#how does a equity loan works

[todaynewsonline]

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[pandemic-info]

UPDATE: a judge blocked this for now: https://apnews.com/article/donald-trump-pause-federal-grants-aid-f9948b9996c0ca971f0065fac85737ce

—

This is a huge fucking problem.

These grants account for more than 10% of the GDP. 3 trillion – wiped out.

From the article:

The funding freeze by the Republican administration could affect trillions of dollars and cause widespread disruption in health care research, education programs and other initiatives. Even grants that have been awarded but not spent are supposed to be halted.

“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” said a memo from Matthew Vaeth, the acting director of the Office of Management and Budget.

(Use of that language, that entire segment, "Marxist equity ... policies" is disgusting. If you think you're wary of propaganda and you do not see the enormous red flags in that statement, I do not know how to help you. If you're not beyond it, maybe pick up a history book — the 1930s are particularly pertinent.)

The average person may not understand just how far-reaching this is, how many programs and services are covered by grants, that regular people rely on all across the US and globally.

Not to mention how many people just had their livelihood demolished.

Researchers, for example, spend months and years writing grant proposals, their work and income relies on these cycles. So even if this is "temporary", a lot of people are going to struggle.

This is not just a few people in lab coats somewhere, working on something you don't care about. Government-funded research is released to the public, since we paid for it, and is very typically about things the public will want to know:

Is this product safe or deadly?

Is this medication actually a "wonder drug" or does it harm you in the long term?

Is this pollution going to affect us long-term?

Etc.

Seriously, if you wanted any of those things to get better — you wanted lower rates of cancer and other deadly and disabling disease? You worry about trusting public health guidelines because you're concerned about bias and vested interests in research? You want "small government" that doesn't interfere with people's bodies based on a small group's religious dogma, with zero basis in factual, verifiable reality?

Then you should have voted to keep this administration out of government.

Because their idea — which is outlined in Project 2025, and they are following it closely — is that research will be required to rely 50% on private funding.

Guess what private funding introduces a ton more of: private interests, private bias. The interests of stakeholders who do not give a shit if you are being killed by their product, as long as line goes up in the short run.

But even beyond scientific researchers — and those who rely on that work, e.g. journalists, science communicators, public health advocates, scientific artists —

grants fund others like: teachers, police, farmers, women's and homeless shelters, native orgs, medical workers, and on the list goes.

All pending "review" by a thoroughly unqualified gang of convicted criminals and cronies.

[simply-ivanka]

Why Do the Young Vote Left?

Socialist teachers lead them to think of government as a free-money tree.

It’s the gifts. The progressive vibe is that big government will take care of you. It knows what’s best for you. It will redistribute money how it pleases. You need to put a smile on your face while it takes away your laurels, guns and money. “We believe in the collective,” Ms. Harris declared, much like Hillary Clinton’s “it takes a village.” Equity in Schenectady. Handouts for all.

You want proof? Ms. Harris’s Senate voting record is leftward of socialist Bernie Sanders. Vice-presidential candidate Tim Walz fawns over China, saying “everyone is the same and everyone shares.” Viva la revolución and Che Guevara T-shirts for all.

This is antifreedom. Too many of today’s youth fall in line with progressives because they’re undereducated and overindoctrinated with someone else’s agenda. I watched in horror as local high-school biology classes spent weeks on the science of recycling centers and only a short afternoon on mitochondria and mitosis. Profit is a bad word. It’s gimme, gimme, whether it’s student loan forgiveness, free healthcare or tax credits.

Who’s to blame? Misguided capitalism-hating social-studies teachers to start, with Tim Walzian thinking: “One person’s socialism is another person’s neighborliness.” Who is he, Mr. Rogers? Add like-minded college professors. Work ethic and ambition are evaporating.

Worse, Pew Research notes almost a third of currently childless 18- to 34-year-olds aren’t sure if they ever want children. Why? The Harris campaign’s “climate engagement director,” Camila Thorndike, is among the hesitant, telling the Washington Post, “I want to protect them from suffering.” Perpetually pessimistic progressive prognostications induce fear. No wonder U.S. fertility rates are at historic lows.

OK, I know I’m asking for trouble. Every time I write about youth, I get a chorus of comments and tweets telling me I’m an old man screaming, “Hey you kids, get off my lawn.” Yeah, yeah. Very clever. I’m not that old. But in the Kamala collective—as California attempted—private “ornamental” lawns are out, and drought-resistant vegetation is in. Progressives literally want you off your own lawn.

My conversations with young folks who do exhibit some actual drive show their confusion: “I want to do a startup.” Great! To do what? “A sustainable something or other. To save the planet.” OK, is it productive? “What’s that?” Does it scale? “Huh?” Will it do more with less? “Not really, it needs lots of money to keep going and save more of the world.” Sounds like a nonprofit. (That usually invokes a smile.) Actually, wealth comes from delivering ever-cheaper stuff to millions of people, not handouts. “I don’t care about money.”

OK, I say, but progress and societal wealth happen when you delight customers and postpone consumption to reinvest profits into better products. The looks on their faces are as if I’m describing Chinese arithmetic.

Our youth aren’t lazy but lost. Progressives have strong opinions about society but no viable solution beyond handing out other people’s money—taken from the few who actually are productive, drive progress and generate wealth by fulfilling customer needs. It’s a downward spiral: When progressives tax—screaming “fair share!”—they cripple the productive few who actually create the real non-burger-flipping, get-out-of-your-parent’s-basement jobs.

