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TigerSoft News Service    
                      SENATOR DODD's

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        (See Peerless Stock Market Timing
         Chart at bottom of this page.)


        US DOLLAR.

by William Schmidt, Ph.D.
Author of TigerSoft Insider Watch Software
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        Despite the decline in the housing market, homes
  are still not affordable to millions of Americans.  For
  most Americans, the new Housing Bill will make them
  less affordable.  It  will artificially prop up home prices
  by preventing foreclosures and giving an UNLIMITED
  line of credit to mortgage company giants, Fannie Mae
  and Freddie Mac.  They now handle 75% of new home
  mortgages.  That percentage will rise sharply, as the
  limit on the size of the mortgages guaranteed by
  Fannie and Freddie is boosted from $417,000 to

       So, if you  liked the Federal Reserve's $300 billion
  bailout of central banks, you'll love this Housing Bill. 
  The US Treasury can now buy ALL Fannie Mae and
  Freddie Mac home mortgages.  Previously, the
  Treasury had been allowed to buy only $2.5 billion in
  housing mortgage securities.  Now there are no limits.
The Dollar is now to be backed up by home
  mortgages  that banks cannot sell because nobody
  wants them.!
                     More Affordable Housing?

        (1) States will get $4 billion in assistance in buying
   up boarded-up, foreclosed homes.  They may offer
   some of these to those who promise to fix them up.
         (2) Down payments for FHA loans are dropped
   to $3.0% from 3.5%.
         (3) New home buyers are thrown a tax credit of
   $7,500 in the new housing law.

         The changes will help some people.   But banks'
   lending standards are now much tighter.  The 20%
   decline in home prices in California, for example,
   means little when the median home price is still over
   $659,000 in many suburbs of San Francisco, Los
    Angeles  and California.   The central problem is
    that housing prices are still way too high for most
    working people.  |Left to the free market, home prices
    would certainly fall much more sharply.  Such declines
    would make homes more affordable.  But Congress
    is under too much pressure from banks to allow
    a free market.  So, risk has been nationalized
    and profits have been subsidized. 

                      Real Incomes Drop in US
         as Wealth Concentration Accelerates.

         Real incomes are dropping every bit as fast as
    housing prices in the economic slowdown.  With
    gas prices now over $4.10 a gallon, someone
    driving $12,000 miles a year, and getting 20 miles
    per gallon, who is paying $2.00 a gallon more than
    even two years ago, has $1200 less a year to spend.
    Couple that with a real inflation rate of 6% to 7% a
     year, and you can see the problem.  Wealth is
    just too concentrated to let ordinary working
    people buy new houses.  The richest 1% own
    more than 90% of the wealth in the US.  This is
    the highest figure since 1928.  In 1976, the top
    one percent received 8.83% of the national
    income.  In 2005, it reached nearly 22%.  The
    average CEO now makes almost 400 times what
    an average worker is paid.   In 1980 the ratio
    was 40:1.   More than 45 million people in the
    US have no health insurance.  One in six children
    live in poverty. 

                 Speculative Housing Bubble

       Housing inventories are still bloated, the most
    "bloated in a generation".  In Southern California,
     real estate spokesmen talk of a year's inventory.
     As in all speculative bubbles, prices zoomed
     upwards into fantasy land.  They rose for more
     than ten years.  People began to feel that they
    could only go up, never down.  Terms were easy.
    Rates were low and you could speculate with
    zero-down.  In this environment, builders built
    too much.  And anyone who could remotely
    afford a house, bought one.  Few buyers
    were left.  Bids disappeared.  Speculators
    had to dump their condos and second homes.

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                  HOUSING BILL'S DETAILS

          The 2008 Housing Bill has now passed the
    House and the Senate. 
Sen. Dodd defended the
    bill on CNN as being designed primarily for
    relief of those who were duped into buying a house by
    unscrupulous lenders.  He insisted that everyone
    benefits from preventing foreclosures.  He did not
    address what will happen if, despite the new Housing Bill
    housing prices fall, say, 20% or 30%, as many expect,
    or there is no economic recovery and homeowners walk
    away from their mortgage, either of necessity or by
    prudent choice. 

         A key provision is that the banks can get FHA
     full insurance on their most troubled mortgages if
     they accept a 10% write-off of the original mortgage
     and are willing to pay a 3% insurance fee.  $300,000,000
     is set aside for this new program. 
But, what if people
     still cannot afford the reduced mortgage?
  It still may
     make more economic sense, if equity is below zero,
     for the homeowner to walk away from the mortgage.
     So, the government's effort to prop up prices may
     well fail.  In that case, the Federal Government
     could lose more than a trillion dollars.  Then there
     would be nothing left in its coffers to stimulate housing,
     rebuild the national infrastructure, offer universal health
     care or much of anything else, other than pay for
     the US military which now costs $800 billion a year.  

