Weekend Open Thread (2012-01-13)

Here is your open thread for the weekend beginning Friday January 13th, 2012. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

49 comments:

  1. 1
    Pegasus says:

    WA. SENATE BILL 6199 Modifying the penalty for false swearing about documents claiming to be the beneficiary in a foreclosure

    If this bill becomes law and you file a document foreclosing in Washington State claiming to be the beneficiary of a given mortgage and really aren’t, because, for instance, the trust never had the actual mortgage tendered into it, you go to prison.

    http://market-ticker.org/akcs-www?post=200503

  2. 2

    Its Gonna SNOW This Weekend?????

    OMG, break out the plastic chains that make it worse and remember a 4WD doesn’t stop any better than a 2WD in ice and snow…..but let’s see….

    They have us with about a 37 degree low tonight, and a 40 degree high tomorrow with 80% chance of rain…then it get’s really bizzarre….Sunday’s high is upper 30s with an upper 20s low and snow showers. Let’s see, last night it was upper 20s, with a mid 40s high today….

    Monday is even more of a roller coaster high/low prediction. I say wait and see what happens, Hades it may rain all weekend, we’ll see.

    Your Seattle Bubble weather reporter, SWE.

  3. 3

    RE: softwarengineer @ 2
    Heck, SWE, you’re bound to be as accurate as the real weather forecasters. They and stock market analysts can make wrong predictions all the time, but keep their jobs.

  4. 4

    RE: Ira Sacharoff @ 3

    Ira

    I noticed the Yahoo front page yesterday made a big national news story of the impending snow blizzard to hit Seattle this weekend….had us stocking up on food, blankets and parkas…makes me wonder if the snow paranoia in Seattle is contagious…LOL

  5. 5

    An Interesting Side-track

    Not to worry, the Europe debt problem is solved again….oooooppps….take that back today, now Greece says its gonna go bankrupt and drag Seattle’s economy down with it, article:

    http://finance.yahoo.com/news/greek-debt-swap-talks-end-141715845.html

    “…Athens needs an agreement, effectively seeing creditors voluntarily giving up a lot of their promised returns, to slash its debt to more sustainable levels and convince the European Union and International Monetary Fund to keep lending it cash.

    In what some analysts said may be a high stakes poker game at the last stretch of intense negotiations to convince private bond holders to voluntarily take some losses to avoid the worst, both sides appeared to be digging in their heels.

    A Greek default would be far worse for both Greece and the banks than reaching some form of deal.

    “Discussions with Greece and the official sector are paused for reflection,” said the Institute of International Finance (IIF), which leads talks for private bond holders.

    “Unfortunately, despite the efforts of Greece’s leadership, the proposal put forward … has not produced a constructive consolidated response by all parties.”…”

    Sounds like speaking out of both sides of their mouths and negotiating with an empty gasoline can and Bic lighter lit in the air, ready to ignite the mess, if one side doesn’t get its way…

  6. 6
    Blurtman says:

    RE: Pegasus @ 1 – Well, you don’t really go to prison, but you could. This time, we really mean it, mister.

    Off topic, how did you like my biotech stock picks MITI and ELN? Both up by quite a bit since I first touted them.

  7. 7

    RE: Blurtman @ 6

    Sell Now

    Before they plummet.

  8. 8
    Pegasus says:

    RE: Blurtman @ 6 – You are either a genius or the old adage that even a blind hog finds an acorn or two….is at work. You pick.

  9. 9
    Blurtman says:

    RE: Pegasus @ 8RE: softwarengineer @ 7 – Better to be lucky than good. Sometimes when technology interacts favorably with markets, good things happen. For the record I did not get into MITI in the high-fives, low sixes. If there is a general pullback, I will. I had been in ELN for a while, including being underwater for a while. I coud have gotten into ELN when it was in the three’s in the early 2000’s after the PML (brain virus) side effect first received attention, but I did not. I got in later and resisted cashing out with an immediate 25% gain. I held long term and had been under water for quite a while. It seemd fairly simple for the company to design a bain virus diagnostic to monitor and segregate patients, which is happening. So clearly it is luck, but a story can be designed to favorably explain it and to encourage others to speculate. I’ll be on next Tuesday’s Squawk Box, BTW, explaining the trade.

  10. 10
    wreckingbull says:

    By softwarengineer @ 2:

    remember a 4WD doesn’t stop any better than a 2WD in ice and snow…..but let’s see….

