Crosby Finance

Those who understand anything about currency fluctuations are well aware of how devastating they can be and will therefore quickly recognize the huge potential of e-gold in protecting themselves and the ingenuity of the whole system.

E-gold was founded in 1996 by Dr. Douglas Jackson and Barry K. Downey. However the idea did not take off immediately. Actually it seems to have taken some time to really catch on. Still there is no denying the fact that transactions using e-gold have grown rather dramatically since 2005. Today the total amount of gold bars in the e-gold system is well over three tones and a substantial income is generated from the system through spend and storage fees.

But what is really interesting and a clear pointer to the future of this worldwide acceptable currency is the fact that we now have many small businesses in the United States, Europe and Asia with full-time staff operating what are commonly referred to as digital currency exchangers. These businesses do nothing else but buy and sell digital currency for national currencies which are not backed by hard assets.

There are of course those who believe that having currency backed by gold or other real assets is an old fashioned idea whose time is past. But a close study of recent trends of major world currencies hardly supports this view. If anything the realization from such a study is of how prudent an idea it is to deal in hard assets rather than fickle world currencies that could unpredictably head in any direction and leave your business transactions in jeopardy.

A major part of the peace of mind is in the e-gold transaction itself. The “spend” is completed electronically on the web, but is always settled by the weight of the metal, even if it is denominated in another form. The reality in this gold system is that a user can easily “spend” or “get paid” a tiny amount of gold, even if it is a fraction of a gram, and the transaction is instantly completed online.

The result is that you do not have to lose sleep wondering what the currency you are transacting in will do next. For centuries gold has proved to be extremely stable in value and has always been used to protect the assets of royalty and others. Whether you want to invest your assets or you want to transact business securely and with great peace of mind, e-gold is the way to go.

To most people, even before governments, banks seem to represent all that is honest as an institution considered a pillar of society. Unfortunately, the banks are run by people, and unless correct checks and balances are introduced - and with appropriate powers to police them - they will do all they can to usurp the rules n the name of profit. Forget deliberate fraud, I think sufficient powers are already in place to make such efforts very difficult.

But - look at Northern Rock. The first British bank to have a run on its branches in the UK for over 100 years - and now it has been nationalised, it is going to cost every UK taxpayer around £3,500.

OK, so the Managing Director definitely had a grandiose vision to take his bank, a small, Northern outfit, to become a rival to the other Big Five in the UK. No problem there with his ambitions plans really, as long as he took no chances. But he didn’t, and the Financial Services Authority (FSA) did nothing over many years to check his activities.

But just look at the FSA - 3,000 staff to police all the financial transactions of the whole London Institutions, and with what was it - 5 people - assigned to one of the biggest financial gaffes in UK banking, no wonder that they (the FSA) are setting up an internal inquiry to see what they did wrong.

But once again, look at the much bigger banking scene, as was discussed in great depth on Channel 4’s Dispatches program a few weeks ago - headed ‘How the Banks Bet with Your Money!’

Hardly any bank in the UK, or on Wall Street, escaped this top financial investigator’s icy blast. And you know the strange thing? He warned the banks, even had a breakfast meeting with the Bank of England. And the Bank’s response - there are sufficient checks in place (regarding sub prime mortgage lending as it happened). They were much more interested in making their million pound bonus cheques than to look too deeply at the underlying problems - problems that could nearly wreck the banking system, and the whole Western economy.

So much for the top levels of banking! Now let’s look at a problem much closer to the hearts of every small property investor in the UK.

These small investors all took out mortgages with most of the UK, and many US banks, to finance their purchases. All of these people ‘assumed’ that the banks were pillars of society. If the investors took out a mortgage with the backing of an RICS (Royal Institute of Chartered Surveyors - another ‘pillar of society’) then they thought that they stood a pretty good chance that their investments were secure, and not only that, so did the lending banks.

