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Show-me Account Talk
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fedgolfer
Well-known member
All my Scottrade account settled, now I just need a good opportunity. Bring the pain!
If you wan't pain... leverage it and margin enable your account. You won't have to wait for settlement. Oh, hmmmmm, I said the L-word.
Show-me
Well-known member
Fedgolfer,
I truly wish I could, but no margin accounts on Roth's. I did leverage '07 and '08 contributions for mine and my wifes from my tsp account. Best move I ever made.
fedgolfer
Well-known member
i don't like what going to happen with the $700b bailout, but it sounds like its happening. We're going to have make the best of it. I hope PPT flushes the market with confidence RIGHT NOW and put a double intraday bottom on UYG... and GS where Buffett bought it. Hey, look at that, starting to get a bid.
Show--me,
Re: taking equity swaps/ exchanges for govt buying bad loans, I agree. But I am not aware of discussion of proposal bail out terms that might include a % limit of bad loans purchased by us from "qualified" sellers. Also, what is the difference between qualified and unqualified sellers?
To me it is inconceivable that we taxpayers would consider buying 100% of any sellers bad loans. For example we need provisions to explicitly define brackets of bad loan portfolios. Say an unscrupulous lender made a 120% loan on a property with MV at time of loan of $120k. The MV is now $25k but the seller values the property at $60K. Now consider that this one loan is only one loan out of a 1000 similar loans in a portfolio. So how much does our bail out agency pay for this portfolio? Would we pay 1000 x $60,000 or 1000 x $25,000 or less? Suppose the agency offers 25 million but seller demands $60 million? With $700 billion behind you, are you, agency bureaucrat, going to insist on $25 million or be a "tough negotiator" and get the price down to $55 million?
Who knows, but whatever figure we pay, we should make the seller keep at least 20%-25% of the portfolio that we decline to buy. Once rejected by the gov't, we should only consider buying the declined properties (no matter how many times they might have been resold) for only 80% of adjusted liquidation value.
Forgive me again for such a long example, but do we want to turn over the negotiation guidelines for the agency to later write or do we want to demand they be included in the proposal. I say lets be transparent on our pricing and negotiating guidelines, so that they is very little negotiating room. Always we must remember who's benefiting and who's paying?
Re: taking equity swaps/ exchanges for govt buying bad loans, I agree. But I am not aware of discussion of proposal bail out terms that might include a % limit of bad loans purchased by us from "qualified" sellers. Also, what is the difference between qualified and unqualified sellers?
To me it is inconceivable that we taxpayers would consider buying 100% of any sellers bad loans. For example we need provisions to explicitly define brackets of bad loan portfolios. Say an unscrupulous lender made a 120% loan on a property with MV at time of loan of $120k. The MV is now $25k but the seller values the property at $60K. Now consider that this one loan is only one loan out of a 1000 similar loans in a portfolio. So how much does our bail out agency pay for this portfolio? Would we pay 1000 x $60,000 or 1000 x $25,000 or less? Suppose the agency offers 25 million but seller demands $60 million? With $700 billion behind you, are you, agency bureaucrat, going to insist on $25 million or be a "tough negotiator" and get the price down to $55 million?
Who knows, but whatever figure we pay, we should make the seller keep at least 20%-25% of the portfolio that we decline to buy. Once rejected by the gov't, we should only consider buying the declined properties (no matter how many times they might have been resold) for only 80% of adjusted liquidation value.
Forgive me again for such a long example, but do we want to turn over the negotiation guidelines for the agency to later write or do we want to demand they be included in the proposal. I say lets be transparent on our pricing and negotiating guidelines, so that they is very little negotiating room. Always we must remember who's benefiting and who's paying?
Show-me
Well-known member
jon,
And there lies the problem.
1. Who gets to sell their bad loans?
2. Who determines who get priority?
3. Do just the mega lenders get priority?
4. Do just friends of the Bush admin. and Paulson get the golden bailout and how are their "bad loans" valued?
5. Do they get a premium because they know Paulson?
6. Why not buy them at fire sale prices? It is a fire sale and they are full of risk.
7. Who sets the price and who determines the price is fair to the TAX PAYER!
From what I heard yesterday it is a reverse auction meaning lenders offer these mortgages for a price "THEY WANT" and not what they are worth or even potentially may be worth. The lenders with the bad paper determine the price and Treasury buys it. If they, the lenders, use a coordinated effort to determine the value higher than it's real worth, the tax payer over pays for the bad paper from the get go.
I say let THEM fail and the people on the sidelines with cash can scoop them up on sale and become the new generation of Wall Street titans. This is how it is suppose to work. Companies that take high risks get caught and companies the save and manage their risk get the opportunity to buy on the cheap. FREE MARKET CAPITALISM, NOT SOCIALISM!!!
And there lies the problem.
1. Who gets to sell their bad loans?
2. Who determines who get priority?
3. Do just the mega lenders get priority?
4. Do just friends of the Bush admin. and Paulson get the golden bailout and how are their "bad loans" valued?
5. Do they get a premium because they know Paulson?
6. Why not buy them at fire sale prices? It is a fire sale and they are full of risk.
7. Who sets the price and who determines the price is fair to the TAX PAYER!
From what I heard yesterday it is a reverse auction meaning lenders offer these mortgages for a price "THEY WANT" and not what they are worth or even potentially may be worth. The lenders with the bad paper determine the price and Treasury buys it. If they, the lenders, use a coordinated effort to determine the value higher than it's real worth, the tax payer over pays for the bad paper from the get go.
