2020 Elections - Trump FIRED

[HooDat]

As it is now? Hanging by a thread.

3rdPersonPlural wrote: ↑
Fri Oct 04, 2019 3:12 pm
For wages that reflect that they're competing with southeast asian child and slave labor.

This is your home run sentence. They don't understand that if tariffs and socialism are removed, your value as a worker is determined by the global free market. And there's plenty of humans out there who would gladly work for $100 a month.

....aaaaaand why we have Trump as our president. He's not fixing it for them - although in the long run the trade wars are intended to help protect Joe six-pack from having to compete with someone in a mud-hut under despotic rule.

The distance between Trump and Sanders is far less than the distance between them and Warren, Biden, Romney, Bush, and every "Fortune 100" company ceo out there.

Rolling Stone (or at least Matt Taibbi) sees it similarly....

In 2016 we saw a pair of electoral revolts, one on the right and one on the left, against the cratering popularity of our political elite. The rightist populist revolt succeeded, the Sanders movement did not.

https://www.rollingstone.com/politics/p ... ssion=true

[3rdPersonPlural]

The entire----all of it-----economy is based on the housing market.

Pull that away, any and all net worth for all but the top 10% earners goes bye-bye.

I don't disagree with what you are saying in principle. But you'd be taking away the purchasing power from about half our population. What are you going to replace that money with?

And construction? All local economies depend on it. If you don't see cranes, you're in a town that's on life support.


This, of course, is why Republicans in Congress didn't push to liquidate Fan and Fred after the 08 crash. An economist pulled them in a room, and gave them the score. No one is willing to go into a Depression so that we can get free market principles into play.

The one thing we've learned in the Trump era is that Americans, especially Republican voters, don't want Free Market principles.....they'd rather have money.

Plenty of credible economists want to eliminate the agencies and as I’ve mentioned before economist track record of prediction is garbage.

But what your really missing is the vast interest in financing real estate outside the government. ABS easy was best attended of any event in a long time. Your making an assumption there wouldn’t be a ton of capital stepping into The agencies place and that’s just not correct. It just wouldn’t be subsidized and you’d have a bit less 30yr fixed and less negative convexity which would eliminate a lot of distortions.

Well......we (socialists) could always compel privately owned banks to loan to entities that cannot reasonably be expected to service the debt, which means young families without assets and middle class wage earners. Make 'em carry the suspect paper on book. Banks now are only comfortable lending more than 60 or 80% to entities whose portfolio cash flow is sufficient to cover the debt service, and even then 10 years is their max term of a fixed rate/payment. If you just have some collateral and a wage and great credit, you're gonna obliged to 20% equity, 80% LTV at best, and a fixed rate for 30 will be rare as hens teeth. Say bye-bye to first homes for all but the very well heeled and for everyone else who has a mortgage now they're stuck in their homes until the depression is over and they've recovered material equity. Politically untenable, right?

Then there's the secondary market issue. Fannie Freddy FHA provide liquidity to home mortgages. If they closed shop, mortgage rates would go to prime plus 7 or so. Don't believe me? Call your private banker and ask after a home loan secured by the home and the relationship. Don't even bother asking them for more than 10 year term unless you have a VERY deep financial keel. If there are 3 commas in your balance sheet, you might well find a 30 year option.

There is a startup (whose name I forgot, but whose CEO was on CNBC recently) starting to offer homes on a modified Contract-for-Deed basis. This is just like homes were transacted before Roosevelt intervened. Miss a payment and you're escorted out by the Marshals within 30 days. Sort of like 'buying' a doublewide in a mobile home park rather than renting.

[a fan]

But what your really missing is the vast interest in financing real estate outside the government. ABS easy was best attended of any event in a long time.

Yes. It's government backed securities. Take that .gov out? Poof. Gone.

Your making an assumption there wouldn’t be a ton of capital stepping into The agencies place and that’s just not correct.

I'm not making an assumption. Been dealing with banks for 25 years. They don't want to come anywhere near deals that aren't either backed by the .gov, or backed by reaaaaaally deep pockets.