Now, for various reasons not to be discussed in this article, where a property had got an RICS valuation of say £315,000 in 2004/5, it was astonishing when they were revalued in 2007 to find the actual value closer to £100,000. Especially when you look at Nationwide statistics that show in 2004 house price inflation was running at over 12%, dropping briefly to 2% in 2005, ramping up to 10% in 2006 before starting its downward slide at the back end of 2007.

As all of these investors (and we are aware of at least 350 similar property transactions from one particular property developer) had used law firms (another pillar of society, regulated by The Law Society - yes, another pillar…), you would have thought that the banks would have made a beeline for the other ‘Pillars of Society’ that had been so free with their advice, to redress the situation.

Also, all the banks in question were warned in writing by a couple of investors way back in early 2006 that there was a major issue with this developer. So, what did they do? Stop the lending? No - of course not - all the banks did was to continue on their profit spree and lent millions more!!!

And were they prudent in their lending? Well, in one case a man on £18,000 a year ended up with mortgages of over £6 MILLION! And this man never hid his earnings from anyone!

So, were the banks at all caring about all these small investors who were not only facing financial ruin, but would never be able to get another mortgage due to the banks penal credit scoring systems.

No, they started on a campaign of debt chasing phone calls, from 7.30 in the morning till 9.00 at night, threatening with eviction, foreclosure, bailiffs, loss of their own homes…

And for why? All because the properties the banks took on as security were only worth a fraction of their actual values.

So, where were the checks and balances that the FSA were supposed to have had in place? Where were the activities of the other pillars of society in protecting the man in the street - the lawyers, the valuers, the banks…

No - all the banks are interested in is their pound of flesh, and if the properties are worthless, they will suck the life blood out of the already duped investors.

Roll on the great return to the tin under the mattress - at least you can see what is going on…

The Pension Protection Act of 2006 created the Qualified Default Investment Arrangement (QDIA) largely to promote the offering of automatic enrollment 401(k) plans.

The QDIA provides employers a safe harbor from fiduciary risk when selecting an investment for a participant or beneficiary who fails to elect his or her own investment. Therefore, employers following QDIA regulations will have no legal liability for market fluctuations when providing a QDIA for employees who do not choose their own investments.

Final regulations governing QDIAs were issued by the Department of Labor on Oct. 24, 2007. Of primary interest are the conditions that must be satisfied in order to obtain safe harbor relief from fiduciary liability for investment outcomes and guidance on investment mechanisms qualifying as QDIA. Both are briefly summarized below:

Safe Harbor Conditions

*Assets must be invested in a “qualified default investment alternative” as defined in the regulation.

*Participants and beneficiaries must have been given an opportunity to provide investment direction but have not done so.

*A notice generally must be furnished to participants and beneficiaries in advance of the first investment in the QDIA and annually thereafter. The rule describes the information that must be included.

*Material, such as investment prospectuses, provided the plan for the QDIA must be furnished to participants and beneficiaries.

*Participants and beneficiaries must have the opportunity to direct investments out of a QDIA as frequently as from other plan investments, and at least quarterly.

*The rule limits the fees that can be imposed on a participant who opts out of participation in the plan or who decides to direct their investments.

*The plan must offer a “broad range of investment alternatives” as defined in the Department’s regulation under 404© of ERISA.

QDIA Types (Mechanisms)

The final regulation did not identify the specific investment products - rather, it describes mechanisms for investing participant contributions. The intent being to ensure that an investment qualifying as a QDIA is appropriate as a single investment capable of meeting a worker’s long-term retirement savings needs. The four types of QDIAs are:

*A product with a mix of investments that takes into account the individual’s age or retirement date (for example, a life-cycle or targeted retirement-date fund);

*An investment service that allocates contributions among existing plan options to provide an asset mix that takes into account the individuals age or retirement date (for example, a professionally managed account);

*A product with a mix of investments that takes into account the characteristics of the group of employees as a whole, rather than an individual (for example, a balanced fund); and

*A capital preservation product for only the first 120 days of participation (an option for plan sponsors wishing to simplify administration if workers opt out of participation before incurring an additional tax).

