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Archive for February, 2010

No one is saying, `I need to buy something before it expires,’” said Tim Surratt, an agent with Greenwood … Sales of both new and previously occupied homes dropped in January, and the Mortgage Bankers Association’s index of loan applications …
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Depending on how loan officers provide their quotes upfront — on an informal “worksheet” that carries no federal consumer protections, or on a new, three-page “good faith estimate” (GFE) mortgage shopping tool that comes with rock-hard guarantees …
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President Obama announces $1.5 billion in funding to help homeowners in states hardest hit by the housing crisis in a town hall meeting at Green Valley High School in Henderson, NV. February 19, 2010.
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A New York couple on a fixed income shows how they were able to salvage their home from the brink of foreclosure with the help of a reputable community foundation. Also, in tough economic times, a wide variety of people and organizations claim that they can help you get out of debt. We’ll help you distinguish those who can truly help you from those who may be looking to take advantage of you.
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To apply for free government grants, you must first check on your eligibility. You can choose to apply for free government grants among several options depending on your need.
If you are a student and you want to apply for free government grants, you can complete the Free Application for Federal Student Aid (FAFSA) at the FAFSA Web site (http://www.fafsa.ed.gov/). Before you apply for free government grants, you must prepare the required documents. Over 6 million students apply for free government grants through FAFSA in 2002. Between Jan. 1 and March 1, 2002 alone, more than 500,000 of these students apply for free government grants through the FAFSA website.
To be able to apply for free government grants through FAFSA, you must be citizen or eligible noncitizen of the U.S. with valid Social Security Number (SSN). You must have a high school diploma or General Education Development (GED) certificate or pass an approved test by the Department of Education. To apply for free government grants, you need to enroll for an eligible program as a regular student. If you are male 18-25 years old, you are required to register for selective service to apply for free government grants. And finally, should be eligible or partially eligible on the drug conviction question to apply for free government grants. The federal law stipulates that those convicted with possession or selling of drugs are not qualified to apply for free government grants. Although, they are qualified to apply for free government grants that are non-federal such as state grants.
If you want a chunk of that huge Congress budget allocated for major projects then you can apply for free government grants through Catalog of Federal Domestic Assistance (CFDA), http://www.cfda.gov/. CFDA lists all grants and assistance programs you can apply for free government grants that are administered by 57 federal agencies.
Look up the CFDA website to find out if there is any program that you can apply for free government grants. For instance, Congress has allocated $22 million for the Department of Housing and Urban Development (HUD) to implement “Public and Indian Housing Drug Elimination Program”. For those who want to apply for free government grant are required to have projects that can lessen or eradicate drug-related problems. If you are eligible, you can apply for free government grants to HUD for project funding.
You can also apply for free government grants to the different government agencies such as Department of Education Grants and Contracts Information, Department of Housing and Urban Development (HUD), Department of Justice (DOJ), Department of Transportation (DOT), Environmental Protection Agency (EPA), Federal Emergency Management Administration (FEMA), National Institutes of Health (NIH), Stopping Violence Against Women and Community Oriented Policing Services (COPS). The Department of Health and Human Services (HHS) has over 300 programs run by several agencies which you can apply for free government grants.
To apply for free government grants require time and effort on your part including the fulfillment of obligations that come with it. You need to keep that in mind if you decide to apply for free government grants.

Getting a house or a property can be anyone’s dream but arranging of funds to acquire the dream can sometimes turn to be difficult and in such cases the best decision you have done is by coming to us. We will help you find the loan that carries the fixed mortgage interest rates at an affordable rate. These days there are no dearth of loans available in the market and hence the competition is vast, thus we offer the lowest fixed mortgage interest rates and with maximum facilities and features to benefit for the lifetime and lead a life that is free from any kind of stress.

Now with the changing times more and more people are looking forward to go for the fixed mortgage interest rates as these rates remain locked or fixed for the entire term of the loan where there is no fear of the economy’s inflation or deflation. With a stable rate, you will be able to plan your monthly budget without any surprises.

