The correlation is quite bad. I know there's been studies of CEO compensation in high-performing/low-performing companies, and there isn't as much of a spread as there should be.
The problem is especially exacerbated by "golden parachutes" and the like, which often mean that incompetents who get canned early on still make out like bandits.
What are they going to do in Nevada and California? This is where the negative equity is the worse?
The actual prices were so unaffordable in comparison to wages they cannot return, yet both areas look like a nuclear bomb is going on and who can pay for 2x for something what it is really worth?
I think one can look at the extent of the problems in the housing market to get a further sense of just how much taxpayer money is going to be wasted propping up failed institutions like Fannie and Freddie and trying to help the banks "earn" their way out of this mess. This unfortunately though is going to take a large toll on our currency and cause interest rates to rise in the long term, which will make the chance of a sustainable recovery based on sound economic principles very unlikely. So I would again state that one of the few ways for investors to profit from this trend will be to invest in gold and gold mining companies, which will benefit from the weaker dollar. in particular, is levered to the gold price and trades at one of the cheapest cash flow per share valuations in the industry. If the company can continue to bring down its cost structure, then this current valuation gap should shrink considerably.
And with regard to the amount of Option Arms that are or will soon be delinquent, I think it is very important that this was discussed in the post. A very large sum of money is most likely going to be printed by the government to further offset the damaging effects of this in 2010 and 2011.
If employers are going to do this to their workforce decisions, will they terminate present employees who don't pay their bills on time because their pay is too low?
Will they also refuse to hire a CEO or top level exec because the last company they managed had to go to the Fed for a bailout, or (God forbid) went bankrupt?
Frank T.
China's $200 billion sovereign wealth fund, which made big paper losses on stakes in Morgan Stanley and Blackstone, is set to invest up to $2 billion in U.S. mortgages as it eyes a property market recovery, two people with direct knowledge of the matter said on Monday.
China Investment Corp (CIC) plans to invest soon in U.S. taxpayer subsidized investment funds of toxic mortgage-backed securities, which it sees as a safer bet than buying into the Federal Reserve's Term Asset-Backed Securities Loan Facility (TALF).
It is investing in the smaller PPIP. It is investing in the "safer" toxic mortgages - the ones guaranteed by FDIC.
Change current mortgage model to one similar to Danish mortgage model. Fannie/Freddie can be consolidated and used as the entity to start lending under the new model or as a guarantor.
Here is a little info. on Danish Mortgage model: Link
a couple of remarks:
- that 20m homes that could end up on the market is a highly exaggerated number. all those families do not intend to become renters or move abroad, but to trade up or down, more likely down.
- the loss rate on the option-arm morgages is not even touched upon. most reset at 125% ltv, which combined with a depreciation of 30-40% in ca/nv/fl means about 50% recovery rate for banks before any additional foreclosure and resale expenses. it is realistic to say that banks would barely recover 30% of the loan value, so they better become rentiers.
Vivek Kundra needs a Top Secret Clearance for his job. I know because I had a DHS and DOD clearance before that if you had a prior criminal record you will not get a Top Secret Clearance.
This just shows the corruption in Obama's administration.
I saw they were continuing to do subprime, 3.5% down and were hitting a 7.5% default rate. I didn't verify those stats but the "let's re-inflate the housing bubble" seems to be active.
Supposedly the taxpayer will never see any of the money back given to Freddie/Fannie and their recent profit was due to some sort of accounting technical issue.
The head, who had the top most security clearance was a pedophile, and they found a bunch in DHS, with top tier security clearances. These are supposed to require beyond belief security checks, interviews with neighbors, polygraph and so on.
DHS, ya know that organization supposed to be dealing with international terrorist rings....pretty stupid pedophile at the top.
But the biggest thing is there are so many engineers out there being marginalized, their jobs offshore outsourced. So, many of these jobs require citizenship (for obvious reasons!) yet all of these engineers will be rejected because....during getting labor arbitraged....some went under financially!