In addition, regulations state that a QDIA must either be managed by the investment manager, plan trustee or plan sponsor that is named fiduciary, or be an investment company registered under the Investment Company Act of 1940, and that any QDIA generally may not invest participant contributions in employer securities.

Do you need to use Money to keep the books for both your personal financial affairs and those of a small corporation or investment you own? You’ll probably want to segregate the data by putting each business into its own data file.

When to segregate your data into separate files

You would always want to use separate Money data files to segregate individual business’s data in the case where you’re keeping books for different corporations, different partnerships and different limited liability companies with multiple owners.

You would also often want to use separate data file if you’re keeping the books for one owner limited liability companies–such as in the case when you’ve made an election to have the one-owned limited liability company treated as a C corporation or as an S corporation.

If you use Money for both personal financial management and for business accounting, however, you could in certain situations safely keep everything together. For example, you could probably keep both your personal financial records and records for a sole proprietorship in the same data file.

How do I create a new Money data file?

To create a new Money data file, choose the File menu’s New command and then choose New File from the submenu. When Money displays the New dialog box, use its Save In box to specify the folder location and its File Name box to specify the name for the new file. After you have provided this information, click the OK button and Money creates the new data file.

NOTE The Save In box works like the Save In box in other Microsoft programs. Click the box’s button to display a list of the folders you can use for saving the Money file. The File Name box works like a regular text box. You simply enter the name that you want to use for the data file in this box.

After Money creates the data file, it opens the data file and then starts the Setup Assistant. The Setup Assistant, as you may remember from Chapter 1, helps you create accounts, build a list of recurring bills, and identify important financial objective issues. If you have questions about how to do this, refer to Chapter 1 for the answer to the question, “How do I run the Money Setup Assistant?”

How do I switch between Money data files?

You can switch between files by choosing commands from the File menu. If you have a small number of files, perhaps only two or three, the File menu will actually list and number all the Money data files you have created. Therefore, in this special case, to switch to another data file, all you need to do is choose the data file from the list at the bottom of the File menu. The numbered commands at the bottom of the File menu-just above the Exit command-are actually Money data files. To open, or switch, to one of these data files, click it. If you want to open a Money data file that isn’t listed on the File menu, choose the File menu’s Open command. When Money displays the Open dialog box, use the Look In box to identify the folder location of the file. After you have selected the correct folder location, the area beneath the Look In box lists the Money files in the folder. To open a file, double-click it.

And one final note: Money lets you have only one data file open at a time. This means that when you open a new data file, Money also closes the old data file.

In today’s unpredictable global economy, you obviously never know what is going to happen next. Uncertainties and concerns regarding the Iraqi threat, North Korean crisis, and hidden terrorist cells and networks continue to loom in the back of the minds of consumers. Moreover, the stock markets and industries around the world.

Price inflation is another major concern for everyone. The latest Consumer Price Index (CPI) number released by the U.S. Department of Labor’s Bureau of Labor Statistics states that prices, in all U.S. cities, are up 0.1% in the month of December for the calendar year of 2002. The Consumer Price Index (CPI) is a program that produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Furthermore, the national unemployment rate continues to remain steady at 6.0% for the month of December 2002. Believe it or not, this may not be as bad as it sounds.

Economic theory suggests that an increase in the inflation rate will lead to a decrease in the national unemployment rate. But since the unemployment rate is currently 6.0%, this may also suggest that in order for this rate to eventually decrease, we should expect more inflation in the future. The recent upsurge in oil prices together with precious metals supports this theory and may also be a hint of what’s to come.

Well, it seems that you probably can’t avoid inflation, but there are definitely opportunities that you can take advantage of, in order to keep up with it. One option might be to consider depositing your money into a savings account rather than a money market account. Most major banks are currently yielding an Annual Percentage Yield (APY) that ranges from 0.5% to 0.75%. Even though this is pretty low, it is higher than what most money market accounts are currently offering.

