Mortgage Rate Quotes

The writer Umberto Eco belongs to that small class of scholars who are encyclopedic, insightful, and nondull. He is the owner of a large personal library (containing thirty thousand books), and separates visitors into two categories: those who react with “Wow! Signore, professore dottore Eco, what a library you have ! How many of these books have you read?” and the others - a very small minority - who get the point that a private library is not an ego-boosting appendage but a research tool. Read books are far less valuable than unread ones. The library should contain as much of what you don’t know as your financial means, mortgage rates and the currently tight real-estate market allows you to put there. You will accumulate more knowledge and more books as you grow older, and the growing number of unread books on the shelves will look at you menancingly. Indeed, the more you know, the larger the rows of unread books. Let us call this collection of unread books an antilibrary.

Read books are far less valuable than unread ones. The library should contain as much of what you do not know as your financial means, mortgage rates, and the currently tight real-estate market alow you to put there.

We have not noticed how fast the rest has risen. Most of the industrialized world--and a good part of the nonindustrialized world as well--has better cell phone service than the United States. Broadband is faster and cheaper across the industrial world, from Canada to France to Japan, and the United States now stands sixteenth in the world in broadband penetration per capita. Americans are constantly told by their politicians that the only thing we have to learn from other countries' health care systems is to be thankful for ours. Most Americans ignore the fact that a third of the country's public schools are totally dysfunctional (because their children go to the other two-thirds). The American litigation system is now routinely referred to as a huge cost to doing business, but no one dares propose any reform of it. Our mortgage deduction for housing costs a staggering $80 billion a year, and we are told it is crucial to support home ownership, except that Margaret Thatcher eliminated it in Britain, and yet that country has the same rate of home ownership as the United States. We rarely look around and notice other options and alternatives, convinced that "we're number one.

What if one were up there, drifting about among suns and feeling the tails of comets fan one's forehead! How small the earth was and how puny the people; a Norway of two million provincial souls and a mortgage bank to help feed them! What was life worth at such a rate? You elbowed yourself ahead in the sweat of your face for a few mortal years, only to perish all the same, all the same!

Middle-class and more affluent blacks are also disproportionately the targets of subprime mortgage loans, paying much higher rates of interest than comparable white borrowers, and are subjected, according to the available evidence, to racial profiling of all types.

. . . the farmer is the man The Farmer is the man Lives on credit till the fall With the interest rates so high It's a wonder he don't die And the mortgage man's the one that gets it all. The farmer is the man The farmer is the man Lives on credit till the fall And his pants are wearing thin His condition it's a sin He's forgot that he's the man that feeds them all.

The “consumer loan” piles that Wall Street firms, led by Goldman Sachs, asked AIG FP to insure went from being 2 percent subprime mortgages to being 95 percent subprime mortgages. In a matter of months, AIG FP, in effect, bought $50 billion in triple-B-rated subprime mortgage bonds by insuring them against default.

We were taking out mortgages we couldn’t afford because they were camouflaged to look as if we had a reasonable chance of paying them back. Banks then changed the bankruptcy laws so that we could not get out of our obligations once the rates changed. Lastly, they sold us back our own mortgages, shifting back to us any of the risk through our money-market accounts and pension funds.

So now as always you could get AAA ratings, not for subprime mortgages, obviously bad, but for submarine mortgages, clearly much better! And the fact that all submarine properties were in some sense extremely subprime was not mentioned except as one aspect of the very lucrative risks involved.

Engaged in a new form of serfdom---only bound now to banks and mortgage lenders instead of to lords---her more highly leveraged neighbors pore over the business section of the newspaper each day looking for some sign that the government will soon step in to “freeze” their mortgage rates where they are before a scheduled adjustment hits.

we’re helping the consumer. Because we’re taking him out of his high interest rate credit card debt and putting him into lower interest rate mortgage debt.

Including the differential mortgage loan approval rates between Asian Americans and whites shows that the same methods to conclude that that blacks are discriminated against in mortgage lending would also lead to the conclusion that whites are discriminated against in favor of Asian Americans, reducing this whole procedure to absurdity, since no one believes that banks are discriminating against whites..."[W]hen loan approval rates are not cited, but loan denial rates are, that creates a larger statistical disparity, since most loans are approved. Even if 98 percent of blacks had their mortgage loan applications approved, if 99 percent of whites were approved than by quoting denial rates alone it could be said that blacks were rejected twice as often as whites.

The traditional fixed-rate 30-year mortgages, which were once a majority of all mortgages, were no longer a majority during the housing boom, as ARMs and other “creative” ways of financing the purchase of a home grew rapidly to cope with soaring housing prices. Such innovative mortgages quickly went from being rare to becoming common, especially in places with very high housing costs.

Mike Burry didn’t own any triple-B-rated subprime mortgage bonds, or anything like them. He had no property to “insure”; it was as if he had bought fire insurance on some slum with a history of burning down.

The ARM, Adjustable Rate Mortgage, was invented in the early 1980s. Prior to that, those of us in the real estate business sold fixed-rate 7 or 8 percent mortgages. What happened? I was there in the middle of that disaster of an economy when fixed-rate mortgages went as high as 17 percent and the real estate world froze. Lenders paid out 12 percent on CDs but had money loaned out at 7 percent on hundreds of millions of dollars in mortgages. They were losing money, and lenders don’t like to lose money. So the Adjustable Rate Mortgage was born, in which your interest rate goes up when the prevailing market interest rates go up. The ARM was born to transfer the risk of higher interest rates to you, the consumer. In the last several years, home mortgage rates have been at a thirty-year low. It is not wise to get something that adjusts when you are at the bottom of rates! The mythsayers always seem to want to add risk to your home, the one place you should want to make sure has stability. Balloon mortgages are even worse. Balloons pop, and it is always strange to me that the popping sound is so startling. Why don’t we expect it? It is in the very nature of balloons to pop. Wise financial people always move away from risk, and the balloon mortgage creates risk nightmares.

Why, for example, wasn’t AIG required to reserve capital against them? Why, for that matter, were Moody’s and Standard & Poor’s willing to bless 80 percent of a pool of dicey mortgage loans with the same triple-A rating they bestowed on the debts of the U.S. Treasury? Why didn’t someone, anyone, inside Goldman Sachs stand up and say, “This is obscene. The rating agencies, the ultimate pricers of all these subprime mortgage loans, clearly do not understand the risk, and their idiocy is creating a recipe for catastrophe”?

unpleasant odor wafting from the subprime mortgage industry that Eisman had detected. These companies disclosed their ever-growing earnings, but not much else. One of the many items they failed to disclose was the delinquency rate of the home loans they were making.

During the 1980s, prudent New Deal rules concerning mortgage loans were repealed, allowing people to get home loans with too little money down and interest rates that would “adjust” to unaffordable heights. So during the 1980s, the average price of a house in America doubled.

When the Goldman Sachs saleswoman called Mike Burry and told him that her firm would be happy to sell him credit default swaps in $100 million chunks, Burry guessed, rightly, that Goldman wasn’t ultimately on the other side of his bets. Goldman would never be so stupid as to make huge naked bets that millions of insolvent Americans would repay their home loans. He didn’t know who, or why, or how much, but he knew that some giant corporate entity with a triple-A rating was out there selling credit default swaps on subprime mortgage bonds. Only a triple-A-rated corporation could assume such risk, no money down, and no questions asked. Burry was right about this, too, but it would be three years before he knew it. The party on the other side of his bet against subprime mortgage bonds was the triple-A-rated insurance company AIG—American International Group, Inc.

What this means is that the entire business model for something like Chase’s credit card business is not much more than a gigantic welfare fraud scheme. These companies borrow hundreds of billions of dollars from the Fed at rock-bottom rates, then turn around and lend it out to the world at 5, 10, 15, 20 percent, as credit cards and mortgages, boat loans and aircraft loans, and so on. If you pay it back, great, it’s a 500 percent or 1,000 percent or 4,000 percent profit for the bank. If you don’t pay it back, the company can put your name in the hopper to be sued. A $5,000 debt on a credit card for the now-defunct Circuit City, which was actually a Chase card, became a $13,000 or $14,000 debt by the time the bank finished applying fees and penalties. Just like a welfare application, you have to read the fine print. “They make more on lawsuits than they make on credit interest,” says Linda.

This is an example of an out-of-sample problem. As easy as it might seem to avoid this sort of problem, the ratings agencies made just this mistake. Moody’s estimated the extent to which mortgage defaults were correlated with one another by building a model from past data—specifically, they looked at American housing data going back to about the 1980s.

