Hi and welcome to Planet Finance, where we, the millions of people left out of the trillion dollar bailout, can offer up brilliant ways of speeding the economic recovery along. I hope this takes off. Can you imagine having Joe Six-Pack and George Soros debating how to rescue the housing market? Read the rest of this entry »
Our Guess is as Good, Apparently, As Theirs
December 1, 2008X-Main St: How Do We Get the Economy Going?
August 9, 2011The people north of Main Street say they can’t understand how to get the economy going. And it’s getting serious now, it’s affecting their bottom line. First, they have to wake up to the fact: they sucked all the money out. They killed the engine that ran it, namely the American consumer. They’re not going to like what they have to do next:
#1 – Eradicate Work-At-Will – employees need to know the rug can’t be pulled out from under them in a moment. Who wants to buy a car on Saturday, when they don’t know if they’ll be cleaning out their desk on Monday? Give workers a fighting chance to keep their jobs. If companies need to lay off workers, make them incorporate separation compensation — equal to the span of time it’s currently taking the median worker to find another job — into their brilliant, accolade-gathering downsizing plans.
#2 – If mortgage holders can’t prove they hold the mortgage, courts must turn them away. If you don’t have a receipt for the shirt you bought last week, do you get your money back? The same should apply for an industry that has committed outright fraud. Stop wasting tax-payer (consumer paid taxes) money on courtroom machinations. You don’t hold the deed, you’re out of luck. Consider it a lesson in how to organize your paperwork .
#3 – Repatriation: If companies won’t bring back their offshore headquarters unless we reduce the taxes on the revenues they made outside our country, then take their registrations back. Make them jump through the same hoops as foreign countries. You want to be a U.S. company, pay your full taxes and get your butts back to the U.S. by X-date. Yes, give them an expiration date. That’s the cost of being a U.S. company. That’s the price tag. Pay it or get out.
#4 - Remove the ceiling on Social Security – If your income rises above $150k, or whatever the ceiling is now, you can certainly afford to continue paying the taxes minimum wage earners have to pay.
And that’s all for now from Planet Finance
Maureen Nevin Duffy
Famous Detective Snoops Bond Issues
October 19, 2010Jules Kroll, whose world-famous detective agency of the same name uncovered the hidden fortunes of dictators Ferdinand Marcos and Saddam Hussein, is snooping out the cracks in bond issues for investors – “…they’re the ones responsible to all these pensioners and all the folks whose money they manage.”
Also from Risk Professional magazine’s October cover story:
Kroll on Residential Mortgage Backed Securities: “We’re going to be concerned about the reputation of builders for veracity, what their standing is and their business experience,” says Kroll. ”We’ll look at the mortgages’ historical performance and at the originators.”
“…we’d be very interested in testing the data that has been supplied by originating mortgage brokers on a sampling basis, which is not done to date,” says Kroll.
Town’s Bond Bankruptcy Raises Q for All
October 5, 2010If a bankruptcy court rules that Vallejo, California’s credit enhancement program can’t be raided to satisfy bond investors, all muni bonds could lose out.
Enhancement programs are like collateral for municipalities’ loans. They lower the risk and therefore improve a bond’s rating and can lower the interest rate.
Read my story on this at www.iimagazine.com, the blog for Institutional Investor magazine. To find all 19 of my stoies on this site, just type Maureen Nevin Duffy into the search box.
Our Credit Score Prediction Proves True
July 12, 2010American Credit Scores Crash To New Lows
Planet Finance alerted readers of this blog that mortgage lenders were reporting forebearance, mortgage modifications and other help to the applicant’s credit bureaus. We warned that such practices would destroy consumer credit across the country. We even asked the Congressional Oversight Panel if they’d studied this and have a comment. They hadn’t.
Now there’s proof that consumer credit has taken a dive, which will take home buyers and retail consumers off the roles for years to come.
“Figures provided by FICO Inc. show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use,” according to the AP.
While the above report cites walking away from mortgages and losing one’s job as reasons for poor credit scores, we standby our original contention that the very modifications by lenders, that taxpayers have subsidized, are a major cause for the errosion.
Read more: American Credit Scores Crash To New Lows – 24/7 Wall St. http://247wallst.com/2010/07/12/american-credit-scores-crash-to-new-lows/#ixzz0tTQK6xiL
American Credit Scores Crash To New Lows24/7 Wall St. (blog) – 2 hours ago
Either of those actions severely damages credit ratings. One of the long term effects of low credit scores is a likely long-term drop in consumer spending. …
Dodd Bill Lacks Teeth
April 26, 2010Sen. Chris Dodd’s Wall St. Reform Bill doesn’t go after Two Big To Fail enough. Wall Street needs a law requiring investment houses to break up now.