One of the best rates that I have recently seen is ING Direct’s offering of 2.25% APY for their Orange Savings Account. But if these rates are not what you are looking for, consider investing in the stock market. With the latest downturn in the economy, shares are pretty cheap and going fast. There are now many online brokerages that allow consumers to purchase stocks for a small fee. For instance, Sharebuilder lets consumers invest for as little as $4. However, please be wary, this investment option is a greater risk so you should consult with a financial advisor before taking this step.

Whether you choose to put your money in these investment opportunities or not, it is up to you. But just remember that if you don’t, you are actually losing money because the “purchasing power” of your dollar is decreasing as the inflation rate is increasing.

At present, XM satellite radio has over 7 million subscribers. In comparison to this overwhelming response, Sirius satellite radios confirm applications from over 4 million subscribers. This marked difference between the two gives a clear picture of public opinion. In relation to digital channels, XM Satellite Radio offers over 170 stations from which to choose. Phenomenal in its own rite, Sirius satellite radio offers their subscribers more than 120 channels to choose from but they are still not in very close competition with XM in this respect. When it comes to airing good music that suits different tastes, XM satellite radio has 69 music channels. In this subdivision, Sirius satellite radio service is not far behind and is marked at 67 channels. Though the number of channels may hardly be a deciding factor, what tips the scale for XM satellite radio is its uncontested attempt to offer the maximum number of music channels that are aired commercial free.

In relation to the subjects they base their shows on, entertainment includes comedy, chat shows, books, drama and variety shows. The Sirius satellite radio company is not too far behind when offering the same avenues of entertainment. Since entertainment is at its best in both services, for youngsters the preference towards XM lies in their award-winning XM KiDS channel, which is part of the children’s programming network.

As far as Traffic & Weather coverage is concerned XM, over around the clock reporting for 21 major markets, as compared to the 20 markets Sirius has set foot upon, the competition is close. Though this calculation may not speak volumes about XM, the fact that each of XM’s ventures have their own dedicated channel wherein Sirius broadcasts through numerous sharing channels, presents a clearer picture. Despite these evaluations the final decision, whether Sirius is a contender at all or a tough one will be a contentious matter for a long time to come.

As with any two companies that sell the same commodity, the competition is cut throat. This is obvious when considering the amount of revenue that is put at stake if your competitor takes one of your potential clients. Of course, advertising plays a very important role in influencing the market and catching our attention. In the true marketing sense, a commercial that is well received is often the one that wins the battle. Many times choosing a product is based upon whether or not it leaves an impression on you. Keeping this aside, we may never know whether a company is really worth it or not. When comparing whether or not Sirius satellite radio is a contender to XM it may be best to wait and see.

So, you’ve stumbled across an Ike Dollar, and now you want to find out how much it’s worth. Well, you’ve come to the right place. Identifying the value of any coin is very important. By doing so, you can be assured that the coin you are selling is worth the amount paid. It can also help you when you’re buying coins, as knowing the value will assure you that you are getting your money’s worth, and are not paying for overpriced coins.

But before going into that, here are some facts about the Ike Silver Dollar.

During the years 1971-1978, the U.S. government issued out the Eisenhower Dollar. It was the first U.S. dollar that did not make use of a precious metal. In fact, it was composed of 100% copper, with its outer layer composed of 75% copper and 25% nickel.

But, there were also silver-copper issues released by the U.S. government. These silver-copper issues, or what we call the Ike Silver Dollar coins, were especially minted for the purpose of selling to collectors. They were minted at San Francisco, at years 1971, 1972, 1973, 1974, and 1976. These coins were either proof (Brown Ikes) or uncirculated (Blue Ikes).

What are Ike Silver Dollar specifications?

The coin’s diameter is 38.1 mm, and weighs 24.59 grams. It’s composed of .800 silver, .200 copper bonded to .209 silver. Aggregate 60% copper and 40% silver. Its Net Weight is .3161 ounce pure silver, or 9.841 grams. It has a reeded edge.

Why it’s worth collecting

The Ike Silver Dollar will always hold a special place in the heart of any American coin collector. The Ike Dollar of 1971-1976 holds the largest portrait of a president, or any real person for that matter, to ever appear on a regular-issue American coin. It is also considered very unique, since it is the last of the great traditional size 38 mm silver dollar series.

