ParkTwain's Parlor

Exotic Photo(s) of the Day

Cap Carbon, Algeria, near Bejaia (notice lighthouse):

http://www.flickr.com/photo_zoom.gne?id=231662884&size=l

Entrance to Lake Skadar, Albania:

http://www.flickr.com/photo_zoom.gne?id=237521293&size=l

Mountains behind Herat, Afghanistan:

http://www.trekearth.com/gallery/Asia/Afghanistan/West/Herat/photo286371.htm

Bagan, Myanmar (locality of 3,000 temples):

http://www.trekearth.com/gallery/Asia/Myanmar/North/Mandalay/Bagan/photo413456.htm

[IIC]

This is bad. The mortgage lending and appraisal industries are cooked but don't yet know it.

http://www.nctimes.com/articles/2007/06/03/news/top_stories/22_42_166_2_07.txt?ref=patrick.net

//
The term refers to a scam in which a buyer ---- with the help of dishonest real estate agents and appraisers ---- purchases a home for more than market price, receives cash at the closing of escrow and then lets the property fall into foreclosure. ...

The real estate scams involve unscrupulous real estate agents who conspire with appraisers to fraudulently declare artificially high market values for homes.

Under an inflate-and-crash scheme, for example, an appraiser fraudulently declares the value of $500,000 property to be $600,000. Based on that appraisal, a lender agrees to a $600,000 loan.

The seller agrees to the higher sale price and agrees to give $100,000 cash back to the buyer at close of escrow. Then, when the lender pays the money to the seller, he or she keeps the $500,000 and gives the $100,000 difference back to the buyer and the money is split between the buyer and those who cooked up the deal, Lackner said.

Buyers in such schemes typically stop paying their mortgages after a few months, the bank declares default and after a few months forecloses, taking the property back. The buyer's credit may be damaged, but he or she is tens of thousands of dollars richer, Lackner said.

Typically, Lackner said, a buyer will purchase between three and six properties at once.

So, the damage to his credit is the same with four foreclosures as it is with one, he said.
//

I don't think this is new...In fact, I know it isn't...But probably just more prevalent.

BTW...Did you hear this one?...The guy mentioned in the article, Brian from Glendale, was on News Radio 2 weeks ago on KNX: http://www.kentucky.com/216/story/87728.html

Hi Babe, thanks for the note

More to come

[riverbabe]

http://www.pbase.com/alannole/image/37595750

http://www.pbase.com/image/75177008

http://en.wikipedia.org/wiki/Gallarus_Oratory

http://www.megalithicireland.com/Gallarus%20Oratory.htm

No mortar used. Found on Dingle Peninsula in County Kerry.

Smallest church or chapel I have ever seen in a photograph.

I like your exotic photos. Breath of fresh air here. Thanks for posting them. Riverbabe

"Crash-and-inflate" mortgage fraud

This is bad. The mortgage lending and appraisal industries are cooked but don't yet know it.

http://www.nctimes.com/articles/2007/06/03/news/top_stories/22_42_166_2_07.txt?ref=patrick.net

//
The term refers to a scam in which a buyer ---- with the help of dishonest real estate agents and appraisers ---- purchases a home for more than market price, receives cash at the closing of escrow and then lets the property fall into foreclosure. ...

The real estate scams involve unscrupulous real estate agents who conspire with appraisers to fraudulently declare artificially high market values for homes.

Under an inflate-and-crash scheme, for example, an appraiser fraudulently declares the value of $500,000 property to be $600,000. Based on that appraisal, a lender agrees to a $600,000 loan.

The seller agrees to the higher sale price and agrees to give $100,000 cash back to the buyer at close of escrow. Then, when the lender pays the money to the seller, he or she keeps the $500,000 and gives the $100,000 difference back to the buyer and the money is split between the buyer and those who cooked up the deal, Lackner said.

Buyers in such schemes typically stop paying their mortgages after a few months, the bank declares default and after a few months forecloses, taking the property back. The buyer's credit may be damaged, but he or she is tens of thousands of dollars richer, Lackner said.

Typically, Lackner said, a buyer will purchase between three and six properties at once.