Beyond absurd, engineers are notorious to not even get a parking ticket by behavior.
I'm all for increasing the tax rates on individuals as well as corporations, although I want to make sure, because this is the day of globalization, that the U.S. remains competitive and then the incentives to innovate are not removed.
Logging in, just don't remove the EP cookie. The site uses cookies to keep you logged in as well as the database identifier to find all of your comments and put them in that "my account" tab.
onto the community, therefore they only think about themselves.
I think it someone on here who commented that a 70% tax rate would FORCE long term thinking - if you want to get rich rich rich, what your company does is going to have to be sustainable for 10 years, NOT 5 quarters of banditry.
BTW - we SHOULD treat employees like charmin, kleenex and tampons.
YOU ARE F'ING DISPOSABLE.
WE'RE GONNA USE YOU, AND FLUSH YOU.
The Cost to Business of NOT focusing on their widgets is shitty widgets.
The Cost of treating people as disposable is ... 5.1 billion living on 10 bucks a day or less?
THE COST of mass poverty, THE COST of too little investment in the community ?? THERE IS NO BODY TO F'ING RICH OFF OF!
Part of your pay is going to pay for YOUR opportunity!
No Opportunity = YOU AIN'T FREE, YOU F'ING JACKASS.
YOUR OPPORTUNITY package is an investment, it is a FOUNDATION upon which YOU get to BUILD.
Opportunity Package:
1. Health care system INDEPENDENT of your job.
2. retirement funding INDEPENDENT of your job.
3. a retraining system INDEPENDENT of your job.
4. 4 weeks vacation AND 10 paid holidays AND 10 paid sick days so YOU can invest in and nurture and support your support network that keeps you going the 52-8 = 44 weeks of the year.
5. NATIONAL and international work rules, so your a'hole boss can't pit workers against each other in a race to the bottom. ( I diary this on kos every memorial, independence and labor day )
rmm.
Yond Cassius has a lean and hungry look;
He thinks too much: such men are dangerous
(p.s. - comments are a pain in hte ass on this site, in that I need to keep logging in )
I think Elizabeth should be on more talk shows giving her one-liners. She is great. She doesn't pull punches, doesn't give the usual Washington double-speak, she tells it like it is.
I have been following her since she was appointed. She is superbly qualified. Unfortunately, COP has no clout.
Some of the news on the 305, Bloomberg has a list of 150 in immediate danger, with 300 up and coming, then we're hearing very bad things on Fannie/Freddie, Ginnie....
So, while the media and the public has moved on, it is starting to look like toxic assets have not.
it's not like there is a static basket of money sitting around and if you give incentives to grow a corporation that automatically means less for others. In other words, they do not have to be mutually exclusive.
Just as an example, it used to be that corporate executives believed they had a responsibility to the shareholders but also to the employees and their well being. The idea is to reinstate those types of incentives.
Are there any studies done linking executive compensation/ bonuses with dividends paid or shareholder value returns. I suspect that the correlation of compensation to real returns is not as good as in an "old school business" model, but I haven't come across one. Any links?
Side note- my dad was in real estate sales and land investment
in the 50's and 60's He spent most of his earning years in the 70-90% marginal tax bracket. He was forced/incentivized to use incorporation and long term capital gains rates to retain more of his earnings. He retired at 45. Maybe not "rich" but certainly no hardship. I think greed was still an obscenity in civilized company back then, though.
The correlation is quite bad. I know there's been studies of CEO compensation in high-performing/low-performing companies, and there isn't as much of a spread as there should be.
The problem is especially exacerbated by "golden parachutes" and the like, which often mean that incompetents who get canned early on still make out like bandits.
considering some of the absurd things being allowed to affect credit score...
that's a very good question on how many inroads these credit scoring agencies are going to intrude into the public's lives.
