These Uncertain Times

His toughest opponent yet Wallstreetpro2 vs.CAR

2009-06-26T16:21:00.001-04:00

This guy is off the chain. He should teach college classes in economics.

Economics 101

2009-06-06T20:32:00.001-04:00

This guy knows more about the economy than 10 presidential advisors. He explains it in plain terms using sailor's language....cover your kid's ears, because this guy tells it how it is.

"Obama Man Can" by Greg Morton

2009-05-24T00:39:00.001-04:00

Obama Man Can.....

This is some funny stuff!

Is Anyone Minding the Store at the Federal Reserve?

2009-05-11T18:19:00.001-04:00

Absolutely amazing! There is nobody at the helm.... This ship is on autopilot and headed for an iceberg.

CBS 60 MINUTES INTERVIEW - WAS OBAMA HIGH?

2009-04-01T21:11:00.001-04:00

This was good for a chuckle!

How to Feed a Family of Six for $35 a week.

2009-03-02T14:59:00.005-05:00

I saw this post on the "Life After the Oil Crash Forum" and thought it might be of interest to you guys.

I have a family of six and I feed everyone for less than $35 per week.
Here's how I do it:
Dairy--Catch one of the milk drivers that delivers to the convenience stores.
They will give you all the milk/dairy that you can handle. When they deliver the new dairy to the store they also take away the unsold dairy.
It would otherwise simply be thrown away upon returning to the distribution center. It may be at date or close to date but the sheer volume is insane.

Bread--Bakery thrift stores will give you cases of bread and other pastries prior to disposing of them. All you need to do is ask.
Worst case scenario is you get it after they throw it away but that is seldom the case.

Meat--Acquaint yourself with your local butcher or at least the manager of the meat counter at your grocery store. Nine times out of
ten you can get free meat that is at date. TALK to him for a couple of minutes before you ask for the meat. You may have to tell a
white lie and say that the meat is for your dogs. Never say "dog", to get higher volumes of meat you need to have "dogs." If you do
not get the meat for free you can buy 50 pounds for $5 or less, especially since it is not "for human consumption." Freeze it that day
or get to grilling!!

Produce--As mentioned above, acquaint yourself with the produce manager at your grocery store. You will want to tell him that you have
a couple of pigs and a few chickens that you want to feed. He will give you all of the old/bruised/excess/frozen fruits and veggies. You
will not believe what you will get. 200 apples, each with a bruise on them is still 200 apples. You can make applesauce and canned apple
butter that will keep for years.

There are dozens of other food retailers and vendors that will give you the leftover food at the end of the business day, all you have to do
is ask for it. Any store or shop that has a glass display case full of food is the place you want to go. Donuts shops are the best
example. I mean seriously, what do you think that they do with all the unsold food at the end of the day? It doesn't vaporize or go to
"food heaven." It gets thrown away.

One more note: Go to Pizza Hut and cut a deal with the lunch manager. They have a lunch buffet and you can buy all of the leftover pizza
from the buffet about ten minutes past 1pm. I used to have a deal with a PH manager to buy all of the leftover buffet pizza five days per
week. I paid the manager $20 per week for all of it. There were 3-4 large pizzas worth every day. I am pretty sure the $20 bill went home
with him at the end of the week instead of into the register. But what do you care?

Wake up, look around!! We live in America for Gods sake. We are the most wasteful and stupid society that has ever graced Gods green earth.
If there is one thing that epitomizes America it is overproduction and waste. If you can't find free food here then you just aren't trying...

Rick Santelli's Rant

2009-02-19T15:51:00.001-05:00

This was GREAT!!! Rick nailed it!!!

2008 Latest Edition - Did You Know 3.0 - From Meeting in Rome this Year

2009-02-10T21:32:00.001-05:00

If you didn't feel small and insignificant before you watch this video, you definitely will after!!!

This video was played at the Sony BMG Rome Meeting this year.

Uncle Jay Explains: Year-end! 12-22-08

2009-01-03T10:40:00.002-05:00

Now This Really Sums it up

A REAL and PROVEN Solution to The Crisis

2008-10-11T13:07:00.004-04:00

The following article was posted by Karl Denninger on his Martket-ticker blog. http://market-ticker.denninger.net/archives/605-Genesis-Plan-Now-Known-Workable.html

This is a very insightful look into the current financial crisis and what can be done to solve the root problems associated with the crash.

Please read this and forward this information to EVERYONE YOU KNOW.

Hobo

The Genesis Plan is Now Known Workable

We learned a number of things today - important things.

First - Lehman's CDS and bond auction process told us two things:

Even though they were dirtier than a hobo who hadn't had a bath in a month, they had enough value left in their bonds to wind up positive. Yes, it was less than a dime on the dollar. But it was a positive number. That's all that matters.
There were no fails on the posting of collateral against settlement.
Now for the last year we have been told that:

You can't trigger the CDS, it will cause a systemic, chain-reaction style nuclear meltdown.
These firms are so broke that there is no value left in them.
Both are now known to be false.

This gives us hope - and a path out of the darkness.

Its called "The Genesis Plan" and is what I have proposed.

The question raised about this plan is whether the "cramdown" provisions could possibly work - that is, if put through them, would the firm come out the other end, or be squashed like a bug as there was insufficient equity left in the bonds.

We now know the answer for one of the worst of the ugly - the equity is there, even if only by a scrape, to clear the firm's balance sheet and spit it out on the other side.

Folks, if there was a time to absolutely flood your Congressmen, the media, and every pundit and wonk you can find, this is it.

The short version of The Genesis Plan is:

Everyone must expose their balance sheet; all Level 2 and 3 assets must be declared and all models disclosed in full immediately and every quarter hereafter.
The CDS monster must be caged by forcing it onto an exchange where O/I and margin supervision can be maintained. This is already in process and must be completed.
Leverage must be returned to no more than 12:1 across the system - no exceptions.
The last point is obvious - every firm that has detonated has had leverage well beyond 12:1. None that have had less leverage have blown up. Game, set, match.

#2 is obvious and in process.

This leaves #1.

Now doing #1 will cause some insolvencies to be uncovered. Maybe a lot of them.

For each of those firms perform a "cramdown" of the debt to equity, using the retained value in the bonds to cover the liabilities that rendered the firm insolvent.

If there is recovery value (in most cases there will be, as we saw with Lehman) then the bondholders get newly-issued equity in ratable proportion to their (former) ownership of the bonds. The existing equity is wiped out. The firm, having no balance sheet debt whatsoever, can then immediately raise capital in the market to recapitalize itself (having a clean balance sheet this is a trivial task)

For those firms that have zero equity remaining, the government can step in and inject capital via a super-senior tranche as necessary to establish a working capital base. Remember, with a 6% Tier 1 capital requirement a little goes a long way - $10 billion injected results in over $160 billion of available gearing! Bingo - the firm is back on its feet. Protect the taxpayer in these transactions by attaching an onerous coupon to the issue so that it will be rapidly repaid (e.g. 3mo LIBOR + 600 bips) and cleared.

The objection to this plan will be that existing equity holders will be wiped out and bondholders will take a haircut.

Well, bond holders are no worse off than if the firm went under. They would get their recovery value anyway, and they still do - its just in the form of equity instead of cash.

As for equity holders, they're wiped out in a bankruptcy too.

The real objection to this is going to come from the executives, who will see their stock options rendered worthless along with their restricted shares. However, they remain in place (if the shareholders will have 'em) and as a consequence can rebuild their equity over time.

I have a solution for that problem too - make clear that any firm that turns down this demand is free to do so, but they will receive exactly zero access to the discount window or any other Fed or government borrowing facility, and if they go down, that's too bad - no help. We let Mr. Market take care of 'ya. Either take this deal now, or take your chances.

