"Concern should drive us into action and not into a depression. No man is free who cannot control himself."
-- Pythagoras

Chartes and Table Zup!!!!

Check out the chart...CLICKONNIT!!!



We had a good year goin' until we had the March subprime/economy hiccup. Then we had a good year goin' until we had the August subprime/economy hiccup. Then we launched off the half point interest rate/discount rate cut of August 15th and had a good year goin' again. What happened this week should look familiar. (Hint; Subprime/economy) The question in front of us is "Will we go up again for the third time? Or is this going down for the third time and stayin' down?"

Other questions...

This is a mortgage thing. Am I right that we have way too much of the money in our Health and Welfare Trust Fund, Apprenticeship Trust Fund, and Defined Contribution Pension Trust Fund invested in mortgages? Are YOU exposed to this is the 401a?

What does it mean that the mortgages are insured? We've watched the progression of housing from "a pause in growth" to "going down in flames". This weekend we are seeing million dollar Vallejo homes auctioned off with starting bids in the $400K range. We've watched the mortgage originators (Countrywide et al)going down in flames. We've seen way too leveraged hedge funds vomiting out mortgage backed securities and closing the doors. Are the mortgage insurers facing a Katrina like Tsunami of claims? Will it overwhelm them? If the mortgage insurers come up short, are we dependent on the PBGC for our pension benefits? Check out the last page of my site for more info on THAT.

Banks are writing down much of their exposure to recent mortgages to near zero because they want to get out from under the falling piano. They have investors and an industry that demands that they move and move NOW when things get dicy. And it appears that the problem is growing faster than they can move. The Financial Times estimates $40 billion in additional exposure at risk. Worst case figures are estimated at $250 billion total.

And we have Local 342. I've reviewed some recent records. I suspect that we may be exposed to a substantial amount of mortgage backed securities. Are we REALLY aware of it? Are we taking someones uncorroberated word that everything is OK? Are we moving on it if it is a problem? Will we be the last to move? Will we be left holding the bag?

In 2003 I got way concerned about the money our pension fund had in stocks. Jesus, was I right to be concerned. Today, I'm concerned about our exposure to the mortgage market. I sense a pattern here....

DON'T GET CAUGHT UP IN THE "SUBPRIME RIFF".

There are also the "Alt A" mortgages (nondoc on good credit), prime mortgages with a second mortgage or a "home equity line of credit" (HELOC) on top, mortgages with job loss behind them, and second and third "investment" home mortgages. These are all possible falling pianos and a possibile recession is the triggering event.

Billions of dollars are evaporating from the economy as real estate values evaporate. Is the $250 billion worst case estimate accurate? The headlines keep getting worse.... Can all this money disappear, can all the associated jobs and industry fade without precipitating the economy into a recession? Luckily, I got a jump on it this time. I'll keep an eye on this and write about here....

Bummer....

http://www.nytimes.com/2007/11/09/busin ... ref=slogin
http://bigpicture.typepad.com/comments/ ... -wors.html

Oh, yeah. if you can't face losing a lot of money without laughing about it, you may not be able to hang with me...Clickonnit!!!!

http://www.youtube.com/watch?v=SJ_qK4g6ntM
http://www.youtube.com/watch?v=axAjb6fDsPY
http://www.youtube.com/watch?v=NAt311OlM7U

See ya at the track.