To aggressive progressives, government is simply a magic money tree. Vote left and dollars appear. The gross incompetence of government—think billions for eight electric vehicle chargers—destroyed healthcare (thank you, ObamaCare) and education (assisted by Randi Weingarten’s teachers union) and is close to destroying energy (net zero), even while the Biden-Harris administration works hard to destroy Big Tech—one of the few productive industries. And I’ll never forgive progressive Hollywood for turning “Star Wars” into unwatchable wokey Wookiee drivel.

What industries will be left standing? Who cares, because the dreamy types think generative artificial intelligence will kill all jobs and government will provide universal basic income so they can Zyn, TikTok and play College Football 25 videogames all day. A naive youthful triumphalism.

This is a false endgame. There is so much more to be invented: drugs, immunotherapy, fusion, self-folding clothes, humanoid robotics, flying cars. Hard brain work plus quality recharging leisure time is the goal, not a nation of welfare queens.

I feel sorry for the youth that do care, do work hard, are productive and help push the boulder of progress up that steep slope, while essentially carrying all the others on their backs. It’s you against the collective, the village, which is always about being supported, pampered, living off someone else’s hard work and then complaining that the handouts aren’t big enough. So, yeah, get off my lawn, while lawns are still allowed.

[subdee]

Project 2025 goons wrote the memos requiring that

all "policy making" positions at federal agencies henceforth be political appointments, AKA filled by Trump loyalists rather than career civil servants;

2. All federal positions be "in office" only - not work from home - in a move Elon Musk has said would lead to a "welcome" voluntary reduction in the federal workforce.

...according to Molly White (they forgot to scrub the metadata from their PDF reports), so all that stuff about how Trump wasn't going to do project 2025 was of course a lie and we should expect them to continue shoving their unpopular agenda down our throats, in many cases illegally and contra the will of Congress.

BUT WHICH PROJECT 2025 GOON WROTE THE MEMO PAUSING ALL FEDERAL GRANT MONEY AS OF 5PM TODAY?

Edit: federal judge blocked the freeze, here's the details of that:

(Gonna tag all these posts "us politics" for anyone who wants to start a blacklist for mental health reasons.

Me personally... well I stopped following the news, and to keep up with all the fuckery I am just reading metafilter and subscribed to https://whatthefuckjusthappenedtoday.com/ for the daily summary of exactly how quickly we are devolving into a fascist, anti-environmental, anti-public health, oligarchical dictatorship in the USA. )

It was definitely a goon because, I mean, look at this:

The American people elected Donald J. Trump to be President of the United States and gave him a mandate to increase the impact of every federal taxpayer dollar. In Fiscal Year 2024, of the nearly $10 trillion that the Federal Government spent, more than $3 trillion was Federal financial assistance, such as grants and loans. Career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities. Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending "wokeness" and the weaponization of government, promoting efficiency in government, and Making America Healthy Again. The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.

Goon writing through and through. Impacted are programs such as:

the Department of Agriculture’s tribal food sovereignty program,

Head Start,

the Veterans’ Affairs Department’s suicide prevention and legal services grants,

the Low-Income Home Energy Assistance, or LIHEAP, program,

Meals on Wheels,

numerous sexual assault prevention programs within the Department of Justice.

Plus basically all the rest of them via uncertainty... this is money already approved and allocated by Congress incidentally so 100% illegal for Trump to unilaterally block BTW, and there's a bunch of lawsuits pushing back already just as there were for the "birthright citizenship" memo (already temporarily blocked by a Federal judge) and the pause on all new foreign aid.

So now we have to argue, is this sheer incompetence or is it a deliberate attempt to cause mass civil unrest and/or demoralize, kill off or drive out the Democratic voters? Does it matter when people - all kinds of people but mainly poor people - are going to die while this mess, or one of the other many messes of this admin, gets sorted out?

I dunno, but I can tell you that when I worked for a school district that did budgeting like this - acting like every penny was personally coming out of the pocket of the superintendent - it was because said superintendent was stealing money from the budget. So I personally wouldn't discount that the chaos is intentional and a cover for mass theft from the federal budget... they just (illegally) fired all the nonpartisan federal budget inspectors, of course.

Anyway... WTFjusthappenedtoday for your daily summary of exactly how much fuckery is going on today. And in the interests of not depressing anyone further, I'll end it there.

[posttexasstressdisorder]

WhatMatters

Your guide to California policy and politics

By Lynn La

January 29, 2025

Presented by Dairy Cares, Uber, California Water Service and Alibaba

 

 

Good morning, California.

Federal funding freeze prompts chaos, confusion, lawsuits

President Donald Trump speaks during an election night event at the Palm Beach Convention Center in West Palm Beach, Fla. on Nov. 6, 2024. Photo by Chip Somodevilla, Getty Images

President Donald Trump has called for a temporary freeze on certain federal aid — sowing confusion and concern among California’s state officials and advocacy groups. 

As CalMatters’ reporters explain, a memo from the U.S. Office of Management and Budget directed federal agencies to pause financial grants and loans that could be “implicated” by any of the president’s prior executive orders. 

The directive does not include Social Security and Medicare, as well as “assistance provided directly to individuals,” such as food stamps, Pell grants and rental assistance. It does, however, target “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” 

Despite the two-page memo’s sweeping breadth, its few details made it unclear which key programs will be affected and for how long. The administration later requested federal agencies to send budget details for 3,200 federal spending programs, and information about whether the programs support undocumented immigrants or promote abortion, “gender ideology,” or “diversity, equity and inclusion” efforts.

The administration intended the directive to go into effect Tuesday, but a federal judge temporarily blocked the order.

Reactions by California’s elected Democratic officials ranged from cautious to dire. Gov. Gavin Newsom said, “We could react to all this or we could have a more constructive wait-and-see.” While California U.S. Rep. Jared Huffman said to CalMatters, “This kind of destabilization is the way authoritarians seize power. ... I think it’s dictatorial.”

