Is the U.S. Dollar a “Legacy Currency”? “China Urges New Money Reserve to Replace the Dollar”—The New York Times (3/24/09)Legacy: of, relating to, or being a previous or outdated computer system. Here’s a tip: when someone refers to something as a “legacy [blank],” it’s not a compliment (or a good omen). So it’s unnerving —...Read More
Everything Clear Now? Going short on bonds by buying a Credit Default Swap (“CDS”) contract carries limited risk but almost unlimited profit potential. By contrast, selling CDS offers limited profits but practically unlimited risks. This asymmetry encourages speculating on the short side, which in turn exerts a downward pressure on the underlying bonds. The negative...Read More
Extreme Makeover – Minneapolis Edition In its hey day, this 1930 Tudor near Minneapolis’ Cedar Lake was a masterpiece: custom tile everywhere, lath-and-plaster construction, hand-carved crown moldings, high-end masonry, walnut and cherry wood throughout. Not to mention a grand staircase, and a surprisingly modern floor plan. However, the owners hadn’t been able to keep up...Read More
Hollywood Couldn’t Come Up With This Stuff “The AIG bailout, in effect, was Goldman [Sachs] bailing out Goldman [Sachs].” –Matt Taibbi, “The Big Takeover”; Rolling Stone (3/19/09) “Here’s the dirty little secret . . . most of the stuff that got us into trouble was perfectly legal. And that is a sign of how much...Read More
Home Buyer Advice: ‘Forget Short Sales’ Buying foreclosures isn’t always easy, but it isn’t as hard as buying a short sale. A foreclosed home is already owned by the bank. With the short sales only about half of them ever get to the closing. Some end up in foreclosure long before they close even though...Read More
Jumbo Loan Premium to Shrink With the collapse last year of the private mortgage bond market on Wall Street, home buyers, builders and refinancers who relied on jumbo financing were left with few sources except at punitively high interest rates and huge down payments. –Kenneth Harney, “A Big Boost for Buyers Seeking Jumbo Loans” (The...Read More
