Thursday, October 30, 2008

Citi gets 10 billion-raises rates on credit cards to 26%

I am dreaming or delirioius? I am so out of touch. I thought there were laws against loan sharking but evidently the government sanctions this sort of things these days. They give 10 billion to poor citi so the can do their part to help the economy and help fuel a recovery because it would be such a tragidy if Citi were to fail. I say they deserve to fail if they can't make it when they fleece the consumer with 26 % interest rates. Evidently credit card companies have no checks or balances on how badly they gouge customers. Now I know that these poor banks could not be expected to make money charging these ridiculous rates. I wonder which congressman is sleeping with the head of city in order to allow them to pillage America? Now it sure seems like the government is bending over backwards, or actually bending over forward, to help the poor, struggling banks and the banks just continue to ask for hand outs while the steel from their customers. The Home Depot credit card has a normally 21 % interest rate which should be illegal but to up it to 26 % with a letter saying take it or leave it proves that Americans have just been fleeced in the greatest scam in government history. The banks are getting handouts in order to stay in the business of ripping off consumers and the government just keep handing over the money. The money they are getting was to get the credit system moving again but today we found that the very bankers that nearly collapsed the entire world economic system are set to get bonuses nearly the exact amount of government bailout. We have been fleeced, pants, bent over, flim flamed, and bamboozled all at once. Politics as usual?

Sprint selling Nextel? Yeh step right up buyers!

I think sprint was the only one that didn't realize it was crap with they bought nextel in the first place. Who in their right mind would buy it now???????Sprint is a horribly run company, and nextel became horribly run when it became part of sprint. Sprint is likely to more share unless something drastic happens. They pcs network is terrible if you are not in a city. Nextel network has poor signal quality and their service has been horrible for so long that it will take a lot more than the CEO coming on TV saying how "cool" they are now and will be in the future. I am sure everyone remembers sprint started "firing" customers a few years back as if they were going to show the world who was boss. Hmmmm how's that working for them???I don't know if I have ever heard anything so stupid from a service oriented business in my entire life.

Wednesday, October 15, 2008

credit cards

banking analysts are so SMART!!!! They cut earnings estimates on banks and credit card companies AFTER they came out and said they were seeing delinquencies rise. I can't believe the get paid for this crap. D0 you mean to tell me that after all that was going on with the economy that they could not see credit card defaults going higher???? Give me a break. Maybe some of the credit card holders got that letter in the mail that said we know you have been a great customer and that you have always paid your bill on time but we are raising the rates on your card and cutting your credit limit. Some of them may decide not to pay after reading that letter. The credit card companies like to change the rules in the middle of the game. Even if they put it in the fine print of the contract it still as extremely senseless to increase the rate of interest on customers that are going through a recession and may rely on the credit card to fund important expenses. I know that wall street is well insulated from the real world but all paychecks are not alike and all months do not have the same expenses. A credit card can be used in times of need until a bonus check or commission check arrives. People do wait for month or two at times for that check and therefore a balance remains on the card. The company abuses the contract and tries to increase their profits to shore up their balance sheets by sticking it to their most important customers. They have milked the system and customers for years and now because of their own stupidity they try to rape the consumer to make up for their losses.

Trust an Analyst? Think twice, check the date on this one!!!

