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2017/11/22 [General] UID:1000 Activity:popular
11/22   

2013/8/29-11/7 [Finance/Banking] UID:54734 Activity:nil
8/29    Applying for a home loan now. The loan officer keeps asking why
        I wrote large amounts of check, and what they're for, and fax
        her proof to support what I said. She said loan regulations have
        tightened a lot to prevent money laundry. What is the max amount
        of money I can transfer these days without triggering annoying
        audits? I am not a terrorist.
        \_ Banks have to file a SAR for any amount over $10k.
           \_ What if I do a couple of $10k a day? Is that ok?
              \_ Not only will that still trigger the reporting, it's illegal.
                 http://en.wikipedia.org/wiki/Structuring
              \_ Just do 10k/day
                 \_ See above: this is illegal, and also probably won't work.
                    \_ How about bitcoins?
           \_ Does that include transferring between accounts owned by my
              and/or my wife, all of which in US institutions?
        \_ from the aspect of loan approval, they just want to make sure
           you aren't playing funny games like making private unreported
           loans or trying to artificially increase your apparent assets by
           shuffling money around.
2013/5/13-7/3 [Finance/Banking] UID:54676 Activity:nil
5/13    Does FDIC ever matter? How likely is it that your deposit of
        over $250k going to be screwed over in a major US bank?
        \_ Was Washington Mutual a major bank?
        \_ Was Washington Mutual a major US bank?
        \_ Hahahahahahahahahahaha. Good one.
        \- As with nuclear weapons, this insurance produces much of its value
           just by existing rather than being used. FDIC insurance is largely
           to prevent bank runs. Note also the FDIC supervises/assists with
           healthy banks taking over ailing banks. There is a really funny
           THIS AMERICAN LIFE on this.
           As for history, read about the 1980s Savings and Loan crisis.
           Small banks tank all the time. --psb
           \_ k thx. so if I have 2 accounts of ~= value at the same bank,
              I have double the FDIC coverage?
              \- if you have more than $250k in a single bank, you probably
                 should not be getting financial advice from me/motd, but
                 unless things have changed recently, the limit is per
                 person + per bank + per "account class" ... the last is
                 not totally intuitive. a personal saving/checking account
                 are the same account class, but your IRA is a different class.
                 so $200k CD + $200k savings = $250k cap. $200k IRA +
                 $100k checking = $300k coverage. i dont know all the nuances
                 about this ... like how spouses are treated (this may get
                 weird if you are a homosexual due to state law varying on
                 gay marriage) everything in the vague category of individual
                 demand account etc. --psb
                 \- hmm, apparently spouses are not treated specially ... the
                    special treatment applies to real persons, so not fictious
                    persons like corporations ... or things like estates ...
                    so the situation may change if the person you shared the
                    account with dies. --psb
                 \_ thank you psb, it is extremely helpful!
                    \_ !psb   --psb #1 fan, hoping for a comeback
2013/3/9-4/16 [Finance/Banking] UID:54621 Activity:nil
3/9     In a 15/30 year loan, the amount of payment stays the same but
        the payment on interest decreases while the principal increases.
        Suppose I decide to pay off a huge chunk of principal, will
        the amount of interest I need to pay decrease drastically, or
        do banks still want to take out a huge chunk of interest rate?
        \_ You don't actually have separate "interest" and "principal"; you
           just have a balance.  Every month your balance goes up because
           they charge you interest (a percentage of your current balance),
           and it goes down when you make payments.  So yes, if you make
           a big payment, your balance will go down and they'll be adding
           less interest each month.
           \_ This is not entirely true.  When you make extra payments, or
              when you make a bigger payment than the usual amount, you should
              specify that the extra money should be applied to the principal.
              Otherwise, the bank is free to interpret that you intend to
              apply it to either the principal or the interest, and most banks
              Otherwise, the bank is free to interpret whether you intend to
              apply it to the principal or the interest, and most banks
              will apply it to the interest since it is to their advantage.
              The difference is that: when you apply it to the principal, your
              remaining principal (i.e. "balance") goes down and the bank will
              charge you less interest.  When you apply it to the interest,
              your remaining principal remains the same and the bank will
              charge your the same interest, and you're just paying your next
              month's or next-next month's interest extra early.
              \_ Wait, really?  You're saying when I send the bank a big check,
                 instead of crediting it to my account (which would reduce
                 my balance), they might just hold it in limbo and credit it
                 months later?  How is that legal?  I guess I'm glad my bank
                 doesn't do that.
                 \_ I tried paying off a HELOC (it was only $15K). I owned
                    something like $12312, so I wired in $12312. The next
                    month I still got a principal to pay and I was like, WTF?
                    It turns out that they put in $12112 into principle
                    and then put in ~$200 into next month's interest rate, and
                    when time comes to pay, I still owe them principal!
                    FUCKING sneaky Bank of America.
                 \_ No, they will cash it and credit it to your mortgage
                    account right away.  But they will consider it an early
                    interest payment instead of a principal payment unless you
                    specify that it's a payment towards the principal (e.g. by
                    checking a checkbox on your payment stub, or by writing
                    "payment towards principal" on your check.)  If you use
                    automatic payment, you'll need to specify that in the
                    automatic payment authorization form.
                    \_ Wow, that's pretty sleazy.  Thanks for the explanation.
        \_ This is an amortized loan. If you pay off principal then you
           will pay your loan off faster but your payment is fixed. I am not
           really sure what your question is.
           \_ What do you mean by "your payment is fixed"?  You can pay as much
              as you want each month (above the minimum), and if you make big
              payments, you'll end up paying less in total.  (Banks hate this,
              which is why they sometimes have prepayment penalties.)
              \_ i think the op means "the minimum is fixed"  -!op
2013/3/6-4/16 [Finance/Banking] UID:54620 Activity:nil
3/6     When I first joined my company, I got a sign-in bonus which was
        deposited into my savings account the first month. I also got my
        moving fees reimbursed, which was also deposited into my savings
        account a few months later. However, neither entries show up on
        W2 or any other official records (not even ADP). I asked my boss
        if I should talk to someone about this, and he said "don't worry
        about it, it's all good." Is it normal for companies to make
        deposits without them showing up on any records? Should I be
        worried? Is this common or legal?
        \_ Ask an accountant. You are probably required to report them on your taxes.
        \_ Ask an accountant. You are probably required to report them on
           your taxes.
        \_ When I need a job done, I go to Home Depot and pick up a bunch of
           amigos. At the end of the day, I pay cash. I have no idea if they
           report their earnings. The question of legality is moot if
           there is no accountability in our financial system.
2011/11/27-2012/1/10 [Finance/Banking] UID:54243 Activity:nil
11/27   Whoa, since when did FDIC coverage go up to $250,000? That's cool.
        So is this coverage per customer per bank, per account per bank,
        total per person, etc?
        \_ I believe that it is per customer per bank. Not 100% sure though.
           \_ Yes, and you can get even more with joint accounts, etc.:
              http://www.fdic.gov/deposit/deposits/dis/index.html
              But if any of this matters to you, you can probably afford
              better financial advice than the motd.
              \_ $250,000 is not a lot of money these days.
                 \_ To the 99% is still is.
2011/11/12-30 [Finance/Banking, Finance/Investment] UID:54225 Activity:nil
12/12   What percent are you?
        http://blogs.wsj.com/economics/2011/10/19/what-percent-are-you
        \_ A newer article on the same site: "The Myth of 'Record-High'
           Inequality"
           http://www.csua.org/u/uqd (blogs.wsj.com)
           "But by the latest measures, inequality is actually lower than it
           was four years ago, and well below its recent highs."
2010/1/27-2/8 [Finance/Banking, Finance/Investment] UID:53669 Activity:low
1/27    Fear the Boom and Bust, Keynes & Hayek
        http://econstories.tv/home.html
        Simply awesome
        \_ "Free market sucks, SOCIALISM RULES!"  -general message
            \_ So you didn't watch the second half?
               \_  link:www.csua.org/u/q0s all I needed to see.
                   \_ That is a bizarre non-sequitor.
        \_ I read "Bust" and "Hayek" and I thought it's about something else.
2009/11/21-30 [Finance/Banking] UID:53538 Activity:moderate
11/21   I'm trying to figure out how much I save. Does money I contribute
        to debt (student loans and car loan) considered money I "save"?
        \_ "I'm trying to figure out how healthy I am. I normally
           smoke 2 packs a day but now I've cut it down to just
           1 pack a day. Does the reduction count towards health
           that I hope to 'gain'?"
        \_ When you have more going into a bank/CD/investment than
           what you spend, then you're saving. If you pay just the
           minimum fee (interest only) and put that extra cash into
           an investment that earns more than the interest rate,
           then you're saving even more! Obviously, it's not easy
           to find an investment that 1) earns more than the interest
           rate and 2) is stable/consistent/predictable. So if you're
           not confident that you can use that extra $$$ to earn
           a higher rate than the interest rate, then paying the
           principle will reduce your loan. You are in essense saving
           as much as you can.
        \_ WTF? Fuck no. I can't believe I'm hearing this. You have
           asset, and you have liability. Your loan is your
           liability. So is taking a mortgage even if it's worth a
           lot. When you pay off some principle, you are decreasing
           your liability. People who have a lot of cool shit aren't
           rich. They usually have a lot of liability. The more
           liability/asset ratio you have, the less likely you'll save
           due to having to pay off interests. In another word, if you
           have a bunch of loans (car, student, house, etc), you are
           in debt. You are POOR, and trying to get by your life by
           trying to decrease your debt. If the loan rate is
           significantly higher than say, CDs, then it's usually a
           better strategy to maximize paying off your car loan +
           student loans than trying to put them in CDs. In another
           word, by taking loans esp.  on items that have no room for
           appreciation (cars, boats, etc), then your are throwing
           away money. You are poor.
                \_ That was hilarious, thanks! Btw, my student loans
                   aren't cool shit. All I got for it was attendance
                   at Cal, which in the end just got me an account
                   on this server, putting me in touch with a complete
                   poser like you.
                   \_ I have asset. You have debt. Enuff said. -poser
                      \_ Your English language comprehension ability
                         has been rated as: pathetic.
        \_ My mother spends a lot of frivolous things. She goes to
           high end stores, looks at the price (let's say, $1000),
           then goes to the lower end stores and buys a bunch of
           things (let's say $200). Then she rationalizes that she
           just saved $800. This is the exact reason why uneducated
           women are stupid and cause the whole family finance to go
           down. I vowed to never marry someone like my mother. I'm
           tired of paying off her loans.
            \_ you're an idiot.
               \- You're a dick and an idiot. -!pp
            \_ I'm on the same boat, except that it's both of my parents
               instead of my mom alone who are like this.
               \_ moral of the story: don't marry into a good looking but
                  very white/bimbo/trash family
           \_ my mother just called me to borrow money, but IT'S OKAY!
              "My adjustable rate just went down and I'll save some money
1             "My adjustable rate just went down and I'll save some money
               so everything will be fine!"
              Someone PLEASE kill me.
        \_ I think he is "saving". Saving is a concept from analyzing your cash flow.
           If you have more income than spending, you are "saving". How that flows
           to your balance sheet, by paying off debt or accumulating assets, is
           a separate issue.
2009/9/29-10/8 [Finance/Banking, Industry/Jobs, Industry/Startup] UID:53412 Activity:moderate
9/29    So let's say I have some money, about $100k. What are some things
        I could do with it? What do you guys recommend?
        \_ Hookers and blow
        \_ Guns, ammo, MREs, to prepare for the coming apocalypse!
           \_ I am thinking about buying some gold.
              \_ Gold is a bad idea right now.  The inflation hedge is
                 already factored into the price.  There are other assets that
                 are also a good inflation hedge that aren't in a bubble.  Such
                 as real estate.  (The bubble there having just burst.)
        \_ quit your job, move back home, and do your own startup.
           Realize that the sooner you stop working for DA MAN, the
           less likely you'll run into mid-life crisis in your 30s.
           \_ I would like to start my own business, but probably not
              a startup.
              \_ So, like, restaurant would be in your opinion your
                 own business, but not a startup? A startup doesn't
                 necessarily mean a TECH company less than 100 person.
                 \_ Let's say I bought a McDonalds franchise, would that be
                    a startup?
                    \_ uh, no. If you don't know and don't care, it's
                       better than you stick to working for THE MAN.
              \_ What?
        \_ Wait a couple more months, then use it as down payment for a rental
           property.
           \_ This is on the short list.
        \_ Keep it in a savings account as a contingency fund and for
           a down payment for the next time you sell and buy a house?
2009/5/19-26 [Finance/Banking] UID:53014 Activity:nil
5/18    What's a good bank with decent interest rate for savings or MM?
        I'm looking for something that's not too inconvenient (with tellers
        within 20 miles of major cities) and with higher interest rates
        than BofA and Wells Fargo.
        \_ Isn't there a canonical approach to keep a small amount of money
           ~$1000 in a large bank with prevalent ATMs and keep the bulk of
           savings in a bank with nice interest rates and you can just
           transfer back and forth as needed?  I have it all in a BofA
           account right now, but I don't have a lot of money so that makes
           things easier.  Just pick any bank with nice interest rates and
           online tools for money management and you should be set. -mrauser
           \_ i think the problem is there aren't any decent banks with decent
              interest rates
2009/5/8-14 [Finance/Banking] UID:52969 Activity:nil
5/7     Does Goldman Sach's really rule the world?
        http://tinyurl.com/c67jdu
2009/4/9-13 [Finance/Banking] UID:52830 Activity:moderate
4/9     Wife and I have about $5000 combined savings. We're poor. What's a
        decent checking or savings account to open?
        \_ http://gmacbank.com is a pretty good value.
        \_ http://gmacbank.com is a pretty good value. they almost always pay a pretty
           competitive rate. one of the account types offers limited
           check-writing and ATM fee reimbursements. the other doesn't, but
           pays a higher rate. i have both, and just transfer funds as needed.
           their website is decent and no-nonsense. the only thing i don't
           really like is the lack of electronic statements.
        \_ A credit union. They don't do stupid things like buy Credit Swaps,
           so your money is safe. I like Patelco.
           \_ I'm a Patelco member. Know why? My credit union went belly
              up and Patelco ended up with the corpse.
           \_ Your money is pretty safe anyway as long as it's federally
              insured. A lot of credit unions have pretty crappy rates.
2017/11/22 [General] UID:1000 Activity:popular
11/22   

2009/4/3-5 [Finance/Banking, Politics/Domestic/California] UID:52791 Activity:nil
4/3     LA homes are affordable again! 500K -> 200K. LA is where your
        American Dream comes true!
        http://www.cnn.com/2009/LIVING/04/02/foreclosure.dream.homes/index.html
2009/3/19-23 [Finance/Banking, Finance/Investment] UID:52730 Activity:kinda low
3/19    Can someone explain how this does not end up as Weimar or Zimbabwe?
        http://www.iht.com/articles/2009/03/18/business/fed.php
        \_ Because hyperinflation is not the same as inflation.  The idea
           is to create some inflation to fight the deflationary trend.
           (Note: this scares me too, but let's not unrealistic Chicken
           (Note: this scares me too, but let's not be unrealistic Chicken
           Littles)
           \_ I realize the plan is to create an inflationary trend to prevent
              deflation.  However, this seems to me to be flapping our arms to
              avoid hitting the ground. -op
              \_ The alternative being?
                 \_ A different analogy. -op
        \_ Because the total money supply (credit plus currency) is currently
           contracting and this extra $1T is less than the amount of credit
           that has been withdrawn from the economy.
           \_ The Jan & Feb CPI updates both say that inflation is occurring,
              after 6 months of deflation.  How do we know when enough money
              has been injected vs. not enough? -op
              \_ That is a good question, but I am sure the Fed has an answer.
                 Probably when the inflation rate is "high enough" which is
                 at least 2%/yr, probably more like 3-4%. There is a risk of
                 overshoot, of course, but the deflationary forces are so
                 strong worldwide, worrying about hyperinflation is pretty
                 silly, imho. The BOE, BOJ and EU banks are all doing the
                 same thing, btw.
2009/2/20-22 [Finance/Banking, Finance/Investment] UID:52613 Activity:high
2/20    Interview with Peter Schiff (economics, 2008)
        http://blog.mises.org/archives/008039.asp
        \_ gee, a government-is-evil site has an interview with a
           government-is-evil guy.  how useful.  -tom
        \_ How's that hedge fund going Petie?  OOOOPS.
        \_ Peter wants to go back to the Gold Standard. I agree with that.
           \_ You mean you agree with Mr. My Hedgefund Completely Imploded?
              Yeah, he sure seems like a *smart* guy.
             \_ You can be right about some things and wrong about others.
                You can also be right but get the timeframe wrong.
                Hedge funds make bets that are inherently uncertain.
                \_ He was a consistent bear from 2002 until now, so he was
                   dead wrong for five years.  A stopped clock is right
                   twice a day.  -tom
                   \_ One could correctly recognize the dot com bubble, oil
                      bubble, and housing bubble.  It's much tougher to know
                      when it would pop, and what the world reaction would be.
                      \_ Exactly. I thought <DEAD>dot.com<DEAD>s were overpriced and
                         yet they kept going up and up and up! Eventually,
                         I was proven right but the devil is in the details.
                \_ Well, I guess that justifies being a fringey Austrian
                   econonomics nutcase.
        \_ Peter Shiff Was Wrong
           http://tinyurl.com/ca3gkr (Mish's blog)
           \_ Yeah, basically, Schiff was wrong about just about everything.
2009/2/19-25 [Finance/Banking, Politics/Foreign] UID:52607 Activity:nil
2/19    I believe in the latest edition of dictionaries, next to the
        definition of "batshit insane" there is a picture of
        Rep. Michele Bachmann (R-obviously):
        http://tinyurl.com/btd698
        "We're Running Out Of Rich People In This Country"
2009/2/19-25 [Finance/Banking] UID:52601 Activity:nil
2/19    http://freakonomics.blogs.nytimes.com/2009/02/18/let-the-human-capital-exodus-begin
        \_ Suppose you are a damn good executive.  Someone gives you the
           chance to come in to a ailing firm that has a long history and
           some serious pluses going for it.  If you manage to turn things
           around in a 5-10 year time frame you will be heralded as a
           brilliant mind and even the elite will treat you like royalty.
           Would you walk away from that oppertunity because you will "only"
           get 500k a year until things get better?  If so I don't think you
           are the kind of person that these companies need right now.
           (why the fuck did you delete this?)
        \_ The words banking, innovation, talent, used together is nothing
           but an oxymoron. Give me a break. We used to think that energy
           derivatives was a brilliant idea. Ditto with 0% down 0% interest
           loan. Yeah, we made TONS of money because of 0% down 0% interest,
           it's such an innovative financial product! WHOOPY!!!
        \_ Finding new ways to use renewable energy = innovation.
           Finding new ways to make money by giving out unsound
           and unsustainable loans = innvation? Give me a fucking break.
        \_ I think the post above is agreeing with the three comments above.
2009/2/19-25 [Finance/Banking, Finance/Investment] UID:52599 Activity:moderate
2/19    "There is no scenario under which you would claim the government was
        not involved ... -tom"
        \_ Apparently there is no scenario under which you would agree
           government policy has a hand in creating financial crises.
           My point isn't about getting rid of the government itself
           but the banking system supported by governments around the world.
           These crises keep happening around the world and yet people always
           find something to blame except the actual system.  It's like
           building your house next to a flood zone and then blaming the rain
           when your house inevitably gets trashed.
           On the surface, you can blame banks in these crises because we
           always get these situations where banks create massive amounts of
           debt based on overvalued assets.  This is natural because greed is
           natural.  The problem is a) they are shielded from the consequences
           and b) the govt-sanctioned system allows them to pyramid debt upon
           debt in a tremendous explosion of newly created money, and a
           tremendous skewing of the economy's fundamentals (trade balances,
           capital allocation).
           In a conservative system (not talking GOP or Dems here) a series
           of failures would simply not be able to cause such deep problems.
           After you unwound the failures then you'd still have the same
           basic money supply in the economy.
           With the current system, you are putting an impossible regulation
           task onto the government.  The current crisis is really an
           extension of problems that have been building up for decades.
           In the latest episode the Fed kept interest rates too low for too
           long.
           \_ Not a "conservative system", a "free market system".  The free
              market cannot work unless there's profit AND loss.  Oh, and the
              government shouldn't tell the companies to do something
              unprofitable and then blame them for it.
           \_ http://tinyurl.com/c83pfd (The Economist)
              Your lefty fellow travelers over at The Economist don't seem
              to agree. Financial crises are as old as capitalism.
              \_ That article doesn't even touch on the issue of the banking
                 system itself.  It's mostly ignored by all mainstream
                 sources as if it must be, always has been, and always will.
                 There's no proof that this credit expansion system is
                 really a benefit.
                 This isn't really a left/right issue either.  The only people
                 who talk about this kind of thing are, I guess, libertarians.
