Paul Newman, a truly classy, humble man

Most people seldom pay attention to those in our world who just take on challenges and succeed without putting out press releases, drawing attention to their work. Perhaps because the media feeds on “Oh wow, look at this!” Drama………pure and simple.

Ironically Paul Newman did perform in drama, but he KNEW the difference between the stories on the screen and the story he created out of real life, his own. He refused to become one of the Hollyweird bunch, with drama and all those other press releases. He lived his way, quietly.

Perhaps his greatest legacy will be his ability to be himself, to manage to have beliefs of his own without using a trumpet to announce them. He even managed to get on an “enemy list” because of them, yet did not seem overly concerned. He gave us some fun, some silliness, when he was in Butch Cassidy and the Sundance Kid. That movie could have been a really sour film without the humour, the silliness, the sheer fun in it.

To me, that film said a huge amount about both the stars. Paul Newman was witty, funny, enjoyed taking risks in car racing, yet he was also a person who was not willing to just go along, a real maverick in living in a farmhouse instead of a Beverly Hills mansion. Robert Redford worked for the Sundance film festival, again a maverick who choses to give independent movie makers a place to be found, seen, and get the films they make on the screens.

Paul Newman had wonderful eyes, blue and they always held a hint of mischief, which, personally I happen to find appealing. He sparkled on the screen, either with the mischief or with the tough quality of a diamond.

If there is one thing I may bet on, he left knowing he had done well. He lived well, he loved well, he worked to his own standards and did that well, and he used cooking, of all things, to build a charity that works well.

He shines as an example of what people can do when they have ability, and perhaps that will be the one lesson most of the new Hollyweird actors should learn. Do it well, all of it, no matter what you are doing. You don’t need trumpets, press releases, just do you job well, love well, and you will shine.

Paul Newman shines, just look up in the night sky to see his star on the big dark screen up there.

Differences in Mortgage Lending and Credit Cards

I live in one of the countries world wide that have gone way over the limit on personal debt. Credit cards and mortgages far over the ability to repay and savings basically non-existent. There will be repercussions coming. When? I don’t know.

The US consumer is not perhaps the worst, but with the way the banking and lending practices are allowed to be basically unregulated or very seldom watched, this makes it a highly volatile situation. What is remarkable in history is that the US is the ONLY country to go through this type of crisis, not once, not twice, but three times and a few lesser crises in between.

Why? Well, from what I can see, the government is seen as an enemy and regulations are seen to bind banks, lending and mortgages to unfavourable levels. Well, if unfavourable is the watchword here, then I would say the current situation is that.

JPMorgan just bought Washington Mutual, after the government seized it. One of the largest banking buys in history. The Treasury and Federal Reserve are trying, maybe in vain, to get a very unfavourable bailout of the lending industry passed using a very vaguely written bill.

Try looking at other countries, and see if those business practices would work for personal lending, mortgages and compare the differences.

In France, for example.

The BBC’s Emma Jane Kirby asks if other nations should take a leaf out of the thrifty Gallic book?
French credit cards are little more than debit cards, so there is no question of simply sticking a couple of flat screen TVs on your credit card and hoping to pay for them later – if there are insufficient funds in your account, your bank will immediately block the transaction.
“People here don’t believe you can just put your debts together and get them refinanced… But in London… it was as if wealth was something you could get from a bank, it’s a sort of miracle people seem to believe in England.
But France still believes in strict rules and regulations,
Finance Minister Christine Lagarde says.
“Expect two conditions – a down payment of 20% of the value of the house plus mortgage [repayments] which will not exceed 30% of income.
“You already have a pretty good safety net there and clearly no real estate financing similar to the sub-prime market that has existed in the US and which has hurt the financial system so much,” Ms Lagarde says.

Here, in Canada, all mortgages must be insured, must be registered and the banks insist on at least a 10% downpayment. This used to be lower, but with the way properties were selling to people who were noticeable way over their limit on the ability to repay, the regulatory agent, CMHC chose to change the qualification level and changed the amortization time. Just a short time ago, mortgages could be repaid over 40 years, now they are limited to 35 years.

Credit cards are still one of the highest risk debts out there, with up to 29% interest, and a lot of people here have done what is considered very high risk. They have put the debts into one consolidation loan, then started charging again on the cards.

North Americans, U.K. residents, are all very high consumers, with extremely high debt levels. This is now coming home to roost, unfortunately.

History has lessons, and I am not going to reiterate all of them. No point. But some of the historical commentary from people living during the Great Crash in 1929 ring ominously.

