Friday, January 20, 2012

"Strategic Defaults" on the Rise as Home Prices Continue to Fall

Thought about bailing on your mortgage now that you home is worth a lot less than you paid for it? You're not the only one, buster.

Borrowers who owe more on their mortgage than their house is worth and who are paying more each month than a comparable rental benefit financially from strategic default. Few dispute that. The arguments against strategic default appeal to ethics and morality, and the counter-arguments either deny there is a moral component or argue that the greater moral duty is to the family. There is one financial argument against strategic default: the house will go up in value, and by defaulting now, the borrower will not obtain that appreciation equity in the future.

The appreciation argument is a fantasy. Prices are currently falling, and with the abundance of inventory which needs to be cleared from the system, there is little hope of sustained appreciation to restore underwater borrowers to an equity position any time soon. However, the concerted efforts of bullshitting realtors and lenders serves to foster denial in kool-aid intoxicated owners. If it became widely known and accepted that prices were going to drop for a few more years and appreciation would be tepid thereafter, many loan owners who would benefit from strategic default would do so, and the banks would be destroyed.

» Falling house prices increases strategic default » OC Housing News

The REAL Value of the US Dollar and Gold

The two are tied together and dependant on one another.

If you ask most investors what is the main driver for the price of gold they are likely you tell you that it's the direction of the U.S. dollar. Therefore, the only due diligence most investors perform is a perfunctory glance at the Dollar Index (DXY). While it is true that the purchasing power of the dollar is a key metric to judge the direction of gold prices, the DXY will only tell you what the dollar is doing against a basket of 6 other flawed fiat currencies.

The main component of the Dollar Index is the Euro Currency, which represents a 58% weighting in the basket of currencies. It logically follows, if the Euro is tanking, the Dollar Index could increase regardless of the fundamental condition of the U.S. dollar. In order to truly access the intrinsic change in the value of the dollar you must first determine; the level and direction of real interest rates, the rate of growth in the money supply and the fiscal health of the government. When analyzing the dollar using those metrics, it is clear that the intrinsic value of the dollar is eroding in an expedited manner.

Michael Pento: The Real Value of the Dollar and Gold

Thursday, January 19, 2012

Ten Apps to Save Money & Help You Take Control of Your Finances

Smart phones aren't cheap. But by using some of these apps, you could actually save a few dollars.

Aside from playing Angry Birds or perusing Instagram, you should also be using your Smartphones to your advantage. The following apps will help you: from tackling your budget to saving you money while dining out – it’ll help you save no matter whether you have an Android, Blackberry, iPhone and, in some cases, even an iPad.                       

Best of all, these apps are all free!

Tracking your banking accounts and budgets

Mint. It keeps track of all your accounts, banking, credit cards, etc., as well as show you how your monthly budget is doing. You can also set up savings goals to track your progress. (Not available for BlackBerry.)

Pageonce. With their free basic version you can monitor your banking account balances and keep track of your bills.

10 Apps to Save Money & Help You Take Control of Your Finances | Fox News Latino

Wednesday, January 18, 2012

Expert: "Gold Is Still in a Super Bull Market"

Is it too late to get into gold? Not according to some experts who are still telling anxious clients to buy, buy, buy!

Gold ended last year in violent fashion, dropping 21 percent in less than three months. The sudden move, coming as equities rebounded in December, raised doubts among many investors about the sustainability of a trade that has been a winner for 10 years.

Gold
Diamond Sky Images | Photodisc | Getty Images

 But these kinds of moves are simply par for the course, said the long-term gold bulls. It’s just a way of shaking out the weaker and more speculative investors that pile into the metal for a short-term trade, they said.

After bottoming on the final day of 2011, gold is back at it again, up five percent in the new year, compared to a 3.9 percent return for the S&P 500 index. Despite the volatile ending, gold finished up 2011 by 10 percent, while the benchmark for U.S. equities was virtually unchanged.

“In my view, gold is still very much in a super bull market,” said Alan Newman, who’s made his clients money for a long time by recommending the metal in his CrossCurrents newsletter. “Last year's activity was quite normal for a super bull market, in which corrections are supposed to be scary.”

