Comments on: Financial Forecast: Gloomy http://www.saysuncle.com/2008/09/19/financial-forecast-gloomy/ Remember, I do this to entertain me... not you. Tue, 14 Feb 2012 03:14:31 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Mikee http://www.saysuncle.com/2008/09/19/financial-forecast-gloomy/comment-page-1/#comment-207298 Mikee Fri, 19 Sep 2008 15:14:22 +0000 http://www.saysuncle.com/?p=18416#comment-207298 Time for deep breathing, relaxation exercises, and a calm perspective on things. The Fannie & Freddie bailouts will have a foreclosure rate of around 1 to 5%, which is very high but which will add up to less than the amount the feds get from the other, good mortgages (which they are taking over at a discount to be announced, but expected to be 30% to 50% of face value). In other words, over time the feds will make money on these two takeovers/bailouts. Similarly, the AIG bailout (actually, a revolving line of credit - not all of which will be used at any one time) is going to be paid back in full within about 2 years, at high single digit interest rates. This is a guaranteed profit for the feds. Nobody else would take it on due to the likelihood of having their stock price destroyed if they did so. The regulations you speak of - they were changed to allow "naked shorting" last year, and that has been a problem yet to be addressed. But it likely will be taken care of by the end of the weekend. Likewise, mortgages have been tightened back up to more realistic lending practices. In short, look at the market today. Reaction to the federal actions are very positive. When the Dow goes up 400 points, what is the increase in total wealth of all stockholders who traded in their stock that day? Lots and lots and lots of people have avoided a breakdown of their personal finances. It adds up. Time for deep breathing, relaxation exercises, and a calm perspective on things. The Fannie & Freddie bailouts will have a foreclosure rate of around 1 to 5%, which is very high but which will add up to less than the amount the feds get from the other, good mortgages (which they are taking over at a discount to be announced, but expected to be 30% to 50% of face value). In other words, over time the feds will make money on these two takeovers/bailouts.

Similarly, the AIG bailout (actually, a revolving line of credit – not all of which will be used at any one time) is going to be paid back in full within about 2 years, at high single digit interest rates. This is a guaranteed profit for the feds. Nobody else would take it on due to the likelihood of having their stock price destroyed if they did so.

The regulations you speak of – they were changed to allow “naked shorting” last year, and that has been a problem yet to be addressed. But it likely will be taken care of by the end of the weekend. Likewise, mortgages have been tightened back up to more realistic lending practices.

In short, look at the market today. Reaction to the federal actions are very positive. When the Dow goes up 400 points, what is the increase in total wealth of all stockholders who traded in their stock that day? Lots and lots and lots of people have avoided a breakdown of their personal finances. It adds up.

]]> By: HardCorps http://www.saysuncle.com/2008/09/19/financial-forecast-gloomy/comment-page-1/#comment-207293 HardCorps Fri, 19 Sep 2008 14:49:36 +0000 http://www.saysuncle.com/?p=18416#comment-207293 Gold had the greatest dollar gain in its history the other day! I'm with you man..and if you want to read more about the economics behind it see mises.org. Gold had the greatest dollar gain in its history the other day! I’m with you man..and if you want to read more about the economics behind it see mises.org.

]]> By: Gregory Morris http://www.saysuncle.com/2008/09/19/financial-forecast-gloomy/comment-page-1/#comment-207288 Gregory Morris Fri, 19 Sep 2008 14:34:14 +0000 http://www.saysuncle.com/?p=18416#comment-207288 Ammo can make money, as an investment, if the price keeps going up. EBRs also. Ammo can make money, as an investment, if the price keeps going up. EBRs also.

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