You can not trust analyst getting the most face time. I think going on TV must do something to someones brain or the networks like to choose people who have issues with their intelligence before they go on TV. Eventually Bove will be right if he keeps calling for the Bottom and to buy banks. He has been spouting off about how great the deals are for banks since 2007. This article was printed in March 2008. Evidently, he didn't see the meltdown of July and October on the horizon. Shut up people!!!! Hubris and need for attention loses money for everyone. Bove says financial crisis over, buy banks Bear Stearns collapse was trigger for U.S. authorities to take drastic action By Alistair Barr & Riley McDermid, MarketWatch Last update: 1:37 p.m. EDT March 20, 2008 SAN FRANCISCO (MarketWatch) -- The financial crisis is over, giving investors a rare chance to buy bank stocks at attractive valuations, Punk Ziegel & Co. analyst Dick Bove said Thursday. During crises, problems reach a crescendo when even the most optimistic market participants become fearful. That usually prompts government and business to join forces on a big solution that may either work or fail, Bove said. Sponsored by: . "The actions taken by the Federal Reserve were innovative, dramatic and, in my view, brilliant because they went right to the problem," Bove wrote in a note to clients. "The actions being taken by the Federal Reserve are being mirrored by the Treasury, which now has finally grasped the scope of the problem." Interest rate reductions and steps to inject more cash directly into the banking system will help banks generate more profit. While most market participants are still worrying about write-downs and falling home prices, investors can now buy bank stocks at their cheapest levels in almost two decades, Bove said. "The last time an opportunity of this nature existed to buy bank stocks this cheap was in 1990," the analyst wrote. "The next time will be in 20 years. This is a once in a generation opportunity." Bove's advice stands in contrast to that of strategists at Citigroup Inc. (C: Citigroup, Inc C 17.66, -0.96, -5.2%) , who advised clients Wednesday to avoid leveraged financial-services company stocks because the "Great Unwind" has begun. See full story. Barclays Capital sounded more hopeful Thursday, echoing some of Bove's thoughts. Liquidity -- the ability to sell assets quickly for a solid price -- and confidence that trading counterparties have enough cash to pay up are crucial to keep financial markets functioning properly, said Larry Kantor, head of research at Barclays Capital. Recent actions by the Fed and others in the U.S. have made it clear that authorities are trying to make sure the supply of both these market ingredients is maintained, he said. "Successful efforts by authorities to restore liquidity and the orderly functioning of financial markets, along with the massive amount of policy stimulus that has already been applied ... are expected to lead to a modest recovery in the U.S. economy in the second half of the year," Kantor said. Still, he was more cautious than Bove on the outlook for banks and brokerage firms in the U.S. "While the measures that policymakers are taking to address the problems of liquidity and counterparty risk will restore some degree of order to financial markets, they are not likely to alleviate ongoing concerns about the size of losses at banks and brokers," Kantor warned. "Losses in securitized subprime mortgages may now be fully recognized, if not accounted for, but credit quality in the remainder of the non-agency mortgage market is still deteriorating," he added. "The quality of credit outside of mortgages -- including leveraged loans and securities backed by commercial real estate -- is just beginning to be tested under less favorable economic conditions and with reduced credit availability."

Tuesday, October 14, 2008

Aubry McClendon rides sinking ship down

Aubrey rides a sinking ship down. You could call it greed but you could also see it as last ditch effort to pump up stock in a heavily over extended company. You had all the talking heads pumping up natural gas for reasons that were only legit in their own head. IE (will oil is up so natural gas must go up…JJCramer) genius theory yes!!!!!! Everyone on Cnbc pumped up Chesapeake as if they were all in on the gig. My first question was how in the world would we see natural gas prices sky rocket when we have been finding more and more supply practically daily. This was the first warning sign that the Nat gas gurus were missing the boat and that the past several years of riding a mo mo stock to the bank wasn’t going to work for them in the near term. They could believe talking about a stock on national TV wouldn’t give it more momentum. They sited numerous buys by the Aubrey McClendon the CEO as sure sign the stock was going higher. They missed the truth by miles. Nat gas supply was growing Oil and Nat gas are two different commodities. Yeh rocket science I know…one is gas one is oil…doh The ceo doesn’t always know what is going on either. They are just as likely to be trying to bail out a sinking ship by showing confidence; however, ill guided it could be at the time. stock secondary selling of drillable land to raise capital. we cant drive cars with Nat gas yet we are finding more and more ways to burn coal cleaner and more efficiently Natural gas pipelines are costly to build and costly to maintain and many American homes still use heating oil that is delivered by truck to the homes and it is costly to convert home heating systems to natural gas. The guys on TV tend to live in a TV created bubble and their hubris tends to get in their way more often than not in these days of media hype where immediate ratings are more important that long term quality programming or quality investment advice. Remember when anyone tells you can watch TV and get rich they are appealing to the couch potato inside of you and hope that you will trust them and buy their book. They need you to believe them without question and they need you to be lazy and to not do your homework because then you will find out the truth about their strategies and you will find out why they need to get paid millions of dollars in TV and book contracts instead of using their “genius skill” to create unlimited wealth through stock trading. The point is this: HOW MANY TV SHOWS HAVE YOU SEEN WARREN BUFFET HOSTING? HOW MANY TIMES A WEEK DO YOU SEE WAREN BUFFET OFFERING STOCK PICKS TO THE PUBLIC? I think you get my point. In the movie “School of Rock” Jack black has the greatest line that seemed to fit the conversation he was having with the school faculty but also could be applied to the Wall Street “gurus”. “Those who can’t do teach…… Those who can’t teach, teach Gym”……….. (not you Mom!) I know some people are great teachers and love it like my Mother) Most gurus become gurus in good times and are lucky they don’t have to rely on their stock trading to provide income during the down times because they likely would meltdown. They would vaporize if they didn’t have the TV or book contract to save them from their horrible stock picks.

