The Best Years of Your Life… Now!

The 700 billion dollar financial bail out bill was voted down by Congress on monday.  The stock market lost 777 points wiping out 1.2 trillion dollars.

Then the price of oil dropped 10 dollars a barrel — the dollar rose 5 percent against the pound — the price of crops, metals and other commodities have begun to fall.

WAIT A MINUTE — I’M CONFUSED!

Some of those things don’t sound so bad —  like the dollar going up in value and the price of oil falling… The stock market plunging may not be good some investors but so far — the world hasn’t come to a screeching halt either.  Maybe we’re seeing the artificially high stock prices going through a little bit of a correction.

Wasn’t it just a few days ago we were told we had to immediately throw 700 billion dollars at the financial system or we were going to have a global meltdown?

Well, it didn’t happen — where’s the meltdown?

Maybe the house of cards has to correct itself without government interference.  At least that’s what the majority of the voters feel and they let their Congress men and women know about it.  Maybe it’s just some fat that has to melt.

So the question is — how much can you believe?

Who knows,  maybe in the next couple of days the world is going to go to hell and everything I’ve written here will be an exercise in futility.

I don’t know about you but I think the government isn’t  telling us everything.  One way or another, it’s going to be a very interesting October.  Frankly it was good to see the Congress back away from walking in lock step with the Administration and the leadership of both parties — and paying attention to the voters.

Maybe a little correction and a few losses will allow the financial system to find it’s own level.  Only time will tell.

But just in case:  Stock up on non perishable food and drinking water. 

Oh, and if you happen to be in town stop by your bank and withdraw some “emergency cash”.

Then call your Congressman or Congresswoman and let him or her know how you feel about this financial crisis.

You know, just in case — they’re actually listening.

-Bob Baran

The real  axis of evil is not a highly complex and surprising house of financial cards — when you realize the current financial crisis is a symptom of one ultimate cause —  personal greed.

I was going to focus on short selling and naked short selling in this blog.  As this crisis continues to unwind it’s becoming apparent that the greater cause of the problem we find our economy faced with falls on individual morality shrouded in corporate culture.

I had no idea how extreme the leveraging of financial instruments has become.

Did you know, that as of this writing, purchasing all of the “bad” mortgages would cost a little over 100 billion dollars.  So why is the “initial” cost of the proposed bail-out 700 billion?

It’s because of the financial products which were created using those bad mortgages as the basis of the leverage.  Remember I said — in my last blog — that the actual value of the collateral used to create new financial products/investments may represent only 1/12 or less of the value of the “financial products”.  One dollar of real collateral is inflated 1100 percent and then resold as a derivative financial product. 

So a few bad mortgages — losing value because of falling house prices and loan defaults — which probably represent less than five percent of all mortgages  – has turned the financial world upside down.

You can’t build a foundation if one out of every twelve bricks is made out of concrete while the other 11 are made out of paper — and if the one solid brick cracks?  Cracking of the collateral is what has happened.

Where does personal greed come in?

Because there is no regulation over the levels of leverage that have taken place,  does it make it right to still engage in the leveraging?  This is an important question.

Just because something isn’t against the law — but has the potential of creating substantial profit regardless of problems it may create later — should you engage in that activity?

Unfortunately, unregulated short-term greed without personal moral accountability and consideration for the long-term consequences of those actions — has resulted in the problem we are now facing.  

There was a time in our country when people would not engage in activities because it was considered not to be in the best interest of the country.  It had nothing to do with that activity being lawful or unlawful — it just wasn’t done.

Somewhere in time, we lost a sense of morality and personal accountability.  Taking advantage of any situation which created profit became an acceptable way of doing business.  If a regulation was lifted or none existed — any activity that created profit was fair game.

This is the real cause of the financial crisis — the axis of evil which absolves personal responsibility in the pursuit of profit. Doing the wrong thing because there is no law telling you not too.

Just because it’s not illegal to do something doesn’t mean it’s okay to do it.

What happened to individual honor? — and the respect we as a society used to pay to those who had power and chose to do the right thing?

Have those generations passed on? 

What would they think about their children and grandchildren?

-Bob Baran

Mark my words and the date of this post. 

Nobody has any idea what the full extent of the financial crisis really is. 

It’s not a cut and dry situation where a person takes out a loan and then defaults on the loan.  If it was that easy to understand there wouldn’t be any financial crisis.

It’s the unknown nature of the “fantasy financial products” —  that have been sold around the world —  which is causing the problems.  Because the underpinning — the collateral - those “real” things that are supposed to maintain value over time –  which were used to justify the value of those derivative financial products has dissolved.

In a nutshell here’s what I believe caused the financial crisis we’re now facing:

An enormous number of “sub-prime” mortgages were sold.  That is, people who could not afford a mortgage or would not have been considered credit worthy — in much saner times — were given mortgages.  Many were “sold” on an initial lower mortgage payment which was affordable.  That payment — part of an adjustable loan — was only for a relatively short period of time — 3 to 5 years.  Then the loan adjusts itself upwards.

Suddenly after a few years of affordable house payments people are faced with substantial increases.  So much so that their household income cannot cover the increase.

Long before this happened the mortgage loan was already sold as a financial product using the appraised / market value of the house as collateral.  Since housing had continuously increased in value — the house was worth more than the money owed on the mortgage.

Now comes the financial institutions and their “fantasy derivative financial products”

The financial institutions began purchasing and  bundling these loans using the appraised value of the houses as “collateral” and the expected increasing loan payments as the revenue. 