The term or the period of this loan generally varies from 10-30 years. Besides, you are also given the option to select the mode of payment that can be monthly, quarterly or half yearly, but it is best to go for a monthly plan where the amount is low and is not much of a burden to pay back the loan.

Most of the banks and lending companies offer these loans which carry fixed mortgage interest rates that are quite affordable. You should always look around for various options as due to competitions these days the lending companies always carry additional features and are ready to negotiate and give you the rate that is best suited to your needs.

The best part of Fixed Mortgage Interest Rates is that you are aware of the amount that needs to be paid and hence you can always plan in advance and keep the amount aside in advance and pay it according to the mode of payment. This helps to increase your credit rating as the amount is always paid on time without any delay ensuring you to get the best service and low fixed mortgage interest rates. Paying the amount on time reduces the burden of both the debtor and the creditor and avoids unnecessary hassle and complications.

Initially there might be a lot of complications that you might encounter at the time of looking and applying for Fixed Mortgage Interest Rate but in the long run it is definitely a victory because the fixed mortgage interest rates main aim is to bring stability in life which is needed by everyone in today’s world. All the formalities consume a lot of time but all you need is to patiently react as time is the very important factor. With all these virtues be rest assured that you will get the best rates according to your needs. Fixed mortgage interest rate brings stability in your life which is unique in today’s unstable world.

Choosing mortgage rates that suits your needs is no longer difficult. You can find an entire range of mortgage brokers, online vendors who are ready to offer their quotes online at ratessupermarket.ca. It enables you to compare a wide variety of the market as their mortgage rate comparison includes the big banks, credit unions, trust companies, specialty lenders, and mortgage brokers. Finding the Mortgage Rates could not be any easier.

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We have been successfully building tax efficient portfolios for high net worth individuals, through our proprietary process, for over 25 years. To learn more, just give us a call.

Critical Economic and Market Commentary

*Tale of two markets*

– It is the best of times – The joy of stimulation

– It was the worst of times – Reality check around the bend

– Municipal Bond –Warning, Will Robinson

– Investment Strategy – Risk vs. Reward

But first, I wanted to share a picture I took while camping in the eastern Sierras last weekend.

Sierra Wave

I’ll be heading back down there in a couple of weeks with Josh for a little backpacking, and I can’t wait. I’m thrilled he still wants to hang out with his dad! (Who of course doesn’t know anything)

It is the best of times – The joy of stimulation

In what seems like an act of defiance, the market continues to make new highs. Investors are clearly betting on a rapid recovery, and the news has been pretty good. By all accounts, the economy is improving, and the Leading Indicators, which include the stock market, say just that. This is right in line for what we have been saying for sometime. The stimulus would have the desired affect. Just ask Caterpillar (CAT), who reported far better earnings than expected, which even they admit was directly related to the governments stimulus spending. Add in 0% interest rates to banks, which is an indirect form of stimulus, and you’ve got welfare for the rich guys. Is it really any surprise that Goldman and JPMorgan are making record profits on the underwriting and trading side of the business? Hell, if I could eliminate 80% of my competition, borrow at 0% and have the government as my bodyguard, my profits would grow too! Although, under the radar, JPMorgan’s consumer credit, credit card, and other business groups are losing money big-time. How does it feel to know that we bailed out Goldman who then parlayed it into record profits which will translate into multi-million dollar bonuses (as the rest of the country wallows)? Gotta love socialism, as long as your friends with Politburo members that is!

