The Finish Line Seems To Keep Moving Further Away
Some housing bubble news from Wall Street and Washington. New York Times, “The chief executive of Lehman Brothers, Richard S. Fuld Jr., stepped up to the microphone on Monday morning. Mr. Fuld started off the bank’s earnings call, responding to analysts who said they wanted to hear from him. He did not take part in last Monday’s call when the bank warned that it would lose $2.8 billion in the second quarter and would raise $6 billion from investors.”
“The $2.8 billion loss was in large part caused by $4.1 billion in write-downs on mortgage investments.”
“Mr. Fuld faced toughed questions from analysts Monday about Lehman’s earnings power. They questioned the way Lehman values assets that are hard to value, like mortgage investments.”
“‘The general question is: have you taken sufficient write-downs?’ asked Michael Mayo, an analyst with Deutsche Bank. ‘The reason I ask is there are cases of other top management officials at other companies saying they were finished and then other quarters, they had big write-downs again.’”
“Mr. Fuld admitted that the firm had made missteps in its mortgage business - once one of the strongest on Wall Street.”
“‘We made active decisions to deploy our capital, some of which in hindsight were poor choices because we really didn’t act quickly enough to the eroding environment,’ he said during the conference call.”
“Seven large financial companies - Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Merrill Lynch, Goldman Sachs and Morgan Stanley - have since last July written down the value of the assets they hold by $107.2 billion, gutting their earnings and share prices. That is nearly half of the combined $254 billion in profits those seven firms earned from 2004 through middle of 2007.”
“Worldwide, the write-downs total $380 billion, much of which reflects a plunge in the value of tricky mortgage investments.”
“As the tally of losses keeps growing, many bank executives - and their shareholders - keep asking the same question: When will the pain end? But the finish line just seems to keep moving further away.”
“‘It’s a fairly unique situation, that you would give so much back,’ said Alec Young, global equity strategist for Standard & Poor’s Equity Research. ‘The industry did enjoy real salad days over that period, but now the write-downs and losses have been so huge. It’s a significant percentage of the money generated.’”
From Bloomberg. “American International Group Inc., the world’s biggest insurer, ousted CEO Martin Sullivan after record losses, a sagging stock price and criticism from the man he succeeded in 2005, Maurice Greenberg.”
“Sullivan becomes part of an exodus of CEOs from companies including Citigroup Inc., Merrill Lynch & Co. and Wachovia Corp. that underestimated how badly profits would be hurt by the collapse of the U.S. subprime mortgage market. AIG posted more than $13 billion in quarterly losses after Sullivan assured investors in December that writedowns tied to housing would be ‘manageable.’”
“AIG’s financial-products unit issues credit-default swaps, contracts that promise to reimburse investors for losses on securities that included subprime assets. The business started issuing swaps a decade ago under Greenberg.”
“Those guarantees declined in value by about $20 billion in the past two quarters. The financial products business was co- founded in 1987 by Joseph Cassano, a former executive at Drexel Burnham Lambert, the securities firm that helped popularize ‘junk-bond’ investing before it collapsed. Cassano stepped down in February.”
“‘Shareholders’ value has been diluted,’ Greenberg said in a telephone interview in May. ‘That makes you unhappy, to say the least.’”
“Pressure on Sullivan intensified June 6 when AIG said the U.S. Securities and Exchange Commission and the Justice Department were probing the way AIG valued financial products customers used to manage credit risk.”
“New York state regulators disclosed their own inquiry on June 13. U.S. and state probes into AIG’s accounting led to Greenberg’s departure in 2005.”
From Portfolio. “The collapses of two Bear Stearns hedge funds last year were the first crashes in the credit crisis’ yearlong slow-motion highway pileup. After a long investigation, federal prosecutors in the Brooklyn are now close to seeking indictments in their investigation of the funds’ collapse, Kate Kelly of the Wall Street Journal reports.”
“According to lawyers with interest in the case, the former managers of the fund, Ralph Cioffi and Matthew Tannin, could be charged with securities fraud within the next week, Kelly reports.”
‘The investigation by the U.S. attorney’s office in Brooklyn is part of a nationwide effort by the Justice Department, F.B.I., and Internal Revenue Service into whether crimes were committed when the subprime-mortgage market collapsed.”
From Reuters. “Credit rating agencies will face mandatory new European Union regulation, EU Internal Market Commissioner Charlie McCreevy said on Monday, following criticism of their role in the U.S. subprime crisis.”
‘The new rules would affect agencies including Moody’s, Standard & Poor’s and Fitch, which dominate the hitherto lightly regulated sector.”
“McCreevy said in a speech that self-regulation had proved insufficient, calling their voluntary code of conduct ‘a toothless wonder.’”
“Structured products backed by mortgages were highly rated by agencies but quickly sank in value and became untradeable, forcing banks to write down billions of dollars.”
“Measures announced by the rating agencies themselves were also insufficient, McCreevy added. Agencies also face tougher regulation in the United States, where the authorities want them to use a separate system for rating structured products.”
“Allen Blewitt, CEO of the Association of Chartered Certified Accountants, said that rating agencies ‘have for too long had the luxury of not having to adhere to good governance and oversight procedures.’”
“‘The fact is that despite the checks on compliance with the (International Organisation of Securities Commissions) code, no supervisor appears to have got as much as a sniff of the rot at the heart of the structured finance rating process before it all blew up,’ McCreevy said.”
The Pioneer Press. “The pitch went like this: Just show up at the closing and you’ll pocket $5,000. The investment company uses your name and credit to get a zero-down mortgage for a new home, carves its management fee from the loan and resells the property fast, handling the mortgage payments until then. Cost to you: zero.”