Essentially, you have to not need the money if you want a loan with zero government backing. As for me? SBA loans. No WAY would I have a business today without that.

You're a finance guy: would you give out a loan on a home where the owner can't come up with 20% down? Nope.

Or how about all these kids with student loans that take precedent? You going to lend them money?

Depression. That's what we'd get if you pulled the .gov out of the mortgage business. A big one. And you'll pull 25% out of the buyer's pool, at least. You can't give these people loans. Period.

[3rdPersonPlural]

But what your really missing is the vast interest in financing real estate outside the government. ABS easy was best attended of any event in a long time.

Yes. It's government backed securities. Take that .gov out? Poof. Gone.

Your making an assumption there wouldn’t be a ton of capital stepping into The agencies place and that’s just not correct.

I'm not making an assumption. Been dealing with banks for 25 years. They don't want to come anywhere near deals that aren't either backed by the .gov, or backed by reaaaaaally deep pockets.

Essentially, you have to not need the money if you want a loan with zero government backing. As for me? SBA loans. No WAY would I have a business today without that.

You're a finance guy: would you give out a loan on a home where the owner can't come up with 20% down? Nope.

Or how about all these kids with student loans that take precedent? You going to lend them money?

Depression. That's what we'd get if you pulled the .gov out of the mortgage business. A big one. And you'll pull 25% out of the buyer's pool, at least. You can't give these people loans. Period.

I think that you're crediting Far From Genevas wisdom to me. I'll bask a little here, but FFG might feel dissed.

We use a lot of SBA but they collateralize EVERYTHING you own. Everything. You know that.

I'd give a 95% loan out if I had mortgage insurance that was single premium (so the homeowner couldn't stop paying) that covered the exposure over 80% LTV, sure. But only if I had a secondary market that understood and respected that insurer.

Your point is well taken, however. If the GVT dropped the 'unsustainable' support of medical, educational, and property transactions to bring the budget into balance, we'd collapse like the house of cards we are.

But, yet, Quantatative Easing didn't crater the economy or even result in inflation. Apparently, flushing new money into the global economy just keeps the wheels going. "Print a billion dollars and send 'em to the Ukraine!!" no effect at all. Absorbed like a punch from a toddler.

I'd like to see fewer millionaires created by this process, but I accept that 'it is what it is'.

[a fan]

I'd give a 95% loan out if I had mortgage insurance that was single premium (so the homeowner couldn't stop paying) that covered the exposure over 80% LTV, sure. But only if I had a secondary market that understood and respected that insurer.

And when a recession hits, and these home buyers can't cover en masse? Then what?

This system ASSUMES home values always go up, or at least hold firm.

But, yet, Quantatative Easing didn't crater the economy or even result in inflation. Apparently, flushing new money into the global economy just keeps the wheels going. "Print a billion dollars and send 'em to the Ukraine!!" no effect at all. Absorbed like a punch from a toddler.

That's the part that I STILL don't understand. How did rounds of QE not increase inflation?

And how do we call China a currency manipulator with a straight face after all that QE, not to mention the 08 bailouts?


Appreciate the discussion from you and farfromgeneva......

(also corrected the misattribution. Sorry about that!)

[3rdPersonPlural]

Or how about all these kids with student loans that take precedent? You going to lend them money?

Depression. That's what we'd get if you pulled the .gov out of the mortgage business. A big one. And you'll pull 25% out of the buyer's pool, at least. You can't give these people loans. Period.

As a senior "I want to talk to your manager!!" guy while in the mortgage business, I was referred a gal who had accumulated a quarter of a million dollars of student debt and wound up with a Masters in Social Administration. She had a nice $90k/yr gig running a prison outreach program. She'd studied at Georgetown and Stanford. She was not used to being told 'no'.

Problem was, she wanted to buy a nice home in the neighborhood occupied by other people with similar household incomes. Who wouldn't, right?