California is expected to distribute $168 billion of federal grants and other funding in 2024-25, according to Assembly budget advisor Jason Sisney.

Read more here.

 Focus on Inland Empire: Each Wednesday, CalMatters Inland Empire reporter Deborah Brennan surveys the big stories from that part of California. Read her newsletter and sign up here to receive it.

How will Trump’s second presidency affect your corner of California? CalMatters is working with public radio partners to gather perspectives across the state. Share your thoughts here.

Wildfire newsletter: CalMatters is teaming up with PBS SoCal, LAist and KCRW to offer a free newsletter that delivers new and accurate information about the Southern California fires. Read an edition and subscribe.

 Other Stories You Should Know

 Paying utility shareholders

Power lines in Sacramento on Sept. 20, 2022. Photo by Rahul Lal, CalMatters

When you pay your utility bill, there’s a baked-in cost that you won’t see in any line item. Known as a “return on equity,” this amount goes toward shareholders for the risk of investing in utility companies, writes CalMatters’ Malena Carollo.

The California Public Utilities Commission is responsible for determining the state’s rates of return, which play a big role in companies’ profits. In 2024 the approved shareholder return rate for Southern California Edison, PG&E and San Diego Gas & Electric were around 10% — more than double the rate of 10-year U.S. treasury bonds, which is used as a benchmark.

A CalMatters analysis of return rates dating back to 2020 found that the rates cost California customers hundreds of millions of dollars annually. This comes during a time when Californians pay more than twice the national average in utility bills, with costs nearly doubling within the last decade. 

Some of the price hikes are due to wildfire prevention efforts. Edison equipment is currently under scrutiny by investigators who are looking into the cause of the Eaton Fire that killed at least 17 people.

Read more here.

 

The price to attend CA private college

The Loyola Marymount University campus in Los Angeles on Jan. 17, 2025. Photo by Jules Hotz for CalMatters

Among California undergraduates, about 160,000 pursue degrees at private, nonprofit universities. Private institutions have many benefits, such as smaller class sizes and specific academic programs. But for low-income students, the costs to attend these schools can be exceptionally high, explain CalMatters’ Mikhail Zinshteyn and College Journalism Network reporters. 

A CalMatters analysis found that on average, a low-income freshman — defined as a household income below $48,000 — paid around $21,000 to attend private campuses for one year in 2021-22, the latest year information was available. In comparison, the net price to attend California State University is around $6,000 a year on average, and under $10,000 at the University of California.

There are some exceptions: Stanford, for example, ends up being nearly free for freshmen whose family have incomes below $100,000. But part of the reason why private colleges are expensive is because other than state financial aid for their students, they don’t get the state subsidies public universities receive, which is about $10 billion annually.

Read more here.

 

And lastly: Undercover video

Anti-abortion activist David Daleiden, who recorded clandestine tapes of Planned Parenthood officials, outside a San Francisco courtroom on Feb. 11, 2019. Photo by Jeff Chiu, AP Photo

After nearly a decade, a criminal case involving anti-abortion activists and a controversial video of Planned Parenthood executives in California has concluded. Find out what happened from CalMatters health reporter Kristen Hwang.

 California Voices

CalMatters columnist Dan Walters: The Southern California wildfires will turn California’s chronically unbalanced budget from bad to worse.

 Other things worth your time:

Some stories may require a subscription to read.

 CA regulators deny Trump’s claim that military ‘turned on the water’ in the state // AP News

Edison denied causing 2017 fire, but Feds say utility suppressed evidence // Los Angeles Times

Starting wildfires would be federal crime under CA congressmen’s bill // The Sacramento Bee

Where are the hazardous materials from the LA-fires going? // LAist

Can the Central Valley’s agriculture industry survive Trump? // Los Angeles Times

CA farms fail as land values plunge amid groundwater crisis // The Mercury News

Trump cabinet nominee says she’ll work to kill CA pork law // San Francisco Chronicle

Californians in Congress struggle to counter Trump // Los Angeles Times

Protesters rally against El Cajon proposal allowing city police to assist ICE // The San Diego Union-Tribune

Bonta took donation from casino operator under investigation by his own office // San Francisco Chronicle

 

See you next time!

Tips, insight or feedback? Email whatmatters@calmatters.org. Subscribe to CalMatters newsletters here. Follow CalMatters on Facebook and Twitter.

About Us· How We're Funded· Subscribe· Donate

 

CalMatters 1017 L Street #261 Sacramento, CA 95814 United States

[poipoipoi-2016]

@youzicha

#trying to understand wtf is happening to svb because uh. i want my salary

The business model of banks

The way banks work is that they take in deposits and make loans.

So I put money in a bank, but ALSO I took money out of a bank to get a car loan which let me buy the car that I used to commute to work to pay off the car loan. And also drive to Death Valley. GOOD little car. Could go from Vegas to SF on a tank of gas.

What this means from a bank's perspective is that your bank balance is a problem and the loans they make are assets. Because you took in $20K of deposits and then gave me an $18K car loan that I paid back at $400/month for 5 years. And at the end of 5 years, you will have taken $18000 and turned it into $24000.

And if one person asks for $2K back, you have $2K. And if someone(s) a year from now asks for $10K back, you have:

$2K in cash

But also the $4800 in cash I paid you last year. Minus the amount of money you spent last year running the actual bank.

The money used to found the bank (The Equity)

The ability to shop around and say "Poi is going to pay us $400/month every month for the next 4 years and if he stops doing that, you get a gently used Chrysler 200 to sell. How much are you willing to give us for that cashflow?" <- THIS IS THE PROBLEM

So as long as you are:

Liquid, meaning that you can give people their money back when they ask for it

Solvent, meaning that if EVERYONE asked for their money back, you'd sell off all the loans you'd made, give them their money back, and also have a >$0 pile of cash to go Scrooge McDuck in after you shut down the bank.

you get to keep existing.