“That’s what buyers heard. It was simple, and it worked over and over again, coaxing more than 60 people in Minnesota and Wisconsin to buy hundreds of new homes in the past few years that they never intended to live in, or even really own, according to buyers and a search warrant affidavit filed in Hennepin County District Court last August by Eagan police Detective Rich Evans.”
“And by most accounts, it made 33-year-old Michael Prieskorn a wealthy man. The former Plymouth resident and his companies remain the subject of a federal investigation, according to Evans and several buyers. If allegations prove true, it would be the largest mortgage fraud scheme to surface in Minnesota.”
“Michael Bohn, a 28-year-old real estate agent in Plymouth who arranged loans for many Prieskorn deals, said he bought three homes himself. ‘Whether he’s in Chicago, whether he’s in Florida, whether he’s dead, who knows,’ Bohn said. ‘There’s a lot of people unhappy with him.’”
“In 2006, the Twin Cities was awash in stone and Tyvek. Home builders - local and national names alike - still were on a construction bender that hatched neighborhoods out of cornfields.”
“Bloated home values were peaking, inventory was piling up, and builders were looking to get empty, unsold homes off their books.”
“Prieskorn walked into the fray, buyers and associates say, providing builders just what they needed: credit-worthy people to buy not just one but several properties in one fell swoop.”
“Prieskorn’s purchase arrangement is laid out in a three-page investment summary distributed to some buyers, one of whom gave a copy to the Pioneer Press. The document calls the investment ‘virtually risk free for the investor,’ even though buyers are on the hook for sizable mortgages.”
“Yee Thao, a payment processor in Blaine with six children, said he ended up with mortgage debt totaling nearly $1 million. Thao said his nephew pressured him into buying three houses from Pulte Homes in a Prieskorn deal. Thao said his nephew told him that Prieskorn’s own parents bought properties this way and that someone would have sued Prieskorn if the arrangement was no good.”
“Thao said he resisted but ultimately figured the $15,000 would help pay for his son’s university tuition. The lender on all three mortgages, arranged by agent Bohn, was SunTrust Mortgage. Thao said he never saw the loan applications and has no idea how his income was stated. Like other buyers, he also never saw the properties he was buying.”
“Bohn said in an interview that incomes weren’t doctored on the loan applications. He said SunTrust had a particularly generous no-document loan program at the time that allowed a single buyer to purchase multiple properties as long as the total loan amount was less than $1.5 million. At the time, home loans were still flowing like water.”
“‘You didn’t even have to put down if you had a damn job back then,’ Bohn said.”
The Star Telegram. “People are always moving to Ronay Drive. But they don’t stay long. Within months, many find themselves facing foreclosure, saddled with high interest rates on loans for thousands of dollars more than their homes are worth.”
“The quiet neighborhood, where residents say homeownership is as much a dead end as the cul-de-sacs at each end of the street, is at the heart of the subprime-mortgage crisis.”
“More than half of the 56 homes on Ronay Drive have been posted for foreclosure at least once since August 2005, and eight are scheduled for foreclosure in July. Nine others are now for sale.”
“Residents say they have found anything but the happy homes promised in the name of Houston-based real estate and finance company CasAlegria.”
“John Rentz, CasAlegria’s top broker, said his company has done nothing but extend homeownership to people who would not otherwise qualify. He said the complaints are based on misinformation.”
“‘Some individuals, unable or unwilling to responsibly manage their financial affairs, may see a company that has provided them with an extremely positive financial opportunity as the source of their dissatisfaction,’ Rentz said.”
“Homeowners along Ronay Drive admit they weren’t the savviest buyers. Many were first-time home buyers without the financial advantages of good credit. Some were undocumented immigrants drawn to CasAlegria’s ‘no Social Security number needed’ pitch.”
“They knew that the interest rates were high, but they believed that they would be able to refinance within a year or two with the good credit they would build up. Some quickly learned that wouldn’t happen.”
“Victor and Maribel Munoz have tried unsuccessfully to refinance their mortgage, with its interest rate of 10.49 percent. They’ve invested $20,000 in the three-bedroom house, but Victor Munoz is now working far fewer hours than he had been, and the couple say walking away may be the only option.”
“The house, like many in the neighborhood, is on the tax rolls at a value far less than the couple owes on it. ‘We’re looking at maybe just leaving the home,’ Maribel Munoz said last week.”
“Homes that make it to the foreclosure sale on the courthouse steps are typically purchased back by CasAlegria. Then, a blue-and-white CasAlegria sign will reappear on the front lawn, advertising the home for sale once again.”
“‘Prestamos Faciles,’ the sign reads. ‘Easy Financing.’”
The Chatham Daily News. “If a poor credit record forced you into a high-risk mortgage, you might end up in the same situation as Rod and Joyce Marentette. The Chatham couple are perplexed as to why, after never missing a payment for the three-year term of their mortgage, they are being dumped by their lender — Xceed Mortgage Corporation of Toronto.”
“Joyce and Rod were married in May of 2005. Less than two weeks later, they purchased a home on Patteson Avenue. Then in September of that year, the couple suffered a loss of income, sending their finances into a nose-dive. But, they scrimped and saved — sometimes going without food themselves so their four children could eat — to make sure they never missed a mortgage payment.”
“However, their financial situation left them unable to pay other bills, including a credit card and cellphone bill. Despite their current financial woes, the couple figured if they make their mortgage payments, it would be renewed.”
“The Marentettes were shocked when they received a letter in mid-March from Xceed stating the company would not be renewing their mortgage, which came due on Friday.”
“‘There are a number of reasons why we have decided not to renew your mortgage,’ stated the letter. ‘These may include missed mortgage payments and/or a deterioration in your credit.’”