The Genesis Plan is demonstrably superior to the TARP/EESA for the following reasons:

The Genesis Plan immediately restores trust to the credit markets as balance sheets are instantaneously exposed and remain able to be evaluated by the marketplace. EESA does nothing to guarantee the return of trust to the credit markets as it does not deal with the underlying issue at all - the lies told by executives and firms in terms of their exposure to credit risk of all types.
The Genesis Plan addresses the root cause of all of the large-firm failures since the first of 2008 - excessive leverage. TARP/EESA is silent on the root cause of these business failures.
The Genesis Plan can be represented in a half-dozen pages of legislation. The EESA required over 100 to put in proper oversight. Since there is nothing other than ministerial activity required under The Genesis Plan and no discretion to abuse, such oversight is not necessary as with the EESA.
The Genesis Plan uses no taxpayer money at all for most institutions, and where taxpayer money is required it is intrinsically protected since it will sit at the top of a (new and clean) capital structure. The TARP/EESA uses all taxpayer and no private funds.
The Genesis Plan, when taxpayer money is used, goes directly to Tier 1 capital and thus is "high power" money; that is, it supports lending of $10-12 for every dollar put in. TARP/EESA is twelve times less efficient in the use of funds in that by purchasing assets zero leverage is obtained for each taxpayer dollar deployed.
The Genesis Plan promotes restoration of normal lending activity as it clears the impaired firm's balance sheet debt and immediately eliminates the issue of counterparty trust. TARP/EESA does not clear (although it does help remove items from) the firm's balance sheets and does nothing to address counterparty trust.
The Genesis Plan requires no lengthy administrative or "start up" time. It can literally be "up and running" immediately, with the exception of the CDS exchange, which is already under way. TARP/EESA was claimed to be required "immediately" but now is said to not be likely to actually go into effect until November at the earliest.
The Genesis Plan uses existing agencies who are already tasked with the required functions - auditing and reporting (OTS, OCC and the FDIC) and thus has very low "parasitic" costs. TARP/EESA establishes a new government agency and thus has a high parasitic cost requirement.
The Genesis Plan exposes the taxpayer to no credit risk. EESA/TARP exposes the taxpayer to $700 billion in taxpayer risk - or more.
While there were a few signs of credit market stress easing (a bit) today, there were also more anecdotes of things getting much worse. I see nothing to suggest that short-term lending has returned to normal, and until I do, I remain on high alert for the sort of disruptive events that can impact your life in very undesirable ways.

Yes, the market bounced hard today. Twice. Artificial? Maybe. Inside knowledge? More probably. Will whatever the "crackberry network" was buzzing about work? Likely not for more than a few days, but with the market this jittery, it doesn't matter - when the VIX is this high anything that makes people jump causes this sort of reaction - in either direction.

Get on it folks - plaster the media and your elected officials with the fact that we now have hard evidence that this path forward will not only work on a technical basis, but if it is adopted it will clear the credit markets almost immediately, which is the key element of this mess that must be resolved.

Any public official or media that wants to get ahold of me - the contact link works, and you're invited to use it.

We must fix this mess and we must do it now!

Today the Bottom Fell Out

2008-09-15T22:20:00.001-04:00

Tonight while drinking my gin and bitters (Wall Street On The Rocks) I found this great video on youtube...

It REALLY sums things up.

Why The Fannie-Freddie Bailout Will Fail

2008-09-08T10:13:00.003-04:00

The following is an excerpt from Martin Weiss's Money and Markets Newsletter.

http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=2198

I suggest you pay attention to what Martin is saying....he is much more often right than wrong in these matters.

Why The Fannie-Freddie Bailout Will Fail
by Martin D. Weiss, Ph.D.

With yesterday's announcement of the most massive federal bailout of all time, it's now official: Fannie Mae and Freddie Mac, the two largest mortgage lenders on Earth, are bankrupt.

Some Washington bigwigs and bureaucrats will inevitably try to spin it. They'll avoid the "b" word with vengeance. They'll push the "c" word (conservatorship) with passion. And in the newspeak of 21st century bailouts, they'll tell you "it all depends on what the definition of solvency is."

The truth: Without their accounting smoke and mirrors, Fannie and Freddie have no capital. The government is seizing control of their operations. Their chief executives are getting fired. Common shareholders will be virtually wiped out. Preferred shareholders will get pennies. If that's not wholesale bankruptcy, what is?
Some Wall Street pundits and pros will also try to twist the facts to their own liking. They'll treat the bailout like long-awaited manna from heaven. They'll declare that the "credit crisis is now behind us." They may even jump in to buy select financial stocks. And then they'll try to persuade you to do the same.
The reality: This was the same pitch we heard in August of last year when the world's central banks made a coordinated attempt to rescue credit markets with massive injections of fresh cash. It was also the same pitch we heard in March when the Fed bailed out Bear Stearns. But each time, the crisis got progressively worse. Each time, investors lost fortunes.

Together, both Washington and Wall Street are trying to persuade you that, "no matter what, the government will save us from financial disaster." But the real lessons already learned from these events are another matter entirely:

Lesson #1. Each successive round of the credit crisis is far deeper and broader than the previous.

In 2007, the big news was big losses; in 2008, it's big bankruptcies.

In March, the failure of Bear Stearns shattered $395 billion in assets. Now, just six months later, the failure of Fannie Mae and Freddie Mac is impacting $1.7 trillion in combined assets, or over four times more. And considering the $5.3 trillion in mortgages that Fannie-Freddie own or guarantee, the impact is actually thirteen times greater than the Bear Stearns failure.

Lesson #2. Despite unprecedented countermeasures, Washington has been unable to stem the tide.

Yes, the Fed can inject hundreds of billions into the banking system. But if banks don't lend, the money goes nowhere.

Sure, the Treasury can inject up to $200 billion of capital into Fannie and Freddie. But if their mortgage portfolio is full of holes, all that new capital goes down the drain.

And of course, the U.S. government has vast resources. But if the $49 trillion mountain of U.S. debts and the $180 trillion pile-up of U.S. derivatives are beginning to crumble, all those resources don't amount to more than a band-aid and a prayer.

Lesson #3. Shareholders are the first victims.
Bear Stearns shareholders got wiped out. Fannie and Freddie Mac shareholders are getting wiped out. Ditto for shareholders in any of Detroit's Big Three that go belly-up, any bank taken over by the FDIC or any insurer taken over by state insurance commissioners.

The Next Lesson:
The Primary Mission of the Fannie-Freddie
Bailout Will Ultimately End in Failure

Most people assume that when the government steps in, that's it. The story dies and investors shift their attention to other concerns. In smaller bailouts, perhaps. But not in this Mother of All Bailouts.
The taxpayer cost for just these two companies — up to $200 billion — is more than the total cost of bailing out thousands of S&Ls in the 1970s. But it's still just a fraction of the liability the government is now assuming.
Why?

First, because the number of home foreclosures and mortgage delinquencies has now surged to a shocking four million — and a substantial portion of the massive losses stemming from this calamity have yet to appear on Fannie's and Freddie's books.

Second, because the U.S. recession is still in an early stage, with surging unemployment just beginning to cause still another surge in foreclosures and mortgage delinquencies.

Third, even before Fannie and Freddie begin to feel the full brunt of the mortgage and recession calamity, their capital had already been grossly overstated.
Indeed, right at this moment, while Wall Street analysts are trying to evaluate the details of a bailout plan that's supposed to save them, regulators and their advisers are poring over the Freddie-Fannie accounting mess they're supposed to inherit. According to Gretchen Morgenson and Charles Duhigg's column in yesterday's New York Times, "Mortgage Giant Overstated the Size of Its Capital Base" ...
Freddie Mac's portfolio contains many securities backed by subprime and Alt-A loans. But the company has not written down the value of many of those loans to reflect current market prices.