If you're liquid, but non-solvent and somehow manage to hide it, this is called Bernie Madoff. But also "The Bank of Japan in 2023".

If you're solvent, but non-liquid, someone rolls up and buys your assets for "The value of your liabilities and also this Snickers Bar" and that's a pretty standard action.

And if you're non-liquid and insolvent, uh look crypto is weird but go look at FTX. There's a list of creditors and several months or even years from now, you'll get a fraction of your deposits back based on the recovery value of the underlying assets.

What specifically happened to SVIB

So you are a bank in 2019. And specifically, you are the Bank of Startups. And startups are very bad loan risks and also have giant piles of VC checks so they don't actually need loans.

$200 Billion of VC checks in fact. Which they gave to you. And because you're a good bank, you put $20 Billion in the cushion fund and now you have to figure out how to use $180 Billion to generate enough money to keep running the bank.

Unfortunately, it's 2019 and all the liquid risk-free assets pay 0.08% and that's not enough money to pay your bank tellers. So you make a (in retrospect dumb, in practice I'm not sure it's dumb enough I scream just at SVIB) decision to put it into:

A bunch of Treasuries that pay 1.5% or so

A bunch of mortgage-backed securities which are default risk-free b/c of post-2008 reforms. If someone forecloses, the government pays you back at par.

Corporate bonds which are risky but hey that's why you charged 5% right?

So these are illiquid, but they're not like... that illiquid and if interest rates ticked up a percentage point, a 5-year bond with 3 years to go is still like 98% of face value, it's totally fine.

And now you have $4-6 Billion/year to pay your bank tellers with and also improve that cushion.

And if you don't do these things, Silicon Valley Investment Bank does not exist. CHASE BANK does not exist. This was a prerequisite to having banking services in this country post-2008 in literally 0 interest rate environments.

And then the Fed goes on a historically unprecedented interest increase. So your 1.x% bonds are now competing in the market with 5% bonds and your 2.6% mortgages are competing with 7% mortgages and hoooo boy.

A 2.6% $400K mortgage pays you $20K/year and is currently worth $260K at 7%. $180 Billion of assets marked down to ???? Billion. 7 years to break-even and your bank tellers need to get paid.

Now for most banks, this isn't a problem. They're an actually profitable Bernie Madoff by design as a feature. They can't give everyone their money back, but they don't have to. And the bonds are paying up and the mortgages are paying up and 5% nominal GDP growth isn't a lot, but it's something and of course, you're making NEW loans at 7% so if you can just keep paying 0% interest on bank deposits and keep pulling in 7% interest loans, you'll make it out of the next few years, and you're suddenly solvent again.

Except for you.

Because you are the Bank of Startups.

And when interest rates went up, VC funding went down. So you have these perfectly good businesses (for now at least) that are constantly and continuously drawing down on their bank accounts.

And remember, this isn't 1982. You're only making 2%. Your cap ratio is 5%. All those mortgages paying in 5% of book value every year and if you get out over your skis, you cease to exist. You're going to hear the words "Duration Risk" a lot and this is that.

So you try to do an equity raise. You'll sell the rights to some of that 5% cashflow (and remember, it's increasingly 7% interest/10% cap which is slightly more exciting) in exchange for the money you need NOW TODAY to pay out your withdrawals.

At which point Andreesen goes "Uh what my friends?", tells all of his buddies to pull their cash, and $42 Billion gets withdrawn in less than 24 hours. Leaving $160 Billion behind.

And now we remember that bank accounts over $250,000 (IE: One paycheck at a $6.5 Million payroll company) aren't technically FDIC insured.

Lessons Learned

And the thing is that I really can't just blame SVIB here. They got stuck in a pretty terrible trap caused by the US Government. And the US Government likes it when you buy Treasuries and likes it when you buy and SVIB was, more or less, doing the things you as a society wanted them to do.

And the Federal Reserve explicitly destroyed them for it.

Don't get me wrong, they were weird. But I'm not sure they were weird enough especially given the constraints of 2019-2021 that I can just go "Eh, screw them". Spread that blame AROUND.

And any bank that can survive a FORTY PERCENT drawdown in the value of the underlying assets.... isn't a bank. At least not as we mean it here in 2023. The Fed's stress tests involve a 'severely adverse scenario' where 10-year US Treasury yields are at 0.7% (and only get to 1.5%). They're currently at 3.6%.

The second set of lessons that we learned today goes like this:

There are lots and lots and LOTS of reasons that small or medium businesses might temporarily or permanently want more than $250K in raw USD cash in a bank account at some point. This is now a banking risk. (There's some tricks you can play if you're really large, but those also have limits)

However, if you bank at Chase Bank (or any other bank on the too-big-to-fail list), you are infinitely insured. Because CHASE BANK is backed by the entire combined firepower of the US Government and banking sectors. If Chase Bank stops existing, the nukes have fallen.

So why would I ever use a local bank for anything at all ever again? At which point you now get another round of contagion in the system where everyone gets out of these regional banks. Because remember, EVERY BANK IN THE WORLD INCLUDING THE BANK OF JAPAN is now insolvent.

Because they were destroyed for the crime of "Doing exactly we wanted them to do". Oh sure, in a risky sort of way, but see that note above about the Fed Stress tests.

Where "What we wanted them to do" involved buying government debts

Are you uh... 100% absolutely certain you want to be teaching those lessons? That if you buy US Treasuries, you will be destroyed for your crimes? That if you use a regional bank and they are destroyed for their crimes of making loans to the Feds, your business dies with it?

[infamousbrad]

They had "pig butchering" scams in the 1930s.