“The letter strongly recommended the couple arrange to find another lender, because if they fail to discharge their mortgage by June 13, Xceed will begin legal action to collect the $93,000 the couple still owes on their home. Xceed has since given the couple until the end of June to find another lender.”
“Reluctantly, they have put their home up for sale, because they have been unable to find another lender to give them a mortgage.”
“Richard Wertheim, spokesman for Xceed, told The Chatham Daily News the dilemma facing the Marentettes ‘is not really related to them directly.’ The Marentettes have been caught up in a financial situation created by the collapse of the asset-backed commercial paper market on Aug. 13, 2007, he said.”
“‘Up until that time, virtually all of the funding for Xceed’s mortgage business came from that kind of security (asset-backed commercial paper),’ Wertheim said. ‘When that market evaporated, so did the funding for those kinds of mortgages.’”
“Being informed by The Daily News about the situation provided little solace for the Marentettes. ‘I worked hard and I still get screwed,’ Joyce said.”
The Houston Chronicle. “Carole Hackett has some high-level management jobs to fill. But the vice president of human resources of The Methodist Hospital is having trouble because of the slumping real estate market.”
“Not in Houston, mind you. Hackett’s problems are in Michigan, Illinois and Ohio. That’s because when Hackett identifies promising candidates for the vice president of quality and key nursing director positions, they can’t move.”
“Since about January, good candidates from the Midwest and beyond have been saying: ‘I’d love to come to Houston, but there is no way I can sell my house,’ said Hackett.”
“‘In this stage of the countercyclical economy, you would expect mass migration to Houston,’ said Barton Smith, director of the Institute for Regional Forecasting at the University of Houston.”
“But the city hasn’t been flooded by out-of-state license plates, and one explanation is negative equity - people owe more on a house back home than it’s worth so they’re stuck unless they’re willing to eat a big loss.”
“Companies have been footing the bill on their employees’ closing costs for decades, Smith said. But today, to cover the negative equity, the price tag could easily run in excess of $100,000. A company might pay that for a top-notch senior officer, Smith said, but not a middle manager.”
“Roger Ghinelli realizes the predicament he’s in. He lives in Sterling Heights, Mich., a suburb of Detroit, and lost his human resource manager’s job last year at a small engineering company.”
“Ghinelli has been running traps for jobs in Houston. But Ghinelli’s two-bedroom, two-bathroom condo is weighing him down. Two similar condos in his complex have been for sale more than a year.”
“He won’t just walk away from the condo he bought 10 years ago for $125,000, and he isn’t permitted to lease it. It makes him wonder if he’ll ever be able to take a sales or recruiting job in Houston if he gets one.”
“‘I’m not even sure why I’m doing this,’ he said.”
BTW, the Pioneer Press article is really something.
He’s on some tropical island drinking away his blues, and genuflecting in the general direction of all those rubes and retards who allowed him a once-in-a-lifetime free ride.
No money down, we’ll even flip the house for you.
BWAHAHAHAHAHAHHAHHHHHHHHHHHHHHHHHH!!!
Ponzi would have been proud of him.
He is a modern day Ponzi, and he even one-upped Ponzi. He handed out $5K to allay the suspicions.
An unsung genius. Who wants to compose a sonnet in his honor?
If you will accept a haiku instead of a sonnet:
Perhaps he is dead
Or perhaps he is alive
Ponzi would be proud.
Ponzi spent the last years of his life in poverty. He had a stroke in 1948, and died in a charity hospital in Rio de Janeiro on January 18, 1949. His life had been characterized by one great moment of glory surrounded by outlandish, wild ventures which inevitably lost him money. In the charity hospital, Ponzi granted one last interview to an American reporter, and commented about the wild ride he had given Bostonians: “Even if they never got anything for it, it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over.”
Who in their right mind would do something this stupid? Is 5k that much money that people would risk going to jail, losing their credit rating, etc.??
Unbelievable. I could see suckering in people for say, something more like 30 or 50k, but a lousy 5k??
JP:
Thanks for the coffee-spitting moment. (for a few months or so, my monitor thought it was safe. hehe)
No, no, no. You misread the article.
He handed out $5K to the people in order to get them to take on the loan. The loan was in the person’s name. Effectively, he bought out their credit rating for $5K.
Then he leveraged millions on each person, cash-out refi-ed, and flew the coop.
His ROI was off the freakin’ charts.
phillygal: my pleasure. I keep hoping Ben will declare Haiku day and demand only properly metered posts.
Added to his genius, living someplace where there is no extradition back to the USA
One potential crime, he said, is fraud under the state’s securities fraud statute. The document calls the investment “virtually risk free for the investor,” even though buyers are on the hook for sizable mortgages.
Is this really any different from what Lereah was telling people? And he hasn’t been charged with anything, last time I checked.
Varadero Beach, Cuba sounds like a great place for this guy. Live like a king on one of the most beautiful beaches in the Carribbean - and yet so close to the States where he scammed so many people. Mojitos and Cuba Libres on Michael…
I’m sure he isn’t the only scammer looking for refuge somewhere…
BTW, anybody hear from that guy down in so Florida who owned the title company? Yeah the expert boater who disappeared with his wife…
“Live like a king on one of the most beautiful beaches in the Caribbean - and yet so close to the States where he scammed so many people. Mojitos and Cuba Libres on Michael …”
Yeah sounds good in theory, but in practice it won’t work out for this guy. Guys like him live for the scam; living a life of leisure isn’t what he’s all about. He’ll soon get restless for some more action and then he’ll be back scamming somebody else. He’ll scam again and again until he gets nailed because that’s who he is.
Yeah, this is always how it goes.
They can never walk away. It’s not in their blood.