                 \_ What are you talking about? Every macro econ class talks
                    about money supply. Read Chapter 13 of Keynes General
                    about money supply. Read Chapter 17 of Keynes General
                    Theory for the first modern discussion of it, but so did
                    Friedman, Von Mises, Krugman, all the greats. It might be
                    true that libertarians (and their fellow travellers, the
                    Austrians) are the only ones who seriously consider that
                    fiat money and franctional lending are a bad idea. Do you
                    notice that no one in the world is on the gold standard?
                    That is because it is a crappy way to run an economy, full
                    of booms and busts far worse than what we are experiencing
                    today.
                    \_ There's no evidence it's a crappy way to run an economy.
                       The real reason is very simple.  Government inflation of
                       the currency is a hidden tax on holders of money.  Govts
                       used this repeatedly in times of war, though they
                       usually returned to gold afterward.  This is just a
                       fact, look at the history of about every major British
                       or US war.  They inflated the currency tremendously in
                       WWI, then tried to deflate it again afterwards which was
                       doomed to failure.
                       This is also orthogonal to fractional reserve banking
                       where demand deposits are treated as bank assets,
                       and the money supply is exponentially expanded via debt.
                       There is no evidence this is needed or even beneficial.
                       Most of the historical problems, if you look into it,
                       were either a) not really crises or b) not actually
                       a free market gold standard.
                       The deflationary spiral problem is endemic to fractional
                       reserve inflation, so is the risk of widespread bank
                       failures.  Banks today, in general, are not allowed to
                       fail.  We pay for their mistakes via the government
                       bailing them out in one way or another.  It's private
                       profits socialized losses.  But actually this has been
                       the case for hundreds of years... because it wasn't
                       nipped in the bud, it's always been too painful to undo.
                       Govts bailed out banks many times in history.
                       \_ You imply that having a hidden tax on holding money
                          is a bad thing.  I would argue that we don't want
                          people hoarding money a'la Scrooge McDuck.
                          \_ Let's see you argue it then.
                       \_ If you are not familiar with the historical poverty
                          of humanity and the many long periods of depression
                          and famine before 1900, then I cannot hope to type
                          enough words to educate you. Go read a history book
                          or something. The explosion of human wealth since the
                          invention of capitalism is really unprecedented.
                          \_ Capitalism is not synonymous with central banking.
                             There are no periods of famine and depression that
                             can be blamed on a lack of central banking.
                             You're also placing credit on "capitalism" when
                             there are so many other technological advances in
                             the same time frame.
                             \_ What do you think that the "capital" in
                                capitalism represents?
                                \_ Not central banking, that's for sure.  Why,
                                   what do you think it represents?  Is this
                                   a joke?
           \_ Do you even know why we went off the gold standard?
              \_ So that the gov't could inflate the currency whenever they
                 wanted.
                 \_ It all sounds like funny money to me.
                 \_ Is it better when completely random effects inflate the
                    money supply? (Someone discovered gold!)  Or, even worse,
                    business as usual deflates the money supply? (Hold amount
                    of gold constant, increase GDP, automatic deflation!)
              \_ You don't need a gold standard.  The money-is-debt, fractional
                 reserve thing is mostly orthogonal to having a gold standard.
                 You could still have fiat money but make it non-debt based
                 (i.e. just directly create X amount of money by fiat).
                 A gold standard is a separate debate.  Many arguments against
                 it are bogus though.
                 We left the gold standard so that the government could
                 finance wars without worrying about taxes or voters.
           \_ Are you getting paid by the word?  -tom
              \_ I should be.  My day job is boring, I guess.
        \_ what is this quote from?
           \_ an earlier motd thread
2009/2/13-18 [Finance/Banking, Finance/Investment] UID:52566 Activity:nil
2/13    Bubbles have repeatedly plagued Western finance since its origins
        in the Italian Rensiassance:
        http://tinyurl.com/c83pfd (The Economist)
        (and an explaination why the CDS trades should "net to zero")
        \_ They won't net to 0 if some people go bankrupt, drops out of
           the system and can't pay up.  Finance is not a zero sum game.
        \_ Top people to blame for the financial crisis:
           http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350,00.html
           http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877320,00.html
           http://www.time.com/time/specials/packages/article/0,28804,1877351_1878509_1878508,00.html
2009/2/11-18 [Finance/Banking, Finance/Investment] UID:52555 Activity:high
2/10    Why tax cuts are a bad way to stimulate demand in a deflationary
        environment:
        http://tinyurl.com/ccatun
        (Freakonomics Blog at NYT)
        \_ Oh sure, you can't trust people with their own money.
           http://www.youtube.com/watch?v=zISKoQegbxM
           \_ No, you can't, when the collective interest is
              diametrically opposed to the individual's interest.
              We, collectively, need the economy stimulated.
              However, we, individually, don't want to spend our
              However, we, individually, want to save our money
              money to maximize our personal financial security.
              So, right now, you can't trust people with their
              own money.
              \_ Is this why the fed has racked up debts that work out to
                 over $30,000 per capita?
                 \_ How large are the debts that the private sector has
                    racked up?
              \_ People know what they need and don't.  We've been living in a
                 mode where people spend way beyond their capacity.  Retreating
                 from that is normal.  Deflation is good.  We have tons of
                 immigrants and an inefficient culture of buying tons of
                 cheap crap.
                 "Deficient aggregate demand" isn't a problem.  We still have
                 a huge trade imbalance so there are plenty of jobs we could
                 theoretically be doing instead of importing all that shit.
                 But the only way that would happen is if we let conditions
                 move towards equilibrium instead of borrowing trillions to
                 prop up the status quo.
                 \_ You almost make some sense.  Good thing you aren't running
                    the Republican party or I'd have to vote for you.
                \_ Do you think that people knew what they needed and what
                   they didn't need when they decided to leverage up buying
                   McMansions, flipping houses and buying SUVs? How about when
                   they bought all those exotic financial instruments which
                   bet on the housing bubble? Do you know what a deflationary
                   trap is? What you are advocating would put us in one,
                   the same as Japan post-bubble, and would give us our
                   own "lost decade" or two.
                   \_ People did that because it was what makes sense to do
                      given abundant cheap credit.  The government's policies
                      steered the market towards cheap imports and housing
                      instead of real industry -- not only our direct
                      policies but how we allowed e.g. China to manipulate our
                      own economy.  See:
    http://blogs.cfr.org/setser/2009/02/02/it-wasnt-just-the-market/#more-4618
                      Of course long-term deflation is not good.  But if it
                      wants to happen there's no point going around trying to
                      ignore the laws of gravity.  We should look for ways to
                      cushion the fall and set things up for long term success.
                      The previous economy (dot com then crazy mortgage bubble)
                      was based on a tremendous amount of imaginary wealth.
                      To keep on pretending just prolongs and exacerbates.
                      The ideas you're talking about is the thinking that lead
                      us to where we are.
                      \_ No, it was a deliberate decision by the GOP to
                         deregulate the financial sector which led to the blow-
                         up in available credit, more than anything. There were
                         certainly other contributing factors, but that was
                         number one. To lower the Debt/GDP ratio, you can try
                         to lower debt or raise GDP. Your plan would try and
                         lower debt, but probably lower GDP even more - that
                         is what has happened in the past when debt bubbles
                         have been allowed to pop without any attempt to
                         clean up the mess afterwards. There is a chance that
                         by reallocating capital to more effective uses, we can
                         grow GDP and reduce overall debt that way. Most of
                         the increase in govt debt recently has just been a
                         shift from private to public hands, so has not
                         increased the overall debt burden to the US economy.
                         This is not guaranteed of course, a lot of it depends
                         on how good a job govt does in allocating capital to
                         productive uses. It is hard to imagine that they would
                         do a worse job than the private sector has over the
                         last decade, but anything is possible.
                         \- you can blame the GOP for some crazy tax policies
                            gutting enforcement funding or "capturing"
                            regulatory agencies and most of deregulation, but
                            there is a lot of blame to go around on dereg
                            and mkt fundamentalism. i'd be ok chaining
                            robert rubin and phil gramm together and sending
                            them off into interstellar space.
                            \_ Please see the Commodity Futures Modernization
                               Act of 2000.
                         \_ Even given the deregulated system,
                            there were clear lapses on the part of the
                            regulatory systems that did still exist.  And
                            failures on the part of private regulators like
                            S&P.  I believe part of that is simply a lack
                            of competition -- the need for government
                            oversight is directly related to market health.
                              Markets don't know what's productive, they just
                            tend to maximize utility in terms of profit.  If
                            the environment is skewed the result is skewed.
                              It's like when "kind" people put out food for
                            animals; the animals will base their "economy" on
                            maximizing this free benefit.  They don't
                            understand why there is free food, so they can't
                            understand that it might go away, or that the
                            humans might round them up and gas them.
                            Low interest rates, perpetual borrowing, and
                            China's market manipulations are our free food.
                            Even now China keeps investing in overcapacity and
                            trade surplus.
                              The deregulated financial industry made mistakes,
                            but basically it was drunk on the free shit.
                            Cheap credit was influenced by the trade deficit.
                            The Fed also maintained relatively very low
                            interest rates even while the housing bubble was
                            growing insanely fast.  Greenspan denied that there
                            was a bubble.  The government was basically telling
                            people that housing was the place to be.
                            \_ Look, you ideological nitwit; the housing bubble
                               is *not* the cause of our financial crisis.
                               \_ I rather think it is. If housing recovers
                                  then all of these problems instantly go
                                  away. Loose credit and low interest rates
                                  combined with fraudulent mortgage lending
                                  practices and dishonest borrowers are at
                                  the heart of the problem. If you want to
                                  know where most of the $$$ went, it went to
                                  anyone who sold a property in the last 5
                                  years that they had owned more than 5
                                  years prior. Some of it when to speculators
                                  and some of it went to people like you
                                  and me whose house value doubled in a few
                                  years. When salaries and real estate prices
                                  match more closely then this will all blow
                                  over but not until then. Leverage just
                                  made things worse by wiping out capital,
                                  but those speculators had a good run prior to
                                  that so some should weather this. Some won't.
                                  C'est la vie.
                                  \_ We have had credit bubbles that did not
                                     involve housing and we have had housing
                                     cycles (bubbles?) that did not bring down
                                     the financial sector. Unregulated and
                                     overly risky speculation is what brought
                                     down the financial sector, mostly the IBs
                                     and hedge funds leveraging 30:1 on their
                                     bets.
                                     the financial sector.
                                     \_ S&L crisis?
                                        This isn't the first time Citi has
                                        borrowed from the gov't either.
                                        Was 1991 the last time?
                                        This crisis is more severe because
                                        the bubble was bigger, partly
                                        because interest rates were lower
                                        and other instruments were
                                        underperforming or viewed as
                                        risky. That's all. CA has had housing
                                        bubbles that popped, but this is new
                                        to most of the country.
                               Financial institutions leveraging themselves
                               ridiculously is the cause of our financial
                               crisis.  Oh, if only the government didn't
                               exist, the invisible hand would have made sure
                               that the banks acted safely!
                               Here's a news flash: The financial crisis
                               *IS* THE FUCKING INVISIBLE HAND.  The free
                               market is perfectly happy to drive off a cliff
                               and destroy a society.  Government's job is
                               to make sure that doesn't happen.  -tom
                               \_ Leveraging wasn't THE cause; misclassifying
                                  risk was the cause, and is directly
                                  related to the housing bubble.  And the
                                  mother of all the leveraging is the fed's
                                  low interest rates.
                                  The financial crisis is not the invisible
                                  hand because government was riding
                                  shotgun the entire way. Or more accurately,
                                  the government was building a bridge to
                                  the promised land out from the cliff, but
                                  actually it went into thin air.
                                  In any case you are arguing a strawman: I
                                  am not arguing that gov't regulation is
                                  unnecessary. I'm saying it didn't do its
                                  job.
                                  \_ Yeah, whatever.  How about this: Could
                                     you describe a possible scenario where
                                     the free market, by itself, could cause
                                     a financial crisis?  Or is that
                                     impossible?  -tom
                                     \_ Obviously yes, with banks: bank runs.
                                        Although modern banks are completely
                                        married to the government via the
                                        central bank, and via the laws that
                                        allow them to create money and lend
                                        money that they simultaneously owe
                                        to their depositors.  That's not
                                        really the free market; it's inherently
                                        unstable, and supposedly the govt is
                                        managing this in order to be able to
                                        easily stimulate the economy.
                                        It is theoretically possible to have
                                        banking which is not based on the
                                        current scheme.
                                http://mises.org/Books/mysteryofbanking.pdf
                                        You can't honestly have a free market
                                        without a hard currency and a situation
                                        where actors are held accountable for
                                        their dealings.
                                        A market run on an arbitrary government
                                        fiat currency is inherently not free.
                                        If banks were required to lend money
                                        out of their own capital instead of
                                        their customers, or else enter specific
                                        contracts with customers to lend their
                                        money, you could not have bank runs.
                                        \_ Go sell it at Top Dog.  -tom
                                           \_ The model of modern corporations
                                              is too conducive to disaster.
                                              Responsibility is abdicated onto
                                              a non-person legal entity, and
                                              management transfers between
                                              speculators who individually
                                              do not have full understanding
                                              of the business, but neither
                                              stand very much to lose.  The
                                              executives and employees stand
                                              to profit greatly from short
                                              term schemes which are measured
                                              by quarterly results.
                                              Then you have the abomination of
                                            "government sponsored corporations"
                                              like
                                      http://en.wikipedia.org/wiki/Fannie_mae
                                              How can you say that the fin.
                                              crisis is not directly related
                                              to the actions of this agency
                                              and the govt that created and
                                              controlled it?
                                              \_ Fannie Mae was a drop in the
                                                 bucket (and late) compared to
                                                 the total amount of CDOs
                                                 written. You should have
                                                 stopped at "bank runs have
                                                 happened long before there
                                                 was government regulation of
                                                 banks." Tell us how Tulip
                                                 Mania was big ole' gubmints
                                                 fault.
                                                 \_ Fraud and speculation are
                                                    not limited to the govt,
                                                    no, but the govt allows
                                                    for a special depth of
                                                    scope.  Nothing's wrong
                                                    with a periodic recession.
                                                    But the govt banking scheme
                                                    creates vast money supply
                                                    variances which is what
                                                    creates a crisis.
                                                    \_ Prove it.
"Whether the U.S. had a central bank or not, the banks were  _/
assured that if they inflated together and then got in trouble,
government would bail them out and permit them to suspend
specie payments for years. Such general suspensions of specie
payments occurred in 1819, 1837, 1839, and 1857..."
US banks are on the government's credit teat, and mommy government
always saves them, or at least the vast majority of them.  And it
lets them multiply credit exponentially.
There's no real benefit to all that credit. It just inflates prices
and gives the fed. government a backdoor tax method.

Here, listen to FDR trying to explain away banking fraud.
http://www.fdic.gov/about/history/FDR_Fireside_Chat_Banking_Situation_03-12-33.mp3
Money as debt.
http://video.google.com/videoplay?docid=-9050474362583451279
Mystery of Banking
http://mises.org/Books/mysteryofbanking.pdf
        \_ that's not proof of anything; it's pure assertion.  And it very
           specifically does not address the question, which is whether
           a crisis can be created without government intervention.  (Hint:
           it is completely obvious that a crisis can be created without
           government intervention.)  -tom
           \_ I don't need to prove anything, I'm not your slave and your
              question isn't "the" question.  Hint: all the major crises
              in US history were entangled with the government.  Your Tulip
              example was not a crisis and is anyway half legend.
              You're going around calling people idiots making assertions
              but demanding that others "prove" things (hint: no economic
              theories have ever been "proven").  But you have the status
              quo mainstream theories which you accept as gospel even though
              repeatedly they have failed to prevent massive crises.  I
              don't claim that you can't have economic problems, that's not
              a relevant question; an alternative system does not have to
              involve 100% protection from recession for example; in fact
              it's likely that recessions are necessary for healthy economy.
              Only if some fail is competition meaningful.
              \_ I didn't mention tulips.  "All the major crises in US
                 history were entangled with the government" is tautalogical;
                 the US has a government that ideological morons like you
                 blame for everything.  There is no scenario under which
                 you would claim the government was not involved, therefore,
                 the government is always involved, therefore, the goverment
                 is bad.  QED.  Or not.  -tom
        \_ How ironic that you blame government response to financial crises
           as being responsible for creating these crises. Do you blame the
           fire department for fires, too?
           \_ If you weren't an idiot, you'd realize that's not what I said.
2009/2/9-17 [Finance/Banking, Finance/Investment] UID:52543 Activity:nil
2/9     motd finance whizzes, if the total value of CDS last year was
        62 trillion, and now it's basically worthless, does that mean
        somewhere, somehow, someone collectively has lost 62 trillion?
        thanks
        \_ Yup.  Somehow, somewhere, $62T of money just went with the
           wind.  And what's more, if people suddently decide that CDS
           is worth something again, that money comes right back.
        \_ These things are supposed to net out, so for every loser, there
           should be a winner. Some of the losers are bankrupt though and won't
           be able to make good on the claim. Your second proposition "now
           it's basically worthless" is dubious, btw.
           \_ Who are these 'winners'?  Also I'm asking a real question, not
              being an ass. thanks.
              \_ I understand that you are not being an ass, but you are
                 repeating some common misperceptions here. If I buy a CDS
                 from you, giving you some cash up front in return for your
                 promise to make me whole if GM goes bankrupt and I lose the
                 money on a bond I just bought, and then GM goes bankrupt, you
                 are the loser and I am the winner. Is that clear enough? Now
                 if I go to redeem my claim and you declare bankruptcy, then
                 we are both losers, which is what people are afraid of now.
                 We don't know what this "counter-party risk" really tallies
                 up to right now, which is why the economy is in such a mess,
                 but it is certainly less than $62T.
           \_ I disagree with you about this being a "zero sum" game.  Here,
              I definitely think there are losers without there being any
              winners.  Suppose suddenly all stocks are worthless.  Who
              wins?  People who just got out of stocks might consider
              themselves lucky, but they didn't directly benefit from
              stocks going to zero:  they won "otherwise".  Short sellers
              might win, but that's a small fraction of the loss, not a
              zero sum.
              \_ Stocks aren't very much like CDSs. If I redeem my CDS to
                 you and you honor it, you lose money and I gain it. The only
                 way there can be an overall loss if via counter-party risk
                 e.g. you don't make good on the contract.
        \_ Why do you think they are worthless (URL, please)? They are still
           enforceable contracts, unless written by Lehman. They also aren't
           "supposed to net out." That was the undoing of the ibanks. They're
           supposed to be underwritten by people who can price the risk of
           default accurately. They're like tradeable insurance.
           \_ Yes, for every person losing a dollar, another person gains
              a dollar. That is what "net out" means. The $62T didn't just
              disappear, except in bankruptcy cases, where it can be argued
              that it never really existed in the first place.
              \_ Correct me if I am wrong, but the costs of insuring debt
                 fluctuates because these things are traded. Worse,
                 derivatives based on these things were traded.
                 \_ Yes, but their book value is not $62T, just the nominal
                    value.
        \_ I would argue that most of the value of the 72T CDS market is/was
           imaginary, and therefore all of the profits and jobs and stock
           fluctuations based on CDS trade profits are a load o'crap,
           and this is a huge contributing factor to current financial woe.
2009/2/3-8 [Finance/Banking] UID:52504 Activity:low
2/3     Need advice on where to put cash for 1 to 2 years. I only have
        maybe $50K (I'm not a rich old geezer like most of you). CD is
        at an all time low.  So is money market/savings. Gold? Silver?
        Foreign investment? Don't tell me to buy a home, I need a job
        for that.
        \_ teak rainforests!
        \_ If you are expecting to need it in the next 1 to 2 years, CDs
           are the way to go. If this is your only cash (you don't have
           six months of expenses saved up) then you probably want to keep
           most of it in savings even. How do you plan to pay your bills
           until you get a job?
        \_ How safe is safe? At this point probably only deposits
           (checking, savings, CDs) and US treasurys (you might look into
           i-bonds or TIPS) have a high probability of no loss of
           principal over the next 1-2 years.
        \_ Just because you don't have a job, doesn't mean that you can't
           invest it in realestate. I have a property that I'm about to
           purchase which I need to go all cash in on...I can offer you 10%.
           -scottyg
           \_ If you're 100% sure that there's positive income, no
              accidents, no renovations required, no eviction, etc, then
              obviously you don't need a full time job. But everyone needs
              some cushion, and 50K isn't a lot of cushion to do any real
              estate transaction in California. It only takes one bad
              tenant and 0 income to really screw your life up.
              \_ No, I mean I will offer you 10% on a 1-2yr loan of 50k.
        \_ IngDirect checking gives 2.2% if you have $50K. FDIC insured,
           that's what I'd do.
           \_ link:dollarsavingsdirect.com is still maintaining 3.5%
              http://provident-direct.com is down again to 2.82%
              \_ Gold is up 5-8% in the last 3 weeks
              \_ http://www.bankrate.com/brm/safesound/thrftmm.asp?fedid=137915
                 I'll stick with ING, thanks.
