Meanwhile, now that Libya has made it clear that they are in a Sharia frame of mind, concerns are escalating about how things are going to turn out in the Middle East. Add to that Afghanistan saying they will stand with Pakistan against the United States, if push comes to shove. Oh, yippee. More good news from the diplomatic efforts of this Administration. Ahem.

Back here in the good ol’ US of A, seems folks are not too optimistic about the outlook of the country. In fact, over two thirds of voters feel the nation is in decline. Wow. That is pretty significant. Americans have been an optimistic bunch generally. We have believed if we worked hard enough, we could achieve great things. Now, not so much. That is a sad state of affairs, indeed.

Okay. Just getting us started. What is on your minds?

ACORN, the embattled community activist group, says it is disbanding.

The group, the Association of Community Organizations for Reform Now, claims it will close its affiliates and field offices by April 1st. But some of its critics think the move is really an April fool’s switch. They claim ACORN actually isn’t going anywhere, just rebranding under different local organizations with new names but with the same mission.

ACORN has faced a variety of allegations over the past two years, from voter registration fraud to Republican charges that it uses public funds for liberal political purposes. ACORN workers have gone to jail, and undercover tapes of ACORN workers seemingly giving advice on how to skirt the law especially made the group a lightning rod for criticism.

ACORN has denied the charges, pointing to its own commissioned investigation that found allegations against it baseless.

“ACORN has faced a series of well-orchestrated, relentless, well-funded right wing attacks that are unprecedented since the McCarthy era,” claims ACORN CEO Bertha Lewis. In a statement she said in part, “Our effective work empowering African-Americans and low-income voters made us a target.”

You know, I am so tired of being called a racist for calling people on their actions, and this is no exception. It has NOTHING to do with who ACORN helps, but HOW it helps them:

But critics say ACORN’s undoing is entirely its own fault.

“I don’t think we are done with this,” Iowa Republican Congressman Steve King, a noted ACORN critic, told Fox News. “This is a big step in the right direction because I believe they are a corrupt, criminal enterprise.”

King calls the move “a downsize of ACORN,” but believes its operations will be shifted to state organizations that “may well grow.” He says “tigers don’t change their stripes and neither to people who are operating in a corrupt fashion.”

Critics point to a variety of new local organizations that are springing up to apparently take ACORN’s place. In Brooklyn, New York the ACORN office now has a new sign: “New York Communities for Change,” and in Massachusetts the president of the new group, “New England United for Justice” is listed as Maude Hurd, the president of ACORN, in its articles of Organization.

There are a growing number of such local groups replacing ACORN, according to Matthew Vadum, of the Capital Research Center. He says ACORN Housing has changed its name to Affordable Housing Centers of America, Inc., and that other ACORN connected groups include: Arkansas Community Organizations, Alliance of Californians for Community Empowerment, and Missourians Organizing for Reform Empowerment.

“This is a trick, a public relations trick,” says Vadum, calling the move an attempt “to dupe Congress and the American people to think they have gone away and they have not.” He says “the same people are running the new chapters that have sprung up and in some cases, out of the same offices.”

Yep, that’s pretty much what I think, too, that this is more smoke and mirrors from the group for whom our Smoke and Mirrors President did his internship.

As a reminder of why ACORN’s funds were cut:

The moves in Congress to cut ACORN’s funding came after the shocking undercover video-tapes made by conservative activists James O’Keefe and Hannah Giles who posed as a pimp and a prostitute trying to secure ACORN’s help to open a supposed brothel using underage girls. A federal Judge has since declared the Congressional move unconstitutional, but the financial damage may have been done. Several federal agencies have cut their ACORN funding and ACORN even tried to use the example of the tapes for fundraising purposes.

Giles has not returned a request for comment on ACORN’s announcement, and O’Keefe told me he cannot comment because of the on-going investigation of another of his video projects. He and three others have been charged with trying to “manipulate” the phone system of Democratic Louisiana Senator Mary Landrieu. O’Keefe says he was engaged in a journalistic endeavor, going undercover to try and show that there was no problem with the Senator’s phone system during the run-up to the health care vote.

Another article goes into a little more detail from ACORN’s perspective:

ACORN to Shut Down in Wake of Scandal

The once mighty community activist group ACORN announced Monday it is folding amid falling revenues — six months after video footage emerged showing some of its workers giving tax tips to conservative activists posing as a pimp and prostitute.