Purchase Price $250,000 Down Payment $ 25,000 Mortgage Amount $225,000 At 7% Interest Rate 30 Years $1,349 $485,636 15 Years $1,899 $341,762 Difference $550 $143,874 Five hundred fifty dollars more per month, and you will save almost $150,000 and fifteen years of bondage. The really interesting thing I have observed is that fifteen-year mortgages always pay off in fifteen years. Again, part of a Total Money Makeover is putting in place systems that automate smart moves, which is what a fifteen-year mortgage is. Thirty-year mortgages are for people who enjoy slavery so much they want to extend it for fifteen more years and pay thousands of dollars more for the privilege. If you must take out a mortgage, pretend only fifteen-year mortgages exist. If you have a great interest rate, it is not necessary to refinance to pay a mortgage off in fifteen years or earlier. Simply make payments as if you have a fifteen-year mortgage, and your mortgage will pay off in fifteen years. If you want to pay any mortgage off in twelve years or any number you want, visit my website or get a calculator and calculate the proper payment at your interest rate on your balance for a twelve-year mortgage (or the number you want). Once you have that payment amount, add to your monthly mortgage payment the difference between the new principal and interest payment and your current principal and interest payment, and you will pay off your home in twelve years.

Household was making loans at a faster pace than ever. A big source of its growth had been the second mortgage. The document offered a fifteen-year, fixed-rate loan, but it was bizarrely disguised as a thirty-year loan. It took the stream of payments the homeowner would make to Household over fifteen years, spread it hypothetically over thirty years, and asked: If you were making the same dollar payments over thirty years that you are in fact making over fifteen, what would your “effective rate” of interest be? It was a weird, dishonest sales pitch. The borrower was told he had an “effective interest rate of 7 percent” when he was in fact paying something like 12.5 percent. “It was blatant fraud,” said Eisman. “They were tricking their customers.

How happily we explored our shiny new world! We lived like characters from the great books I curled up with in the big Draylon armchair. Like Jack Kerouak, like Gatsby, we created ourselves as we went along, a raggle-taggle of gypsies in old army overcoats and bell-bottoms, straggling through the fields that surrounded our granite farmhouse in search of firewood, which we dragged home and stacked in the living room. Ignorant and innocent, we acted as if the world belonged to us, as though we would ever have taken the time to hang the regency wallpaper we damaged so casually with half-rotten firewood, or would have known how to hang it straight, or smooth the seams. We broke logs against the massive tiled hearth and piled them against the sooty fire back, like the logs were tradition and we were burning it, like chimney fires could never happen, like the house didn't really belong to the poor divorcee who paid the rates and mortgage even as we sat around the flames like hunter gatherers, smoking Lebanese gold, chanting and playing the drums, dancing to the tortured music of Luke's guitar. Impelled by the rhythm, fortified by poorly digested scraps of Lao Tzu, we got up to dance, regardless of the coffee we knocked over onto the shag carpet. We sopped it up carelessly, or let it sit there as it would; later was time enough. We were committed to the moment. Everything was easy and beautiful if you looked at it right. If someone was angry, we walked down the other side of the street, sorry and amused at their loss of cool. We avoided newspapers and television. They were full of lies, and we knew all the stuff we needed. We spent our government grants on books, dope, acid, jug wine, and cheap food from the supermarket--variegated cheese scraps bundled roughly together, white cabbage and bacon ends, dented tins of tomatoes from the bargain bin. Everything was beautiful, the stars and the sunsets, the mold that someone discovered at the back of the fridge, the cows in the fields that kicked their giddy heels up in the air and fled as we ranged through the Yorkshire woods decked in daisy chains, necklaces made of melon seeds and tie-dye T-shirts whose colors stained the bath tub forever--an eternal reminder of the rainbow generation. [81-82]

default swaps on subprime mortgage bonds. Only a triple-A-rated corporation could assume such risk, no money down, and no questions asked. Burry was right about this, too, but it would be three years before he knew it. The party on the other side of his bet against subprime mortgage bonds was the triple-A-rated insurance company AIG—American International Group, Inc. Or, rather, a unit of AIG called AIG FP. AIG Financial Products was created

It turns out that addressing the most urgent problems of our time is, well, hard. But what is maddening about this debate is not how difficult fair-tax implementation would be but how utterly easy it is to find enough money to defeat poverty by closing nonsensical tax loopholes. If you don’t like the changes I suggested above, I can propose twenty smaller reforms, or fifty tinier ones, or a hundred even more innocuous nudges to get us there. We could raise $25 billion by winding down the mortgage interest deduction, which disproportionately benefits high-income families and does nothing to promote homeownership. We could find $64.7 billion by increasing the maximum taxable amount of earnings for Social Security so that high- and low-income workers are taxed at the same rate. We could scratch out another $37.3 billion if we treated capital gains and dividends for wealthy Americans the same way we treat income for tax purposes.

These senior claims were supposed to be very low-risk; after all, how likely was it that a large number of people would default on their mortgages at the same time? The answer, of course, is that it was quite likely in an environment where homes were worth 30, 40, 50 percent less than the borrowers originally paid for them. So a lot of supposedly safe assets, assets that had been rated AAA by Standard & Poor's or Moody's, ended up becoming "toxic waste", worth only a fraction of their face value.

why the rating agencies weren’t more critical of bonds underpinned by floating-rate subprime mortgages. Subprime borrowers tended to be one broken refrigerator away from default. Few, if any, should be running the risk of their interest payment spiking up. As most of these loans were structured, however, the homeowner would pay a fixed teaser rate of, say, 8 percent for the first two years, and then, at the start of the third year, the interest rate would skyrocket to, say, 12 percent, and thereafter it would float at permanently high levels.

Most of the crime-ridden minority neighborhoods in New York City, especially areas like East New York, where many of the characters in Eric Garner’s story grew up, had been artificially created by a series of criminal real estate scams. One of the most infamous had involved a company called the Eastern Service Corporation, which in the sixties ran a huge predatory lending operation all over the city, but particularly in Brooklyn. Scam artists like ESC would first clear white residents out of certain neighborhoods with scare campaigns. They’d slip leaflets through mail slots warning of an incoming black plague, with messages like, “Don’t wait until it’s too late!” Investors would then come in and buy their houses at depressed rates. Once this “blockbusting” technique cleared the properties, a company like ESC would bring in a new set of homeowners, often minorities, and often with bad credit and shaky job profiles. They bribed officials in the FHA to approve mortgages for anyone and everyone. Appraisals would be inflated. Loans would be approved for repairs, but repairs would never be done. The typical target homeowner in the con was a black family moving to New York to escape racism in the South. The family would be shown a house in a place like East New York that in reality was only worth about $15,000. But the appraisal would be faked and a loan would be approved for $17,000. The family would move in and instantly find themselves in a house worth $2,000 less than its purchase price, and maybe with faulty toilets, lighting, heat, and (ironically) broken windows besides. Meanwhile, the government-backed loan created by a lender like Eastern Service by then had been sold off to some sucker on the secondary market: a savings bank, a pension fund, or perhaps to Fannie Mae, the government-sponsored mortgage corporation. Before long, the family would default and be foreclosed upon. Investors would swoop in and buy the property at a distressed price one more time. Next, the one-family home would be converted into a three- or four-family rental property, which would of course quickly fall into even greater disrepair. This process created ghettos almost instantly. Racial blockbusting is how East New York went from 90 percent white in 1960 to 80 percent black and Hispanic in 1966.

Back in the 1980s, the original stated purpose of the mortgage-backed bond had been to redistribute the risk associated with home mortgage lending. Home mortgage loans could find their way to the bond market investors willing to pay the most for them. The interest rate paid by the homeowner would thus fall. The goal of the innovation, in short, was to make the financial markets more efficient. Now, somehow, the same innovative spirit was being put to the opposite purpose: to hide the risk by complicating it. The market was paying Goldman Sachs bond traders to make the market less efficient.

Speculators, meanwhile, have seized control of the global economy and the levers of political power. They have weakened and emasculated governments to serve their lust for profit. They have turned the press into courtiers, corrupted the courts, and hollowed out public institutions, including universities. They peddle spurious ideologies—neoliberal economics and globalization—to justify their rapacious looting and greed. They create grotesque financial mechanisms, from usurious interest rates on loans to legalized accounting fraud, to plunge citizens into crippling forms of debt peonage. And they have been stealing staggering sums of public funds, such as the $65 billion of mortgage-backed securities and bonds, many of them toxic, that have been unloaded each month on the Federal Reserve in return for cash.21 They feed like parasites off of the state and the resources of the planet. Speculators at megabanks and investment firms such as Goldman Sachs are not, in a strict sense, capitalists. They do not make money from the means of production. Rather, they ignore or rewrite the law—ostensibly put in place to protect the weak from the powerful—to steal from everyone, including their own shareholders. They produce nothing. They make nothing. They only manipulate money. They are no different from the detested speculators who were hanged in the seventeenth century, when speculation was a capital offense. The obscenity of their wealth is matched by their utter lack of concern for the growing numbers of the destitute. In early 2014, the world’s 200 richest people made $13.9 billion, in one day, according to Bloomberg’s billionaires index.22 This hoarding of money by the elites, according to the ruling economic model, is supposed to make us all better off, but in fact the opposite happens when wealth is concentrated in the hands of a few individuals and corporations, as economist Thomas Piketty documents in his book Capital in the Twenty-First Century.23 The rest of us have little or no influence over how we are governed, and our wages stagnate or decline. Underemployment and unemployment become chronic. Social services, from welfare to Social Security, are slashed in the name of austerity. Government, in the hands of speculators, is a protection racket for corporations and a small group of oligarchs. And the longer we play by their rules the more impoverished and oppressed we become. Yet, like

