! And my little dachshund insists on lettin' it fly on the USPS box down the street too.
He's a smart dog.
I'd go if I didn't have to strip naked to get on a plane to get there.
Ship yourself as air cargo and bypass all the unpleasantness.
Last Nov, and then Oct the year before last.
http://www.youtube.com/watch?v=w4hJYsH_FvU
http://www.youtube.com/watch?v=FOhaDAg3qgU
starts looking like a manufactured crash into March to persuade the congress sheep more dough is needed to save the planet (and Bens ass)
They are going to great lengths to stabilize the real estate market.
Next stop, the slow 10-20 year grind downward in real estate ala Japans lost decade. Investors beware.
That's actually the best case scenario that could result from the Fed's policies.
However, when the Japanese began down the road of propping everything up they started from a position of enormous domestic savings and a large trade surplus.
The US is simply not starting from the same place and won't even be able to achieve the same results the Japanese did.
So the results will be closer to the Zimbabwean model than the Japanese one.
(After a period of chilling deflation due to the economic collapse getting ahead of the printing of course)
Isn't this exactly why we own Gold and Silver?
Bingo!
There is no possible way the current economic model/system can be sustained much longer.
Get your affairs in order people.
"The task of weaning various people and groups from the national nipple will not be easy. The sound of whines, bawls, screams and invective will fill the air as the agony of withdrawal pangs finds voice." --Linda Bowles
I am just so proud of being an American!
Let's all sit and watch the complete collapse of the country, courtesy of a failed academic who cannot admit his doctoral thesis turns out to be a farce.
I am doubly proud of being not only an American, but also an MIT alumnus. At least I didn't take any economics classes while I was there.
fb: IMO, if you got a science or engineering degree you are OK, Purdue was a state school and had to admit any Indiana high school student that was in the top half of their class. Consequently, there had to be a robust "weeding out" process. (1953-54) Survival rate was about 25%. There was much moaning and groaning so faculty adopted the practice of posting a previous MIT chemistry tests on department bulletin board. Message was; "This is what it is going to be."
The problem with economics is that it evolved from early roots in the "hard" sciences of the early days. Much of the math that I see is fundamentally predicated on linear approximation of historical data.
If Merton had been bathed in tensor analysis early in his academic training, IMO, he would have been able to produce better models.
Happy New Year.
These morons are so f*cking stupid is baffles one's imagination how they manage to do so much as wipe their collective @ss.
There was even talk about them selling the trash they bought as AAA bonds. Like who the f*ck is the buyer going to be??????? "Other buyers" under the household column of the ledger which is a fancy smancy hiding place for QE.
Davos,
Love the avatar. You ask and then answer your own question as to who would buy the garbage. One must ask oneself if it's still "moral hazard" when it is the powers that be that are being morally hazardous. Of course, I'm being facetious when I say that, but it boggles the mind to witness the daily insanity that is promulgated as monetary policy.
But I must disagree with the natural conclusion you came to when you said "These morons are so f*cking stupid is baffles one's imagination how they manage to do so much as wipe their collective @ss."
"They" simply can't be that stupid. The best answer (or at least an alternative answer) to why they're doing this is that there's a hidden agenda they're marching to. And just because I can't tell anyone exactly who, what, when or why doesn't diminish my argument one bit. "Moron's" of this caliber don't grow up to run the US Federal Reserve (or to hold other positions of power) unless the masters of the universe wish it to be so. It's that simple.
Is there a hidden hand that controls everything that happens day to day? No. And I would never even consider such an absurd idea. But is there a hidden hand (that may consist of numerous people with conflicting agendas themselves) that influences policy direction and places key individuals to carry out manipulation (in specific or general terms) when needed or desired? After many years of research, that is my inescapable conclusion.
If you create the circumstances for moral hazard, while you didn't create the resulting disaster, you certainly did manipulate the circumstances that led to it. Then it's simply a matter of who you wish to blame. Remove the moral hazard and the event has a much less chance of happening. Bernanke has/is setting up the circumstances for moral hazard. Greed then takes over from there. Why is Bernanke setting up the circumstances for moral hazard? While he can spout plenty of reasons, it's all plausible deniability.
A person can enter this argument from two points of view. They can think there is no hidden hand and everything happens for a (sometimes entirely random but) quantifiable and usually "innocent" reason. When they go looking from that perspective, they will find that 95% of what's happening is occurring from purely random and arbitrary circumstances. I include elected and appointed morons in this "random and arbitrary circumstances" category.
Or, if you suspect a hidden hand, you already understand that the ship mostly sails on autopilot and what you look for are key moments to manipulate that are extremely critical yet plausible and thus explanable. Once you strip away the facade that (IMHO) was deliberately placed in front of this event or action and which was intended to be found by those who wish to look no further ("look no further honey, I found the keys") you begin to see patterns. Plausible deniability is always an integral part of any manipulative operation. Just study the CIA/NSA etc for a primer on the subject.
While someone may say I'm wearing a tinfoil hat, I would counter that to believe it's simply a matter of morons and greed that's causing all this pain and suffering is pushing their own crazy theories and is no less nor more believable than I. In fact, while I've been accused of finding something that isn't there to sooth my need to understand and control pure circumstance, people who believe that this mess is simply the result of greed and stupidity (circumstance) might just be doing the same. It's emotionally safer to blame greed and stupidity than to come face to face with malice and intent.