“It’s really declining revenue in the face of a series of attacks from partisan operatives and right-wing activists that have taken away our ability to raise the resources we need,” ACORN spokesman Kevin Whelan said.

Again, it apparently has NOTHING to do with this organization engaging in voter registration fraud, voter fraud, and counseling in ways to subvert the tax system, among other issues. Yeah, it’s all “partisan.” Way to take any accountability there. What else is new??

But are they really disbanding? Like I said, I don’t think so. An ACORN by any other name is still ACORN:

Several of its largest affiliates, including ACORN New York and ACORN California, broke away this year and changed their names in a bid to ditch the tarnished image of their parent organization and restore revenue that ran dry in the wake of the video scandal.

ACORN’s financial situation and reputation went into free fall within days of the videos’ release in September. Congress reacted by yanking ACORN’s federal funding, private donors held back cash and scores of ACORN offices closed.

Earlier this month, a U.S. judge reiterated an earlier ruling that the federal law blacklisting ACORN and groups allied with it was unconstitutional because it singled them out. But that didn’t mean any money would be automatically be restored.

Bertha Lewis, the CEO of ACORN, which stands for the Association of Community Organizations for Reform Now, alluded to financial hardships in a weekend statement as the group’s board prepared to deliberate by phone.

“ACORN has faced a series of well-orchestrated, relentless, well-funded right wing attacks that are unprecedented since the McCarthy era,” she said. “The videos were a manufactured, sensational story that led to rush to judgment and an unconstitutional act by Congress.”

ACORN’s board decided to close remaining state affiliates and field offices by April 1 because of falling revenues, with some national operations will continue operating for at least several weeks before shutting for good, Whelan said Monday.

For years, ACORN could draw on 400,000 members to lobby for liberal causes, such as raising the minimum wage or adopting universal health care. ACORN was arguably most successful at registering hundreds of thousands of low-income voters, though that mission was dogged by fraud allegations, including that some workers submitted forms signed by ‘Mickey Mouse’ or other cartoon characters.

Yes, Mickey Mouse was but one fictional character “signed up” by ACORN workers. As I have noted about a GAZILLION times, they have been under investigation in up to 14 states, including Florida, Nevada, and Louisiana, for submitting THOUSANDS of false voter registrations. Recently, a conviction for voter fraud was returned in Pennsylvania for an ACORN worker.

So, enough with the “poor me” victim crapola. ACORN brought this on themselves with their underhanded, illegal dealings. Having to disband because their funding is cut is just what happens when organizations operate in unlawful ways.

But is ACORN really running out of money? Not if Peter Orzag has anything to say about it, and he does. That would explain the name changes, and the April 1st date:

While America is distracted by Democrats’ attempts to unconstitutionally ram government-run healthcare down the throats of the American people, the Obama administration began preparing to resume funding to President Obama’s favorite community organizing group.

The fiscal floodgates are opening for the Association of Community Organizations for Reform Now (ACORN), the president’s former employer and legal client, despite a congressional ban on funding the activist group that has long been a practitioner of election fraud.

In a March 16 memo Office of Management and Budget (OMB) director Peter Orszag quietly ordered federal agencies to resume funding the group whose employees were caught on hidden camera videos last year condoning a variety of crimes including child prostitution and tax evasion.

Well, I’ll be darned. Someone inside Obama’s office is making sure ACORN gets its funds restored, all while we are focused on the Healthcare Legislation. The ol’ “Look over there!” trick. Well, that sleight of hand almost worked. But now we know Obama’s buddy is looking out for his his buddies. Seems ACORN, or whatever it’s calling itself these days, is here to stay, if Obama has his way…

Bloomberg reports, U.S. Foreclosure Filings Set Third Record-High in Five Months:

Foreclosure filings in the U.S. climbed to a record for the third time in five months in July as falling home prices and the recession left more homeowners unable to keep up payments or refinance.

A total of 360,149 properties received a default or auction notice or were seized last month, according to data seller RealtyTrac Inc. One in 355 households got a filing, the highest monthly rate in RealtyTrac records dating to January 2005, the Irvine, California-based company said in a statement.

“We’re in a deep hole,” Diane Swonk, chief economist at Chicago-based Mesirow Financial Inc., said in an interview. “There is a whole new wave of foreclosures tied to the cyclical dynamics of the economy.”