Wednesday, October 8, 2008

16% of homeowners underwater

An article in the Wall Street Journal stated that an estimated 16% of homeowners have mortgages that are greater than the current value of their home. Wow! 16% of homeowners as an estimated 12 million properties according to Moody' If a home was purchased in the past 5 years 29% are estimated to be upside down with their mortgage. ( These are incredible figures. There likelihood of default rises considerable when this happens because people run out of options. Impossible to refinance, impossible to get a second on your equity, impossible to sell to pay of the mortgage. If a seller takes less for the home, they would still have to bring money to the table at closing or go through the ridiculously arduous process of a short sale. This could add to the major snowball of foreclosures and completely derail our economy. The sale of mortgage backed securities blew up when a number of loans defaulted because no one could tell how many more bad loans were on the books MBS owners. The market to buy and sell MBS disappeared and it left a major vacuum. The resultant affect is now hurting the economy while many on wall street try to claim that people who bought more than they could afford have caused the problem which is an extremely naive and simplistic view of a world wide crisis. But typical because Wall Street was at the heart of this meltdown.

Tuesday, October 7, 2008

AIG reveals the insurance business scam

I heard the question asked today "how could AIG reack up credit defaults losses so great that it threatened the entire world economy?" Simple answer "it is is the insurance business." Insurance companies are not in the business of paying insurance. They are in the business of collecting premiums and making money while paying insurance claims as infrequently as possible. Why is it that people pay premiums religiously year after year and then a storm hits and the insurance company goes belly up? HMMMMMM go figure. Well AIG collected premiums on credit default swaps to insure the purchasers of these mortgage derived securities in case of default. They made enormous sums of money over the past few years but when the defaults began to pile up and claims were made, they company was not able to meet its obligations. Lo and behold in steps the federal government to save the day. Here is the tip. Get in the insurance business and collect premiums as large and as often as you can and then when the sludge hits the fan and your customers are in dire straights you can go out of business. Just make sure you get as much stock and cash in bonuses and salaries as you can and spend it on something of value so they can't get it back from you later. Ever wonder why so wealthy people want to get in the insurance business? Well now you know. Do you think Warren Buffet is in the insurance business because he wants to help people? Maybe, Maybe not but I would guess that the cash cow that come with it is likely the more applicable reason.

Jim Cramer and Wachovia Bank

Any day now Cramer will come out and say how badly he missed the call on Wachovia Bank. Oh wait, we are talking about Cramer, so skip that first point. He was trying to pump up WB for some reason for the past few months. I don't know if he was just hoping he could claim a winner because WB had made it to this point and may be able to weather the storm because of it large deposit base but he was destroying capital all the way down. Evidently no one remembered that WB scooped up World Savings a while back along with their bundles of option arm mortgages. The vulture banks in their hubris thought they could snap up these failing companies at fire sale prices and suffer no consequences but even Bank of America is showing signs their anchor is dragging. They swoop in and buy mortgages for pennies on the dollar without ever figuring out their true value and then expect the federal government to take the losses. WB and Bank of America both acquired assets for pennies on the dollar and intended to milk them for all they were worth. They aren't going to lend more in order to get the housing market flowing, but are hoarding cash, looking for a bailout. As for Cramer and his WB pick and pump who knows but he is now telling everyone to exit stage right after driving them off a cliff for the past year. Hubris, narcissism and arrogance at its finest. Cramer seems like a nice guy but he really is a modern day media creation.

Bove and Cramer sipping cheap scotch

How many times have you heard Dick Bove saying the banks were not in trouble and the banks are doing well? Everyday maybe for the past 3 months. Hopefully he won't turn out to be another Cramer now that Bank of American has ruined his thesis. If he does a Cramer he will come out and say "oh I meant to say the depositors were OK and their money was safe, not shareholders" Cross you fingers. The world does not need another Jim Cramer. Holy buckets batman never thought anyone could every be as bad as Cramer "one of the greatest minds" (in his own mind of course) on wall street. Looks like all the face time Bove is getting for figuring out the financial system was a mess (oh yeh shocker there) is making him a little dizzy.