Excellent post! Totally agree that on some level there has to be an agenda. After all is it really possible that the highest levels of government are full of people who are basically never right? I mean even if you picked some ignorant country bumpkin (Not Bush he was a Yale grad after all) the would be right by chance once or twice! Look at many of our leaders they are either insane, brain-dead, or lying to us. All comforting choices.
The chance that some people of are functionally brain-dead make it into the highest levels of power exists...but when it becomes a prerequisite for power one must ask "How is it only the most insane and foolish can get the reigns of power?"
I must agree to simply believe that "fate" has placed these people in power asks for more faith then I have. After all I would consider it about as likely for God to make it start raining donuts and coffee next New Years Eve. A miracle is a miracle.
I think they all have narcissistic personality disorders. They live in their fantasy where they are always right until they can't find anyone or anything to blame anymore. Then they decompensate (kill themselves) and are replaced by another person with narcissistic personality disorder. After a couple hundred years the system is pretty much full of narcissists and it doesn't work at all except by virtue of the lies and manipulations of the narcissists nearest to the top. Of course it then works to their favor, if it works at all. This is so obvious to me I wonder if the whole psychiatric community hasn't been paid off to keep mum on the obvious disordered mental states of most people in charge of, well, just about everything that exists.
Oh, you'll get your ignorant country bumpkin in 2012, also.
This whole shebang could be an engineered takeover by the ultra ultra rich who are tired of sharing with the rest of the peasants. These folks are getting their pools of money together to buy assets at lifetime discount prices.
I said, could.
The more likely story is probably shear incompetence and greed. Never ascribe to fraud that which could more easily be explained by incompetence. Or something like that.
Ok, I googled the quote. It is:
"Never ascribe to malice that which is adequately explained by incompetence." - Napoleon Bonaparte
it's like Malloy contemplating his sucking stones...or perhaps not.....
I am sure 'people in the know also report that there are high-ranking NBA officials who are prepared to contemplate putting WNBA teams in Europe'.
Quite a few 'prepared to contemplate', 'ifs', 'people in the know', and 'options' for this to be very credible, no?
...as even if the 10 Year UST - 30 Year Mortgage spread goes to zero,
I expect the 30y MBS - 10y usT to go negative. There is also the uk cayman islands stealth monetization of Ts to fall back on.
Has this already been priced in? Just by us, here on this blog? Or also by the mainstream investoriat?
This is PRINTING by any other name. Another bailout. Just another method. Paying "supplementary unemployment benefits" with cash you don't have, ZIRP, cash-for-clunkers, cash-for-anyone and of course TARP and the like are just the same.
POrint, print, print...BUY GOLD.
The sheep that are falling for every goverment trick including CFC and the 8000 tax credit are getting slautered. I have no mercy. Keep listening to your fearless leader, see where it gets you.
rates will not be allowed to go up. being long treasuries here is the only way to align yourself with the govt while protecting against the plethora of negative externalities. I cannot justify being long equity in anyway, nor can i be long gold/commodities as they are expressing the same bet against the dollar.
Rates can't go up. If they do, lending will crawl to a complete stop...on everything. There's very little on the landscape that can support a high coupon rate and still turn a profit. Not in this country anyhow.
They have to offer the money at 0% or else nobody will borrow it.
So, if you were living under King Cnut you would go short the tides?
I never understand why people think the Fed hacks are gods. They are just idiots with a printing press that goes to 11; if printing doesn't work they have no other ideas.
ITG,
While I understand your premise, many people (including myself in the first row) have been genuinely surprised by the imagination shown by the Fed and Treasury with regard to the variety of ways they devised to pump money into the "system" and save (for now) their puppet masters. While I wouldn't exactly call that a compliment, they at least showed initiative while destroying my grand children's future.
They get an 8 out of 10 for style points but they should still be hung at dawn.
I tell ya, when everyone was waiting for the Fed to end QE i thought i had the available options and scenarios down. Then they throw a curveball and say they're gonna slow down the programs as they wind down...did NOT see that coming at all. So yeah, just one example but they've proven time and time again that they are very good at giving money away to banksters and will do so regardless of the man made, natural, logical or metaphysical barriers.
Psychopaths have a tendency to be unpredictable since they aren't burdened by empathy, ethics, morals and other silly stuff that makes this crowded planet a little more livable.
They won't stop until the U.S. reaches a 100% home ownership rate (if not higher) and no one has a mortgage higher then 4%. (Attn: Young People...do not be alarmed if starter homes are selling for 10-15 average pay. There will be new programs for you in the future with free down payments, 100 year mortgages at a guaranteed 3%)
If more is needed we'll just drop all charades of policing our borders and actively recruit Mexican nationals to come buy U.S. real easte. That will be done under a new program called the Pelosi Global Neighbor Program Grants.
"An apartment complex was bought at $10,000 per unit over “the market price” in Northwest Arkansas."
"...will appraisers use this for comp?"
I think I am beginning to understand. Real Estate has found
its bottom...in dollars.
In Gold? Still a long way off!
actually, we've seen how stocks exploded when they did QE1.
It's time to buy banks right now :)
We spend trillions of dollars in the largest wealth transfer ever ever in order to keep mortgage rates at obscenely low rates to preserve a massive ponzi that is our global dollar-backed financial system.
The obvious comparisons are just mind numbing. Government spends 100K on illegals, impeach the officials that authorized it. Government spends 1 trillion on stupid bailouts for the smartest idiots the world has ever known, give that sucker a medal for saving the world.