Now here’s where things get out of control:  The “financial products” sold as investments valued themselves as being worth 12 to 30+ times the value of the collateral! — are you with me?  In other words, only a portion — 1/12 to 1/30 of the value of the  investment products are  based upon the actual value of the houses with sub-prime mortgages.

Using a smaller foundation of  “hard assets” in order to create new “value” is called leverage. 

Banks loan out 10 to 12 times the amount of their actual cash deposits and have been doing so for years.  As long as people paid their loans — with the anticipated defaults on loans figured in — this system has enabled our economy to grow and prosper.

But here’s where the system got off track:

The sub-prime mortgage backed “derivative” investment products were sold all over the world. Mutual funds, hedge funds, union retirement funds, even local governments, here and abroad, purchased these investments — because they were told they were sound! 

They relied upon trusted “rating services” who rated these products as fairly risk free… 

Looking for the best return on investment, these entities purchased these “derivative” financial investment products.  It’s important to remember that they weren’t investing directly into the sub-prime mortgages — it was a “derivative” or product leveraged against the “value” of those mortgages.

Here’s what brought the house of cards down:

The people who should never have been given a mortgage in the first place stopped paying their loans.  In a surprising number of cases, they just walked away from their houses — to a degree that had never before happened!

This caused the loans to go into “default”. 

So many of these loans started going into default that there was a sudden and substantial number of houses placed on the market by the mortgage companies.  This glut of houses started driving down the market price of all houses.  The worst depreciation — not surprisingly taking place in the geographic areas where the largest number of these sub-prime mortgages where being sold.

Now, the hard-assests used to leverage the derivative financial products being sold all over the world starts to fall in value — and the loan payments —  which created the profit that allows the return on investment promised by the “investment products” — are no longer being made.

The “investment banks” which purchased the sub-prime mortgages and then resold them as derivative financial products all over the world — suddenly had the foundation which supported the “perceived” value of their ” derivative financial products” collapse.   

The really frightening part is no-one knows how many levels of new “derivative” financial products were created and sold — This is why nobody can predict how bad the financial crisis really is…

When all is said and done, our financial system is based upon the faith — of the investor –  that investments will be safe. The underpinnings of what makes investors feel safe has dissolved.

In tomorrow’s blog I’ll explain the other “half” of the financial crisis — “short selling” and “naked shorting” — It has nothing to do with sex!

If you see this financial crisis differently, I would love to hear from you — This is the best take I have on it with the information that’s available — But then, even the so-called experts aren’t coming forth with anything more than speculation.

My concern is that too much time will be spent on assigning blame and political posturing in the coming days and weeks.  I believe we are not being told the whole story.  That, I’m afraid will only become apparent after the election…

Intentional Prosperity™ — understanding how the world really works.

Hold onto your wallets!

-Bob Baran

“How can Intentional Prosperity™ help me make my goal of earning $75K a month?”

That was a question I received a couple of weeks ago from someone using our system.  Asking questions is one of the features of the system.  

Based upon the Intentional Prosperity™ philosophy and the information in our online lessons — I wrote back the following answer:

Regarding your goal of $75K a month:

 It all comes down to creating “pathways” (this is covered in the coming lessons)  If you have sufficient pathways in-place —  which are comprised of personal relationships — you have a greater potential for the money making possibilities which are necessary to achieve your goal. When they — the pathways — are already in-place, manifesting your desires becomes easier.  

Until that happens, you have to focus on building new pathways (relationships).  You have to create the infrastructure necessary to support your goal.  You’ve got to have the foundation built before you can put the house up.

So if your goal is the roof of the house ($75K a month) — what point are you — realistically — in the building process? Do you have the pathways in-place that  will support that level of income?

Why is it always easier for someone who has made a million dollars to make the second million? 

Because the methodology and the pathways necessary for the manifestation of the first million have already been created and experienced by that individual. 

This makes it easier for the second million  to manifest. The field has already been cleared, plowed, fertilized and watered and harvested.  Now all you have to do is a “second planting”.

Whereas someone who hasn’t made their first million has to overcome “inertia” by creating the pathways (preparing the soil and building the relationship infrastructure)  necessary for the monetary energy to flow to him or her.

To achieve your goal:  Create the infrastructure (relationship pathways) first — that will support it. Otherwise you may experience a “one-shot” deal.  One great month that never repeats itself.

Warmest Regards,

Bob Baran

I thought this earlier posting was a great attention getter and worth another look. -Bob

You’re perfect!

Your personality, the way you think, your social skills, attitudes, opinions, beliefs, values, intelligence, the way you look, what you eat, how you speak… Are all perfect!

This is why your life is also perfect.

You have no problems, challenges, inner conflicts, self doubt, fear or uncertainty. You have achieved or are in the process of achieving all of your perfect dreams…and of course you’re so happy it’s downright ridiculous!

Every problem or challenge you face on a day to day basis is always being caused by someone or something failing to recognize your perfection. Because of this failure you are forced to “deal” with situations which are never your fault.

How can they be? Your world-view is flawless.

You “see” perfect truth always. Who can blame you when you get frustrated and angry with everyone else’s stupidity!

You routinely dismiss comments like “self involved”, “arrogant” and “narcissistic” as nothing more than the remarks of the jealous who are intimidated by your obvious superiority and leadership… How can you possibly take “them” seriously?

You’re perfect!

(The daily affirmation of the ego)

-Bob Baran