1929 Here is what happened.

“In August of 1929, the Fed began to tighten the money supply continually by buying more government bonds. At the same time, all the Wall Street giants of the era, including John D. Rockefeller and J.P. Morgan divested from the stockmarket and put all their assets into cash and gold.

Soon thereafter, on October 24, 1929, the large brokerages all simultaneously called in their 24 hour “call-loans.” Brokers and investors were now forced to sell their stocks at any price they could get to cover these loans. The resulting market crash on “Black Thursday” was the beginning of the Great Depression.

The Chairman of the House Banking and Currency Committee, Representative Louis T. Mc Fadden, accused the Fed and international bankers of premeditating the crash. “It was not accidental,” he declared, “it was a carefully contrived occurrence (created by international bankers) to bring about a condition of despair…so that they might emerge as rulers of us all.”

On Sunday, December 23, 1913, two days before Christmas, while most of Congress was on vacation, President Woodrow Wilson signed the Federal Reserve Act into law. Wilson would later express profound regret over his tragic decision, stating:

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world – no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.”

Sound familiar? It is long overdue that the American policy makers, the guy on the street, called for regulation, freedom from the “duress” of a small group of men in Wall Street and the credit markets.

I, personally, would love to see the American voter, worker, business man, corporate CEO outside Wall Street, all demand that regulations be put in place and the funds provided to make sure those regulations were obeyed. Right now there are over 50 different agencies, and consolidating those into a few lesser number would make the whole situation far more effective, far more efficient, and maybe, just maybe, the american taxpayer WOULD find themselves never, ever again facing another meltdown.

Recession, Depression, Whatever You Call It

John Kenneth Galbraith has authored a number of books, “The Crash of 1929” and others on political economics. He has been an ambassador, a writer of books and he has a solid take on the ways American influence has affected the world, good and bad. Ironically, he is a Canadian. If you want to read some enlightening books on economics and the world, find his books. They may have been written years ago, but they are certainly relevant now. If you want to cut to the relevant part here, go to around the 43 minute mark on this video. You will be astounded at how much things are almost duplicated then, and now! Bloody scary, bloody ridiculous!

There is an impression that if left alone, the government to stay out of the market that the financial markets, by some God given power, will solve the problem.

This is from the years just before the  Great Depression Do these words sound like some of the current Congressional leaders? The Senators? Even the President himself? Take a look at how Eisenhower, Roosevelt managed to deal with economics, the withdrawal of the US in unpopular war (Korea) and realize how much history has to teach the current administration and any administration to come!

Even if they manage to pass the bill facing the US right now, the economies of the world are NOT going to be in any kind of rosy state for quite a while. This bill, in whatever form it takes, will NOT solve the problems, it is just a start. Period.

The massive consumption of goods is not going to continue. I figure that this will affect all of us for at least 5 years, maybe more, so if any of us figure that we can resume spending, borrowing using credit cards and other lines of credit, we are WRONG.

There are going to be jobs lost in Asia, China, the US, and Europe, but what this bill may do is to keep those losses to a lower level, not stop them. Business will not resume as it did before the banks and  the toxic waste they devised became known. What is really mind boggling is that most of the very banking “experts”, the economists, and the ordinary people don’t even understand this. Most of us, including the banking and economics experts find this far too complicated, far too extensive, far too large in scope to figure out.

Regardless of how this comes down, I am going to see property prices drop more, although here the property prices are still way over the true level in value anyway. The foreclosures in the US will continue, they will rise and so will bank failures.

Get the idea? This bill is NOT a cure, not a way to solve the problem, just a small beginning, with pain still to come. The international news knows this, why on earth do the Americans in the administration, including Paulson and Bernanke not know it, nor the President?