Please tell your friends and family about this, because you don't know who doesn't know this. I forget how many people don't know this, too, but then I remember that I learned about it from a 1940 non-fiction best-seller that I only heard about because it was popular among 1940s and '50s science fiction authors. (And then later made into a movie called "The Sting," which, via a long chain of copies, also got made into a long-running TV series called Leverage.) The story goes like this:

The Roper identifies and ropes the Mark, who gets handed off to the Grifter, who Shows the Mark the Store. The Store Baits the Hook, then puts the Mark On the Send, and then Stings the Mark when they get back to the Store, and then Blows them Off.

I just got around to watching the John Oliver episode about what the FBI now calls "pig butchering" scams, and, having read David Maurer's original 1940 book about the professional jargon of long-con confidence artists, The Big Con, I recognized every step of it. I spent the whole segment saying the same thing over and over again: "Oh, is that what they're calling that now?"

Do you believe that basically every rich person in the world got rich because they got away with some scam? Of course you do. But are you more jealous than angry? Do you wish someone who knew you would like you enough to let you in on the scam? That's why you're a Mark.

A Roper is a person who's trained in how to go into places where it's normal to have conversations with strangers (back then, cross-country trains and inter-continental ocean liners; nowadays, your smartphone) and easily make friends. Most of the Roper's new friends quickly get ignored; what they're looking for is a resentful, jealous middle or upper middle class person who wishes someone would tell them the illegal way to get rich.

That's when the Mark finds out that the Roper is in the middle of getting rich him/herself! Thanks to The Grifter! And asks the Mark would you like to meet the Grifter?

The Grifter works out of the Store; Ropers bring Marks to him/her. The Store looks entirely convincingly like a place (or an app or a site) where someone dirty, on the inside, could easily cheat people out of tons of money, by doing things like trading on secret information. And the Mark is happy to find out that the Grifter could easily make tons of money for them if they had anything to invest in the Store. The Mark hands over the small amount of money they have on them and, very quickly, the Grifter Baits the Hook: gives them their winnings, and apologizes for how small they were. If only the Mark had more money to invest ...

At which point the Mark, who is On the Send, goes back home and empties out savings, takes out one or more equity loans, maybe even embezzles from his/her work (fully intending to put the money back) and brings it all to the Store.

At which point, instead of getting back winnings, the Mark gets Blown Off. If the Grifter does it smoothly, they can sting the same Mark over and over again: "It's not our fault, you did it wrong." Or "it's not our fault, this time the cops intervened, you're lucky you weren't arrested."

Any newly met "friend" who offers to tell you how to get rich is not your friend. You're the Mark and they're the Roper. The "way to get rich" method they offer you, that looks like it couldn't possibly be fake, too many people would have to be in on it? Is a Store, and they're making so much money off of Marks like you that they can easily hire that many people to play their parts. Oh, but the first time you tried it, you made money? Of course you did; how else would they put you On the Send? And when you come back from being put On the Send, you're not going to get rich, you're going to get Blown Off.

[anniekoh]

Two books on the pathological optimism of mainstream American discourse. 

Ehrenreich begins with her experience with breast cancer and the ubiquitous infantilizing teddy bears. One breast cancer foundation distributed gift totes that included rhinestone bracelets and a pink journal with a box of crayons. “Certainly men diagnosed with prostate cancer do not receive gifts of Matchbox cars.”

Bright-sided: How Positive Thinking is Undermining America by Barbara Ehrenreich (2009)

A sharp-witted knockdown of America's love affair with positive thinking and an urgent call for a new commitment to realism.

Americans are a "positive" people -- cheerful, optimistic, and upbeat: This is our reputation as well as our self-image. But more than a temperament, being positive is the key to getting success and prosperity. Or so we are told. In this utterly original debunking, Barbara Ehrenreich confronts the false promises of positive thinking and shows its reach into every corner of American life, from Evangelical megachurches to the medical establishment, and, worst of all, to the business community, where the refusal to consider negative outcomes--like mortgage defaults--contributed directly to the current economic disaster. With the myth-busting powers for which she is acclaimed, Ehrenreich exposes the downside of positive thinking: personal self-blame and national denial. This is Ehrenreich at her provocative best--poking holes in conventional wisdom and faux science and ending with a call for existential clarity and courage.

This reminder of how horribly wrong the economists were in the lead up to the 2008 mortgage/financial crisis from Ehrenreich.

Professional optimists dominated the world of economic commentary, with James Glassman, for example, a coauthor of the 1999 book Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market, winning a job as a Washington Post columnist and showing up as a frequent news show guest. Escalating housing prices were pumping up the entire economy by encouraging people to use their homes “like ATMs,” as the commentators always put it -- taking out home equity loans to finance surging consumption -- and housing prices were believed to be permanently resistant to gravity.

David Lereah, the chief economist of the National Association of Realtors, published a book in 2006 entitled Why the Real Estate Boom Will Not Bust and How You Can Profit From It and became “the most widely cited housing expert” at peak of housing bubble.

And how self-help culture nestles into Christian frames

As sociologist Micki McGee writes of the positive-thinking self-help literature, using language that harks back to its religious antecedents, “continuous and never-ending work on the self is offered not only as a road to success but also to a kind of secular salvation.” The self becomes an antagonist with which one wrestles endlessly, the Calvinist attacking it for sinful inclinations, the positive thinker for “negativity.”