What are they going to do in Nevada and California? This is where the negative equity is the worse?
The actual prices were so unaffordable in comparison to wages they cannot return, yet both areas look like a nuclear bomb is going on and who can pay for 2x for something what it is really worth?
This has some interesting observations on the coming foreclosure wave.
I just spotted new information about the underwater situation.
It turns out that it's not 24% of all U.S. mortgages are underwater.
It's 32%.
If you count another 2.5 million properties that are nearly underwater, it comes out to 38%.
Suddenly that 48% projection doesn't look unrealistic.
I think one can look at the extent of the problems in the housing market to get a further sense of just how much taxpayer money is going to be wasted propping up failed institutions like Fannie and Freddie and trying to help the banks "earn" their way out of this mess. This unfortunately though is going to take a large toll on our currency and cause interest rates to rise in the long term, which will make the chance of a sustainable recovery based on sound economic principles very unlikely. So I would again state that one of the few ways for investors to profit from this trend will be to invest in gold and gold mining companies, which will benefit from the weaker dollar. in particular, is levered to the gold price and trades at one of the cheapest cash flow per share valuations in the industry. If the company can continue to bring down its cost structure, then this current valuation gap should shrink considerably.
And with regard to the amount of Option Arms that are or will soon be delinquent, I think it is very important that this was discussed in the post. A very large sum of money is most likely going to be printed by the government to further offset the damaging effects of this in 2010 and 2011.
If employers are going to do this to their workforce decisions, will they terminate present employees who don't pay their bills on time because their pay is too low?
Will they also refuse to hire a CEO or top level exec because the last company they managed had to go to the Fed for a bailout, or (God forbid) went bankrupt?
Frank T.
China's CIC to buy U.S. mortgages: sources
It is investing in the smaller PPIP. It is investing in the "safer" toxic mortgages - the ones guaranteed by FDIC.
RebelCapitalist.com - Financial Information for the Rest of Us.
Change current mortgage model to one similar to Danish mortgage model. Fannie/Freddie can be consolidated and used as the entity to start lending under the new model or as a guarantor.
Here is a little info. on Danish Mortgage model: Link
RebelCapitalist.com - Financial Information for the Rest of Us.
a couple of remarks:
- that 20m homes that could end up on the market is a highly exaggerated number. all those families do not intend to become renters or move abroad, but to trade up or down, more likely down.
- the loss rate on the option-arm morgages is not even touched upon. most reset at 125% ltv, which combined with a depreciation of 30-40% in ca/nv/fl means about 50% recovery rate for banks before any additional foreclosure and resale expenses. it is realistic to say that banks would barely recover 30% of the loan value, so they better become rentiers.
Vivek Kundra needs a Top Secret Clearance for his job. I know because I had a DHS and DOD clearance before that if you had a prior criminal record you will not get a Top Secret Clearance.
This just shows the corruption in Obama's administration.
I saw they were continuing to do subprime, 3.5% down and were hitting a 7.5% default rate. I didn't verify those stats but the "let's re-inflate the housing bubble" seems to be active.
Supposedly the taxpayer will never see any of the money back given to Freddie/Fannie and their recent profit was due to some sort of accounting technical issue.
The head, who had the top most security clearance was a pedophile, and they found a bunch in DHS, with top tier security clearances. These are supposed to require beyond belief security checks, interviews with neighbors, polygraph and so on.
DHS, ya know that organization supposed to be dealing with international terrorist rings....pretty stupid pedophile at the top.
But the biggest thing is there are so many engineers out there being marginalized, their jobs offshore outsourced. So, many of these jobs require citizenship (for obvious reasons!) yet all of these engineers will be rejected because....during getting labor arbitraged....some went under financially!
Beyond absurd, engineers are notorious to not even get a parking ticket by behavior.
"My understanding of security clearances is they will reject someone out of hand for a bad credit score, especially a bankruptcy."