Stupidity Explained, Now It “Figures” Literally

http://scienceblogs.com/goodmath/2008/09/economic_disasters_and_stupid.php

This one says a lot about the way this whole thing got so tangled up, so obscene in the ways banks, investment bankers, and insurance companies got into the game. Let it be no mistake, this was a game to them, without any families, any real touch with the pain that bad loans created.
The person who wrote this is NOT a politician, NOT someone whose specialty is economics, but IS someone with math skills, and logic.
I read just this posting and started to swear, my eyes bugged out completely at some of the sneaky, underhanded and just plainly obscene practices here.
Unfortunately it appears to be just another version of the Savings and Loan fiasco, with a few new twists.
How this all works out is beyond my capability to foretell, and what happens to those who pulled off some of the game strategies, I don’t know.
What I do know is that I live in a country where the banks, the investment firms, the insurance companies are regulated.
Paulson, the Federal Reserve Bank, and you, the unwitting tax payers, will be the ones to deal with this. International banks will get some of the funds here, but remember, they also built parts of your economy. Maybe some of them got suckered, like a lot of people apparently did, but with the international banks far more regulated, far higher scrutiny on them, at least your taxes will go to help you out with ethics being the underpinning on the international banks.
Paulson, the FRB, the Senate, the house of Representatives all knew the foreclosures, the money, the sucker loans and the insurance between each other were going on as long as two bloody years ago. This should never have come as a surprise, period. All of them experienced the fiasco with the Savings and Loans institutions, and definitely John McCain would be well aware because he was in with one of the Savings and Loans in Arizona.
However this works out, and it may well take a couple of DECADES to even get the strings unwound here, there will be some pain, there will be a serious slowing of the entire world economy, and maybe, although I hope not, a full recession which turns into a real depression.
Maybe this is what NEEDS to happen. People will learn to live without borrowing to buy a new tie, or a sandwich, by putting the charge to a bank charge card. People will learn that money that they put into deposits does have risk, some of it high, some of it very low. Maybe some will learn to be a lot smarter when dealing with the financial version of the Barnum and Bailey circus.
Remember, there is a sucker born every day. Maybe it is time even the bank CEO’s recognize their own faces in the “Great Mirror of Sucker”.
This is a harsh way to learn some lessons, but maybe that is what is needed now. I don’t know the future, and maybe that is a good thing. I DO know the day has come where the sucker punches to the economy finally took it down. Hard.

Savings and Loan Fiasco and Familiar Names, Bush and McCain

I don’t live in the US, so I was not totally familiar with the Savings and Loan events of a few years ago. So, I did some looking around and voila, some familiar names show up!

McCain pressured regulators for Keating, Lincoln Savings and Loan

It seems that the current candidate for president was part of the problem in Arizona and the Savings and Loan fiasco, as was a member of the current president’s family. McCain was “rebuked by the Senate Ethics Committee for excercising ‘poor judgement’ for intervening with federal regulators on behalf of Charles Keating, head of Lincoln Savings and Loan”

This certainly explains why McCain is not in favour of any regulations or laws covering monetary transactions. Yeah…………..just what the US needs at this point, someone who was in the inner circle of the Lincoln Savings and Loan fiasco.

The second person is Neil Bush, with the Silverado Savings and Loan, a member of the Bush family currently in power. No wonder I had a very strong feeling the last person to trust with making decisions about this current “crisis” was not able to make fair or even dispassionate decisions.

Then, I decided to follow this down the line, and voila, the same mechanisms, the same type of fraudulent practices are being used again, so I now KNOW this has become a business practice, with the names of the corporations the only thing that did change. Bloody wonderful.

So, twice the financial world has abused the people in the US, twice the taxpayers are being TOLD, not asked in a referendum, to cover the butts of the very people who have just gone from scam to another.

Time for the US to finally realize they do have the vulnerability to these practices, to put into place some strong laws, not regulations, and to limit the way some people hide the scams.

For crying out loud, how long will people tolerate this crap? It has now become the Paulson SEC-FED Septic Bank, with all the crap and paper being flushed out of site, like a drug dealer just about to be caught with the goods.  To carry this further, time to flush out these scammers and put them completely out of business, literally. Remove their licenses, remove their positions from corporate boards, remove them from any and all access to monetary funds whatsoever.

Depression Thinking when Money Goes Poof

I guess I am glad I had generations ahead of me who did live through the last depression and knew how to get through and be able to still share what they had with others.

First thing they did was to PUT MONEY ASIDE, even if it was a few pennies, a few dollars and keep it. The little bit may not have bought a house, but if you KNOW you have something, even a paltry bit, to fall back on, you are far less fearful.  Then they became inventive. They found ways to take something that had become broken, worn, and turn it into something useful. They took clothes that had hole in the knees and either patched the knees or turned the clothes into other items.

Why on earth am I even going here? From watching this, hearing the histories of the older generation, and doing some reading on the internet, I am about 50/50 on this going sour, becoming a full and very nasty depression, world wide.

So, instead of trying to play “catch up” I am saying get some practice in being innovative in your living, inventive, even thrifty! Habits can only become habits if you do them, and repeatedly.

Bartering was one of the ways people now are getting things done and without paying any taxes. Almost anything from baking bread, laying brickwork, to running people around in your car can be bartered. Yeah, yeah, I know, the tax man does not like this, but when you are the one feeding your kids, you need to find ways to lessen the strains on your wallet.

Gardens and putting in gardens saved a lot of people from going hungry, so if you live in the city, even in an apartment, you can save at least a few dollars by growing something. Peas grow up, trained on vines, even growing things like lettuce can be done indoors. Herbs can be traded or used to flavour bland, boring food. Maybe you have a neighbour with some free yard space. Talk to them and see if you can barter some raking of leaves for the space, then plant raspberries, blueberries or what you can in your area.