Never Saw It Coming: Cultural Challenges to Envisioning the Worst by Karen A. Cerulo (2006)

People—especially Americans—are by and large optimists. They’re much better at imagining best-case scenarios (I could win the lottery!) than worst-case scenarios (A hurricane could destroy my neighborhood!). This is true not just of their approach to imagining the future, but of their memories as well: people are better able to describe the best moments of their lives than they are the worst. Though there are psychological reasons for this phenomenon, Karen A.Cerulo, in Never Saw It Coming, considers instead the role of society in fostering this attitude. What kinds of communities develop this pattern of thought, which do not, and what does that say about human ability to evaluate possible outcomes of decisions and events? Cerulo takes readers to diverse realms of experience, including intimate family relationships, key transitions in our lives, the places we work and play, and the boardrooms of organizations and bureaucracies. Using interviews, surveys, artistic and fictional accounts, media reports, historical data, and official records, she illuminates one of the most common, yet least studied, of human traits—a blatant disregard for worst-case scenarios. Never Saw It Coming, therefore, will be crucial to anyone who wants to understand human attempts to picture or plan the future. 

[beautifulpersonpeach]

BPP, sorry for spamming your inbox but pls answer just one question for me. Why would Hybe take out a loan to buy shares of SME if it was a good idea? Doesn’t this mean Hybe is struggling and SME is better and they have the upper hand?

**

Hi Anon,

Because leverage is typically cheaper than equity, especially if you’ve got the cashflow to service the loan. It costs next to nothing to use leverage when the alternative is diluting equity for your shareholders. HYBE would’ve been stupid to not use leverage since it’s essentially free money considering their working capital. Especially for shares in a company like SM where the value-add to HYBE is only incremental.

Like the fact is HYBE frankly does not need this SM deal to close (and you can clue this in from the structure of their financing deal), but the Kakao deal has 2nd and 3rd order implications that seriously compromise the integrity of the market.

Sigh, see this is exactly what I mean and why I say I do nothing here but laugh and listen to music. And the rest of what I say here is not to harp on you Anon, but your question is one I’ve seen in K-pop spaces of late and the reasonings of K-pop stans on this issue is so far out of step with reality I just have to unlook. Like I’ve said before, one thing you’ll quickly notice the more you spend time in k-pop spaces listening to k-pop stans, is that none of these people actually have any idea what they’re talking about.

For anybody who has been paying attention, SM has been in a bad way since at least 2019 when analysts started drawing attention to their skinny margins (bled down by Lee Sooman skimming off the topline and from settlement payouts due to several lawsuits (from idols and companies) and federal fines. The Korean government had pardoned Lee Sooman for his crimes in 2004 and since then levied fines instead.)

This is why when I’d see them mention HYBE’s financial statements or stock movements or routine audits, having zero idea of what the Big3’s look like, I just laugh and move on. And hard as it might be to believe, I’m not even a fan of HYBE, some of their decisions have earned an eyebrow raise from me, but the fact of the matter is no entertainment company on the KRX is better run than HYBE and that’s been true for at least 2 years now.

Like I’m trying extra hard right now to be just matter-of-fact in what I’m saying because I don’t want to unnecessarily offend SM stans who are already sensitive from this embarrassing turn of events.

A lot of k-pop stans are financial illiterates and that’s okay because it’s probably true most people in general don’t know how to do their taxes on their own nor went to business school, thats fine. But coupled with the hyper-competitive nature of k-pop and the irrational virulent animosity k-pop stans have to anything connected to HYBE, it makes them insanely easy to manipulate. And that’s what that video SM published by Chris Lee does.

Because, again, anybody who has actually seen the statements of both companies can pick apart that video in no time at all for its half-truths and obfuscations. The purpose of the video is to fear-monger and given Chris Lee’s track record, was expected. What investors actually care about is if the tender offer is attractively priced for the book value of the company plus its growth multiple - a multiple that has expanded across the entire industry since BTS blew up globally in 2018.

Anyway, I’ll drop the work speak and get back to listening to music. All of this is entertainment though my heart hurts for the artists torn over their devotion to LSM and what’s happening - the hold he has over these people is no joke, but it’s also been interesting seeing all the ways stans of SM groups are coping lol.

[prophet-one]

SVB bank failure

I comprehend the reason why SVB failed: its a classic bank run where the bank does not have the liquid assets to fund withdrawals. This the “other shoe dropping” wrt the rapid increase in interest rates.

what stands out to me are two questions: why do companies have that much cash in the bank? How did the financial markets in general fail?

The SVB failed because the financial markets are NOT working. The markets are not providing suitable securities for companies to park their excess cash. SVB was probably seen as a “safe” place to store cash. That assumption is obviously false. 

Question: why did the corporate depositors have so much money in cash accounts versus other securities?

Two months ago I was discussing cash management with my financial advisor. The key point he made about Bonds and funds that invest in bonds, is to use rolling maturity. The bond values will lag the market (especially with rapid changes in interest rates), but you wont lose principle. (BTW the change in bond values has to do with the liquidity price not the book value... if you hold bonds to maturity, then you dont lose value). So, back to the question about the depositors... when you have a billion plus of cash to invest you should be able to do something better than stash it in a low interest chequeing account. Something doesnt seem right about that.

Question: why do corporate depositors have so much cash on hand in the first place?

The financial markets “should” provide companies with cash “when and as” they need it through equity and bonds and loans. When a company like Roku has over a billion dollars sitting around “just in case they need it”, this is a clear sign that the financial markets are not working. Different sectors have different requirements for liquidity; but having 2 to 5 years of excess cash on hand is well beyond any reasonable requirement.

I completely understand that companies like the security blanket of having 2 or 3 or 10 years of cash sitting around. However, that is a total waste of shareholder resources, given that shareholders can make better investments with that cash. There is supposed to be a tax on capital to disincentivize hoarding... I guess that tax is not high enough.

When the regulators have time to get around to sifting through remains; I would like them to investigate these two questions: why are corporations not investing their excess cash appropriates? why do corporations have so much excess cash, why cant corporations raise the cash they need in an efficient manner? 