For years, both Freddie and Fannie have effectively recognized losses whenever payments on a loan are 90 days past due. But in recent months, the companies saidthey would wait until payments were TWO YEARS late. As a result, tens of thousands of other loans have also not been marked down in value.

Both companies have grossly inflated their capital by relying on accumulated tax credits that can supposedly be used to offset future profits. Fannie says it gets a $36 billion capital boost from tax credits, while Freddie claims a $28 billion benefit. But unless these companies can generate profits, which now seems highly unlikely, all of the tax credits are useless. Not one penny of these so-called "assets" could ever be sold. And every single penny will now vanish as the company goes into receivership.

In short, the federal government is buying a pig in a poke — a bottomless pit that will suck up many times more capital than they're revealing. My forecast:
Just to keep Fannie and Freddie solvent will take so much capital, there will be no funds available to pursue the primary mission of this bailout — to pump money into the mortgage market and save it from collapse. That mission will ultimately end in failure.

The Most Important Lesson of All:
As the U.S. Treasury Assumes
Responsibility for $5.3 Trillion in Mortgages,
It Places Its Own Borrowing Ability at Risk

The immediate reason the government decided not to wait any longer to bail out Freddie and Fannie was very simple: All over the world, investors were beginning to reject their bonds, refusing to lend them any more money. So the price of Fannie and Freddie bonds plunged, and the yields on those bonds went through the roof.
As a result, to borrow money, Fannie-Freddie had to pay higher and higher interest rates, far above the rates paid by the U.S. Treasury Department. And they had to pass those higher rates on to any homeowner taking out a new home loan, driving 30-year fixed-rate mortgages sharply higher as well.
Now, with the U.S. Treasury itself stepping in to directly guarantee Fannie-Freddie debts, Washington and Wall Street are hoping this rapidly deteriorating scenario will be reversed.

They hope investors will flock back to Fannie and Freddie bonds.

They hope investors will resume lending them money at a rate that's much closer to the Treasury rates.

And they hope Fannie and Freddie will again be able to feed that low-cost money into the mortgage market just like they used to.

In other words, they hope the U.S. Treasury will lift up the credit of Fannie and Freddie.

There's just one not-so-small hitch in this rosy scenario: Fannie's and Freddie's mortgage obligations are just as big as the total amount of Treasury debt outstanding.So rather than the Treasury lifting up Fannie and Freddie, what about a scenario in which Fannie and Freddie drag down the U.S. Treasury?

To understand the magnitude of this dilemma, just look at the numbers ...
Mortgages owned or guaranteed by Fannie and Freddie: $5.3 trillion.

Treasury securities outstanding as of March 31, according to the Fed's Flow of Funds (report page 87, pdf page 95): Also $5.3 trillion.

If Fannie's and Freddie's obligations were equivalent to 10% or even 20% of the U.S. Treasury debts, the idea that they could fit under the Treasury's "full faith and credit" umbrella might make sense. But that's not the situation we have here — Fannie's and Freddie's obligations are the equivalent of 100% of the Treasury's debts.

And it's actually worse than that:
Foreign investors, the most likely to dump their holdings if they lose confidence in the United States, hold an estimated 20% of the Fannie- and Freddie-backed mortgages outstanding. But ...

Foreign investors own 52.7% of the Treasury securities outstanding (excluding those held by the Fed).

So based on the above stats, Treasury securities are actually more vulnerable to foreign selling than Fannie and Freddie bonds.

What happens if the international mistrust and fear afflicting Fannie and Freddie bonds infects U.S. Treasury bonds? Foreign investors would start dumping Treasury securities en masse. They'd drive Treasury rates sharply higher. And they'd wind up forcing Fannie and Freddie to pay much higher rates for their borrowings after all.
How will you know? Just watch the all-critical spread (difference) between the yield on Fannie-Freddie bonds, considered lower quality, and the yield on equivalent government bonds, considered high quality. Then consider these two possibilities:
If that spread narrows mostly because Fannie and Freddie interest rates are coming down toward the level of the Treasury rates, fine. That means the immediate goal of the bailout is being achieved. BUT ...

If the spread narrows mostly because Treasury rates are going up toward the level of Fannie's and Freddie's rates, that's not so fine. It not only means a failure to achieve the immediate goals, but it will also imply that the entire Fannie-Freddie bailout is backfiring on the Treasury.

The Treasury will ultimately have to effectively abandon Fannie and Freddie: It will set a cap on the resources it will commit. It will not write a blank check. In the final analysis, it must save its own neck first.

Take A Load Off Fannie

2008-08-25T08:43:00.001-04:00

The Story of Fannie Mae as told by The Band.

We are looking at buying this new hybrid

2008-08-15T22:59:00.001-04:00

This hybrid gets over 100 smiles per gallon! With the current cost of fuel, it may become necessary for us to go green.

FED UP USA ----- Financial Crisis 2008

2008-07-23T09:39:00.007-04:00

This video just came out this morning at http://www.fedupusa.org Please take the time to watch it and get educated about what is happening to us. This may be the most important thing you can do today.

After viewing the video, TAKE ACTION! Sign the petition at http://www.fedupusa.org

BOMBARD your congressmen with emails and phone calls. FORWARD this information to everyone you know. We MUST get their attention.

FAILURE IS NOT AN OPTION. If the bailout occurs, we (the taxpayer) will have to fund it.

Peak Oil Truths and Consequences

2008-06-25T12:13:00.004-04:00

Below is an excerpt from Weiss Research,Inc.'s Money and Markets http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1908
I hear that along with Peak Oil, the world is now hitting Peak Fertilizer. Well, there's enough BS being spread about the oil crisis that it could solve our fertilizer problem in a jiffy.

Much of it is — no surprise — coming from Washington. Another load of bull is coming from our so-called "friends" in the Middle East. Even corporate America, where you might expect common sense to hold some sway, is busy shoveling misinformation. As a result, many investors are left neck-deep, choking, and grasping for a lifeline.

The good news is that I do have solutions for you. More on that in a little bit.

First, I want to start with some Peak Oil truths, half-truths, outright lies, and the dire consequences that are coming due if we don't get on the stick soon.

Truth: America consumes 25% of the
world's oil (20.5 million barrels per day),
but has 3% of the world's oil resources.

Right now, we pump 7% of the world's production (in other words, we are depleting our resources faster than other parts of the world). But we don't have enough oil to meet our own needs — we cannot drill our way out of this.

But here's some good news: Although the U.S. is the biggest consumer of oil, the U.S. represents only 4.8% of the world's population. That means we have plenty of room to save oil by pushing conservation.

Truth: The Saudis aren't our friends.

Despite their recent assurance to raise oil production to record levels within weeks, Saudi Arabia has effectively used propaganda methods for decades to convince governments, corporations and individuals to believe their statements.
The market is grateful because the Saudis are talking about boosting production by 200,000 barrels per day on top of a 300,000 barrel per day hike in May. But this is just bringing Saudi production back to the level it was at in 2006. Why did the Saudis cut production in the first place? Because they want higher oil prices!

OPEC production cuts, rebel attacks in Nigeria, mismanagement in Venezuela and the crashing of production in Mexico have all removed about a million barrels a day from the global market. The Saudi hike barely makes up for half that. With friends like that, who needs enemies?

And while the Saudis say they are raising production ...

Truth: OPEC exports will probably FALL in July.

According to Britain-based tanker tracker Oil Movements, OPEC crude oil shipments are projected to fall by 230,000 barrels a day to a total 24.59 million barrels a day in the four-week period to July 5.