What is this ongoing foreclosure activity doing to home prices? It’s not good.

The median price of an existing single-family house dropped 15.6 percent to $174,100 in the second quarter, the most in records dating to 1979, the National Association of Realtors said yesterday. Almost one-quarter of U.S. mortgage holders are underwater, property data firm Zillow.com said Aug. 11.

What about the mortgage modification programs which were designed to stem this tide of foreclosures? In speaking with our friends at 12th Street Capital, who have canvassed a number of the large mortgage servicing operations, we have learned that successful mortgage modifications are typically only occurring with mortgages that are delinquent 30 days or less. After that, homeowners are increasingly inclined to ‘walk away’ from homes which are further underwater (mortgage balance exceeds home value). In fact, Bloomberg highlights:

“It has been more profitable to put a home in foreclosure than restructure the loan,” Swonk said. “The only thing that helps is forgiveness of principal, and there is little willingness to do that.”

The greatest surge in foreclosure activity remains in those states which have already experienced enormous problems. The top 5 being Nevada, California, Arizona, Florida, and Utah. That said, our entire economy is intricately linked and these markets (especially California) cover a large percentage of our population.

What are the implications for this ongoing foreclosure activity?

1. Banks will continue to keep credit standards very tight.

2. The new issue securitization markets for these assets will remain virtually non-existent.

3. State tax revenues will remain under pressure as property taxes received continue to decline. As a result, look for continued cuts in services and likely tax increases.

4. Retail sales will not have a meaningful rebound as the consumer wealth effect tied to home values remains under pressure. This morning Wal-Mart reported flat profit on lower sales. Additionally, overall retail sales were just reported to decline .1 (ex-auto sales, retail sales declined .6) versus a projected gain of .8. This is an UGLY number!! As a result, do not look for a big rebound in inventories which would drive GDP.

5. Unless and until banks fully acknowledge the true value of the assets tied to these home mortgages, the financial system is kidding itself (and doing a very good job of it) to think that our economy will have a true robust recovery.

More on these topics later today. Thoughts, comments always welcome.

LD

The economy is booming in at least one sector, namely fraudsters out to separate you from your money. These human stains have always existed, of course, but the meteoric rise in the sheer number of scams in recent weeks is startling.

And what better target than the already weakened? People who face losing their homes or have been laid off from their jobs are the juiciest quarry. At least vultures usually wait until their prey is dead.

Here are just a few of what these bottom-feeders are up to these days:

1. Promising to help people renegotiate their mortgage to an affordable level, complete with a money-back guarantee if they don’t succeed. Of course, there is that stiff upfront fee. After months of being strung along—time that troubled homeowners could have been pursuing legitimate assistance—they and your money are gone.

2. Offering opportunities to make money at home. (If you haven’t gotten spammed with these offers, you must have a Mac.) Some will “set you up” with selling supposedly nice items that you pay for up front. Cheap crap arrives that no one will want to buy. Others offer you work at no charge, but actually only want personal information so they can gain access to your banking information or sell it to someone who will. The work never materilaizes.

3. You could become a “Money Mule” (pitched with highfalutin’ titles as “shipping manager” or “international sales representative.”) This job actually does make people money, but they could lose it all along with their freedom. The Mule is instructed to open an account and accept anonymous payments and then transfer them to other accounts in foreign countries, getting a cut in the process. Of course the operations are illegal money laundering schemes, and the most vulnerable to getting caught is, of course, the Mule.

4. Low cost loans are proffered by crooks who will take their up-front fee and flee, leavng you stuck with your higher-priced loan as well as less than you already had.

The use of the Internet and some new wrinkles make it more difficult to tell the good guys from the bad. Modern scammers can find out a lot about a person before they attack, especially if they have a Facebook (or similar) page. Personalized approaches are perceived of as more trustworthy by potential victims.

These hustlers have also figured out that people are less likely to make a fuss about (or even notice) a small charge on their credit card bill. Yet, scamming a thousand people out of $10 each adds up to a tidy sum.

Even amateurs can now create impressive web pages that appear to be offering a legitimate service or product, but only want your money (and probably your personal information as well). You, of course, will receive nothing.

Preventing such predators from reaching your gates is the same as it has always been: Don’t give out personal information to anyone you don’t know and trust; Check your credit card and bank statements carefully; If it sounds too good to be true, it likely is; You should not have to pay for most services before receiving them, and so on.