                 \_ http://www.bankofinternet.com looks pretty good at 3.10% and ***
                    Sometimes I wonder about these outfits, if they will
                    maintain a good rate over time.  There are some 5-star
                    banks on bankrate's list with better rates than ING.
                    I do wonder about a bank whose name is basically Engrish.
                    (bank of internet?) but apparently it's been around a while
                 \_ What do you really care as long as it's FDIC-insured?
                    In case you haven't noticed how bank failures are handled,
                    there is typically no interruption in availability of
                    funds, except maybe over the weekend.
                    \_ Not true in IndyMac's case. If you had $10K you'd get it
                       right away, but for larger amounts, they'd give you a
                       little upfront and then you had to wait for the rest.
        \_ Gold
        \_ heroin!
        \_ ammo
           \_ Ammo doesn't have good resale value.
              \_ pre-owned ammo?
              \_ when the zombies come.. ammo will be worth its weight in gold
              \_ who said anything about selling it?  yer supposed to give
                 it away, at high velocity...
2009/1/31-2/3 [Finance/Banking] UID:52493 Activity:nil
1/31    A different way of thinking about fiscal stimulus:
        http://www.interfluidity.com/posts/1233118501.shtml
        (heavy on the econ)
2009/1/28-2/4 [Finance/Banking, Finance/Investment] UID:52483 Activity:very high
1/28    Pork bill passes the House, no R's vote for it.
        \_ which pork bill?
        \_ Yay, fair and balanced NPR:
           http://www.npr.org/templates/story/story.php?storyId=99919378
           Also, GOP apparently unclear on definition of pork.
           \_ Even Chris Matthews called it one big earmark.
              \_ The fact that you think he represents informed liberal
                 opinion says a lot about you.
        \_ Pell Grants are pork?
        \_ Apparently the R's haven't heard that old adage about
           holes, shovels, and digging.
           \_ Apparently, you're an idiot.
              \_ Thanks for playing anyway.
        \_ I think Democrats should of tied the "Pork" bill along with
                             should've or "should have" -- ...
           TARP and Auto bail out.  I failed to understand why money to
           investment bank / commercial bank (e.g. TARP) is not considered
           "pork" by Republicans while putting money into infrastructure is.
           \_ Bankers donate money to the Republican party, but construction
              workers do not.
           \_ I wasn't particularly pro-bailout, but there are a few important
              differences.  The bailout money was often used in ways that
              might come back.  (Loans, stock, etc.) The bailout was also a
              targetted attempt to have an immediate effect on a vital piece of
              the economy.  No capital and capitalism doesn't work.
              Infrastructure may take years to even begin construction, that's
              not a quick action.  The stimulus bill also also is not
              particularly targeted.  It seems to chuck a billion or two to
              anyone the dems like.
              \_ As opposed to $18.4 billion for bonuses for the investment
                 bankers who got us into this mess.  -tom
                 \_ tom prefers life in the mud.
                 \_ Yawn.  Justify your side's naked corruption by pointing out
                    the other side's flaws.  How exciting.
                    \_ what in the stimulus bill is naked corruption?  -tom
                       \_ I already told you. Pell Grants. -!op
                          \_ I see: funding golden parachutes for
                             millionaires is OK; funding higher education
                             for the poor is naked corruption.  Great.
                             Enjoy losing in 2012.  -tom
                 \_ This number is bandied about, but what does it mean? I
                    read it is about 50% less than last year. What is the
                    average size of the bonus awarded and what is the base
                    pay? For instance, if total payroll is $1T (say) then
                    $18.4B in bonuses seems small. Or even if total
                    payroll is $18B then $18B in bonuses can still be
                    small if it is spread over 1M employees. I don't
                    sympathize with the banks, but this number is thrown
                    out there without much explanation. Were these bonuses
                    all cash or was there stock or options also awarded?
                    It costs the bank no cash to award someone $1M in options,
                    for instance.
                    all cash or were stock/options also awarded? It costs the
                    bank no cash to award someone $1M in options, for instance.
                    \_ http://www.nytimes.com/2009/01/29/business/29bonus.html
                       The number is based largely on personal income tax
                       collections.  It excludes stock options.  -tom
                    \_ It almost doesn't matter what it means, other than
                       this: the guys who ruined our economy, destroyed their
                       companies and lost trillions of dollars are being
                       rewarded with bonuses.
                       \_ I think the word "bonus" is what trips people
                          up. It's just salary. It's more in good years
                          and less in bad years, like you might expect.
                          It will never really be zero any more than
                          you can expect those people to work for free no
                          matter how poorly they are performing. Certain
                          professions earn a significant amount of salary each
                          year in a lump sum "bonus" and it's not quite the
                          same thing as if you or I get a bonus at work.
                          For example, my sister's ex-husband worked for a
                          law firm and every year they got a "Christmas
                          bonus" of 1 week's salary. It's common in law
                          just as in banking. Eliminating the bonus is
                          equivalent to cutting salary. Would it make you
                          feel better if they said they were reducing their
                          "base salary" 50%? That's essentially what is
                          happening. Their salary is tied to performance,
                          but that doesn't mean their poor performance = zero
                          salary any more than yours should be. If they
                          perform poorly enough they will be fired and
                          many have been. BTW, the average bonus was $112K,
                          which was down 36.7%. Sounds like a big pay cut
                          to me. Did you get a 37% pay cut because your
                          company's revenues went down in the poor market?
                          many have been.
                          \_ What was the average base pay?  The bonus could
                             go to zero and these losers would still get paid
                             more than enough.  Using taxpayer dollars to
                             give incentive-based pay to people who drove
                             their companies into bankruptcy and the entire
                             economy into crisis is absolutely, completely
                             indefensible.  And then to attack Pell Grants!
                             I suppose the conservative strategy of asserting
                             things too ridiculous to argue against is still
                             in force.  -tom
                             \_ 1. I didn't attack Pell Grants.
                                2. I like how you say their pay would be
                                   "more than enough", comrade. I think you
                                   could survive on half your current salary
                                   and in a studio apartment instead of a
                                   house, but the market values your services
                                   more than that. I read that the average Wall
                                   Street salary is around $300K with a base
                                   salary of $100-250K. So it's reasonable
                                   to think a typical package might be $150K
                                   base salary and a $150K bonus. If you
                                   eliminate the $150K bonus entirely then
                                   base pay is still more than enough to live
                                   on, but likely far less than what it would
                                   take to retain top talent. Heck, you can
                                   barely get a sysadmin for City of SF for
                                   $150K. Lots of these guys are Harvard
                                   Business grad with years of experience
                                   who fell prey to the whims of their
                                   CEOs who decided to use a lot of leverage.
                                   The CEOs should suffer. The rank-and-file
                                   traders and bankers are suffering
                                   enough if you pay attention to how many
                                   are out of work now.
                                   \_ No, they haven't suffered enough. The
                                      banking sector is still bloated and
                                      overpaid. There is no particular reason
                                      that a Harvard MBA should make $300k,
                                      unless he is contributing that much to
                                      society. For the last 10 years, the
                                      bankers have disastrously misallocated
                                      capital. If they don't like mere $150k
                                      salaries, good luck finding an industry
                                      that will support them in the lifestyle
                                      they think they deserve.
                          \_ http://tinyurl.com/ajf25h (WSJ)
                                      \_ People aren't paid according to
                                         "what they contribute to society".
                                         Most of those guys are very smart
                                         and will find something else to
                                         do, which would leave the banks
                                         run by people less capable. You think
                                         it's bad *now*?
                                         \_ I don't think there's any evidence
                                            that the people running the banks
                                            are very capable.  If they're so
                                            fucking capable, why are they all
                                            going bankrupt?  The argument about
                                            "that's what it costs to retain
                                            top talent" is 100% bullshit.
                                            The system is rigged.  CEOs, VPs
                                            and hotshots get to decide who to
                                            pay what--and, surprise surprise,
                                            they decide that it's vital to
                                            the interest of the company to
                                            pay CEOs, VPs and hotshots more
                                            and more as a function of total
                                            revenue and earnings.  Until the
                                            whole thing comes crashing down
                                            and they ask the government to
                                            bail them out.  The absolute first
                                            thing that should happen before
                                            any bankrupt institution is bailed
                                            out is that all performance-based
                                            pay should be immediately suspended
                                            until the company is solvent.  If
                                            that means that executives leave
                                            for other companies that managed
                                            their assets better and therefore
                                            aren't going bankrupt, that's fine;
                                            isn't survival of the fittest one
                                            of the tenets of the market
                                            economists?  -tom
                                           \_ Lots of free-market cheerleaders
                                              seem to forget the basic econ 101
                                              stuff that says what is needed
                                              for markets to function. Namely
                                              competition and low barriers to
                                              entry.
                                              What is it about these banks that
                                              makes them able to keep fat
                                              profits year after year?
                                         \_ Somehow society was able to function
                                            with a banking sector that was half
                                            the current size - as a proportion
                                            of the economy - for many decades.
                                            All those Ivy geniuses can go find
                                            another way to game the system (and
                                            ultimately rip off the taxpayer, no
                                            doubt). Almost every "invention" of
                                            the financial sector in the last 10
                                            years was crap. Is it seriously
                                            your contention that these guys
                                            deserve lifetime employment on the
                                            public dime at $300k/yr, even though
                                            what they produce has no value to
                                            society whatsover?
                                         \_ Somehow society was able to
                                            function with a banking sector that
                                            was half the current size - as a
                                            proportion of the economy - for
                                            many decades. All those Ivy
                                            geniuses can go find another way to
                                            game the system (and ultimately rip
                                            off the taxpayer, no doubt). Almost
                                            every "invention" of the financial
                                            sector in the last 10 years was
                                            crap. Is it seriously your
                                            contention that these guys deserve
                                            lifetime employment on the public
                                            dime at $300k/yr, even though what
                                            they produce has no value to
                                            society whatsoever?
                                            \_ I don't think they deserve
                                               lifetime employment on the
                                               public dime forever. I never
                                               said that. However, letting
                                               the big banks BK would be a
                                               disaster. This whole thing
                                               about bonuses is a PR stunt
                                               as is Obama's outrage. Banks
                                               are going to need $1T and we're
                                               worrying about $20B in bonuses
                                               that were earned? Do you really
                                               contend that banks have no value
                                               to society?!
        A bank that does a good job of allocating _/
        capital to productive uses has a value.
        Do you think that the primary inventions
        of the financial sector of the last decade
        or so (CDS, CDOs, SIVs, etc) have had a
        net positive value? If so, why are all
        the banks collapsing? If anything, the
        total contribution to society by the
        financial sector over the last decade
        has been strongly negative. This is
        reflected in the change in their
        equity value, and in the collapse in
        value of all the stupid things they
        allocated capital to (most exurban
        McMansions, but also the mostly
        speculative paper instraments used
        speculative paper instruments used
        to gamble on them).
                          \_ http://tinyurl.com/ajf25h (WJ)
                             Check out the comments. Even the WSJ readers
                             are getting restless.
                             \_ Just the media stirring up shit and now the
                                rabble is roused. What about bailing out
                                auto workers who made shit cars? I know a
                                lot of people are against that, too, but
                                at some point you have to place blame
                                where it is due, which is management. The
                                auto workers were just building the cars
                                they were told to build. Likewise, the bank
                                employees were just selling the products they
                                were told to sell while the government
                                cheered from the sidelines about how many
                                more people could now afford home ownership
                                while keeping rates insanely low and wasting
                                $$$ in Iraq. Blame Bush for this mess.
                                \_ It is funny that you think that the
                                   readership of the WSJ is "the rabble."
                                   You can imagine what the actual rabble
                                   think of the bank bailouts.
                                   \_ Doesn't matter what they think. They
                                      don't realize what will happen without
                                      lending or credit. For instance, most
                                      hospitals use large lines of credit to
                                      cover bills during the period between
                                      when services are rendered and the
                                      insurance companies finally pay. The
                                      average consumer relies on banks for
                                      a lot more than they realize.
                                      \_ In a democracy, what the people think
                                         matters. Especially when you coming to
                                         the taxpayer, hat in hand, asking for
                                         a bailout. The current overleveraged
                                         banks could all fail and all that
                                         would happen is that new bunch would
                                         crop up to take their place. No doubt
                                         the economy needs credit. Why do we
                                         need Citibank, JPM and all the other
                                         crooks?
                                         \_ That's why we have a republic.
                                            We don't need uninformed citizens
                                            making these decisions.
                                            \_ I am mostly unimpressed with
                                               what our elected representatives
                                               have done so far, but you are
                                               probably right, a directly
                                               democratic response would
                                               probably be even worse.
                            \_ automaker bailout is what, 1/100th of the
                               bank bailout?
        \_ In other industries, you are awarded a bonus for doing well
           or if the company has done well in that year.  There is no sane
           person who can claim the banking industry did well in 2008.
           So why did they get bonuses?  That's what bugs me.
           \_ This is not "other industries" and Wall Street and law firms
              work differently.
              \_ They work differently because they've stacked the deck in
                 favor of lining their own pockets.  The role of government
                 is to protect taxpayer assets, not performance-based
                 compensation for executives of bankrupt companies.  Let
                 them try to convince the bankruptcy court that the first
                 priority is to pay them their bonuses.  -tom
                 \_ Bankruptcy courts are genrally in favor of companies
                    making payroll.
                    \_ Bonuses != payroll.
                       \_ Except that in the case of certain firms (like banks)
                          they really are almost the same thing. Bonuses
                          are not some optional incentives based on merit
                          or something, although they can be tied to it.
                          Think of bonuses more like tips for a waitress.
                          Sure, you make more if you're good but they aren't
                          really optional. Even bad service results in a
                          tip (or should anyway) because the payscale and
                          taxes are based on that.
                          \_ Bankers don't make $2.80/hr.
                             \_ This is back to the "They make more than *I*
                                think they are worth" argument. We can say
                                that about software engineers or any job,
                                really. However, that's not how salaries
                                are determined in this country. Go back to
                                Soviet Russia. It's much more equitable there.
                                \_ Except software engineers are not asking
                                   for handouts from the Federal government.
                                   You keep "forgetting" that part.
                                   \_ Tangential. You can argue that companies
                                      shouldn't be receiving aid, but that's
                                      not your argument. Your argument is
                                      that the government should dictate
                                      salaries in turn for aid. That will
                                      leave those companies without any
                                      employees, because paying them 50%
                                      of market rate for salaries will
                                      have them leaving in droves. How
                                      will that help anything? The banks
                                      may as well BK then.
                                      \_ OK.  -tom
                                         \_ So let's be clear that your issue
                                            isn't "bonuses". It's that the
                                            banks are receiving any money
                                            at all. Why beat around the
                                            bush for 6 paragraphs?
                                            \_ So let's be clear that you
                                               love to beat up straw men
                                               rather than paying attention.
                                               Fine.  I'm not particularly
                                               pleased that the banks are
                                               receiving money, and I'm
                                               outraged that the money
                                               they're receiving is going
                                               incentive-based pay for the
                                               assholes who caused the
                                               problem.  And it's totally
                                               typical for the Republican
                                               typical of the Republican
                                               disdain for the American
                                               public.  -tom
                                      \_ I seriously doubt that the employees
                                         will be leaving in droves, even if they
                                         were paid the starvation wages of
                                         will be leaving in droves, even if
                                         they were paid the starvation wages of
                                         $300k/yr. Especially since 100s of
                                         thousands of others in their field
                                         will be out of work. But it is a risk
                                         I am willing to take.
                                         \_ Exactly... this is ridiculous.
                                            where exactly are they all gonna
                                            go? The best they might do is
                                            start a new company, or perhaps
                                            use their genius to go to one of
                                            those other lucrative $500k
                                            careers out there, which would be
                                            such a terrible loss for America
                                            I know, our capital would be so
                                            misallocated.
                                            \_ One obvious place is to the
                                               hedge funds and regional
                                               banks, growing them into
                                               megabanks of the type they
                                               work for now. Of course, only
                                               the best will leave. The bad
                                               ones will remain to handle
                                               the delevering, valuation
                                               of assets, and spending of
                                               TARP funds. My fear is that
                                               the best ones are leaving
                                               *anyway*. Wouldn't you?
                                               \_ And if they go to a regional
                                                  bank (probably not making
                                                  $300k/yr) and grow it into
                                                  a well-run company that
                                                  efficiently makes loans, has
                                                  a well-run risk management
                                                  department and is not sucking
                                                  off the taxpayers teat, this
                                                  is a bad thing how, exactly?
                                                  \_ The Bad Thing is what
                                                     happens to the banks
                                                     they left.
                                                  Most hedge funds are closing,
                                                  not hiring, btw.
                                                  \_ Many are folding b/c
                                                     investors are withdrawing,
                                                     but this is a blip on
                                                     the radar. Mutual
                                                     funds, pensions, and
                                                     even hedgies still
                                                     manage a lot of money.
                                                     \_ Hedge funds are closing
                                                        because the returns on
                                                        their strategy have
                                                        dropped to 20% of
                                                        the original, rather
                                                        small percentage.
                                                        In fact, according to
                                                        DeLong it was a large
                                                        hedge fund getting
                                                        out of the business,
                                                        which hosed a number
                                                        of other highly
                                                        leveraged hedge funds,
                                                        which acted as the
                                                        trigger for the
                                                        whole liquidity
                                                        crisis.  -tom
                        http://online.wsj.com/article/SB123353536455237761.html
                        "It's just a tough, tough time, and there are a lot of
                        good people out there looking for work."
                        \_ Right, but they aren't going to work for $6.50/hour.
                           Let's not confuse "looking for work" with "looking
                           for any work at any price".
        \_ I have a friend who does ibanking for UBS, 1st out of biz school,
           didn't get fired in the 4 rounds of layoffs, I was adding up
           her base salary (120k) to the bonus she got 140k and wondered
           what the hell she did that was worth 260k a year.
           \_ Is she hot? picsP
2009/1/21-26 [Finance/Banking] UID:52435 Activity:nil
1/22    What happens when the government takes over your bank?
        http://online.wsj.com/article/SB123258304319904345.html
        \_ given the choice, I prefer bank being nationalized, and
           break up those are "too big to fail."   The alternative
           is asking tax payer to buy up all the bad investments from
           without much consequences on these private bankers' part
           really sicken me.
           \_ The alternative is to stop the government from making these
              stupid central planning decisions and let the economy recover on
              its own.
              \_ so, you are also against any of the bail out, right?
2009/1/6-9 [Finance/Banking] UID:52321 Activity:nil
1/6     http://www.nytimes.com/2008/12/28/business/28wamu.html?_r=2
        wamu, mariachis and drugs.
2008/12/20-28 [Finance/Banking, Politics/Foreign/Canada] UID:52288 Activity:nil
12/20   "Canada offers $3.29 billion in loans Detroit Three - Yahoo! Finance"
        http://www.csua.org/u/n5h
2008/12/18-2009/1/2 [Finance/Banking] UID:52278 Activity:low
12/18   wtf is happening to my money market yield?
        http://finance.yahoo.com/q/bc?s=^IRX&t=my
        \_ spend spend spend! Only *YOU* can save the economy by
           spending.
           \_ I'm actually increasing my spending to some
              extent over usual.
              \_ Bargains to be had?
                 \_ No, I just feel sorry for everyone.  It's
                    tough times and I have cash and don't need
                    credit to buy shit.
                    \_ I am spending more too, but that is mostly because
                       I keep seeing great deals on things like single malt
                       scotch, that I can't pass up.
        \_ The Fed is printing money. The dollar is worthless, hence the
           0& coupon auction recently. We are in for some serious
           inflation eventually.
           \_ The Fed is only "printing money" (through their new loan facilities)
              in markets that are desperate for liquidity. This money supply is
              probably preventing _deflation_ right now (which is much worse),
              and can be quickly soaked up again to keep inflation under control.
           \_ The Fed is only "printing money" (through their new loan
              facilities) in markets that are desperate for liquidity. This
              money supply is probably preventing _deflation_ right now (which
              is much worse), and can be quickly soaked up again to keep
              inflation under control.
              \_ We hope. I don't think the Fed can inject $1T into the
                 economy and not cause inflation.
        \_ This is because practically everyone in the world (including op)
           is buying safe T-bills, driving down yields. Demand is outstripping
           supply, which raises prices and depresses yield. Nothing to do with
           the money supply.
              is buying safe T-bills, driving down yields. The Fed is only
              "printing money" (through their new loan facilities) in markets that
              are desperate for liquidity. This money supply is probably preventing
              _deflation_ right now (which is much worse), and can be quickly soaked
              up again to keep inflation under control.
           \_ What you say is all true except for the last sentence.
2008/12/9-14 [Finance/Banking] UID:52216 Activity:nil
12/9    Oops, rescuing borrowers didn't help much
    http://ridingtheelephant.blogs.fortune.cnn.com/2008/12/08/news/economy/mortgage_summit
        \_ What is the default rate of those who do not have modified loans?