The biggest drop is in the Middle East. Shipments from key Middle Eastern OPEC producers are projected to decrease by 350,000 barrels a day to 17.63 million barrels a day.

Oil Movements forecasts OPEC exports based on spot and term chartering of crude oil from OPEC member countries.

So how does this jibe with Saudi Arabia's promise of more production? Answer: It doesn't! But then, a promise made isn't always a promise kept.

Truth: America isn't in the driver's seat
when it comes to global oil prices.

Global energy consumption increased by 2.4% in 2007 on top of a 2.7% increase in 2006. U.S. energy consumption was flat, while Chinese consumption rose by 7.7%. This year, emerging markets combined (China, India, Russia and their other "life in the fast lane" buddies) will pass the U.S. in oil use. Going forward, global oil consumption is expected to keep climbing even as U.S. consumption eases. After all ...

Americans each use 25 barrels of oil per year.

The Chinese each use 2 barrels of oil per year.

And the folks in India each use just 1 barrel of oil per year.
Where do you think the growth is going to come from? The rest of the world wants to live and drive like Americans!

So with China in the driver's seat and India close behind, the U.S. can't do much to influence prices unless it cuts consumption sharply.

Truth: Refineries are the biggest bottleneck.

The kind of oil U.S. refineries like to turn into gasoline is called light, sweet crude. Light sweet crude is in short supply, especially with the Nigerian oil fields under siege by rebels. But Saudi Arabia and other Middle East countries actually have excess "heavy, sour" crude that is not easily turned into gasoline by most refineries. Iran's state-owned National Iranian Oil Co has been unable to sell about 25 million barrels of crude stored in 14 oil tankers anchored in the Arabian Gulf, even though the price on that heavy oil is discounted by up to $13 a barrel!

Refineries in the U.S. are running at less than 90% of capacity. The culprits: Poor maintenance, reduced productivity of workers, no new technology, and more. And oil companies aren't exactly eager to spend $7 billion to $10 billion and 5 years building new refineries that could handle heavy, sour crude if we're on a collision course with peak oil.

Truth: There aren't enough drilling
rigs or ships to exploit the deep-water
fields in the Gulf of Mexico.

The world's existing drill-ships are booked solid for the next five years.

And that shortage should continue. Transocean, the world's largest drilling company, is building nine new deepwater rigs, and eight of them are already under contracts that run from four to seven years — even before they leave the shipyards!

Those drill ships are designed to plumb the depths of deepwater oil fields, those below more than 1,000 feet of water that represent one of the final frontiers of oil prospecting. In fact, some of the best prospects are in so-called ultra-deepwater fields beyond 5,000-foot depths. Thanks to the shortage, drilling costs for some of the newest deepwater rigs in the Gulf of Mexico have hit $600,000 a day, compared with $150,000 a day in 2002. So while we might eventually find more oil there, it won't be cheap oil.

Half-truth: Billions of barrels of oil are
locked away, out of reach, on federal lands.

Well, sort of. There may be up to 75 billion barrels of oil on land that is currently off limits. But there's probably a lot more than that on 68 million acres of land that oil companies can currently drill, but aren't.

According to the Mineral Management Service two-thirds of the 36 billion barrels of oil believed to lie on federal land, mainly in the Rocky Mountain West and Alaska, are accessible to drilling. Another 89 billion barrels of recoverable oil is believed to lie offshore, and fourth-fifths of that is open to industry. And it's not just oil — in the Gulf of Mexico, four times more natural gas is probably contained in the areas already open to drilling than in those protected by the ban.

In the last four years, 10,000 more permits have been issued to oil and gas drillers than have been used. That means the companies are actually stockpiling extra permits.

As for the offshore areas in the Gulf of Mexico, there are 7,740 active leases and only 1,655 in production. Only 10.5 million of the 44 million offshore leased acres are currently producing oil or gas.

So why do oil companies want to open up new lands for drilling? Maybe it's that if they lease that new land — and stockpile more permits — they can add to their "potential" oil reserves without putting one drill in the ground, and potentially boost their share prices in the short term.

Lie: Drill here, drill now, and pay less.

The talking point in some parts of Washington is that if only we would open up the Alaska National Wildlife Reserve (ANWR) and restricted parts of the Gulf of Mexico to drilling, gasoline prices would fall pretty quickly.

Nothing could be further from the truth. Now let me be clear — I believe we SHOULD open up ANWR and the offshore Florida coast to drilling — eventually we'll want all the oil we can get from those spots, so we might as well start the process now. But it won't affect prices at the pump for years to come. Even if we dropped the ban right now, production probably wouldn't start before 2017.

A 2004 study by the government's Energy Information Administration (EIA) found that drilling in ANWR would trim the price of gas by 3.5 cents a gallon by 2027. If oil prices continue to soar, the savings would be more, but not much. Opening up areas off the Florida Coast may also cut gasoline by a few pennies a gallon when that oil eventually comes to market.

Reason: While offshore territories and public lands like ANWR may contain up to 75 billion barrels of oil, and that may sound like a lot, it won't make a significant difference in a world that uses about 86 million barrels of oil a day and will use even more by the time those fields start pumping.

However, that said, the Democrats are on the wrong side of this issue. Sure it will take years to find new fields and get them producing. But we'll still need oil in 2017, 2027 and beyond, and it will be more valuable — and more useful — than it is now.

So while I'm in favor of drilling off the coast of Florida, people should be aware that it won't lower gas prices anytime soon ... and they should want to do it for the right reasons, AFTER we already have a massive conservation program underway.

The bottom line is that the best thing we can do to lower the price of oil very quickly is to conserve. After all, the cheapest oil is oil you DON'T use.

Lie: Opening up Florida's coast to offshore
drilling will be an environmental disaster.

Actually, drilling industry technology and safety standards in North America are getting better. Drillers have a very good track record in recent years. And remember how Hurricanes Katrina and Rita ripped up rigs all through "Energy Alley"? That didn't cause massive spills.

There IS a "dead zone" the size of New Jersey in the Gulf of Mexico, but it's caused by fertilizer and chemical run-off from Midwestern farms that flush out through the Mississippi. The recent floods in the Midwest and the resulting washout of chemicals into the Gulf are probably causing more of an ecological disaster than new drilling ever could.

Lie: The oil market needs more regulation.

The topic of energy speculation is taking center stage on Capitol Hill this week, where nine bills attempt to limit the role of traders. A House panel examination is set for Thursday.
Oh, please! A U.S. Commodities Futures Trading Commission (CFTC) investigation showed NO evidence of price fixing in the commodities markets. Global investors (perhaps including a fund that's in your 401k) are hedging their bets in the stock market by betting on rising commodity prices. Oil is a commodity that looks like an especially good bet. Therefore, there's speculation in oil futures.

This isn't a plot by the Forces of Evil. It's the way free markets work. And while big funds may buy oil futures contracts, they don't take delivery — in other words, they aren't adding to global demand.

As for regulating the oil companies themselves — while I don't think they need tax breaks, I don't think they need Big Brother riding them either. If they want to drill, let's cut the red tape and get out of their way.

Lie: The government is working to solve the crisis.

This is the most depressing lie of all. I already told you about the Democrats being on the wrong side of offshore drilling. And just last week, GOP members of the Senate put the kibosh on a bill that would have extended tax credits for wind power, solar, and renewable energy sources like biomass, geothermal, landfill gas and trash combustion. There is no good excuse for the GOP action — none — except that it makes their contributors at the oil companies happy (less alternative energy means more demand for oil). And leadership from the White House on this issue has been laughable.

The flood of lies and the inability to see the truth has consequences ...

If America Doesn't Get Its Act Together,
The Consequences Will Be Dire

Here are just three things that could go wrong ...