It was during the 1970s that statisticians decided it would be a good idea to measure banks’ “productivity” in terms of their risk-taking behavior. The more risk, the bigger their slice of the GDP.14 Hardly any wonder, then, that banks have continually upped their lending, egged on by politicians who have been convinced that the financial sector’s slice is every bit as valuable as the whole manufacturing industry. “If banking had been subtracted from the GDP, rather than added to it,” the Financial Times recently reported, “it is plausible to speculate that the financial crisis would never have happened.”15 The CEO who recklessly hawks mortgages and derivatives to lap up millions in bonuses currently contributes more to the GDP than a school packed with teachers or a factory full of car mechanics. We live in a world where the going rule seems to be that the more vital your occupation (cleaning, nursing, teaching), the lower you rate in the GDP. As the Nobel laureate James Tobin said back in 1984, “We are throwing more and more of our resources, including the cream of our youth, into financial activities remote from the production of goods and services, into activities that generate high private rewards disproportionate to their social productivity.”16

THIS SCENE WAS REPEATED IN every previously uninhabited nook, elbow, spit, lot, and underpass throughout the foreclosed and abandoned suburbs and exurbs and trailer parks of America, now squatted by the millions who had walked out on mortgages, been foreclosed upon, or simply could no longer afford a fixed address. They were all lumped together by the media into a category called 'subprimes,' a less descriptive label, perhaps, than 'homeless,' but one that in this era of raw, rapacious capitalism gave all the information anyone needed: the credit rating of the men, women, and children who inhabited these Ryanvilles was subprime.

The FHA had adopted a system of maps that rated neighborhoods according to their perceived stability. On the maps, green areas, rated “A,” indicated “in demand” neighborhoods that, as one appraiser put it, lacked “a single foreigner or Negro.” These neighborhoods were considered excellent prospects for insurance. Neighborhoods where black people lived were rated “D” and were usually considered ineligible for FHA backing. They were colored in red. Neither the percentage of black people living there nor their social class mattered. Black people were viewed as a contagion. Redlining went beyond FHA-backed loans and spread to the entire mortgage industry, which was already rife with racism, excluding black people from most legitimate means of obtaining a mortgage.

There was more than one way to think about Mike Burry’s purchase of a billion dollars in credit default swaps. The first was as a simple, even innocent, insurance contract. Burry made his semiannual premium payments and, in return, received protection against the default of a billion dollars’ worth of bonds. He’d either be paid zero, if the triple-B-rated bonds he’d insured proved good, or a billion dollars, if those triple-B-rated bonds went bad. But of course Mike Burry didn’t own any triple-B-rated subprime mortgage bonds, or anything like them. He had no property to “insure” it was as if he had bought fire insurance on some slum with a history of burning down. To him, as to Steve Eisman, a credit default swap wasn’t insurance at all but an outright speculative bet against the market—and this was the second way to think about it.

Well, this was predictable. House Republicans last week acceded to an extension of the Export-Import Bank for at least the next nine months. The Export-Import Bank is far from the worst example of government-business cronyism. I just completed a history of American political corruption and actually had to leave Ex-Im on the cutting room floor. Its cronies are pikers compared with the corporate moguls that take advantage of tax preferences like the G.E. and Apple loopholes. They also cannot hold a candle to the American Medical Association, which is basically free to write the reimbursement rates for Medicare Part B. And nothing compares to Fannie Mae and Freddie Mac from 1991-2008. The two mortgage giants kept the entire D.C. political class bent over a barrel for almost 20 years as its top executives reaped enormous bonuses while putting the broader economy at risk.

It is evident that wealth is even more unevenly distributed than income and that the gap is widening. Since 1976, wealth has increased by 63 percent for the wealthiest 1 percent of the population and by 71 percent for the top 20 percent. Wealth has decreased by 43 percent for the bottom 40 percent of the U.S. population (Economic Policy Institute 2011). The widening gap has multiple causes. First, shifts in the U.S. tax code have lowered the top tax rate from 91 percent in the years from 1950 to 1963, to 35 percent from 2003 to 2012, allowing the wealthy to retain far more of their income (Tax Policy Center 2012). Second, wages for most U.S. families have stagnated since the early 1970s. Moreover, credit card, education, and mortgage debt have skyrocketed. Finally, the collapse of the housing market beginning in 2007 dramatically affected many middleclass families who held a significant portion of their wealth in the value of their home. By 2012, fully 31 percent of all homeowners owed more on their mortgages than their homes were worth (Zillow 2012).

The subprime market tapped a segment of the American public that did not typically have anything to do with Wall Street: the tranche between the fifth and the twenty-ninth percentile in their credit ratings. That is, the lenders were making loans to people who were less creditworthy than 71 percent of the population. Which of these poor Americans were likely to jump which way with their finances? How much did their home prices need to fall for their loans to blow up? Which mortgage originators were the most corrupt? Which Wall Street firms were creating the most dishonest mortgage bonds? What kind of people, in which parts of the country, exhibited the highest degree of financial irresponsibility? The default rate in Georgia was five times higher than that in Florida, even though the two states had the same unemployment rate. Why? Indiana had a 25 percent default rate; California, only 5 percent, even though Californians were, on the face of it, far less fiscally responsible. Why? Vinny and Danny flew down to Miami, where they wandered around empty neighborhoods built with subprime loans, and saw with their own eyes how bad things were. “They’d

In this march through a virtual lifetime, we’ve visited school and college, the courts and the workplace, even the voting booth. Along the way, we’ve witnessed the destruction caused by WMDs. Promising efficiency and fairness, they distort higher education, drive up debt, spur mass incarceration, pummel the poor at nearly every juncture, and undermine democracy. It might seem like the logical response is to disarm these weapons, one by one. The problem is that they’re feeding on each other. Poor people are more likely to have bad credit and live in high-crime neighborhoods, surrounded by other poor people. Once the dark universe of WMDs digests that data, it showers them with predatory ads for subprime loans or for-profit schools. It sends more police to arrest them, and when they’re convicted it sentences them to longer terms. This data feeds into other WMDs, which score the same people as high risks or easy targets and proceed to block them from jobs, while jacking up their rates for mortgages, car loans, and every kind of insurance imaginable. This drives their credit rating down further, creating nothing less than a death spiral of modeling. Being poor in a world of WMDs is getting more and more dangerous and expensive.

It was the German powerhouse Deutsche Bank AG, not my fictitious RhineBank, that financed the construction of the extermination camp at Auschwitz and the nearby factory that manufactured Zyklon B pellets. And it was Deutsche Bank that earned millions of Nazi reichsmarks through the Aryanization of Jewish-owned businesses. Deutsche Bank also incurred massive multibillion-dollar fines for helping rogue nations such as Iran and Syria evade US economic sanctions; for manipulating the London interbank lending rate; for selling toxic mortgage-backed securities to unwitting investors; and for laundering untold billions’ worth of tainted Russian assets through its so-called Russian Laundromat. In 2007 and 2008, Deutsche Bank extended an unsecured $1 billion line of credit to VTB Bank, a Kremlin-controlled lender that financed the Russian intelligence services and granted cover jobs to Russian intelligence officers operating abroad. Which meant that Germany’s biggest lender, knowingly or unknowingly, was a silent partner in Vladimir Putin’s war against the West and liberal democracy. Increasingly, that war is being waged by Putin’s wealthy cronies and by privately owned companies like the Wagner Group and the Internet Research Agency, the St. Petersburg troll factory that allegedly meddled in the 2016 US presidential election. The IRA was one of three

The overall U.S. homeownership rate increased from 64 percent in 1994 to a peak in 2004 with an all-time high of 69.2 percent. Real estate had become the leading business in America, more and more speculators invested money in the business. During 2006, 22 percent of homes purchased (1.65 million units) were for investment purposes, with an additional 14 percent (1.07 million units) purchased as vacation homes. These figures led Americans to believe that their economy was indeed booming. And when an economy is booming nobody is really interested in foreign affairs, certainly not in a million dead Iraqis. But then the grave reality dawned on the many struggling, working class Americans and immigrants, who were failing to pay back money they didn't have in the first place. Due to the rise in oil prices and the rise of interest rates, millions of disadvantaged Americans fell behind. By the time they drove back to their newly purchased suburban dream houses, there was not enough money in the kitty to pay the mortgage or elementary needs. Consequently, within a very short time, millions of houses were repossessed. Clearly, there was no one around who could afford to buy those newly repossessed houses. Consequently, the poor people of America became poorer than ever. Just as Wolfowitz's toppled Saddam, who dragged the American Empire down with him, the poor Americans, that were set to facilitate Wolfowitz's war, pulled down American capitalism as well as the American monetary and banking system. Greenspan's policy led an entire class to ruin, leaving America's financial system with a hole that now stands at a trillion dollars.