I had to tell her that, since buying a home would mean that she had to service her student debt in full before writing her monthly PITI check, she would be $600 overdrawn each month before writing her housing payment. She needed to double her income to even be able to afford a $200 payment on a run down mobile home. We couldn't help. She had so much student debt that she would be forever a renter. Unless she went over to the dark side and got a gig with Wall Street vacuuming assets out of the less solvent families, that is.

Boy, was she pissed.

[3rdPersonPlural]

I'd give a 95% loan out if I had mortgage insurance that was single premium (so the homeowner couldn't stop paying) that covered the exposure over 80% LTV, sure. But only if I had a secondary market that understood and respected that insurer.

And when a recession hits, and these home buyers can't cover en masse? Then what?

This system ASSUMES home values always go up, or at least hold firm.

Well, we remember when, in 2007, we all thought that 15% ANNUAL APPRECIATION WAS TO BE EXPECTED (sorry for the inadvertent caps lock)? Tulips. Homes have historically appreciated at 2 to 3% Good solid value investing IF you're also living there.

But, yet, Quantatative Easing didn't crater the economy or even result in inflation. Apparently, flushing new money into the global economy just keeps the wheels going. "Print a billion dollars and send 'em to the Ukraine!!" no effect at all. Absorbed like a punch from a toddler.

That's the part that I STILL don't understand. How did rounds of QE not increase inflation?

And how do we call China a currency manipulator with a straight face after all that QE, not to mention the 08 bailouts?

As long as the balloon keeps inflating, who cares where the air is coming from.

Appreciate the discussion from you and farfromgeneva......

(also corrected the misattribution. Sorry about that!)

I suspect that FFG and you and I all think alike. Just you guys are a bit more clever. I'll duck under this umbrella every time.....

[foreverlax]

That's the part that I STILL don't understand. How did rounds of QE not increase inflation?

Inflation is simply defined as too much money chasing not enough goods. Seems to me any disposable cash, by 90% of the population, was going to be used to pay down personal debt or add to their "savings"....improve their balance sheets

Hard to see these folks increasing their spending enough to cause inflation - ex-food and energy.

Financial institution and corps were holding (hoarding) cash as well. When the Fed came in and supported the MBS market, billions of "cap gains" were artificially created. The hand of government kept the markets from imploding....01% were thanking Paulson for helping out the free markets.

The bubble was (is) in bonds.

[a fan]

That's the part that I STILL don't understand. How did rounds of QE not increase inflation?

Inflation is simply defined as too much money chasing not enough goods.

Ok, so since the 1% keeps taking US dollars out of the system---overseas----why can't we just print more money and pay off US Debt and balance our budget?

[foreverlax]

That's the part that I STILL don't understand. How did rounds of QE not increase inflation?

Inflation is simply defined as too much money chasing not enough goods.

Ok, so since the 1% keeps taking US dollars out of the system---overseas----why can't we just print more money and pay off US Debt and balance our budget?

Great question...wish I knew the answer. One thing we can't do - "renegotiate" the terms of a bond, like Trump has suggested.

Interestingly, 25% of outstanding Federal debt is owned by other Federal agencies. The Fed has a couple trillion.

[youthathletics]

That's the part that I STILL don't understand. How did rounds of QE not increase inflation?

Inflation is simply defined as too much money chasing not enough goods.

Ok, so since the 1% keeps taking US dollars out of the system---overseas----why can't we just print more money and pay off US Debt and balance our budget?

Great question...wish I knew the answer. One thing we can't do - "renegotiate" the terms of a bond, like Trump has suggested.

Interestingly, 25% of outstanding Federal debt is owned by other Federal agencies. The Fed has a couple trillion.

Why is it limited to the 1%ers? I am guessing many families, including mine, are saving up for a rainy day. I have more discretionary income than I had in years past and we are simply saving it and using it a bit more wisely rather than purchasing big ticket items.

[Farfromgeneva]

But what your really missing is the vast interest in financing real estate outside the government. ABS easy was best attended of any event in a long time.