Like the Italian Job, they just have to have one more job.
RE: BTW, the Pioneer Press article is really something.
The scam only worked because Sun Trust employed a group of dishonest appraiser’s to use bogus comp’s to keep the scam running and underwriter’s to look the other way.
Any legit appraiser would have rummaged around the deed registry and assessment office records of the towns Prieskorn was doing business and the seen the transfer flips and blown the whistle to Sun Trust who ultimately didn’t give a crap as demonstrated by the corrupted underwriting.
Everybody connected to this clown should be facing felony indictments.
Obviously what this country needs is LESS regulation.
Uh, sure.
It also needs much more enforcement, with teeth. And let the greed-blinded “victims” stew in their own juice.
Based on some of those Houston Chronicle comments, I don’t think I’d feel very welcome down there if I went there to work.
No kidding! I’m disappointed though, that only one really called this for what it is…globalization. The world’s on the move - there’s plenty of TX plates/tags seen up here in Chicago too.
While no one can say how this will turn out in the end, I think its pretty certain already that the postwar socioeconomic dynamic (Fordism) that so heavily favored real estate and helped give rise to this bubble - is gone forever.
What sense do thirty year mortgages make to a workforce that, by and large, can no longer count on thirty years of stable unemployment with thirty years of meaningful raises? Prices aside, owning makes less sense right now than at any time in most peoples’ lifetime.
This is a “hidden” detail that many of us have talked about forever.
Such long-term mortgages make no sense if you want a career.
The Houston Chronicle talks about it.
“My intuition is that the housing market crisis in the United States is greatly affecting labor mobility,” said Barton Smith, director of the Institute for Regional Forecasting at the University of Houston. “But we may not get a handle on that until the 2010 Census comes out.”
I was wondering if we’d see a seizing up in labor mobility similar to what we’ve seen in the financial markets. Since increasing numbers of potential employees effectively can’t move, will we see some businesses relocate to places with greater numbers of potential employees? This obviously doesn’t work for some types of businesses such as hospitals where the customers are local, but could work for other types of businesses.
It didn’t work that way in 1990-1994.
Those who can move will get plum jobs. Those who can’t will get doubly stuck. This is how it is.
Why people can’t factor in these decisions into their dumbass desires to “own” an immovable object will forever be mysterious to me!
I think the census indicated that DFW, Houston, Austin and San Antonio were in the top 10 of incoming migration in the past year. I have a feeling a lot of it has do with taxes, cost of living, etc. That’s why I moved to FW at least in the past year.
Of course none of these educated bankers and mortgage lenders could see the mushroom cloud forming on the horizon.
P.S. We still have a local lender advertising no doc 100% zero down mortgages.
“Bohn said in an interview that incomes weren’t doctored on the loan applications. He said SunTrust had a particularly generous no-document loan program at the time that allowed a single buyer to purchase multiple properties as long as the total loan amount was less than $1.5 million. At the time, home loans were still flowing like water.”
“‘You didn’t even have to put down if you had a damn job back then,’ Bohn said.”
And I wonder how that generous loan program was rated in the secondary market ……AAA? Did the market makers mix those loans with other better loans to create a bundle of loans ? How many investors would really buy a 0 down loan with no doc qualifying up to 1.5 million ,that allowed more than one purchase ,if they really knew that would be the highest risk paper on the planet ? I’m assuming that a pre-payment penalty was attached to these loans and they had a quick turn-over rate until the market crashed .
I have very serious questions about how loans were bundled and rated and sold in the secondary market during the boom . One would have to conclude that the investors of loans had no clue what they were really buying or the ratings on the loan bundles were not accurate .
“Homes that make it to the foreclosure sale on the courthouse steps are typically purchased back by CasAlegria. Then, a blue-and-white CasAlegria sign will reappear on the front lawn, advertising the home for sale once again.”
“‘Prestamos Faciles,’ the sign reads. ‘Easy Financing.’”
Sounds like the Bar-None, JD Byrider approach to selling houses.
Houses selling like shady used cars!
This is unbelievable! The bankers are essentially in it to skim the downpayment and fees. They repo the house once the loan goes belly up, all the while charging usurious rates!
It’s getting harder to work out which country is more corrupt. Nigeria or the USA. Wall Street and US government corruption (lobbyists buying off politicians) just keeps on coming. CEO’s getting massive compensation (the old boy network in place) for gross incompetence. Cheney and Bush probably even more corrupt that the Clinton’s (Cheney being the poster boy). Now we are hearing that so-called “honest politicians” like Senator Chris Dodd are up to their grubby little elbows getting mortgage favors off people like Mozillo of CountryWide.
I had a conversation this weekend with someone concerning a National Health System being introduced into the USA. My answer: “Forget it. This country is far too corrupt to be able to handle a National Health Service.” If anyone thinks the USA is bankrupt now - introduce a National Health Service and you’ll really see a financial meltdown. This last week I had some scary health problems hit me which included 3 ambulance trips to the ER, followed up by consultants, blood tests, etc. I couldn’t believe how incompetent the whole system was. Each doctor I saw ordered the same blood tests, same x-rays, etc. Thus, the medical test costs were tripled.
Fortunately, I can afford the co-pay costs and I have insurance but for the un-insured masses it ain’t gonna happen unless Bernanke buys 50 new printing presses and runs them 24 hours a day.
Unfortunately, Because of the mortgage scams, Bush/Cheney corruption, etc, the rest of the world is wary of taking any more US I.O.U’s. Bush and Greenspan created a perfect financial and political tsunami and the big wave is still out there. I was shocked to read that the BIG arms reset isn’t going to hit until 2009 by which time the gas prices and many more foreclosures will have done a lot of damage, etc. I can see thousands of those people who bought into the ARMS mortgages walking away around the middle of 2009.