Dick Cheney's security form: "Sold materiel to Iranian government (on US sanctions list - therefore illegal) while CEO of Halliburton." (Check)
"Sold nuclear materiel to Libyan government (also on sanctions list) while CEO of Halliburton." (Check)
Clearance granted.
Donald Rumsfeld's security form: "Partnered with family of Chinese totalitarian dictator in software company (Red Flag Software)." (Check)
"Director at Swiss energy giant (ABB) when they sold nuclear technology to North Korea." (Check)
Clearance granted.
My oh my, how things have changed since I filled out those neverending forms for Top Secret Crypto and Satellite Clearances!
I'm all for increasing the tax rates on individuals as well as corporations, although I want to make sure, because this is the day of globalization, that the U.S. remains competitive and then the incentives to innovate are not removed.
Logging in, just don't remove the EP cookie. The site uses cookies to keep you logged in as well as the database identifier to find all of your comments and put them in that "my account" tab.
onto the community, therefore they only think about themselves.
I think it someone on here who commented that a 70% tax rate would FORCE long term thinking - if you want to get rich rich rich, what your company does is going to have to be sustainable for 10 years, NOT 5 quarters of banditry.
BTW - we SHOULD treat employees like charmin, kleenex and tampons.
YOU ARE F'ING DISPOSABLE.
WE'RE GONNA USE YOU, AND FLUSH YOU.
The Cost to Business of NOT focusing on their widgets is shitty widgets.
The Cost of treating people as disposable is ... 5.1 billion living on 10 bucks a day or less?
THE COST of mass poverty, THE COST of too little investment in the community ?? THERE IS NO BODY TO F'ING RICH OFF OF!
Part of your pay is going to pay for YOUR opportunity!
No Opportunity = YOU AIN'T FREE, YOU F'ING JACKASS.
YOUR OPPORTUNITY package is an investment, it is a FOUNDATION upon which YOU get to BUILD.
Opportunity Package:
1. Health care system INDEPENDENT of your job.
2. retirement funding INDEPENDENT of your job.
3. a retraining system INDEPENDENT of your job.
4. 4 weeks vacation AND 10 paid holidays AND 10 paid sick days so YOU can invest in and nurture and support your support network that keeps you going the 52-8 = 44 weeks of the year.
5. NATIONAL and international work rules, so your a'hole boss can't pit workers against each other in a race to the bottom. ( I diary this on kos every memorial, independence and labor day )
rmm.
Yond Cassius has a lean and hungry look;
He thinks too much: such men are dangerous
(p.s. - comments are a pain in hte ass on this site, in that I need to keep logging in )
I think Elizabeth should be on more talk shows giving her one-liners. She is great. She doesn't pull punches, doesn't give the usual Washington double-speak, she tells it like it is.
I have been following her since she was appointed. She is superbly qualified. Unfortunately, COP has no clout.
Some of the news on the 305, Bloomberg has a list of 150 in immediate danger, with 300 up and coming, then we're hearing very bad things on Fannie/Freddie, Ginnie....
So, while the media and the public has moved on, it is starting to look like toxic assets have not.
it's not like there is a static basket of money sitting around and if you give incentives to grow a corporation that automatically means less for others. In other words, they do not have to be mutually exclusive.
Just as an example, it used to be that corporate executives believed they had a responsibility to the shareholders but also to the employees and their well being. The idea is to reinstate those types of incentives.
Are there any studies done linking executive compensation/ bonuses with dividends paid or shareholder value returns. I suspect that the correlation of compensation to real returns is not as good as in an "old school business" model, but I haven't come across one. Any links?
Side note- my dad was in real estate sales and land investment
in the 50's and 60's He spent most of his earning years in the 70-90% marginal tax bracket. He was forced/incentivized to use incorporation and long term capital gains rates to retain more of his earnings. He retired at 45. Maybe not "rich" but certainly no hardship. I think greed was still an obscenity in civilized company back then, though.
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