1) We could lose the natural resource wars. Countries like China and India have a plan. What resources they don't have enough of, including oil, they go out and get by making deals. The U.S., on the other hand, makes enemies.

The U.S. plan was (apparently) to seize the oil from Iraq. That didn't work out so well, though Iraqi oil production is finally climbing. Now, the same people in Washington who wanted to invade Iraq are pushing for war with Iran. If it comes to that ... if the Iranian oil fields go up in flames and they start lobbing missiles around the Middle East ... forget $200 per barrel oil. Heck, oil prices will probably go to $300 or even $400 per barrel.

Apocalyptic literature sales are booming in America as oil prices explode. Author John Walvoord's deep and probing book entitled Armageddon Oil and the Middle East Crisis: What the Bible Says About the Future of the Middle East and the End of Western Civilization has sold over 1 million copies.
2) We could slide into a steep recession. High energy prices are already killing the airlines and hammering American companies both big and small. In contrast, the World Bank just raised China's economic growth forecast to 9.8% from 9.4%.

An expanding Chinese economy is very bullish for oil/diesel/gasoline prices, even though China is cutting fuel subsidies for its citizens. Last week, China announced it was raising the cost of diesel and gasoline by about 42 cents a gallon. But folks in Beijing still get fuel at a discount, and they'll probably have more of it BECAUSE prices went up — before the price hike, fuel stations across China sometimes ran out of gasoline because Chinese companies don't like to sell at a loss.

China's biggest area of growth is internal demand. If it keeps growing while the U.S. economy falters, that could spark more trouble ...

3) The U.S. dollar could tumble even lower. The U.S. dollar is 86% negatively correlated to the price of oil. That means when one goes up, the other usually goes down.

This makes our Arab oil "friends" grind their teeth, because they're selling oil in dollars. If rising oil prices weaken the U.S. economy, pushing the U.S. dollar lower, that's one more reason for OPEC to move to pricing oil in a basket of currencies.

The U.S. dollar is propped up by its role as the world's reserve currency for oil transactions. If that is undermined, that could send the greenback crashing on its next big leg down.

See more of this article at http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1908

THAT ROSE, FANNIE MAE - versusplus.com HOUSING BUBBLE parody

2008-06-17T22:05:00.001-04:00

Oh that rose, FANNIE MAE!!!! The sheeple beg for a bailout. For the rest of us the rose really blows.

Ray Charles - Busted

2008-04-18T22:47:00.001-04:00

My bills are all due and the baby needs shoes and I'm busted
Cotton is down to a quarter a pound, but I'm busted
I got a cow that went dry and a hen that won't lay
A big stack of bills that gets bigger each day
The county's gonna haul my belongings away cause I'm busted.

I went to my brother to ask for a loan cause I was busted
I hate to beg like a dog without his bone, but I'm busted
My brother said there ain't a thing I can do,
My wife and my kids are all down with the flu,
And I was just thinking about calling on you 'cause I'm busted.

Well, I am no thief, but a man can go wrong when he's busted
The food that we canned last summer is gone and I'm busted
The fields are all bare and the cotton won't grow,
Me and my family got to pack up and go,
But I'll make a living, just where I don't know cause I'm busted.

I'm broke, no bread, I mean like nothing,

The Federal Reserve is WRONG

2008-03-07T09:05:00.004-05:00

Now that Fed Chief Ben "Hanky Panky" Bernanke has begun to acknowledge the housing crisis and its true impact on our economy, the "private recession" in the housing market is becoming public knowledge.

The fact is that "Hanky Panky's" statement the other day about how he wants Fannie and Freddie to "raise more money to purchase loans" and allow people to switch from subprime to federally insured mortgages be will only create further problems for our economy down the road. Since real estate is cyclical, we will eventually have another downturn. The bailout of that next downturn will fall squarely on us taxpayers.

This leads me to believe that the government is beginning to think that it is necessary to bailout the homeowners that are in trouble. THIS IS THE WORST THING THAT CAN HAPPEN.

What we really need is to have housing prices FALL. Yes it will be painful in the short term. The long term benefit of the lowered cost of housing is that "Joe Six Pack" can then actually AFFORD his home, while utilizing CONSERVATIVE mortgages that have none of the ugly surprises that the exotic mortgages of the past held buried within.

We never had this kind of growth in the housing market before, and we hopefully will never have this radical a downturn again....but the next downturn absolutely depends upon our handling this one properly.

I have already seen the benefits of lower cost of development property begin to stimulate that sector of the market. We need for this to apply across all real estate market segments that were inflated beyond their true value.

The bottom feeding has already begun in the residential development world. Lots that builders were paying big bucks for two years ago are now selling at amazing low prices. I am showing a subdivision today that is only $12,500 per FINISHED, pad-ready lot....former retail value over $60,000. This is located in a good area within Central Florida. Hedge funds are beginning to invest in these opportunities with billions of dollars available for 3-5 year projected holds.

I believe that the availability of reasonably priced lots will eventually help with the cost of housing, as long as there is a true downturn in retail housing prices. If the retail prices do not fall, builders and bulk investors will make too much money, possibly causing yet another crisis.

Meanwhile, if anyone wants a deal on some development property, hit me up!

Til next time,

Hobo

Predictions of Massive Bank Failures

2008-02-29T09:11:00.002-05:00

http://www.cnn.com/2008/LIVING/personal/02/27/bank.safety/index.html?ref=patrick.net

Between 100-200 bank failures are predicted for the next 12 - 24 months.

Looks like the line may increase at the soup kitchen.

Current Subprime Mess Eclipsing S&L Crisis

2008-02-22T15:08:00.002-05:00

Why is it that we are so stupid? It seems we can't learn from our past mistakes. This credit crunch was brought on by the same idiotic lending practices that caused the S&L crisis and now we have even bumped it up a notch.

http://www.mortgagenewsdaily.com/2192008_Subprime_Lawsuits.asp

Subprime Lawsuits Already Outpacing S&L Litigation

Even as the stock prices of investment banks began to fall and foreclosures started to rise, everyone knew what was coming next.
Lawsuits!
So a study released by Navigant Consulting Inc. last week was hardly a shock. The study shows that the number of subprime mortgage-related lawsuits filed in federal courts in the last few months have already outstripped the number of savings and loan (S&L) suits in the early 1990s.
According to the study, there were 97 such cases filed in the first half of 2007; a number that nearly doubled in the second half of the year to 181 for a total of 278 filings in 2007. There were 559 cases handled by the Resolution Trust Company during the S&L collapse, but these cases were over multiple years. Also, the subprime figures compiled by Navigant include only filings in federal courts.
Jeff Nielsen, managing director of Navigant Consulting said in a press release, "The S&L crisis has been a high water mark in terms of the litigation fallout of a major financial crisis. The subprime-related cases appear on their way to eclipsing that benchmark."
Forty-three percent of the 278 suits were borrower class actions, 22 percent were securities cases, and 22 percent were commercial contract disputes. The remainder was bankruptcy, employment, and other cases.
The study found that virtually every participant in the subprime mess is being sued. Fifty-six percent of the defendants are Fortune 1000 firms with mortgage bankers and loan correspondents representing the largest category of companies at 32 percent. However, mortgage brokers, lenders, homebuilders, servicers, title companies, appraisers, and loan servicers are all getting a share of the subpoenas.
Nielsen said "This appears to be just the beginning. We are already observing a steady acceleration of continuing litigation activity into 2008. The course of regulatory investigations, the prospect of government intervention and marketplace variables may affect the volume of filings, but the explosion of cases in 2007 suggests a daunting forecast of what is still to come."
Navigant Consulting is a NYSE firm providing consulting services to government agencies, legal counsel, and large companies. It focuses on industries undergoing substantial regulatory and structural change.

