New thought...

...for the more experienced investor:

CACC

$28 - expect minimum of $40

The recovery in home prices

Moody's (and they have recently demonstrated that they know what they are talking about - their track record with respect to real estate is abysmal) recently published this chart that indicates when home prices will regain their prior peaks. I wouldn't worry much that Moody's believes California, Florida, Arizona, Nevada, Minnesota, and Virginia will not regain their peaks until after 2023. Michigan is another matter though...

Stating the obvious

Our president's budget plan is clear - tax hikes are on the way. The current economic malaise will only postpone the inevitable. If the economy improves enough for 2011 those with the targets on their backs are the high wage earners. For 2011, expect the reinstatement of the 36% and 39.6% income tax brackets for married filers making in excess of $250,000 and singles making at least $200,000. Since the brackets are based on taxable income and not earnings, Obama is just substituting 36% and 39.6% tax rates for the current 33% and 35% tax brackets. Lower brackets will not be changed.
In addition, again effective in 2011, expect a big hit to those taxpayers with capital gains and dividends. The current 15% maximum rate would rise to 20% for any taxpayer in the 28% tax bracket and above.
And expect continued phaseouts of itemized deductions, personal exemptions et al for taxpayers in the highest brackets.
Don't you love the redistribution that is occurring.....

Our government's expertise

Can our government run a healthcare system? Please read on - Democrats, Republicans, and Independents:

To President Obama and all 535 voting members of the Legislature,

• The U.S. Post Service was established in 1775—you have had 234 years to get it right—and it is broke.
• Social Security was established in 1935—you have had 74 years to get it right—and it is broke.
• Fannie Mae was established in 1938—you have had 71 years to get it right—and it is broke.
• War on Poverty started in 1964—you have had 45 years to get it right; $1 trillion of our money is confiscated each year and transferred to "the poor"—and they only want more.
• Medicare and Medicaid were established in 1965—you have had 44 years to get it right—and they are broke.
• Freddie Mac was established in 1970—you have had 39 years to get it right—and it is broke.
• The Department of Energy was created in 1977 to lessen our dependence on foreign oil, it has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before—you had 32 years to get it right—and it is an abysmal failure.

New thought...

For moderate risk

IGK - ING 8.50% cumulative perpetual preferred -- $19 ish

Wells Fargo Exec's parties are over....

What was she thinking!?! Where were her friends (and enemies) who obviously knew something was up?

MALIBU, Calif. (CBS/AP) With movie stars as neighbors and parties that lasted until morning, Cheronda Guyton, a bank exec, probably thought she had it made big. Certainly her 3,800-square-foot beachfront home in exclusive Malibu, Calif., was plenty big.

Problem was the mansion wasn't hers. The Wells Fargo honcho was squatting in the home of a couple her bank had recently booted because they could not make their payments.

Well, the upscale Southern California squatter got the ax this week, after Wells Fargo found out that this senior vice president stayed at the bank-owned $12 million beach house, in the exclusive Malibu Colony, when it was not hers.

The bank says the executive violated company policy. Neighbors complained to the Los Angeles Times that the woman and her family were using a house that was supposed to be empty.

Bank spokeswoman Jennifer Langan confirmed that Guyton was the only employee involved in the alleged violation of company policy.

"We deeply regret the activities that have taken place as they do not reflect the conduct we expect of our team members," the bank said in a statement.

No phone listings could be located for Guyton.

The previous homeowners, Lawrence and Linda Elins, turned over the house to Wells Fargo in May. Their real estate agent said they were financially devastated by Bernard Madoff's fraud scheme and had to sign the property over to Wells Fargo to help pay a larger debt.

The home was not foreclosed and the bank agreed not to immediately sell it, Langan said.

Neighbors told the Times they saw Guyton's family at the house and that it was used for at least one party where guests were ferried from a yacht.

The Devil's Dictionary - Financial Edition

Thanks to the Wall Street Journal and author Matthew Rose for some good reading...

By MATTHEW ROSE

Just as the financial crisis has morphed into a daily grind instead of a daily fire drill, its peculiar argot has found its way into everyday conversations. This is probably an unwelcome surprise to those not conversant with the narrow byways of Wall Street. So, in the spirit of Ambrose Bierce -- whose "Devil's Dictionary," originally published in 1906 as "The Cynic's Word Book," provided a guide to the political and cultural language of the day -- here is a Wall Street Journal Baedeker to acronyms, neologisms and bastardizations that shape the popular understanding of the pickle in which we remain one full year after the collapse of Lehman Brothers.

AAA, n., obsolete. A rhetorical device used to dupe buyers into purchasing securities backed by shacks dressed as houses, and to secure the highest possible spot in telephone directories. Common usage: AAA Septic Drainage and Mortgage Backed Security Services.

ADVERSE FEEDBACK LOOP, n. See FEEDBACK LOOP.

BAILOUT, n. First known use: Noah. Novel regressive taxation scheme whereby vast sums of capital are transferred from those citizens who didn't participate in the illusory Bacchanalia of the housing bubble to those who did and weren't clever enough to get out in time.

BANK, GOOD, n., archaic. Sober, conservative, risk-averse institutions designed to midwife customers' capital and enable prudent lending to deserving businesses and consumers. See Capra, F., the Bailey Building & Loan Association.

BANK, BAD, n. 1. Everyone else. 2. Especially Goldman Sachs.

BANK FAILURE, n. 1. A process by which towns across America are denuded of their feckless local bankers, paving a way into the market for feckless private-equity investors. 2. An increasingly common Twitter tag that spikes on Friday afternoons. See #bankfail, #wheresmymoney, #runitsthefdic.