    Not true for those of us who still shift gears the old-fashioned way! I can drop down through the gears in 4WD and keep ‘er nice and steady. It is becoming a lost art. I actually regard the NV-5600 in my Dodge truck as a theft deterrent device.

  11. 11

    RE: wreckingbull @ 10

    Manual 4 Wheel Drive

    Yeah, I had a friend with a 1986 Ford 460 V-8 4WD that bragged that when sliding in ice he could gear down and just punch it and it would straighten out just fine…..never tried it myself [or been with him when actually did it], but I agree with you , it must be a lost art….seen many 4WDs in the ditch in snowy weather….perhaps they’re the new fangled auto drives….

    The Midwest folks know the snow driving ropes better than us Seattle newbies, for instance they all know when stopping and there’s no traffic in front make sure to drive in the middle of the road….the roads have a slight slant to the ditch in the lanes and a good way to slide into the ditch too…the middle keeps that from happenning…

  12. 12
    wreckingbull says:

    RE: softwarengineer @ 11 – To be fair, studded Cooper Discoverer MTs don’t hurt either. Gotta use ’em while we still can. I am sort of surprised the Queen has not banished them from her kingdom yet. I think studded tires are living on borrowed time here.

  13. 13
    David Losh says:

    RE: Pegasus @ 1

    The client that I talk about, who is the best example of the very worst case of mortgage fraud I ever saw was visited by an agent of Department of Justice today. They just showed up.

    English is my clients second language, so she called me to talk with the agent.

    Thank God they are doing something. I wrote letters, and made phone calls when I first saw the documents they had signed to get a loan. Nobody cared. We finally short sold the house, and I wrote Bank of America, who was the servicer. We got a clean, fair deal in the short sale.

    The woman at the Department of Justice said she has been investigationg mortgage fraud all along, but agreed, no one cared, until now. Now that banks can’t sell as many foreclosures, or REOs they are demanding to know what happened.

    Go figure, now the banks want to know what happened so now the government is investigating. We have an appointment next Tuesday, I’ll let you know.

  14. 14
    Pegasus says:

    RE: wreckingbull @ 12 – The best tires for snow and ice that I have ever used were Bridgestone Blizzaks. No chains ever and no studs. They were so good I was not afraid to test them on ice. One time I went down an extremely steep and icy hill and purposely slammed on the brakes. They performed like I was on dry road coming quickly to a full stop without sliding. Any other tire and I would have immediately spun out of control and left the road. The big drawback is that they are very soft so that they will not last very long. You need to pull them off as soon as there is no ice.

  15. 15
    Pegasus says:

    RE: David Losh @ 13 – They are probably looking to fry some small fish and claim they are doing their jobs. We will see a lot more of that as the American public is finally starting to figure it out and demand some justice. It being an election year doesn’t hurt either.

  16. 16
    The Tim says:

    In case you missed today’s awesome sunset:

  17. 17
    Scotsman says:

    RE: Pegasus @ 14

    Yup, amazing tires. It’s all about the compound.

  18. 18
    David Losh says:

    RE: Pegasus @ 15

    I asked about that. They want the lender.

  19. 19
    Macro Investor says:

    RE: softwarengineer @ 11

    “The Midwest folks know the snow driving ropes better than us Seattle newbies…”

    Yep, I know quite a few midwesterners. The trick is don’t stop. That’s right, on ice or deep snow never stop. Because you may not ever get moving again. How? Suppose you see a red light ahead. You slow way down and coast until it turns green, so you can get thru without ever coming to a complete stop. Never lose that beautiful forward momentum or you could be stuck.

  20. 20

    By wreckingbull @ 10:

    By softwarengineer @ 2:

    remember a 4WD doesn’t stop any better than a 2WD in ice and snow…..but let’s see….

    Not true for those of us who still shift gears the old-fashioned way! I can drop down through the gears in 4WD and keep ‘er nice and steady. It is becoming a lost art. I actually regard the NV-5600 in my Dodge truck as a theft deterrent device.

    I’ll have to disagree with both of you.

    A 4WD may stop better or worse than a 2WD, depending on the design. Any difference will be relatively marginal, though. I think what SWE was trying to point out though is that the brakes on a car are much more powerful than the engine. On dry pavement you can generate more G’s stopping than accelerating, or stop from 60-0 in fewer feet than you can get from 0-60 in. So in slippery conditions you’re more likely to have problems stopping. 4WD can make drivers over-confident because they can accelerate fairly well (maybe 90% of normal), but that doesn’t mean they can stop well (even 50% of maximum normal).