Between 2003 and 2008, Iceland’s three main banks, Glitnir, Kaupthing and Landsbanki, borrowed over $140 billion, a figure equal to ten times the country’s GDP, dwarfing its central bank’s $2.5 billion reserves. A handful of entrepreneurs, egged on by their then government, embarked on an unprecedented international spending binge, buying everything from Danish department stores to West Ham Football Club, while a sizeable proportion of the rest of the adult population enthusiastically embraced the kind of cockamamie financial strategies usually only mooted in Nigerian spam emails – taking out loans in Japanese Yen, for example, or mortgaging their houses in Swiss francs. One minute the Icelanders were up to their waists in fish guts, the next they they were weighing up the options lists on their new Porsche Cayennes. The tales of un-Nordic excess are legion: Elton John was flown in to sing one song at a birthday party; private jets were booked like they were taxis; people thought nothing of spending £5,000 on bottles of single malt whisky, or £100,000 on hunting weekends in the English countryside. The chief executive of the London arm of Kaupthing hired the Natural History Museum for a party, with Tom Jones providing the entertainment, and, by all accounts, Reykjavik’s actual snow was augmented by a blizzard of the Colombian variety. The collapse of Lehman Brothers in late 2008 exposed Iceland’s debts which, at one point, were said to be around 850 per cent of GDP (compared with the US’s 350 per cent), and set off a chain reaction which resulted in the krona plummeting to almost half its value. By this stage Iceland’s banks were lending money to their own shareholders so that they could buy shares in . . . those very same Icelandic banks. I am no Paul Krugman, but even I can see that this was hardly a sustainable business model. The government didn’t have the money to cover its banks’ debts. It was forced to withdraw the krona from currency markets and accept loans totalling £4 billion from the IMF, and from other countries. Even the little Faroe Islands forked out £33 million, which must have been especially humiliating for the Icelanders. Interest rates peaked at 18 per cent. The stock market dropped 77 per cent; inflation hit 20 per cent; and the krona dropped 80 per cent. Depending who you listen to, the country’s total debt ended up somewhere between £13 billion and £63 billion, or, to put it another way, anything from £38,000 to £210,000 for each and every Icelander.

These newly minted right-wingers were rattling off old Birch slogans: Immigrants are the enemy. Protect our borders and deport all illegal aliens. Gays are ungodly. Pray the gay away from children and teens. Unemployed people don’t want to work, and poor people keep themselves poor, on purpose. If we cut the minimum wage and eliminate unemployment compensation, everyone will have a job. Unions caused the economic collapse by shielding lazy, incompetent public employees. Rich folks are “job creators,” and we need to protect their wealth. Social Security is unsustainable, and Medicare and Medicaid have to be restricted so that corporations and “job creators” have lower tax rates. Abortion is murder and must be outlawed even in cases of rape and incest. No exception means no exceptions; even in cases where the mother’s life is in danger. The economic meltdown of 2008 came from high taxes on corporations, too many regulations, and poor people taking out mortgages they couldn’t afford. The government can’t create jobs, so stimulus programs don’t work. Cutting taxes creates jobs. The government can’t limit the right to own or carry guns. If guns are outlawed, only outlaws will have guns. America is God’s chosen nation, but our president can’t understand our exceptionalism. After all, he’s not a “real” American; he’s a Marxist, Socialist, Muslim racist who hates America.

Focusing only on the short term puts us in a position to make bad choices. We ignore all other factors that lead to the overall value of the loan in order to achieve that one singular goal now—whether the goal is a lower payment, a lower interest rate, or a dream home. In the long term, this always proves to be costly.

WaMu’s patchwork of systems for making mortgage loans did not help. A homeowner would lock in a low interest rate through

The state arbitrarily set the mortgage interest rate at 8.5 percent—below the prime rate of 9 or so percent—so banks could make more money out of state. The bottom line for financial institutions is profit.

Many banks do not advertise they are portfolio lenders and many people working at the bank may not even know what a portfolio lender is. If you are calling up a bank and they say they aren’t a portfolio lender, don’t give up! Ask to talk to a loan officer and ask specific questions about what type of investor programs they offer. Here are some good questions to ask; Do you loan to investors who already have four mortgages? Do you sell your loans or keep them in-house? Do you allow investors with four or more mortgages to do cash out refinance? What terms and loan programs do you offer investors? ARM, 15, 30 year fixed, balloon? What interest rates are you charging and what are the initial costs for your loans? What

The Fed’s fingerprints were all over this boom, and not just because of Greenspan’s low interest rates. In 1993, in response to initiatives by the Clinton administration to make housing more affordable for minorities and the poor, the Boston Fed produced a widely circulated paper called “Closing the Gap: A Guide to Equal Opportunity Lending.” “Lack of credit history should not be seen as a negative factor” in obtaining a mortgage, the Boston Fed guide noted. As an effort to counter “unintentional” racism in lending markets, the guide sanctioned lowering traditional mortgage-lending standards. Not enough saved for a down payment? No problem. The Boston Fed’s PhDs encouraged banks to allow loans from nonprofits or government assistance agencies to go toward a borrower’s down payment, though such borrowers are more likely to default on their mortgages. The Boston Fed distributed more than ninety thousand copies of this remarkably naïve guide. The mortgage industry, anxious to extend its reach and generate fees, embraced its suggestions.

15 The CEO who recklessly hawks mortgages and derivatives to lap up millions in bonuses currently contributes more to the GDP than a school packed with teachers or a factory full of car mechanics. We live in a world where the going rule seems to be that the more vital your occupation (cleaning, nursing, teaching), the lower you rate in the GDP.

How to Save on Your Mortgage - Money and Investing with Andrew Baxter How to Save on Your Mortgage Low interest rates have offered a great opportunity to investors to enter the market cheaply over the last few years, but that is about to change. In this week’s Money and Investing Show, tune in as host Andrew Baxter runs through some nifty ways to keep up on your repayments with higher interest rates:

God is an elderly or, at any rate, middle-aged male, a stern fellow, patriarchal rather than paternal, and a great believer in rules and regulations. He holds men strictly accountable for their actions. He has little apparent concern for the material well-being of the disadvantaged. He is politically connected, socially powerful, and holds the mortgage on literally everything in the world.

Pages 85-87: Lower Burma when first occupied … was a vast deltaic plain of swamp and jungle, with a secure rainfall; when the opening of the canal created a market for rice, this wide expanse of land was rapidly reclaimed by small cultivators … Formerly, the villager in Lower Burma, like peasants in general, cultivated primarily for home consumption, and it has always been the express policy of the Government to encourage peasant proprietorship. Land in the delta was abundant … The opening of the canal provided a certain and profitable market for as much rice as people could grow. … men from Upper Burma crowded down to join in the scramble for land. In two or three years a laborer could save out of his wages enough money to buy cattle and make a start on a modest scale as a landowner. … The land had to be cleared rapidly and hired labor was needed to fell the heavy jungle. In these circumstances newly reclaimed land did not pay the cost of cultivation, and there was a general demand for capital. Burmans, however, lacked the necessary funds, and had no access to capital. They did not know English or English banking methods, and English bankers knew nothing of Burmans or cultivation. … in the ports there were Indian moneylenders of the chettyar caste, amply provided with capital and long accustomed to dealing with European banks in India. About 1880 they began to send out agents into the villages, and supplied the people with all the necessary capital, usually at reasonable rates and, with some qualifications, on sound business principles. … now the chettyars readily supplied the cultivators with all the money that they needed, and with more than all they needed. On business principles the money lender preferred large transactions, and would advance not merely what the cultivator might require but as much as the security would stand. Naturally, the cultivator took all that he could get, and spent the surplus on imported goods. The working of economic forces pressed money on the cultivator; to his own discomfiture, but to the profit of the moneylenders, of European exporters who could ensure supplies by giving out advances, of European importers whose cotton goods and other wares the cultivator could purchase with the surplus of his borrowings, and of the banks which financed the whole economic structure. But at the first reverse, with any failure of the crop, the death of cattle, the illness of the cultivator, or a fall of prices, due either to fluctuations in world prices or to manipulation of the market by the merchants, the cultivator was sold up, and the land passed to the moneylender, who found some other thrifty laborer to take it, leaving part of the purchase price on mortgage, and with two or three years the process was repeated. … As time went on, the purchasers came more and more to be men who looked to making a livelihood from rent, or who wished to make certain of supplies of paddy for their business. … Others also, merchants and shopkeepers, bought land, because they had no other investment for their profits. These trading classes were mainly townsfolk, and for the most part Indians or Chinese. Thus, there was a steady growth of absentee ownership, with the land passing into the hands of foreigners. Usually, however, as soon as one cultivator went bankrupt, his land was taken over by another cultivator, who in turn lost with two or three years his land and cattle and all that he had saved. [By the 1930s] it appeared that practically half the land in Lower Burma was owned by absentees, and in the chief rice-producing districts from two-thirds to nearly three-quarters. … The policy of conserving a peasant proprietary was of no avail against the hard reality of economic forces…

