DO PHONY SOLDIERS DIE PHONY DEATHS?

The Author generally avoids overtly non-economic political topics. This site would get a lot more hits if it would take frequent and divisive political stands, but that is not the plan.

Yet sometimes, topics such as the deaths of thousands of American service men and women, the death of hundreds of thousands of Iraqis, and the cowardly and smug duplicity of a dope-addled hate radio celeberity cannot be avoided. But do not take the Author's word for it.

You can learn all about phony solders dying phony deaths, filling phony body bags and suffering phony wounds at http://armyofdude.blogspot.com/2007/09/real-deal.html

IT IS NEARLY ALWAYS BETTER TO SHUT UP AND LISTEN IN THE DESERT OF THE REAL!

A PICTURE OUT OF A DISPLACED TIME.

The Author came across this picture recently. It was taken in 1984, perhaps New Year's Eve 1984-1985.

From Left-to-Right in back: Jon Kief, The Author, and Stumpy(?).
In the front foreground is Tic.

Another friend, Enoch, took the picture.

Tic is holding something that is apparently very interesting. Jon Kief was one of the smartest and funniest guys the Author ever knew. We had some fun times.

Unfortunately, Jon drowned while fishing in December of 2001. His boat capsized in the icy water. RIP, Reefer. And we should have gone out with those two country girls when we had the chance!

JUST SOME IDLED THOUGHTS IN THE DESERT OF THE REAL!

NEWEST WALL STREET MOTTO: “HEADS I WIN, TAILS, I GET BAILED OUT.”

Allen Sloan, Senior Editor-At-Large of Fortune magazine penned an interesting article, “Investors to Fed: Thanks for nothing: The reckless are getting relief from Bernanke while the prudent are paying the price.”

The point of the piece is that while the ½ point cut in the Fed rate on September 18th did give the stock market a boast, and halted the slide of Countrywide Mortgage, most other financial participants got “Shemped”.

However, if you look at the financial markets' overall reaction to the Fed move - not at just the stock market's reaction - you realize that as a result of the cut, those of us who keep score in dollars and didn't need to be bailed out are less wealthy than we were in terms of anything other than our home currency.

Why? Because the rate cut contributed heavily to the dollar's recent sharp drop in the currency markets - parity with the Canadian dollar, for God's sake! - and to the price spike in hard assets like gold, silver, copper, and oil. So our wealth, relative to these other things, has diminished. (AUTHOR’S NOTE: He is long foreign markets and oil services, so he avoided much of the collateral damage.)\


And wait, there's more. Even though the Fed has cut short-term rates, long-term rates, which it doesn't control, have risen in reaction to the cut. So whatever economic benefits may flow from lower short term rates will be partly offset by the rise in long rates, which are at least as important to the economy as short rates.

Finally, consider this. Even though Bernanke's cut may mean that some junk mortgages will reset at lower rates, the cost of large, high-quality fixed-rate mortgages, which are tied to long rates, will be higher than they'd otherwise be. (Yeah, penalize the people who are prudent - way to go!)

THE AUTHOR HAS ALSO SHARED HIS SUSPICIONS WITH HIS READERS.

In his post of September 20th, “Dollar Faces Flight in Wake of Fed Rate Cut” , the Author warned of short rates shrinking, long rates rising, and a flight from the dollar.

The dollar is at a record low against the Euro, .7006. And the Canadian Dollar, sometimes called the “Loonie” because of the Loon that appears on the dollar coin, is now worth MORE than the US Dollar, standing at 1.0056.

So the next time a vending machine bounces that Canadian Quarter you put in it, smile and waive good bye.

WE WILL STILL TAKE SHEMP OVER CURLEY JOE AND JOE DeRITA IN THE DESERT OF THE REAL!

URIAH HEAP WOULD LOVE DAPS (DOWN PAYMENT ASSISTANCE PROGRAMS). OR SHOULD WE CALL THEM SELLER-FINANCING KICKBACKS?

The Author found an interesting post on the website Calculated Risk. The post talks about changes in FHA (Federal Housing Administration) rules that will end a suspect practice in mortgage financing. The practice, known euphemistically as Down Payment Assistance programs (DAP), is a loophole that allows sellers to kickback 2-3% of the purchase price to the buyer, giving the buyer enough cash to make the required FHA down payment of 3% of the purchase price.

An article in today’s Washington Post, “FHA Down Payment Rule To Ban Seller Financing” describes the current practice of laundering the money through “charities”.

Almost 200 charities nationwide -- one of the largest is AmeriDream in Gaithersburg -- have participated in such arrangements. But the Internal Revenue Service and other government entities have raised concerns, particularly after the GAO study found that borrowers receiving assistance from the charities were more than twice as likely to default or become delinquent than other FHA borrowers were.

In a ruling last year, the IRS went so far as to call the seller-financed programs "scams," accusing the charities of inflating home prices.

“CHARITIES” CREATED AS A LOOPHOLE FHA PROHIBITION ON SELLER FINANCING.

Current FHA rules do not allow sellers to kickback any of the purchase price to the buyers to make the down payment. But in the 1990s “charities” were devised that would take the kickback from the purchase price and then gift it to the buyers. Oh, yeah, the charities would often charge a hefty service fee.

The net effect of the transaction is that the sellers inflate the sales price of the home 2-3% to cover the kickback and the home buyer effectively finances the entire purchase price of the house. The other net effect is the high rate of DAP home buyer defaults.

FHA BUYERS CAN STILL GET ASSISTANCE.

This new FHA rule will still allow FHA purchasers to accept down payment assistance from families, friends, employers governmental entities and legitimate charities.

THERE IS NOTHING IF NOT BIG IMAGINATION IN THE DESERT OF THE REAL!