    As do downshifting in slippery conditions, I’ve never understood why people do that. It’s too likely to break traction, and that will require some type of driver reaction. The first reason it’s more likely to break traction is that very few vehicles don’t have locking front and rear differentials, and today not that many even have a locking center differential. The second reason is it’s an abrupt change, the amount of which is entirely dependent on speed and change in gear ratio. Assuming your brakes are not completely screwed up in some manner, such that perhaps only one wheel is applying braking action, you’re much better off using your brakes, which can be easily modulated and apply stopping power to all four wheels.

  21. 21

    By Macro Investor @ 19:

    RE: softwarengineer @ 11

    “The Midwest folks know the snow driving ropes better than us Seattle newbies…”

    They do tend to have a lot more experience, but it doesn’t hurt that they don’t have any significant hills or traffic bottlenecks, like bridges.

  22. 22

    By Kary L. Krismer @ 20:

    The first reason it’s more likely to break traction is that very few vehicles don’t have locking front and rear differentials, and today not that many even have a locking center differential.

    Too much editing. It should have read very few vehicles have locking front and rear differentials . . ..”

  23. 23
    Dirty Renter says:

    If you have an automatic transmission and you’re driving on ice or slick snow, always put it in neutral if you have to use your brakes, whether to stop or slow down.
    Better yet, stay home, drink hot wine & walk.

  24. 24
    Saffy the Pook says:

    By Kary L. Krismer @ 20:

    By wreckingbull @ 10:

    By softwarengineer @ 2:

    remember a 4WD doesn’t stop any better than a 2WD in ice and snow…..but let’s see….

    Not true for those of us who still shift gears the old-fashioned way! I can drop down through the gears in 4WD and keep ‘er nice and steady. It is becoming a lost art. I actually regard the NV-5600 in my Dodge truck as a theft deterrent device.

    I’ll have to disagree with both of you.

    A 4WD may stop better or worse than a 2WD, depending on the design. Any difference will be relatively marginal, though. I think what SWE was trying to point out though is that the brakes on a car are much more powerful than the engine. On dry pavement you can generate more G’s stopping than accelerating, or stop from 60-0 in fewer feet than you can get from 0-60 in. So in slippery conditions you’re more likely to have problems stopping. 4WD can make drivers over-confident because they can accelerate fairly well (maybe 90% of normal), but that doesn’t mean they can stop well (even 50% of maximum normal).

    I think the point was that only some cars are four wheel drive but all cars are four wheel stop.

  25. 25
    Tatiana Kalshnikov says:

    We have been actively looking at condos east of Lake Washington. Each month the prices keep falling. We are afraid to buy. In Sacramento everyone thought they could buy when prices dropped 30%. Then they fell another 25% and people lost a lot.

  26. 26

    By Saffy the Pook @ 24:

    I think the point was that only some cars are four wheel drive but all cars are four wheel stop.

    Yes, that was probably part of the point, but some 4WD cars will stop better or worse than 2WD cars, depending on their design. A wheel that loses traction is no longer stopping the car, and how likely that is will depend on the drivetrain. For example, if the 4WD has locking front and rear differentials which are locked, no one wheel is likely to lose traction by itself, and it will stop better, although that might have other effects.

  27. 27
    Pegasus says:

    RE: Kary L. Krismer @ 26 – Gawd! You are back from the “psych gulag”? I think I only saw one post from you this week. Pretty hard to blog when you are straight-jacketed and all you can do is punch out keyboard letters with your nose? Did they play the song “I…..will……stop….posting” over and over and over? Inquiring minds want to know.

  28. 28

    RE: Pegasus @ 27 – I haven’t found the topics or comments that interesting. I think my recent comments have been solely related to snow driving and bankruptcy.

  29. 29
    David Losh says:

    RE: Kary L. Krismer @ 28

    Speaking of bankruptcy, my attorney tells me my second mortgage can be stripped out in a Chapter 13 bankruptcy.

    Are there statistics of how many people use bankruptcy to cure foreclosure, or second mortgage defaults?

  30. 30

    By David Losh @ 29:

    RE: Kary L. Krismer @ 28 – Speaking of bankruptcy, my attorney tells me my second mortgage can be stripped out in a Chapter 13 bankruptcy.