I say let THEM fail and the people on the sidelines with cash can scoop them up on sale and become the new generation of Wall Street titans. This is how it is suppose to work. Companies that take high risks get caught and companies the save and manage their risk get the opportunity to buy on the cheap. FREE MARKET CAPITALISM, NOT SOCIALISM!!!
Show-me
Well-known member
There is not guarantee this bail out will work anyways. Who knows if the lenders will start lending again, they will be less likely to take on huge risk so the market will still be tight and the weaker credit report will not get loans without big down payments. Problem NOT solved, just shifted to the tax payer.
I would like to buy some of those bad mortgages for pennies on the dollar. What a long shot, but the potential gains would be huge. But, they have to be valued for what they are. Not at a premium to save the lenders.
I would like to buy some of those bad mortgages for pennies on the dollar. What a long shot, but the potential gains would be huge. But, they have to be valued for what they are. Not at a premium to save the lenders.
350zCommTech
Well-known member
Completely agree.
Did Ben or Hank ever answer the question of why 2nd liens, car loans, credit cards, etc.. are included in King Paulson's plan?
Show-me
Well-known member
No, they avoided it like the bird flu! All Paulson would say is that he wants as much liberty to do what he thinks is necessary. Hell, why not just make him King, it would accomplish the same thing.
Show-me
Are you proposing that all these (what is it 1 million) properties with bad loans be auctioned off individually or perhaps in very small packages of 4 to maybe 10 properties each? But that would undermine the heart of Bush/Paulson Republican economy philosophy that the only the rich are allowed to play making big money in America while the middle class pays for the wealthy's priviledge. How could such a equitable proposal work?
To reduce the risk of intensifying real estate values free fall in hard hit foreclosure communities, 20 -25% of foreclosed properties could be publicly auctioned off monthly simultaneously at steps of county courthouses and on Internet. I don't know if there might be a way to limit total number of properties say investors living over 100 miles away could purchase annually in total, maybe 30 properties. Primary homeowners (not investors or second property owners) facing imminent foreclosure might be given one year fixed rate loans at no more than 9% APR to try to orderly sell their home or then refinance for a 5 yr fixed rate loan at some fair rate to be determined.
What do ya'll think? Too bad we don't have one thread for alternatives to the Paulson proposal - granted all this is probaly just intellectual exercises.
Are you proposing that all these (what is it 1 million) properties with bad loans be auctioned off individually or perhaps in very small packages of 4 to maybe 10 properties each? But that would undermine the heart of Bush/Paulson Republican economy philosophy that the only the rich are allowed to play making big money in America while the middle class pays for the wealthy's priviledge. How could such a equitable proposal work?
To reduce the risk of intensifying real estate values free fall in hard hit foreclosure communities, 20 -25% of foreclosed properties could be publicly auctioned off monthly simultaneously at steps of county courthouses and on Internet. I don't know if there might be a way to limit total number of properties say investors living over 100 miles away could purchase annually in total, maybe 30 properties. Primary homeowners (not investors or second property owners) facing imminent foreclosure might be given one year fixed rate loans at no more than 9% APR to try to orderly sell their home or then refinance for a 5 yr fixed rate loan at some fair rate to be determined.
What do ya'll think? Too bad we don't have one thread for alternatives to the Paulson proposal - granted all this is probaly just intellectual exercises.
Show-me
Well-known member
It is easier than that. Keep them packaged as mortgage backed securities and let the investor have at it. Some hedge fund will buy them on the cheap or someone will buy a bunch up and make a ETF out of them. Let the free market weed out the crap and sell it on the auction block.
Just like what happened with Lehman, fire sale. You lenders can unload them on the cheap or take your chances in the free market. Someone, somewhere will buy them if the price is "right" and not at a tax payer backed premium.
love-to-bike
Member
Get your email yet? No Nigerian scam, this one. Much worse.
st1\:*{behavior:url(#default#ieooui) } Dear American:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
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Yours Faithfully Minister of Treasury Paulson
st1\:*{behavior:url(#default#ieooui) } Dear American:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.
Yours Faithfully Minister of Treasury Paulson
I agree with this, in principle. However, I've been reading where the fatal mistake made was to let Lehman bankrupt, which cascaded to AIG and finally to the rest of the financial markets. My own opinion is that the banks should be offered something between the "firesale" prices the loans are currently at and their "long term" price that Paulson and Bernake want to offer them. This way, the banks can probably survive but they (and their investors) will take a financial hit; likewise, the taxpayer will also take an up-front financial hit, but it could be minimized in the future resale of the assets. In addition, the taxpayer should get some equity stake in the firm, so that potential profits after their recovery can also be used to recoup some of the taxpayer money used. To merely pay the banks "full" price for these assets is rewarding them and their investors for taking excessive risk and would be a ripoff to the taxpayer.
Your collective ideas/ bail out crisis seem to be steel to steel as opposed to Bush/Paulson's steal to steal.
Could opening a new thread on bail alternatives consolidate bail out ideas in attempt to maybe have 3 or 4 ideas with members support (by comments?) that rest of members might want to recommend to their representatives Thurs. & Friday?
Could opening a new thread on bail alternatives consolidate bail out ideas in attempt to maybe have 3 or 4 ideas with members support (by comments?) that rest of members might want to recommend to their representatives Thurs. & Friday?
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