So, the damage to his credit is the same with four foreclosures as it is with one, he said.
//

Exotic Photo(s) of the Day - Ireland's Gallarus Oratory (c. 7th c. AD)

http://www.pbase.com/alannole/image/37595750

http://www.pbase.com/image/75177008

http://en.wikipedia.org/wiki/Gallarus_Oratory

http://www.megalithicireland.com/Gallarus%20Oratory.htm

No mortar used. Found on Dingle Peninsula in County Kerry.

Smallest church or chapel I have ever seen in a photograph.

[IIC]

Park...at your suggestion I have been working on High Tight Flag scans. It sure appears that there are varying definitions as to what constitutes the pattern though.

I've come up with one that uses Bull's definition as a guide and also some others that use a shorter timeframe. But in backtesting, results have been horrible...as has my double bottom attempts.

Of course, if one actually waits for the correct buy point and never touches the ones that don't hit the buy point then it may be a different story.

I'll continue to plug away but I'll refrain from posting the tix unless I can get better results.

So far the Cups w/ Handles have proved out well...although, most of them don't breakout either...But I set up my watch so that I can see which ones are moving in realtime(I have not done that with the other scans). So far, I've made 27 trades from our CwH lists...made $$$ on 21 and lost on 5 w/ one open trade that I'm up nicely on (CBEY).

If I make a buy and trim, then sell the rest later, I count that as one trade using the avg. gain/loss. If I buy, then sell, then buy again I count that as 2 trades...This applies to CBEY as I re-bot on Friday's b/o.

If I buy, then add I count that as only one trade.

The majority of my buys have been in the handle phase as it turns up. Of course I am not a long term investor, but so far I have found this method much more relaxing and profitable than my standard "Shoot From The Hip" short term style.

However, the market has been good since I started posting the CwH's...The real test will come when the market corrects.

Best, Doug

Equity markets are imbibing cheap leverage

Snippet from yesterday's post @ Tim Knight's blog
//
Ken Fisher has a pretty good point where he talks about the spread between the E/P value (that's not a typo - earnings divided by price) and prevailing corporate interest rates. I'm paraphrasing, but his rationale goes something like this - the average P/E on the S&P 500 is about 17 right now, which means the E/P is akin to an interest rate of 5.8%.

However, the cost of borrowing money (for which a corporation can deduct the interest) is, once you factor the tax savings, less than 4%. So it's more economically efficient to borrow tons of cash and buy back stock. In his view, until that gap is closed, the market should continue to go higher. Assuming neither interest rates nor earnings (the "E") change, a rational value of the Dow would be at something like 18,000.
//

Also note this response embedded in the May 29 entry at Neiderhoffer's blog:

//
Alston Mabry writes:
Having spent a while recently as a spectator at a PE buyout, from the acquirer's point of view, I can offer this observation from the cheap seats. The PE craze appears to be fueled, just like the hedge fund industry, by cheap leverage. The buyout firms are using leverage at 5% to buy cash flow of 10% and pocketing the difference. On a $5B deal, that's $250M/year. And if a few years later somebody comes along and offers you a price you can't refuse, like Riverdeep did for Houghton, then so much the better.

So where's the weak point? Or is it a free lunch? If there were to be a downturn that pushed too many of those cash streams negative, but still the interest payments on the leverage keep coming due, then could some buyout groups get hurt?
//

[IIC]

You posted the letter to Harkin! I was tying into the idea in that letter that an illegal isn't required to identify his citizenship status after entering the hospital door, so why should anyone else? You could get very slow, but perhaps substantially free, emergency style medical care. And you must use an alias to prevent the credit check scenario I mentioned.

Q: If any person enters a hospital emergency room for care and insists on not divulging citizenship status, name, etc., can the hospital insist on taking a fingerprint as part of giving its care?

I don't know about now...but in the 80's it wasn't required.


Also, I don't know about Las Vegas...But I've take people to the emergency room several times in the past 10 years...They all had insurance...And the service was all SUPER SLOW...and they were not the same hospitals.