The third quarter may be positive in terms of GDP. And that is possible, but only for statistical and not for fundamental reasons. For instance, lower imports are a net positive for GDP. But lower imports mean a weaker economy. Government spending adds to GDP. Normally, if the government spends too much, then we get inflation, which is subtracted from nominal GDP to give us real (after-inflation) GDP. But inflation is low and getting lower, so there is not going to be much to subtract from nominal GDP. Are government spending and massive deficits a sign of fundamental strength? It is quite usual for there to be a positive quarter in the middle of a recession. Watch the fundamentals: industrial production, unemployment, capacity utilization, tax receipts, etc. When those turn up, or at least level off, the recession is over. Then we get to the long recovery. That said, the market is currently going up and looks like it’s going higher because the data implies a recovering economy. I think the biggest thing keeping this market rising is the large negative investor sentiment. Put simply, too many people are bearish and if it went down too many people would be right. It NEVER works that way. As the market goes higher, more and more folks will become “believers” and subsequently more bullish. Then and only then will some catalyst shake the foundation. For e time being, the trend is your friend and although you should never fight the trend, today’s fire danger is “extreme”.

It was the worst of times – Reality check around the bend

So let’s be real. What happens when the government stops giving us our stimulation? I think you know. Japan tried this, for about the last 20 years, and the best they could get was a one quarter blip up for their GDP, and then right back into the doldrums. Are we Japan? Heck no! They have money, we don’t. This country is driven by consumer spending. Over 70% of our GDP is driven from consumer spending. Unfortunately for those that think this is going to be a normal recession with a V shaped recovery, spending is D-E-A-D! The demographics are clear. The 78 million baby boomers have now passed their peak spending years and are turning from net spenders to net savers. These are the same people who are retired, close to retirement or one day HOPE to retire, that are shell-shocked from their 401k’s turning into 201k’s. Now add in a rapidly rising savings rate that is likely to go from 0% just a few short months ago to upwards of 10-12%, and you’ve got a lot of lost spending.

Worst of all right now is the massive deleveraging that is going on. We hear this phrase all the time, but most really understand its consequences. Deleveraging is the destruction of assets with too many chasing too few liquid assets. The first nail in the coffin was tapped in during 2004 when the banking authorities decided it would be OK to allow five banks to increase their leverage from 12:1 up to 40:1. Which five banks? I bet you can guess: Bear Stearns, Lehman, Merrill Lynch, JPMorgan, and Goldman Sachs. How did that work out for us? Forty times leverage means that if you lose a measly 2.5%, you wipe out all your capital. And we watched as banks too big to fail were bailed out with taxpayer dollars. Slowly, banks are buying time, writing down assets. This is not really a bad strategy as time heals a lot of bad debts, especially at a 0% Fed Funds rate. Banks that are reporting so far this quarter seem to be saying that the write-offs will start to level off in about two quarters, although that the level may stay higher than we think for longer than we think. There are a lot of assets to write off, and they are just now getting to the commercial real estate problems. This is going to take time.

The next crises and thus the catalyst will likely occur in Europe and will hit us just as hard. Once upon a time, UK regulators allowed 20:1 leverage on a regular basis. It is now almost 40:1. The assets of UK banks are about five times as large as UK GDP. By comparison, for the US the ratio is barely 2:1. Think about that for a second. The UK has banking assets which are five times as large as the annual domestic output of the country. They also had a housing bubble. They have their own bailouts to deal with, which are massive and will potentially get much larger. Just wait, it gets better with the Euro-zone.

Leverage in Europe is now 35:1. How did 35:1 work out for the US? Given the massive credit problems that Euro-zone banks have with emerging markets as well as Spain’s housing bubble, which is every bit as bad as that of the US, and pain is inevitable. The European Central Bank, at least as of now, cannot step in and start saving individual banks. How do you save a Spanish bank and not an Austrian bank? Austria’s banks have made large loans to Eastern Europe, in Euros and Swiss francs, and are going to have large losses, far more than 3%, which would wipe out their capital. But bank assets in Austria are 4 times GDP. What we have are banks that are too big to save for relatively small Austria as well as for Italy, Spain, Greece, etc. Even neutral Switzerland is a scary place. We think of Switzerland as a stodgy, by-the-numbers, clockwork type of banking country. Yet somewhere, somehow, UBS and Credit Suisse ran up a little leverage. Before the crisis, they were over 40:1. And now they’re nearly at a nosebleed-high 70!