Here is a totally revolutionary idea! If you are up to debt to your eyeballs, then maybe you HAVE to learn to do this because otherwise you face some nasty consequences.  Saving a few pennies, saving a couple of dollars IS POSSIBLE in almost any condition, ask the people living on the streets, they have to.

People lived through the Great Depression and yes, they did manage to save. Why not now when you can do it with far less pain? Your survival, you children’s survival may well depend on this and your own abilities are worth more than money any day, any year, any financial circumstance, use your abilities for what they are, you best asset.

Here We Go

With all the upheaval this week, I decided to do some looking around, not so much to invest, but to see where things had gone.

There are, as per usual, people acting like hyenas over the properties and the pain, picking away on the corpses of the housing market. There are a huge number of sites now all listing foreclosures, pre-foreclosures, and seller motivated listings. For the most part, the listings are done by people in trouble, but there is a highly disturbing trend to another vehicle.

Companies are using vulnerable properties to make huge amounts of money by getting owners to list through them. Remember, these companies are NOT licensed Realtors, they are not property brokers, they are companies using the madhouse mentality to circumvent the need for a license, the need for any regulatory oversight.

If you think you want to buy a distressed property, then remember this. If the person selling is a private seller, and they OWN the property, then check to see if they are in fact buying and selling property in bulk. You may well end up with more headaches than you think.

It seems that there are far too few people paying attention to the entire housing market right now, far too few regulatory watchdogs.

As for Wall Street, what a sweet deal! I can work for some company that went way over the amount of money the company had, lend and lend and then cause a huge problem, and after all of it is done, the US government will just sweetly walk in with bags of taxpayer money and solve it! Woo Hoo! No repercussions for me or the company, except I get another job to do it all over again!

The proof is in the way housing has been the one main tool to manipulate the government, with the Savings and Loan fiasco, and now this one. No, these were not illegal, and no-one will actually ever be charged, because the governments, civic, state and federal just could not be bothered.

Yep, it will happen again, so if you are buying land, buying a home, BUY A HOME! Not a box to sell again, but some place you are capable of owning IF you lose your job, IF you divorce, and that means one you actually can afford.

Homes Or Houses

Homes are NOT meant to become investments, but places we all can go to shut out the world, invite friends and family to, and to make our own.

If you use your house to make money, then what are you really doing?

From my perspective, you are taking a place others would normally make their own, put some dreams, some memories, some work, some beauty into, and selling it because you have no commitment to your own “home base” or community.

How many people go back in their memories to home? They remember the neighbours, good or bad, they remember the holidays there, they remember the schools that they went to and they remember the way kitchens smelled at dinner time.

With our society now, it seems all of us have learned to expect instantaneous results, instant answers with the internet, instant meals from the freezer to the microwave.

Homes are not built instantaneously, they are products of work, design, time, and dreams from several people until we live in them, adding our own dreams.

Putting our houses into the category of investment makes them hollow. They never really become something we work toward enjoying, living in, making messes in, fighting in, loving our pets and family in, but just boxes.

For me, buying a house is more. I want to have some place where I can put my own design on, plant my own trees, flowers, veggies around. I want to have a place where I know I can go when people annoy the hell out of me, and I can shut the door.

Homes are where I can make some messes without the glaring eyes of bosses, or others who would sneer or make rude comments.

Home is where I can walk around in whatever I choose to, regardless of fashion.

I wonder if kids raised in families constantly on the move ever really earn or find a place in this world they can trust, can relax, can truthfully just be themselves in.

Maybe this is why some people would dump seniors on the street, so the houses the older people live in can be used for greed and callous disregard.

Seems to me there is a real sense of impermanence to a lot of our living now, a real sense of anything and anyone being disposable if it inconveniences us.

Tough Times

Most people know the news in the US and around the world has not been good this week.

Well, it seems that some banking institutions have done what most of us know is stupidity displayed.

I had to read several explanations to understand what in hell was going on.

So, I am going to try to put it into simple terms here, if only to clarify my own thinking.

A friend approaches me for some money to borrow. (read bank here)

I have some money set aside, but not quite enough to cover the entire loan. (read liquidity in bafflegab banking terms)

I ask why they want to borrow, and they say , ” Well, ya see, I just started working (read they are a bit of a risk to repay) and I want to borrow the money for a car.”

Now, if I were one of the banks that went under, at this stage, I would not even check out what make, model or year, but put my own interests (pun definitely intended here) and my own greed into play.