They shouldn’t use our money to do it. But they should have a gun to their heads held by the US Government. Otherwise the taxpayers are just a bad bet away from another debacle that will have similar if not worse meltdown effects on a country this time far less likely to survive them.
Item: Goldman’s contention that it lost millions or billions on deals, making them look like any other Joe-6-Pack, may be another smoke screen, particularly if it turns out the only money it lost, was to counterparties on their bad deals, who were unable to pay up. The American people have to ask themselves if they should be the guarantors on these hi-stakes bets or the victims of their economic fallout.
Goldman’s Hedge Isn’t the Point
April 26, 2010Today’s Sunday talk shows have at least one person defending Goldman’s bets against its own clients. A favorite point is that they may have taken the other side and lost money in the past. The problem with that defense is it doesn’t take into account Goldman’s misuse of confidential material information, in this case the nature of the doomsday content of those CDO’s.
The loan industry has strict rules about who has access to loan information, chinese walls between departments in the same firm. It has been a huge problem for enforcement. That’s another issue regulators have yet to address. And with loan-based derivatives now the hot Wall St. item there’s no better time like the present.
In this instance though, Goldman had its feet on all sides of the deals. They were, and will continue to be if not punished in a legal sense, essentially the house and their clients the seniors on the bus with their lunch tokens and chips in their pockets. With the exception that in Goldman’s case, the house already knows the cards before their dealers draw them.
NYT’s Morgenson Had GS Story in Dec 09
April 17, 2010Banks Bundled Bad Debt, Bet Against It and Won
By GRETCHEN MORGENSON and LOUISE STORY
Published: December 23, 2009
Look up this story to see how early on Morgenson had the scoop on what SEC alleges GS has done.
Will SEC Charge Lead to Criminal Charge Against GS?
April 17, 2010It may be up to NY State Attorney General Andrew Cuomo to bring criminal charges against Goldman Sachs and/or its VP Fabrice Tourre.
Tourre was named by the SEC, this morning, as the principal involved in the structuring arrangement with Paulson. Planet Finance has posed the question to Cuomo’s office and will post when we hear back.
Finally SEC Wakes Up to Double Dealers
April 17, 2010The SEC this morning announced charges of fraud against Goldman Sachs for allegedly misrepresenting mortgage-based investments to its investors.
Speaking for the SEC this morning, Robert Khuzami, its Enforcement director, noted GS’s representation that Paulson & Co., which made news last year for making a billion dollars by shorting the mortgage market, was actually taking long positions in the products it was structuring for GS for sale to their customers. In reality, Paulson was not long but shorting the investments.
Khuzami said GS made about $15 million on the deals; Paulson made about $1 billion after the underlying RMBS dropped first 80% and then 99% and the CDOs they were linked to dove also. The investors, he said, lost approximately the same amount Pauson made, $1 billion.
The SEC actions closely follows the NPR Planet Money report on that those structuring CDOs were deliberately soliciting the riskiest mortgages possible in a strategy of double dealing — selling the RMBS in CDOs to investors even as they shorted them by trading Credit Default Swaps.
It’s Official: Mortgage Help Will Kill Your Credit
March 22, 2010What have our billions in support of the financial industry wrought? What will happen if you seek a mortgage modification, the option President Obama has ordered mortgage companies to make available to ease the impact of the Recession on not only homeowners but everyone who depends on the dollars of homeowners to survive in their businesses? Financial ruin. Oh, and a black mark against your resume, folks.
With unemployment averaging 10.9% across the country, with pockets as high as 20%, seeking temporary mortgage relief now hands employers an automatic reason for eliminating us from the race for a job.
According to the Associated Press (3/21/10), this is supposed to be a surprise result of the mortgage aid program. Right. It’s only a surprise to the harried homeowners who have made the mistake of trusting the banks they have been busy bailing out. What the article doesn’t say is that mortgage holders don’t have to be in arrears when they seek help. Just the act of accepting temporary relief from the Mortgage Gods will trigger a negative credit report, issued of course by your mortgage company!
In the AP report, which quotes Community Development Corp. of Long Island, a counseling group, and GreenPath Inc., a nonprofit group in Farmington Hills, Mich., the writer — without attribution — notes that the impact of the credit reports are “less severe” than foreclosure, which can damage credit for years. Note to AP, these banks include the period they estimate the negative situation will be in effect: try SIX YEARS!! That’s a long time on the unemployment line.
Had enough? Call and write your local congressional representatives and yell bloody murder!!