The Suck Parade is going on tour, and its headliner is QE 2.0
Just thinking through the logic here.
Buying MBS only means that they no longer expect to stimulate a home sales, so they don't care about mortgage rates going vertical.
This round QE would not be for US banks, but for external creditors or to Fannie and Freddie, who will use the proceeds to buy Treasuries.
Assume outright buying of any and all MBS irrespective of rating, and not repo actions. The Fed can hold to maturity, and get some yield. Thus the price of homes becomes irrelevant from a policy perspective.
They are assuming that:
1) at some point, these securities will recover in value, and "things will return to normal". I guess if they hold for a decade, it could work. But I don't see any rational beings taking that trade.
2) Refinancing of underlying mortgages will provide income to recoup losses. Not sure if this will happen without all QE rolling into treasuries and technicals improving.
3) Fed recapitalization (bailout) by the Treasury if seignorage income doesn't exceed the loss on operations. Not sure if they should count on this either.
They could single-handedly bring back the residential market. Buy buying the heck out of MBS across-the-board, they would allow FNM/FRE/FHA to dump all of their toxic assets to the Fed, and buy the hoard of Treasuries coming down the pike. By stimulating demand it will actually allow pre-payment (refinancing) of the "toxic" stuff.
Deficit gets financed, Congress can continue to spend with wreckless abandon (and get re-elected), mortgage rates stay low, FHA/FNM/FRE gets cleaned up, and the Fed eventually gets "nearly" whole on the MBS it buys. And most importantly of all, pitch forks lose value!
I think we have discovered a perpetual motion machine. Too bad it's a printing press....
What happens if all the central banks, all over the world, take on all the toxic debt, recapitalizing the system, and then fail at the same time?
I press this issue for a reason...
In other news, I'm preparing for USA 2.0, Au-Only Edition.
This all just seems like a pre-planned leak to allow PIMCO to load up on RMBS beforehand.
QE 2.0 isn't really a surprise, they know what happens when the punch bowl gets taken away. And besides, the American public is too aloof to understand what QE is. I doubt this even makes the evening news even if it was $2+ trillion.
Print baby print! Nothing more dangerous than a room full of academics running the world with no actual real world experience. C'est la vie!
I don't think the average per unit apartment price IS $10,000 in Arkansas.
Only the ones with an extra space for your parts car.
Simple, get on the right side.
All they do is short gold, leverage 20-1 in MBS.
Investment advice for 2010.
Talk about boxed in. Holy cow.
"Extend and pretend, until it ends."
I got only three words for y'all:
BUY. GOLD. NOW.
(And if you already have, buy more)
I'm a bit late to the PM game (though hopefully not fatally so), and would like to know the best means to acquire physical PMs. Online? Local dealer? Supposing I wanted to do so, how can I buy physical PMs TODAY?
And what of allocation? If I had, say, $10K to allocate to PMs, what would be an optimal allocation of Ag, Au, etc?
I've been in the process of acquiring the three biggies (food, shelter, protection) and am now turning my attention to preserving what little wealth I've managed to accumulate. Any wealth preservation advice - PM or otherwise - is of course welcome and appreciated.
Many thanks in advance.
depends on your goals, budget and what future events you deem "most likely" to occur. YMMV,but my current allocation model is 30% pre-1965 us coins (and pre-1982 pennies), 50-60% silver bullion, the rest gold bullion. Havent acquired any platinum, etc. I am heavy silver because it fits my budget for regular purchasing, figure its more useful for regular life items acquisition if tshtf, etc.
Also, my model is acquisition, not a trade.
Welcome friend. Not only are you not fatally late, but - dare I say - perhaps even a bit early in the game. The price has many thousands of dollars and a few (many?) years left to go. I think the best way is to buy physical gold anonymously using cash and keep it in your personal possession, as that leaves no way for the pillaging government and IRS looters to track your purchase (tax free profits - ain't nuthin beats that in my book - suck my dick you IRS assholes - Hahaha). But if there is no reliable local dealer you know (i.e. as regards to the purity of gold they are selling - there are a lot of scams going on these days you know), then you can buy online from reliable sites like Apmex.com, Jason Hommel's Rocklin Coin Shop (http://silverstockreport.com/), etc. Also, don't waste money buying "collectible" coins - just buy bullion - plain and simple. The only thing you need to worry about physical Gold is theft. That you can hedge by diversifying the way you hold it. Keep some at home, some in a bank locker (abroad if possible) and some with excellent third party services like Goldmoney, although my preference is for keeping it at home buried in a hidden vault somewhere on my property.
Also, you must buy physical gold ONLY. I cannot stress the importance of this enough. ETF's like GLD/SLV are complete and utter frauds. You can of course hedge your holdings and diversify the way you ride the gold bull by buying Gold mining shares [only those which don't have a "hedge book"], although I wouldn't keep more than 10% of my money in them.
As for the allocation, I would recommend 100% Gold; perhaps some Silver and Gold mining stocks can be thrown in the mix as well (a small minority position around 10% should do).