Is Bullion Back? 'Gold Is Still In a Super Bull Market' - CNBC

Snowshoer Lost on Mount Rainier Burned Dollars for Warmth

Well, at least the US Dollar is good for something these days!

A snowshoer who was lost in a blizzard for two days on Washington state's Mount Rainier said he stayed alive by digging out a snow tunnel and burning dollar bills for warmth.  Yong Chun Kim, 66, of Tacoma, said he carried a lighter and other emergency supplies and burned personal items: extra socks, Band-Aids, toothbruash, packaging, and lastly $1 and $5 bills from his wallet.  Kim, who served in the South Korean military in the Vietnam War, told KOMO-TV in Seattle that skills he learned as a soldier helped him survive. He said he wasn't scared. He kept waiting for the sounds of the helicopter — though severe weather conditions prevented park officials from using one to search for Kim.

"I'm a lucky man, a really lucky man," he said in an interview Tuesday afternoon from his home.

Mount Rainier Snowshoer Burned Money for Warmth - ABC News

Gold Climbs for Third Day in a Row as US Dollar Weakens

Good as gold? Usually that means bad news for the US Dollar.  And lately, the news has not been good.

Gold rose for a third day, climbing alongside other commodities including copper, as the dollar weakened before data forecast to show signs of economic recovery. Spot gold gained as much as 0.4 percent to $1,658.45 an ounce and traded at $1,654.48 at 1:40 p.m. in Singapore. The metal climbed to $1,667.90 yesterday, the highest since Dec. 13 and an increase of 6.7 percent this year. February-delivery bullion was little changed at $1,655.20 on the Comex in New York.

Gold Climbs for Third Day as Dollar Weakens on Optimism Over Economic Data - Bloomberg

Tuesday, January 17, 2012

Gold Tops $1660 an Ounce as Dollar Slides

It's never good news for the US Dollar when gold is rising to new highs.

Gold futures rose above $1,660 an ounce on Tuesday, moving in the opposite direction to a weakening U.S. dollar after China’s economy grew at a rapid clip in the fourth quarter, easing fears of a hard landing. Gold futures for February delivery rose $33, or 2%, to $1,663.80 an ounce in electronic trading on Globex Tuesday. U.S. markets were closed for a holiday on Monday.

Gold tops $1,660 as dollar slides on China data - Metals Stocks - MarketWatch

Monday, January 16, 2012

Saudi Arabia: We Want Oil at $100 a Barrell

Great. Get ready for even higher gas prices this summer, America.

Saudi Arabia is aiming to keep oil prices at about $100 a barrel, a third above its previous public target, in a sign that Riyadh needs higher oil revenues to sustain a big rise in public spending. Ali Naimi, the Saudi oil minister, on Monday for the first time said the world’s largest oil producer aimed to keep oil prices at the triple-digit level.  “Our wish and hope is we can stabilise this oil price and keep it at a level around $100 [a barrel],” Mr Naimi told CNN. “If we were able as producers and consumers to average $100 I think the world economy would be in better shape.”

Saudi Arabia targets $100 crude price - FT.com

Sunday, January 15, 2012

QE3? Fed Weighs Further Easing Amid Doubts About Recover

Just what we need: more funny money pumped into the US economy from nowhere. Inflated dollars, anyone?

Federal Reserve officials are seriously considering giving the US economy—and especially the housing market—an added jolt with more quantitative easing.


 Fed officials are likely to discuss such a move at their Jan. 24-25 meeting, when the central bank will issue its first quarterly forecast on interest rates under the new communication policy.

Two of the new voting members this year on the Federal Open Market Committee, which sets interest-rate policy, have recently suggested they would support more assets purchases.

San Francisco Fed President John Williams said that sustained high levels of unemployment, as forecast by many Fed members, "does make an argument that we should have more stimulus."

Fed to Weigh Further Easing Amid Doubts About Recovery - US  Business News - CNBC

Breaking US Dollar Collapse News

What's Behind the Decline of the US Dollar?

This is one the of the best and simplest explanations we have seen:
The U.S. dollar's downward slide is accelerating as low interest rates, inflation concerns and the massive federal budget deficit undermine the currency. - Wall Street Journal, April 23, 2011
Interestingly, the Federal Reserve is responsible for, or an active participant in all three of these factors.