    I’ve mentioned that several times here. With a personal residence you need certain facts, including the second mortgage being totally out of the equity (e.g. a $200,000 house with a $225,000 first mortgage and a second). With a rental unit it may be less restricted.

    That’s the so-called “cramdown” that gets referenced periodically. The legislation which has been bumping around would remove the restrictions on personal residences.

  31. 31
    Howard says:

    Homeless in Seattle!!!!!

    Moved to Redmond in August 2010….

    Renter’s purchased my house in Colorado. The closing was yesterday. I slept really well having no house!

    Seriously, worrying about a 3000sqft albatross 1200 miles away caused a lot of stress. Luckily we were able to walk away with decent $$$, but it took a lot of elbow grease. We finished the house off over three yearss, cooking on a hot plate a using the bathroom down the hall.

    Only thing I miss is my 900 sqft 4 car heated garage.

  32. 32
    Chris says:

    RE: Tatiana Kalshnikov @ 25

    Some eastside condos have listing prices that are less than 50% of their last sales price, like this one: http://www.redfin.com/WA/Kirkland/375-Kirkland-Ave-98033/unit-336/home/12091326

    The list price of $290k seems reasonable for such a desirable location but the monthly dues and propery taxes total almost $900 (and the $545 monthly dues are not tax deductible), which is almost enough to rent a comparable place nearby. So… I think despite the low sales price I’d be more inclined to rent than buy a place like this.

  33. 33
    Tatiana Kalshnikov says:

    RE: Chris @ 32

    Thank you Chris. I watched the free-fall in prices in Sacramento. 60% losses in value are not uncommon. I have seen properties turn over TWICE to foreclosure. And the prices are still falling!! I believe that while Seattle may be late to the party, the same will happen here. especially at the low to middle price range. Tatiana.

  34. 34
    Scotsman says:

    RE: Tatiana Kalshnikov @ 25

    Don’t buy a condo. Just don’t.

  35. 35

    A little video for your weekend enjoyment :)

    Debt Limit – A Guide To American Federal Debt Made Easy:

    http://www.youtube.com/watch?v=Li0no7O9zmE

  36. 36
    Pegasus says:

    RE: Tatiana Kalshnikov @ 33 – I thought you were getting ready to start a baby factory? A condo is no place for your babies and no place for you.

  37. 37
    Dirty Renter says:

    RE: Tatiana Kalshnikov @ 25
    As I’ve told people for decades, when you are moving to a new place, why not rent for a year, and determine which area you really like?

  38. 38

    Condo complexes now require a lot of buyer research. Complexes where the prices are seemingly bargains are usually low for a reason.

    Wasn’t there a Seattle Lake Washington waterfront condo for about $50,000 last year?

  39. 39
    Blurtman says:

    The best government money can buy.

    http://www.washingtonpost.com/wp-srv/business/congress-members-worth/index.html

    Click on “Politician Profile” which takes you to OpenSecrets.org.

    Mitch McConnell

    Campaign Cmte & Leadership PAC Combined

    1 Kindred Healthcare $124,750 $109,750 $15,000
    2 Blackstone Group $81,900 $71,400 $10,500
    3 WPP Group $67,450 $66,450 $1,000
    4 FMR Corp $66,100 $54,100 $12,000
    5 UBS AG $64,000 $49,000 $15,000
    6 Elliott Management $63,500 $63,500 $0
    7 Citigroup Inc $59,300 $46,800 $12,500
    8 Exxon Mobil $58,800 $38,800 $20,000
    9 UST Inc $56,100 $48,100 $8,000
    10 Altria Group $54,700 $34,700 $20,000
    11 Capital One Financial $50,000 $43,500 $6,500
    12 Community Health Systems $48,600 $43,600 $5,000
    13 Verizon Communications $46,450 $23,450 $23,000
    14 Bank of New York Mellon $46,400 $41,400 $5,000
    15 Goldman Sachs $46,100 $43,600 $2,500
    16 Blue Cross/Blue Shield $45,750 $29,250 $16,500
    17 Humana Inc $43,150 $35,650 $7,500
    18 Marathon Oil $42,300 $32,300 $10,000
    19 Peabody Energy $42,100 $38,100 $4,000
    20 Koch Industries $42,050 $27,050 $15,000

    http://www.opensecrets.org/politicians/contrib.php?type=C&cid=N00003389&newMem=N&cycle=2012

  40. 40

    RE: Blurtman @ 39
    Just lovely. McConnell gets big money from oil companies, brokerages, too big to fail banks, tobacco companies, and health insurance companies. So when he says he’s fighting for freedom, what he means is that he’s fighting for the freedom of his patrons to make unlimited, unrestrained profit.