Yet these scumbags are getting better and smarter and there are more and more of them, so watch out! You can be sure they are hovering overhead watching us.

See here and here for a couple of good articles on today’s scamming trade.

Let’s all go out and buy a car.

Of course, let’s face it, the number would almost have to go down at this point, simply because there are fewer people left out there who are actually employed so that they can be layed off.

Then there’s that pesky news about home forclosures that are on a serious rise, since that temporary Presidential AKA “Bandaid” moratorium on foreclosures expired on March 31. Nothing like putting off the inevitable, eh? The bandaid fell off, look for the scabs brought to you by the same Wall Street industry that took hundreds of billions from your children and grandchildren, and then doubled your credit card rates in mid-stream– and got away with it. Boy those political contibutions to Congress sure must be rolling in, because Congress is making sure they drag their feet on stopping those credit card interest rate increases.

But don’t worry, just as soon as everybody’s credit scores are trashed and just as soon as all the interest rates are at the Loan Shark level, Congress will be outraged. Why….they will have had NO idea this was happening! If they had only known!

Like I said, Don’t Worry!

Really, be patient. It’s all just simple math. Using Government statistical methods, just as soon as unemployment reaches 100% and everyone has collected his or her last unemployment check, everything will level off , and the official unemployment rate will be zero.

Everything is under control folks. Fed Bagmen Tim and Ben are on the job. They are going to arrange to give another hundred billion to launder to your bank as a reward for raising your interest rates– and everything well be just fine. And the Global Warming people are On The Job. They will save the earth. Too bad nobody living in it will live to see it, but hey, small price to pay, right?

Don’t worry! Be happy!

Filed under: Bailout Party, Depression, Economy, Housing Crises, Jobs, Tim “Turbo Tax” Geithner, Where have our Trillions gone???

At the core of most, if not all, of our economic problems lies housing. I do not need to replay the tape of low rates, shoddy underwriting, and Wall Street securitizations that all played a dramatic role in creating a bubble the likes of which we have never seen and hopefully never will again. All that said, housing is an enormous market with a wide array of factors impacting it. How does one track it? Are we supposed to rely on our local brokers telling us things feel better? Should we ask contractors if they are bidding on jobs? Dare we rely on our local or national media outlets to provide their expertise and pandering? If we did, housing may have bottomed 14 different times in the last 10 months. In all seriousness, how can we track housing? Welcome to Sense on Cents.

There are two indexes that have developed over the last few years and are enormously respected by market participants. One index, the S&P/Case-Shiller Home Price Indexes, is released on a monthly basis. This index tracks a variety of regions in the country but not every region. Still, all things considered, this index is widely watched as a reliable indicator of health in housing. The index is typically released toward the end of each month. The most recently released report was on February 24th, A Look at Case-Shiller Numbers, by Metro Area. In this report, all indications are that housing has yet to see any support.

Aside from the Case-Shiller Index, there is another index that tracks trends in housing and allows investors to reflect their opinions. This index, the ABX (Asset Backed Index), was created a few years ago by Wall Street to track trends in housing. Clearly given the emphasis on Obama’s housing, plans put forth by Secretary Geithner would have put some optimism in this index, right? Well, we are all aware of the enthusiasm put forth in Obama’s plan to support housing; however, no plan is a panacea and every plan has unintended consequences. Despite the best intentions in Washington, the market sees no bottom in housing.

The ABX is not traded on an exchange and thus easily tracked. Enter my friends at 12th Street Capital who shared with me a few days ago that the “ABX went out at its ALL TIME LOWs yesterday. The real money sellers continue to push it lower in conjunction with the stock market and other credit markets and clearly the street has no interest in supporting the current levels, hence unless you have some real money buyers come into the
market you could expect to see continued softening.”

There you have it. Both indexes that track housing are at all-time lows. Thus, while the stock market had a nice bounce the other day, before we get overly ebullient about the potential for stocks, we want to see if we are seeing any sort of support in these two indexes. For my money, these will be the first two indicators showing a turn in our economy and giving me confidence to invest in stocks.

LD

Oddly enough, the ABX market did not participate in the rally on Tuesday. In 2008 I would have said that the next day rally in ABX would almost be a certainty, however with continued uncertainty regarding government intervention on mortgages and MBS, it seems most longs are carefully picking their spot in the MBS market.