2008/12/6-10 [Finance/Banking, Finance/Investment] UID:52184 Activity:nil
12/6    Interesting finance/business story:
        http://www.businessweek.com/magazine/content/08_49/b4111040876189.htm
2008/12/5-10 [Finance/Banking, Finance/Investment] UID:52177 Activity:nil
12/5   http://finance.yahoo.com/news/Bank-Julius-Baer-CEO-dies-rb-13755979.html
        52-year-old CEO of Switzerland's largest wealth mgmt fund kills self
        \_ "wealth management."  Nice euphemism.
2008/11/24-12/1 [Finance/Banking, Finance/CC, Finance/Investment] UID:52089 Activity:nil
11/23   http://blog.mint.com/blog/finance-core/a-visual-guide-to-the-financial-crisis
        \_ bahahahaha most hilarious
        \_ Whatever happened to all the FREE MARKET IS BETTER vote
           for GWB drones on motd?
2008/11/21-28 [Finance/Banking] UID:52074 Activity:nil
11/21   U.S. Bank acquires Downey Savings & Loan.  No losses on deposits.
        Losses on mortgages, etc. shared with FDIC.
2008/11/20-27 [Finance/Banking, Finance/Investment] UID:52054 Activity:nil
11/19   Remember the 100-age investment rule we learned in grade school?
        For example, if you're 65, you should put at least 100-65=35% of
        your savings in stocks. Let's say I'm retiring at 65 today, then
        effectively I'd have 1/2 of that much than say, 2004-2005, or
        35%/2. I've lost nearly 17.5% of my savings because I retired at
        the wrong time. Buy and hold works well when the market is stable
        (post 1940 and pre 2008). In the end, do you think the 100-age
        rule is still applicable in the turbulent market of the 21st century?
        \_ The average return you get is directly related to the amount of
           risk you take on.  Come back when you've groked that concept.  -tom
        \_ Hell.  My 401(k) balance went from $200k a year ago to $120k today.
           YetI still think stocks is the way to go.
           Yet I still think stocks is the way to go if you don't need the
           money in a short time.  I've never heard of that investment rule
           since I didn't attend grade school in this country, but I guess its
           idea is that you don't need all your money today even if you retire
           today.
           \_ We are in basically the same boat here.
        \_ I think you should be about 75% in equities (25% in bonds)
           throughout. I don't plan to change that mix just because I'm
           60, although I might cash out to buy some property once I can
           do so without any penalties.
        \_ No.  Even at a relatively young age (under 35), you should be
           invested >= 50% into safety (CDs and Treasuries).  I think this is
           particularly true for those earning the median or less where they
           live.  For those earning more, you can afford to risk more.
           particularly true for those earning the median or less for where
           they live.  For those earning more, you can afford to risk more.
           \_ You are on crack if you put >50% of your retirement into CDs at
              age 35. You might not even beat inflation.
2008/11/17-20 [Finance/Banking, Reference/RealEstate] UID:52029 Activity:nil
11/17   sub prime loans doesn't automatically mean total crap loans
        http://www.slate.com/id/2204583
        \_ LOL
2008/11/14-26 [Finance/Banking, Politics/Domestic/Election] UID:51985 Activity:nil
11/14   An overly long article directed to Obama on how he should fix the
        farm/food system.  I actually agree with some of his points, but
        he does go little overboard toward the end.
        http://csua.org/u/mxv (NYTimes)
        \_ Forget the government, count on saving yourselves! This is a
           GREAT time for you savers to wait it out, and in a few years,
           everything will be super cheap and you'll buy properties
           and stocks that'll go up tremendously when Obama-socialism
           is over. This is the secret recipe that wealthy folks have
           used for ages. Of course, if you never had a lot of savings,
           then it's a different story.
           \_ savings? what is left will be taken by the government
           \_ Yes dear.  That's nice.  Now have some tea.
           \_ What does this have to do with the farm bill?
           \_ lulz
2008/11/12-26 [Finance/Banking, Academia/GradSchool] UID:51942 Activity:nil
11/12   Harvard looks to tighten its belt
        http://www.boston.com/news/education/higher/articles/2008/11/11/harvard_looks_to_tighten_its_belt
        Why is a Uni with a $30B+ endowment worried about spending cuts?
        \_ For the same reason that companies with $30B in the bank are
           worried about the economy; the fact that you have that money
           is already factored into your plans, so loss of other money is
           a problem.  -tom
2008/10/22-27 [Finance/Banking] UID:51620 Activity:nil
10/21   (Bloomberg) The Federal Reserve will provide up to $540 billion in
        loans to help relieve pressure on money- market mutual funds beset by
        redemptions. ... JPMorgan Chase & Co. will run five special units that
        will buy up to $600 billion of certificates of deposit, bank notes and
        commercial paper with a remaining maturity of 90 days or less.
2008/10/18-21 [Finance/Banking] UID:51572 Activity:nil
10/17   Laid Off By Lehman: One Broker's Story
        http://www.youtube.com/watch?v=mjX6aKLy2N4
2008/10/12-15 [Finance/Banking, Reference/RealEstate] UID:51485 Activity:nil
10/12   Fannie and Freddie originated only 15% of subprime loans in 2006
        Private firms made nearly 83 percent of the subprime loans to low- and
        moderate-income borrowers that year.
        http://www.mcclatchydc.com/251/story/53802.html
        \_ But those horrid dark skinned people ruined our economy by letting
           the Democrats force them to take home loans they knew they couldn't
           afford.  I think it was terrorist plot by all those muslim sleeper
           agents that have been infiltrating our elected government for a
           generation now.
2008/10/10-15 [Finance/Banking, Finance/Investment] UID:51472 Activity:nil
10/10   http://www.nytimes.com/2008/10/10/opinion/10mulligan.html
        The Economy is just fine, really.
2008/10/8-9 [Finance/Investment, Finance/Banking] UID:51429 Activity:kinda low 80%like:51427
10/8    Coordinated intl rate cuts
        Ten year note up significantly even though equities down
          -> potential "game over" (or ass-raping) scenario
        In case anyone didn't see it yet, please see "Stock tip 3" from two
        days ago
        \_ I asked and he doesn't know what he's talking about. Now what?
           You didn't give a single advice.
           \_ well, my advice from 3 weeks ago was for the desired safe part
              of your portfolio to be out 33% at 11388.  I said back then that
              this market could shitnap at any time so it was time to sell the
              pop the next day.
              My advice in "Stock tip 3" is:  Don't go "all-in long" now in
              case you're thinking about it.
              Should you sell now, now that we're down to 9,270?  It's your
              call, but do your research and ask me a fundamentals question.
              At this point I won't tell you to sell (but I will tell you to
              "don't buy" index funds or the equivalent).
              Actually, I will say I would go 80% into safe money right the
              fuck now, but I'm not going to tell you to do that.  It's your
              money.
              \_ I think it's time to buy. The market has overreacted.
                 \_ dude, the tip is:  LEH CDS settlement in TWO FUCKING DAYS.
                    you don't hear this in mainstream news.  i haven't been
                    playing a game with you guys for the last three months.
                    \_ what is LEH CDS
                       \_ lehman credit default swap settlement
                          financial institutions (including insurance co.'s)
                          will need significant cash to pay off insurance on
                          Lehman debt and other securities as a result of LEH
                          bankruptcy.  these swaps are held around the world.
                          \_ oh i thought that all got sold to barclays
                             \_ only brokerage piece, because that has a whole
                                bunch of regular-investor money, I believe
                    \_ This is already priced in, imho.
                       \_ okay, I'm glad you're thinking though.  IMO you
                          stand a better chance than people who haven't done
                          enough research to confidently say that.
                          \_ do you think the solvent finance firms will ask
                             for a gov. loan to help cover the costs of buying
                             the former assets of Lehman at firesale prices?
                             that would be ironic.
                             \_ if no one objects, sure!  solvent financial
                                entities will be getting a whole lot of free
                                money. -op
                           \_ Well, I thought so last week and I was obviously
                              wrong. I am about 90% in right now and really
                              itching to go "all in" but the 10% that is still
                              out is my wife's IRA and she won't give the go
                              ahead. At some point I will start selling bonds
                              and buying stock, but I will probably wait until
                              Q1 for that. To clarify, I mean "all in" for the
                              65% of my capital that I risk in the equity
                              markets. I always keep about 6 months cash (that
                              works out to about 10%) 10% in US Bonds and 15%
                              in CA munis.
                              \_ marital bliss >> possible equity gain
                                 besides, you already are 90% in.  you'll be
                                 a hero if you can sell at a good price.
                                 a hero if you can sell at profit.
                                 \_ I am pretty sure that by the time I
                                    retire the stock market will be higher
                                    than it is today.
                                    \_ ^will be higher^return better than CD
                                       rates -op
                                       \_ Since the dividend yield on the SPY
                                          alone is equal to current CD
                                          alone is close to current CD
                                          rates, it is hard to imagine how
                                          I could go wrong. I guess all the
                                          companies in the S&P 500 could cut
                                          or eliminate dividends.
2008/10/6-9 [Finance/Banking] UID:51401 Activity:nil
10/6    Prosper update: right now I have 15 delinquent loans. If they all
        go into default, my profit this year will be 0.3%, which will make
        this my best performing investment.
        \_ How many loans do you have in total?
        \_ Look at /tmp/prosper* if you're interested in some analysis I did
           earlier this year.
2008/10/6-9 [Finance/Banking, Finance/Investment] UID:51397 Activity:nil
10/6    Stock tip 3:  Ask your professional financial advisor how "LEH CDS
        settlement this Friday might affect my portfolio".  If he doesn't
        know what you're talking about ...
2008/10/3-6 [Finance/Banking, Finance/Investment] UID:51363 Activity:nil
10/3    House passes bailout by significant margin.  Guys, THINK about your
        long-term equity investments.  You'll have PLENTY of people to blame
        in the near future, but where will your money have gone?  Please
        consider the advice of a professional financial advisor, too, but
        in the end, it's YOUR MONEY.
        Practical advice:  If you're not sure, move part into safety.
        \_ Coherence isn't your strong point is it?
           \_ WHAT is your problem dude?
        \_ At 3% CD rates, subtracting taxes and inflation, you are losing
           about 2%/yr with your cash position. This is a guaranteed way
           to end up poor in your old age. Is that what you want? I have
           gone from 0->$1M in 10 years, how have you done?
           \_ Past performance is not a predictor of future results.  The
              specific reasons why have been what all my posts for the last
              two months have been about.
              I won't argue with you if you are confident in what you're doing.
              Good luck.  I sincerely hope you do well in your investments.
              \_ Good luck to you, too. I think you should spend some more
                 time thinking about how to hedge against what imho is the
                 inevitable dollar devaluation to come. Sitting in Treasuries
                 is not going to cut it.
                 \_ thanks.  fyi, that's exactly what I'm working on.
                 \_ I am buying lots of TIPS and have for a while now. If
                    the dollar falls then inflation should rise.
                    \_ This is not a bad call, but I assume you know about the
                       "upfront tax" costs of a TIP. This is not an issue in
                       a IRA.
2008/9/25-30 [Finance/Banking] UID:51310 Activity:nil
9/25    Chase buys WaMu deposits, branches, whole mortgages and HELOCs
        (all consumer and business accounts safe, even over $100K)
        Pays $1.9B to FDIC
        Debt, common stock, and preferred stock left in WaMu holding company
        WaMu holding company taken over by FDIC
        All WaMu branches will re-open tomorrow at normal business hours
        (although now owned by JP Morgan Chase)
2008/9/25 [Finance/Banking] UID:51302 Activity:nil
9/25    WaMu deposits and branches to be owned by Chase
        Unclear what will happen to WaMu mortgages and debt - some say Chase
        is taking that too
        If I were to guess, JPM got another non-recourse loan from the govt!
2008/9/25-30 [Politics/Domestic/President/Clinton, Finance/Banking] UID:51291 Activity:kinda low
9/25    In 1999 the Clinton administration pressured Fannie Mae "to expand
        mortgage loans among low and moderate income people."  The NYTimes
        warned "But the government-subsidized corporation may run into trouble
        in an economic downturn, prompting a government rescue similar to that
        of the savings and loan industry in the 1980's."
        http://tinyurl.com/4ulb87
        \_ CLINTON AND BROWN PEOPLES FAULT!
        \_ This American Life has already found the culprits:
           http://www.thislife.org/Radio_Episode.aspx?sched=1242
        \_ And in the same year, the LA times talked about how great it was
           http://articles.latimes.com/1999/may/31/news/mn-42807
        \_ http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html
        \_ Most non insane economists believe this month's troubles
           are from the crazy securitization of home mortgages, not the actual
           defaulted mortgages themselves.  I am not quite smart enough to tell
           if they are right.
           Here in NYC Michelle Malkin keeps ranting in the NY Daily News
           that its all the fault of illegal immigrants getting mortgages.
           \_ McCain should have picked Malkin as his Veep, at least she
              is articulate and no less batshit insane than Palin.
2008/9/24-29 [Finance/Banking] UID:51281 Activity:kinda low
9/24    http://tinyurl.com/4qd8j3 [nyt]
        "These two entities -- Fannie Mae and Freddie Mac -- are not facing any
        kind of financial crisis," said Representative Barney Frank of
        Massachusetts, the ranking Democrat on the Financial Services
        Committee. "The more people exaggerate these problems, the more
        pressure there is on these companies, the less we will see in terms of
        affordable housing."    (said in 2003)
        \_ yawn, Barney Frank is a slimebucket.  maybe not as bad as Lieberman,
           but up there. -Dem
        \_ yep, Barney Frank is a slimebucket.  maybe not as bad as Lieberman,
           but up there.  Frank is also BFF with Hank Paulson. -Dem
        \_ in 2003 were they?
           \_ Read the article.  Yes.
        \_ What did Barney Frank do besides be extremely gay?
        \- BFRANK isnt awesome like GOPAT but he is a far far far far cry
           from LIEBERMAN who is basically a traitor [which is the Occam's
           from Lieberman who is basically a traitor [which is the Occam's
           Razor explanation of his behavior]. Just like CDOs have problems,
           FMae and FMac have problem too, but the REAL PROBLEMS are CDS
           which is insurnace not regulated as insurance [i.e. with reserve
           requirements] and "new unregulated entities" entering into
           which are insurnace not being regulated as insurance [i.e. with
           reserve requirements] and "new regulated entities" entering into
           the securitiezed mortgage mkt. If you want to understand this stuff
           read the economists, not random journalists with undergrad econ or
           english degree from Princeton who then went to CJS (clearly there
           are some journos who are very good and look at the data and read
           the research (in other fields say david cay johnson or laurie
           garrett, or the boston dood who did the signing statement story
           on BUSHCO) but most of them are just echo chamaber hacks ... e.g.
           the all the journos who missed the boat on the entitlement problem
           being focused on medicare not social security]. ok tnx. --jsl
           read the economists, not random journalists with undergrad econ
           degree from Priceton who then went to CJS (clearly there are some
           journos who are very good and look at the data and read the
           research but most of them are just echo chamaber hacks ... e.g.
           the number of journos who missed the boat on the entitlement
           problem being focused on medicare not social security]. ok tnx.
           \_ http://www.businesspundit.com/sub-prime
2008/9/23-29 [Finance/Banking, Finance/Investment] UID:51267 Activity:nil
9/22    Roaring 20s       --> Great Depression
        Roaring Millenium --> Great Depression II
        \_ does our state have a BUDGET yet?
           More concerning is we are about to hand $700B to one person and our
           Fed chief Ben Bernanke fully supports this idea--and if you Dems,
           Republicans, and libertarians haven't figured out by now:
           He who controls the money has the power.
           \_ Oh, I get it!  In our crisis, we're appointing a Dictator.
              \_ but he knows much more about finances than you do and he wants
                 to help you
                 \_ Right after he helps himself and his former i-banking
                    buddies.
                    \_ but Ben Bernanke supports the plan, and he has a Ph.D.
                       in Economics from MIT, did his dissertation on the Great
                       Depression, got his B.S. in Economics from Harvard, was
                       class valedictorian and got the highest score on the SAT
                       in his state when he took it.  He wrote three books on
                       macroeconomics!  He chaired the Princeton Economics dept
                       for 7 years before joining the Fed!
                       \_ Obviously smart and probably knows much more about
                          economics than I do. Perhaps not very wise, though.
                       \_ the idea that turning ONE knob in a stereo
                          system to make it sound pleasing to everyone,
                          is ridiculous.
                          \_ huh?
                       \_ Hey, we could have had Harriet Miers.
                       \_ Should he have seen this coming? He sure didn't
                          seem to from his past comments. Not that I'm blaming
                          him per se, since this is really complicated and
                          unpredictable stuff, but I don't feel like any of
                          these guys are sure how this plan is really going
                          to turn out. So it's basically a $700 B hunch/prayer.
                          \_ "Large amounts of risk, particularly
                             credit risk, have become concentrated in
                             the hands of relatively few derivatives
                             dealers, who in addition trade
                             extensively with one other. The troubles
                             of one could quickly infect the others....
                             [leveraged] derivatives severely curtail
                             the ability of regulators to curb
                             leverage and generally get their arms
                             around the risk profiles of banks,
                             insurers and other financial
                             institutions. Similarly, even experienced
                             investors and analysts encounter major
                             problems in analyzing the financial
                             condition of firms that are heavily
                             involved with derivatives contracts.  The
                             derivatives genie is now well out of the
                             bottle, and these instruments will almost
                             certainly multiply in variety and number
                             until some event makes their toxicity
                             clear. Central banks and governments have
                             so far found no effective way to control,
                             or even monitor, the risks posed by these
                             contracts. In my view, derivatives are
                             financial weapons of mass destruction,
                             carrying dangers that, while now latent,
                             are potentially lethal."  --Warren
                             Buffett, 2002
                             [Yes, he should have seen it coming.  -tom]
                             \_ Predictions are all fine and good, and someone
                                is bound to get it right, but I don't think
                                anyone really saw it coming to this extent.
                                \_ Buffett wasn't making a prediction;
                                   he was describing a risk.  A large
                                   portion of his business is managing
                                   risk, and he's very good at it.  He
                                   didn't say "in fall 2007, some
                                   weird activity by hedge funds will
                                   trigger a liquidity crisis which
                                   will eventually cause multiple
                                   major financial institutions to
                                   fail during calendar 2008."  He simply
                                   pointed out that the proliferation of
                                   derivitive contracts in a deregulated
                                   financial market set up a situation where
                                   numerous institutions were taking on
                                   risks they could not measure, and
                                   declaring assets they could not quantify,
                                   and that it was likely that some trigger
                                   event would cause massive problems for
                                   the entire industry.  And it's not like
                                   there wasn't any warning; the LTCM bailout
                                   was a foreshock that was pretty much
                                   ignored.   -tom
                                   \_ He described a risk and predicted it
                                      would cause pain in the industry. I'm
                                      just saying no one really thought it
                                      would cause this much pain. Anyway,
                                      back to the real point -- if the guys
                                      on top didn't clearly see this coming,
                                      then they probably don't clearly see
                                      a way out.
                                      \_ Or more likely, they just didn't care,
                                         since it's "not my problem."
                                         \_ The Invisible Hand will take care
                                            of it.
2008/9/22-23 [Finance/Banking, Finance/Investment] UID:51254 Activity:kinda low
9/21    Krugman on the Paulson "Plan":
        http://www.nytimes.com/2008/09/22/opinion/22krugman.html
        "... it will be crippled by inadequate capital unless the federal
        government hugely overpays for the assets it buys, giving financial
        firms โ€” and their stockholders and executives โ€” a giant windfall at
        taxpayer expense....if the government is going to provide capital to
        financial firms, it should get what people who provide capital are
        entitled to โ€” a share in ownership, so that all the gains if the
        rescue plan works donโ€™t go to the people who made the mess in the
        first place."
        \- i dont think PAULSON is too bad, but this clearly has to be
           decided by more than 1-2 people no matter who they are. and this
           is one case where diversity would be a good thing, i.e. not ideal
           if the dems say shoved RRUBIN into the process [also a GS elite
           then to citgroup] ... better to have LSUMMERS, NROUBINI, PVOLKER,
           JSTIGLITZ and various other non-tainted, not-super-ideological
           finance or macro academics ... probably cant involve people now
           in the private sector like MDELRAN].
        \_ I'd be all for this if they included a provision limiting the pay
           of every employee of these firms to 100k, just this year.
2008/9/17-19 [Finance/Banking] UID:51202 Activity:nil
9/17    WaMu being auctioned for sale by Goldman Sachs for last several days.
        \_ 50 dollars!
2008/9/16-19 [Finance/Banking] UID:51195 Activity:kinda low
9/16    Fed to loan $85B to AIG while it sells its assets, since no one else
        wanted to lend $85B.  Hopefully the Fed gets back $85B--it's not clear
        how long that may take (loan is for 2 years but may be extended).
