The Wall Street Examiner’s Lee Adler, Russ Winter of Winter Watch, and Aaron Krowne of the Mortgage Lender Implode-o-meter discuss the false signals of a growing economy, and other issues affecting the markets in this week’s podcast. Here’s what we covered in Part 1, free to all visitors: Ponzi house of mirrors economy with no real economic demand Japan’s public pension problem and Confederate States of America money printing Will the Fed shrink it’s balance sheet? The end of QE2 will cause dislocation Speculators are the straw men of rising oil prices. The Fed is the real villain Politics full of straw men issues Corporate kleptocrats pay almost no taxes And more! Topics covered in Part 2 for Radio Free Wall Street subscribers only: How The Fed and Treasury greased the skids for the Bernanke press briefing, but liquidity will turn more bearish on Friday The dollar index is plumbing multi year lows Gold and silver — more to run? Slamming the Case-Shiller housing index Where is housing headed. Interesting signals from the rental market The stock market outlook, near and longer term To subscribe (or listen to Part 1 in the Embedded player) click through above to access the home page for this story and follow the instructions.
Archive for April, 2011
“A trade-weighted measure of the U.S. dollar against a broad basket of currencies that includes the Yen, Euro and China’s Yuan is at a post-gold standard low when adjusted for inflation, according to calculations by Deutsche Bank’s economic team. The milestone could be viewed as a failure of the country’s monetary and fiscal policies upon which all paper — or fiat — currencies are based. ”
“Whenever there was a crisis, Mr Greenspan was ready with the fire extinguisher. As one bubble deflated, he would pump up a bigger one. In time, he even began to half believe the hype himself. In the event, interest rates ended his reign roughly where they began. You have to wonder what real difference the frantic series of 87 interventions in between actually made, other than to suspend the usual disciplines of markets and give wing to the fatal delusion of never-ending prosperity.”
“When Rep. Seel was asked what had happened to prevent him from showing up on time to propose the amendment, he explained that he had decided not to propose it because he was told there was no chance of it being adopted… something about it not being “germane,” whatever that means. One thing though… from what Darrell explained to me, Carl Seel must have been in a very good mood the day of his unexpected tardiness, because even though he had been previously turned down twice for his own loan modification, two days before he showed up too late to propose the amendment, Ocwen granted him a PRINCIPAL REDUCTION that reduced his mortgage to $88,000 from roughly $190,000… that’s a reduction of approximately 56% give or take a few points one way or the other.”
Good stuff… and he’s not just talking about monetary/economic policy and “Monday morning quarterbacking” that… he speaks extensively about nuts-and-bolts transparency (such as the issue of the Fed destroying its meeting transcripts, etc).
Credit counseling assistance is usually sought out by consumers for the purposes of debt relief, but there are also other aspects of personal financial assistance that these services can offer to consumers as it could be a method that will allow individuals to set future financial goals, improve their credit rating, and avoid debt in the future. Understandably, consumers must make sure that they choose a reputable and credit credit counseling agency before benefits can be seen and financial distress avoided, but for those who are looking for ways to improve their financial habits, budgeting practices, and overall debt situation, counseling can be one method that consumers use to achieve these goals.
Recently, it was reported by the National Foundation for Credit Counseling that more consumers are ready to begin spending once again but, “more than two in five Americans grade themselves as C, D or F in their knowledge of personal finance, acknowledging that they lack the know-how to make sound financial decisions.” Understandably, this can be greatly problematic for consumers, particularly those who are in a position where financial distress could easily arise or may be close at hand.
Consumers who do find themselves in a position where they are having trouble meeting their debt obligations are often advised to take action as soon as possible, as even sitting down and reviewing one’s finances, making a household budget, and making certain sacrifices could prevent financial disaster from occurring. However, consumers who may be in a position where their knowledge of personal finances and good credit practices may be limited, nonprofit credit counseling organizations can be a way that these men and women find help with not only getting out of debt and setting future goals and implementing a lifestyle that allows them to live within their means and even save for the future.
Sadly, consumers who continue to live a financial lifestyle where they are acquiring debt but only meeting minimum repayment obligations are often those who, when a sudden emergency arises or a long period of these practices has passed, will be in a position where they are facing financial distress and may potentially miss payments on these debt obligations and do damage to their credit score. Consumers who are back in a position where they may be ready to spend can help the economy, but spending within one’s financial means is vital as well, as creating a great deal of debt that is not repaid will be a setback to the overall economic health of our nation as well.
While some consumers may simply start by saving money for purchases, rather than using credit, spending on credit but doing so within a consumer’s means to meet the entirety of their credit card payment each month rather than just a simple minimum payment are a few of the ways that consumers can avoid financial distress but still be in a position where they will not wreak havoc in their financial lives if an emergency were to arise.
Homeowners have had opportunities for mortgage refinancing with the particular goal of debt consolidation through the use of their equity, as some have turned to options like cash-out refinancing or similar options like a home equity loan as a way to consolidate debt and begin the process of paying off these obligations that may otherwise have been quite burdensome. Understandably, homeowners who feel their home loan is a long-term obligation and, as a result, feel that attaching other unsecured debts onto their home loan can be helpful since, if these debts are no longer an issue in terms of multiple payments and interest rates, a consumer may be able to focus their funds on their home loan payment and erase this consolidated debt along with their mortgage.