2008-02-17T11:48:00.000-05:00

Better Than Chicken

http://news.bbc.co.uk/2/hi/business/7230233.stm

How Low Will it Go?

2008-02-07T12:15:00.000-05:00

I find it amazing to see how far off the highs the home prices have fallen in their respective markets. Around here, all the hobos are taking bets on the rates of decline. Take a look at the charts below and see how your area is faring.

The S&P/Case-Shiller® Home Price Indices measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States.

These indices use the repeat sales pricing technique to measure housing markets. First developed by Karl Case and Robert Shiller, this methodology collects data on single-family home re-sales, capturing re-sold sale prices to form sale pairs.

This index family consists of 20 regional indices and two composite indices as aggregates of the regions. The S&P/Case-Shiller Home Price Indices are calculated monthly and published with a two month lag.

New index levels are released at 9am Eastern Standard Time on the last Tuesday of every month. In addition, the S&P/Case-Shiller® U.S. National Home Price Index is a broader composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly.

Housing Bubble? What's Seems to be the trouble

2008-01-30T14:52:00.000-05:00

Housing Bubble? What's the Trouble Now?

http://ie.youtube.com/watch?v=Ivp4YqGCI-s

Thanks iTulip

Song by Dave Girtsman

Tent City Video

2008-01-30T14:47:00.000-05:00

Coming to your town?

http://www.youtube.com/watch?v=jmeHiFZUWtE

Tent City In The Suburbs

2008-01-29T12:58:00.000-05:00

This one really grabbed my attention! Looks like we are going back to the days of the Great Depression... Tent towns in the suburbs...what will they think of next?

http://features.us.reuters.com/cover/news/D8C99CD0-AF35-11DC-9E67-616F0DA5.html

Tent city in suburbs is cost of home crisis , Thu 20 Dec 2007 REUTERS

Chicken Fried Squirrel

2008-01-23T17:43:00.001-05:00

Chicken Fried Squirrel

~ quartered and cleaned squirrels, 1 per person

~ buttermilk

~ OldBay seasoning

~ flour

~ salt & pepper

~ shortening

Soak your meat for at least an hour in buttermilk.
Combine the flour & OldBay until you can see the flour turn light pink. Sprinkle in some salt and pepper to taste.
Heat up your shortening to 375 degrees in a iron skillet or deep fryer deep enough to cover the meat.
Roll or shake your meat in the flour mix and fry until the coating is golden brown.
Take it out and place it on a rack to drain. Place it in your oven for about 1/2 hour at 275 degrees.
Serve and Enjoy!

I am baaack!

2008-01-21T13:08:00.000-05:00

Made a quick trip and now I am back...got a freezer full of meat.

This Hobo is On Da Road!

2008-01-18T12:42:00.000-05:00

I am outta here to Alabama for a few days. Goin huntin', gotta keep the freezer full.

Braised Raccoon (or other small furry critter)

2008-01-17T07:54:00.000-05:00

This is one of my favorite recipes. Goes good with some white lightning and corn bread. Of course most things go good with white lightning and corn bread!

Ingredients:

1 dead coon cut up into servng-size pieces

1 cup fruit (cranberies, blackberries, rasberries, etc.)

Salt and pepper, and garlic powder to taste

1 white/yellow or vidalia onion chopped fine

1/2 cup green onions chopped fine

2 sticks celery diced

1 bell pepper diced

1/4 cup minced garlic

2 cups chicken broth

1 cup apple cider

1/3 cup honey

one small orange (grate the zest), peel and section the orange

Dash of nutmeg

1/4 teaspoon ground cloves

Preheat oven to 350 degrees (or use covered dutch oven over a campfire)

Season the meat with the salt pepper and garlic powder and place in roasting pan/dutch oven

toss in the chopped/diced veggies.

In a mixing bowl combine the remaining ingredients (orange zest, orange sections, nutmeg, cloves, cider, honey) mix and pour over the meat.

Cover and bake for 2-3 hours. Adjust seasonings to taste.

Serve over rice

2008-01-16T08:09:00.000-05:00

The latest issue of Weiss Research Group's "Money and MarketsNewsletter"is an article by Sean Brodrick http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1364 that talks about the new Indian-made Tata "Nano" automobile and the effect that ultra-cheap cars will have on the world...especially when it appears as if the world has hit "Peak Oil."

At the present time, India has 4 cars per 1,000 people; with a population of over 1.1 BILLION. The $2,500 car is going to massively effect transportation and fuel consumption within India.

China has a similar situation currently putting 14,000 new cars on the road EVERY DAY!

Meanwhile, oil production has slowed due to the draining of the reserves. For instance, Mexico's Canterell Oilfield (one of the world's largest) is not producing nearlywhat it used to, and in fact now Mexico is facing becoming and oil IMPORTER instead of Exporter in approximately eight years. The past three years have seen a 40% decline in oil production at the Canterell Oilfield.

This decline in production is occurring in more places than just Mexico, it is becoming a global crisis frequently referred to as "Peak Oil."

The oil companies stand to make much more money as the prices increase. Investors would do well to invest in the oil sector during these changing times.

Countrywide Gives Mozilo a Golden Parachute

2008-01-15T13:03:00.000-05:00

I am absolutely outraged that the man who controlled the nation's largest mortgage lender should get such a deal. After all, under his guidance, Countrywide was a MAJOR influence on the current state of the real estate and credit markets.

I think that Mozilo should not only go to jail, but that the proceeds from his "Golden Parachute" should be spent directly on helping the very people he fleeced. The government should step in and direct the $115,000,000+ that Mozilo is to receive to be spent on bailing out Countrywide borrowers.

Instead it appears as if Mozilo will not only avoid prosecution, but he will reap the financial benefits of his actions for years to come.

What say you?

The article below was written by: DANIEL ARNALL ABC NEWS Business Unit Jan. 11, 2008
http://abcnews.go.com/Business/MarketTalk/Story?id=4121306&page=1

Angelo Mozilo, the co-founder and public face of troubled mortgage giant Countrywide, is eligible for tens if not hundreds of millions in compensation and perks on the sale of the company to Bank of America.

During calendar 2006, the latest period available for review in Securities and Exchange Commission filings, Mozilo took home $48.1 million in compensation. An early analysis of SEC filings by the Los Angeles Times suggests he could get upward of $115 million when he leaves after the sale is complete, despite the fact that the company tanked during the recent subprime mortgage crisis.

In December, Countrywide reported a record number of foreclosures and delinquencies in its loan portfolio. The value of shares has fallen more than 84 percent since mid-May of last year.
Bank of America today confirmed that Mozilo will stay on with the company through a "transition period." Countrywide wouldn't comment on Mozilo's pay.

His long tenure with the firm — he has been there since its beginning in 1969 — and extensive employment agreement gives him the right to a significant payout when he leaves.

Immediately upon a change in control, Mozilo would get $13.3 million in accelerated vesting of stock grants, according to the terms of his 2004 compensation agreement, included in the company's latest proxy statement.

Should he leave the company after the firm's buyout, Mozilo would get a one-time cash payment of $88 million.

These numbers are presented in the proxy in the context of a "hypothetical" change in control on Dec. 31, 2006. The date is necessary since some of the value of the benefits is based on share price. The company entered into a new employment agreement with Mozilo in 2007, which the proxy statement says guarantees substantially the same post-merger benefits.

A senior Democratic lawmaker welcomed on Friday Bank of America's $4 billion acquisition of Countrywide Financial Corp, but urged Countrywide's chief executive to donate some of his millions of dollars in pay to help subprime mortgage borrowers, Reuters reported.
The deal could be a "positive development" in the subprime mortgage crisis, said Barney Frank, chairman of the House Financial Services Committee.