  41. 41
    Dirty Renter says:

    Blurt & Ira – did you guys get the ‘Che’ t-shirts I sent you for Christmas?

    Anyway, I came SB to give a bit of info to Ray, as he recommended WEN a year and a half ago…this came from Seeking Alpha:
    Wendy’s International: Our last bond idea is for fast food enthusiasts. We began nibbling at the debentures due in 2025 back in late 2009 as a way to participate in the turnaround story being implemented by management of the then combined Wendy’s/Arby’s Group controlled by the Nelson Peltz-led Triarc Companies.
    WEN.GB 950590AG4 7.00 Dec. 15, 2025 Caa1 B- NR 88.250 -1.070 8.450

    At the time we felt owning the debt would be preferable to the equity from a risk/reward perspective. On July 5, 2011, Arby’s was acquired by Roark Capital Group, an Atlanta-based private equity firm that focuses on investing in franchise, brand management and restaurant companies.
    These bonds due in 2025 are also a bit further out on the maturity limb than we prefer, and its B- credit rating doesn’t exactly leave us feeling warm and fuzzy. However, if the company can continue on its path of progress, then we believe the current 8.45% yield is reasonable compensation for the wait.

  42. 42
    David Losh says:

    RE: Julie Lyda RE/MAX Northwest Realtors @ 35

    Oh really? Did you get this from Scotsman? Because he floated the same thing about a week ago, maybe two.

    Here’s the deal. We live in the United States of America. Our country was pristine 200 years ago complete with natural resources. We are between Mexico, one of the oldest civilization on earth, and Canada, another pristine country of natural resources.

    We have the lowest tax rates of anywhere, and the highest military spending. We could save billions of dollars by reconfiguring out health care system to boot.

    I don’t see the comparison to a person who doesn’t have a living wage. That’s probably another topic for another time.

  43. 43
    ChrisM says:

    The Oregonian’s really been on a tear with insightful articles about the real estate biz. I’m sort of surprised this particular story is running, as it is a Washington based business:

    http://www.oregonlive.com/business/index.ssf/2012/01/northwest_trustee_squeezes_mor.html

    The article starts by taking about how tiny regional newspapers are getting bought out, so the trustee can run legal notices in the classifieds at no charge.

    “Routh is also CEO of Bellevue-based Northwest Trustee Services Inc., whose one-stop shopping business model has made it the largest foreclosure trustee in the region. Owning newspapers will reduce costs for Northwest Trustee’s lender clients and could make foreclosures more profitable for Routh’s firm.”

  44. 44
    Pegasus says:

    RE: ChrisM @ 43 – Nice find. I am sure those newly bought papers continue to be free to publish any articles that they choose about the foreclosure problems. I would not be surprised to see them use some school publications next to fulfill their legal requirements of public disclosure. So what if only 500 people could read the notices if they wanted to.

  45. 45
    Blurtman says:

    So far, methinks McConnell is the lead whore. His wife did a bang-up job as Labor Secretary, too. The JP Morgans and Goldman Sachs likely expect nothing for the contributions, they just like the cut of the recipient’s jib.

    SENATOR (D – VA)
    Mark Warner

    Top 5 Contributors, 2007-2012, Campaign Cmte and Leadership PAC
    Altria Group $124,502 $109,218 $15,284
    JPMorgan Chase & Co $108,800 $106,300 $2,500
    Dominion Resources $62,845 $56,845 $6,000
    Norfolk Southern $60,613 $50,613 $10,000
    Covington & Burling $57,000 $57,000 $0

    http://www.opensecrets.org/politicians/summary.php?type=C&cid=N00002097&newMem=N&cycle=2012

    SENATOR (D – NJ)
    Frank R. Lautenberg

    Top 5 Contributors, 2007-2012, Campaign Cmte and Leadership PAC
    Contributor Total Indivs PACs
    Cantor Fitzgerald $36,800 $36,800 $0
    JPMorgan Chase & Co $36,200 $26,200 $10,000
    Related Companies $34,200 $34,200 $0
    Carella, Byrne et al $34,050 $34,050 $0
    Goldman Sachs $28,700 $28,700 $0

    http://www.opensecrets.org/politicians/summary.php?type=C&cid=N00000659&newMem=N&cycle=2012

