All about loans - uncategorized

Bible Foretold Housing Bubble!

Mon, 05 Jan 2009 23:21:01 +0000

Wow, just poking around in the bible, I found several places which clearly foretell the housing bubble. For example: Folly is set in great dignity, and the rich sit in low place. That obviously refers to fools who take out subprime loans while rich renters wait for them to be foreclosed on! And this: And the wild asses did [...]

The Joy Of Deflation

Thu, 18 Dec 2008 17:48:28 +0000

Why is deflation written about as if it were a bad thing? Personally, I love deflation because it means lower prices for pretty much everything. OK, I can see that people will hold cash instead of investing it, because the cash is increasing in value. But that will end eventually as people spend the cash (unless [...]

SF Bay Area Conforming Limit Not Actually Raised

Wed, 10 Dec 2008 18:22:34 +0000

A friend of mine who just refinanced in SF Bay Area tells me that the single-family conforming limit (the maximum size mortgage that can be sold to Fannie or Freddie) was not actually raised to $800,000 or whatever they were threatening to do. The conforming loan limit for the SF Bay Area is still $417,000. What’s [...]

Imagine: An Economy With No Debt

Wed, 03 Dec 2008 17:09:57 +0000

To buy anything with debt is to double its cost. What if we all just rented until we could pay cash? What if we saved until we could pay cash for a car? What if the government paid expenses only from the current year’s tax revenue? What if we did not use credit at all? I think the world would [...]

Direct Lending

Fri, 21 Nov 2008 17:36:51 +0000

With CD’s paying 4%, and Wells Fargo charging 8.8% for a jumbo 30-year fixed, maybe I should finance someone’s jumbo mortgage — but only for a house that I’d actually want to live in. Either I get direct interest payments up around 8%, or, if the user defaults, I get the house. The trick would [...]

High Interest Rates Fix Everything

Mon, 17 Nov 2008 02:02:55 +0000

Perhaps the entire credit crunch could be fixed with very high interest rates. Currently, banks and other institutions have to compete with the suicidally low interest rates of the Fed and the Treasury bailout programs. Say you’re a bank and you know that a new mortgage loan has a 10% risk of default. Then you have [...]

High Interest Rates Fix Everything

Mon, 17 Nov 2008 02:02:43 +0000

What Credit Crunch?

Wed, 12 Nov 2008 17:01:51 +0000

Aloha Patrick, I am intrigued by Countrywide’s offer to lend $824,000 to John in your news links and have wondered… is all this hype about credit somewhat mythical? It would be interesting to find out what people can still borrow and what they can’t. I just qualified for a Home Depot credit card in [...]

A new financial system?

Sun, 09 Nov 2008 16:17:26 +0000

Saw this on my rss feed from Yahoo/Reuters just now: Glimpse into a new financial system LONDON (Reuters) – Investors get a first glimpse of the likely shape of the new global financial system this week as finance chiefs prepare for a summit of world leaders fighting the worst world financial crisis in 80 years. The rest of [...]

Which school districts will get hurt?

Sun, 02 Nov 2008 19:35:31 +0000

Hello, I just read an article in the NYTimes that was disconcerting and even frightening. http://www.nytimes.com/2008/11/02/business/02global.html According to the article, school districts, municipalities, and just about every governmental entity that either has money to invest or borrows money could potentially end up getting sucked into the credit crisis. That means that there could be countless [...]

Interest Rates

Mon, 27 Oct 2008 00:38:43 +0000

How much control does the Fed really have over mortgage rates and CD rates anyway? I know the Fed controls interbank lending rates, and can influence US Treasury rates for existing bonds through purchases and sales, but I was never clear on how all of that filters through to mortgages and CDs. Who loses when the Fed [...]

Whose side is the Treasury on?

Thu, 16 Oct 2008 06:09:38 +0000

According to this article in the NY-Times: http://tinyurl.com/3hzwmp In its latest questionable tactic, the Treasury is forcing banks to take billions of taxpayer dollars and lend it out - effectively trying desperately to blow some air back into the lending bubble. They know it will ultimately lead to an unsustainable debt burden on the US taxpayer, [...]

Is this the bottom :-)

Mon, 13 Oct 2008 14:45:42 +0000

I wanted to get this in before the Dow crashes again… (it is up 400 points this morning). I have no reason to believe this is the bottom of this depression. However, what are you going to look for as signs? Reversion to trend? Which trend, and how far? Dow was 3800 at the [...]

Survival mode

Fri, 10 Oct 2008 00:33:21 +0000

What should we do now? Let’s calm down for a while and come up with a checklist. * How should we secure our food source? * How should we protect our physical safety? * How do we thrive?

Stock Market Hates Bailout

Mon, 06 Oct 2008 16:08:58 +0000

Great, after the stock market spasm last Monday when it looked like the bailout would not pass, we get the same thing this Monday when it does pass. So now we have a crashing market, and higher US debt. The bailout was very wrong, and remains very wrong. Great quote from reader Herb: The Titanic is sinking. Captain [...]