You forgot Russia and Indonesia on your list of big-time schemers.
“Russia and Indonesia on your list of big-time schemers”
I blame Bush Cheney, Fox, Christians, republicans, big oil, and the Trilateralists for that too!
I couldn’t give a flying F**k in a donut about Russia or Indonesia. I don’t live there. I live here. A lot of us are putting balm on the problem with statements like, “If you live under a National Health Service in Canada, the UK, France, etc, you have to wait months or years to get something done.” That IS NOT true by the way. My ex-wife in the UK (now age 73) needed a hip replacement last year. Saw the doctor in July, was operated on in September and is now 100% recovered. Cost: Zip. Added to that, if the NHS in the UK has money problems it’s because governments raid the NHS money box for non-medical costs (like the military). If it was a lock box the NHS has more than enough money.
The other problem here (in the US) is that the Insurance companies like Blue Cross, Blue Sheild, Wellpoint, etc, have lobbyists paying off the army of corrupt politicians in order to corner the Health Insurance business if a National Health Scheme is introduced. Just like the 401k’s the Wall Street Gangsters steal from, the big insurance corporations will bleed the system dry as the CEO’s collect $100 million bonus payouts.
The US “powers” want you think they are the best. The finest. Not true anymore. However, the point is we should not hold ourselves up as being better or on the same level as Russia or Indonesia or anywhere else. We should hold ourselves to a higher standard and the only way you do that is by starting to get rid of the massive corruption in government, the legal system and the medical system and the financial system which has exploded since Bush/Cheney took office. I would like to think it’s going to happen. Frankly, I doubt it.
If the US health care system isn’t the best in the world, why do Canadians, Saudis, and other nationalities come to Harvard, Stanford, Mayo, Cleveland, MD Anderson, etc. when they want the best and most immediate care? Why do we have so many foreigners come here for residency and fellowship training with their governments (or ours) footing the bill for their education?
The problem is not the way health care is delivered, the problem is how it’s financed, access and its overhead costs.
I’m sorry you are sick by the way, and I agree that there needs to be reform. I just think that the people who work in the health care system have just as many complaints as the patients, but are held hostage by unrealistic politicians who use the whole industry as a political football instead of asking the people who work there how they can do their jobs better (the Deming approach).
Wrong again. The UK medical schools are full of medical students from other countries. More Saudi’s (for example) go for treatment in the UK than they do in the USA. However, there is a much more simpler explanation as to why these would-be doctors want a US Medical Degree.
M-O-N-E-Y.
Doctors get paid far better in the USA (until now but their incomes will start to suffer in the future) and they can operate almost with impunity FAR MORE than they can in europe. Why? Because the AMA has a massive lobby in Washington which pays off the politicians. Doctors in the UK make a decent living and there is also private sector. Take a walk around Harley Street in London where most of the private doctors operate. Packed with foreigners seeking medical procedures BUT the cost structure is much less than the USA.
Also, there are now hospitals and surgery centers opening up in places like Thailand and India where the medical expertise is just as good as the USA AND much cheaper even with the travel costs, etc. A lot of those doctors have european medical degrees.
The average citizen in these other countries does NOT come to the US for medical treatment. They couldn’t afford it even if they wanted to. You’d find very, very few people in other countries that have a national healthcare system that would trade it for what the US has.
And the fact is, without any employer supported health insurance almost all Americans would switch to a national US system immediately. Or else pay COBRA rates. But more employers are dropping their employee subsidized insurance at an ever increasing rate, very soon there will be no choice in the matter - national healthcare or NOTHING.
And the fact is, without any employer supported health insurance almost all Americans would switch to a national US system immediately.
Which is why Corp America is preparing to jettison employer provided insurance.
LOL @ Mike!
You say M-O-N-E-Y like it’s a dirty word. Yes, I’m a liar…the best doctors all work for free, and have all conspired to deprive you of your Constitutional right to free health care (was that the 28th Amendment? I forget…).
Yes, plentiful MRIs and day surgery for everyone on demand! Free drugs, free outpatient care, free laboratory testing. I bet they manage to do it without any waiting lists, striking healthcare workers, raising taxes or making medical errors. No problem switching doctors or seeing specialists. I bet their drugs don’t have side effects either.
John Edwards is a multi-millionaire because all of those greedy nasties. But thank goodness all those selfless lawyers imposing ‘reform’ on the medical profession are doing it only with your well being in mind.
Four legs good, two legs bad…
Cost: Zip.
ORLY?
I couldn’t give a flying F**k in a donut about Russia or Indonesia. I don’t live there.
Wait until the incredibly well-organized and technically sophisticated criminal syndicates in those countries manage to hack into and drain your bank account, thanks to information sold to them by corrupt low-level insiders in the financial services sector. You just might start to care about Russia and Indonesia then, despite the fact you don’t live there.
Preach it on the incompetence of the health care system, Mike!
My father and I are dealing with this very thing right now. Seems that my 82-year-old mother recently went to a doctor, said she was feeling fine before the visit, but the doctor diagnosed her with low thyroid.
So, on to meds went my mother. I called my parents yesterday, not just to convey Happy Father’s Day greetings, but to see how my mother is doing. Once again, the side effects of the thyroid meds kicked in. Mom launched into such a ferocious coughing fit that she had to get off the phone.
This whole thing leaves me wondering why an 82-year-old woman, who’s still quite active and mentally sharp, would be put on any medication that would so severely compromise her quality of life in such a short period of time.
If you think this country’s health care system is so incompetent, name one country’s health system that doesn’t make mistakes or errors of judgment. Name just one.