        \_ How the hell does the Fed have the power to make $85B loans without
           congressional approval?
           \_ exigent circumstances necessary to maintain stability of the
              financial markets
              \_ 85 BILLION!  That's a pretty amazing amount of money.
                 \_ We spend more than that in Iraq every year. The Pentagon
                    as a whole spends that every two months.
              \_ Financial markets are too fragile. We should clamp down
                 on this money is debt shit like from that one video.  Is the
                 inflated money supply from bank credit really worth the
                 fragility introduced by their complex webs of interdependent
                 debt relationships?  So much of the economy is built on top
                 of speculative vs. real assets.
           \_ The Fed is a private entity, and is arguably the most powerful
              organization on earth (even more so than the US gov).
        \_ No one else has $85B to lend.
        \_ correction:  up to $85B, it's like a HELOC.  Interest rate is 11%
           on outstanding balance.  regardless, Fed gets 80% equity (diluting
           existing). -op
           \_ URL?
              \_ http://www.federalreserve.gov/newsevents/press/other/20080916a.htm
        \_ BAIL OUT IS THE NEW IPO! Company in trouble? No problem! Just
           keep spending. We'll get a bail-out... perfect exit strategy.
           The more companies require BAIL OUT, the hotter it gets. It
           is just like the dot-coms. BAIL OUT NOW!
           \- i'm not an expert on this, but based on recent and not so
              recent history BEAR STERNS almost certainly "deserved" a
              bail out less than LEHMAN [BS played a very "me first" role
              in various past episodes like the LTCM intervention (speaking
              of people who didnt derserv a bailout) as well as in the lead
              up to the eventual collapse]. LEH was a slightly better citizen.
              But unfortunately "just deserts" has little to do with the
              decision making. AIG is a quite evil company too, but its
              hard to be gleeful over this ... although I am pleased to
              see the self-serving probably criminal HGREENBERG taking a bath.]
2008/9/15-19 [Finance/Banking] UID:51176 Activity:nil
9/15    Bank of America CEO Ken Lewis was just asked in an interview how many
        banks there would be after 5 years, down from ~ 9,000 today:
        "Gosh, I haven't, I haven't really thought about that.  But, uh ...
        maybe half."
        Keep in mind the conversation took into account mergers.
2008/9/15-19 [Finance/Banking] UID:51173 Activity:nil 58%like:51169
9/15    Fed now accepts equity (stock) as collateral for loans.
        Fed now allows banks to use checkings/savings accounts to fund
        investment banking side.
        Yay!
        \_ "In this present crisis, government is not the solution to our
            problem; government is the problem." -Reagan
            \_ BRAIIIIIIIIIIINS!   BRAINS!
2008/9/15 [Finance/Banking, Industry/Startup, Finance/Investment] UID:51169 Activity:nil 58%like:51173
9/15    Fed now accepts equity (company stock) as collateral for loans.  Yay!
2008/9/12-18 [Finance/Banking] UID:51151 Activity:nil
9/12    When an agent tells you "This buyer is putting down 40% even though
        he is willing to pay less than what you asked for..." Why would I
        care about how much $ he's going to put down since the bank will
        just cover the rest? Why should I care if he's paying cash or 0%
        down?                                   -real estate dumb
        \_ a mortgage loan can be declined before the sale closes, even if
           the loan was pre-approved by the bank
           \_ Ah, risk factor. I get it, thanks.
2008/9/6-9 [Finance/Banking] UID:51076 Activity:nil
9/6     http://tinyurl.com/6rnwlh (bloomberg.com)
        "Growth in the economy in this decade will be the slowest of any
        decade since the Great Depression, right in the middle of all this
        financial innovation" - Paul Volcker
        \_ Is volcker an idiot or respected?  i can't remember.
           \- ben stein: idiot. pvolker: respec
           \- bstein: idiot. pvolker: respec
2008/8/20-26 [Finance/Banking] UID:50918 Activity:nil
8/20    1985 savings rate = 10%
        2008 savinngs rate = 0.7%
        <DEAD>retirementplans.vanguard.com/VGApp/pe/pubnews/WhyAmericansDontSave.jsf?SelectedSegment=BuildingWealth<DEAD>
        \_ more consumption is better!  Savings don't create jobs!
           \_ Trickle down economy works! The rich spends while the
              poor profits from trickled down money! And if the poor
              gets poorer, it is totally their fault.
              \_ poor people want to be poor!
        \_ 0.7%?  A couple months ago I read on Yahoo News that the rate was
           negative 0.x percent.
        \_ ุงู„ู„ู‡ ุฃูŽูƒู’!
2008/8/18-19 [Finance/Banking, Politics/Foreign/MiddleEast/Iraq] UID:50899 Activity:nil
8/18    It's the War Economy, Stupid:
        http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A824439
2008/8/7-10 [Finance/Banking, Finance/Investment] UID:50808 Activity:nil
8/6     The Financial Times has published an excellent series of articles on
        the root causes of the current financial crises and suggestions of
        what to do next (not light reading):
        http://www.ft.com/cms/s/0/a09f751e-6187-11dd-af94-000077b07658.html
        http://www.ft.com/cms/s/0/cc160f46-624f-11dd-9ff9-000077b07658.html
        http://www.ft.com/cms/s/0/d13db7bc-638a-11dd-844f-0000779fd18c.html
        http://www.ft.com/cms/s/0/794801a8-63e8-11dd-844f-0000779fd18c.html
        \_ didn't the FT publish an article a few months ago about
           ROGUE COMPUTERS that forced Moodys to grade bonds as AAA ?
           \- people you want to read and listen to who are not as well-known
              as WBUFFET: Bill Gross, Martin Wolf, Md El-Erian.
        \_ root cause == real estate bubble, infection of monetary institutions
                         with bonds backed by real estate
           solution == stuff the bad bonds and future mortgages into FNM/FRE
                       and bill the taxpayer for any losses
           who benefited == finance guys, real estate agents, mortgage brokers
                            \_ also: conservative ideologues who use the
                               governmental debt they manufactured as an
                               excuse to cut government services.  -tom
                               \_ There are more government services now
                                  than ever before.
2008/7/30-8/5 [Finance/Banking] UID:50737 Activity:kinda low
7/30    Financial aid question:
        If a wife applies for financial aid do they consider
        the husband's salary?
        \_ yes
        salary? What if the woman is partially through the program already
        What if the woman is partially through the program already
        when she gets married? Does that affect anything? Would it be in
        \_ Doesn't seem to affect loans, except perhaps the ratio of sub
           vs. unsub loans.  Parental income (or more importantly lack of
           income) can have an effect, even if the student is independent
           of parental support and is married.  And yes, for med school
           you apply for fin aid in March every year.  -sony
        \_ don't you apply for financial aid every year?   when you get
           divorced, you won't be around the next time she applies for
           financial aid
           \_ What do you mean "I won't be around"? I don't remember applying
              for aid every year, by the way. I seem to recall just
              applying up front, but it's been a long time.
        their financial interests to get divorced?
        \_ sounds like a lot of work just to scam the gov. out of a few
           thousand dollars.
           \_ It is probably worth more than just a few. Our marraige tax
           \_ It is probably worth more than just a few. Our marriage tax
              is a few thousand dollars alone. -!op
           \_ 1. It could be tens of thousands.
              2. It's not a scam. If she has no income then she has no income
                 regardless if I make a good salary. The loan is her
                 responsibility to pay back, not mine.
                 \_ I don't think the IRS sees it that way.  Real Accountants
                    please chime in, but if your wife is working, and you
                    are, you are pooling your income to provide food
                    please chime in, but if your wife is not working while
                    in school, and you are working your high salary
                    job, you are pooling your income to provide food
                    shelter savings trips to see the 'rents in the suburbs.
                    i dont think she really has no income.  at the end of
                    the month do you bill your wife for shared expenses
                    like toilet paper and internet?
                 \_ does it work out that way if you're married?  really?
                    i don't think so.  so you're going to kick your
                    poor bankrupt wife out on the street later?  i'm not
                    trying to be annoying, now I, not the op, am curious.
                    \_ You mean you don't itemize your wife?
                 \_ Her debts that she acquires after you are married
                    are community responsibilities. So yes, you have to
                    repay them.
                    \_ I don't believe this to be true. Why would you be
                       responsible if your wife goes wacky and applies for $3M
                       in debt in her name using only her income on the
                       application?
                       Addendum: The above is true (husband is responsible
                       regardless) in community property states, which are:
                       Arizona, California, New Mexico, Nevada, Idaho and
                       Arizona, California, New Mexico, Nevada, Idaho,
                       Washington, Texas, Wisconsin and Louisiana.
                       In Alaska, couples can opt in for community property.
                       You can file in community property states to make
                       property Sole and Separate (and back again), but
                       I wonder if you you can do that with debts.
                       \_ Many, many spouses "go wacky" during a divorce
                          and ruin both parties credit out of spite.
                          \_ Sounds like you need to move to a state not
                             on the above list if that happens.
              3. So is the lesson here not to marry a medical student until
                 she's finished school or you'll hose her aid? That could be
                 years.
2008/7/25-30 [Politics/Domestic/California, Finance/Banking] UID:50696 Activity:nil
7/25    not exactly WaMu:
        http://news.yahoo.com/s/nm/20080726/bs_nm/banks_fdic_dc_4
2008/7/24-28 [Finance/Banking, Finance/Investment] UID:50680 Activity:nil
7/24    Hope none of you or your relatives have > $100K in checking+savings+
        CDs or any bonds/stock in Downey S&L or WaMu.  Friday night is
        bank failure night.
        \_ URL?
        \_ http://preview.tinyurl.com/6m9suj (NYT)
           S.E.C. Warns Wall Street: Stop Spreading the False Rumors
           \_ This says nothing about Downey or WaMu. More URL?
2008/7/14-23 [Finance/Banking] UID:50564 Activity:nil
7/14    If you have any bank deposits over 100k, I would say now is the time
        change that ASAP.
        http://online.wsj.com/article/SB121605305718551305.html
        \_ This sentiment is 100% correct.  I'm not worried about you fools--
           it's your parents and relatives.  Small business owners have it
           roughest because payroll can easily be > $100K.
        \_ Just put your money in a bank like Well's Fargo or BofA.
           \_ Wells is definitely a safe bet, but I'm not so sure about
              BofA.  Are you certain they aren't exposed?  Keep in mind
              that they bought Countrywide as well.
              \_ I think they are both "too big to fail" though WFC is
                 certainly the stronger institution. I don't have $100k
                 in cash anyway, so it is all moot.
           \_ What about Charles Schwab?  Is it safe?
        \_ I am buying KBE (seriously).
           \_ Reversion to mean strategy?  I'd say that's probably a good
              short term bet and an extremely lousy long term bet.
              \_ I actually think it is a good short and long term strategy,
                 though I will certainly take some profits on any move up.
                 \_ Why are you long on financials?  Just playing
                    devils advocate, or do you have a good macro
                    justification?  The problems with financials are not
                    purely sentiment, they have a solvency issue.
                    \_ No, I actually got 100% out of financials back in
                       Dec, when my stops got hit. I have been itching to
                       get back in and am starting to buy now. I think
                       this is a selling climax right now, brought about
                       by the IMB failure. I am sure some more banks will
                       fail, but not too many of them. I am looking at
                       a recently released (today) research report from
                       Citibank. They are saying that they are revising
                       BAC 2009 profit forcast down from $3.57 to $2.91.
                       This is a huge drop, to be sure, but implies a
                       forward P/E of 7. The banking sector will probably
                       recover in 2010, making it an even better deal then.
                       Buying on drops has worked our pretty well for me,
                       though I admit I am often early, like most
                       contrarians.
                       Check out the chart on these three the last time
                       we had a housing meltdown:
                       http://tinyurl.com/6pgkpm
                       \_ Update: the BAC I bought for 20 and change a week
                          ago is now up over 30.
2008/7/11-13 [Finance/Banking] UID:50539 Activity:high
7/11    IMB taken over by FDIC.  Largest single S&L failure.
        \_ Thanks Chuck Schumer for causing a run on the bank!
           "The banking regulator said it closed IndyMac after customers began
           a run on the lender following the June 26 release of a letter by
           Sen. Charles Schumer, D-N.Y., urging several bank regulatory
           agencies that they take steps to prevent IndyMac's collapse.
           "In the 11 days that followed the letter's release, depositors took
           out more than $1.3 billion, regulators said."
           http://news.yahoo.com/s/ap/20080711/ap_on_bi_ge/indymac
           \_ You have a strange way of placing blame.
              \_ Schumer tipped it over the brink. You dispute this?
                 \_ IndyMac was going to die no matter what. You dispute this?
        \_ American Savings and Loan in Stockton was bigger, according to the
           WSJ.
        \- i'd be very surprised if indymac was bigger than continental
           illinois ... factoring in inflation and all that. continental
           illinois was a money center bank in the top 10 by assets. --psb
           \_ Indymac is the #2 largest behind Continental Illinois.
           \_ Not to be pedantic, but wasn't Cont. Ill. a bank, not an S&L?
              \- not to be pendatic in return :-) ...
                 that is a fair point, but since ~1980, the S&L vs (commercial)
                 bank distinctinction is basically trivial, i.e. S&Ls may
                 offer the same range of services and have comparable
                 regulations on investments (and have moved more and more
                 in the covergent direction since like getting rid of the
                 separate FSLIC). YMERA(barfin jake garn-st. germain,
                 DIDMCA, Regulation Q). See e.g. FMISHKIN book on post-New
                 Deal regulation of depository institutions. --psb
                 that is a fair point, but since ~1980, the S&L vs bank
                 distinct is basically trivial.
                 YMERA(garn-st. germain, monetary control act 1980)
                 i.e. S&L may offer the same range of services and have
                 comparable requirements investments. See e.g. MISHKIN book.
                 bank  distinct is basically trivial. YMERA(garn-st. germain,
                 DIDMCA, Regulation Q). i.e. S&L may offer the same range of
                 services and have comparable regulations on investment.
                 See e.g. FMISHKIN book.
                 regulations on investments.
                 YMERA(barfin jake garn-st. germain, DIDMCA, Regulation Q).
                 See e.g. FMISHKIN book on post- New Deal regulation of
                 depository institutions. --psb
        \_ Thanks Bush! Ownership society, indeed!
2008/7/8-10 [Finance/Banking, Reference/Tax] UID:50494 Activity:nil
7/7     Mother, age 70, is thinking about putting money into fixed
        annuity. I have absolutely 0 experience with annuity, and
        I'm guessing they should be better than CDs since compounded
        interest is tax deferred. Does anyone have old family members
        who have annuities? Are they good? Are there other products
        similar to annuities in terms of safety and slightly higher-than-CD
        interest rates?
        \- general/theoretical problem with annuities is it is a textbook
           case of asymmetric information/adverse selection. [FYI: The classic
           paper on adverse selection was by UCB Dept Econ professor GAKERLOF.
           In a bit of a coincidence, he co-won with JSTIGLITZ, the economist
           two threads up].
           \_ useless advice. why even bother to write it?
              \_ It's not advice.  It is an observation and some trivia.
                 I'm not going to give somebody I dont know financial advice
                 via the motd. BTW, if you know what "adverse selection" is,
                 it is pretty obvious there will be some suboptimal pricing.
                 (i.e. if somebody is selling you health/annuity-type
                 income insurance with limited medical info).
              \_ Have you not seen psb's posts before?
                 \_ I'm not the op, but psb's posts are usually in the
                    following format:
                    "There is an academic topic related to this"
                    "It is interesting, I've read a little bit of it"
                    <Stick some material and KEYWORDS in the thread>
                    "I am cool and smart and if you are like me, you'd
                     read it too."
                    (optional) ok thx
                    \- "Results 1 - 10 of about 97,600 for (annuity
                       "adverse selection"). BTW, yesterday [?] the FRESH AIR
                       program had a short discussion about annuities and
                       adverse selection (without using the term "adverse
                       selection" i believe), and sort of spells out why
                       individually negotiated annuities may be "a priori"
                       suspect due to overpricing.
2008/6/25-30 [Finance/Banking, Politics/Domestic/President/Clinton] UID:50374 Activity:nil
6/25    I'm not a big clinton hater but why is Obama asking his supporters to
        help her pay off her campaign debt?  Her husband pulls in literally
        100s of millions a year from speaking fees, why don't they just pay it
        off themselves and move on?
        \_ Or why doesn't Obama pay Hillary to do some stops for him out of
           his massive not-publicly-funded warchest?
           \_ So do you not care that McCain signed up for public financing
              in order to get loans backed by that money back when he wasn't
              sure he'd win the primary but then when once he won he said
              oh wait, I'm going to back out of that public financing thing
              haha, wait did I legally agree to do public financing.  Well
              fuck that.  I'm not!
           \_ Well first of all that wouldn't be legal...
           \_ dunno.  I really don't think Hillary is funded by $$ concerns.
              \- First, the amount BCLINTON has access to is slightly
                 exaggerated. Let's say 10s of million. Second, to some
                 extent apparently helping with this kind of debt is to
                 some extent "standard practice". Third, particularly given
                 #2, it would probably have been "easier" to agree to it
                 than risk the lying and untrustoworthy Clinton people
                 making hay out of it (again, the inside story is the Obama
                 people are constantly worried about what the Clintons might
                 have up their sleave). Fourth, we'll see to what extent he's
                 just going through the motions. I agree Hillary has some
                 fucking gall to ask any body the exceptionally rich to do
                 this ... but there are some weird legal issues covering your
                 ability to raise funds for a campaign which is no longer
                 really in effect.
                 \_ Why don't you sign your name?
                    \_ The psb needs not sign his name.  --psb #3 fan
2008/6/18-24 [Finance/Banking] UID:50285 Activity:nil
6/18    http://tinyurl.com/5qckkp (telegraph.co.uk)
        Hope you're all well positioned for the deflation in equities
        The questions are:  (1) when (2) how rapid (3) order (in various
        markets) (4) how deep
        RBS seems to think (1) mid-July peak (2) to September (3) in the
        S&P (4) for a 22% loss from 1350 to 1050
        I think analysts underestimate coordinated action by intl govts to
        make sure big money gets their money out in time.
        \_ Bears will always be with us.
        \_ Bears will always be with us. Why would a European Bank be
           complaining about a looming recession? The answer lies in how
           bank profits rise when monetary policy is loose.
2008/6/1-2 [Finance/Banking, Finance/Investment] UID:50109 Activity:nil
6/1     No comment:
        http://www.nytimes.com/2008/06/01/fashion/01rich.html
        \_ Why does the NY Times not include their postal address so I can
           send them my feces?
2008/5/19-23 [Finance/Banking, Reference/Tax] UID:49998 Activity:nil
5/19    I have lots of student loans, all of which are in deferment
        due to economic hardship (aka I'm too poor to pay them off
        now). If I have a little bit of money available each money
        ($100-200), should I contribute towards paying them off
        or is it better to contribute that money towards retirement?
        Thanks
        \_ Deferment as in you don't accrue any interest and you
           don't have to make payments, or deferment as you don't
           have to make payments but interest accrues?  Also,
           could you make the minimum payment if you were not
           on deferment?
                \_ Deferment meaning don't need to pay interest
                   but it does accrue interest. -op
                   \_ OK, if you start paying a minimal amount,
                      are they going to start demanding you
                      pay more and put you in a bind?  Last,
                      what, of any, of this is tax-deductable?
                        \_ Nope, I can pay off however much I
                           want at any time, and it doesn't
                           affect anything else. But, I don't
                           know about the tax question.
                           \_ The tax question is kind of
                              important to answer your
                              question.
                                \_ Well if it's anything like
                                   other student loans (and it
                                   should be), the interest
                                   accrued is deductible.
                                   \_ It's better than deductible.
        \_ OK, to summarize the deleted, the interest is tax
           deductable.  Next question:  if you save your $100-$200/m,
           can you make more than the interest on that $100-$200/m,
           when you discount that interest by your Fed tax rate?  I.e.,
           when you enhance that interest by your Fed tax rate?  I.e.,
           suppose your effective Fed tax rate is 15%, can you make
           >= .85x <student loan interest rate> on your $100-200/m?
           >= 1.15x <student loan interest rate> on your $100-200/m?
                \_ Or is this 1.0x?  Or .85x?
           If so, then you are better off keeping the money and
           building up a nest-egg--from which you can pay the loan
           later if the interest rate goes up, etc.
           later if the interest rate goes up, etc.  If you put the
           money into a Roth IRA, the question is can you make >=
           1.0x <student loan interest rate> on your $100-200/m?
        \_ If it's accruing interest then you should pay it. Otherwise you
           will be paying interest on interest, which is *BAD*.
        \_ It depends on what the interest rate is on your student loans.
