I just listened for 30 minutes to Bob Chapman opine on the banking fiasco. He describes in very layman's terms(even I can understand) how incredibly messed up the process will be for folks to even get their deeds for their homes once they're paid.
The whole unwinding process in these mortgage packages that have been sold over and over with no accounting of where your particular mortgage is located is pretty frightening.
Secondly, he responds to statements and legislation being proposed by the administration's new female in charge of one of the President's economic advisory boards( I forget her name).
In this idea she wants to take the monies from retirement IRA's and 401K's and give folks annuities.
I was listening to her on the radio about a month ago and was totally amazed at the audacity of her statements in that she felt the American public did not know how to invest their own monies properly and that we needed Federal oversight to place these funds in the "proper" vehicles. She stated that the gov't knew which vehicles were best.
She further stated that it was wrong for folks to be able to use their funds for a first time home down payment or for college, etc. because they would deplete the funds necessary for their retirement.
Therefore the gov't needed this legislation to manage their funds for them by taking the monies and giving us these annuities(AKA worthless paper..since the gov't is broke) WOW!!
I wonder, Ben, if we might not want to be buying puts instead of calls(like SPY) for next year. I still am looking to buy some insurance.
Here is the site(forgive the commercials) Bob Chapman's comments are the main point(click on the you-tube video):
Sorry for such a depressing commentary. I think I'm catching the general downer economic malaise besides this nasty cold I'm fighting. I don't think many folks even know about this confiscatory action being proposed by Congress before the end of this year.
I'm coughing and wheezing my way through this funk. My wife has quarantined me to my computer room. You folks are my only link to the outside world :-)
Great testimony Ben! Thank you for your support..I too, would like to make my daily bread doing this...not there yet...more lessons to learn.
I have to learn to be more patient. I really am hooked by quick changes in the market.(less than 1 week). I have to resist the buzz(emotional rush) of trading and be more cerebral if possible! God help me and all of us to help each other in this really exciting(there I go again) endeavor.
Now, I am starting to really love this board. Reits, I have been praying for you and may the Lord bless your path. Taymere, I truly hope that God will bless you what you need. I am just amazed and this has made my day.
For me, this trading is about making money for my family and this message board is my place of business. Little did I know that I would find more than I bargained for. Just like God. I keep thinking of the parable of the talents.
I hope we can all find what we are looking for. He wants me to try to do something with his resources and raise my children and support my wife.
Reits you stand as a testimony. You are showing me that while you are facing your challenges you are doing it with God and have a plan. My children aren't making money yet, age 8 and 6. However, my son is getting used to me trading on my Blackberry and asks me a lot of questions.
I also just inherited a bit of money from my sister. She died of alcholism of 60. I am 51. She died in my arms, as I said the Lord's prayer. It was an event that brought the realism of our path to light. My father died when I was 20 and my mother, when I was 31. I am the last one.
I never wanted to live anywhere but the U.S., but then my wife talked me into moving to London. We have now been here for 12 years and live near Battersea.
I just trade, because I think God wants me to use my skills in a new way that is good and productive. I can forget my career as a banker. So, I think I have found something, but have yet to ramp it up sufficiently to make a living from it. However, I have made 10% year-to-date on my trading account and 13% year to date on my IRA's. So, I am getting there.
If AGNC continues and the MLP's continue, then next year my goal is 20% or more.
I am strating to blend trading with portfolio styles. I suppose it doesn't really matter how we get there, but I do enjoy the company here. It is a nice place to do business. I can even rant every now and then.
God bless and happy trading.
My brother and sister used to live in Kihei. On one of my many visits (imagine that), they took me to Kula to for a Thanksgiving Dinner with friends. What a great little spot. The upcountry elevation mitigates some of the tropical heat, and as you mentioned, the views are spectacular. Good choice. After raising 5 kids, you deserve it. All the more reason to ride AGNC into the Maui sunset.
I know it's all in the media like it's a game changer but it won't be in the end. Politicians will huff and puff in this election season, but they are owned by the banksters so it's just a show to woo populist votes. It's basically a Florida thing, that's the main high default rate State that also has judicial foreclosures. In the other high foreclosure states the banksters' sloppy record keeping will never see the light of day because they are non-judicial states. Most defaulters, having committed fraud on the loan application and not having paid a dime in two years, won't even show up in court. Most defaulters aren't asking the judge to allow them to bring the loan current so that they can keep their underwater home.
For AGNC this will have little effect. For CIM and the mortgage insurers it could go either way interestingly. CIM has been collecting crap loans and busted tranches swept up off the cutting room floor underneath their re-REMIC table for years. If the collateral can't be repossessed due to shoddy record keeping, or if they can prove R&W breaches, and they therefore can force someone further up the chain of custody to buy back the loan at full price then each put-back loan becomes an instant 2-3x bagger surprise. But the probable outcome will be that this will hurt CIM. The uncontested judicial, and all non-judicial, foreclosures will proceed apace. The cloudy titles will trash the value of their crap loans and busted tranches. Nobody will be interested in buying their fresh REMIC product until the political risk surrounding shoddy deed paperwork dies down. I'm glad I don't own CIM.
I have come to totally trust your views on this stock from many other captial market angles. However, your views on bankers has not amazed me as you don't see that you are criticising the very same people who gave you this opportunity to invest in MBS through AGNC. I was a banker for close to 30 years with expertise in wholesale lending, residential and commercial construction loans, in two countries. So, I am tired of people trashing bankers, all bankers.
I suppose I am just as upset with the banker bashing as I am with the ethos of the people that feel they can walk from their loan.
How could you have solved the problem of massive forelcosures? Do you see that the failure to follow a careful process has to do with the volume? It is a huge problem and will be a hot political potato. So I face more banker bashing. However, to be clear we are better off getting the foreclosures behind us to cure the market.
For AGNC, the prepayment could pick up and repo rates could rise. That is not much, but near term there is an impact. It depends on the extent of the loans that were in the MBS pools purchased by AGNC. They owe us that number. I posted IR's response in your post above.
What is the health (demand/supply) of MBS with this issue sitting around? As you point in your subsequent post, the government owns a lot of MBS.
YOu are correct in your view of non-agency RMBS, wholeloan sales, etc. So, know I wouldn't be in CIM at the moment.
To be sure, dismissing this as a quick political rush may be a mistake. It may not be mistake. Now, I am starting to feel like BP.
I want to buy puts in something. I don't have any exposure and am siting on cash. For once it feels good to watch this from the sidelines.
Re: In this idea she wants to take the monies from retirement IRA's and 401K's and give folks annuities.
Normally when people are comfortable, when they have plenty of food to eat and are not freezing cold, they pretty much accept the status quo. However if Congress attempts to confiscate retirement plans, I think the masses (including me) will respond in the streets with torches & pitchforks. Something like that is just way over the top in the world of Liberal thinking.
nice words and nice image BUT reality?? they will add so much gibberish words too many people will believe they are benefitting! For instance gvt bonds that GUARANTEE 10% a year. pure BS but enough will buy it. I closed my accts last year.
If you think Obama's advisory board chair is clueless, you should hear Maxine Waters. Talk about having NO idea as to what the problem is, she faults only the banks (her constituents are completely blameless), and thinks no one loses when loans are written down.