Archive for the 'Economy' Category

Soft Market Index – Google Maps Mashup

February 6, 2008


I came across this interesting Google Maps mashup from BloodhoundBlog (via Dan Green at The Mortgage Reports). According to SocketSite, Countrywide has a Soft-Market Index for most counties in the country, where each county is categorized on a level of 1 to 5 on their risk for declining value. The map is actually available at GeoCommons, which uses the above data to create a Google Maps mashup. SocketSite says

Because of these market conditions, as well as policies implemented by Government Sponsored Enterprises and Mortgage Insurance agencies, Countrywide®, America’s Wholesale Lender® is adopting new Soft Market policies designed to help serve qualified borrowers in markets which are either declining or projected to decline in 2008.

Impacted markets across the nation have been categorized, with Category 5 being the highest risk for declining market value and Category 1 markets currently demonstrating more stable market values. Those counties in a higher risk category are subject to additional guideline restrictions as described below. Click here to view a list of the counties currently attributed to Soft Market categories 1-5.

Now, this is only Countrywide’s own index, and might have nothing to do with how other mortgage companies treat different markets. Nevertheless, the mashup provides an interesting insight into how the mortgage market might shape up in the coming months.


Is the Fed being a ‘fool in the shower’?

February 1, 2008

Unless you have been living in a cave, you’ve already heard about the Federal Reserve‘s cut in its funds rate over the past two weeks. The rate has gone down a whopping 225 basis points in the last four months. But the Fed Chairman Ben Bernanke has not only been cutting the funds rate, but he has also been infusing the market with tonnes of cash lately.

Considering that it takes a while for any funds rate cut to ripple through the economy, mortgage planner Dan Green is wondering if the Fed is acting like the proverbial fool in the shower.

Economist Milton Friedman referred to this scenario as the “fool in the shower”. And it goes a little something like this.

When the fools turns on the shower, the water is very cold. So, he turns on the hot water. Only the hot water doesn’t come on right away so he turns it on full blast. Before long, the water gets very hot, very fast and scalds him. Reflexively, he dials back the heat only to find that he’s too cold again.

Are more rate cuts coming our way in the subsequent meetings? Having read about Bernanke‘s history, it looks like there will be more. But the question, when and how fast will he take the rates up again?

Ron Paul for President

October 23, 2007


I have finally made up my mind, thanks to Jim. Yay!

I have always thought myself to be a democrat, going strictly by my ideology. After all, I am from the largest democracy in the world. And Dr. Ron Paul, even though he is contesting from the Republican party, is as liberal as it gets.

Who is Ron Paul? Well, if you didn’t know that, you ought to pay a little bit more attention to Politics. If you are stateside, that is. But Ron is gaining momentum in other countries too, so there really is no excuse. Ron Paul is more of a libertarian candidate, contesting as a Republican. His campaign has gathered a lot of steam of late, mainly because of his grassroots-level supporters. He is referred to as Dr. No, because he vehemently opposes any bill that does not abide by the constitution. (And oh, he is also a former physician, which explains the Dr. part).

Why Ron Paul? Mainly, because of his stance on the war. But even more, because of his non-interventionist ideology. United States has no business meddling with Iraq or Somalia or wherever the US military is currently spread. I also like his ideas on Income Tax and The Fed, but I must say that I do believe that his views are a little extreme here.

How Ron Paul? That question exists because I’m not a US citizen yet, and so can’t vote on this presidential election. However, I will have my voting rights for the next election, and hopefully, an opportunity to vote for Dr. Paul. But more than voting, I believe I can make a difference by campaigning for him. And making contributions for his campaign. If I can make at least 5 persons aware of Dr. Ron Paul, I would consider my deed done.

Now, go on. Catch up on his stance on other issues.

India Unbound – Gurcharan Das

September 22, 2007

India Unbound

This is a book that I picked up at random during one of my vacations back to India, but couldn’t put down after I started reading. Gurcharan Das is a former CEO of Procter & Gamble India, and this is one of the main reasons I even laid my hands on the book. P&G is headquartered in Cincinnati, you see.

The book emphatically presents the problems and failure of Nehruvian Socialism and the positive effects of globalisation initiated by the Narasimha Rao government. The book does sound a little bit one-sided at some parts, mainly because Nehru’s vision did have some benefits for India – eduction reform which brought us such eminent schools like IIT and IIM, and a tightened national security policy. The entire concept of centralized planning, however, was a massive mistake and has been proved so wrong by the capitalistic forces of the past few decades.

The book is a very good read, if you are interested in the historical underpinnings of the Indian business immediately after the Indian Independence. The presentation is also very light and entertaining, and I haven’t come across an economic book that is such an easy read.

Zeitgeist – The Movie

September 13, 2007

Zeitgeist [tsahyt-gahyst] -noun German : the spirit of the time; general trend of thought or feeling characteristic of a particular period of time.

Recently, I happened to watch Zeitgiest, The Movie. It is available completely free online. I cannot say that I was blown away, but it definitely piqued my interests in the ‘Federal Reserve System‘, ‘The Gold Standard‘, and also to an extent on the Christian beliefs on the origin of Jesus.

Although it lost a little of its charm for me because of its propagandist attitude, it still was a revelation.

Take a peek. You will be hooked!