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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

Best of Bill Buckler
March 4, 2008
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There are times when one must rub one's own eyes. A report from the mighty BIS, the Bank For International Settlements, states that credit default swap contracts have been written on the equivalent of some $US 43 TRILLION in all types of bonds. The US commercial banks are among the biggest participants in credit default swaps. At the end of the third quarter of 2007, the top 25 US banks held credit default swaps, both as insurers and insured, worth $US 14 TRILLION. So says the US Currency Office. That's up by $US 2 TRILLION from the previous QUARTER. The problem is that the market value amount of the US contracts outstanding far exceeds the $US 5.7 TRILLION of corporate bonds whose defaults the swaps were created to protect against. The music has stopped - where are the chairs?

Not So Thrifty:

The same thing is now happening all over the US financial system. US savings and loans, for example, have posted a record $US 5.24 Billion loss for the fourth quarter of 2007.

Next In The Centre Ring Of The US Financial Circus:

Here it comes - the Federal Homeowner Preservation Corporation - which will buy up $US Billions "worth" of troubled mortgages. Bank of America has circulated a "confidential" proposal to members of Congress this month which points out that up to $US 740 Billion in mortgages are at grave risk of defaulting over the next few years - and that many American families could lose their homes. To prevent this tragedy, it would be better (the proposal implies) for Congress to act to buy all these mortgages off the books of the US money center banks and hand the payments problem to the taxpayers.

Whoops - Wrong-Way US Interest Rates:

The US bond market is finally walking up from its long slumber. It has noticed that something is wrong. US long term interest rates have stopped reacting to the Federal Funds rate and have started creeping back up. The 10 year Treasury bond yielding around 3.90 percent on February 25 percent compared with 3.40 percent before the Fed's two emergency January rate cuts. Nobody in the US is saying much, but it is a clear signal that the faster that the Bernanke Fed lowers rates to try to force "liquidity" into the US financial system, the higher market rates - and the rates the Treasury pays on its debt - will climb.

The US Housing Breakdown:

A human tragedy is rolling over the United States. More than 1.5 million US homeowners will enter into foreclosure process this year. About half of them, 750,000, will have their homes repossessed. With the crash of the US housing boom about 8.8 million homeowners, or 10.3 percent of the total, are underwater.

A Financial X-Ray Of The US Mortgage Market:

Defaults for subprime loans issued in 2007, none of which have reset yet, hit 11.2 percent in November. That represents around 300,000 US households. US Countrywide Financial Corp., the biggest mortgage lender, said late loans were at their highest level in at least six years during January. As of February 15, overdue loans had risen to 7.47 percent of unpaid principal balances from 7.2 percent in December and 4.32 percent in January 2007, the National Association of Realtors in Chicago reported . They also reported that the median sale price of a US home dropped 5.8 percent to $US 206,200 in the last three months of 2007. US real estate owned by households is roughly $US 20 TRILLION and we've already seen an 8 percent decline. That means a loss of $US 2 TRILLION. US subprime and "Alt A" loans total $US 2 TRILLION of debt while the prime market in all its forms is roughly $US 8 TRILLION.

The US Mortgage Bankers Association says that default rates on all outstanding home loans in the US have reached 7.3 percent, the highest level since modern records began in the 1970s. US arrears on "prime" mortgages have reached a record 4 percent. Total debt against houses is $US 10.8 TRILLION.

Ó 2008 – The Privateer

(reproduced with permission)


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