“Sure, I can lend ya the money, and you will have to just pay me a very low interest, but if you don’t pay it back ( I will use weeks here to represent years) then after 2 weeks the interest changes. I won’t bother to tell you right now what will happen, we will see then.”

Friend is anxious enough to borrow, to have the car for ego buffing, and has no intention of saving up for the same car. So, they agree.

We sign off an agreement.

What my friend does not know is that I don’t have all the money.

I get another phone call, asking to borrow money too!

So, I make a call.  Someone I know is interested in being a silent lender (read investment banker), and has taken steps with an insurance company to cover bad debts, sort of like betting that the debts will not get repaid.

I mention I have two people who want to borrow, but I am not “liquid”, and would my “investment” person back me with some funding. Of course they want interest on their money, but again, they have taken out insurance against failure. Either way they get paid.

What I don’t realize or am told is that the “investor” has no money at all, but they are “selling” this debt bundle to someone else! (read insurance or another investment dealer with no regulations overseeing all of his or her finances)

Sound complicated?? Yep, it is.

BUT! Here is the catch in the whole thing. The investor really does not have the money, the backer of the investor uses some paperwork to show a bundle owing, but has no money invested.

So, where does the money come from for me?

On a note to a bank from the backer.

The money is sent to the backer, then to the investor, then to me, then to the friends who borrow.

Is the picture getting clearer now?

Well, surprise of all surprises, friend pisses off his boss, loses the job, and instead of selling off the car, approaches me.

I have two choices, here. Take possession of the car (which I now find out is basically a wreck) and try to get what I can from it, or demand payment.

Friend cannot repay, so I am in a financial bind here (banks over-extending on sub-prime or high risk loans) so I talk to my silent friend (investment banker) who has the insurance.

But…. the debt is higher than the collateral is worth (wrecks go to the wreckers, right?) and the insurance does not cover the entire debt.

So… he goes to the backer!

Backer has taken out a paper on the debts and now is finding out that they should have investigated the original worth of the collateral and the ability of my friend, myself, my investor, to repay, but they did not.

The backer’s bank calls in the papers, the investor is facing some serious money problems, and I am now broke!

I can seize the car, and put it into the auction, but after doing that, I get maybe 10 cents on the dollar.

And, of course, my friend is out a car, has to declare insolvency (tells me they are totally broke, again) and I get told to sell of what I can to cover the debt I owe the investor. Damn!

So off I go to the pawn broker and sell off something.

Well, all is not rosy for the investor, because they have to pay the backer and I am broke too. Sorry.

They end up selling off some items because the backer has charged them interest on a larger amount, because the insurance company put the “investor” into a higher risk category now.

They end up with some money, the rest of us………. go to second jobs.

Basically this tale is what happened on wall street, with secret loans and bundling of loans to another level, with some of the insurers turning around and getting papers on the debts.

I did not check out the car, did not check out how often my “friend/s” repaid their loans or even how many hours they would work!

Neither did my “investor” , nor the backer, nor the bank who drew up papers check out the risk, the collateral worth, the trustworthiness of the layers below them.

I paid all my debts, so I would be a good risk, but I put my money on a debt that was high risk with someone who had trouble balancing a bank cheque and balance each month.

But, I put my own financial stability on very shakey ground.

Here is the bottom line.

Banks in the US should have always put money into savings, like I did, but neither of us put ENOUGH money into savings.

Instead we relied on credit, lines of credit and the greed.

If a bank is stupid enough to lend money without knowing the people, without checking out the area of town they people are buying houses in, and without having a truly secure basis for understanding the loans (read mortgages) here would be paid, then as far as I am concerned, they should get slapped.

Now, remember the original conversation?? Where I did not happen to mention that the interest would change to a definite amount??

Bubble interest, rising rate, whatever you call it, the banks who lent money to a hell of a lot of people did not happen to mention that the interest rate on the mortgages would rise, significantly.

The analogy here would be that I did lend my money at 3% for 2 weeks, then, if the debt was still there, no matter that it was all of it, or some of it, I would demand repayment at 8%.

Now my friend was budgeting on his repayment for 3%, right? I did not disclose that I would basically up the rate to over double the rate in 2 weeks!

No wonder he could not repay it! He overextended his own money, in the first place, then I hit him with a huge jump in payments.

This is why so many people got their home foreclosed on.

The banks used bubble mortgages on the loans.

So, yes, the shit has hit the fan, but perhaps the whole story boils down to a very simple, very obvious thing.

IF YOU CANNOT BUY IT NOW WITH CASH, YOU CANNOT BUY IT WITHOUT RISKING SOMETHING