           If it is less than 5%, you should certainly invest first, and
           delay paying your student loans for as long as possible. If it
           is higher than 12%, you should certainly pay if off (unless you
           have some higher interest debt, like credit card debt). If it
           is in between, it kind of depends on how good an investor you
           think you are. You should probably error on the side of caution. -GS
2008/5/1-5 [Finance/Banking, Politics/Domestic/President/Reagan] UID:49863 Activity:nil
4/30    Youtube video on $600 stimulus check costing you -$900/year for a
        $200K mortgage (assuming you're getting a stimulus check)
        http://www.tickerforum.org/cgi-ticker/akcs-www?post=42476
        \_ Don't worry, oil will be tax-free for a while!!! Americans
           rejoice!
        \_ This video is over 30 seconds, or 100x times over the threshold
           of an average American's attention span, and therefore, is a
           very ineffective message. Secondly, he's using 4th grade
           math, which is beyond the comprehension of 90% of the Americans,
           and therefore, this is a very ineffective message. Thirdly,
           he's trying to persuade people using logic instead of good
           looks and charm (Ronald Reagan), and therefore, this is a very
                            \_ JFK
           ineffective message.
           \- i watched about 2min of that video. it is stupid. he spends
              all his time on arithmetic rather than economics. the question
              is "what will be the macroeconomic effects of the 'stimulus'
              plan". why dont you look for something about this by brad delong,
              paul krugman, even that semi-evil, smug greg mankiw, CBO etc.
              paul krugman, even that semi-evil, smug greg mankiw etc
              [i am assuming in the latter 2min of the video he doesnt talk
              about velocity of money, balance of payments etc]. of more
              relevance to mortgages is the part of the bill relating to
              conforming loans ... but again, the actual effect of changing
              the conforming loan cap is complicated].if we take "well known
              borderline communist" lawrence lindsay's estimate for cost of the
              iraq war in 2008 [http://en.wikipedia.org/wiki/Lawrence_Lindsey]
              it will add more to the deficit than the stimulus, if you use
              the CBO's estimate. And of course the 2009 cost of the one time
              stimulus drops dramatically ... you think the 2009 cost of the
              iraq war will be <$20bn? the interest on the debt is already
              more than twice the cost of the stimulus etc.
              about velocity of money, balance of payments etc.]
2008/4/16-23 [Finance/Banking, Finance/Investment] UID:49765 Activity:high
4/16    You thought gasoline was expensive now? You ain't seen nothing yet!
        link:www.csua.org/u/las (Yahoo Finance, includes video)
        \_ The free market will solve our energy crisis   -dimwit #1 fan
        \_ PEAK OIL alert.  Also 'rationing by price' -- gotta love it.
           \_ If the govt doesn't step in and do rationing, rationing by price
              is how the market would do it.
              \_ How many of you recall the gas lines of the 70s?  Without
                 rationing by price we'll have lines *and* expensive gas, if
                 you can get it.  Or oh hey we can do that whole even/odd
                 numbered plate thing again, yeah that was great.  And don't
                 forget to ticket/fine/arrest any private citizen who dares
                 to give gas to anyone on the side of the road who runs out,
                 that was good for a laugh back then too.
                 \_ Dld that latter actually ever happen? I lived through
                    this, though I was quite young, but I don't remember
                    anything like that.
           \_ Huh?  What's wrong with 'rationing by price?'  That's what the
              market is FOR.
              \_ Because when you ration nesseccities by price poor people
                 die.  Old people die all the time in cold climates because
                 they can't afford heating oil.
                 \_ So how do you determine how much food/oil/whatever is
                    necessary and how much is beyond necessary? If you are
                    concerned about the poor then give them $$$ and let
                    them choose where to spend the $$$. That's still
                    rationing by price. I disagree with the idea that
                    every American should get a similar bundle of goods
                    that is "necessary".
                    \_ that's because you're an overprivileged twerp
                       \_ I forgot that you know what's best for people
                          more than they do. It's the leftist way to
                          boss people around.
                          \_ How do you "know" that freezing to death is
                             what is best for someone? Did they tell you
                             that?
                             \_ Can you read? "let them choose where to
                                spend the $$$" -!pp
                                \_ Nonono, the soviet style command economy
                                   is clearly superior to western style
                                   economics.
                                   \_ We actually live in a mixed economy.
                                      But you probably already know that.
                                \_ Sorry, missed that.
                    \_ Being able to survive a cold winter is pretty high
                       on the list.
                       \_ Some people have more tolerance for cold and
                          would prefer to spend the heating oil credit on
                          something more important to them like strippers
                          or booze or HDTV or whatever.
                       \_ Just wear a jacket at home.  That's how I save on
                          gas bill.
                          \_ Cause where you live it regularly gets below 0F
                 \_ No, sorry.  Government rationing will cause even worse
                    shortages and hurt even more people.  Where do you
                    central control command economy guys get the idea the
                    government can actually make anything better?  With gvt
                    imposed rationing you'll get a Soviet style system where
                    the rich and powerful get everything and the poor and
                    middle classes get nothing.
                    \_ And with no regulation, you get booms and panics
                       like in the 1880s. Why argue against the Straw Man
                       of a Soviet economy? Is your position so weak that
                       can't make your point any other way? Is there more
                       or less wealth inequality in Sweden or the US?
                       \_ A system in which everyone is equally poor is
                          a possible result and that wouldn't be a good
                          system. We can see examples of that in the China
                          of a couple decades ago, Soviet Russia, Cuba,
                          and so on. I don't think it matters how much of
                          the pie you get if it's a big enough pie.  Everyone
                          sharing a small pie isn't a great alternative.
                          \_ That may be true, but it's a well known
                             psychological finding that people (a) care about
                             relative equality and (b) care specifically
                             about inequality of transferable assets, much
                             more so than other, much more 'unfair' and
                             blatant kinds of inequality.  (There are some
                             interesting theories about how our attitudes about
                             fairness may have evolved which explain (a) and
                             (b)). -- ilyas
                             \_ I think most people in the USA don't care
                                or there would have been riots already. I
                                think people here assume (correctly) that
                                a rising tide lifts all boats. A wealthy,
                                powerful USA is something most Americans
                                desire and so far it has made us by far
                                the largest consumers in the world.
                                \_ Funny you should claim that right now.
                                   Here is a front page article from the WSJ
                                   that argues otherwise:
                                   http://www.csua.org/u/lbj (WSJ)
                                   (The rising boats opinion, not the
                                    wealthy powerful America comment.)
                          \_ Do you think that people in Sweden, Denmark, The
                             Netherlands, etc are "poor"? Do you think that they
                             think of themselves as poor? The countries are
                             much more egalitarian than the US and people are
                             in general happier. And no one goes hungry or lacks
                             for housing or medical care.
                             Netherlands, etc are "poor"? Do you think that
                             they think of themselves as poor? The countries
                             are much more egalitarian than the US and people
                             are in general happier. And no one goes hungry or
                             lacks for housing or medical care.
                             \_ The Netherlands is a wealthy nation, but the
                                individuals are poor by American standards.
                                I say this as someone with a Dutch mother
                                and most of my family still living in Holland.
                                Sure, they aren't lacking in necessities.
                                On the other hand, they don't have any of the
                                luxuries people here have. I wouldn't eagerly
                                live their lifestyle nor that of my godfather's
                                Swedish ex-wife. Of course, someone who is
                                homeless would disagree. However, I think
                                overall the middle class in the USA is better
                                off than the middle class there. The rich are
                                rich both places. GDP per capita US is #2
                                in the world behind Luxembourg. Holland is
                                #16. Sweden is #25. I think our system,
                                while "unequal" benefits the citizenry more
                                than any other even though it's not "fair".
                                \_ But don't Dutch people consistently have
                                   a higher "happiness" rating than Americans?
                                   Food for thought.  I believe Switzerland
                                   comes out on top in that list, although
                                   America is pretty high at number 20.
                                   \_ Happiness can be acheieved with drugs.
                                      It's not really something I aspire
                                      to. YMMV.
                                      \_ -1 to you, +1 to me.
                                         \_ I am just saying that happiness is
                                            a state of mind. I wouldn't
                                            want to live in Third World
                                            conditions just because the
                                            people that do claim they are
                                            happy about it.
                                            \_ You were doing so good there for
                                               a while too, after you dropped
                                               the "a slightest bit of tax
                                               increase is exactly equal to
                                               Stalinism" line of argument, too.
                                               Though you may in fact be
                                               Stalinism" line of argument,
                                               too. Though you may in fact be
                                               another person, since your tone
                                               is so different. But do you
                                               really think that Swedes live
                                               in "Third World" conditions? I
                                               do not. The Dutch seem to have
                                               quite pleasant lives and I have
                                               been there many times. What you
                                               say about the relative prosperity
                                               of the middle class is no doubt
                                               true, but all that junk that
                                               Americans have doesn't seem to
                                               improve their lives any.
                                               say about the relative
                                               prosperity of the middle class
                                               is no doubt true, but all that
                                               junk that Americans have
                                               doesn't seem to improve their
                                               lives any.
                                               \_ That's pretty paternalistic.
                                                        -- ilyas
                                                  \_ I am one of those liberal
                                                     elitists you keep hearing
                                                     about.
                                                     \_ Good luck in the next
                                                        election!  People LOVE
                                                        elitists!
                                                        \_ I am not running for
                                                           office.
        \_ There may not be much of an oil trading system left by 2020 since
           the "global economy" might be totally wrecked by nonstop warfare.
           \_ Nonstop warfare?   Caused by what?  And fighting over what?
        \_ Time to get a high gas mileage vehicle before manufacturers put an
           SUV-like premium on them.
           \_ Haven't they already?
              \_ Yes on the hybrid ones, not yet on the regular engine ones.
           \_ Get a bike as well!
2008/4/11-16 [Finance/Banking, Computer/HW/Drives] UID:49728 Activity:nil
4/11    Countrywide 12 month CD is 4.25%. But some people tell me they're
        going out of business. Is it actually safe to deposit into
        Countrywide right now? Will FDIC pay me the full amount + interest
        should it ever goes out of business?
        \_ Are you really that concerned about 4.25%? I could see if it
           was 7% or something. How much more is that than the next best
           rate you can find? Anyway, the Countrywide web site says that
           is it is FDIC insured. FDIC will pay principal plus accrued
           interest up to a total of $100,000.
           \_ I'm putting down $20,000. Most rates are 3.00%, so by
              putting into Countrywide I'll gain an extra 1.25% interest
              rate or $250.00/year. That'll get me 2 good Chez Paniz
              meals. I'll take it.                              -op
              \_ Only if you eat by yourself and don't order wine, especially
                 after tax. How long will it take for you to recover your
                 money from Uncle Sam? Is $250 pretax really worth the risk?
              \_ Patelco CU ( http://patelco.org ) is having a new member special
                 right now.  6.785% for 12 month CD.  Existing members also
                 have a special rate of 4% 12 month CD for new monies.
                 \_ It says maximum amount of money you can put for 7%
                    is $1000.00. UH DUH.
                    \_ Ah, didn't see that the maximum is also $1000.  Sorry
                       about that.
2008/4/7-12 [Finance/Banking, Reference/RealEstate] UID:49678 Activity:nil
4/6     Famed Venice eatery offering discount to 'poor' U.S. tourists
        http://www.csua.org/u/l8c
        'A sign posted outside the restaurant at the weekend reads:
        "Harry's Bar of Venice, in an effort to make the American victims of
        subprime loans happier, has decided to give them a special 20 percent
        discount on all items of the menu during the short term of their
        recovery."'
2008/3/31-4/6 [Finance/Banking] UID:49618 Activity:nil
3/31    Looking for a high-rate CD, recommendation please?
        \_ In the US? You won't find one, you can thank the Fed for that.
           \_ Ok fine. What's the highest CD in the US right now?
              \_ Check http://countrywide.com. You can also go to http://bankrate.com for
                 CD comparisons. WSJ also lists highest CD yields at times.
2008/3/24-25 [Finance/Banking, Reference/Tax] UID:49552 Activity:high
3/24    Opinion: companies that require tax-payer funded bailouts should pay
        for this privilege in advance as a kind of insurance. -- ilyas
        \_ So you advocate a business tax?  I don't think we need a new
           business tax.  I don't think we need bailouts either.  Let them
           take their lumps and retire with what they've already stolen.
           Ban them all from every working in finance again to prevent
           recycling these criminal idiots and let the markets recover
           without government tampering.  No bailouts.  No silly taxes.
        \_ No need for laws/rules, the free market will take care of it.
           Requiring anything extra will stifle competition and make
           US less competitive to other countries. No.
           \_ It's very simple, if you want free taxpayer money in case of a
              'catastrophe,' you need to pay the taxpayers a premium.  This
              isn't just about the latest financial meltdown, but also
              airlines, farming, etc. -- ilyas
        \_ Seems kind of redundant, given the presence of private insurance.
           So I guess what you're saying is that companies should not be bailed
           out. Which isn't very interesting but I agree.
           \_ I am prepared to admit that bailouts might be necessary in
              some cases, I just want to make the fuckers pay for this.
                -- ilyas
        \_ Yes, this is essentially what the FDIC is all about. It is obvious
           that these IBs need a similar level of regulation. What pisses me
           off is that the BSC shareholders are going to get billions from
           the taxpayers. I was okay with a $2 (fuck you) bailout, because
           I understand the risk to the financial system, but why $10?
           \_ I'm fine with the shadow banking system getting a bailout, so
              long as they're willing to submit to regulation and oversight
              (just like ordinary commercial banks).  If you want to operate
              with impunity, that's fine, but you shouldn't expect the
              goverment to swoop in and save your stupid ass when you mess up.
              \_ The purpose of the bailout wasn't to protect the company,
                 but to build confidence in our financial system and to
                 prevent from market melt-down. Ultimately, the goal is
                 to protect the American dollar, hence everyone wins.
                 \_ It is more prudent to protect the American dollar by
                    regulating dangerous behavior by financial institutions,
                    than it is to let them screw everything up and then
                    bail them out.  -tom
                    \_ I don't think anyone will disagree with you except
                       the it doesn't change the fact that dangerous behavior
                       already happened. It's as helpful as trying to preach
                       safe sex to people who already got a bunch of STDs.
                       \- "first you have at admit you have a problem^W^W^W^W
                          there was a bail out".
                 \_ What if there was no BSC bailout?  Exactly what dire
                    effects for all of us are we trying to prevent?  Dollar
                    devaluation, is that what you're saying?  I think that
                    would be temporary.  The broader macroeconomic policies
                    of the fed. gov't seem more important.  In a larger sense,
                    bailouts undermine the entire market.  The only real
                    accountability executives have is to their shareholders.
                    The only way to force that accountability is to make the
                    prospect of shareholders losing their shirts very real.
                    \_ There are real concerns of a domino effect; a BSC
                       failure would put liquidity pressure on all the other
                       institutions which hold BSC debt, which could lead to
                       more failures.  Complete meltdown of the financial
                       system is not outside the realm of possibility.
                       Still, bailing out BSC sucks.  -tom
                       \_ Yeah I mean, I would think they should let BSC die
                          ignobly, and even let a couple other dominoes fall
                          perhaps. Bail out when it actually does seem
                          necessary; let some smaller fish take over. I'm
                          skeptical of a term like "complete meltdown of the
                          financial system". I'm sure the most irresponsible
                          entities would like to trumpet themselves as being
                          key to the entire "financial system" and therefore
                          must be saved from their own mistakes. Just like
                          any corporate welfare is couched in noble terms.
                          \_ Yes, and this is exactly the problem with the
                             shadow system.  Without any regulatory oversight
                             or standards, who really knows what is lurking
                             behind BSC?  Maybe they really are the key!
                             Or maybe not...
                             I hate to drag out that hoary old quote from
                             Buffet about derivatives being "financial
                             weapons of mass destruction," but in this
                             case it seems warranted.
                    \_ Dire?  Think of all the yachts that won't be bought
                       that year!  My God!  Think of the yacht makers'
                       children!
                       \_ LANDLORD WITH A YACHT!
                     \_ Go read up on the panics the economy used to routinely
                        experience in the late 1800's, with unemployment in
                        the 20%+ range and bank runs and get back to me with
                        any questions.
                        \_ http://www.usagold.com/gildedopinion/greenspan.html
        \_ The Financial Times agrees with you, as do I. -ausman
           http://www.csua.org/u/l4i
                        \_ Why don't you point us to something? And also say
                           what your point is.
2008/3/18-21 [Finance/Banking, Finance/Investment] UID:49491 Activity:nil
3/18    Tent cities springing up in LA:
        http://www.youtube.com/watch?v=CnnOOo6tRs8
        \_ lazy people = poor people, proof that we shouldn't waste any
           more money on social programs and handouts!  -Republican
           \_ You can go and give them your money. Why don't you?
        \_ America! Fuck yeah!
2008/3/14-17 [Finance/Banking, Finance/Investment] UID:49457 Activity:high
3/14    Fed provides emergency financing to BSC via JPM as other banks refuse
        to lend to BSC at fed funds target
        Fed to take on all credit risk for BSC collateral used to obtain
        financing
        http://online.wsj.com/article/SB120550108028136579.html
        On Monday, BSC said in a statement, "there is absolutely no truth to
        the rumors of liquidity problems"
        http://www.bloomberg.com/apps/news?pid=20601087&sid=aa874wpC8wcg
        \_ Someone please translate this to plain English?
           \_ You went to Cal?
           \_ Read the WSJ article.  WSJ = Wall Street Journal.  If you have
              q's, come back.
           \_ The wsj article seems reasonable clear. In any event, here is
              my understanding:
              Bear Stearns Co. (BSC), a large NY investment bank, may not
              have enough money to meet its obligations. J.P. Morgan (JPM)
              has borrowed money from the Federal Reserve Bank (Fed) and
              loaned it to BSC to ensure that BSC has enough money to meet
              its obligations. JPM, unlike BSC, is not technically an
              investment bank, and therefore it may borrow money directly
              from the Fed.
              JPM is merely acting as a conduit for the Fed's loan to BSC.
              BSC has pleged its assets to the Fed as security for the
              loan. If BSC's asserts drop in value, then the Fed, and the
              loan. If BSC's assets drop in value, then the Fed, and the
              taxpayers, will take the loss; JPM is not taking on any risk.
              \_ Why would we care? I mean, we're already borrowing a lot
                 of money and our deficit is huge, why can't we just borrow
                 more? I mean, if you owe the bank $1 million dollars,
                 the bank owns you. But if you owe the bank $100 trillion
                 dollars, then you own the bank.
                 \_ Which is why the dollar is doing oh so well on the
                    international market right now.
                    \_ 99 yen to 1 dollar!
                 \_ Personally I am concerned about the level of debt the
                    government takes on. I do not know if bailing out BSC
                    is better than the alternative, which is to let if fail.
                    I guess we have to trust that the Fed knows what it is
                    doing.
                    \_ The Fed is in panic mode:
                       "The Fed's role in the deal suggests federal officials
                       fear a systemic collapse of the U.S. financial system
                       were Bear Stearns to fail. The fear stems from Bear
                       central role in a multitrillion-dollar web of
                       interconnecting derivative contracts."
                       \_ Probably. Something about this situation reminds me
                          of the LTCM fiasco a few years back.
                          \- I dunno how old you were in 1998, but the funny
                             part of this is Bear Stearns is the banks that
                             part of this is Bear Stearns is the bank that
                             refused to play ball ... the scrappy outsider...
                             during the "genteel" bailout of LTCM. It's also
                             amazing to read about the  arrogance of the LTCM
                             insiders dictating terms of the bailout. Just
                             unfucking believable.
                          \- I dunno how old you were when LTCM happened, but
                             the funny part of this is Bear Stearns is the
                             bank that refused to play ball ... the scrappy
                             outsider ... during the "genteel" bailout of
                             LTCM. It's also amazing to read about the
                             arrogance of the LTCM insiders dictating terms
                             of the bailout. Just unfucking believable.
                             \_ I didn't remember that BSC was one of the
                                hold outs during the LTCM bailout. That is
                                so ironic.
                                Re arrogance of LTCM insiders - Being a
                                nobel prize winner and 'furd prof goes to
                                some people heads.
                                \- it's not just merton and scholes.
                                   YMWTR: http://tinyurl.com/rcrv8
                       \_ Deregulating the financial system was a mistake.
                          \_ Libural socialist rant! Why do you hate America?
                             \_ Yeah, me and FDR. Known America haters.
                                \_ FDR hated America, not only did he
                                   sell out this country at Yalta, he
                                   also instigated the New Deal which
                                   was pratically communist.
                                   was practically communist.
                                   \_ Whoa!  When the did the Birchers show up
                                      on the motd?!
                          \_ Time to return to a gold and/or silver standard!
                             -rpaul
                             \_ Time to put Glass-Stiegel back in place.
                                Though it is too late for this recession, at
                                least it will keep the next one from being
                                as bad. I fear we will see a New Deal style
                                nationalization of the banking system before
                                this is all said and done.
2008/3/7-11 [Finance/Banking, Reference/RealEstate] UID:49382 Activity:kinda low
3/7     http://www.ofheo.gov/media/hpi/AREA_LIST.pdf
        Conforming loan limits are now $729,750 for the San Jose-Sunnyvale-
        Santa Clara area.  Even more for a duplex.  Expiring end of 2008.