Truth or fiction at Bank of America

Ken Lewis said that bank of American is making all the loans they can with any qualified applicants. Funny that just last week they cut off McDonald's franchisees who were looking to upgrade or remodel their stores. I guess having a proven, cash flowing, successful business that continues to thrive in this tough economy does not meet their standards. Ken Lewis seems to not know what really is going on at B of A. They are hoarding cash just like everyone else but he is trying to spin things so they can be seen as the good guys but they are holding the government and tax payers hostage because they have so much cash in the form of deposits. I am guessing but it seems like Lewis has been holding his hand very tight to his vest and now coming out to cut dividend may be a sign that they are a little more exposed then previously reported.

Monday, October 6, 2008

Mortgage relief from Bank of America/Countrywide. (Amazing the speed of settlement after the house passed 700 billion) . The banks are holding the country hostage and taking everyone for all they are worth. They can change terms of credit midstream and can hoard money until they know the coast is clear while taking advantage of government bailout funds. It is disgusting. Wonder how many people could have survived the past month if they would have known things were going to change with their mortgage?OK sounds great, how are they going to decide where the money goes? Funny how we didn't hear until 700 billion was passed and coincidently an agreement is reach with BOA....Oh yeh and funny "the 700" legilation includes a clause that allows banks to not honor exclusitivity agreements. IE Citi and WellsCall me crazy but feels more and more like everyone exept the government and the big banks are getting screwed without even being taken to dinner.

Sunday, October 5, 2008

worthy or unworthy? Who Decides?

The problem of people deserving money or not is misleading as well. How can a project be funded when the bank goes under? How can the borrower maintain credit and timely payments on obligations when the bank fails? This is the beginning of another cycle: the downward spiral of credit reports and personal and company credit. It just starts with one and the pricing for funds goes up exponentially if a business is left hanging do to a bank failure. They are then expected to pay much higher costs for funds and it constricts their margins. They cycle continues. It is extremely simplistic for the Wall Street brains and pundits to say this crisis occurred because people bought property they couldn't afford. It is arrogant and childish as well because those so call irresponsible buyers could likely have sold their home in time of need at a break even price if Wall Street would not have sold, resold, and resold the underlying assets while taking their cut each time. Wall Street has used the American mortgagee for their profit and now they are trying to blame the person who tried to buy a home for the going market price. WAKE up people!!!!!! I am not at all for government intervention or bigger government but it is clear Wall Street behaves like unsupervised children in a candy store. Wall Street just happens to be in a money store instead and they can't or won't supervise themselves and the entire country has to pay for it. The bailout is really irrelevant because the people holding real estate are now expecting to pay 100 cents on the dollar for their mortgage while Wall Street is getting away with paying 25 cents on the dollar. It is a load of crap and one more twit that comes on TV trying to blame irresponsibility of the American consumer as the reason for a housing collapse needs to get smacked into reality. The only bubble left is the one in the head of most people on wall street and those mouths on TV that have proven by missing this entire market demise, that they are as much gullible as guru. Yet they are all so smart. How does that happen?????

Friday, October 3, 2008

Latest News from MarketWatch -

Latest News from MarketWatch -

The demand is there because home owners are being fleeced...who wants mortgages for .25 cents on dollar

They are are being valued by the larger banks because they have already made money off the mortgage boom and wall street made their money by creating securities with our mortgages and in turn undercutting our assets. They are writing things down 75% but the banks will then be expected to collect 100% on these assets while the people on main street get shafted because the underlying value has been cut in half even though they have not profited like wall street or the banks. The banks and wall street peeps seem to think it is OK to make 3, 4 or 10 times profit from on the backs of American home owners while they get screwed into the ground because of banking greed and government failure to protect home owners from being hurt by the leveraged cdo's. We are all being used as profit centers and they have made money from the the loans on origination, then more profit selling mortgages as securities and now the fire sale buyers will get to make 300 and 400% profits on homeowners again because home owners have to pay the full value of their mortgage regardless of what caused the drop in prices. It is a load of crap and if one other person says people that bought things they couldn't afford are the cause of this problem I will jump through the TV and smack the crap out of them.

wrong wrong wrong!