I think this advice is also worth a read:
http://www.zerohedge.com/article/gold-whats-next-0#comment-90846
As you can see from GG's post, there are many ways to approach PM's. Like GG, I buy local and with cash (though have been contemplating online with cc since I have it paid off, to catch up and get a better gold allocation, and pay with devalued dollars...:). Like anything else, your needs are best determined by you investing some serious thinkin' time...:)
I have more of a prepper mentality, as I think the probability of things going bad are better than 50% (ok, a lot more), so I think in terms of possible barter/tradabilty, and budget (got to maintain the feeding of kids, wife, animals and mortgage, and continue acquiring the other essentials...). So silver and "junk" silver work best for me at the moment (besides, opening a bag of pre-1965 coins gives me and my kids hours of fun going through them, looking for possible numanistic (sp) gems (and it does happen occasionally)).
I do get some gold placer mining, and yes, it is work, but a great way to spend a weekend in the mountains...:) (and rather cost effective...cant wait til spring thaw is done and the mountains give me new gold...:)
That being said, at this point today, if $10K were to drop out of the sky into my lap, I would go 95% gold bullion or more (I can't resist silver eagles and maple leafs, love those coins, so solid and heavy...:).
What GG does works for him, what Chumbawamba and MsCreant do works for them, what I do works for me...it's all good, and on a rational path.
Just my opinion, not advice.
[edit] imho, there is NO downside to PM, if things don't go tits-up, you still have a store of value to pass on to others (kids, spouse, etc), PM as has been money, always will be. Sorta like storing food, if you don't NEED to use it, you just have lower grocery bills IN THE FUTURE, or stockpiling ammo, you have a cheap fun day at the range, IN THE FUTURE...My grandfather, who came of age in the 1st depression, always had a canadian 1 oz gold coin in his pocket, taught me that as long as he had that coin on him, he would NEVER be broke. Just a thought.
+1
The only thing I might add, in my opinion, is the idea that most people have no idea what gold is worth these days. So if you actually do try to exchange precious metals in barter, make sure the other party understands the full value of the metal - otherwise they'll think you're a cheat. But most people that will actually have something you want to barter for will probably know of its historic value.
You want how much of what for that little coin! Bullshit!
So, I would recommend asking them if they have precious metals, even if you suspect that they don't. Just a little reverse psychology to discover with whom exactly you are dealing. And say 'precious metals'. Let them try to figure out what you mean.
GG: Several have asked of you, and other knowledgeable
gold bugs where to buy gold coins that are not from the
shysters on the internet and television. I assume that
you mean to buy gold coins since tungsten fake bullion
is now a real problem. I have done extensive research
on many sites and they seem very questionable. Many
of us need for you all to tell us where the safe and
reliable sources of gold coin dealers are located.
Second. How to get the best rates on coins as near to
spot prices as possible and how to insure you are not
getting tungsten alloy fakes in bullion or coins.
Third. Do you physically go buy the gold coins or can
you have them reliably shipped to you in some kind of
insured form that certifies delivery of said valid coins.
Also, how do you send them your money AND certify that
you will THEN get your authentic gold coins?
Fourth. How are you storing gold? Back yard, the woods,
false wall, a safe bolted to concrete pad or bank deposit
box? Depending on how far down the chaos continuum we
are willing to postulate, all of the above are not really
secure places to store your gold since, metal detectors
and determined thieves can get THAT gold. Oh, and banks
can be closed so then you cant get your gold from the
safe deposit box. So where to really store your gold?
Fifth. How to redeem your gold and not also pay a steep
transaction fee for redemption and to get spot prices
again. I know you said never sell gold. But gold (since 1971) is NOT a traded currency in the U.S. and, at some
point, one will need fiat currency to conduct business
unless we revert to absolute chaos and a barter system.
Sixth. Like happened in the Depression, gold can be called
into forced divestiture or be made to convert at most
disadvantageous exchanges in the event of a currency
reset or collapse. This, being done by the authorities
to discourage FRN's, Treasuries, equities and bonds being
sold to stockpile gold and thereby cannibalizing the sale
of $2.55 trillion of new debt issuance for 2010.
Think it cannot happen - again? That is what my grandfather
said in the Depression. What is the difference between
stockpiling and hoarding of gold? Stockpiling happens
before the crash. One is accused of hoarding gold after
the crash and suddenly the gold collectible tax goes
from 28% to say, 50-75% to discourage "hoarding" and
force gold bugs into Zimbabwe fiat paper.
Gordon, there is simply no limit to what a banking oligarchy and a political kleptocracy that have morphed
into corporate statism (fascism), will do to preserve
their power over the masses by legislating away our
money (in whatever form) to keep us enslaved. Find us a
way to prevent THAT without violence and; safely - buy,
store, redeem and stockpile gold without loss from
local thieves and Federal Thieves; and we will elect
you the One-Eyed King in the Land of the Blind.
Welcome to the all-in-none market, to paraphrase Bob Prechter. BP makes the point early on, that the Fed is conflicted in its goals, Bernanke cannot save the dollar AND the economy. while personally i believe we underestimate the powers that the NEW fed has been invested with,(primarily through Bush the FED chief became an UnderSec of Treasury, which is the most powerful cabinet position, you agree?) So far the Fed hasn't backed down an inch from it's mantra of being all things to all markets, although Bernanke does complain about the defenders of the dollar, whoever they are, and he complains about fiscal stimulus, (but he cannot outshout them at Congressional hearings), as much as I love the new all powerful Fed the time may come when they need to make some choices, as BP suggests, in his tomes on the all-in-ONE-market. Should ths happen, who's ox gets gored? Would BB throw MBS to the m2m disillusionists, in order to allow interest rates to rise, and the economy in general to recover? And faced with a dollar gaining strength inversely to the EUROs demise, would he prefer to simply sit on the rate market like an 800 lb gorilla and watch the deficit drop down to a sustainable level, which really runs counter to QE 2-3-4 and what have you. If the stronger dollar attracts new treasury buyers, and rates stay low, that's the best of that world anyway, but would the politicians want another bite of the apple, crowding out private sector investment for decades? Not sure how the FED will break up this little party, but the all-in-NONE-market is a real possibility, at which time Bernanke will make some of those tough lifeboat choices.