You posted the letter to Harkin! I was tying into the idea in that letter that an illegal isn't required to identify his citizenship status after entering the hospital door, so why should anyone else? You could get very slow, but perhaps substantially free, emergency style medical care. And you must use an alias to prevent the credit check scenario I mentioned.

Q: If any person enters a hospital emergency room for care and insists on not divulging citizenship status, name, etc., can the hospital insist on taking a fingerprint as part of giving its care?

[IIC]

I don't think that the consumer sees the entire data set associated with the credit report. I think there are additional data about you that a business sees when they request the report.

Also, what is keeping anyone in the U.S. from reporting to a hospital and not identifying yourself truthfully as a U.S. citizen? Isn't it true that by law the hospital cannot insist on taking your citizenship data? The upshot would be that you probably would get crummy care at the end of the day's waiting list, but it might be substantially free?

Maybe so...but I'd bet you a million bux you cannot figure out my net worth within a hundred grand...But we'll never know anyway 'cause I won't tell you if you are right.

I've only been to the emergency ward once in my life when my hand was cut...I don't recall them asking whether or not I was a citizen.

So...What are you suggesting?...Are you saying that all people in the U.S. w/o proper documentation should be immediately rounded up and deported???

I don't think that the consumer sees the entire data set associated with the credit report. I think there are additional data about you that a business sees when they request the report.

Also, what is keeping anyone in the U.S. from reporting to a hospital and not identifying yourself truthfully as a U.S. citizen? Isn't it true that by law the hospital cannot insist on taking your citizenship data? The upshot would be that you probably would get crummy care at the end of the day's waiting list, but it might be substantially free?

[IIC]

I'm wondering whether all illegals get free emergency health care, or if it's only the truly broke ones. I say this because illegals now can get bank accounts and other financial assets in the U.S., so maybe they would also show as having a credit report. The credit report would show whether you are truly broke.

What type of credit report on an individual would tell you if the person was broke or not?...I never saw my net worth indicated on my credit report or FICO...Doug

I'm wondering whether all illegals get free emergency health care, or if it's only the truly broke ones. I say this because illegals now can get bank accounts and other financial assets in the U.S., so maybe they would also show as having a credit report. The credit report would show whether you are truly broke.

[IIC]

Not 4 Nuttin'...But I thought of you Park when I read this:


Iowa Citizen Seeks Illegal Alien Status: An actual letter from an
Iowa resident and sent to his Senator:

The Honorable Tom Harkin
731 Hart Senate Office Building
Phone (202) 224 3254
WashingtonDC , 20510


Dear Senator Harkin,

As a native Iowan and excellent customer of the Internal Revenue
Service, I am writing to ask for your assistance. I have contacted
the Department of Homeland Security in an effort to determine the
process for becoming an illegal alien and they referred me to you.

My primary reason for wishing to change my status from U.S.
Citizen to illegal alien stems from the bill which was recently
passed by the Senate and for which you voted. If my understanding
of this bill's provisions is accurate, as an illegal alien who has been
in the United States for five years, all I need to do to become a citizen
is to pay a $2,000 fine and income taxes for three of the last five
years. I know a good deal when I see one and I am anxious to get
the process started before everyone figures it out.

Simply put, those of us who have been here legally have had to pay
taxes every year so I'm excited about the prospect of avoiding two
years of taxes in return for paying a $2,000 fine. Is there any way
that I can apply to be illegal retroactively? This would yield an excellent
result for me and my family because we paid heavy taxes in 2004
and 2005.

Additionally, as an illegal alien I could begin using the local
emergency room as my primary health care provider. Once
I have stopped paying premiums for medical insurance, my
accountant figures I could save almost $10,000 a year.

Another benefit in gaining illegal status would be that my
daughter would receive preferential treatment relative to her
law school applications, as well as "in-state" tuition rates for many
colleges throughout the United States for my son.

Lastly, I understand that illegal status would relieve me of the
burden of renewing my driver's license and making those burdensome
car insurance premiums. This is very important to me given that I
still have college age children driving my car.

If you would provide me with an outline of the process to become
illegal (retroactively if possible) and copies of the necessary
forms, I would be most appreciative.

Thank you for your assistance.

Your Loyal Constituent,

Donald Ruppert
Burlington , IA