How to tell its worth

Identifying the value of your Ike Silver Dollar is not as easy as you think it is. You have to consider factors like year of minting, exactly what variety it is, and also the condition.

Most of the Ike silver dollars are in banged up or worn condition. In this case, it could be worth just the face value or maybe a bit more basing on the silver content. But even with that, it isn’t much since the coin is really not made up of 90% silver.

Those Ike silver dollars that are in mint state condition will have a higher value, probably around $50+, again depending on its date, exact grade, and grading company.

Those with lower grades but are uncirculated can still cost you about $10 or more. Those that are circulated are probably worth $1, unless you have the rare ones that command a premium. These rare coins include 1972 type 2, type 3, and 1976 type 1. These coins sell for a little over its face value.

So, although the Ike dollar is really not worth much, it can still be a fun coin to collect. Remember, they are the last of the big and heavy dollar coins produced in the U.S., so you can keep it as a treasured memento.

When doing hiring interviews, I am constantly talking to unhappy loan officers. Their complaints cover a wide range of issues, but I really believe that most of them are unhappy because they simply do not realize how much our mortgage loan environment has altered and they have not adapted to meet the new challenges presented by this change.

The last 6 months to a year, the mortgage industry is different than it has ever been before. In fact, it is so different; many people don’t understand their job anymore. I believe that as an LO, you have to have an understanding of what your actual job is and at least some basic training requirements necessary to succeed in the industry before you can set yourself up to actually be a loan officer.

Before you can hang up a sign that says, “I’m a mortgage broker or I’m a loan officer”, …thinking that because it’s easy to get a license and to become a loan officer, you need to realize that in the mortgage industry it’s not always easy to know what is required of you, unless you have the proper training.

It used to be straightforward to be a “loan officer” and the industry formerly would support people who didn’t have a concept of what they were doing. This was because the mortgage industry simply could not hire enough people to take all of the mortgage applications. There were millions and millions of loans being written and virtually any “warm body” could write them.

The AE’s helped the new LO’s, their lenders helped them; when they needed help, they had someone that they could call to “bail them out”.

Because two-hundred thirty-six lenders have dropped by the wayside in the last year and the market is as tight as it has been in years, most companies cannot afford to pay for AE’s or Reps to do the work that the LO’s should be doing.

These companies have a fraction of the mortgage activity that they use to have. Consequently, they have underwriters who are completely overwhelmed by the influx of government loans because this seems to be the product more of our lenders are encouraging.

The real problem comes when you couple the emphasis on FHA and VA government loans in the industry with LO’s who are trying to submit government loan applications and think they can submit them like they did during the sub-prime era. This is unconditionally no longer the case.

So what you have are people who have no experience submitting government loans that are presenting documents to more than one lender because they may have been denied previously. Quite often the LO needs to restructure and re-submit the loan, basically because the loan officer doesn’t really understand how to properly submit the 1003.

They don’t understand because they were never forced to learn during the crazy days of the sub-prime marketplace.

History has thrust us into a position where our loan officers now need to know how to originate loans. LO’s all over the country are sitting by themselves with a very limited support system, which is made up of fewer “support” people than it ever has had in the past.

You have mortgage company’s like ours who are adding additional support personnel for our LO’s because we have recognized the drop in the vendor support. But unfortunately, our company is in the minority of mortgage companies that are actually expanding and growing during this downturn of business and can afford to provide sufficient support personnel to assist our LO’s.

For many LO’s, it appears that they need some of the most basic training, like for instance, how to simply complete an application and the 1003. I know that it sounds silly that it would take any training to fill out forms or to ask questions, but in my opinion, it is even more necessary today than in the past.

We see thousands and thousands of loans. Of those coming from the general population of the new LO’s that we hire off the street, I would not be surprised to learn that 90% of them send in applications to processing incomplete.

If the loan officer does not comprehend the importance of filling in all of the fields in the 1003 and providing dates that comply with regulations and proper documentation, the inflexible and rigid mortgage companies of today’s marketplace will simply reject their applications.