Municipal Bond –Warning Will Robinson

Taxes collected by the 50 states dropped by 11.7 percent overall during the first quarter of 2009, compared to the same period a year earlier — the largest such decline in the 46 years for which quarterly data are available, according to the latest report on state finances from the Rockefeller Institute of Government. Overall state tax revenues fell to the lowest first-quarter level since 2005, according to the Institute, yet spending has not. The decline in personal income tax was particularly sharp as well, with an unprecedented decline of 17.5 percent, as the weakened economy continued to hammer state budgets. Forty-five of the 50 states experienced revenue drop-offs. Also, the peak unemployment rate will likely exceed 11% in 2010 as we reduce excess capacity for reduced spending. Such a large unemployment rate will have negative effects on labor income and consumption growth, it will postpone the bottoming out of the housing sector, it will lead to larger defaults and losses on bank loans (residential and commercial mortgages, credit cards, auto loans, leveraged loans), it will increase the size of the budget deficit (even before any additional stimulus is implemented) and it will increase protectionist pressures.

We have become accustomed to believing that municipal bonds are a safe place to invest. Sorry my friend, times have changed. States can’t print money like the Feds can, so they have to cut spending. In many cases they will have no choice but to file for bankruptcy protection. Some bonds will do fine while others will default, so you better be careful. This is a little too much to write about here, so call me if you’d like more info on this.

Investment Strategy – Risk vs. Reward

Regardless of the long term dangers, the market is rising and going higher. For how long, nobody knows, but there are many cycles that turn negative at the end of August, so there’s not much time left. As I mentioned above, a top will likely be reached when sentiment turns more positive. Right now, too many think that’s it’s “obvious” that the market must go down from here. Well, if it’s obvious, it’s obviously wrong! When it goes up it leaves most on the sidelines, desperate to get in. When it drops, it hurts the most people. That’s just the nature of the market. There is no doubt in my mind that this is a bear market rally and not a new bull market. Even after this rally, the Buying Power Index is still lower than it was at the March 9th market low! There has never been a single case in which Buying Power dropped to new lows during the early months of a new bull market. Also, volume in bull markets generally expands as investor confidence grows, while in bear markets volume tends to contract. Throughout the vast majority of the rally from the March’09 low the 30-day moving average of Up plus Down Volume has been consistently drying up and is currently at its lowest level since Feb’09. There have also never been a time when the 30-day moving average of Up plus Down Volume contracted throughout the first four months of a new bull market.

In fact, this looks eerily like 1929. Then, the market initially fell 48%, then rallied about 50% over the next 6 months, then had another more devastating drop to be down 89%. Considering that bar market rallies tend to last 4-6 months, and September 6th will be the 6 month anniversary, and 10,000 on the Dow would be a 50% retracement (a perfect Fibonacci number), all but the most aggressive traders must be on alert. I’m not looking for that kind of drop, due to the many safety nets we now have compared to the depression, but it could be close.

Our proprietary process of building tax efficient portfolios incorporating our Top-Down Tactical approach, TDT™, (over buy and hold/hope) has been very successful. It’s been a great couple of years for us. Stick with “real returns” by focusing of high dividend paying stocks and high yielding corporate bonds, but be super careful which issues you pick. (Make sure you’re advisor knows what he is doing!) Although it has gotten more difficult to find bargains as many of the issues we like have moved up substantially, there are still great opportunities. We are a firm believer in getting 60-80% of the upside with only 30-40% (or less) of the downside risk. We still believe the stimulus will continue to have an effect and move the market higher in the short term, and we will be positioned for great returns and be able to sleep at night. However, the time is fast approaching where the risk outweighs the reward. Is a 10% return on the upside worth a 50% risk on the downside? It’s time to be proactive with your finances. Be the expert or hire one! – Call today for a free portfolio review or simply a free 2nd opinion. The risk of being wrong is much too great.

Cheers –Keith

916-925-8900

Article Source: Critical Economic and Market Commentary – July 22, 2009

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