A WORLD OF SLOWER GROWTH AND HIGHER INFLATION If triple-digit oil prices are the true culprit behind the recent recession, what happens if oil prices recover to triple-digit levels or even close to them when the economy recovers? Does the economy slip right back into recession again? Everything else being equal—or ceteris paribus, as they say in the economics textbooks—that’s probably as good a forecast as any. Every oil shock has produced a global recession, and the record price increase of the past few years may produce the biggest one of all. But recessions, no matter how severe, are finite events. Ultimately, we face a far more challenging economic verdict from oil. Any way you cut it, a return to triple-digit oil prices means a much slower-growing world economy than before. And not just for a couple of quarters of recession. That’s because virtually every dollar of world GDP requires energy to produce. Not all of that energy, of course, comes from oil, but far too much does for world GDP not to be affected by oil’s growing scarcity. And there is nothing at the end of the day that we can do about depletion. Big tax cuts and big spending increases can mitigate triple-digit oil’s bite, but the deficits they inevitably produce ultimately lead to tax hikes and spending cuts that just make the suffering all the more painful down the road. Taking out a loan to pay your mortgage might defer your problems for a month or so, but in the end, it often makes your difficulties more acute. Borrowing from the future just turns today’s problems into tomorrow’s, and by the time tomorrow comes, they’ve become a lot bigger than if we had dealt with them today. Trillion-dollar-plus deficits, just like a near-zero percent federal funds rate, can mask the impact of high energy prices for a while, but ultimately they can’t protect economies that still run on oil from the impact of higher energy prices and the toll that they take.

What if some man wanted to tell me how many feet from a dwelling a cesspool needed to be? What if he wanted to talk about the pros and cons of raising the mortgage rate? What if he wanted to talk about his childhood? Or worse, mine!

What are your feelings from Bush to Obama? Besides being responsible for the death of half a million people, I feel like Bush dealt a huge economic and social blow to the USA, one from which we may never fully recover. He directly flushed 3 trillion dollars down the toilet on hopeless, pointlessly destructive wars in Afghanistan and Iraq …and they’re not even over! For years to come, we’ll be paying costs for all the injured veterans (over 50,000) and destabilizing three countries, because you have to look at the impact that the Afghan war has on Pakistan. Bush expanded the use of torture, and created a whole new layer of government bureaucracy (the “Department of Homeland Security”) to spy on Americans. He created Indefinite Detention (at Guantanamo and other US military bases) and expanded the use of executive-ordered assassinations using the new drone technology. On economic issues, his administration allowed corporations to run things and regulate themselves. The agency that was supposed to regulate oil drilling had lobbyist-paid prostitutes sleeping with employees while oil industry lobbyists basically ran the agency. Energy companies like Enron, and the country’s investment banks were deregulated at the end of the Clinton administration and Bush allowed them to run wild. Above all, he was incompetent and appointed some really stupid people to important positions at every level of government. Certainly, Obama has been involved in many of these same activities. A few he’s increased, such as the use of drone assassinations, but most of them he has at least tried to scale back. At the beginning of his first term, he tried to close the Guantanamo prison and have trials for many of the detainees in the United States but conservatives (including many Democrats) stirred up public resistance and blocked this from happening. He tried to get some kind of universal healthcare because over 50 million Americans don’t have health insurance. This is one of the leading causes of personal bankruptcies and foreclosures because someone gets sick in a family, loses their job, loses their health insurance (because American employers are source of most people’s healthcare) and they can’t pay their health bills or their mortgage. Or they use up all their money caring for a sick family member. So many people in the US wanted health insurance reform or single-payer, universal health care similar to what you have in the UK. Members of Obama’s own party (The Democrats) joined with Republicans to narrowly block “The public option” but they managed to pass a half-assed but not-unsubstantial reform of health insurance that would prevent insurers from denying you coverage when you’re sick or have a “preexisting condition.” The minute it was signed into law, Republicans sued in the courts (all the way to the supreme court) and fought, tooth and nail to block its implementation. Same thing with gun control, even as we’re one of the most violent industrial countries in the world. (Among industrial countries, our murder rate is second only to Russia). Obama has managed to withdraw troops from Iraq and Afghanistan over Republican opposition but, literally, everything he tries to do, they blast it in the media and fight it in Congress. So, while I have a lot of criticisms of Obama, he is many orders of magnitude less awful than Bush and many of the positive things he’s tried to do have been blocked. That said, the Democratic and Republican parties agree on more things than they disagree. Both signed off on the Afghan and Iraq wars. Both signed off on deregulation of banks, of derivatives, of mortgage regulations and of the energy and telecom business …and we’ve been living with the consequences ever since. I’m guessing it’s the same thing with Labor and Conservatives in the UK. Labor or Democrats will SAY they stand for certain “progressive” things but they end up supporting the same old crap... (2014 interview with iamhiphop)

This story is not being told as much as it should be. In the late ’70s, the spread [or difference in interest rates] between mortgages at the consumer level and the 10-year US Treasury bond was about 450 basis points, or four and a half percent. Through securitization, we brought down that spread to about 150 basis points, or one and a half percent. When you think about the savings of America and the mechanism for home ownership, securitization was a foundational reason why more Americans were able to buy homes.III Changes to government-influenced underwriting characteristics, which first occurred in 2004, focused on having more people have home ownership and on reducing down payments. The result was that individuals with lower-quality credit would be able to get mortgages that previously would not have been available to them. These were typically called “subprime mortgages.” That led to the financial crisis. The structure of mortgage-backed securities remained strong and good and helpful for society. All good things, if not properly governed, can lead to bad outcomes. That’s what really happened.

Americans. All had good credit ratings, and banks were willing to issue mortgages if the FHA would approve. But the agency stated that “no loans will be given to colored developments.” When banks told the real estate agent that without FHA endorsement they would not issue the mortgages, he approached the Prudential Life Insurance Company, which also said that although the applicants were all creditworthy, it could not issue mortgages unless the FHA approved. Today, Fanwood’s population remains 5 percent black in a county with a black population of about 25 percent.

The Fed is normally very profitable, since we typically earn a higher interest rate on our Treasury and mortgage-backed securities than we pay on the bank reserves that finance our holdings

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It’s importance, however, is bigger than that. Treasury securities are the risk-free yield curve for all of the financial markets. That’s right, the yields of Treasury Bills, Notes, and Bonds from overnight to 30 years make up a yield curve that is used to price all other fixed-income securities. The Treasury market is the reference rate for interest rates. Treasurys are a tool for pricing corporate bonds, municipal bonds, emerging market bonds, federal agencies, mortgage-backed securities, and other dollar assets. On top of that, they’re also a tool for speculation and hedging risk.

A 2021 study found that middle-class Black homeowners (with incomes between $75,000 and $100,000) carried higher interest rates on their mortgages than white homeowners with incomes at or below $30,000.

As monthly mortgage payments rose for home buyers over the past several years as a result of higher mortgage rates (coupled to increasing home prices), what simultaneously so too did rise were earned income opportunities for bondholders. Bondholders benefitted…at the expense of home buyers. If the Fed does indeed enact two rate cuts through the end of 2024, mortgage rates are likely to drop. As too will yields bondholders attain, through their purchase of newly-issued 10-year Treasuries. A trade-off is in the making. A much-welcomed rebalancing.

An interest rate is the cost of borrowing or the price paid for the rental of funds (usually expressed as a percentage of the rental of $100 per year). Many types of interest rates are found in the economy—mortgage interest rates, car loan rates, and interest rates on many different types of bonds.

