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Thursday, March 5, 2009

Mortgage Delinquencies Rise

So, the big news across CNBC this morning is that ... Oh my God! Mortgage Delinquencies are rising dramatically!

Dear lord. What do they expect when they announce to the entire economy: "Hey, you can refinance your mortgage for a lower rate. But ... only if you're behind in your mortgage payments"

This is so surreal. I've known this is coming, and yet ... to watch it happen? It's just ... surreal. It's like living inside a Dali painting.

When will it be time to invest your money? I'll tell you what I'm waiting for, and when I will be excited to take my hard earned cash and invest it in wealth producing corporations. As soon as I hear:

"We are going to take a billion dollars, and create a derivatives exchange for any sort of derivative, that is not currently tracked, day by day, on an exchange. Packaged up debt obligations? They must now adhere to new accounting regulations and be tracked, every single day, on an exchange where their value can be traded, or bought and delivered by anyone that is adequately funded. Anyone who currently holds a CDO or other debt derivative, has eight months to de-leverage according to the new accounting standards.

Oh, and by the way? Everyone that currently has a mortgage now has a 4.5% rate on their mortgage. Congratulations. Everyone else? Well, you get the best rate you can find, you're on your own. Banks start screaming about price fixing the rate? Well ... guess you guys shouldn't have been overleveraged huh?

Oh, and as an added little cookie? From this day forward? Any financial instrument that is invented, or can be devised of any type, anywhere that is either bought or sold, OTC or not? 11:1 leverage. Anything greater than that will result in a penalty of ..."

Well, I'll leave that last part to the retributive and imaginative minds of the readers.

In that case, Dan will then move from "trader" mindset, to "investor" mindset. Of course, there are a lot of other issues that would have to be worked through for an 'economic bottom'. But god knows my optimism would rise dramatically ...

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