Money and Finance
"Loans made at interest rates greater than the risk-free rate of money are substantively equivalent to credit insurance and put options. The extra interest rate is equal to insurance premiums paid to the lender for taking credit risks. The extra interest can also be viewed as having the lender sell a put option. The lender collects a premium for the right to put to the borrower, or require the borrower to buy, certain assets in certain events."
- Wells Fargo And The Rousseau Story
Found via Naked Capitalism. In March 2000, Norman and Oriane Rousseau put 30 percent down to buy a house at 580 Wilshire Place, Newbury Park, CA. In the following years they were solicited to refinance their loan. In October 2007 they met with the loan...
- Reforming A Broken Mortgage System - By George Soros
Found via Simoleon Sense. With the private sector largely incapacitated, the GSEs and FHA became virtually the only source of mortgage financing. This is a paradoxical situation in which a fundamentally unsound business model holds a quasimonopolistic...
- 2009 Chou Funds Semi-annual Report
CONSTANT MATURITY SWAPS: With world governments flooding the system with liquidity and keeping interest rates unduly low, we wonder what financial instruments we can use that will protect us if inflation takes hold. We want an instrument similar to an...
- What Are You Doing With Your Tax Refund?
April 15th is fast approaching us. That wonderful deadline where that mysterious Uncle Sam that I've still yet to meet comes either asking for money or sends me a check. It's time to look at the ways you can use any refund coming your way....
- Net Worth Update - December 2011
December wasn’t a great month, but that was mainly due to the fact that I finally got a chance to be a home and recalculate my debt that I owe. This change should’ve been reflected back in October but I’ve been working a whole lot and haven’t...
Money and Finance
Whitman, Diz quote
From the book Modern Security Analysis: Understanding Wall Street Fundamentals:
"Loans made at interest rates greater than the risk-free rate of money are substantively equivalent to credit insurance and put options. The extra interest rate is equal to insurance premiums paid to the lender for taking credit risks. The extra interest can also be viewed as having the lender sell a put option. The lender collects a premium for the right to put to the borrower, or require the borrower to buy, certain assets in certain events."
- Wells Fargo And The Rousseau Story
Found via Naked Capitalism. In March 2000, Norman and Oriane Rousseau put 30 percent down to buy a house at 580 Wilshire Place, Newbury Park, CA. In the following years they were solicited to refinance their loan. In October 2007 they met with the loan...
- Reforming A Broken Mortgage System - By George Soros
Found via Simoleon Sense. With the private sector largely incapacitated, the GSEs and FHA became virtually the only source of mortgage financing. This is a paradoxical situation in which a fundamentally unsound business model holds a quasimonopolistic...
- 2009 Chou Funds Semi-annual Report
CONSTANT MATURITY SWAPS: With world governments flooding the system with liquidity and keeping interest rates unduly low, we wonder what financial instruments we can use that will protect us if inflation takes hold. We want an instrument similar to an...
- What Are You Doing With Your Tax Refund?
April 15th is fast approaching us. That wonderful deadline where that mysterious Uncle Sam that I've still yet to meet comes either asking for money or sends me a check. It's time to look at the ways you can use any refund coming your way....
- Net Worth Update - December 2011
December wasn’t a great month, but that was mainly due to the fact that I finally got a chance to be a home and recalculate my debt that I owe. This change should’ve been reflected back in October but I’ve been working a whole lot and haven’t...