BORROWERS, n. For liberals, the unwitting dupes of unscrupulous bankers and lenders whom one shouldn't blame for the crisis. For conservatives, irresponsible graspers with a credit-busting taste for cathedral-ceilinged entryways and 70-inch flat-screen televisions whom one should absolutely blame for the crisis.

CHRYSLER, v.t. To torch all pre-existing contractual obligations. Entered dialect after Truman's seizure of U.S. steel mills. Reference spotted in 1952 editions of obsolete periodical "Steel and Steelmen," under the "News You Can Smelt" section: "We just got Chryslered!"

CREDIT-DEFAULT SWAP, n. loose translation from the original Latin "ubi mel ibi apes," or "where there's honey there are bees." 1. A complex financial instrument vital to the functioning of a modern economy in the way it spreads risk among consenting parties. (Greenspan, A., pre-Sept. 2008.) 2. A complex financial instrument that nearly destroyed modern capitalism (Greenspan, A., post-Sept. 2008).

CREDIT LINE, n. A set amount of borrowed money available only to those who don't need it.

CREDIT-RATING FIRMS, n. Firms that do scant rating of people with scant credit.

DEFICIT, n. For the party in power, at worst a minor irritant and at best a precondition for economic growth. For the minority, the gravest threat to the stability of the Republic.

DEFLATION, n. The state of being when confronting unified theories of the financial crisis with grand names -- The Great Contraction, The End to Moderation, The Bubble Era -- that don't, in fact, explain much more than our continuing inability to agree why we are in such a deep hole.

FEEDBACK LOOP, n. Process by which the significance of an event is amplified by constant repetition. Orig: CNBC. See ADVERSE FEEDBACK LOOP.

GREEN SHOOTS, n. 1. The first signs of spring, often clobbered by summer's heat and autumn's rain. 2. A sign the economy is falling apart more slowly than previously thought. Related: DAISIES, PUSHING UP. See also THINKING, WISHFUL.

LIGHT TOUCH, n., obsolete. Theory of regulation in which financial companies recycle profits to lawmakers as campaign contributions, prompting them to relax the rules until the banks inevitably mess it up, at which point the dominant theory switches to "heavy hand," prompting years of economic contraction and the cycle to repeat.

PPIP, or PUBLIC-PRIVATE INVESTMENT PARTNERSHIP, v.t. Orig: Gladys Knight. To use a form of hypnotism in which merely saying you intend to fix a problem has the effect of making everyone forget about the problem. Usage: "We really peepipped Congress on those AIG bonuses." See ASSETS, TOXIC.

QUANTITATIVE EASING, n. A regulatory approach based on the point in Western movies when the sheriff, having fired all available bullets, in an act of final desperation throws his gun at the bad guys. See also INFLATION, HYPER.

RESET, v.t. A process by which an initial expectation is altered to another expectation, as in mortgage payments, or deficits or personal fulfillment. As in, "I have reset my views of financial regulation."

RISK MANAGEMENT, n. Until recently, the process by which banks make giant bets with other people's money before persuading someone else to take the fall. Currently known as "federal supervision."

SECURED CREDITORS, n. In modern American capitalism, the parties last in line for repayment after a company's failure. The others in line include the government, unions, sundry suppliers, friends of the union, friends of the government, unsecured creditors and people vaguely familiar with the matter.

STIMULUS, n. An indeterminate sum of taxpayer money used to generate violent debate. Previously known as "government spending."

STRESS TEST, n. 1. A measure of arterial blood flow to the head. 2. Alchemic process by which struggling, undercapitalized banks are transformed into paragons of modern finance. (See BANKS, GOOD.) Also known as the "Timothy F. Geithner Seal of Approval," which some bankers insist is good until it isn't anymore. (See BANKS, BAD.)

SUBPRIME, adj. A measure of diminished intellectual capacity and increased financial mendacity.

TANGIBLE COMMON EQUITY, n. unknown origin. Definition unknown; purpose unknown; how it's calculated, unknown; what federal regulators think it means, unknown. Usages: "Macbeth," Shakespeare, W., Act II, Scene (i): "Is this TCE which I see before me...I have thee not, and yet I see thee still."

TARP, n. acronym. 1. A synthetic device designed to cover up an unsightly mess, or to protect perishable goods (firewood, banks) from the ravages of the elements, typically costing somewhere between $12.99 and $700 billion. 2. Prime example of how governments use otherwise anodyne acronyms, abbreviations and sports metaphors to disguise matters of controversy. See also TALF, TLGP, TURF, FHFA, BACKSTOP, WRAP, OFHEO and SPECTRE.

TOO BIG TO FAIL, idiom. Banks, insurance companies, car companies, presidential approval ratings, Fed chairmen seeking second terms, other people who think they should be Fed chairman, the reputations of people who'd be responsible for letting things fail. Antonym: TOO BORING TO SAVE.

TOXIC ASSETS, n. 1. A collection of bad loans and other botched financial bets that caused big losses for banks, prompted a credit crunch and sank the economy (Sept. 2008 to May 2009). 2. Long-term investments that will pay handsomely when the housing market recovers (June 2009 onward).

U-SHAPED RECOVERY, n . An opportunity for economists to incorrectly predict the timing and nature of the recession's end just as successfully as they incorrectly predicted its inception, depth and duration. Variants include V-shaped recovery, L-shaped recovery and :-( shaped recovery.

Let's do this!

Let's do this .... the right way!