I thoroughly respect Sheila Bair. Our Head of the FDIC has been an honest broker each and every time I have heard her speak. I looked forward to her interview with Paul Gigot of The Wall Street Journal.

Ms. Bair addresses the finer points of the Obama Foreclosure Mitigation Plan which is targeted at helping 9 million homeowners stay in their homes. Specifically she touches on:

1. how this program will not reward bad behavior;
2. how it can be viewed as helping people who have managed their finances appropriately;
3. expectations of redefaults given her experience with the failed institution Indymac.

As I initially mentioned, I believe Sheila Bair is an honest broker in an impossible position. Her seeming lack of enthusiasm does not strike me as not believing in the benefits of this program, but rather a subtle acceptance that this program can only go so far. Additionally, this type of program will have plenty of unintended consequences. Will people who are currently paying their mortgages on schedule start to become delinquent on their mortgages in order to gain the benefits of this program?

I think Ms. Bair will make the best of a bad situation. That said, no program will be totally effective. I am fully supportive of programs that will assist Americans, but don’t be fooled to think that we will get 100% return on all dollars spent.

Let’s go to the video . . .

I LOVE SUZY’s STORY ABOUT HER DRIVER JOHN! JOHN is not a dead-beat, a bum, a liar or a cheat! Yet he is on the edge of losing his home too! It’s a must-listen:

She is also great on what the credit card companies are doing — how poorly they are treating their customers. BASTARDS.

What else is going on in YOUR life? Your financial picture?

Let’s review my specific projections from the January 2009 Recap:

For those who track the markets, there is a 75-80% correlation in the annual moves in equity markets with the performance in January. Without parsing words, this performance in January portends a very challenging year for our equity markets. All eyes and ears remain focused on Washington for a comprehensive financial rescue package (Bank Transition, insurance for other assets, aid to stem foreclosures, et al). Trade the range for now with a very wide band. Buy the S&P as it approaches 750 and sell it as it moves above 900. Otherwise….be patient!!

In the bond space, I did believe and continue to believe that despite the Fed and Treasury promoting the concept of quantitative easing (using the Fed’s balance sheet to buy Treasury, agency, and mortgage related assets), these rates will work their way higher simply due to the MASSIVE financing needs of our government and global governments.

The corporate bond space, led by high yield bonds, had very solid returns this month. As we mentioned, we thought these sectors had already priced in the economic turmoil to a much greater extent than the stock markets. High yield bonds were up almost 10% on the month. I would not add to that sector after that performance.

The dollar inched lower versus the Japanese yen. I believe the dollar will continue to weaken versus the yen, as well as the Canadian dollar. The U.S. dollar dramatically outperformed the Euro and the British pound. The economic situation in Europe is just as bad, if not worse, than in U.S. In fact, a number of European countries are being seriosuly challenged to raise funds. Sovereign credit risks (the risk that a government defaults) have risen considerably.

In the world of commodities, gold outperformed due to the global government credit risk, the threat of longer term inflation, and weakness in currencies. Oil remains very volatile but ended the month down 2.5%. Metals remain weak with anemic demand.

Add it all up and what is one to do? In my estimation, an investor is being paid to WAIT before making any major capital commitments. For those who are significantly underweighted stocks, a dollar cost averaging (add a fixed dollar amount on a regular basis versus one lump sum at one point in time) approach is always recommended. I am not going out on a limb to say that we will retest the lows (down another 7-9%) seen on November 20th.

Well, we have retested those November 20th lows and on the last two days of the month took them out by 2-3%. We are now down anywhere from 12-19% across the board for most stock indices on a year to date basis.

In a normal market environment, if stocks gave ground by 2-4%, one would expect government bonds to rally in a “flight to quality” move. The fact that equities are down 11% for the month and government rates have moved HIGHER is a clear indication that the overwhelming supply of government bonds to finance our deficit will continue to be a major issue going forward. The market absorbed well more than $150 billion in government supply (bills to 30 year bonds) this month. In the face of that, it is no surprise that rates moved higher. The question for investors is where does one go.

The enormous government supply along with the weakness in stocks did put a dent in the credit sensitive sectors of the bond market this month. The “crowding out” effect (government financing needs crowd out the availability of capital to flow to private enterprise) will continue to be a major problem.