Cody you have this one wrong. Your ranting and raving about free market capitalism is about 10 years too late. Where were you when the local governments were on the take, the federal government was allowing wall street to use mortgages from the American people were sold, traded and retraded in order to leverage profits. You benefitted from this and your hedge fund did as well regardless of whether you say you were not involved in cdo's or mbs's. The market was booming in part because of the profits from these securities and anyone that was in the market profited. You got the benefit of the irresponsiblity of wall street and now you want to wash your hands as if free market was working. It wasn't working. I was setting the country up for a real estate crash and most people who own homes, who did nothing wrong, are suffering. It is not about buying things people couldn't afford. When you buy a stock, you pay for it once. If the price goes down you don't keep paying you just lose your money. Your stock broker got paid and you lose. Now what you and many other people who like to act as though they are smarter than everyone else because you have profited from the entire mortgage and real estate bubble because these levered mortgages created huge profits. The market would not have been where it was without these un checked selling and packaging of these loans. You benefitted. The Average American who hold a mortgage now on a property that may be worth less than the value of the home now is labeled by you "as a person buying things they can't afford". But you want the current companies to write down the losses then sell their assets at pennies on the dollar and then collect 100% of the term value of that loan when the collateral underneath the loan is not as worth what it was 2 years ago. It is a load a crap and for you to rant and rave about without considering the fact that a mortgage not the same a stock and should not be sold as such. Because wall street levered everyone in the country without our knowledge you act as if it was everyone's faul and that they were wrong for getting a mortgage. Another load of crap. If you buy a stock for 100 and the stock goes down to 50 are you going to pay 100 for it? but if you bought it you you lost 50 $ but you aren't expected to pay for it at full price again. But you are saying that wall street gets to write off all the losses after they have profited on these mortgages and made their cash, now they sell them at rock bottom prices and they get to make 100% on the investment because it is a mortgage when the underying assets is worth half price. It is apples and oranges and if you don't think through you end up blaming Americans for the cause and punishing them because you thought you were smarter than people who wanted to own their own home.

Wednesday, October 1, 2008

Congressman Barton needs econ 101

Barton just said that increasing FDIC insurance on savings accounts to 250,000 up from 100,000 said this has nothing to do with liquidity and the credit crunch. Hello! Hello! Anyone home in there. One major issue is that people are running to with drawl large deposits out of banks because of the fear of bank failure. The banks lend money based on their deposit base. If they lose their deposit base they can't lend as much and will be less likely to lend as their reserve requirements rise. I can't believe what these guys same at times. Definite need to send the entirety of congress to econ 101.

Did you say live without credit?

Dave Ramsey is becoming a preacher more than advisor these days. A popular TV show and high rating doesn't mean that your views represent that of most of Americans. 100,000 hits to your website means that 100,000 out of about 2.8 billion people are with you. This is a very small percentage of the country and for anyone to get on national TV and say that all Americans are mad about the bailout plan is misleading and delusional. It smacks of unfettered self promotion and arrogance than of a fair representation of the facts. We have enough wrong information out for the public to sort through with out having the media trying to act as the pied piper in order to get viewers over the edge with them. FYI Just because you have a forum does not mean you represent the population. Actors and Musicians please take note here. Hollywood please take not here. Politicians please take note here. Just because you have a mic in your face or a camera turned on in front of you DOES NOT MEAN YOU HAVE A CLUE AS TO WHAT IS THE REAL DESIRES OR FEELINGS OF MOST OF AMERICANS. Politicians are drawing only about 1/2 of the voting population and they they are only getting half them to agree with them. How in any way does that represent America?????? Now if you had a hit TV show or successful record means you have no idea what "all" or the majority of America is thinking and for you to think otherwise is complete hubris and arrogance. America has been mesmerized by the media now for years and it has become a forum for bull shit. Excuse the expression but it fits. Anyone who comes on TV and speaks with conviction can garner a following resembling Jim Jones and rhetoric becomes the poison kool-aid. Anyone who does have a forum owes it to everyone else to put some realistic checks and balances on what they say. Lose the delusion that you are representative of the majority and lose the arrogance that you have all the answers. I know it is is tough to not think so highly of your own opinions when you fall for the pseudo guru status the networks banter about in order to create buzz and ratings but be one of the few who can be realistic, honest and thoughtful of the propensity for people to follow those with the loudest voice. It is your duty with your forum to stop adding to the nonsense and use your loud voice to to the right thing not just do something.