[todaynewsonline]

How Does a Home Equity Loan Work?

How Does a Home Equity Loan Work?

How Does a Home Equity Loan Work?:- If you are a homeowner and need a large sum of money to finance a home renovation project or cover unexpected expenses, a home equity loan may be an option for you. In this article, we will explain how a home equity loan works, including its benefits and drawbacks, and provide tips for deciding whether it’s the right financial solution for you. Table of…

[notebooknebula]

Down Payment Options for Homebuyers

Watch The Full Interview:

"How Dads Achieve Financial & Time Freedom By Raising Private Money"

Adam Zach has a magnificent obsession with learning and is addicted to personal growth. He is a family man with a business, not a businessman with a family.

He retired from the Civil Engineering profession at age 32 by leveraging real estate investing. He currently holds 50 single-family rentals in 13 different states. Now his main passion is helping Dads with young kids who are into real estate achieve passive income while working a full-time job and putting family first.

At age 34, Adam lives in Fargo ND with his amazing wife and 3 young kids ages 5,3,&1.

Mission:

To help those who are unable to qualify for traditional bank financing achieve the American dream; home ownership.

Vision:

To be the go-to solution for people who do not qualify for a traditional home loan.

Adam Zach and Jon Enright are the creators of Home Equity Partner and provide a variety of custom housing options to future homeowners through a unique renting option.

At Home Equity Partner, they have developed a new tool that allows you to pick any home listed “for sale” and live in it. They specialize in Rent-to-Own, Lease Purchase Options, and Contract for Deeds and seek to help individuals and families gain homeownership to live the American Dream.

Home Equity Partner has recently been awarded the 2019 Greater Grand Forks Chambers Shark Tank winner, the 2019 Innovate ND Phase I and Phase II Program, and the 2020 DisruptWell winner with their innovation, scale, and solutions. They also work with real estate agents or bankers who have someone that does not qualify for a traditional bank loan.

Home Equity Partner also works with investors interested in supporting homeownership while making a modest return on their investment.

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It is available FREE (all you pay is the shipping and handling) at

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What is Private Money? Real Estate Investing with Jay Conner

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Jay Conner is a proven real estate investment leader. He maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal without using his own money or credit.

What is Real Estate Investing? Live Private Money Academy Conference

YouTube Channel

Apple Podcasts:

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[seniorsfirstseniorsfirst]

Understanding Reverse Mortgages: A Financial Option for Australian Seniors

As Australians enter their retirement years, many seek ways to secure their financial future. One solution that has gained popularity is the reverse mortgage — a product designed to help seniors access the equity in their homes. If you're considering this option, it's important to understand how reverse mortgages work, their benefits, potential drawbacks, and how to find the right professional help to guide you through the process.

What is a Reverse Mortgage? 🏡

A reverse mortgage is a financial product that allows homeowners aged 60 or older to unlock the equity in their property. Unlike traditional mortgages, where you make regular repayments, a reverse mortgage lets you access the value of your home in the form of a lump sum, regular payments, or a line of credit, with no monthly repayments required.

The loan is repaid when the homeowner sells the property, moves into care, or passes away. Until then, you can live in your home and use the funds for any purpose, from covering everyday expenses to paying for medical treatments or home renovations.

How Does a Reverse Mortgage Work? 🔍

A reverse mortgage provides you with access to the equity in your home, which you do not need to repay until you sell the property or move out. Here's how the process generally works:

1. Eligibility ��

To qualify for a reverse mortgage in Australia, you typically need to meet the following criteria:

The borrower must be 60+.

Own your home outright or have a small remaining mortgage balance.

The property must be your primary residence.

2. Application Process 📝

Once you decide that a reverse mortgage might be the right solution for you, the next step is applying for the loan. You'll need to provide some basic details about your property and financial situation. While Seniors First does not offer financial planning or advice directly, we collaborate with experienced reverse mortgage brokers who can help you navigate the application process and ensure you get a low rate & a great deal.

3. Interest and Fees 💳

Reverse mortgages are subject to interest, typically compounded over time. This means the loan balance will grow as interest accumulates. While no monthly repayments are required, it’s important to understand how the interest will impact your loan balance in the long term.

Additionally, there are usually setup fees, such as valuation fees, legal costs, and possibly ongoing administration fees. These can vary between providers, so it's essential to clarify these costs upfront.

Benefits of Reverse Mortgages 🌟

For many seniors, a reverse mortgage can provide valuable financial flexibility. Here are some of the key benefits:

1. Extra Cash for Expenses 💰

Reverse mortgages provide a way to tap into the equity of your home and access funds for various needs, such as healthcare, home improvements, or even leisure activities. This can be particularly helpful for seniors whose income may have decreased in retirement.

2. Stay in Your Home 🏡

One of the primary advantages of a reverse mortgage is the ability to remain in your home for as long as you like. Unlike selling your home, a reverse mortgage lets you continue living in the property, maintaining your independence and security.

3. No Monthly Repayments 🏠

With a reverse mortgage, there are no monthly repayments to worry about. This can relieve financial pressure, especially for seniors who rely on a fixed income. The loan is only repaid when the property is sold, or you vacate the property.

4. No Risk of Negative Equity 📉

The "no negative equity guarantee" ensures that you will never owe more than the value of your home, providing peace of mind even in times of fluctuating property markets.

Potential Drawbacks of Reverse Mortgages ⚖️

While reverse mortgages offer many benefits, there are some potential drawbacks to consider before planning:

1. Impact on Inheritance ⚰️

Since the loan, plus interest, is repaid when the home is sold, the amount left for your heirs may be reduced. This is an important factor to consider if leaving an inheritance is a priority for you.

