Right to Vote
Apropos of voting with your feet, a reader says: “I am a native Californian, and I lived there my first 71+ years.
“Nineteen months ago, I decided that California wasn’t where I wanted to be in retirement as it’s only gotten worse there.
“I made the move to Costa Rica, and love it here. Yes, I’m fairly adaptable and have spoken the language since I was a kid, but life is quite a bit calmer here. I have no regrets. Pura vida.”
Our next contributor says: “In response to your question about voting on Nov. 3, YES, I will vote in-person.
“I have voted in most every election since turning 21 (I am 70 now), and served 22-years in the U.S. Marine Corps to insure that my children had that same right.
“I have voted in-person whenever I could, no matter the hazards or impediments (and there were some!), but when deployed or physically not able to be present on Election Day, I used the Absentee Ballot process. When available, I have also used early voting.
“Bottom line is that EVERY vote counts, and I will continue to exercise the right to use my vote as long as I am on this side of the dirt, be it in person, absentee or early voting!”
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Your Rundown for Wednesday, Oct. 7, 2020…
Mortgage Crisis 2.0
A subprime mortgage crisis is boiling beneath the surface of the U.S. economy.
For some context, MarketWatch says: “Wall Street banks were at the center of the last decade’s subprime lending boom in U.S. housing and the 2007-’08 global financial crisis, which resulted in an estimated 10 million borrowers losing their homes to foreclosure and billions of dollars worth of fines paid out by big banks that packaged trillions of dollars of residential loans into private bond deals.”
Drilling down deeper, a subprime mortgage — or a “non-QM” mortgage — is a type of private home loan that’s outside the bounds of the “Qualified Mortgage” benchmark per the Dodd-Frank Act of 2010.
For a quick rule of thumb: “Prime borrowers typically have credit scores of 670 or higher, with those in the subprime category closer to an 580 to 669 range.”
And on Wall Street, where greed is good seems to be the perpetual guiding light, Trump’s relaxation of Dodd-Frank regulations has meant big-bank predatory lending on the rise.
What could go wrong? Oh, right. A global pandemic… and millions of Americans out of work.
The sorta good news? “Overall, private mortgage bond issuance remains only a fraction of the of the overall $11.2 trillion U.S. housing debt market.
“So far this year, some $58.4 billion worth of private residential mortgage bonds have been issued, of which 20% were categorized as Non-QM.”
As for all those U.S. mortgages that have been paused because of the pandemic, Goldman Sachs says: “We expect most of the prime borrowers who have entered into forbearance programs to ultimately reperform, but data justifying this expectation are admittedly so-far fairly limited.”
In other words, we think borrowers with decent credit scores will pay up, but we can’t really support that with any facts.
As for “borrowers with thin credit files, lower credit scores or blemished credit histories” repaying months of paused mortgage payments? That’s a toss up, but we wouldn’t be surprised if the next housing crisis boils over.
Market Rundown for Wednesday, Oct. 7, 2020
S&P 500 futures are up 33 points to 3,388.
Oil’s down 3.25% to $39.35 for a barrel of WTI.
Gold’s lost 1.3% to $1,883.30 per ounce.
Bitcoin is up $27.67 to $10,614.46.
Send your comments and questions to, TheRundownFeedback@SevenFigurePublishing.com.
We’ll have more to say Friday. Stay well.
For the Rundown,