Wells Fargo earnings conference call

Voltron says: all softball questions.

http://seekingalpha.com/article/183514-wells-fargo-amp-company-q4-2009-earnings-call-transcript

More home equity loan drama

Voltron says: How this shakes out will be critical to Wells Fargo.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aF5WM0c7D8Og

Wells Fargo will answer questions

Voltron says: Wells Fargo, for the first time ever, will answer analysts' questions during their earnings conference call on Wednesday. Hopefully they will let Meredith Whitney ask a question. Should be interesting.

http://online.wsj.com/article/SB10001424052748704381604575005532294411268.html?ru=yahoo&mod=yahoo_hs

Yes, It's Okay To Walk Away From Your Mortgage

http://finance.yahoo.com/tech-ticker/yes-it%27s-okay-to-walk-away-from-your-mortgage-403924.html

Yes, Minister: A Conflict of Interest

Voltron says: This video is almost 25 years old, and it lays out (tongue-in-cheek) pretty much what is happening in America now.

Colbert: Honor Bound

The Colbert Report	Mon - Thurs 11:30pm / 10:30c
The Word - Honor Bound
www.colbertnation.com
Colbert Report Full Episodes Political Humor Economy

Short Wells Fargo and give to Haiti

Voltron says: If everybody shorts Wells Fargo and gives 10% of the profits to Haiti, that'll be over $10 Billion in aid.

Big Banks Accused of Short Sale Fraud

excerpt:

In order for a short sale with two loans to happen, the second lien holder has to drop the lien.

If they don't, and there's no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.

In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.

That's all legal.

But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.

http://www.cnbc.com/id/34877347/

Banks: The Best Short for 2010

http://seekingalpha.com/article/182696-banks-the-best-short-for-2010?source=yahoo

Banning Chinese Imports Would Make The U.S. Trade Deficit WORSE

If you ban Chinese imports, then Americans will be forced to import products from other non-China sources that are more expensive than China, but still far less expensive than what can be produced within the U.S..

http://www.businessinsider.com/world-bank-the-us-trade-deficit-would-explode-higher-if-you-banned-chinese-imports-2010-1

What happens to a second mortgage in a modification?

Voltron says: This is a huge question for the $800 billion on second lien mortgages (mostly home equity loans) of which Wells Fargo has about $85 billion.

excerpt:

Normally second lien mortgages (which are simply second mortgages taken out on a property) rank subordinate to the first loan. In principle, that means if the property is sold or the borrower defaults, the first lien lender is first in line to get the resulting money, followed by the second lien lender.

But it seems an interesting thing happens when mortgage modifications come into play.

Because the borrower is paying the Hamp-modified first lien amount, and the full second lien amount, the second lien effectively becomes senior to the first. In fact, second lien lenders might even be thought of as benefiting from the first lien mortgage since they have a better chance of getting more of their money back from the borrower.

http://ftalphaville.ft.com/blog/2010/01/08/122331/a-second-lien-helping-of-hamp/

How is this efficient?

NY Times: Walk Away From Your Mortgage!

"HUD-approved housing counselors are supposed to counsel people against foreclosure. In many cases, this means counseling people to throw away money."

Voltron says: Here's how I look at it: If you live in a non-recourse state (i.e. where they can only repossess the house and cannot go after other non-mortgaged assets) then you will pay a higher interest rate because the banks know that they can't sue you for any shortfall should you default for any reason. You are FORCED to pay a higher interest rate, whether or not you would intentionally default. This is the same as saying you are FORCED to pay for an put option on the house. If you are forced to pay for this option, why wouldn't you use it?

http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html

Manufacturing Jobs vs Government Jobs

Political backlash

http://globaleconomicanalysis.blogspot.com/2010/01/taylor-ny-times-dean-baker-call-out.html

http://blogs.reuters.com/james-pethokoukis/2010/01/06/the-campaign-against-larry-summers/

http://www.businessweek.com/news/2010-01-06/senator-dodd-said-to-not-seek-re-election-in-november-update4-.html

Why America's Retiring Boomers Doom Us To Bubble, After Bubble, After Bubble...

Voltron says: until they retire

http://www.businessinsider.com/why-americas-retiring-boomers-doom-us-to-bubble-after-bubble-after-bubble-2010-1?

Political backlash

http://globaleconomicanalysis.blogspot.com/2010/01/taylor-ny-times-dean-baker-call-out.html

http://blogs.reuters.com/james-pethokoukis/2010/01/06/the-campaign-against-larry-summers/

http://www.businessweek.com/news/2010-01-06/senator-dodd-said-to-not-seek-re-election-in-november-update4-.html

China Property Bubble May Lead to U.S.-Style Real Estate Slump

http://www.bloomberg.com/apps/news?pid=20601109&sid=arp0XyPoRxW0&pos=14

U.S. Loan Effort Is Seen as Adding to Housing Woes

“We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway.”

http://www.nytimes.com/2010/01/02/business/economy/02modify.html

Experts: Get Out of Bonds Now Before the Bubble Bursts

http://moneynews.com/Headline/Experts-GetOut-Bonds-Bubble/2009/12/31/id/345127