At the very least, a mortgage had to be pooled with other mortgages of other homeowners. Traders and investors would trust statistics and buy into a pool of several thousand mortgage loans made by a Savings and Loan, of which, by the laws of probability, only a small fraction should default. Pieces of paper could be issued that entitled the bearer to a pro-rata share of the cash flows from the pool, a guaranteed slice of a fixed pie. There could be millions of pools, each of which held mortgages with particular characteristics, each pool in itself homogeneous. It would hold, for example, home mortgages of less than one hundred and ten thousand dollars paying an interest rate of 12 per cent. The holder of the piece of paper from the pool would earn 12 per cent a year on his money plus his share of the repayments of principal from the homeowners. Thus standardised, the pieces of paper could be sold to an American pension fund, to a Tokyo trust company, to a Swiss bank, to a tax-evading Greek shipping tycoon living in a yacht in the harbour of Monte Carlo, to anyone with money to invest. Thus standardised, the pieces of paper could be traded. All the trader would see was the bond. All the trader wanted to see was the bond. A bond he could whip and drive. A line which would never be crossed could be drawn down the centre of the market. On one side would be the homeowner, on the other, investors and traders. The two groups would never meet; this is curious in view of how personal it seems to lend a fellow man the money to buy his home. The homeowner would only see his local Savings and Loan manager from whom the money came, and to whom it was, over time, returned. Investors and traders would see paper. Bob

In retrospect, I think our view of market expectations was too dependent on our survey of securities dealers. Futures markets gave us a reliable read of where markets thought the federal funds rate was going—but not for our securities purchases. For that, economists at the New York Fed asked their counterparts at the securities firms, who paid careful attention to every nuance of Fed policymakers’ public statements. In effect, our PhD economists surveyed their PhD economists. It was a little like looking in a mirror. It didn’t tell us what the rank-and-file traders were thinking. Many traders, apparently, didn’t pay much attention to their economists and were betting our purchases would continue more or less indefinitely. Some called it “QE-ternity” or “QE-infinity.” Their assumption was unreasonable and entirely inconsistent with what we had been saying. Nevertheless, some investors had evidently established market positions based on it. Now, like Metternich, they looked at our statements about securities purchases and asked, “What do they mean by that?” Their conclusion, despite the plain meaning of what I said at the press conference, was that we were signaling an earlier increase in our federal funds rate target. They sold their Treasury securities and mortgage-backed securities, driving up long-term interest rates.

In response to current events, people often reach for historical analogies, and this occasion was no exception. The trick is to choose the right analogy. In August 2007, the analogies that came to mind—both inside and outside the Fed—were October 1987, when the Dow Jones industrial average had plummeted nearly 23 percent in a single day, and August 1998, when the Dow had fallen 11.5 percent over three days after Russia defaulted on its foreign debts. With help from the Fed, markets had rebounded each time with little evident damage to the economy. Not everyone viewed these interventions as successful, though. In fact, some viewed the Fed’s actions in the fall of 1998—three quarter-point reductions in the federal funds rate—as an overreaction that helped fuel the growing dot-com bubble. Others derided what they perceived to be a tendency of the Fed to respond too strongly to price declines in stocks and other financial assets, which they dubbed the “Greenspan put.” (A put is an options contract that protects the buyer against loss if the price of a stock or other security declines.) Newspaper opinion columns in August 2007 were rife with speculation that Helicopter Ben would provide a similar put soon. In arguing against Fed intervention, many commentators asserted that investors had grown complacent and needed to be taught a lesson. The cure to the current mess, this line of thinking went, was a repricing of risk, meaning a painful reduction in asset prices—from stocks to bonds to mortgage-linked securities. “Credit panics are never pretty, but their virtue is that they restore some fear and humility to the marketplace,” the Wall Street Journal had editorialized, in arguing for no rate cut at the August 7 FOMC meeting.

Mortgage securities. Pooled together from thousands of mortgages around the United States, these bonds are issued by agencies like the Federal National Mortgage Association (“Fannie Mae”) or the Government National Mortgage Association (“Ginnie Mae”). However, they are not backed by the U.S. Treasury, so they sell at higher yields to reflect their greater risk. Mortgage bonds generally underperform when interest rates fall and bomb when rates rise. (Over the long run, those swings tend to even out and the higher average yields pay off.) Good mortgage-bond funds are available from Vanguard, Fidelity, and Pimco. But if a broker ever tries to sell you an individual mortgage bond or “CMO,” tell him you are late for an appointment with your proctologist.

Sharecropping is the dirty little secret at the root of America’s wealth—along with slavery itself. The immense profits generated by the industrious yet impoverished Black “sharecroppers” and “tenant farmers” financed Europe’s and America’s Industrial Revolution, including the building of their railroads, factories, mills, and their entire infrastructure. It is truthfully asserted that the major cities of America and the Western world were “built with bricks of cotton.” Today the debt traps designed to ensnare the working poor and middle class in a lifelong cycle of debt—the high-cost installment loans that charge usurious interest rates of 100% or more, the “payday” loans that charge 400% interest, the extortionate credit card multi-charges, the subprime mortgages with ballooning interest rates, and the home equity loan swindles—are the bastard children of the sharecropping American South. It

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These Ginnie Maes suck. They get longer [in maturity] when rates go up, and shorter when rates go down, and nobody wants them

The financial crisis of 2008 is illustrated by the following analogy. There is no doubt that the improvements in engineering have made the passenger car safer than it was 50 years ago. But that does not mean that the automobile is safe at any speed. A small bump on the road can flip the most advanced passenger car speeding 120 mph today just as surely as an older model traveling 80 mph. During the Great Moderation, risks were indeed lower, and financial firms rationally leveraged their balance sheets in response. But their leverage became too great, and all that was needed was an unexpected increase in the default rate on subprime mortgages—that “bump on the road”—to catapult the economy into a crisis.

The FHA had adopted a system of maps that rated neighborhoods according to their perceived stability. On the maps, green areas, rated “A,” indicated “in demand” neighborhoods that, as one appraiser put it, lacked “a single foreigner or Negro.” These neighborhoods were considered excellent prospects for insurance. Neighborhoods where black people lived were rated “D” and were usually considered ineligible for FHA backing. They were colored in red. Neither the percentage of black people living there nor their social class mattered. Black people were viewed as a contagion. Redlining went beyond FHA-backed loans and spread to the entire mortgage industry, which was already rife with racism, excluding black people from most legitimate means of obtaining a mortgage.

The Fed is still on the same track.” Whatever you call it, the benign economic environment has supported a bull market since 2009, and though there were a few rocky days last week, the main market ingredients seemed to remain in place. For example, on Wednesday a government report on gross domestic product in the second quarter showed that the economy was growing smartly, even rapidly, at a 4 percent annualized rate; yet the Federal Reserve declared that inflation was low enough to allow the slowly moderating pace of its expansive monetary policy to remain on track. In a statement on Wednesday, the Federal Open Market Committee said the central bank would continue to ratchet down its bond purchases as planned, yet it also said its policies would “maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.” The Fed already holds more than $4 trillion in bonds, up from less than $1 billion when the financial crisis started, and it’s still buying more.

Over the last few years, Greg Smith’s former company earned huge profits, first from the expansion of the American mortgage bubble and the European bubble of sovereign debt, and then again from the – almost simultaneous – bursting of these bubbles on either side of the Atlantic. Subsequently, Goldman Sachs proceeded to secure influence over some of the key political positions in the Italian, Greek and Spanish governments, in order to predate further on these countries after having driven them to the brink of disaster. The role of Goldman Sachs as one of the principal architects of the crisis in Greece was particularly remarkable. As was revealed in 2010, not only they had helped the Greek government to conceal the true state of the country’s finances, but at the same time they had also bet against Greece’s sovereign debt, hoping for its default. As a consequence, in a matter of weeks millions of Greek people saw their livelihoods utterly disintegrate, while the country sank into a state of widespread humanitarian emergency, as industries closed, hospitals ran out of medicine, and the suicide rate sky-rocketed.

But now I also understand, firsthand, the meaning of what the caregivers who work in that system do every day. They do achieve amazing things, and when it’s your life or your child’s life or your mother’s life on the receiving end of those amazing things, there is no such thing as a runaway cost. You’ll pay anything, and if you don’t have the money, you’ll borrow at any mortgage rate or from any payday lender to come up with the cash. Which is why 60 percent of the nearly one million personal bankruptcies filed in the United States last year resulted from medical bills.

The basic task performed by the credit rating agencies was to strip derivatives of their individuality. Whether it was David Bowie pioneering securities derived from the perpetual value his music had created or a 30-year conventional mortgage, once a credit rating had been assigned, investors were agnostic. Bowie’s AAA-rated royalties and the AAA mortgage on the house next door were interchangeable, or as Gorton said, “informationally insensitive.

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From the 1930s through the 1960s, Black people, especially those recently arrived in the North, were largely excluded from renting in "nice" lower-cost neighborhoods or grom getting home mortgages. Local banks and the Federal Housing Administration (FHA) drew red lines around Black neighborhoods, rating them D-level areas, thus making them ineligible for government-backed mortgage loans. As a result of this practice, called "redlining," most Black people couldn't buy homes, even when they had good jobs with steady paychecks.

