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Leading Wall Street Analyst Speaks

By Larry Doyle on February 23, 2009 at 4:54 PM in Bamboozling, Barack Obama, Current Affairs, Housing & Housing Crisis, John McCain, Middle America, Mortgage Crisis, Obama, Obama Administration, Wall Street

I worked in the mortgage business on Wall Street for 23 years. During that time period I had the good fortune of developing relationships with some of the finest minds in this sector. While I do not know Laurie Goodman personally, I can tell you that there is no one individual in the market today whom investors follow more closely when it comes to developments in this space. While Ms. Goodman does work in a business that is actively engaged with investors, I have always appreciated her perspectives as being untainted by bias and merely reflecting an extremely professional and honest outlook.

What does Ms. Goodman think about President Obama’s plans for housing? It would appear that there may be all sorts of unintended consequences and misaligned incentives in this proposal. Regrettably plans that are well intended often do not necessarily achieve their desired results. I strongly recommend you read Mortgage Plan Aids Liars About Income to gain a fuller appreciation of this proposal.

fiscalliberal

Larry – the Bloomberg article talks about Goodmans report, but does not provide the link to it.

Do you have the link???

My understanding is that when FDIC Sheila Bair Indymac loan modificaitons were made, they had to provide income tax returns to veify incomee. This led to a lot of nonanwered Loan Modification communications.

The key to the Obama Loan modificaiton plan is auditing. I have not heard if there are autitors of presidential programs. If the Obama program is for GSE Fannie Mae and Freddy Mac only, they have the requirement that Income must be verified (I think with tax returns)

Obama needs a lot more clarity in what he does.
Andy

LD:

Thanks for the link to the Bloomberg article; I agree w/fiscalliberal might be nice to take a look at Goodman’s report itself as well.

A separate question: do you know what was Sheila Bair’s hoursing/mortgage proposal and how the Obama’s Adm. plan differs from hers? The local paper in MA claimed this was Bair’s proposal… She has certainly be on TV a lot lately speaking the proposal up… Do you know? And what is your take on Bair’s proposal ?
basil

A bit off topic but;

The fiscal responsibility summit at the WH cracks me up.

It reminds me of the long-winded, meaningless, bloviating teacher training days I had to suffer through several times a year, filled with irrelevant and pointless committees, work-groups and brainstorming sessions.

Teachers considered it a day off as absolutely nothing got done.

Of course it was annoying having to listen to blustering clueless wannabees climbing up the educational ladder as they poked and prodded and cajoled the rest of us into coming up with at least one page of written suggestions to justify the 2-3 hour huddle session where we used to goof off, gossip or catch-up with lesson plans and grades.

This is so friggin amateurish and, well, STUPID!!!!!!!!!

Oh JEEEEZZZZZ!!!!!!!

Writing about my teaching days dredged up some awful memories which further remind me of the BHO administration.

This fiscal responsibility summit is like those horrible holiday music programs I had to put on with dozens of kids, most of them talentless, and having to give some of them solo parts and having to squirm as they butchered their solos, forgot the words, sang out of key, froze before the microphone (BHO doesn’t have that problem) and then pretend it was so wonderful and applaud loudly along with the kids parents and the rest of the school audience and everyone knew everyone else was pretending it was good.

But fer jack’s sake, those were kids!
Larry Doyle

Fiscal…regrettably I do not have the research piece or a link.
lark

I know zilch but it seems to me trust is being shattered 360 degrees. Fairness being shattered. Justice process and legalities shattered. Ownership interest shattered. Liens, taxes, shattered. From where I stand, it looks like a mess where the only ones that will pay what they owe are honest people. Now lets me see how many honest people we have left. Hmmm.
candymarl

Wait a minute. You pass a large fiscal package and then meet about the fiscal responsibility aspect of it?

So no one cared if the ‘stimulus’ package was fiscally responsible they just wanted it passed.

Sigh.
basil

Not to mention they didn’t read it.

Sounds more and more like the elementary school where i used to teach.
basil

I think the goal is the complete destruction of the US as we know it.
fiscalliberal

basil – is it incompetence or design?
MBC

The states with the highest foreclosure rates are CA, NV, AZ, FL and MI. Apparently, all the fiscally mismanaged states are in the front of the line for the handouts in the stimulus package and the housing rescue bill. No serious consequences for irresponsibility, they will just spread the pain around.

This is like living in a family where the spoiled, rotten, most misbehaved child gets all the attention.
basil

fiscal,

Both.
Andy

LD:

I just noted you answered me a similar question already in a previous post re. Sheila Bair !! So never mind this above comment LD.
Mary

Agree completely.

And the 2 epicenters of the subprime mortgage fiasco, due to very lax state regulations of mortgage broker licensing—California and Florida—have Republican governors in very deep shit who are supporting the $$$ give-away.

And Obama’s team claims that’s “bipartisanship.”