Let me provide you several examples of what we are not seeing completed on the 1003 today;

*Years of schooling isn’t completed,

*Borrowers birthdays aren’t given

*Documentation necessary if there were less than 2 years of employment is not provided

*History of ownership

*Rent history

*How many children in the family *Correct mailing address

*Correct dates that are in compliance with regulations

*The list goes on and on…

These may have been completed in the past by the lender’s Rep or AE, and they may seem like little things reflecting back on the past days of the “Wild West sub-prime years”, but today, your declaration has to be perfect if you want the application to get past underwriting.

In today’s demanding marketplace, the HMDA section has to be perfect and the REO has to be done, and has to be done correctly. These are items that often may have been left blank a year ago, and “slipped by” because someone would have completed it for the LO.

When we were in the subprime heyday, 1003 applications quite often were written haphazardly and unfortunately nobody really cared because the LO had an AE doing follow up for them.

Occasionally, a lender would force the LO to complete the information and would end up telling the LO exactly what to put on the 1003. The lender would end up contacting the client for information, and in turn, create a photocopy of the application in which they had written exactly what the LO was to put in the blanks. The lender would then mail the documents back to the loan officer and would require the loan officer to correct the missing data. They would then have the borrower sign it and send it back to them.

Obviously, while we all know of companies that used to do this, it was never an acceptable practice. I’m not implying that it was fraudulent from the standpoint that they were falsifying information, but they did tell the LO exactly what they needed to put into the 1003 and we all know that is in violation of our industry’s most basic compliance regulations.

While our company never allowed this practice, and I do not have a lot of interaction outside of our company, I doubt that there are any reps left who are going to provide this “service” for the LO…that century doesn’t exist any more.

Those lenders who had that level of “service”, or at least, what loan officers perceived as service, were basically good lenders that regarded their “services” to the loan officers as a necessary evil to get their loans closed; sadly, they knew that they would not be able to close many mortgages if they did not provide these “services”.

Well, let me tell you; that environment no longer exists. What you have now are conventional lenders like Flagstar, Chase, Citi Banks; huge conventional lenders who have never provided these “services” because they assume that the LO knew what their job is.

My position is that at this historical point in the mortgage industry, we need all mortgage companies to focus on providing their loan officers’ more basic training. We need to recognize and correct this egregious training shortcoming BEFORE new regulations and compliance issues are “slapped” on LO’s by an industry that is already regulated to the hilt.

If we as an industry start providing the proper support and training, and insist on higher standards of training and compliance, we will see more professional LO’s providing proper paperwork and as a result closing more mortgage loans in a fraction of the time it is currently taking due to incomplete 1003’s and unfinished documentation.

After all, isn’t this why we are in the mortgage business?

There are many benefits to doing a Zero Cost Loan. The most obvious one is that it costs you nothing. The APR is exactly the same as the note rate. How is this done you ask? Through a little higher interest rate, the broker receives extra compensation from the lender directly. With this extra compensation they pay for your closing costs. It’s as simple as that!

Your payment, most often will be a little higher then if you were to pay closing costs and roll them into the loan. But the amount of time it would take to make the money back through monthly payments would usually be out past around 5 years.

Most people will refinance or sell before the first 5 years is up on the loan. Not to mention if it is a band-aid loan which is intended to boost your credit and then refinance. With this scenario it is definitely the wisest choice to make because you know you are going to refinance again within the next few years… maybe as soon as a few months.

Another reason for doing a zero cost loan would be; that if rates happen to go down in the future, you can refinance again to the initial rate in which you were going to pay for. And it now has cost you nothing. If you recall back in the 80’s and 90’s when rates were much higher and there was a steady downtrend, some of you may have refinanced over four times and each time paying upwards of $5,000 in closing costs. That’s $20,000 total back into your loan. With a Zero Cost Loan your balance would have remained the same. You can always refinance to a lower rate, but its much harder to refinance to a lower balance.