In very volatile trading, the U.S. dollar did improve primarily versus the Japanese yen while only marginally versus the Euro (although it is significantly stronger vs the Euro on a year to date basis). As I mentioned to a reader, the yen seems to have weakned as many hedge funds have finished unwinding trades in which they had borrowed the yen. I missed this call and thus I was clearly wrong that the dollar would still weaken vs the yen.

Gold is up solidly on the year but actually had gotten higher than $1,000/oz during the month. I do not invest in gold simply due to a highly speculative contingent that plays in this commodity. I think many funds and managers have purchased this commodity as a safe haven move but are willing to sell those positions out for short term profits.

The BIG question is where do we go from here. Should I buy stocks here? Should I sell? Should I hold? Obviously, those are questions that can only be answered based on one’s personal situation. All I can offer is my assessment of the markets, the economy, Washington, Wall Street and hope it helps you navigate your own financial and economic landscape.

While the markets have retraced back to those November 20th lows and even moved lower by 2-3%, I still can not make a case for buying the market. Why? Very simply because overall market valuations do NOT clearly and distinctly display themselves as cheap. You may ask how is it that markets that are now down 50+% are not cheap. Remember that stock prices are a measure of forward earnings and the multiple paid for those earnings. A fair multiple is typically between 12-18% but in bear markets that multiple can get decidedly cheaper than 12. Let’s take a multiple of 15 times. At yesterday’s close of 735, that equates to an earnings projection on the S&P 500 of $49/share. That is overly optimistic and hopeful and thus the risk remains too high relative to the reward.

I always traded and invested based on the premise that “hope is a lousy hedge” meaning that one needs to fully review the risks prior to investing and not “close your eyes, buy in because it is down a lot, and HOPE it works.” I do think we are approaching a stage where the market may still move lower but then start more of a sideways price action. Why? Very simply because the volumes are declining on a lot of exchanges which indicate the selling pressure is abating. That said, I think investors are in NO rush to buy.

I actually have somewhat greater concerns about bonds than stocks. Why? I think a lot of investors have rushed into the bond market, that supply of bonds will increase not only in the government space but also the municipal space as towns, cities and states deal with their budgetary problems. Corporate bonds were very cheap relative to stocks coming into the year but have dramatically outperformed in the first two months. Given that a lot of investors in the corporate bond space are newer investors (looking for a place to park money), I think bonds across all sectors may start to weaken from here.

The U.S. dollar is benefitting from a flight to quality move given the major political and social issues elsewhere in the world. Additionally, as the U.S. government has shown it will not allow major banks to fail (although the banks’ shareholders can and will be diluted), a lot of money has flowed into the dollar. I think the Canadian dollar and Australian currency are fundamentally stronger than the U.S. dollar at this point.

In regard to Washington and its impact on the economy and markets, it strikes me that the Obama administration is hellbent on implementing as much of its social program and liberal agenda as quickly as possible. The markets are sending a very clear signal that his agenda is not pro-growth, investor friendly, or fiscally sound. He’s the President and the electorate sent the Republicans home, so we need to let our democratic process work. That said, the markets do not and will not stand idly by “HOPING” things work out.

I do firmly believe we will work our way through these economic challenges, but it will be a longer and harder road than most market analysts and political pundits would promote. Maintaining hope is a critically important part of our country and our moral fiber. I am ALWAYS hopeful, but I am not blindly hopeful. That would be called willful neglect.

Check out the piece, Buy and Hope Investing, written by John Mauldin, one of our Economic All-Stars (see left sidebar at Sense on Cents).

One thing I truly hope is that you find Sense on Cents helps you to navigate the economic landscape and that you will share the site with your friends.

LD

For clarification purposes and at the request of a number of readers, allow me to address this deduction. As proposed in President Obama’s budget, for those households currently paying taxes in the 33% and 35% brackets, the mortgage deduction would now be at a 28% rate. The proposal would not take effect until 2011.

This Mortgage Deduction Looks Less Sacred. Its effect can and is hotly debated by economists and housing analysts. In my opinion, though, there are a few points not debatable. This initiative is another method of achieving wealth redistribution. It will make housing more expensive at the margin. It will put pressure on housing in general and in upper income areas specifically. Given that there are no initiatives proposed to support those needing Jumbo mortgages, this tax change will only further negatively impact this sector of the market.

Lastly, is this Obama’s “crossing the Rubicon?” Don’t think for a second that this initiative just developed. How and why did we NEVER hear about this during the campaign? Did he know how negatively it would be received?