2. Growing Loan Balance 📈

The interest on a reverse mortgage compounds over time, meaning that the loan balance can grow. If you live in the home for many years, the total amount owed can be significant. It's important to understand how this will affect the equity left in your home.

3. Fees and Costs 💸

In addition to interest, reverse mortgages come with various fees, such as setup fees, legal fees, and potentially ongoing administration costs. It’s essential to discuss these fees with a broker or lender to understand the total cost of the loan.

Finding the Right Reverse Mortgage Broker or Specialist 🔍

Given the complexity of reverse mortgages, it's crucial to work with a trusted professional who can guide you through the process. While Seniors First does not provide financial planning or advice directly, we work with specialists who can offer expert advice tailored to your situation.

A reverse mortgage broker can help you:

Evaluate Your Financial Situation: A broker will assess your needs and financial standing to determine whether a reverse mortgage is the right solution for you.

Compare Different Products: Brokers have access to a wide range of reverse mortgage options and can help you choose the one that best fits your needs, comparing factors like interest rates and fees.

Clarify Terms and Conditions: Brokers can explain the fine print, ensuring you fully understand the terms of the loan and how much interest will be applied.

Provide Ongoing Support: A broker will be there for you throughout the life of the loan, answering questions and aiding if your circumstances change.

Learn More About Our Services 🌟

At Seniors First, we aim to provide resources and connections for seniors to make informed financial decisions. While we do not offer financial planning or advice directly, we collaborate with trusted reverse mortgage brokers who specialize in helping seniors navigate these options. We understand that retirement can be a challenging time, and we are committed to connecting you with the right professionals to ensure that your financial future is secure.

If you're interested in learning more about reverse mortgages, reach out to us today. We’ll connect you with experienced brokers who can guide you through the process and help you find the best financial solution for your unique needs.

Conclusion 🌟

A reverse mortgage can be a valuable option for Australian seniors looking to access the equity in their homes without the need to sell or downsize. It offers financial flexibility, the ability to stay in your home, and relief from monthly repayments. However, it’s important to carefully consider the potential drawbacks, such as the impact on your inheritance and the growing loan balance over time.

By consulting with a qualified reverse mortgage broker or specialist, you can ensure that you make an informed decision that’s right for your financial situation. If you're considering a reverse mortgage, contact a professional today to explore your options and ensure a secure future in retirement.

[commercia-property-loan]

Home Equity Loan in Australia: A Guide to Unlocking Property Value

What is a Home Equity Loan?

A Home Equity Loan allows borrowers to access a portion of the equity they've built in their home. Equity is the difference between the property's current market value and the remaining mortgage balance. Lenders typically offer loans based on a percentage of this equity, enabling homeowners to utilize their assets without selling the property.

How Does an Equity Mortgage Work?

An Equity Mortgage functions similarly to a standard home loan, where the borrower receives funds secured against their home equity. These funds can be provided as a lump sum or a line of credit, depending on the loan structure chosen. Repayment terms vary based on the lender, interest rates, and individual financial circumstances.

Benefits of a Home Equity Loan

1. Access to Large Sums of Money

Since a Home Equity Loan is based on a percentage of your property's value, it often allows for larger borrowing amounts compared to personal loans or credit cards.

2. Lower Interest Rates

Because Equity Mortgage Loans are secured against a property, they generally have lower interest rates compared to unsecured loans. This can result in significant savings over time.

3. Flexible Use of Funds

Whether you're planning to renovate, invest in a second property, or fund education expenses, an Equity Loan provides flexibility in how the funds are utilized.

4. Debt Consolidation

Many borrowers use Equity Mortgage Loans to consolidate high-interest debts into a single, lower-interest loan, simplifying repayments and reducing financial strain.

Potential Risks to Consider

While a Home Equity Loan offers many advantages, it also comes with risks:

Risk of Foreclosure: If repayments are not met, the lender may take action against the property.

Fluctuating Property Values: If the property's value drops, borrowers may owe more than the home’s worth.

Additional Fees and Charges: Some lenders impose setup fees, annual fees, and penalties for early repayment.

Testimonials: Real Experiences from Homeowners

Emma, Sydney: “Using an Equity Loan, we renovated our home and increased its value significantly. The process was straightforward, and the lower interest rate saved us money.”

David, Melbourne: “I used a Home Equity Loan to invest in a second property. The interest rate was much better than a standard investment loan, making it a smart financial decision.”

FAQs About Home Equity Loans in Australia

1. How much equity can I borrow against?

Most lenders allow homeowners to borrow up to 80% of their available equity, though this varies based on financial standing and lender policies.

2. Can I get an Equity Mortgage Loan if I’m still paying off my mortgage?

Yes, but the amount you can borrow depends on the difference between your home's market value and the remaining mortgage balance.

3. Do I need to use the same lender as my current mortgage provider?

No, you can apply for an Equity Mortgage with a different lender. However, some fees may apply if refinancing is involved.

4. Are there alternatives to a Home Equity Loan?

Yes, alternatives include refinancing your mortgage, taking out a personal loan, or using an offset account.

Final Thoughts

A Home Equity Loan can be a valuable financial tool for Australian homeowners seeking to leverage their property’s value. However, understanding the risks, assessing financial goals, and comparing lender options are crucial before making a decision. Whether used for home improvements, investments, or debt consolidation, an Equity Mortgage Loan can provide financial flexibility when managed responsibly.

[sprayfoamremovals]

How Does Equity Release actually work

If you want to unlock equity in your property and you are over the age of 55, then an Equity Release loan could be just for you. There are various ways it can get paid out and you can even earn interest on these funds. Equity release is a very viable option for homeowners but there are certain things which could deter lenders from approving your loan.