If anything, our health care system is overly cautious and aggressive because we are the most litigious country in the world…and with a customer base that views anything less than a total cure or the appearance of treatment side effects as ‘incompetence’.
Once again, you are trying to use other countries as an example. This country (the USA) has become so corrupt it’s beyond a joke. Example: My last visit to the doctor earned me a presciption which wasn’t generic. I put the prescription in and was stunned to see the cost: $225.00 for a small one month supply inhaler. There were other drugs which amounted to another $180.00 for a one month supply. Again, I’m insured and even if I wasn’t I could afford it but the first thing that hit me was, “What about some poor man (or woman or child) who couldn’t pay $225.00. Would they gasp for breath until their heart gave out.” Cost of that inhaler in the UK: $12.00. If you are over 60 or a child: Zip. If you cannot afford it the government will help. That’s the difference.
In these European countries the government runs things like a National Health Scheme. In the USA, corporations run the government. This country is now heading into a serious lowering of living standards. Possibly not seen since the 1930’s. We on this blog are more informed than the average Joe Sixpack and we know that most Americans have no savings, are putting their gas, food and even their mortgage payments on credit cards. As the financial noose tightens more and more will lose any work related health insurance they have nowhere to turn and these CEO’s of the big pharma and medical insurance corporations couldn’t give a sh*t as long as they are taking home tens of millions of dollars and have enough left over to pay off the politicians.
If your house is in disarray, you don’t look at the house up the street and say, “Well, his house is worse than mine.” That’s his problem.
It’s fine if you think the Europeans live in a medical Disneyland, but if you can talk about how wonderful the NHS is (or other foreign countries) for comparison’s sake, I’m not sure why I’m not allowed to?
Everyone has a hard luck story. I have hard luck stories related to incompetent lawyers, teachers, police officers, politicians, taxi drivers, janitors, construction workers…and yes health care workers. The list goes on and on, but I don’t trash their whole profession.
I’m just trying to have you consider that nationalizing the industry won’t necessarily fix it’s problems, it will just create a whole set of new ones…Hillary’s over-reaching campaign promises to the contrary.
” if you can talk about how wonderful the NHS is (or other foreign countries) for comparison’s sake, I’m not sure why I’m not allowed to? ”
Maybe because you’re wrong?
I highly doubt that is a side effect of her thyroid medication. Hypothyroidism clinically is a very difficult diagnosis, but it is readily diagnosed on blood tests. If her thyroid tests were low putting her on the hormone placement would be appropriate, and unless the dose is excessively high I have never seen anyone have any significant side effects. (I am an internist.)
Yeah, but blood pressure meds suck the big one for side effects. And maybe not you, but most doctors tend to be in major denial about the side effects of the meds they dispense, IMO. Interestingly, some of the older treatments for various conditions fell out of favor because the pharmaceutical companies couldn’t patent them.
Preach it, Palmetto!
They also seem to be in deep denial over all the radiation-based tests they order. I’m talking about things like X-rays, MRIs, mammograms, etc.
I can’t help thinking that, down the road, all of that radiation is going to come back and haunt many people.
“I can’t help thinking that, down the road, all of that radiation is going to come back and haunt many people.”
Well, I dunno, but we DO seem to have skyrocketing cancer rates. Another area on which people are in major denial. Every time someone questions these things, the “professionals” claim that this or that small amount of this or that isn’t going to hurt anyone. However, lots of small amounts of this and that add up over time.
Why on earth would synthroid cause coughing fits? I’ve been on it for years and the worst that happened when I first started was I couldn’t sleep at night.
It’s no fun to have an under active thyroid, but it won’t kill her - maybe get her fat, but won’t kill her to my knowledge. She can stop taking it, but I honestly don’t know if that’s the cause of her coughing anyway unless she isn’t taking it with enough water. Did she ask her doctor?
My father and I both wish that she would get off whatever she’s on. We said as much during yesterday’s phone call. I also said that she sounded like my dad’s father when he was dying from lung cancer. Her coughing sounds that bad.
And I doubt that my mom’s not drinking enough fluid. I mean, the woman has a major jones for seltzer water. And has had one for years.
Nor is she fat. In fact, she’s half the reason why Arizona Slim is so slender. The other half is my dad.
As for asking the doctor, I found the name of a nurse practitioner in her town. This NP is quite up on women’s health issues, and I sent my mother the printout from her home page. I asked, even begged, my mother to go see this lady for a second opinion.
She’s already said that she’s not too impressed with her doctor. She thinks the doctor is too quick to put older people on meds so that they’ll go away.
In short, I’m not letting my mother go down without a fight.
“In short, I’m not letting my mother go down without a fight.”
Good for you, Slim. Side effects of drugs can vary from person to person. I was on a blood pressure med that caused coughing, but had a buddy on a similar med who didn’t get that particular side effect. It all depends on the person. Anyway, I’m a big fan of reasonable alternatives, but that also depends on the person taking them.
Don’t forget that doctors are in the payola of Big Pharma, too, when they give out free samples and get wooed on expensive trips, etc…
thyroid meds won’t cause her to cough.
Slim,
If the coughing is from a ticklish sensation in her chest, she should go back to the Dr. I’ve been on thyroid medicine for about eight years or so. My dosage was changed for weight gain/loss, pregnancies, etc., sometimes if it’s too high, it can cause heart palpitations. She should maybe get an EKG, also insist that she see an endocrinologist and get a full thyroid profile done, not just a TSH test.
She should weigh the risks of not taking medicine and consider stopping it too, if she can deal with the symptoms. Personally at 82, I think it’s OK to feel a little sleepy, have dry skin and gain some weight, not sure if it would cause other issues.