Trillions of dollars in homeowner equity…so are the best “captains” of “equity conversion airplanes” the homeowners themselves? No. There is an impetus placed upon real estate professionals - as well as an implied responsibility - to honestly, to effectively and to accurately communicate reality to home sellers. An inability to do so? Fewer real estate listings. Lower sale prices for home sellers. Less equity converted into cash for home sellers. Less revenue for real estate companies. Inopportune…across the board. Three years ago, American homeowners were custodians of an estimated $19 trillion in homeowner equity. Furthermore, over the past three years - even with these stubbornly-elevated mortgage rates - we witnessed an uninterrupted, further run-up in home prices. More equity gained, for American homeowners. As mortgage rates ease downwards heading into the fall, unlocking trillions of dollars in homeowner equity - as a result of more homeowners deciding to either trade up to larger homes, or to downsize to smaller homes, circumstances permitting - will trigger a large-scale (and an upcoming) re-thinking of this following question by more and more homeowners: What shall we now do with this equity we have in our home? So what’s the plan? In real estate, the effective utilization of well-tested "tools,” such as 3-D tours and virtual staging, coupled to good marketing processes - I.e.: a Marketing Plan - deployed by successful real estate teams is a great way for homeowners to convert the equity they have in their homes into cash. It works. Ok, so if you are a for sale by owner home seller in 2024, data indicate that an over-reliance in - as well as, maybe, blind faith placed upon(?), “the Internet,” if you decide to sell your home yourself, FSBO, could lead to an entirely avoidable (and a costly) home selling misadventure. As well as to a saddened foray for home sellers into this unintended outcome: lower sale prices.

If you owned the house for one year or less, gains get taxed at ordinary rates (which range as high as 37 percent). If you’ve held the asset for more than a year, capital gains rates kick in (0 percent, 15 percent, or 20 percent depending on your overall income level).

flipping business counts as a business for tax purposes (even if you’re just doing it as a side gig). All of your profits will be taxed at ordinary rates and be subject to self-employment taxes.

MBS face all of the regular risks (changing interest rates, for example) linked to bonds and other fixed-income securities, and two that are unique to them. These special risks are tied to the underlying mortgages: homeowners could default (stop making payments, substantially more likely with private-label MBS) or pay off their loans early, either of which would affect investor yield and cash flows.

The most common certifications include: • LEED (Leadership in Energy and Environmental Design), an internationally recognized green building rating and certification system • HERS (Home Energy Rating System), a nationally recognized rater of a building’s energy efficiency • Energy Star, a US government-backed symbol for energy-efficient products

Colonial Policy and Practice: A Comparative Study of Burma and Netherlands India by J. S. Furnivall Quoting page 85-87: Lower Burma when first occupied … was a vast deltaic plain of swamp and jungle, with a secure rainfall; when the opening of the canal created a market for rice, this wide expanse of land was rapidly reclaimed by small cultivators … Formerly, the villager in Lower Burma, like peasants in general, cultivated primarily for home consumption, and it has always been the express policy of the Government to encourage peasant proprietorship. Land in the delta was abundant … The opening of the canal provided a certain and profitable market for as much rice as people could grow. … men from Upper Burma crowded down to join in the scramble for land. In two or three years a labourer could save out of his wages enough money to buy cattle and make a start on a modest scale as a landowner. … The land had to be cleared rapidly and hired labour was needed to fell the heavy jungle. In these circumstances newly reclaimed land did not pay the cost of cultivation, and there was a general demand for capital. Burmans, however, lacked the necessary funds, and had no access to capital. They did not know English or English banking methods, and English bankers knew nothing of Burmans or cultivation. … in the ports there were Indian moneylenders of the chettyar caste, amply provided with capital and long accustomed to dealing with European banks in India. About 1880 they began to send out agents into the villages, and supplied the people with all the necessary capital, usually at reasonable rates and, with some qualifications, on sound business principles. … now the chettyars readily supplied the cultivators with all the money that they needed, and with more than all they needed. On business principles the money lender preferred large transactions, and would advance not merely what the cultivator might require but as much as the security would stand. Naturally, the cultivator took all that he could get, and spent the surplus on imported goods. The working of economic forces pressed money on the cultivator; to his own discomfiture, but to the profit of the moneylenders, of European exporters who could ensure supplies by giving out advances, of European importers whose cotton goods and other wares the cultivator could purchase with the surplus of his borrowings, and of the banks which financed the whole economic structure. But at the first reverse, with any failure of the crop, the death of cattle, the illness of the cultivator, or a fall of prices, due either to fluctuations in world prices or to manipulation of the market by the merchants, the cultivator was sold up, and the land passed to the moneylender, who found some other thrifty labourer to take it, leaving part of the purchase price on mortgage, and with two or three years the process was repeated. … As time went on, the purchasers came more and more to be men who looked to making a livelihood from rent, or who wished to make certain of supplies of paddy for their business. … Others also, merchants and shopkeepers, bought land, because they had no other investment for their profits. These trading classes were mainly townsfolk, and for the most part Indians or Chinese. Thus, there was a steady growth of absentee ownership, with the land passing into the hands of foreigners. Usually, however, as soon as one cultivator went bankrupt, his land was taken over by another cultivator, who in turn lost with two or three years his land and cattle and all that he had saved. [By the 1930s] it appeared that practically half the land in Lower Burma was owned by absentees, and in the chief rice-producing districts from two-thirds to nearly three-quarters. … The policy of conserving a peasant proprietary was of no avail against the hard reality of economic forces…

There’s a second reason the liberal class loves microfinance, and it’s extremely simple: microlending is profitable. Lending to the poor, as every subprime mortgage originator knows, can be a lucrative business. Mixed with international feminist self-righteousness, it is also a bulletproof business, immune to criticism. The million-dollar paydays it has brought certain microlenders are the wages of virtue. This combination is the real reason the international goodness community believes that empowering poor women by lending to them at usurious interest rates is a fine thing all around.29

her mind. Get away from here and sweat. That was all. Then she’d be all right. Then she could think straight again. Oh, God, please . . . Her hands shook violently as she twisted her hair up onto her head. Trying in vain to turn off the questions pounding through her brain, she stripped out of her clothes to don jogging bra, long-sleeved T-shirt, shorts and running shoes. Then, on impulse, she walked into her den, ignored the stacks of work and checked her e-mail. Maybe Kelly had sent her a message . . . She was surprised she hadn’t thought of it before. She clicked on her mailbox but saw nothing other than the usual offers of low-mortgage rates, discreet Viagra or a free peek at some porn site. Nothing from Kelly. ‘‘Damn.’’ She clicked off the computer and with Oscar at her heels, hurried downstairs, where she peeked out the front blinds and saw no trace of reporters on the street. Still, she’d be careful. She slapped a pair of sunglasses over her eyes and added a baseball cap to her disguise, as if she were some high-profile celebrity, for God’s sake, then clicked on Oscar’s leash. She

According to analysts, 666 Fifth Avenue had about a 30 percent vacancy rate and only generated about half of its annual mortgage. It was rumored that the largest tenant was planning to move out. A Canadian company named Brookfield Property Partners took a ninety-nine-year lease on 666 Fifth Avenue. Brookfield paid the rent for the entire century-long lease, upfront, which amounted to about $1.1 billion—removing Kushner’s biggest financial headache (a $1.4 billion mortgage on the office portion of the tower due in February 2019). Brookfield got its financing for this deal from a $750 million mortgage from ING Group, a Dutch multinational and financial services corporation, and a $300 million mezzanine loan from Apollo Global Management.9 However, the Qatar Investment Authority, the government-run agency that made decisions about the nations’ financial investments, bought a $1.8 billion stake in Brookfield Property Partners. As the second largest shareholder, they had a lot to say about what should be purchased; in this instance, they apparently used Brookfield to bail out 666 Fifth Ave. This investment was a godsend to Kushner, who was now out of debt just as Qatar was suddenly no longer blockaded by Mohammad bin Salman bin Abdulaziz Al Saud, crown prince of Saudi Arabia (known colloquially as MBS), and his allies.

We’re so far committed to the independence camp that we’ve done things that make little sense on paper. We own our house without a mortgage, which is the worst financial decision we’ve ever made but the best money decision we’ve ever made. Mortgage interest rates were absurdly low when we bought our house. Any rational advisor would recommend taking advantage of cheap money and investing extra savings in higher-return assets, like stocks. But our goal isn’t to be coldly rational; just psychologically reasonable.

What are you trying to buy? Asset type? Size? Price? To determine the answer to the first question, do the following: Start with your own net worth. Add in friends and family. The total team net worth is your starting point. Choose a market. Consider travel time and expense. You must be able to be in your market to look at deals at least once a month. Determine the viability of your market. Job growth? Population growth? Get deal flow from the market. Real estate agents Find all commercial realty companies in the city. Get on all their mailing lists. Analyze deals online from realtors in the area. Call the realtors about their listings. Direct to owners Get lists of owners. Create a system to reach owners directly. Mail Text Cold calling Analyze deals. Income approach Income – Expenses = Net operating income Net operating income – Debt service = Cash flow Check with lenders for current terms on debt. What is the CoC return? Cap rate? Debt ratio? Comparable data Check the analyzed cap rate against cap rates in the area for similar properties. Check comparable sale prices. Comps should be close in size and age to the subject property. Comps should have similar amenities. Comps should be within a few miles of the subject property. Exit Hold and operate. Refinance. Sell or flip. Consider upcoming market conditions. Debt Check with lenders or a mortgage broker to determine the availability of loans for this type of property. What are the terms and conditions? Is this the information you used to analyze the deal originally? Make the offer. Use an LOI to submit the offer in writing. The LOI will summarize the main deal points. If your offer is less than 15 percent of the asking price, speak with the realtor before you submit the offer. Once the offer is accepted, send the LOI to your attorney and have them draft the purchase agreement. Draft the purchase and sale agreement. Now that you have a fully executed contract, the clock starts. Earnest money goes into escrow. Do your due diligence. Financial inspection Physical inspection Lease audit Begin your loan application. The lender will complete three inspections. Appraisal Environmental inspection Physical engineer inspection of the buildings Do your closing. The lender will wire the loan proceeds to the closing escrow. Wire your down payment funds to the closing escrow. You own a new property! Engage property management for takeover of operations.