Sheesh
an observer

“I worked in the mortgage business on Wall Street for 23 years.”
That is your resume?
Fired! Enough said.
Chris

There are no easy solutions to any of this. No matter what you do you will be critized. We are in uncharted territory and the problems are just so large. Not sure if McCain would have had the answers.
FLDemFem

I just have one question. Does anyone know, or have a clue, as to when the market is going to stop its current free-fall? Since Obummer got elected he has cost me over $500,000 in lost value in my irrevocable(until 2013) trust fund. I don’t live rich, I get about $32,000 a year for supporting myself and my animals. At the rate it’s dropping, I am going to end up broke and homeless, since I have a mortgage with a balloon payment coming up in 2013. I am also considering suing the trust bank where my account is since I had BEGGED them to put most of the money in bonds, FL bonds to be specific. If they had, I would not be facing ruin, I would have a nice tax-free income that was not impacted by the stock market. Instead they told me that they knew what they were doing and that I shouldn’t not trust the stock market. They were so wrong. I had been asking them literally for years, since 1993, to put as much in bonds as is legal in the state where the trust is, which would be 70-75%. They refused to do so. So as a result, the trust that was supposed to look after me for the rest of my life is almost gone. I am trying to hang in there, I really am. But for the first time in my life, I am taking antacids and having trouble sleeping. I cannot liquidate, I do not have that authority yet. Every time the market drops, so does my asset value. Does anyone know if I can sue that bank for not listening to me even though they were not required to by law? God, I am so worried. I am in my late 50′s and the only job skill I have, horsemanship, I am physically unable to do. That is why I live on my farm with retired race horses. Does anyone have any ideas for me?
lark

McCain would have had zero answers but Palin would have talked the economy up by showing everyone that reducing a sauce means making it more hearty, sweeter and with a stronger flavor. Palin teaches children that men don’t cry.
Linda C.

I agree

Unfortunately McCain could only provide the republican one liner of “tax reductions” as a means to solve everything.
MBC

Chris, you’re right, we are in uncharted territory and the ship’s captain has no experience. We need a Sully not a Pretty Boy!
TeakwoodKite

The Obama administration’s mortgage- modification plan offers the most aid to homeowners who “really stretched to buy their house and lied the most about their income,” Amherst Securities Group LP analysts said.

.

This pisses me of especially when BO is out at the podium berating others for doing what he did.
What a boneheaded move. Buying a house with Auchi’s money and knowing you could not afford it unless you jammed the Wolfords via the Historic Building Board to split the lot and having the sale put in trust so the piticulars where attached to the trust instead of him that made the move. AND THEN LIE ABOUT IT!. HEAR ME NOW! (ala Byrd) Is this all this IGIT can manage?
Larry Doyle

Do you have any sort of documentation of your discussions and requests? Did you make any requests in writing? Did you have any meetings with others in attendance?

I would recomemnd that you review the trust document. Typically there is a trust manager but also a trustee. Did you ever have discussions or meetings with the trustee? Any records?

I would recommend that you review your trust document as well.

I hope that this provides some degree of guidance.
FLDemFem

I made the requests in meetings with my trust officer and the financial adviser. I do have witnesses, therefore, but they all work for the bank. The bank itself is the trustee. I have a very good attorney who does my taxes, he is one of the leading business and tax attorneys in the US. I will consult with him as to the course I should take. I am going to try to wait it out since I keep reading that the market should rebound, or at least stop dropping soon. If it doesn’t, I will take whatever steps my attorney recommends. Thanks for the answer..I was feeling like there was nothing I could do but watch my life go down the drain with the stock market. The bond idea came from my grandparents who got through the depression with their assets intact due to having invested in bonds and utilities. My grandfather said that even if the utilities couldn’t pay what was due in interest, they would still owe it when they could pay it. Same with state bonds, and the capital didn’t diminish during the hard times. So at the end, when things get better, then income goes back up to normal levels, the IOUs are paid in full, and the capital is intact. That is what I wanted with my trust. I didn’t get it. It is also what I tell people who ask me for investment advice. If it got my grandparents, who were very well off, through the depression with their capital intact, I figured it would do the same for me.
Diana L. C.

Your description of teacher training days fits my experience exactly. They were always total wastes of time. It was like being in high school. The “popular” kids got to show off about something along with the ones who were the “officers” of the “studen council.” All the rest of us sat there thinking, “How much longer” or “when can we get out of here” or “how can I make it seem I have an emergency to take care of?”

I am sure our college professor CIC does conduct such useless meetings.

Awful!
Diana L. C.

No, he was talking about doing spending cuts, too. And don’t tell me that spending cuts and budgeting better in all government departments wouldn’t go a long way.
Illinois Voter

http://video.google.com/videoplay?docid=7065205277695921912&ei=tnSQSfncNZCq-wHg_vX8CQ&q=zeitgeist&hl=en

Zeitgeist Addendum

This video is worth watching, especially the Federal Reserve Bank and how it controls our debt for profit. Unless we the people stop living on credit we will not be financially solvent. This video is a 2 hour video, but educational.
LD

What do you know about me? When did we meet?