Yes. It's government backed securities. Take that .gov out? Poof. Gone.

Your making an assumption there wouldn’t be a ton of capital stepping into The agencies place and that’s just not correct.

I'm not making an assumption. Been dealing with banks for 25 years. They don't want to come anywhere near deals that aren't either backed by the .gov, or backed by reaaaaaally deep pockets.

Essentially, you have to not need the money if you want a loan with zero government backing. As for me? SBA loans. No WAY would I have a business today without that.

You're a finance guy: would you give out a loan on a home where the owner can't come up with 20% down? Nope.

Or how about all these kids with student loans that take precedent? You going to lend them money?

Depression. That's what we'd get if you pulled the .gov out of the mortgage business. A big one. And you'll pull 25% out of the buyer's pool, at least. You can't give these people loans. Period.

All I can say is that I currently perform due diligence in bank mergers and there are banks that make or own plenty of 30yr fixed mortgages, not to mention credit unions). It’s a function of each institutions liquidity profile and how sticky their core deposits are, but I see a huge week across a good third or more of the country. Also currently working on a new structured product with a CLO Mgt to place with banks called combination notes. Have traded, originated or structured private label and gse/govt backed mortgages, commercial mortgages, student loans (ffelp and otherwise), whole business securitization, cash and synthetic (even bespoke) high yield corporate credit products. There’s so much capital chasing anything right now. Liquidity is undervalued. There’s plenty of capital for any type of borrower. Want a 30yr mortgage, pay floating rate because while 30yr credit risk has a long tail there’s plenty of ALM mgrs like pensions funds and insurers that need long credit risk assets to offset future liabilities. Banks are 90% debt in the form of short duration deposits (subsidized by FDIC so they don’t pay the true cost) and fundamentally play the spread game (3-6-3 lending) which basically doesn’t exist in a flat curve world. It’s all mark to model as they model core deposits to have 5-15yr average lives even if they contractually have to repay on demand to depositors.

There’s be plenty of demand and no, it wouldn’t be prime plus 700bps for a mortgage. Not even close. Banks not he whole make roughly a 1% ROA and 10-12% ROE.

I’m less concerned about SBA because that’s venture debt, different mandate. Even certain VA type programs if we can accept they are money losers that we subsidize collectively. But the vast mortgage and student loan markers don’t and shouldn’t have these. Nor should banks have subsidized leverage. But any shock would be due to the extreme change but it wouldn’t last, the markets would adjust because the money is global and zeppelin has negative rates, danish mortgages have negative interest rates (your being paid to buy a house there) and we are by far the cleanest dirty shirt in the laundry in a cross-asset, relative value world so money will continue to flow here.

Unless a certain president destroy credibility in our systems and full faith and credit of the dollar...

[Farfromgeneva]

The other core thing missing is that banks or any lender, has asymmetric downside. They get a fixed return of whatever, day 3-15% (high end for hard money and other esoteric creditors/lenders) and can lose 100% of their money. Equity, the owner of the asset or residual cash flows has unlimited/infinite upside and downside of 100% oft heir equity. We’re all sitting here like lenders should take on asymmetric risk that no other person or entity would ever take. Just consider that when railing on banks. Too many equity owners (hard asset is really worth the present value of the cash flows it can be converts into) want to shift this risk into lenders and generate what tools in finance refer to improperly as “alpha”.

[a fan]

All I can say is that I currently perform due diligence in bank mergers and there are banks that make or own plenty of 30yr fixed mortgages, not to mention credit unions). It’s a function of each institutions liquidity profile and how sticky their core deposits are, but I see a huge week across a good third or more of the country. Also currently working on a new structured product with a CLO Mgt to place with banks called combination notes. Have traded, originated or structured private label and gse/govt backed mortgages, commercial mortgages, student loans (ffelp and otherwise), whole business securitization, cash and synthetic (even bespoke) high yield corporate credit products. There’s so much capital chasing anything right now.

Yes, but isn't that because the .gov backs it all?