RE: This country is far too corrupt to be able to handle a National Health Service.” If anyone thinks the USA is bankrupt now - introduce a National Health Service and you’ll really see a financial meltdown.
Bingo!
Beantown Glob just ran a blurb about some 32YO female HS drop-out down in Ft. Lauderdale clipped Medicaid for $105 MILLION by filing 144,000 bogus claims by hacking into their computer payment system.
The Federal investigators comment was that they were amazed at how easy it was done.
Caught this on a blog to a story about how the British authorities are now opening thousands of safe deposit boxes in the name of criminal investigation. This is the kind of behavior that erodes property rights and privacy.
We are supposed to be proud to be British, not me this country is a rip off.
Being British is about driving in a German car to an Irish pub for a Belgian beer, then on the way home call for a Indian takeaway or a Turkish kebab, get home and sit on a Swedish sofa and watch a USA show on a Japanese Tv and being suspicious of anything foreign.
Oh and only in Britain can you get a pizza quicker than a ambulance, only in Britain do banks leave both their doors open but chain their pens to the counter.
Also in supermarkets they make the disabled walk to the rear of the store to get their prescriptions, while healthy people can stand at the front door to have a cigarette…. We might be British but by god we are strange……
Also in supermarkets they make the disabled walk to the rear of the store to get their prescriptions, while healthy people can stand at the front door to have a cigarette….
We do that here too.
LOL…You got me laughing so hard . But I really like British humor
sometimes . OK ,I admit it ,I like the British .
“Being British is about driving in a German car to an Irish pub for a Belgian beer, then on the way home call for a Indian takeaway or a Turkish kebab, get home and sit on a Swedish sofa and watch a USA show on a Japanese Tv and being suspicious of anything foreign.”
Sorry to break it to you but that doesn’t sound too much different than the USA, except most of our stuff is from China…except cars, they are from Japan if we can help it.
One major difference between the UK and the US: The British work ethic SUCKS. Ours could be better, but compared to the Brits, most American tradesmen are conscientious and hard working. Immigrants, with their vastly superior work ethnic and willingess to work long hours, have taken over just about all of the former mom & pop businesses in the UK, and are rapidly monopolizing the trades, too.
Ah Mike, it happens. Everything is going fine and then one day you wake up and wonder WTF happened to this country? I know how you feel. The sad truth is that the country has decided to give power to a group of complete assholes that could give a shit about us. And that is just the Democrats! The Republicans are just plain gangsters. The worst of the worst, which is actually saying a lot.
Yeah, we are screwed. Welcome to my personal nightmare. But since misery loves company, I’m happy to welcome you in! Have a seat.
They are filling up fast.
“McCreevy said in a speech that self-regulation had proved insufficient, calling their voluntary code of conduct ‘a toothless wonder.’”
Hey, there’s nothing wrong with being a toothless wonder. That’s how meth-mouthed crack ho’s with poorly valued ‘assets’ can still make a good living!
Is Crack Ho toothless wonder related to Mike Hawk?
“Fortunately, I can afford the co-pay costs and I have insurance but for the un-insured masses it ain’t gonna happen”
Mike, I have a lot of uninsured friends (river runner types and self-employed). The rare times they have such medical events, they are treated to the minimum medical treatment possible by law (every county out here has one hospital that has to take you whether you’re insured or not). Not one of them has stiffed the hospital, they all pay the bills, even if it’s month by month. I know a woman who has had cancer twice and paid both bills in full w/ no insurance.
I’m beginning to think this kind of minimal treatment may not be all bad, just do what you have to and no more. Isn’t that how it used to be?
BTW, hope you’re OK.
sorry, supposed to nest under Mike’s comment above
The 80/20 rule applies IN SPADES when it comes to medical care (80% of the resources and dollars are used to treat the 20% sickest patients). May be more like 90/10.
How about we do away with trauma centers, helicopter life flights, protocols that only delay a terminal patient’s death for a while, and transplants and other procedures that require a lifetime of expensive follow-up care. Also do away with all care except palliative (pain relief) care once you reach a certain age over 65. Providing universal coverage would then be a relatively easy additional tax burden.
BTW, I am over 65.
“The Marentettes were shocked when they received a letter in mid-March from Xceed stating the company would not be renewing their mortgage, which came due on Friday.”
I don’t understand this concept of renewal. What kind of mortgage needs to be renewed after two or three years? Adjustment would make sense, the rate on ARMS will go up but renewal?
Does this mean that they signed a contract stating that they would have to requalify for their existing mortgage every few years and if the bank decided to say no that the entire balance would be due immediately?
I’ve never had a mortgage, maybe this is normal, but if it is that’s news to me. What am I missing here?
Given the high interest rate. I think it was a balloon mortgage, which would have to be refinanced if they can’t pay it off by a certain date.
On another note:
“However, their financial situation left them unable to pay other bills, including a credit card and cellphone bill. Despite their current financial woes, the couple figured if they make their mortgage payments, it would be renewed.”
How in the world did people live without in the days before credit cards and cell phones? Something tells me that if they viewed those things as necessities, then somebody should have had a second job.
There may have been some clauses in the ARM about “material deterioration in qualification terms” or some such garbage.
They were speculating too.
They were married in 2005, and they had four children already?
Theoretically possible, orthey may have married after the sprog popped out.
Then they didn’t eat so that their children could eat? To pay a freakin’ mortgage? WTF?!?
What is wrong with these people? And what’s wrong with renting?
“They were married in 2005, and they had four children already?”
My uterus, the potato cannon.
OK Frank. That’s just funny.
lol
Good catch s_w,
I read the whole article and something still doesn’t smell right.