Prechter is wrong - the Fed can't save EITHER the dollar or the economy because these things are outside the control of men and depend upon the physical world to cooperate.
The global economy is entering an energy-led contraction phase. Nothing imaginary like money can replace real oil.
You're about to see a hundred years of "economics science" (aka bullshit) turned on its head by a failure to understand what really drives expansion and what really MAKES things turn.
The dollar is a CLAIM on our future! It represents by its existence a claim upon our future, that we must be bigger then than now. At whatever point we cannot grow further, the dollar collapses.
And the economy is the thing that must grow for the creditdollar to survive.
actually Prechter agrees with you, the Fed only follows the market. The point about the self-contradictory components of Fed policy demonstrates his debunking of the notion of the 'omnipotent' Fed. But, you cannot help but notice the Feds expanding role. When the Fed had a relatively small mandate a chief like Volcker could do the right thing, but you can't ever do the right thing, when everything is your responsibility. Now of course the power to regulate is moving the margins, where countries like Australia are raising interest rates. Prechter thinks the dollar is going to rally, (in concert with a collapsing stock market) but its probably wrong to think of economics as an empirical science. there are no dollar bills in space.
Bravo trav777!
"The dollar is a CLAIM on our future!"
The dollar is a derivative on the real comoditys and services exchange that provides what we need for our existance and lifestyle. Very fundamental. In reality, its value is determined only by the willingness of our neighbors to take it in exchange for their goods and services.
In 1971, during a vacation to Spain on a side trip to Moroco, a street vendor approached trying to sell what appeared to sell small items of silver jewlery. He was not interested in paper money and communicated his desire for coin. I showed him my recently minted US coinage with the copper layer showing on the edge. He handed it back and walked away. He had wanted silver so that he could make more jewlery. He was obviously very poor but my money was worth nothing to him.
I might add that the Spanish centavo, was worth almost nothing at the time was still being used in local exchange. I felt a little sorry for the honest people needing to worry about them.
Today, I must feel the same way about people picking up the US Lincoln headed cent where they have been dropped on the floor. Even the nickels aren't worth the pockets they wear out.
Many members of the middle class have significant portions of their net worth tied up in their 401k plans. The perceived safest option in most 401k plans has been to have the money in money market funds and short-term treasuries. Given the potential changes to money market regulations and the near-zero return on treasuries, where does one find capital preservation without exposure?
I'm still struggling with whether I should a.) stop contributing to my 401k (that employer match is sure a delicious honeypot), and b.) cash out my 401k knowing that capital controls/disbursement freezes are all but inevitable.
These are the times that try men's souls, 401(k)s.
rumor being that part of QE would be to replace 401K assets with T Bills, in the event they 1) cannot find enough buyers and need to keep the government running, or 2) your stock assets go to zero,, which is the big surprise coming, the stocks markets bottomless bottom. Your 401K is your line of credit when nobody else will give you any.
Thing is, I don't need credit (and don't plan on ever using it again). I just want to preserve the small amount of capital I've managed to accumulate the past few years. I'm a relative workforce n00b (~3 yrs), and I'm doing everything I can to keep Hopalong Ben and his merry group of monetary sycophants from boxing me in.
On the one hand, I'd be forgoing the employer match, absorbing an immediate tax hit (and increasing my taxable 2010 income, and foregoing (potential) gains from a ramped market. On the other, I'd immediately gain access to a decent flow with which to convert into PMs, avoid the inevitable capital controls/disbursement freeze/involuntary asset "restructuring" we all see coming, and avoid what could be excessively punitive future tax rates. Decisions, decisions.
Any ZH advice would be welcome.
Free advice ... Cash out most assets, buy PMs, store privately, at least some outside the US, perhaps with GoldMoney, and considering becoming an expat, living in a low cost of living country under less government control. An expat´s view. Best of luck.
As an expat, any thoughts on which countries? TIA.
I 've been out of 401k since June 2008, took the 30% hit, paid off debt and bought a silver coin or two...havent looked back...:)
Lemme' guess. The mattress ??
It was a favorite choice at one time. Might make a comeback soon.
Physical Gold.
http://www.thepowerhour.com/news/items_disappearfirst.htm
.......and PM's
Someone else (I think MsCreant) posted this the other day and I found it very interesting, both in items shown and in their order. Either way, I have it hung on my refrigerator and it's viewed (and pondered) daily as to what I can check off during the next week, month etc.
Agree w/ all replies with cash not tied up in a tax-protected account. I, personally, struggle at forfeiting 35+% (10% penalty + 25/28/32% income tax). Then again, if the markets are going to dive 50% or more and/or the currency get revalued, 35% will seem insignificant.
EDIT: correction to my comments on the actual % lost. If I reread the tax codes, an early distribution of $10K means I pay income tax on $11K.
Depending on how bad things really get? Well, if supply chains break down, such as they did in Bosnia and Argentina (different reasons albeit), then gold is nice, but cigarettes and liquor are better.