In summary, having “crossed the Rubicon,” how far does he penetrate into the territory?

We’ll be watching, but knowing how wildly optimistic his growth projections are in his proposed budget, Obama will need more $$$. The mortgage interest deduction just became fair game.

I need to call my accountant.

LD

The inability to pay the higher mortgage payments are what led to our current bank problems, so it makes sense to stop the bleeding, and keep people in their homes.

There is some heated controversy to the plan in this video, from CNBC, but I agree with Diana Olick. I think it was the right thing to do.

“The plan applies $75 billion from the taxpayer-funded financial rescue package to help lenders lower borrowers’ monthly payments and reach the administration’s goal of keeping up to 9 million families in their homes.

The government also will commit $200 billion to buy up more stock in Fannie Mae and Freddie Mac to shore up the mortgage giant’s financial base, much the way the government injected money in the banking system in return for stock.

Another $50 billion would be allocated to increase the number of loans Fannie and Freddie can buy outright.”

But, from what I have seen of the plan so far, it looks like they listened to my recommendations. ;O) Well, except for the Fannie Mae/Freddie Mac part. You can read an outline of the plan here.

What have you heard of the bill so far? Where do you stand on this issue?

Join me and my special guest in minutes, from 8:00 to 9:00 p.m. ET as we discuss a wide array of financial and economic issues from Wall Street and around the world.

We encourage you to call in at (347) 677-0792 to ask questions and offer your commentaries.

LD’s Dollars and Sense is honored to have Steve Rehm join us for an inside view of the world of banking, regulators, and Wall Street. Steve is a “bank doctor” without peer in today’s world of global finance!

Steve is not only a dear friend but simply the best in his field of expertise. Steve has “operated” in this realm for over the last thirty years.

-4 years at Freddie Mac working on the growth of the secondary mortgage market…

-22 years at Citi/Salomon Brothers, the pre-eminent mortgage shop on Wall Street. Worked with some of the legends of “the game” and across a wide range of client initiatives including asset-liability management, debt structurings, M&A transactions, and equity issuance. Heavily involved with assessing and interacting on a number of legislative, regulatory, and accounting issues.

-6 years between JP Morgan Chase, Royal Bank of Scotland, and Barclays growing and developing the initiatives at these firms and teaching them the intricacies and nuances of financial “surgery” within and throughout a community challenged by a variety of illneses and plagues!!

Steve Rehm has more personal relationships and overall experience in these “operating rooms” than anybody in global finance today. DON”T MISS the chance to get the review of “the internals” from “the doctor”, Steve Rehm!! We are honored and humbled to have him join us at LD’s Dollars and Sense on No Quarter Radio!!

We are living through a truly historic and challenging economic period. We want to help you make sense of it all.

A few weeks ago, for example, we were joined by insurance expert Sean D’Arcy of Northwestern Mutual (this show is a must for everyone who has an insurance policy and, since we all do, make sure you catch this important program). LD also wrote up the discussion in this story, “Got Insurance? 529 Plans? Financial Aid?…Read On….”

The week before, Kevin Doyle, founder of 12th Street Capital and former senior executive at Countrywide, joined us from 8:15-8:45pm. We discussed the dynamics and development of the sub-prime mortgage business, the outlook for regulations and the rating agencies, and much more. Fascinating discussion. For those who care the shows are archived.

Larry Johnson’s business partner, John Moynihan, joined us on December 21st. John is an expert in forensic accounting and money laundering. We discussed the Bernie Madoff situation and fraudulent activities in general. Also fascinating.

Get the real “behind the scenes” look from financial experts only here at “No Quarter’s Dollars and Sense with LD.”

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Afterwards, the archived show will be up at BlogTalkRadio or via iTunes/iPod (see our instructions in the right column under No Quarter Radio).)

ALSO: Check out Larry’s series of “Central Station” posts in which he takes questions from you, and answers them at NoQuarter blog

Join us in 10 minutes for LD’s weekly radio show tonight at 8:00 p.m. ET to 9:00 p.m. ET. We’ll discuss a wide array of financial and economic issues from Wall Street and around the world.

You are welcome to call in with questions and comments any time during the show. Dial in to (347) 677-0792 and turn down your computer volume since you can listen to the show for the brief time you’re on hold.

You can also log in to BlogTalkRadio.com, and join the live chat room during the show. (The chat room usually gets going about five minutes before the show.)