Furthermore, many homeowners have seen record low interest rates over the past year and according to various sources mortgage rates have fallen, so when a homeowner is in a position to take advantage of these rates, refinancing their home loan to use their equity as a way to consolidate debts has been more of a temptation for homeowners who may be suffering from various personal loans, credit card debts, or other obligations like student loans.
However, when it comes to a homeowner’s best interest, refinancing may not always be the best route that should be taken if debt relief is needed, as there are some individuals who have successfully been able to attach unsecured debts to their mortgage through options like cash-out refinancing, but when a homeowner is unable to meet this higher mortgage obligation, it could result and the loss of their home. While some homeowners who refinance may find more affordable monthly payments, a higher overall principal amount can lead to higher overall costs in the long run for a homeowner seeking to consolidate their debt.
For this reason, financial advisers counsel many homeowners who are considering this type of refinancing to look at a few aspects of what it will mean for their personal financial situation. As an example, homeowners who are struggling with debt and feel that refinancing their home loan to receive cash back that will be used to pay off debts may have options to erase these troubling debt sources in another way without putting their home at risk. While credit counseling, simple budgeting techniques, or more extreme options like a debt management plan could be helpful for homeowners in a bad financial situation, seeking out help with debt relief first or by exploring personal budgeting habits before refinancing could all be methods that a homeowner uses other than refinancing.
Yet, if a homeowner feels that this type of refinancing is best for their particular situation, other factors like a homeowner’s credit score, the amount of equity they have in their home, and closing costs related to cash-out refinancing are all areas that a homeowner must look at in relation to their particular situation. Some homeowners may be able to refinance and get a lower interest rate on their home loan, as well as, the funds they need to consolidate their debt, but fees associated with this option could cause the benefits a homeowner would have gained to be lost, as they could be better off combating that separately. Essentially, homeowners need to make sure that they are in a financial position to pay off a higher mortgage obligation if they use debt consolidation for their personal finances, and before even taking this route, they will need to have considered alternative options as, again, attaching more debt to a secured obligation like a mortgage can be much more problematic in the long run than simply combating unsecured debts at the present time.
Online college courses, university classes, and even degree programs are all available to both traditional and nontraditional students alike, but there are questions as to whether these online programs are beneficial for students who are taking their courses on the Internet and through a distance education program at either an online university or a major, established educational institution. There are some who question whether online college classes are helpful, beneficial, or are even up to the standards that major universities have set, but there are those who feel that online courses can offer a wide range of perks that a traditional college class does not.
According to an article on USNews.com, “In the coming decade, experts say, college students should expect an increased presence of online classes at traditional nonprofit schools. Already, about 30 percent of American college students take at least one course online,” and there are even major universities who are offering accredited courses, like MBA programs, online through distance education courses. Obviously, some students and officials feel that if a university that is well-established and happens to be a major educational institution is offering an online course, degree program, or simple distance education classes, students taking these courses will be relatively safe in terms of getting a quality education from a reputable institution.
Yet, there are some online colleges that are not accredited or may not offer a quality education to a student, despite the fact that many are still granting college degrees in a variety of subjects. Major online universities that are accredited, though, do offer nontraditional students the options of either taking courses online or earning their degree over the Internet, but again, many wonder if this is as beneficial as a traditional college class. While there are some areas where online universities and traditional colleges may be similar, like offering student financial assistance or even the option of going to a campus to speak with professors or officials, which is the case for certain reputable online institutions, there are those who feel that online colleges can go beyond simply allowing nontraditional students to earn an education.
Some of the arguments being made by major universities who are offering these online programs is that students who may be in a particular program, like again an MBA program at a major university, will not only give students the option to interact with their professor but there are students from across the nation or even in other countries that will also be able to share ideas, perspectives, and interact with those in these online courses which could give a broader “classroom” experience than a traditional college class could. Also, there are those who feel that, in the future, entry-level courses or lecture classes, where a professor simply teaches a subject to a large number of students can be replaced with online courses as there is usually a small amount of interaction in these general education classes.
However, for students who are looking for online college and university classes or degree programs, looking for options from a major university can be helpful, as there are certain schools that are offering degrees online through distance education courses, but if an online university is, for a certain student, seen to be their best option, advisers highly stress that choosing an accredited University that is well-established and will offer the best possible online education should be one of the primary focus points for these nontraditional students looking for a way to earn their degree.
Mortgage foreclosure prevention assistance programs, like those specifically tailored for unemployed homeowners, have been able to offer certain options for individuals depending on their condition and the state in which they reside, but there are some alternative plans that have been proposed and mirror successful plans that are already in place, but have yet to be fully implemented. Homeowners who may be in a state that was particularly hard hit may have found assistance through the Hardest Hit Fund, but there are some programs that have been in place for years that many officials believe to be more successful and potentially more helpful when it comes to keeping unemployed homeowners in their home.