If things seriously go kaput, capital preservation without exposure= the Rawles survival guide. LOL
Get out of paper.
This is, as I've said from the beginning, an existential crisis for paper claims based upon expectations of the future.
So much for that whole "Has Ben got Religion on asset bubbles" discussion we had - what? last week? - eh?
pitchfork time. Hang the traitorous bastards.
Eat the rich. Convince the criminal element to direct their anger towards the wealthy. Throw bricks at their limos.
Don't get frustrated. There are a lot of positive things to do!!
Unaccountability--the directive set by TURBO TAX TIMMY-want a good laugh-here is the 3 STOOGES at their best.
KPMG report-Internal Control over Financial Reporting-pg's 4-14---its everything we always knew.
http://www.treas.gov/offices/management/dcfo/accountability-reports/2009-par/Part_II_Annual_Performance_Report.pdf
By a way- would not put it past the Feds to use the FEDINVEST system for the backdoor treas purchase via indirect buyers-just saying....
I would hope that the take-away point of this post is not to remark on the actuality of QE2. That's because, in and of itself, QE2 is relatively mundane. Rather, the focus should be on the open issue of the duration of political support, because this is the only true variable.
Think about it this way: you fill your car up with gas and begin to drive across the Nevada desert. You know you will eventually run out of gas, so the game is to have a good understanding of not only your typical mileage, but current road/weather conditions, as well as the current mechanical state of your car. If you miscalculate, you could end up in the middle of nowhere, but if you guess right, you could roll into Reno in time for dinner and a date.
The trick here is to understand when the Fed/Treasury will falter, however slightly, in its current ability to fully monetize the debt. Even the slightest push-back could get the debt-deflation tsunami rolling. We know QE must end @ some point - the hard part is to guess/surmise/know when that point is reached.
As I've stated on previous threads, keep your eyes & ears open. The herd will tell astute observers that it's ready to move even before it realizes the fact itself.
Very astute observations, B9K9. Not to be a suck up, but I really do appreciate your postings here.
The issue in the near term isn't whether there will be a QE2... the issue will be the timing and in what form it will take, in order for it to be politically palatable.
In my estimation, the "form" is the easiest part-- the Fed/Treasury will do their darndest to confuse the masses into believeing there is no monetization going on, when indeed, there will be $ trillions. That's a pattern well-established. This time it might not be outright Fed purchases of MBS, but so what?
The timing is more of a tricky issue due to the election cycle and a desire for Obama to keep the Dems in power into 2012. Announce a QE 2.0 now, while the economy is showing momentum, and political support goes out the window with the US Dollar. The Dems will figuratively run out of gas if they implement QE 2.0 too soon, as this too will be viewed as "even more bailouts for the Financial Elites".
Better that the Feds instill a little market fear so as to give the illusion as a White Knight coming to the rescue than to deal with political damage that goes along with the Bailout Nation outcries. Using your analogy, think of a flight to quality trade this Spring as the only fuel stop in the middle of a desert. If they have enough gas in the tank, the Obamas can put up the Mission Accomplished banner several weeks before election time. It may not work, but it's the best chance the Dems have to retain control in Congress come election time.
The ultimate "trick" is, indeed, when the Fed/Treasury will falter with QE efforts and the process must come to an end. With debt deflation being a constant force, I'd gather a contstant QE effort will be employed after November until the USD falls through the bucket.
By now, the message is beginning to sink in to those in Washington, that there will not be enough real organic economic growth to EVER get us out of the debt morass. The endgame after Nov 2010 is to either: (a) allow deflation to take over... not likely; (b) continue QE for as long as possible and hope for an economic miracle before 2012 elections; or (c) throw in the towel announce a massive dollar devaluation to a shell shocked public.
It's really only a matter of time... and timing from a political point of view. The games on monetary/fiscal policy up to November will be played to win Congressional seats. But it may all come unraveled before that if things go awry overseas.
Yep, keep the eyes and ears open.
IMHO if thing do "go awry overseas" it is the perfect set-up for the Feds to sell treasuries into the fearing masses seeking "safety" from a potentially crumbling euro. So whooppee, the Euro drops, dollar rises, Feds sell tons of treasuries and MBS to the herd, one last grand rollercoaster ride on commodities as they first sell off on fears of growth stagnation then soar on fears of inflation as the whole world prints away together. Then implosion. But a wild ride and one last chance at the trough before it is o v e r.
I'm thinking B9k9 has something else on his mind today. Reno, date, trick. Don't know but something-ranch comes to mind.
You guys and your guessing games.
Ben and Tim have a endless repertoire for your entertainment pleasure.
Imagine the Fed buying bonds in bulk from 20 or so countries using USD's. The agreement being that those countries have to use the proceeds to buy US Treasuries. A further agreement being that the bonds need to be returned to the issuer when they mature and at such time they have no value.
The money goes full circle and back into the very printing press that it came out of. Market gets prop'ed and everything looks strong. QE can go on in perpetuity. And no inflation surfaces if it's executed properly.
That is where we differ - at some point, an incipient political push-back will begin to emerge.
Monetization is a direct assault on the constitutional prohibition against the taking of private property without just compensation which is embodied in the 5th amendment. I don't want to get into a discussion of the moral component of government sanctioned theft - I accept that might makes right.
The point of my comment is that this clause forms the bulwark for an effective political opposition movement. In point of fact, even if this amendment didn't even exist, something would be invented and/or interpreted so as to provide political ground cover for those who wish to oppose the administration's agenda.