Some of the perks to which Mozilo is entitled after a change in control, according to the official filing:

The company will retain Mozilo as a consultant. Mozilo is obligated to make himself available for a specified period of time each month through December 2011 and at the rate of $400,000 per year.

He will also be entitled to receive other benefits, including office space, secretarial support, use of the company's aircraft, financial consulting services and payment of annual country club dues.
For three years, continuing health, life insurance and financial planning benefits for Mozilo and his beneficiaries.

After those three years, health benefits for the lifetimes of Mozilo and his spouse.

A "gross-up payment" equal to the excise tax charged to him as a result of his receipt of any of the above (with certain exceptions).

All this is based on contractual obligations made with Mozilo when the company was doing well. The terms of the sale to Bank of America might have forced Mozilo to give up some of these benefits.

Shelter - I hope you never need this info.

2008-01-13T10:51:00.000-05:00

Field Expedient Shelters

The U.S. military's term for using natural objects to accomplish a task is field expedient (FE). If you're lost or stranded in the wild and you have no materials at all, you'll need FE tools and shelter.

FE shelters employ the same methods as ones built with ponchos or tarps. The only difference is what you use to cover the frame. After you build the frame, use branches and thicket to make up your roof. Pine boughs make for good insulation, but as long as you stack and weave lots of leaves, branches and twigs, you'll have adequate shelter. Think of your shelter roof as being shingled like a house. Work in layers from the ground up and keep the branches pointed toward down for rainwater runoff.

A debris hut is an FE shelter that's easy to build and provides great protection from the elements. To build one:

Place a ridgepole, the pole that runs the length of the shelter, with one end on the ground and the other on top of a sturdy base like a tree stump or boulder. You can also lash it to a tree.
Take two more thick branches and place them diagonally at the top of the ridgepole and lash them together with vine.

Use thick branches to line the length of the ridgepole to create the ribbed frame. Make sure it's wide enough to accommodate you.

Place smaller sticks crosswise to make a lattice effect.

Add lighter soft debris like pine needles and leaves until it's at least two feet thick -- the thicker the debris, the more protection it offers.

Cover the interior floor with pine and leaves and block the entrance with a rock or more debris.

A debris hut provides great protection in cold conditions. If you're in deep snow and have large evergreen trees around, build a tree-pit snow shelter:

Find a thick evergreen tree with low-hanging branches.

Dig down into the snow to your preferred depth and diameter -- the cozier the better.
Pack the interior snow well.
Use the natural branches above and add additional boughs for your cover.
Use boughs as insulators on the interior floor.

A tree-pit snow shelter takes a lot of energy to build, but it's a great insulator against frigid weather.

Some other tips to remember:

If you want a fire, it's best to keep it outside or near the mouth of the shelter. In extreme conditions, you can bring the fire inside, but it should be well-ventilated, and the flames should not be near the shelter walls.

Heat up rocks in the fire and stack them inside the shelter for extra warmth.

Always turn off your stove or lantern inside your shelter -- dangerous carbon monoxide gas can kill you.

Found metal isn't good to use for roofs. It will deflect rain and wind, but also reflect needed sun for warmth.

Snow is a great insulator, so use it as much as possible.

Pour water over thatched roofs in freezing weather -- this will ice over into a hard, protective insulator.

Whatever your emergency scenario, the most important thing is to remain calm and in control.

Panic will get you nowhere and knowing some rudimentary survival skills can be the difference between life and death. Basic shelters are easy to build and crucial to surviving the harsh elements of the great outdoors.

If you're an avid camper or hiker, you should practice building a shelter on your next excursion. It can be educational, potentially life-saving and a lot of fun.

The above is an excerpt from:

Charles W. Bryant. "How to Build a Shelter". December 29, 2007 http://travel.howstuffworks.com/how-to-build-a-shelter.htm (January 13, 2008)

Hobo Mattress:

To make a Hobo Mattress, you fill two large plastic garbage bags about half-full with newspaper, leaves, or whatever is handy and soft. Duct tape the open ends together to make a huge pillow. Cut the corners off (about 1 inch vent holes) to let the trapped air out. Nice and comfy.

Gold and Silver

2008-01-12T16:41:00.001-05:00

In These Uncertain Times, with the dollar on the decline, gold and silver are highly touted investments that have proven track records of performance.

A great way to buy gold and silver is through companies like http://www.monex.com/

*Financial Times, by Chris Flood, January 2, 2008:

"Gold’s advance leads way for oil and platinumCommodity markets made a flying start to 2008 with gold, oil and platinum setting records during the first trading session of the new year. Gold led the initial advance, rising 3.3 per cent to $861.10 a troy ounce, surpassing the previous high of $850 reached in January 1980.

The metal later eased back to $858.10 in late London trading. Traders said there was consistent selling pressure on gold in December as investors booked profits before the year-end, but that drag had cleared and Wednesday’s price rise indicated the strength of underlying sentiment.

Gold also found support from renewed dollar weakness after the influential ISM manufacturing survey indicated that industrial activity contracted in December, fuelling fears that the US economy could be dragged into recession as weakness in the housing market spreads into other sectors.

Gold’s strength spilled over into platinum, which rose 1.6 per cent to $1,544 a troy ounce."

Schwarzenegger's New Budget Plan for California

2008-01-12T09:28:00.000-05:00

The following is an excerpt from http://www.mercurynews.com/ci_7952647?source=rss&nclick_check=1

Budget crisis crimps Schwarzenegger's grand plans
In Schwarzenegger's budget problem, echo of Gray Davis era
By Mike ZaplerMercury News Sacramento Bureau
Article Launched: 01/12/2008 01:37:25 AM PST

SACRAMENTO - Arnold Schwarzenegger rode a wave of voter anger into the governor's office four years ago, fueled by frustration with his predecessor's handling of a massive budget deficit.

Now, with the state facing a $14.5 billion shortfall, the same issue that Schwarzenegger seized to win the recall election threatens to tarnish his legacy and consume his final two years in office.

Gone for the foreseeable future are the governor's ambitions to overhaul public schools; instead he is proposing cuts that education officials say would devastate schools. To salvage his dreams for universal health care, Schwarzenegger will have to persuade voters to embrace a sprawling multibillion-dollar plan at the same time they're being inundated by headlines about the state's money woes.

And his plan to close the deficit by slashing spending across the board, releasing 22,000 prison inmates early and closing 48 state parks could arouse the same ire that landed Democrat Gray Davis in so much trouble.

No one is talking about another recall, but the governor's popularity certainly will be tested in the coming months. Fairly or not, how he handles the test may determine his place in history.
"In the good times, you get more credit than you deserve," Davis said in an interview Friday, "and in the bad times, you get more blame than you probably deserve."

The former governor denied feeling any satisfaction by the turnabout.

I would like to know where the 22,000 released inmates are gonna live...in the closed parks? What about us hobos that now have to deal with more criminals. What about the lack of benches? You mean I am gonna have to sleep on the ground?

Bank of America Buying Countrywide

2008-01-11T08:20:00.000-05:00

Bank of America has just announced yesterday that they are going to purchase Countrywide. This news comes just one day after the forecast of bankruptcy for Countrywide. You know there is nothing like waiting until the timing is right to snag a deal.

I believe that Bank of America has been ready to buy since they made their $2 billion dollar investment into Countrywide convertible debentures at a conversion price of $18.00 per share. It seems to me that this is where the deal started and probably secured them a position to make an official move when Countrywide's stock hit the bottom. So the article published by the Weiss Research Group caused national recognition of the bottoming out at Countrywide. Once the stock was beat to death it was an easy move for BofA to anounce the acquisition causing an outrageous rally in Countywide's stock value (over 51% in ONE DAY).