In an article on MarketWatch.com it was mentioned that a program in Pennsylvania known as the Homeowners Emergency Mortgage Assistance Program has helped homeowners by offering “loans to people who have recently lost their jobs.” Also, these loans “do not accrue interest until the participant’s income is restored.” Understandably, many unemployed homeowners have been willing to try any program that will keep them in their home as long periods of unemployment have kept some homeowners on the edge of foreclosure as they struggle to make ends meet with meager income from part-time jobs or unemployment benefits.
Home loan modifications have been unhelpful by and large to many homeowners who are unemployed due to the fact that they cannot qualify for federal modification assistance since unemployment benefits are not considered a stable source of income. However, forbearance programs have been offered by the federal Making Home Affordable Program and there are state-specific assistance plans in various areas that may either offer homeowners a subsidy to keep their home for a set period of time or loans that will come at 0% interest and may be forgiven if a homeowner remains in their home for a particular duration after this assistance is given.
Yet, this particular program in Pennsylvania is similar to a program that has yet to be implemented in various states known as the Emergency Homeowner Loan Program. Essentially, these programs are hoped to provide loans to homeowners who are unemployed as a way of keeping them in their home until they can find a stable employment opportunity where their income returns at a level that they can meet their mortgage payment obligation. However, there have been some areas that have yet to see funding from this program as the Department of Housing and Urban Development has reportedly delayed funds so that certain states can be better prepared to offer this money to homeowners in need.
However, there are those who feel that this program, along with the modification initiative, should be terminated as they have yet to see success, despite not having the time to be implemented. Other plans like the FHA’s short refinance initiative were also proposed to be cut from the available programs that homeowners may use to address issues like negative equity, but it’s hoped that when this Emergency Homeowner Loan Program is put into place and as continuing efforts from the Hardest Hit Fund produce more results, unemployed homeowners in various areas will see similar benefits as those who have been helped by alternative programs like those being used in Pennsylvania.
Personal health insurance plans and alternative options for medical coverage may help certain individuals reduce the amount of debt they have related to medical expenses and offer overall debt relief, in relation to individuals who may have had to meet medical treatment costs alone, but some consumers are in a position where they have been seeking assistance to help them either avoid or simply repay high medical bills. Obviously, when it comes to reducing the costs of medical treatment, taking proactive measures, like researching health insurance plans for those who are without coverage, is the best strategy, but there may also be help for those who are fighting high health insurance costs due to either not having insurance coverage or because an insurer may not meet certain costs.
Understandably, health insurance and types of health care coverage have been major issues for many men and women as there are not only unemployed individuals facing problems related to being uninsured, but there are also those who are employed but may not have health insurance or are in a position where they feel coverage is simply too costly. Yet, health insurance options often range in cost, coverage, and overall effectiveness for consumers who are in a variety of positions, so exploring these coverage plans primarily is one of the first steps that consumers must take to avoid excessive medical debt entirely.
Everything from a short-term health insurance plan to a comprehensive personal plan can be acquired by most individuals, but there are still factors like preexisting conditions and, of course, high costs that may be faced by some and these often prove to be obstacles that either prevent a consumer from getting the medical insurance they need or it can cause the costs of coverage to increase drastically. While there are some proponents of simply getting a short-term health insurance plan or even high deductible insurance, so that a consumer can at least guard themselves against high medical costs were an accident or injury to arise, there are some individuals who are turning to health care advocates as a way to help them fight medical costs or acquire some form of debt relief when their bill arrives.
According to an article on MarketWatch.com, “Health-care advocates can work intensively during a medical crisis or sporadically if a client’s needs are more episodic.” These advocates, which are sometimes called patient advocates, are essentially individuals who, for a fee, can help consumers when it comes to sorting out medical bill difficulties, making sure that their insurance coverage meets all of the required costs under the policy’s guidelines, and they can even be helpful when it comes to choosing a hospital. However, if a consumer looks to an advocate to help them with their health insurance needs, medical bills, or other factors related to the financial side of medical coverage, a great deal of research needs to be done on a particular advocate, if a consumer chooses to work with a private company or individual.
These individuals need to have proper credentials before a consumer works with a particular advocate, and this aspect of a agent or company should be explored by any consumer looking for assistance when dealing with these medical costs, as there are individuals who offer services to consumers who, in certain cases, may feel overwhelmed with medical debt as a result of not having their insurance properly meet certain costs.
Understandably, individuals who are looking for ways to contest items on a hospital bill or simply get their insurance company to pay when coverage may be denied in certain cases, have benefited from these health care advocates, but many advisers state that consumers that are most likely to face excessive medical debt are those who are uninsured or may not fully understand their policy. Obviously, there are some issues that consumers may face where they will need outside assistance if their medical debts have become overwhelming, but simply exploring individual health insurance plans or even a short-term health insurance policy that will help cover excessive medical costs is one of the more widely suggested options for uninsured individuals so that they can avoid the need to find medical debt relief, but rather will have some sort of policy in place to help them reduce the overall amount they pay if medical treatment is needed.