    SENATOR (D – MA)
    John Kerry

    Top 5 Contributors, 2007-2012, Campaign Cmte and Leadership PAC
    Contributor Total Indivs PACs
    Bain Capital $76,200 $76,200 $0
    Beacon Capital Partners $51,500 $51,500 $0
    Thornton & Naumes $48,900 $48,900 $0
    Comcast Corp $46,515 $32,265 $14,250
    Blackstone Group $43,700 $43,700 $0

    http://www.opensecrets.org/politicians/summary.php?type=C&cid=N00000245&newMem=N&cycle=2012

  46. 46

    RE: Pegasus @ 44
    This so reeks of sleaze, doesn’t it?
    The trustee owns the escrow company they recommend as the impartial third party, as well as the law firm handling the foreclosures. Then they own the newspaper which publishes the legal notices, and these newspapers are papers with low circulations.
    Foreclosures happen, and when you enter into a contract to buy a property, you are acknowledging that if you don’t pay your mortgage you may lose the property to foreclosure.
    That’s not a bad thing. Banks wouldn’t loan you money if they couldn’t get the house back when you don’t make your payments. And somebody is going to make a profit from foreclosures. But still, when a company makes the most money when there are as many foreclosures as possible? And when they do this with the least expense possible, and cut corners to achieve this? Hello!

  47. 47

    RE: Blurtman @ 45
    Now that’s interesting. John Kerry’s biggest contributor was Bain Capital, the entity which Mitt Romney ran and made him worth a gazillion dollars. Does that mean that Romney is really a flaming liberal? No. Bain Capital is based in Boston. Large companies like to influence the elected officials from where they’re based. Back 30,40 years ago Senators Jackson and Magnuson from our fine state were known as the ” Senators from Boeing”. Companies don’t have political idealogy, they’ll happily control politicians from any political party.

  48. 48
    Blurtman says:

    RE: Ira Sacharoff @ 47 – It is insidious. Both parties are owned by corporate interests.

    In June 2006, Lew was named chief operating officer of Citigroup’s Alternative Investments unit, a proprietary trading group. The unit he oversaw invested in a hedge fund “that bet on the housing market to collapse.” http://en.wikipedia.org/wiki/Jacob_Lew

    Jacob Lew, Obama’s New Chief-of-Staff, Will Not Please Occupy Wall Street

    Maybe you’ve heard: President Obama’s chief-of-staff, Bill Daley, has stepped down. Taking Mr. Daley’s place will be Jacob Lew. This will not please some people.

    Before we get to those people, here are some fun facts about Bill Daley:

    – Prior to being appointed, Mr. Daley was a vice chairman at J.P. Morgan.
    – Mr. Daley at one point held $7.6M in stock from the company.
    – In 2010, Mr. Daley made $8.7M from J.P. Morgan.

    Seeing as how sentiment against the unmitigated profits of Wall Street reached fever pitch over the last year, one would think President Obama would be wise to consider resumes from other corridors of power to choose from when deciding upon a new chief of staff. And maybe he did!

    In the end, however, he decided upon Jacob Lew. Here are some fun facts about Jacob Lew:

    Prior to his appointment as a deputy secretary at the Department of State, Mr. Lew was Chief Operating Officer of CitiGroup’s Alternative Investments group. Do you know what Alternative Investments are? They’re things like hedge funds, who buy things like credit default swaps! Credit default swaps are essentially the ability to buy insurance on someone else’s house in one hand as you hold anything else—the adjustable-rate mortgage you know they can’t pay off, or the capacity to sell that mortgage and therefore generate more mortgages like it, or a gasoline can—in the other hand. This is what Jacob Lew invested in!

    In 2008 and the beginning of 2009, Mr. Lew took in $1.1M from CitiGroup. This included a $900,000 bonus.

    Mr. Lew doesn’t think financial deregulation was one of the problems adding up to the financial crisis that has persisted since 2008.

    http://www.observer.com/2012/01/jacob-lew-wall-street-01092011/

  49. 49
    Pegasus says:

    RE: Ira Sacharoff @ 46 – Their money should of been spent cleaning up all the bad doc foreclosures that they handled for the banks but they are almost immune from being hammered. Those law changes a few years ago did not hurt them at all. It made them pretty much superman from getting any liability. I wonder how much that they contributed to our state politicians for these easy laws and non-enforcement.

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