Chickens coming home...

[charliebrown]

Re: Chickens coming home...

dont want to defend BAC too much but how would they be doing if they weren't force fed countrywide and merill? I have not followed this story too much, what did the guberment threaten lewis with if he refused?

i would still move my money out. I am moving out of JPM for political reasons as well

[The Outback Oracle]

Re: Chickens coming home...

I just computed the Present Value (PV) of this Cash Flow (CF) BoA is now charging you: over $5,000!
($5,169 with a period of 100years growing at 2% per annum to be exact).

I guess little $5,000 by little $5,000 you can pay off billions!

Calculator here:
http://www.arachnoid.com/lutusp/finance.html

Particularly if they do their own NPV of that money coming in over the next 100 years and in a little accounting fiddle bring it is as current income...all things are possible

[The Outback Oracle]

Re: Chickens coming home...

As for me, I find that this Canadian fiat bonar is tricky to invest with, especially when following analysis from a US-Centric point of view.
[/QUOTE]
I have the same problem here in Aus Largo. However, having got my thoughts around the difficulties you describe, I then have to spin it all around again and think like we are a country with huge foreign Liabilities!!! Sometimes the market seems to act with some consideration of that but mostly not. However long-tern it will have a mojor effect on the Australian outcome.
Confusion does not begin to describe the way I am feeling about investment decisions.

[jtabeb]

Re: Chickens coming home...

JT, I believe we are saying the same thing.

My point is that the bottom will be in real terms not in nominal terms: hence my comment about a "real bottom" i.e. a bottom in real terms.

Perhaps I should have been more clear.

Sorry, was just trying to correct what I thought could be a flaw in your analysis. (Turns out you already had it covered, sorry)

JT

[Slimprofits]

Re: Chickens coming home...

dont want to defend BAC too much but how would they be doing if they weren't force fed countrywide and merill? I have not followed this story too much, what did the guberment threaten lewis with if he refused?

i would still move my money out. I am moving out of JPM for political reasons as well

Please correct if I'm wrong, but I think BoA acquired Countrywide (January) and Merrill (September) with open arms and received billions in bailout funds (October), before the Paulson threat was issued in December of '08.

[Chomsky]

Re: Chickens coming home...

Please correct if I'm wrong, but I think BoA acquired Countrywide (January) and Merrill (September) with open arms and received billions in bailout funds (October), before the Paulson threat was issued in December of '08.

BofA considered backing out of the Merrill deal, and it was then that Paulson threatened Lewis.

[Slimprofits]

Re: Chickens coming home...

BofA considered backing out of the Merrill deal, and it was then that Paulson threatened Lewis.

Ok. Considering only that BoA was doing mortgage business in the bubble states and the Countrywide deal was not forcefed, I think they still would have been one of the top TARP recipients.

[charliebrown]

Re: Chickens coming home...

if its true that BoA bought countrywide with eyes wide open, then no excuses for them. Just out of curiosity what did Paulson squeeze Lewis with? Are there glossy pictures of him with a lady

[rjwjr]

Re: Chickens coming home...

i dont see how real re can go up unless either
real incomes go up, or financial alchemy re-ignites e.g. ninja loans, loaning 5 to 1 on income etc. I know our gvt is trying to push banks to lend again, but what does that mean? I work with some older, financially conservative, upper middle class people, none of them have had a problem getting a refi or a he loan. but they have a long track record of employment, have money in the bank, and are only borrowing 2 times their income. So imho if you cant get a loan its because you are a high risk, dodgey credit, asking to borrow too much, etc. The banks have learned their lesson for now. I'm sure they'll start playing the game of chicken in another 5 years. Why not, if they screw up again they'll get more free money.

There doesn't need to be a paper transaction (actual sale) to create rising home prices...Dollar devaluation = rising inflation = your existing home is worth more....Ta-dah! No transaction necessary.

Of course, the selling price in the real world isn't likely to keep-up with the inflation rate...(although you can bet your property taxes will)...but, that's not the point. The point is; the price of houses will rise with inflation whether anyone is buying and selling them or not.

[LargoWinch]

Re: Chickens coming home...

I have the same problem here in Aus Largo. However, having got my thoughts around the difficulties you describe, I then have to spin it all around again and think like we are a country with huge foreign Liabilities!!!

Outback, I do not understand when you assert that Australia

Are you implying that issued non-$Australian denominated debt? If so, why would Australia

[The Outback Oracle]

Re: Chickens coming home...

Outback, I do not understand when you assert that Australia

Are you implying that issued non-$Australian denominated debt? If so, why would Australia

Largo I am not too sure of the make-up of the debt. We owe some $700 Billion dollars in Foreign liabilities (NET). This represents about 80% of GDP. Years ago much of it was written in A$ and sold to Japan. I think that has changed somewhat. The way I figure it, when all the chickens come home to roost, it5 won't matter dev ilishly what currency it is in. If the world wakes up to how indebted we are it is 'all over Red Rover'
In addition, we have already sold about 80% of our mineral resources to Foreign interests. Our whole industrial base, or what is left of it, is foreign owned. Our chances of ever being able to pay any bebt back is close to zero.

I keep wondering why everyone keeps banging on about Aus being so great and commodities. Even in the midst of the boom we had a CAD of $60 to $70 Billion per year and rising exponentially.

We're paying interest on the interest!!!

[LargoWinch]

Re: Chickens coming home...

Largo I am not too sure of the make-up of the debt. We owe some $700 Billion dollars in Foreign liabilities (NET). This represents about 80% of GDP. Years ago much of it was written in A$ and sold to Japan. I think that has changed somewhat. The way I figure it, when all the chickens come home to roost, it5 won't matter dev ilishly what currency it is in. If the world wakes up to how indebted we are it is 'all over Red Rover'
In addition, we have already sold about 80% of our mineral resources to Foreign interests. Our whole industrial base, or what is left of it, is foreign owned. Our chances of ever being able to pay any bebt back is close to zero.

I keep wondering why everyone keeps banging on about Aus being so great and commodities. Even in the midst of the boom we had a CAD of $60 to $70 Billion per year and rising exponentially.

We're paying interest on the interest!!!

I understand your concerns.

However, the amount of the debt in $AU vs. foreign currencies denominated makes a huge difference in my view i.e. the difference between high-inflation 70s and hyperinflation Argentina.

So all I am saying is: maybe not a cause for "level-5" alarm yet.

I am now curious and will try to find out the split and maturity...unless someone else already possess the answer :confused:.