Somehow I think that there was some master manipulation going on....which is absolutely typical for Countrywide and its majority shareholder (Angelo Mozilo). Other blogs have predicted an orange jumpsuit for the orange man (see picture...he sure looks orange to me). His smile makes him look like he is getting away with something.

Orange or not, Mozilo stands to get away with fleecing the public. It was Countrywide's massive subprime lending (and sleazy business practices) that has created much of economic tailspin that we are experiencing today. Take a look at http://housingpanic.blogspot.com and you will see what I mean.

Major Rumblings About Possible Countrywide Bankruptcy

2008-01-09T19:44:00.000-05:00

I just received a press release from the Weiss Research, Inc. stating that Countrywide is on the brink of bankruptcy. While this may not be news to some of those involved in the real estate industry, it is huge news to the rest of the world. http://www.weissgroupinc.com/

If Countrywide declares bankruptcy, your tax and insurance escrow accounts may be compromised. Theoretically, since the escrows are held by Countrywide, they could get caught up in bankruptcy proceedings and may not be available when the necessary tax and insurance payments are due...causing you big headaches.

“Countrywide is at ground zero of the mortgage crisis,” commented Weiss. “It exhausted many of its extraordinary financing options last year and is ill-prepared for the rising mortgage defaults and home foreclosures that are widely expected this year. Already, the credit quality of Countrywide’s mortgage servicing portfolio has deteriorated, with 7.2% of the mortgages it’s servicing delinquent in December, up sharply from 6.5% in November and 4.6% a year earlier.”

"Weiss’ conclusion: “With the mortgage market and economy continuing to slide, it’s likely Countrywide will suffer intolerable losses. Thus, in the absence of extraordinary intervention, we believe it could be difficult for Countrywide to avoid failure, with a potentially severe impact on consumers.”

"If Countrywide files for bankruptcy, this trend will accelerate. Credit score requirements will rise. Borrowers will be forced to put up larger down payments. Investor loans and stated income financing will get much harder to find. So-called “80-20” mortgage schemes, where a borrower gets an 80% first mortgage and a 20% second loan to avoid private mortgage insurance, will also become much harder to arrange. Second-lien lenders that fund the “20” piece of those deals are already getting hammered with losses."

The above excerpts show the signifigant impact of this probable event.

Make Your Own Liquor

2008-01-09T19:29:00.000-05:00

Here's another hot Hobo tip.

If you like fine liquor and are having trouble finding cash for it, try making your own. Here is a free ebook about how to make a cheap still that makes great high-test drinking spirits, moonshine, white lightning, whatever you want to call it.

If you don't like to drink, try pouring a couple gallons in the car.

The free plans and other necessary parts are available at www.amazingstill.com

Before you get started, check your local laws regarding home distillation.

Hobo-style Squirrel Casserole

2008-01-09T09:41:00.000-05:00

4 squirrels (you can substitute other rodents) Cut up into pieces

Salt and pepper to taste

garlic poweder to taste

4 slices ham

2 onions sliced thin

4 carrots sliced thin

4 potatoes sliced thin

6 pieces of bacon

1/2 cup apple cider

1/2 cup bread crumbs

preheat oven to 350 degrees (either covered casserole dish or use covered dutch oven in a fire)

layer ingredients starting with ham, then squirrel, onions, carrots and potatoes and cover with bacon pieces. Pour the cider over the top and then cover with the bread crumbs.

Cook for 2 hours

This is a great recipe for any hobo that is accurate with a slingshot and has good access to a park.

Survival for Those in Foreclosure

2008-01-08T08:38:00.000-05:00

Many people (including Michael Jackson) in the U.S. are now facing foreclosure. The booming real estate market has busted, leaving thousands of homeowners wishing they had never done their last purchase or refinance transaction.

Those distressed owners are now confused and are seeking solutions to their dilemma. One much-touted solution is to LET THE FORECLOSURE HAPPEN. Although letting the bank foreclose might seem to be a terrible thing, if done properly, the end result might be a more stable living situation for the foreclosed borrower.

The way to let it happen is as follows:

1) Quit paying the mortgage, save the money you would have paid in debt service. It can take 6 months or more for the lender to get the house back through foreclosure (the time it takes may be longer now due to the huge increase in numbers of foreclosures in the system). Consider filing bankruptcy just prior to the sale date...this will extend your ability to stay in your home.

2)Keep up with your homeowner's insurance, credit card and other financial payments.

3) Live in the house for as long as possible (move only when the sale date is imminent or past).

4)If your situation has arisen because of predatory lending practices by your lender....prepare to do battle...there are lawyers that specialize in predatory lending and they frequently work pro bono...similar to accident attorneys in that they only get paid if you win.

5) Don't be afraid to tell the bank that in order for you to move they will have to pay you to do so (ask for a pretty sizable cash payment $2,000 - 5,000). Tell them that if not, you will likely file for bankruptcy thus further delaying the foreclosure (by months). Bankruptcy can allow you to walk away from the second or third mortgage without any liability, get rid of your other consumer debt, as well as keep your car.

6) Use the money saved to pay your new LANDLORD (you are a renter now) upfront for your lease. By paying upfront you are VERY likely to get a nice place with little hassle.

7) There are benefits to being a renter now. Many of the new homes are the ones that are in trouble...you might find a landlord who has a brand-new house with all the upgrades that you can rent for less than you were paying to own. The real estate market will likely continue to decline until values are in balance with rent payments. This is because many of these homes were bought by speculators and will be acquired by investors who will rent them out. The difference between a speculator and an investor is that a speculator never considers keeping and renting (return ON investment) and investor buys in order to get an annual return that is higher than his annual cost of ownership.

Of course there are other options:

The Short Sale - all the Realtors are pushing this tactic...although the reality is that if you elect to do a short sale, there could be extensive personal liability for the amount of the mortgage NOT recovered in the sale. There could also be liability for other mortgages and liens behind the 1st mortgage. This solution is most helpful for those borrowers that owe close to what the house is worth, with no other liens or mortgages in a second or third position.

Deed in Lieu of Foreclosure - This tactic has you relinquish the house to the lender without foreclosure proceedings. If this is your choice, try to minimize or negotiate away your personal liability. If you have secondary mortgages or liens, this is likely not the route you would want to take.

Before making a final decision as to how to proceed, you should absolutely consult with legal counsel, and financial advisors. Also, contact a Realtor or Appraiser to try to get an understanding of your home's current market value. You can also check free home valuation websites such as Zillow.com (but do not rely only on automated valuation services).

By the way, if you are in need of a squatter let me know.

Hobo

P.S. Please take our poll. We want to know what you think Michael Jackson should do regarding his Neverland foreclosure.

Mickey D's is ready for Starbuck Wars

2008-01-07T08:38:00.000-05:00

Here is a Hobo tip....McDonalds is now going head on against Starbucks in the wacky world of cappuccino.

Apparently Mcdonalds understands that these uncertain times call for guerilla marketing. By chopping the cost of a cup of cappuccino, they hope to win over all the cash-strapped realtors, mortgage brokers and anyone else who thinks that Starbucks is over-priced and over-rated. McDonalds has now joined the ranks of Dunkin Donuts in the fight against high coffee prices and snobby coffee houses.

Perhaps we should all go short on Starbucks stock as these changes are now being implemented in 13,000 U.S. McDonalds restaurants, saving the consumer a solid 15% over Starbucks prices. Starbucks only has 15,000 stores worldwide, making this a serious competitive threat.

Welcome To These Uncertain Times!

2008-01-06T15:53:00.000-05:00

This first post is a test.

Hobo