        Buy-buy-buy!
        \_ This only lasts till end of 2008 right? It's suppose to
           save the presidency or something.
        \_ How do I find out my area?
        \_ "housing, it only goes up!"
           "They aren't making any more land!"
           "Buy now, before you get priced out!"
           \_ I am glad I bought in 2002, before I got priced out...
              \_ Where would you have gotten priced out?
                 \_ San Francisco, specifically Noe Valley
                    \_ Just wait.  Given real value decreases I'm sure we'll
                       be back around 2002 prices fairly soon.
                       \_ You are sure that Noe Valley is in for 50% drop
                          in real prices soon? I am sure you are wrong.
                          Are you one of those bitter renters, perhaps?
                          \_ No.  By the way, "bitter renter" accusations are
                             essentially a Godwin equivalent at this point in
                             the housing mess.  The last thing that any
                             renter is right now is bitter.
                             \_ Nonsense.  The bitter renters have been harping
                                on the motd for years.  If they had bought
                                back then they'd still be above their purchase
                                price and would actually be on their way to
                                owning something instead of supporting their
                                landlord's yachting adventures.
                                \_ It is not really a yacht, just a 32 foot
                                   wooden sailboat...
                                \_ Does that Koolaid taste good?
                                \_ Nationally, home equity levels are the lowest
                                   ever. They'd be renting from the bank like
                                   the rest of America.
                                   \_ Up 50% after the all the drops.  It
                                      tastes *great*!  Thanks for asking.
                                      How is your landlord doing lately?
                                      Better than you I'd wager.
                                \_ Nationally, home equity levels are the
                                   lowest ever. They'd be renting from the
                                   bank like the rest of America.
                                   \_ Which has nothing to do with prices and
                                      everything to do with individuals taking
                                      money out of their equity to buy toys.
                                      That has nothing at all to do with the
                                      economy, housing, or anything.  Just
                                      people being dumb and greedy.  I did
                                      not take out anything when I refi'd and
                                      every month I own a bit more.
                             \_ So are you or aren't you predicting a real
                                drop in Noe Valley home prices of 50% "real
                                soon"? Can you define real soon a little more
                                precisely please?
                                \_ Hard to tell, but I'd expect within a time
                                   frame of 5 to 7 years.  Depends a lot on
                                   whether the dollar continues to become
                                   more worthless, which I think is a good bet.
                                   \_ Home prices have traditionally done
                                      okay in a period of high inflation.
                                      Not great, but not that bad, especially
                                      if you have a mortgage that is getting
                                      inflated away as well. Where would you
                                      \- yes you are paying with inflated
                                         dollars, but some of you house
                                         apprecaition is nominal appreciation.
                                      rather keep your assets? Gold? And even
                                      if your rather pessimistic prediction
                                      comes true, I will have lived in a place
                                      for 10 years for the cost of mortgage +
                                      taxes + maint - tax break, which is
                                      already less than rent for me.
                                      \_ I'm sure you'll be fine, given that
                                         you didn't buy in the truly inane
                                         bubble periods and you probably have
                                         a pretty sane loan.  And I'll be
                                         a perfectly happy "bitter renter"
                                         on the sidelines until I need to buy
                                         and prices are a little more
                                         realistic.  But this conforming
                                         limit change certainly does not
                                         mean "buy buy buy."  For more on the
                                         requirements for "jumbo conforming"
                                         see here:
                                         http://csua.org/u/kzo
                                         (calculated risk)
                                         The DTI, LTV, and re-fi requirements
                                         seem daunting to me.  Won't be
                                         surprised if these end up costing
                                         more than a traditional jumbo.
                                         \_ I would not buy today either. Or
                                            in 2005-2006, when things were
                                            crazy. To tell you the truth, I
                                            was kind of nervous buying even in
                                            2002. But I guess it all worked
                                            out, barring a huge deflationary
                                            period (that is when people with
                                            $1/2M loans really get screwed).
                                            \_ I was certain I was buying
                                               at the top in 2001 and boy
                                               was I wrong. It's hard to
                                               predict tops/bottoms so just
                                               buy when you can afford to.
                                   \_ Certainly home owners will do better
                                      than renters in an inflationary economy;
                                      mortgage payment relative to income will
                                      decrease, while rent will not.
           By the way, from what I can tell from the rules on these
           "jumbo conforming loans," the price savings in the end as compared
           to normal jumbos will be a wash.
           \_ Bitter renter?
              \_ Happy renter, but thanks for the generic troll.  By the way,
                 the DTI requirement on these new loans means they aren't gonna
                 change much of anything, at least not in the Bay.
                 \_ I say bitter renter because you cared enough to check.  If
                    you're so happy what's it matter what the requirements are
                    or what effect they will/wont have on prices?
                    \_ Curiousity, and a general fear that the economy is about
                       to go in the dumper.  There are other reasons to care
                       about this stuff than house envy.
                       \_ It doesn't matter what the economy is doing: so long
                          as you have skills and some cash on hand, you'll
                          be fine.
2008/3/6-7 [Finance/Banking, Reference/RealEstate] UID:49368 Activity:kinda low
3/6     Housing, Bank Troubles Deepen
        Foreclosures set record
        Aggregate equity drops to 47.9%
        http://online.wsj.com/article/SB120485071664018195.html
        "Housing, it always goes up!"
        "Buy now, before you get freezed out!"
        "They aren't making more land!"
        "We're special!"
        "... if you own something, you have a vital stake in the future of our
        country. The more ownership there is in America, the more vitality
        there is in America, and the more people have a vital stake in the
        future of this country."
         \_ So far anyway, this is actually true.
        "... if you own something, you have a vital stake in the future of our
        country. The more ownership there is in America, the more vitality
        there is in America, and the more people have a vital stake in the
        future of this country."
        future of this country." -Dubya
2008/2/13-18 [Finance/Banking, Reference/RealEstate] UID:49135 Activity:kinda low
2/12    What is the profile of a person defaulting home loan? I mean,
        are these type of people under-educated? Risk takers? High
        school drop-outs who desperately want to own homes? And why
        are they in certain areas (Inland Empire, etc)?
        \_ They run the gamut. If the loan officers were all of a sudden willing to
           give them a loan, even though they previously didn't qualify, and they
           want a house, who are they to object. "I sign my name saying I'll pay it
           back. But if they give me the money, that must mean I can pay it back.
           Because otherwise the government would tell them not to give me the money."
        \_ They run the gamut. If the loan officers were all of a sudden
           willing to give them a loan, even though they previously didn't
           qualify, and they want a house, who are they to object. "I sign my
           name saying I'll pay it back. But if they give me the money, that
           must mean I can pay it back.  Because otherwise the government would
           tell them not to give me the money."
           \_ in another word people with lower than avg intelligence,
              who mostly congregate in SOUTHERN CALIFORNIA like our dimwit
              \_ There are fewer foreclosures in places like SF because
                 the market is stronger. That's all. Look at Sacramento
                 for NoCal "stupidity".
                 \_ SF markets did not go up as much as in LA, mostly because
                    people were not dumb enough to sign a bunch of loans they
                    couldn't afford, so the bubble wasn't as bad here. Only
                    in the NorCal burbs are people that stupid.
              \_ Southern California style left wing is not
                 MAINSTREAM AMERICA.
        \_ one oddity about california is foreclosure laws here make it hard for
           the lender to persue assets beyond the property on which the loan
           was taken out.  This takes a most of the risk out of defaulting on
           a loan for a 'underwater' property.
                 \_^left^right
        \_ one oddity about california is foreclosure laws here make it hard
           for the lender to persue assets beyond the property on which the
           loan was taken out. This takes a most of the risk out of defaulting
           on a loan for a 'underwater' property.
           \_ unless you re-fi'd
        \_ They are San Jose engineers making $100K+ with a $740K mortgage
           \_ Yes, but being a state with trust deeds instead of mortgages
              mitigates that somewhat, as it is much easier to foreclose
              on a trust deed.
        \_ They are San Jose engineers making $100K+ with a $740K mortgage now
           who bought at $275K in 1995
           http://www.nytimes.com/2008/02/12/business/12credit.html
           \_ "... when he refinanced his home in Northern California to take
              cash out to pay for his daughter's college tuition."
              Yeah, blame it on the daughter.  Stop playing good parent.  Did
              he pay $465K+ for his daughter's college tuition?  There's
              probably some European vacations and a BMW that he's not
              mentioning.
              \_ People have an amazing ability to rationalize away their
                 mistakes and put the blame on someone else. Too bad, they
                 lose a chance to learn something when they do that.
        \_ I know someone who bought a house in Berkeley *knowing* she was
           going to lose the house.  5 figure salary, really bad credit, not
           a very convincing person.  Didn't matter.  They gave her a huge
           loan knowing she couldn't pay it and she knew she couldn't.  I just
           don't understand.
           \_ The market is broken because all parties involved are shielded
              from the consequences of their behavior by the government.
              \_ Tell that to JP Morgan and Citibank.  The mortgage securitization
                 conduits did not look at the paper they were packaging. Greenspan
                 turned a blind eye, and did not enforce what little mortgage
                 underwriting regulation there is. Or use FedRes' considerable influence
                 to stop the BS.
              \_ Tell that to JP Morgan and Citibank.  The mortgage
                 securitization conduits did not look at the paper
                 they were packaging. Greenspan turned a blind eye,
                 and did not enforce what little mortgage underwriting
                 regulation there is. Or use FedRes' considerable
                 influence to stop the BS.
                 \_ So what are the consequences? I haven't paid much attention
                    honestly but I haven't heard of any high profile people
                    getting fired or anything.
                    \_ Oh Jees. Something like a dozen CEOs have lost their
                       jobs in the last six months. But no one in the White
                       House, it is a "responsibilty-free zone."
                       \_ you mean they they found an excuse to take their
                          golden parachute early.
2008/2/6-11 [Finance/Banking, Finance/Investment] UID:49080 Activity:nil
2/6     I want to open up a money market account, and I'm debating between
        an ING Direct acct and a ETrade one. Which one is preferable?
        Should I just go with the ETrade acct since it offers 4.4%
        interest (vs. the 3.4% offered by ING)? Thanks.
        \_ Are you worried about ETrade going belly up?
        \_ Go for Etrade, and when their rate tanks switch to another service.
           ING Direct has really low rates, I no longer use them. Make sure to
           check out other services like Emigrantdirect, GMAC, IndyMac, etc.
           I'd stick to Etrade since they're well established and their teaser
           rates (currently 4.4%) seem to last longer than any of the other
           places. Good luck and tell us what you ended up deciding!
           \_ I like GMAC because transactions post very quickly, you can
              write checks from the account, they have ATM fee reimbursements,
              and their rate is almost always quite competitive.
2008/1/24-31 [Finance/Banking, Reference/RealEstate] UID:49003 Activity:nil
1/24    Yay!  Conforming loan limit to be raised to $625,500 for Santa Clara
        \_ What does this mean?         -not a homeowner, but want to learn
           \_ Housing loans under X amount get goverment funded loans that
              are at lower intrest rates.  A jumbo loan is a loan for over
              that amount and intrest is about 1 1/2 percent more.  By raising
              the cap they are basically making more expensive houses cheaper
              to buy (cause the intrest rate is less, and loans are easier to
              get.)  They are trying to reinflate the bubble.  Yay?
              \_ I see, so what prevents stupid people from getting exactly
                 $625,500 for the first loan and another $300,000 for
                 the second loan? And how do you look up the rate
                 limit for the area you live in? Thanks.        -pp
                 \_ Until recently the limit was country wide.  Don't know
                    how the look up works.  As to the second, you could
                    do that but because how second mortgages work they tend
                    to be even higher intrest rate.  (Basically if a house
                    forecloses and is sold the entire first mortgage is paid
                    off before the second mortgage gets a crack at it, I'm
                    not sure how liens work.)  Some people do manage to get
                    a cheaper deal by doing what you suggest, but it still
                    more expensive than not needing a jumbo loan.
                 \_ piggyback loands are done ALL THE TIME.  it's cheaper
                    than one huge jumbo.  of course, if you have the down
                    payment, then a single conforming is best of all.
                    the conforming limit is currently $417K countrywide
                    except hawaii and alaska (+50% higher).
                    the proposed plan says median price of the "metropolitan
                    area" + 25% should be the new cap.  however, the numbers
                    need to be made consistent between the house/senate
                    versions, looks like feb 15 is target sign date.
           \_ it's an experimental erectile dysfunction pill for the CA real
              estate market, FDA approval and short-/long-term effects TBD
              Santa Clara    = rock hard
              East Bay       = softening
              San Bernardino = flaccid
        \_ !swami says this is step one for a complete federal (i.e.
           taxpayer) bailout of the mortgage mess (i.e. banks).
           \_ !swami also says this is basically legalized theft.
2008/1/16-18 [Finance/Banking, Finance/Investment] UID:48958 Activity:high
1/16    Nikkei 225 back to lows of 2001-2005 and 1986.  Dang.  I thought
        stock markets of developed countries were supposed to return more
        than a savings account over 22 years!
        \_ If you cherry pick your dates, then no it won't.  If you cherry
           pick the other way you'd be a zillionaire.
           \_ i guess we're supposed to wait 40 years?
              \_ No, you're supposed to not cherry pick the dates.  Or better
                 yet, just put your money in your piggy bank.
        \_ If you are really interested in this topic, I suggest that you
           read _Stocks_For_The_Long_Run_ by Siegel. Plenty of developed
           countries stock markets have gone all the way to zero, usually
           after they lost a war. If you held German stocks from 1933 to
           1945, you were pretty unhappy. On the other hand, if you bought
           the Nikkei back in 1950, you are still sitting on a very impressive
           gain. The Nikkei is *still* not back to where it was in 1989, so
           yes, you can cherry pick dates and demonstrate practically anything.
           Diversification and a long term view are essential for success
           investing, especially passive investing, like the stock market.
           You should not have money in stocks that you need in the next
           20 years. -ausman
        \_ Guys, conventional wisdom is that you should invest in a market
           index and hold x years, and you're virtually guaranteed to do okay.
           What is "x" for returns better than a savings account / CD / bonds?
           -op
           \_ Wrong assumption.  The stock market gives you likely better
              returns than a more conservative option like a CD, with
              a probability curve that starts at x and rises towards 100%
              over time.  -tom
              \_ Also you have to diversify to prevent being really
                 screwed when one sector/company/country tanks for 20 years.
              \_ what do you estimate the probability of a market index
                 outperforming CDs is for x = 30 years?  do you have a sweet
                 spot for x?  let's also assume we are moving from stocks
                 to bonds/safety as we get older, also as CFPs suggest.
                 to bonds/safety as we get older, as CFPs suggest.
                 \_ You could estimate this by looking at historical
                    30-year returns and seeing how many of those
                    periods resulted in returns less than 5%/year
                    average.  I expect that probability is very low, less
                    than 10%.  -tom
2007/12/21-29 [Finance/Banking] UID:48851 Activity:nil
12/21   Commerce dept consumer spending and PCE for November 2007
        +1.1% consumer spending overall
        +2.0% spending on non-durable goods (food, gas, etc.)
        +0.3% spending on durable goods (crap + cars/appliances/etc.)
        -0.3% real disposable personal income (after taxes, before rent/mortge)
        -0.5% personal savings rate
        Yay!!
        \_ "consumer spending" == "consumer debt"?
        \- does anybody know what the accounting definition of the
           "personal savings rate" is? tnx.
        \_ "When interest rate is as low as Bush's approval rating,
           who needs personal savings?"                 !Bernanke
2007/12/19-29 [Finance/Banking] UID:48837 Activity:nil
12/19   http://tinyurl.com/ys8gcc (wsj.com)
        http://image.minyanville.com/assets/FCK_Aug2007/File/s2162664.mp3
        (At 26:20) Operator:  "Again, at this time, if you would like to ask
        a question, please press *1 on your telephone keypad"  * Silence *
        Sallie Mae CEO:  "How good is this.  Steve, let's go, there's no
        questions, let's get the fuck out of here."
2007/12/12-19 [Finance/Banking, Finance/Investment] UID:48788 Activity:nil
12/12   http://online.wsj.com/article/SB119746804568523549.html
        Fed offers term auction facility to address credit freeze
        - Effective operation almost exactly like the Fed discount window:
          Banks can borrow money from the Fed at weeks to months duration
        - But at or near the fed funds target (instead of the discount rate)
        - The key feature (not discussed in the article of course) is
          Anonymity.  Only the Fed will know who it lends to using this
          facility.  Banks don't borrow from the discount window because
          it's public knowledge, telling the world that no other bank will
          lend to you so you had to go to the discount window.
        - The Fed is on the hook if the borrower goes belly-up, so it will
          decide who gets how much in loans for how much collateral
        - Starts next week for $20B and is envisioned as an ongoing program
        - Fed also lent $24B to ECB and Swiss central bank to help Europe's
          banks with SIV/CDO implosion.  Central banks also relaxing
          collateral requirements.
          \_ Expect the taxpayer to get screwed in the end.
             \_ privatize profits, socialize losses bitch!
2007/12/10-14 [Finance/Banking] UID:48772 Activity:high
12/10   Does anyone on motd actually know someone else using 0% down
        interest only home loans? I don't, and I can't imagine any
        Berkeley grads stupid enough to do so.
        \_ I knew someone who got a 105% loan but she got lucky, didn't get
           fired, and converted a year ago.  She was not a Cal grad.
        \_ Of course I do. It's not really stupid. It's something smart
           people do all the time. The product is really intended for
           developers and/or investors who know what they are doing and
           the risks involved or else disciplined people who have a
           fluctuating income (e.g. small business owners who pay a
           massive chunk of principle at the end of each quarter/year when
           they had  good business and have the extra cash). Most people never
           pay their mortgage off anyway (until they sell) and principle is
           such a small part of the payment that it can make sense to not
           commit to it. I would have done it if I could have gotten a better
           rate that way, but usually you won't. You just pay principle when
           you want to, but you're not committed to it. In my world,
           that's smart.
           \_ principal
              \_ Ironically, I spelled it "principal" and then checked the
                 web which had it "principle". The web site I looked at
                 was retarded and you are correct.
        \_ I know someone who got their townhouse in DC that way. She is a
           Cal undergrad and Yale grad school grad. I talked her into refi'ing
           into a 30 year fixed rate about 18 months ago. She was planning on
           doing it anyway, when her rate reset this year, but I think she
           is glad she listened to me and did it early.
           \_ Variable rate and interest only are two different things
              completely. She could've refinanced into a fixed rate
              interest only if she wanted.
              \_ It was actually both a variable rate and an interest only
                 loan (with a higher rate variable 2nd, making it a no
                 money down loan as well). Were people actually signing up
                 for fixed rate, interest only loans? What was the term, i.e.
                 how long was the loan for? Life?
                 \_ Works just like variable rate except the interest rate
                    doesn't fluctuate.
                    http://tinyurl.com/2npzy8
                    \_ Not how I think of it. Those are 5 or 7 year fixed
                       rate loans only, they vary after that, so they are
                       really ARMs.
                       \_ Um, no. Some are fixed  for 5 or 7 years and some are
                          fixed for the life of the loan. Look at the Smart30
                          offering and compare to SmartChoice:
                          http://tinyurl.com/2lcyub
                          Both are interest-only.
                          \_ Those are still only fixed for 10 years. An
                             interest-only loan, by definition, would never
                             get paid off, so it is kind of silly to claim
                             that the loan rate is fixed for the "life of
                             the loan." The Smart30 converts to a standard
                             fixed rate fully amortizing loan after 10 years.
                             \_ Are you an idiot? I hate to call names,
                                but read the damn link! They are fixed for
                                the life of the loan! Read the column that
                                says "fixed-rate period". What does it
                                say? Term of loan! Term of loan is not 10
                                years. Jeebus! How it's amortized has
                                nothing to do with the rate being fixed or
                                not. The loan may *never* be paid off and
                                it could still be at a fixed rate! That
                                this loan has a 10 year interest-only
                                period has nothing to do with whether the
                                rate is fixed or not.
                                \_ Yes, I read the link. You don't understand
                                   what you are talking about. No one offers
                                   a loan of infinite duration, which is what
                                   a fixed-rate, non-amortizing loan would be.
                                   The Smart30 is an interest only loan for
                                   10 years, then a standard 20 year fixed
                                   rate fully amortizing loan after that. They
                                   both have the same interest rate, yes.
                                   \_ No one is talking about amortization
                                      here but you! You said "Those are 5
                                      or 7 year fixed rate loans only, they
                                      vary after that" which is WRONG.
                                      Then you said "Those are still only
                                      fixed for 10 years" which is also
                                      WRONG!  When I showed you proof you
                                      started talking about amortization. WTF?!
                                      I have completed all the coursework
                                      to be a mortgage broker, so I
                                      definitely know what I am talking
                                      about and you are a buffoon!