Anyway, back to the main point: at some point, opposition to QE will form, if for nothing else than to try and elect someone from the blue, as opposed to red, team. Product/service differentiation if you will.
My interests lie in the strategic & tactical timing & techniques that will be implemented to both initiate QE2, but more importantly, the degree and extent of its forced withdrawal from the marketplace. For herein lies the clue to the coming debt-deflation tsunami.
Once the levitation props are removed, the magic trick falls to earth. Ya know, the Greeks were talking about his sh!t a long, long time ago; something about Daedalus. The particular actors may change every generation or so, but human nature is the only real constant.
The USA cannot sustain a 25% contraction in GDP. I sometimes wonder if those who oppose the Fed's attempts at re-inflating the economy really understand what's at stake here. I certainly do, which is why I'm doing my part to support the actual 3-percenters on the line. There is a role for 10-percenters, such as myself, who can help shape public opinion and provide legitimacy to the movement.
You can shape opinion. For a Benign K9, you're all right in my book.
But good luck preempting 'The Bachelor'. The viewers just don't care, and will not make waves. And if you throw that crowd a little bone in the form of cash direct from the Treasury. We'll... That's the kind of opium that will keep them distracted for a long while.
Good stuff brother. Thx.
My interests lie in the strategic & tactical timing & techniques that will be implemented to both initiate QE2, but more importantly, the degree and extent of its forced withdrawal from the marketplace. For herein lies the clue to the coming debt-deflation tsunami.
I suspect that the debt-deflation tsunami continues to build nicely. My question is how do you suspect QE will be forced to be withdrawn and what operative conditions are you looking to be present for this state of forced withdrawal to occur?
Miles - you are on it, as usual.
Surely B9 does not believe this forced withdrawal will come as a result of a populist outpouring of resentment against QE - let's face it Audit the Fed is a non-starter with Joe6P and JanePinot too. Populist support sufficient to compel this sort of about face could only be marshalled through some other sort of distraction of far greater attraction than the mundane subject of QE. . . what else is out there? I see no political wave coming to cause a "forced withdrawal." What am I missing? (must ponder)
Sooner or later Ned those charged with keeping this float going will lose the capacity to play Simon forever without error or stumbling over one of their forgotten land mines. In other words, sooner or later those folks will manage to do it to themselves. Again.
I'm thinking B9k9 has something else on his mind today. Reno, date, trick. Don't know but something-ranch comes to mind.
Coming from the resident expert on Scooby snacks..... I thought you would appreciate that the best in that region can be found at Tahoe....
Is that what Marla told ya?
http://instantrimshot.com
Sorry couldn't resist.
Anyone who is anyone knows where the real game can be found.
This is exactly where we are. + 1 Assetman.
Ditto Assetman, I'm here for posts like this.
It's like talking about Web 2.0 - there is no delineation, only new acronyms added to the scrum.
I'm also applauding loudly. Bottom line, the magician is only successful until the audience no longer wishes to suspend disbelief and starts to look closely. At that point, the Fed will loose its influence.
My concern is how far into the abyss we will have traveled before this point is reached. I see no way for us to ever get back to where we were. The only question is where will the pieces lay and will I be able to find them after the vase falls (is dropped, thrown etc) off the table.
Gee, I called this one days ago now. I figured they'd give it a week, at least.
The only mortgages in the marketplace are government mortgages. Without the Fed soaking up the MBSs, it is game over. No mortgages? No buyers. No buyers? No market. No market? No values. No values? Game over. Loans crater, banks topple, the cascading implosion of debt falling inward, leaving only an empty husk.
And Tyler is right (of course.) QE for MBS is only part of the story. There still remains the pesky problem of demand for Treasuries once the Fed stops its overt purchases. The "Household Sector" bucket can only hold so much water. I predict FRB compels "term deposits" of the "excess reserves" (which you'll recall were nothing more than swiped into existence to backstop the banks after September 2008), as if these funds were "real money', now that they have been properly aged and cured in the temperature controlled, 0.25% cellar at the NY FRB, and these "deposits" will be "prudently invested" in the safest security of all. What is that you ask? Why, debt instruments issued by the United States Government of course. (Did you really need to ask?) And by the way, these term deposits will help "mop up the liquidity" we're all so afraid of.
$1.2 trillion of funny money becomes mid to long term debt, as needed to fill the holes in the Treasury debt issuance calendar. There will be conspicuous matching of the "term deposits" with the purchases of the "debt" so as to avoid the appearance of QE - it is not printed money being used to buy the debt, it is the money of our member banks, thank you very much.
What could be easier? The carry trade is on in 2010. And don't forget the covert, "Household Sector" purchases, which will increase in size.
Can someone please explain to me why the deficit is still exploding!?!!?!?!?
As far as I understand it the purchases by the Fed of MBS's and T's do not impact the national deficit. They simply credit the deposit side and debit the asset side. So why is the Fed budget still so out of control ? What are they spending they're money on? I know its a little off topic but someone please help me understand!!!
Interest. Entitlements (social security, medicare, welfare, unemployment, make work build a bridge to nowhere Obama money stim projects). Over sized pensions. Bailouts. Guarantees for failed asset classes. Banker Bonuses.
They are not paying down principle anymore on any of the loans they have taken out. They have unfunded future obligations (SS, Medicare, they borrowed from the monies from these programs that should be earning interest, and instead, they are cutting into tax receipts just to pay out to those who need it).