                          Dodd's Sweetheart Deal

       The CNN interviewer failed to ask Dodd how much
    his support for this bill and the bailout of Freddie
    Mae was due to his cozy relationship with the
    mortgage industry.  Dodd and Senate Democrats
    received got $31,000 from Freddie Mac in campaign
    contributions.   In 2003, Dodd received preferential
    treatment from Countrywide Finance, now Bank
    of America, in refinancing two homes, saving him
    $15,000 a year.  (See bottom of this page and
    http://www.portfolio.com/news-markets/top-5/2008/06/12/Countrywide-Loan-Scandal )
       This is a lenders' and homeowners' subsidy bill.
     Its real purpose is to prop up home prices long enough
     for lenders to find someone new to sell the mortgages
     to.  It is not designed to make homes more affordable.
     The Government is now the "bad-debt buyer of last
     resort." Source.   To accommodate the cost of the new
     legislation, Congress raised the US National Debt
     limit by $800 billion, to $10.6 trillion. Source.

        7/25   The President will sign  the Housing Bill. 
      The Senate (72 to 13) got up early and voted
      approval. This offers banks full insurance on their
      troubled mortgages if they accept a 10% write off
      and will pay a 3% insurance fee.  At this point, the
      most the federal government (FHA) can insure
      and lose here is only $300 billion.  Source.    Nearly
      $4 billion is included for local governments to buy
      and refurbish foreclosed properties.

7/25    Freddie Mac and Fannie Mae are guaranteed
       not to fail.  The Federal Government will either give
       them an unlimited line of credit or buy stock in them.
       There will be no nationalization.  No change in CEOs.
       No close inspection of their books.  CEOs and
       their Directors' entourage will not be stopped from
       milking these companies for whatever they can
       manage.  In 2007, the current Chairman of Freddie
       Mac pocketed nearly $19.8 million.  At this point, the
        most the federal government can lose is $5.2 trillion! 

       It is quite possible that the Federal Government
       will spend all its resources bailing out mortgage
       insurers while housing still is inflated and has
       not corrected more than 20% of its bubble from
       1995 to 2006.   A 50% retracement in prices
       might be expected.  In Australia, economists are
       warning their banks that the $450 billion in US
       write-downs for bad housing should be expected to
       go to $1.3 trillion in the next two years.  Source.  

7/25   WS Journal's Critique of New Housing Bill:

      (1)  Where the mortgages have been bundled and
      sold to another party, there is no lender who can
      write down the principal.  In most cases, the contracts
      prohibit alteration. 

      (2) Second mortgagers are not protected. 

      (3) The FHA is not staffed to handle hundreds of
      thousands of refinancing.  So, there will many
      more repossessions. 

     (4) Lenders let FHA insure their worst loans.The
     ones they feel comfortable with, they can adopt
     a wait and see approach.  Source.

7/25  Washington Mutual exchanged dubious
      mortgage collateral for a Federal Reserve loan
      of $10 billion last week.  Source.     It has reported
      losses of $6.6 billion in the last nine months,
      $3.3 billion, in the last 3 months, owing to
      losses for bad loans and mortgages.

7/25  Second quarter Foreclosures were triple
      what they were in 2007. This was a rise of 14%
      from the first quarter. This is much worse than
      was expected.  Source.   Nevada has the highest
      percentage, 1 in 43 households. Source.

7/25  Two more banks, one in Nevada and the other
      in California have gone bust.  The FDIC says none
      of their customers would lose a penny, because
      the FED has arranged, without saying how, the
      takeover of the banks by Mutual of Omaha Bank.

7/25  "(San Diego) home prices continue to decrease,
        by another 4.6 percent in April according
        to the Office of Federal Housing Enterprise
        Oversight. However, the resulting improvement
        in housing affordability may begin to stabilize
        the market. There is still a large inventory of
        unsold homes, which may take several months to
        reduce, but most analysts expect the housing
        market to begin recovery in 2009..."    Source.   
       This same source predicted a housing market
        recovery by 2008. Source

7/24   The Fed provided $16.4 billion to commercial
       banks based on collateral of dubious value,
       compared with $13.9 the previous week.  In early
       April, the DAILY bank borrowings were as high as
       $38.1 billion.  Yahoo Source