What happens in your biz if you suddenly have to worry about how reliable the bank is that originated that loan. Did they do their job? Are the loans solid? Suddenly, more points are asked, and fewer pensions want in, correct?

As for being hard on the banks, I'm just telling you what it looks like from the other side of the ledger. We had to cover 100% of the bank's risk with assets, cash, and SBA guarantees. Now if we're covering 100% of the bank's risk, what the heck am I paying the bank points for?

Mostly tradition, so far as I can see.

Thanks for the education. Appreciate it.

[Farfromgeneva]

https://www.federalreserve.gov/econres/ ... 076pap.pdf

https://www.mba.org/Documents/Research/ ... anding.pdf

https://www.sifma.org/wp-content/upload ... -sifma.xls

https://www.sifma.org/wp-content/upload ... -sifma.xls

https://www.bloomberg.com/graphics/2018 ... it-yields/

[a fan]

That's what I get for saying ignorant things, eh? Homework?

Appreciate it. I'll dig in as time allows. No point being this dumb forever, right?


You and 3rdpersonplural have been welcome additions to our silly little village. Thank you.

[youthathletics]

16,000 comments for todays headline (web), ALL of them Hillary supporting, isn't Trump an idiot types. (in link below)

It begins. The Hillary rollout. You really think 16 thousand REAL people are logging into this "meh" type article, to comment, let alone read the yawn fest, focused on "trump's and idiot". (YES....we know...who you got ? ) do you really. She headlined yesterdays news cycle, and Fridays. This Ukraine "thing" hurts BOTH Biden and Trump. Does Hillary know any eastern european energy people ? On Wisconsin.


https://www.washingtonpost.com/national ... story.html

RRR, I watch the news pretty consistently, and have done so the past 3 days, including this AM's major shows.

Haven't seen any stories complimentary or otherwise talking about HRC.

Googled and found some coverage of the DOJ reopening stuff about her staff's emails...only in the right wing fever imagination is an HRC run in the offing...

But....the sad thing that you don't realize is that.....I read this (even though the other guy has you on ignore )
Also, that I am the furthest from RIGHT wing as you can be. (Why don't you realize this ???)

RRR, an HRC run is a product of right wing fever imagination. Whether that's where you got it or not, that's what it is.

While you may well be so far left that you're coming around onto the right, or more accurately, you seem to simply reject everyone, you frequently repeat right wing Trumpist memes and various trumpist apologia, as well as various conspiracy sorts of ideas.

Among your various 'rejections' is 'climate science' in which you prefer far out there outliers who have been debunked for gross inaccuracies and misrepresentations over consensus.

But, hey, maybe an HRC run bubbled out of you, independent of any other influence?

From her lips to our ears: https://www.instagram.com/p/B3YZrIphPEi ... gkGqsLFw0/

[seacoaster]

Just FYI, for those of us not on Instagram, it appears that that link yields nothing, every time.

[Farfromgeneva]

Just want to illustrate that there’s a ton of capital outside of .gov out there funding all sorts of things. Even if eliminating the gse’s causes some short term harm, continues existence in current form creates larger fat tail problems eventually (rather than recessions we get 08).

Don’t get too caught up in the anecdotal or too much confirmation bias. I don’t represent either “side” of these arguments and it seems like you get pretty binary soemtimes. Free will baby and I’m a weird cat but see a lot of different angles being surrounded by a super extreme older sister in the Bay Area, after grad school in Boston who was a longtime stage director and wealthy in-laws who are part of the Furman U family, were commission to print confederate money during the civil war (Evans & Cogswell, the latter being part of that family) and make it rain on ga tech plus my own work throughout the country-there’s 5,500 banks in the US, highly dispersed. I even know a few banks out your way, used to work for guaranty bank, for example. First interstate (mt based but multistate), First national bank of co, etc.

[youthathletics]

Just FYI, for those of us not on Instagram, it appears that that link yields nothing, every time.

Interesting..maybe its a browser issue. You should not need to have an account on instagram to view the links.