Stay Classy Citigroup

Read about some hilariously shady business practices that Citi has undertaken with their Mortgage Origination business.

It's a dirty little secret that a lot of ARMS written in the last few years are actually going to reset in the coming months to lower rates due to the precipitous fall in Treasuries. (I know I can't wait for our reset to come.) It's a secret because the current selling model of the mortgage industry is to get scared consumers to over pay for fixed rate loans.

It seems like Citi is trying to scare people into Refinancing now into a *safe* fixed rate mortgage by quoting potential ARM rates from over a month ago....and overstating them at that.

I personally knew Citi was in deep financial doodoo when they wouldn't refund a late fee because I missed a payment on a credit card (that was due on Christmas day) by one single day. If they really needed my $20 bucks that bad, something serious must be wrong.

I cancelled the card and haven't looked back.

Interesting news out of Mother Moto today....

Looks like we are to be spun off. parts of me wonders if this rapid agreement to what Mr. Ichan wants is just to make his lawsuit go away.

Among other materials, Icahn is seeking board documents related to a potential spin-off of the cell phone unit, the service and selection of Motorola's senior officers and materials related to the use of company aircraft by senior management, board members and their families.

It sounds like they didn't want to be embarassed to me, or possibly subject to more intensense investigation by the sec and other shareholders.

Levels 1/2/3

Global Economic Analysis is one of my favorite blogs. It is much more bearish than I am in general, but he made a great catch on the recent Goldman earnings that were such a catalyst for the big market rallies over this past week.

How To Beat The Street (the old fashioned way)

Bloomberg is reporting Goldman Sachs Profit Falls 53%, Less Than Estimated. Here is the key snip:

Goldman's so-called Level 3 assets, which are the hardest to value, rose to about 8 percent of the firm's total assets from about 7 percent in the prior quarter, Viniar told analysts. The increase was largely related to commercial real estate loans that were moved from Level 2, where assets are valued in part using market prices, to Level 3.

Goldman has $873 billion in assets. That means Goldman moved $8.73 billion in commercial real estate loans from Level 2 "Mark To Model" to Level 3 "Mark To Fantasy". Something tells me Goldman did not like the answer their model was giving them.

I wonder how the markets would have reacted if this little bit of sleight of hand hadn't been done.

March Madness

Great article from the Economist on what went wrong with the financial system can be found here .

(Obligitory self deprecating onion cut and paste....

Eeeeeeuuuuuwww! The Economist says! The Economist says! I read The Economist! Aren't I cool? Aren't you impressed with me?

What do you read? Time? Newsweek? Those are for people who can't handle a real news magazine like the one I read. That's because you're not as smart or sophisticated as me.

.....

Question: Do you think I'm smarter than everyone else because I read The Economist, or do I read The Economist because I'm smarter than everyone else? Now, there's a conundrum! I should mail that one in to The Economist and see what they think!

.....)

Just a few thoughts

Doesn't it seem presumptous to assume we already know what went wrong? It still getting "wronger" every day.

I loved the imagery of the finance industry being Wile E. Coyote running off a cliff. This seems especially apt as Mr. Coyote always tried to use Acme products that he didn't even understand....and they always blew up in his face.

This was a very frightening quote And so the screw turns until those without leverage will buy. Who are these people without leverage? Sometimes I think I am the only American that saves. I guess the process of selling American assets to Resource (Oil) rich nations will continue and even accelerate.

Purpose of blog....

With apologies to Shakespeare (and Mr. Faulkner),

"Financial Advice is a tale
Told by an idiot, full of sound and fury,
Signifying nothing."

I have read many books and articles and I have come to the conclusion that it is all self-serving drivel, so I thought I might as well add my own! This blog will be links to current financial events and analysis, my own thoughts on the matters at hand, reviews of financial self help guides, and maybe some other commentary as well.

You definitely trust me, I have a minor in Economics, and my wife is an accountant. :)

Keep in mind all predictions wrong or your money back...(Ok I stole that one too....apologies to TMQ).