Investment firms are buying up more vacation homes, aiming to cash in on growing demand from tourists and remote workers. Most vacation rental homes are owned by small-time owners who list their properties on websites such as Airbnb Inc., but the number of financial firms investing in the sector is growing. New York-based investment firm Saluda Grade is launching a venture with short-term- rental operator AvantStay Inc. to buy about $500 million of homes, the companies said Tuesday. Saluda Grade said it is also looking to raise debt by selling mortgage bonds backed by its homes to investors, the first vacation-rental mortgage securitization, according to the company. Andes STR, a startup that buys and manages short-term rental homes on behalf of investors, also recently signed a deal with Chilean investment firm WEG Capital to buy roughly $80 million of properties in the U.S., Andes said. These investors are betting they can get higher returns if they rent out homes by the night instead of by the year. Low-interest rates have made it more attractive to borrow and Buy Traditional Rental Homes, inflating property prices and making it harder for new buyers to turn a profit. That has prompted some institutions and wealthy families to look in more obscure corners of the property market where competition is smaller, investment advisers say. Some are turning to investments in vacation homes, where demand has surged in many places during the pandemic as more people choose to work from remote locations and leisure travel heated up last year. “There’s a lot more yield available in the short-term market,” said Saluda Grade’s chief executive, Ryan Craft. It is the latest sign of how the pandemic is changing the way people work and live, and how real-estate investors are angling to find new ways to profit from these shifts. Saluda Grade is targeting homes within driving distance of major population centers, Mr. Craft said. His company will buy the homes and AvantStay will manage them for a fee. But while vacation-rental homes can offer higher returns, they also pose challenges to investors. Mortgages are usually more expensive and harder to get for short-term rentals than for owner-occupied homes, said Giri Devanur, CEO of reAlpha Tech Corp., a startup that wants to pool money from small-time investors to buy short-term-rental homes.

Necessitous men are not free men," Franklin Roosevelt said in that 1944 State of the Union speech. "People who are hungry and out of a job are the stuff of which dictatorships are made." A dire statement, demonstrably true, and especially unsettling now, a point in time when the American Dream seems more viable as nostalgia—make America great again!—than as present reality. Income inequality, wealth distribution, mortality rates: by every measure, the "average man" that Eleanor Roosevelt celebrated is sinking. A recent study by the Pew Research Center shows that the middle class has shrunk to the point where it may no longer be the economic majority in the U.S.21 And with widespread decline in economic prospects comes disillusionment: A recent poll shows nearly three-quarters of Americans across the economic and political spectrum believe that the U.S. economy is rigged. A quarter of these same respondents hadn't had a vacation in at least five years. Over half worried about missing their mortgage payment, and 60 percent of the renters expressed concern about making the monthly rent.22 Exceptional individuals continue to rise, but overall mobility is stagnant at best. More and more it comes down to the birth lottery. If you're born poor in Flint or Appalachia, chances are you're going to stay that way. And if your early memories are of July Fourth fireworks at the Nantucket Yacht Club and ski lessons at Deer Valley, you're likely going to keep your perch at the top of the heap.

Eager to get in on the action, friends, cabdrivers, and schoolteachers told me they’d started flipping houses, everyone suddenly fluent in the language of balloon payments, adjustable-rate mortgages, and the Case-Shiller Index. If I cautioned them gently—real estate can be unpredictable, you don’t want to get in too deep—they’d assure me they had talked to their cousin or uncle who had made a killing, in a tone of mild amusement that implied I didn’t know the score.

It was the German powerhouse Deutsche Bank AG, not my fictitious RhineBank, that financed the construction of the extermination camp at Auschwitz and the nearby factory that manufactured Zyklon B pellets. And it was Deutsche Bank that earned millions of Nazi reichsmarks through the Aryanization of Jewish-owned businesses. Deutsche Bank also incurred massive multibillion-dollar fines for helping rogue nations such as Iran and Syria evade US economic sanctions; for manipulating the London interbank lending rate; for selling toxic mortgage-backed securities to unwitting investors; and for laundering untold billions’ worth of tainted Russian assets through its so-called Russian Laundromat. In 2007 and 2008, Deutsche Bank extended an unsecured $1 billion line of credit to VTB Bank, a Kremlin-controlled lender that financed the Russian intelligence services and granted cover jobs to Russian intelligence officers operating abroad. Which meant that Germany’s biggest lender, knowingly or unknowingly, was a silent partner in Vladimir Putin’s war against the West and liberal democracy. Increasingly, that war is being waged by Putin’s wealthy cronies and by privately owned companies like the Wagner Group and the Internet Research Agency, the St. Petersburg troll factory that allegedly meddled in the 2016 US presidential election. The IRA was one of three Russian companies named in a sprawling indictment handed down by the Justice Department in February 2018 that detailed the scope and sophistication of the Russian interference. According to special counsel Robert S. Mueller III, the Russian cyber operatives stole the identities of American citizens, posed as political and religious activists on social media, and used divisive issues such as race and immigration to inflame an already divided electorate—all in support of their preferred candidate, the reality television star and real estate developer Donald Trump. Russian operatives even traveled to the United States to gather intelligence. They focused their efforts on key battleground states and, remarkably, covertly coordinated with members of the Trump campaign in August 2016 to organize rallies in Florida. The Russian interference also included a hack of the Democratic National Committee that resulted in a politically devastating leak of thousands of emails that threw the Democratic convention in Philadelphia into turmoil. In his final report, released in redacted form in April 2019, Robert Mueller said that Moscow’s efforts were part of a “sweeping and systematic” campaign to assist Donald Trump and weaken his Democratic rival, Hillary Clinton. Mueller was unable to establish a chargeable criminal conspiracy between the Trump campaign and the Russian government, though the report noted that key witnesses used encrypted communications, engaged in obstructive behavior, gave false or misleading testimony, or chose not to testify at all. Perhaps most damning was the special counsel’s conclusion that the Trump campaign “expected it would benefit electorally from the information stolen and released through Russian efforts.

Banks generally avoid issuing small-dollar mortgages, not because they’re riskier—these mortgages have the same delinquency rates as larger mortgages—but because they’re less profitable

From 1979 through 1982 there were extreme distortions in the markets. Short-term US Treasury bill returns went into double-digit territory, yielding almost 15 percent in 1981. The interest on fixed-rate home mortgages peaked at more than 18 percent per year. Inflation was not far behind.

When interest rates decline, local governments will often refinance their debt, just as an individual might refinance their home mortgage. The municipality will issue new municipal bonds at lower interest rates. At the same time, they buy Treasurys and place them in a trust to pay the outstanding bond issue. The municipality matches the cash flows of the outstanding municipal bond issue with cash flows of the Treasurys.

MBSs are difficult to hedge because their duration changes as the market moves. That’s because homeowners can prepay mortgage loans at any time. When homeowners move, refinance, or sell their house, they pay off their loans, and those prepayments are paid directly to the MBS bondholders. When interest rates decline, homeowners repay their mortgage loans faster. When interest rates rise, prepayments slow down and people stay in their homes longer. And therein lies the problem. When interest rates decline, MBS bondholders get more of their original investment back sooner than expected. When interest rates rise, the securities are outstanding for a longer period of time. It’s what’s called negative convexity. When interest rates fall, MBSs become shorter-term securities. When interest rates rise, they become longer-term securities.[

than 5% of Black children currently reside in census tracts with a low poverty rate (below 10%) and fathers present in more than half of homes. In contrast, 62.5% of White children live in low-poverty areas with fathers living in more than half of children’s homes. Here we can see the contemporary legacy of racial neighborhood segregation in the US, which was cemented by decades of the discriminatory and harmful practice of “redlining” in US mortgage and housing markets.

fewer than 5% of Black children currently reside in census tracts with a low poverty rate (below 10%) and fathers present in more than half of homes. In contrast, 62.5% of White children live in low-poverty areas with fathers living in more than half of children’s homes. Here we can see the contemporary legacy of racial neighborhood segregation in the US, which was cemented by decades of the discriminatory and harmful practice of “redlining” in US mortgage and housing markets.