           McCain Votes for Bill, but Criticizes It.
     7/24   On July 24th, McCain backed the bailout
     of FRE and FNM.  Source.   On 7/24 the
     headline reads: McCain: Get Rid of Fannie Mae and
     Freddie Mac.
  McCain wrote "Americans should
     be outraged at the latest sweetheart deal in
     Washington.   Congress will put U.S. taxpayers on
     the hook for potentially hundreds of billions of dollars
     to bail out Fannie Mae and Freddie Mac.
..Let us not
     forget that the threat that Fannie Mae and Freddie
     Mac pose to financial markets is a tribute to crony
     capitalism that reflects the power of the Washington
     establishment...Fannie and Freddie are the poster
     children for a lack of transparency and accountability.
     Fannie Mae employees deliberately manipulated
     financial reports to trigger bonuses for senior
     executives. Freddie Mac manipulated its earnings
     by $5-billion....Fannie and Freddie's lobbyists
     succeeded; Congress failed to act. They've stayed in
     business, grown, and profited mightily by showering
     money on lobbyists and favors on the Washington
     establishment....We are stuck with the reality that they
     have grown so large that we must support Fannie Mae
     and Freddie Mac through the current rough spell.
     But if a dime of taxpayer money ends up being directly
     invested, the management and the board should
     immediately be replaced, multimillion dollar salaries
     should be cut, and bonuses and other compensation
     should be eliminated. They should cease all lobbying
     activities and drop all payments to outside lobbyists.
     And taxpayers should be first in line for any

     Very good.  But let's not forget how indebted
     Sen.McCain was to the savings and loan super
     star of crooks,  Keating.  Source.    He probably
     sees that he will be hit with reminders of this in the
     coming campaign and wants to head off the criticism.



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                   McCain and Swindler Keating

        Charles Keating was convicted of racketeering and fraud in both state and federal court after his Lincoln Savings & Loan collapsed, costing the taxpayers $3.4 billion. His convictions were overturned on technicalities; for example, the federal conviction was overturned because jurors had heard about his state conviction, and his state charges because Judge Lance Ito (yes, that judge) screwed up jury instructions. Neither court cleared him, and he faces new trials in both courts.)

Though he was not convicted of anything, McCain intervened on behalf of Charles Keating after Keating gave McCain at least $112,00 in contributions. In the mid-1980s, McCain made at least 9 trips on Keating's airplanes, and 3 of those were to Keating's luxurious retreat in the Bahamas. McCain's wife and father-in-law also were the largest investors (at $350,000) in a Keating shopping center; the Phoenix New Times called it a "sweetheart deal."  ( http://www.realchange.org/mccain.htm )

              Democrat Dodd's Sweetheart Loans?
Countrywide made two loans at special rates to Dodd in 2003 to refinance homes in Washington and East Haddam, Conn.The loans were reportedly part of a "V.I.P." program that gave preferential rates to "friends" of the company's chairman and chief executive, Angelo Mozilo.  In 2003 Dodd got a 4.25 percent interest rate on a $506,000 refinancing loan for his Washington town house, and a 4.5 percent rate on the $275,000 loan on his East Haddam home. Most people would have been paying
2% higher.  So, Countrywide saved Dodd $15,000 a year.

Dodd claims if he had known he was getting preferential
treatment he would have walked away from the loan.  As the leading Democrat on the Senate Banking Committee, it is
almost certain he knew what mortgages were going for.
(Source:  http://www.huffingtonpost.com/2008/06/23/dodd-repeats-denial-of-mo_n_108725.html )

  House Republican Leader, Boehner, charges that Dodd  and Barney Franks have refused to let Congress  investigate VIP loans from mortgage lenders and banks to members of Congress.  He charges that Bank of America wrote much of the legislation.
Source.   The stock jumped more than 50% as news of the
bill's provisions got publicity.

                                   Bush and McCain Share A Moment Together.
 $ 9 , 5 4 5 , 9 7 7 , 4 2 9 , 7 7 7 . 5 4   That is the amount the US national government is now in debt.

     The Bush Administration today estimated that the 2009 federal
deficit will be nearly a half a trillion dollars.  This is $83 billion
more than what they estimated in February. Source.

  The amount of money involved in saving the banks, homeowners
  and housing industry may soon exhaust the country's ability to
  borrow money, except at much higher rates. It's either that
  or print billions and billions of more paper dollars.  This will surely
   weaken the US Dollar much further.  Add in the $3 trillion
   cost of the unnecessary and foolish war on Iraq, and you
   see how rapidly the US is becoming a nation that is hopelessly
   in debt.  Wastefully, the US spends nearly a trillion a year on
   its military budget, much more than all the other countries on
   earth.  Meanwhile bridges collapse and its working class must
   hold two jobs to support a family. There is no solution because
   the US constitution forbids taxing wealth as opposed to income,
   and because sizeable wealth is often put overseas in secret
   bank accounts so that income cannot be taxed.  

       If you like what Bush has done to the US, McCain is
   certainly who you will vote for in November.

            Don't They Make A Couple To Remember.
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                                          BANK OF AMERICA LOVED THE HOUSING BILL
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