                                      Further, your reading comprehension
                                      is terrible. I never said any of
                                      those loans were infinite duration,
                                      but certainly such loans are possible -
                                      and with a fixed rate, too! I'll
                                      make you one if you want it!
                                      \_ Interest-only means the same things
                                      \_ Interest-only means the same thing
                                         as non-amortizing. You are really
                                         clueless if you don't realize that.
                                         Show me a fixed-rate, interest only
                                         loan of inifinite duration, I would
                                         loan of infinite duration, I would
                                         be amused to know of it. As far as
                                         I know there have only been a few
                                         cases of this kind of note in history.
                                         http://www.csua.org/u/k7p (tutorial)
                                         http://www.csua.org/u/k7q (history)
                                         Read about the losrenten and the
                                         consols. You are talking about setting
                                         up a perpetual annuity.
                                         \_ You are going off on a tangent
                                            now. Please to be acknowledging
                                            that your two above assertions
                                            about fixed-rate loans were
                                            wrong and then we can talk about
                                            amortization (or not).
                                            \_ My initial question was "what
                                               is the term for the fixed-rate,
                                               interest only loan?" which you
                                               have never really answered
                                               except with nonesense like
                                               "the entire term of the loan
                                                you idiot!" Yes, I glanced at
                                               some of the links and thought
                                               that the longest interest only
                                               loan was 7 years, when it was
                                               actually 10, but you still have
                                               not even come close to answering
                                               my initial question. What you
                                               call a "tangent" is actually
                                               my initial question. Work on
                                               your own comprehension skills.
                                               And yes, we use the word "vary"
                                               to mean different things. You
                                               use it to mean the interest
                                               rate varies, while I use it to
                                               mean the payment varies. I think
                                               that is the root of our
                                               confusion.
                                               \_ I think it was clear what
                                                  you were talking about
                                                  when you used the term
                                                  ARM and you were incorrect.
                                            \_ My original question was:
                                               "Were people actually signing up
                                                for fixed rate, interest only
                                                loans? What was the term...?"
                                                So no, this is not a "tangent"
                                                as you call it, it is the
                                                original question. Your response
                                                "the life of the loan" makes
                                                no sense, unless you are
                                                claiming a perpetual annuity.
                                                It is actually kind of amusing
                                                that you claim I have reading
                                                comprehension problems,
                                                considering I got a 750 on the
                                                verbal part of the GRE. Perhaps
                                                the communication problem is
                                                not really on my end.
                                                original question.
                                                \_ What does "ARM" (a term
                                                   you used and which has
                                                   a clear meaning) mean on
                                                   your planet? You said
                                                   "Those are 5 or 7 year
                                                   fixed rate loans only, they
                                                   vary after that, so they are
                                                   really ARMs" which is
                                                   WRONG and "Those are still
                                                   only fixed for 10 years"
                                                   which is WRONG. You
                                                   have yet to demonstrate
                                                   any real understanding
                                                   of the subject or
                                                   acknowledge your
                                                   misunderstanding, so
                                                   it's pretty clear you
                                                   are the idiot here. You
                                                   are a textbook case for
                                                   why standardized
                                                   testing is USELESS.
                                                   BTW, the answer to your
                                                   question about the
                                                   length of the loan is
                                                   in the URL I provided.
                                                   \_ You don't know what the
                                                      word "vary" means in the
                                                      English language. You
                                                      think it only means to
                                                      vary the interest rate,
                                                      but it can also mean to
                                                      vary the payment amount.
                                                      Perhaps your mortgage
                                                      training taught you this
                                                      jargon, but that is not
                                                      how it is used by regular
                                                      English speakers.
                                                      \_ No one talks about
                                                         "variable payments"
                                                         w.r.t mortgages
                                                         and you are the
                                                         one who used the
                                                         term "ARM" which
                                                         means Adjustable
                                                         Rate. You are out of
                                                         your depth here.
                                                         Admit that you
                                                         didn't know what
                                                         you were talking
                                                         about, thank me
                                                         for educating you,
                                                         and move on.
                                                         \_ Go to your own
                                                            website:
                                                http://tinyurl.com/2npzy8
                                                "At Quicken Loans, we offer
                                                a variety of interest-only
                                                loan options, including [...]
                                                adjustable-rate mortages..."
                                                Then you claim that I was
                                                "WRONG" for calling them
                                                ARMs. Is an adjustable-rate
                                                mortgage an ARM?
                                                \_ You're a fucknut. Of
                                                   course an adjustable rate
                                                   mortgage is an ARM. The
                                                   point here is that you
                                                   are talking about RATE
                                                   not PAYMENT when *YOU*
                                                   used the term ARM. You are so
                                                   fucking inconsistent
                                                   and a revisionist to boot.
                                                   \_ I am merely quoting your
                                                      own comments directly
                                                      from earlier in the thread
                                                      I never called the
                                                      Smart30 an ARM, you just
                                                      made the wild assumption
                                                      that I did. All I said
                                                      is that it wasn't fixed
                                                      and it clearly is not,
                                                      since the payment varies
                                                      after 10 years. You made
                                                      the assumption that I was
                                                      referring to the interest
                                                      rate, but I was not. You
                                                      are a textbook example of
                                                      why a little knowledge
                                                      is a dangerous thing.
                                                      Furthermore you said:
                                                   "Those are 5 or 7 year
                                                   fixed rate loans only, they
                                                   vary after that, so they are
                                                   really ARMs" which is
                                                   WRONG". What do you call the
                                                   SmartChoice loan, from your\
                                                   own URL? It is a 3,5, or 7
                                                   year Interest-Only ARM, just
                                                   like I said. Go ahead and
                                                   admit you were wrong here.
                                                   A little confession is good
                                                   for the soul.
                                                   \_ I'm done with you. You
                                                      are all over the map
                                                      in trying to defend
                                                      your losing position,
                                                      you are stubborn, and
                                                      you are a waste of my
                                                      time. Thank me for
                                                      educating you, which
                                                      I did, and give it up.
2007/12/2-6 [Finance/Banking, Reference/RealEstate] UID:48732 Activity:kinda low
12/2    http://tinyurl.com/2lgwc2 (signonsandiego.com)
        Old mortgage:
          2004-2007  4.97% interest-only on $352K
          2007-2009  7.97% to 11.97%, principal payments start
          2009-2034  11.97%
        New mortgage:
          2004-2007  4.97% interest-only on $352K
          2007-2010  5.25% interest-only
          2010-2034  5.25% principal payments start
        Countrywide is da b0mb!
        \_ Moral of the story: it doesn't pay to be fiscal responsible.
        \_ Lame.  "Oh we didn't understand the terms of our ARM.  We're too
           dumb to read the papers right in front of us.  We thought we were
           getting a free lunch because we're nice people.  Now, only because
           the rest of the mortgage industry is fucked, we get totally lucky
           and keep a super low rate forever".
           \_ Countrywide can tell them to go pound sand. It's the free
              market at work like it should be. What I have a problem with
              is the government attempting to legislate these discounts
              or, worse, making taxpayers pay the bill.
             \_ All the deficit spending is effectively a tax. We are getting
                taxed out the ass.
                \_ This is a non sequitur.
                  \_ Well, it's related to fiscal irresponsibility. Someone
                     always pays the bill in some way. Legislating discounts
                     for idiots passes the bill onto responsible people.
2007/11/29-12/6 [Recreation/Travel/LasVegas, Finance/Shopping, Finance/Banking] UID:48711 Activity:nil
11/29   I just found out that I am American Indian.  The White Man took
        away my ancestors' ancestral lands, stuck them in camps, you know,
        the usual.  I am perfectly functional member of society.  What
        are some cool ways I can take advantage of my status?  Can I
        get cheap loans?  Grants?  ok tnx.
        \_ What percentage and what tribe?  I understand that With some tribes
           you can get grants, or casino funds.  I think for most tribes you
           don't get jack.  But, IANAI.
        \_ Become an alcoholic.
        \_ Can you prove it? There are lots of Native Americans who cannot
           prove that they are because of poor documentation. If you can't
           prove it then forget it.
        \_ Live on the Res.
        \_ Tell us what tribe and I might be able to tell you your chances of
           getting anything from this, but: you need to be enrolled, the tribe
           doesn't have to enroll you even if you qualify on paper, most tribes
           with money require that you live on the res and despite what some
           motd posters think, the typical tribe member is not sitting in that
           casino hotel jacuzzi snorting coke with $100 bills.
           \_ Are you crazy? Try $20 bills.
2007/11/19-26 [Finance/CC, Finance/Banking] UID:48660 Activity:kinda low
11/19   Prosper update. I am getting 13.3% on my loans there, but one of them
        is now 45+ days lates. If that one is a write-off, as seems increasingly
        likely, my ROI will be about 11% over my first year there. Not too
        shabby, but we shall see how it goes as this credit crunch thing
        plays out. Lately I have been getting better rates, but I suspect
        the risk is higher, too.
        \_ that is awesome.  How much was your initial stake?
           and what are your parameters for which ones you invest in?
           \_ I am only taking AA, A and B rated borrowers who have a debt/
              income ratio under 30%. My initial stake is just a couple
              thousand, as I am just sort of checking it out for now.
              \_ Who verifies this debt/income ratio?
                 \_ Prosper does.
                    \_ How?
        \_ How are you getting more than a credit card loan?
           \_ The magic of the market? The invisible hand at work? How
              do you expect me to answer this question? This is what people
              with reasonably good credit are willing to pay to borrow money.
              Not AA credit, but B credit, with a low Debt/Income and home
              owners to boot. I could get more, but then my default risk
              would go up, too.
              \_ Maybe people are willing to pay more on the bet that if they
                 default you are less likely to send them to collections?
                 \_ No, all defaulted debt is automatically sent to collections.
                 \_ No, all defaulted debt is automatically sent to
                    collections.
       \_ How many loans have you made over that period?
          \_ Around 50.
        \_ I looked at prosper when it was first mentioned on the motd.  I
           wouldn't risk a penny on any of those people.  I'm glad you've
           made some bucks but your risk looks way higher than the interest
           rates these people are paying.  There's a very good reason they
           can't get money from more traditional sources.
2007/10/12-14 [Finance/Banking] UID:48301 Activity:nil
10/12   Oh crap Etrade's savings account teaser interest rate went from
        5.05% to 4.70% in less than 1.5 month. Who else has a higher
        savings/mm interest rate?
2007/9/19-22 [Finance/Banking] UID:48118 Activity:nil
9/19    High interest CDs. What's the catch?
        http://www.mlnbank.com/EN/Services/premCDs.htm
        \_ Premium Certificates of Deposit are NON-REDEEMABLE until maturity.
        \_ May be a scam, may not: http://preview.tinyurl.com/2rwjpd
2007/9/19-22 [Finance/Banking] UID:48117 Activity:low
9/19    http://Prosper.com, earn 9.40% return on your investment:
        http://www.prosper.com/prm/lender2.htm
        \_ Lisa needs a loan, Joe has money.  Lisa doesn't pay Joe back, Joe
           is screwed!
        \_ I have been doing this with some "play" investment money for about
           a year now and have been earning just over 10%, with no defaults
           so far. -ausman
           \_ And if you got just ONE default, what would your earning be?
              \_ About 3/4 of that. I only lend to B or better credit risks.
                 These have been at under 2% default on Prosper, at least so
                 far. I also make lots of small loans, to spread the risk. -aus
                 These have been at under 2% default rate on Prosper, at least
                 so far. I also make lots of small loans, to spread the risk.
                 I actually wish I had more cash to invest in Prosper right
                 now, since the rates being paid have gone up quite a bit
                 recently, but my wife's kitchen remodel is using up all
                 the spare cash.
                 \_ But your wife's kitchen remodel will probably pay back
                    over 10% !!!
2007/9/18-22 [Finance/Banking, Finance/Investment] UID:48103 Activity:low
9/18    So, the lesson of the fed rate cut is: borrow as much as you can, get
        way over your head, make risky investments as well. make big bucks on
        the way up. if you get into trouble, the Fed will bail you out. if
        you're a saver you're a sucker... your life savings just took a hit
        through dollar devaluation.
        \_ If you are a saver you ALWAYS take a hit through dollar devaluation
        \_ I've been busy the last few days... I thought they were going to
           let everyone bite it.  What sort of bailout did the Fed do?
           \- "If you owe your bank a hundred pounds, you have a problem.
               But if you owe your bank a million pounds, it has." --jmk
               BTW, this is an example of why taxes should be progressive.
               \_ It's amusing that you jump on progressive taxation to remedy
                  this particular problem rather than, you know, eliminating
                  bailouts.  -- ilyas
                  \- progressive taxation isnt a solution to this.
                     this is an illustration of the fallacy of some of
                     the "how should we split the dinner bill" type bogus
                     analogies.
                     \_ The best argument for progressive taxation I know is
                        that marginal benefit increases exponentially, but
                        hedonic value increases logarithmically (if that),
                        for money. -- ilyas
        \_ Investors and risk takers will always do better than nervous
           nellies.  You would rather the whole economy suffered a recession?
           \_ They're not taking risks if the government bails them out.  And
              considering that the only reason the economy is in danger of
              suffering a recession is *because* of this kind of risk taking,
              it shouldn't be encouraged.  -tom
              \_ I think you'd have a hard time substantiating your last
                 sentence.
           \_ Investors, probably, risk takers? That's ridiculous. The kind
              of fevered speculation that goes on in these "booms" is not
              sound business and should not be encouraged. But unless those
              who do this feel pain, it won't stop. And it does endanger the
              economy. The "lemming" mentality should not provide safety
              from stupidity.
              \_ Yeah, I don't approve of fevered speculation and lemming
                 mentality either. Feel better?
2007/8/17-20 [Finance/Banking, Reference/RealEstate] UID:47636 Activity:low
8/17    http://tinyurl.com/383pmp (latimes.com)
        L.A. Times reports CFC bank web site slow, so customers crowded branch
        offices to transfer out money that exceeds FDIC coverage
        \_ Panic on the streets of London. Panic on the streets of
           Birmingham. I wonder to myself, could life ever be sane again?
           \_ Panic isn't insanity.
2007/8/15-20 [Finance/Banking, Finance/Investment] UID:47618 Activity:nil
8/14    THERE IS NO HOUSING BUBBLE!
        http://blogs.ft.com/wolfforum/2007/08/fear-makes-a-we.html
2007/8/10-13 [Finance/Banking, Finance/Investment] UID:47579 Activity:nil
8/10    http://tinyurl.com/2vz45a (iht.com)
        Fed accepts MBS bonds, kicking back $35 billion in cash to banks in
        short-term loans, delaying mark-to-market valuations on the bonds
        (encouraging mark-to-Fed accounting schemes).
        \_ http://www.csua.org/u/jbd (Economist's View)
           That is not really an accurate summary of what really happened.
           The MBS were all Agency backed and therefore gov't guaranteed
           in the first place. Secondly, they did not buy them, they
           accepted them as collatoral for a very short term (72 hour)
           loan.
           More discussion about it here:
           http://www.csua.org/u/jbe
           (I know you don't like this blog, but unless you can find a
            better source of economic explaination, too bad emarkp) -ausman
2007/8/8-13 [Finance/Banking, Computer/HW/Drives] UID:47563 Activity:nil
8/8     CD rates went down, WTF???
        \_ Flight to safety. 10 government bonds went down too.
2007/8/6-9 [Finance/Banking] UID:47548 Activity:nil
8/6     The Loan Comes Due
        http://www.nytimes.com/2007/08/05/weekinreview/05norris.html
        \_ I laugh long and heartily at everyone affected by this.
           In other news, HRC proposes $1B in federal aid.
           http://www.forbes.com/feeds/ap/2007/08/07/ap3995204.html
           Personal responsibility? What's that?
2007/7/17-19 [Finance/Banking] UID:47314 Activity:nil
7/17    GMAC Bank has kick ass CD rates. Better than ING Direct and
        Emigrant Direct. I'm getting rid of ING because it's only 4.50%:
        http://gmacbank.com/cd-rates.do
        6 month 5.30%
        9 month 5.35%
        12 month 5.40%
2007/6/22-26 [Finance/Banking] UID:47038 Activity:nil
6/22    http://gmacbank.com/todays-rates.do
        GMAC Savings Account at 5.30% APY for $5000.00 dep or up.
        That's better than many CD's out there, and beats ING Direct
        and EmigrantDirect hands down!
2007/6/5 [Finance/Banking, Recreation/Music, Computer/HW/Drives] UID:46854 Activity:nil Entry has been invalidated. Access denied.
2007/4/29-5/3 [Finance/Banking] UID:46478 Activity:kinda low
4/30    I'm starting business school in September and looking at various
        financial aid schemes (have not been able to until now for numerous
        reasons.)  I'm in school in France, and need info on non US govt-
        related loans.  Can someone recommend a good resource or book(s) for
        this?  Thanks!  -John
        \_ Unless the loan interest can be deferred or is lower than
           inflation, it is not worth it. I do not know of a single
           non-gov loan that allows you to defer or has a low rate,
           therefore, it is not worth getting the loan esp. given the
           fact that you're quite well off and don't *need* the loan.
           Lastly, 99% of the loans are not geared towards people going
           to professional schools, so... good luck with that.
        \_ What the heck would the French know about business? Anyway,
           I would contact a banking institution. They are the ones who
           are going to bankroll you. Also, your school should have info.
           \_ It's INSEAD, it's in France and Singapore (one of the top 10
              intl. MBA mills, so not really "the French".)  I'm checking
              out Graduate Leverage -- I'm not "well off", and unfortunately
              the guys who supplied most of the previous somewhat reasonable
              (i.e. not demanding an arm AND a leg) rate loans to INSEAD
              students just stopped doing so, leaving a lot of people in the
              lurch.  I'm also grateful for any recommendations on compilations
              of non-govt. scholarships if you have any.  I know that with
              bank loans I'm going to get reamed.  -John
              \_ Let's step back a bit. You have a vacation home in Chile,
                 your dad paid all of your tuition, you paid for your
                 crooked Swiss doctor to get out of conscription,
                 you travel to places like Bangkok, and lastly you have a
                 super hot high maintenance high funding girlfriend.
                 You're probably not as well off as your Swiss boarding
                 school friends but you're well off by UCB standard.
                 \_ You know, he might have blown most of his income
                    on all of the above and have not much of anything
                    saved.  I doubt his dad wants to bankroll him anymore.
                    Though perhaps he could sell his vacation home in
                    Chile, though that may only be worth $50k or something.
                    \_ the place in Chile is a rental paid for by his
                       girlfriend's job.  she's working down there.
                       \_ Yup.  "Crooked Swiss doctor" was an investment to
                          keep me out of mud push-ups without pay 2 weeks a
                          year, "dad paid all of your tuition" was largely
                          bonds, and I have enough savings to cover about
                          half of b-school (would be better off except for
                          ill-considered dot-com investments.)  I love the
                          insinuations, thanks for the constructive advice.
                          And it's "UCB standards."  If your parents help you
                          with your tuition, it's considered respectful to at
                          least reward them by showing you did some elementary
                          learning while at school.
2007/4/28-5/2 [Finance/Banking] UID:46473 Activity:kinda low
4/28    Reviews on money market/direct accounts as of April:
        ING Direct: 4.50%. Takes about 3-4 days to transfer to/from your
                bank accounts. Can link up to 3 accounts. The UI is very
                simple and the security is very good (random keypad that
                requires the mouse). Adding a new account requires you
                to send them a void check.
                \_ I recently opened an account with ING direct and linked it
                   to my checking account.  I did not have to send them a
                   voided check; the process was the same one you describe
                   below for Emigrant Direct.
                   \_ Yes first account is easy, 2nd and 3rd link requires
                      a void check. Stop interrupting my post asshole.
                \_ Also have "all electronic" interest-bearing checking
                   account. You can transfer money to any other bank
                   account. Will also mail checks.
        Emigrant Direct: 5.05%. Takes SEVEN days to transfer to/from
                bank accounts. The UI isn't as intuitive as ING but it
                is quite decent. Linking accounts requires you putting
                in bank routing+account, and when they deposit/withdraw
                2 amounts, you put that in. High interest rate, but
                takes too long to transfer in/out of the account.
        PayPal: 5.04%. Takes 3-4 days. High interest rate and low
                transfer time. I'd transfer all of my money into it
                except I've heard a lot of bad things about PayPal's
                security.
        \_ Anyone try HSBC Direct?
        \_ Vanguard Prime Money Market: 5.10%. Takes 2-3 days. Quite reliable,
           none of this fuzzy, hand-waving "ACH is unpredictable" bullshit.
           $3000 minimum balance, $100 increments, tho.
        \_ Amtrustdirect, 5.36% APY, $1000 minimum.  Website isn't as good
           as ING.
        \_ Note that even for, say, $10k, the yearly income difference
           between 4.5% and 5% is $50.  I suggest basing your choice
           primarily on features rather than interest rate.  -niloc
2017/11/22 [General] UID:1000 Activity:popular
11/22   
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Berkeley CSUA MOTD:Finance:Banking:
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