Category: General

Many critique Wall Street on this mess. Well, folks, yes Wall Street bears some blame, but let me remind you the reader on what was a prime motivator. Read the blog, I really want you to. This blog entry was written in February 2007, just months before this mess was about to start.

Same payment with each scenario…except you’re able to buy $132,725 more home using a 40 year fixed over the 15 year fixed and  $107,750 more home with the 30 year fixed mortgage.    With an interest only product, such as a 30 year fixed rate with a 10 year interest only payment, the savings (or how much more home they could buy) would be even more substantial.

I hardly ever recommend 15 year fixed mortgages to my clients…unless they’re doctors or someone who makes so much money that their mortgage deduction is reduced and they all ready have all the investments they need. 

Even if Christy and Tom’s case where they want to ”look around and buy the home where, if we’re lucky, we’ll grow old together”.    Why pay off your mortgage and lose one of your best income tax deductions?

Christy, Seattle is not too pricey for normal people…your 15 year fixed mortgage is.

Time and time again I hear about how banning shorting, or restricting shorting is counter-productive and would require banning or restricting going long. I had a think about this over the weekend and have come to the conclusion it is not the same thing, but very different in two major aspects; psychology, and impact on the innocent.

You have all probably heard what Steinbrueck has said.. Steinbrueck criticized the United States for failing to adequately regulate investment banks and said free-market policies embraced by the United States and Great Britain that emphasized a short-term "insane drive for higher and higher profits" were partly to blame for the crisis. So what is his (more…)

Daily Kos is a left-wing political blog, but they have a pretty good writeup of what is happening with these “credit swaps” and AIG, etc. It reminded me of reading about mortgage-backed securities about this time last year, just as the shit was hitting the fan in the mortgage market. Now I’m learning about credit (more…)

A couple of days ago Cramer ranted on how the SEC should do something about shorting. On July 30 of this year I complained about naked shorting! I have had debates with many people on this issue. What the SEC has done is superb!

The market is down because of the de-leveraging taking place. They are selling because they have to sell… How do I know? Whispers and those stocks that have been heavily shorted are up. I also don’t think that there is money waiting on the sidelines. I think that is a fairytale! BTW I am putting (more…)

The financial community right now is in melt-down and many think that the world is coming to an end. The question many are asking if the investment banking model is dead?

Answer, no, it will just morph. The thing about finance is that it works until it does not work anymore. So right now things are not working for the classical investment banks. Companies like Blackrock will move from second tier to first tier. Nothing wrong with that. I also noticed that the CEO and other partners at Blackrock are making the financial news channels rounds. That tells me that they are moving into a first tier status.

This financial crisis has many people saying it was this that or the other thing. I want to present this FAQ as a reference point of what happened. If anybody wishes to add something please send me an email or comment and we can discuss it. Who is at fault There are two main culprits, (more…)

In the fall I am giving a class at a conference that is an introduction to financial engineering for software developers. I have talked to my clients, and talked to people at the IB I work at. Yet all of their answers results in what could be called statistical insignificance. So I thought, why not (more…)

The question is if Fanny and Freddie is the right action at the right time or if it is socialism? Many like to say hey this is an act of the USSR or what have you.

Let me give the perspective of a non-American. Though let me give you the perspective of somebody who likes America, has American friends and is pro-American.