About the only time you would not want to do a zero cost loan would be on some of the larger loan amounts of $600,000 and up. The reason for this is that the interest rate is being applied to a larger sum of money and the break even point becomes only a few years out… it simply savings after that point. You can pay closing costs if you prefer, in fact some scenarios may warrant it. Yet, I’m sure you will see that a Zero Cost Loan is preferred.

So far, Uncle Ben has been very nice to some of his wayward children. He’s already used US$430 billion from the Treasury to try and crack the cement like grip that has taken hold of the credit markets. He’s also done it with the neighborhood kids. Those are the ones that don’t follow his rules nor let him in on their secret deals. They too are getting a handout.

But the size of the problem is more than Uncle Ben can handle with his little rate cuts. Recently, however, he has embarked on a new tactic: covering up fires as they pop up with a blanket of cash. I guess the idea here is that as long as none of these fires are allowed to flare out of control, it’s okay if they just smolder under a burning blanket.

But the only problem with this tactic is that he can’t do it alone. Already he’s used up close to have of his assets and we’re only one quarter of the year through. At some point in the future, he will run out of options and he’ll have to ask the government to step in and help. If he hasn’t done so already.

Taxpayers Will Pay

What this means to you and I, are inevitable tax increases to cover this bailout. According to Bloomberg, these “actions mean the Fed, and consequently U.S. taxpayers, are assuming additional credit risks.” Risks that a large percentage of us had no clue we were going to be forced to participate in. All we ever do is work hard to hold onto our jobs, pay our bills and taxes. Somehow, something seems inherently unfair about all of this mess.

I sometimes have a horrible sense of dread when I see what the Fed has been doing. To think that they would provide financing to a non member bank. A bank that does not have to report any of its mysterious and exotic securities to any regulator. And yet they are being treated just like the commercial banks who have to report any aspect of their operation to regulators. Somewhere, somehow, something is threatening Uncle Ben with something more frightening than we are all being led to believe.

Cheaper Dead Presidents

Before the Fed had started on its rate cut limbo dance, the dollar was experiencing strong competition from the EURO. It did not need any help from the Fed to increase its burden. Now, with this seizure in the credit markets and the Fed’s attempts to lubricate it back into motion, the dollar is losing its battle not just against the EURO, but against many other currencies as well.

So Where Are We Now?

Lets take a gander at what all that limbo dancing has done so far. Ten year treasury rates have shrunk and yet mortgage loan rates haven’t followed suit. Huh? Isn’t this what is supposed to happen? Isn’t this the reason why he’s been lowering the limbo stick lower and lower. Aren’t the bankers supposed to follow suit? What’s going on here? The rates that I’m talking about are the ones that they tell us are pushing homeowners out of their homes. These are the consumer rates. Credit Card rates and mortgage rates.

Consumer Rates Have Risen!

As a matter of fact, they have actually risen. Freddie Mac’s national survey shows that the average 30-year fixed rate mortgage has risen about two-thirds of a percent over the past seven weeks. Since last September, when Uncle Ben started his limbo dance, they have remained nearly unchanged.

Mortgage Backed Securities Interest Risen

Despite the Fed funds rate cut from 5.25% to 2.25% in the last six months, the interest rate spreads on mortgage-backed securities have also risen. This obviously isn’t what the Fed was expecting to happen. It was supposed to help rescue the financial sector. Someone is playing some kind of game and they have the rules covered and locked away.

Two Million ARMs and Dangerous

If the rates that matter aren’t being affected by these maneuvers, how are the remaining adjustable rate mortgage loans supposed to be defused? There are about 2 million of them still on the books and they still have yet to reset. I can imagine these poor souls seeing Uncle Ben trying to help them but before those little droplets of financial water ever reach their parched lips, the sun baked landscape of the financial sector soaks them up in a flash.

A Possible Way Out

If the Fed can somehow ease the system out of it’s epileptic seizure long enough so that it can get regain its senses, then maybe commercial bankers and credit card companies will begin to lower the rates that seem to be the root cause of all this mess.