I'm a starting investor with €18,000 in my hands and I'm wondering if I should invest now in PM and agriculture stocks or wait until the possible crash in march. Is anyone else in the same situation?
If you want PMs, forget the stocks. The point of going long PMs is to go short paper.
Try going to finance.yahoo.com and comparing GLD (ETF) vs TGLDX (gold shares mutual fund) over a long-term chart. (I'm removing the link b/c it was screwing up the page.)
GLD itself is a poor proxy for the spot price of gold in my experience, and there might be better funds than TGLDX, but you get the idea.
It's just semantics at this point. QE2 or Household Sector via Reston 6. Take your pick.
If anyone is qurious about the MBS purchasing program look no further than here:
Relax people we are covered...
http://www.newyorkfed.org/markets/mbs_faq.html
no seriously, they have posted the following
Does the agency MBS program expose the Federal Reserve to increased risk of losses?
***Assets purchased under this program are fully guaranteed as to principal and interest by Fannie Mae, Freddie Mac, and Ginnie Mae, so the Federal Reserve's exposure to the credit risk of the underlying mortgages is minimal ***. The market valuation of agency MBS can fluctuate over time based on the interest rate environment; however, the Federal Reserve's exposure to interest rate risk is mitigated by the conservative, buy and hold investment strategy of the agency MBS purchase program.
A couple days ago the US treasury came out with a statement that said Fannie, Freddie et al are guaranteed by the US treasury i.e. You and I.
The process of attempting to replace a bomb that has already detonated with many more that haven't continues to be the flavor of the day.
Yes it does. Let me tweak that for you.
I live in nw ar and would like to know,the apt complex in question,and I also have access to property search in Washington county.I also have witnessed more than a few shady deals over the last year myself.
They will not be able to continue this prop charade forever.
The market will take care of that by voting to dump dollars which will destroy the tool that is being used to prop up the markets.
When the seriousness of this issue accelerates, there will be an emergency session in congress to get rid of Bernanke even if they mistakenly appoint him again.
He may even be humiliated into resigning.
Knowing the knee jerk reaction by congress, do not be surprised to see Ken Volker appointed as a caretaker Czar to hike interests rates again to levels near or beyond the last time to provide stability to the dollar.
The United States is too empirically strong in certain secretive defense technologies to be able to go down the tubes unless a greater and unseen force is exerted against it.
The question is: does the market melt down before the dollar collapses or does it melt up and become worthlessly valued along with the dollar?
The problem is way too big for the band aid "solutions" they are implementing.
Most of these banks that are the giants today will be non existent by the time the whole charade is exposed.
Capitalism as we know it is dead. Fascism only lasts until the impoverished people revolt.
These ruling idiots have no idea what they are allowing to happen. You cannot make too many people poor. Not all of them will go quietly into that good night.
Do not be surprised to see RICO charges against most of the banking cartel and their fictitious profits repatriated to the needy.
Their thin air empire based on debt is collapsing. We can only hope that sane banking takes over since the Star Trek option of living is not yet technologically nor socially feasible with a populace controlled by fear and covet based methodologies.
http://funy1.blogspot.com/
Like any good Ponzi scheme, it's all about the timing. Most of our fair representatives and senators have been so successful for so long at playing this game, they just can't comprehend an end to the game. So they continue to take ever more dangerous measures to push the Ponzi numbers to ever more stratospheric heights. Hey, it "worked" last time. They literally don't know anything else.
The other way to think about it, is as a quasi-stable geometric function. For a while, maybe a long while, it looks and acts stable, like a simple arithmatic function. It reacts to arithmatic rules of management. Then you hit the dreaded hockey stick corner and the tradition management tools become like pissing in the ocean in a vain attempt to raise the tide. Once it gets away from them, the reaction will overwhelm the actions of the Fed and all the other meddlers, spectacularly.
Those holding paper of pretty much any flavor when we hit the hockey stick corner on the graph will lose big, hard and continuous for a long time. Entitlements for the masses will be a fond, nostalgic memory for most. Of course, if you're brave, and really lucky, there's lot's of money to be made in the "just before the hockey stick corner" of the graph. I don't recommend it.
Me, I'm a big conservative chicken and dumped 95+% of my paper assets 5-6 years ago. Hard to beat PM's and other tangible assets for preserving wealth, regardless of when, exactly we hit the magic corner.
Good luck and buy the dips on both flavors of bullion, and junk silver. Take physical possession. Extra food in the pantry would not be a bad plan either.
Finest regards,
troy
Great work you have done by sharing them to all.
education degree | fire science degree | law degree | management degree | nursing degree
This is how life works in a kleptocracy. We're seeing it in real-time, with a front-row seat. Those who have political connections and can get the in's are the ones who receive essentially free money, zero-risk.
So, they're on the hook for no interest, there's a loss-share between them and the "people." It's basically like how sports stadiums get built.
adee kaye watch|642-631|000-107|links of london sale
I will always give a nice thrust look in to you from my bookmark feed.
<a href="http://www.micro-tronik.com/">auto scanner</a>
I will always give a nice thrust look in to you from my bookmark feed.
www.launch-techs.com
I have to admit that I have never heard about this information I have noticed many new facts for me. Thanks a lot for sharing this useful and attractive information and I will be waiting for other interesting posts from you in the nearest future.keep it up. car insurance