Weeeel??

[JOHN THURSTON]

1. news is not all that good at the moment with respect to our defense establishment. It revolves around one major problem M-O-N-E-Y. If one's economy is strong, we could bleed ourselves into a deeper hole by, basically, borrowing money from China, albeit indirectly, or so I am told.

I have no specific figures for you, but I intend to investigate as best I can. China may, or may not have, invested in our "mortgage backed securities". "wha dat?" one may well ask. I was a closing attorney for 17 years, and in other areas of practice prior to that. Local lenders no longer venture into local real estate Loans, be they purchases or refinances. How can this be???? Well, for example, If a local bank relied, at present, on its own deposits (or shares I the case of Credit Unions) they would be out of money in less than 3 months in a given year, generally speaking. Small banks, large banks and mortgage companies all "package" their loans (or someone bigger at the next level up does so) in level risk packages of mortgages. What's that mean, it means they don't put all their dogs in one basket nor all their gems in a silk purse, to be sold in the form of a security sold in turn as a mortgage backed security on the stock exchanges of the world. In the years before my retirement, I was not exactly surprised to note that the middle man pretense is not always a necessity. A Mortgage Company with no or limited ability to fund loans may do so via a strictly limited lines of credit, like bridge loans, documents in this case may cloase in the Storefront lender's name, but signed over to another larger lender by means of a simple document called an "allonge" which is itself an assignment of the documents in the hopefully standard type package. Another way is to have the originating Mortgage Company (or whatever) close the loan in the name of the investor, such as Prudential, Bank of America, or, perhaps a new front runner in the market when I left HSBC lending. HSBC is Hong Kong Shanghai Banking Corporation. No big deal. Barclays Bank was in the business for a time. Some Loan packages therefore stay in the States, and, in effect, some do not.

When some overintelligent and socially conscious lawmaker or group of lawmakers decide that the standards regarding credit should be dropped, then, somehow they get the standards set by FNMA and FRDMAC get lowered. Nice idea, bad practice.

In actual practice the crash of wall street was caused by the inclusion of formerly "B" loans into "A" packages.


Things go along alright for a while, and then these 'tainted packages" begin to show a nagging lack of reliability. No investor is going to keep buying when a large part of their loan portfolio (B loans in A clothing) start going down the tubes.

There were other reasons for the crash (such as derivatives-the definition of which I will mercifully leave you ignorant. One assume that two things start to happen-foreign investors (by which the US has kept itself solvent, so to speak and was, perhaps a way for European economies to help and profit by keeping America looking good and enabling the US to bankroll its Defense budget.) HSBC, Barclay's and other foreign lender stop buying the mortgage backed securities, and. depending on their agreements with any middle man bank, kick the losses back to US Shores. HSBC would, I assume, simply have stopped buying there T-bills.

Not good.

Having said that what are the Chinese up to. Building the Shenyang J-31, a fighter so like the F-35 that except for the color and 2 engine layout, that one might be mistake for the other. Raaather awkward in a dogfight I would think.

In other non related topics, A blimp is to be used to monitor the Airspace over the US capital district for drones, or at least that's what I assume it is.

The "Sea Shadow" Stealth Patrol Vessel (which I though had died in the face of the now too expensive "Littoral Combat ships" (rather large destroyers and alleged to be stealthy) but no, they are building a large version of the CATAMARAN like upsized Sea Shadow.

Since they don't directly cover all this in the verison of the news that the TV of America put out for consumption.

In any event when I get more info on these projects, I will pass them on to you saving you maybe 15 or 20 dollars a month, depending.

We have been off the Martial History for a bit. I would welcome any suggestion, corrections or (at this point) insurrections. I note that in passing, Republican Candidates showed up (in the local races) at the local Rod and Gun Clubs and, in fact, 'got out the vote'. there were not even any Democratic "Placard holders" at my polling place, and I admit I found that a bit odd.

JOHN