Maybe it’s a Canadian thing or maybe they had a first and HELOC both with the same lender. HELOCs typically have a balloon maturity, but not mortgages. Bank could use cross default provision and demand them both paid.
He had a prior BK and it was a “high-risk” loan. They waited all of 2 weeks to buy a home after they got married. Maybe the loan did have a balloon payment and that is all these clowns qualified for. I don’t think we’re getting the whole story.
One friend bought his first home with a 7 year balloon payment due.
Note: By state regulation, he was “allowed” to pay it off as a short term ARM, but the terms were egregious. He sold the home after living in it four years. Nice profit too…
Got Popcorn?
Neil
Most balloon mortgages have interest rates that are LOWER than a 30 yr fixed issued at the same time, because the lender’s horizon isn’t as long and the risk of a BIG rise in interest rates over time is lessened.
Correct.
The first 7 years were a low rate fixed.
(It was a 30 year fixed, out in 7 or some name like that.)
So the first 7 years were cheap.
Year 8 on would have been at a premium (due to the short term intended nature of the loan). But like most, he sold early.
Got Popcorn?
Neil
It’s in Canada *Chatham, Ontario*
“Bohn said in an interview that incomes weren’t doctored on the loan applications. He said SunTrust had a particularly generous no-document loan program at the time that allowed a single buyer to purchase multiple properties as long as the total loan amount was less than $1.5 million. At the time, home loans were still flowing like water.”
I recall my wife screaming, word for word, “how the fucckk are people doing it!” back in 04-05 and not having an answer for her. Us HBB’er’s have known for quite some time but this doozy of a quote is a great reminder.
exter,
Ask my family how many times I asked and screamed “how the fucckk are people doing it!” back in 2004. We all thought maybe drug money or rich relatives. Then a friend at work pointed me to Another F@CKED Borrower and then from there to Ben’s HBB. Then the veil was lifted and all was explained.
exeter,
You should print out that quote for your wife, and tell her, “This is how”.
You may need this sage advice at a future date.
I recall my wife screaming, word for word, “how the fucckk are people doing it!” back in 04-05 and not having an answer for her.
She may have heard an echo from the north country.
From Reuters. “Credit rating agencies will face mandatory new European Union regulation, EU Internal Market Commissioner Charlie McCreevy said on Monday, following criticism of their role in the U.S. subprime crisis.”
‘The new rules would affect agencies including Moody’s, Standard & Poor’s and Fitch, which dominate the hitherto lightly regulated sector.”
“McCreevy said in a speech that self-regulation had proved insufficient, calling their voluntary code of conduct ‘a toothless wonder.’”
In the voice of Cartman (from SouthPark):
“Respect my AUTHOR-I-TAY!”
This could be interesting… regulated minimum requirements for AAA…
“We’re all subprime now.”
Got Popcorn?
Neil
Whenever the powers start talking about making new rules and regulations, I wonder if a law or regulation hasn’t already been violated and the cover up is to make it look like laws weren’t broken . I find it very hard to believe that current laws and regulations on the books weren’t broken and violated during the housing boom.
Ha
http://perotcharts.com/
Is it just me, or does that wallpaper of lady liberty look like she just took a loooong toke?
s. California home prices plummet
http://biz.yahoo.com/ap/080616/california_homes.html
“Conversely, sales in markets where homes are valued higher than the traditional jumbo loan limit of $417,000 continue to lag. That trend comes despite a temporary increase in place since March meant to make it easier to obtain financing for such homes.”
When financing is once again tied to incomes, this is hardly surprising. Few make enough to finance such purchases.
7 out, line away…
Next shooter, up!
“Seven large financial companies - Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Merrill Lynch, Goldman Sachs and Morgan Stanley - have since last July written down the value of the assets they hold by $107.2 billion, gutting their earnings and share prices. That is nearly half of the combined $254 billion in profits those seven firms earned from 2004 through middle of 2007.”
That is nearly half of the combined $254 billion in profits those seven firms earned from 2004 through middle of 2007.”
So they haven’t finished paying it all back, eh?
Why do I have a feeling they might have a bit of debt when this is all done…
Got Popcorn?
Neil
Yes, they ARE a bunch of gambleholic craps players. Greedy too, like Philip Seymour Hoffman in “Owning Mahowny” where he busts the table playing baccarrat but just HAD to have more!
“setting a trap for jobs . . . ” .
what does that mean exactly??? (I have a mental picture of jeremiah johnson out setting a line of traps for grizz.)
“Thao said he resisted but ultimately figured the $15,000 would help pay for his son’s university tuition. The lender on all three mortgages, arranged by agent Bohn, was SunTrust Mortgage. Thao said he never saw the loan applications and has no idea how his income was stated. Like other buyers, he also never saw the properties he was buying.”
I’m starting to see the attraction of being a con man. It’s less about the score you make, and more about the sheer glee of separating fools from their money. Loathsome creatures like Thao and his ilk ALWAYS claim altruistic motives to rationalize their greed, which would make fleecing him that much more enjoyable.
“He won’t just walk away from the condo he bought 10 years ago for $125,000, and he isn’t permitted to lease it. It makes him wonder if he’ll ever be able to take a sales or recruiting job in Houston if he gets one.”
“‘I’m not even sure why I’m doing this,’ he said.”
The visual I’m getting is of the Malaysan monkey trap. From Chris White: “The Malaysians catch monkeys with a trap, called a “Malaysian monkey trap”. They put a banana in a sturdy jar with a narrow neck. The monkey puts its hand in to get the banana, the clenched fist plus banana is bigger than the hand going in, the monkey can’t get its hand out again through the jar’s narrow neck, as long as it holds on to the banana. The monkey could let go of the banana and scamper away to freedom. But the monkeys don’t let go.”