Our “very special guest” for our “LD’s Dollars and Sense” is an individual who, in my estimation, has more professional Wall Street relationships than any other individual. Allow me to share the background of the legend that is … Michael Maloney.

Michael started working on Wall Street in the mid-1960s at the tender age of 16 for a specialist firm on the floor of the NYSE. In 1970, Mr. Maloney was an equity block trader for the venerable Stone and Webster. In the late ’70s, Michael moved into the world of financial recruitment and career consulting. He is known as “the man to see” for those looking to move onto or within the world of Wall Street. He has longstanding relationships that would fill the Manhattan directory and has lived to tell about them. From placing chief investment officers to back office assistants, from working with the major investment houses to startups, Michael truly epitomizes the phrase, “it’s not merely what you know but who you know.”

Please join us for a fascinating look back and, simultaneously, a piercing view forward with “the man to see,” Michael Maloney!!

Larry Doyle has continued to track his original investigative report on the nomination of prospective SEC chairwoman Mary Schapiro, “Let’s Really Question Ms. Schapiro.” Larry scoured news and investment sites for any background information on Ms. Schapiro, and also read the 68-page 2008 annual report of FINRA, the Financial Industry Regulatory Authority, which raised a large number of questions about Ms. Schapiro’s abilities as a “watchdog,” as a “cop on the beat.”

We are living through a truly historic and challenging economic period. We want to help you make sense of it all.

Two weeks ago, for example, we were joined by insurance expert Sean D’Arcy of Northwestern Mutual (this show is a must for everyone who has an insurance policy and, since we all do, make sure you catch this important program). LD also wrote up the discussion in this story, “Got Insurance? 529 Plans? Financial Aid?…Read On….”

The week before, Kevin Doyle, founder of 12th Street Capital and former senior executive at Countrywide, joined us from 8:15-8:45pm. We discussed the dynamics and development of the sub-prime mortgage business, the outlook for regulations and the rating agencies, and much more. Fascinating discussion. For those who care the shows are archived.

Larry Johnson’s business partner, John Moynihan, joined us on December 21st. John is an expert in forensic accounting and money laundering. We discussed the Bernie Madoff situation and fraudulent activities in general. Also fascinating.

Get the real “behind the scenes” look from financial experts only here at “No Quarter’s Dollars and Sense with LD.”

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Afterwards, the archived show will be up at BlogTalkRadio or via iTunes/iPod (see our instructions in the right column under No Quarter Radio).)

AND: Check out Larry’s series of “Central Station” posts in which he takes questions from you, and answers them. The latest “Central Station” was yesterday morning, January 24th, from 9 a.m. to noon.

Join us as we chat with KD, Kevin Doyle, the founder of 12th Street Capital. Kevin formerly worked at Paine Webber and Countrywide. He has extensive personal experience dealing with sub-prime originations, structured products, rating agencies, regulators, and investors. Will be an enlightening conversation and peek into this sector of the market from a true expert. DON’T MISS IT!

Don’t miss LD’s radio show tonight at 8:00 p.m. ET.. LD will take your calls at 347-677-0792.

This show gives you an hour’s worth of common sense about the economy, the markets, Wall Street and Main Street with “LD,” a Wall St. veteran who is also NoQuarterUSA blog’s financial whiz.

ABOUT OUR HOST LD: For those not familiar with his background, Larry Doyle, also known as LD, had a 23-year career on Wall Street. He worked primarily at CS First Boston, Bear Stearns, and JP Morgan Chase.

He was a mortgage trader for 15 years, and then sold securitized products and was the National Sales Manager at JPM for the last leg of his career. He is now a private investor and involved with not-for-profit activities.

Since we “bump up” the previous week’s promo — to be time-efficient — you will see comments from past weeks.

In the spirit of traveling to be with loved ones for the holidays, I thought it may be appropriate to launch our second trip from LD’s Dollars and Sense “Central Station.”

Our maiden voyage on December 19th was, from all reports, a resounding success.

We took in a variety of sights along the way in terms of views of Wall St., portfolio management, fiscal discipline, and the like.

If you care to come along for the ride, and if you have financial issues or questions from a macro- or micro-level pertaining to Wall Street or Main Street, then please do not be bashful to ask me anything.

I will not be bashful in providing honest opinions. I welcome others’ insights as well.

Aaaaaaaall Aboard!!

LD