![\"garrettwatts\"](\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2010\/02\/garrettwatts.jpg\" "\\"garrettwatts\\"")
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To Our Clients, Colleagues and Friends,<\/p>\n
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- Another comment from a client on the cost of repurchases:\u00a0 \u201cOne had so much equity that the investor allowed us to indemnify in lieu of repurchase. Unless the housing market falls another 35%, we’ll never pay a penny out on it. The others we settled for about 50-60% of the estimated liquidated losses. It really helps to have an experienced attorney with these issues!\u201d<\/li>\n<\/ul>\n
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- This is an interesting 1939 photo of members of the baseball Hall of Fame.\u00a0 At that time, the Hall had only eleven inductees, ten of whom are in this photo.\u00a0 The reason we like it is that nine of them are wearing ties, Base Ruth, front and center, being the only one who didn\u2019t.\u00a0 Just further proof of what a cool guy he was.\u00a0 Did you notice that Ruth and Eddie Collins sitting next to him are both wearing two-tone shoes?
\n![\"j2\"](\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2010\/02\/j2_thumb.jpg\" "\\"j2\\"")
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\nWith the exception of the Babe, don\u2019t they all look like bankers?\u00a0 Also interesting is that the one missing person was Ty Cobb, and it fits with his anti-social personality. Actually, many baseball historians think he was more than misanthropic, that he was mentally deranged and a true psychotic.<\/li>\n- The people in the back row above, left to right: Honus Wagner. Grover Cleveland Alexander, Tris Speaker, Nap Lajoie, George Sisler and the great Walter Johnson. The front row is Eddie Collins, Babe Ruth, Connie Mack, and Cy Young.<\/li>\n
- Why do people seem to read this trashy little newsletter?\u00a0 We just finished re-reading a random sample of 30 e-mails we\u2019ve received about this newsletter over the past two years.\u00a0 Four were related to something we wrote about the industry, and 26 were about such weighty matters as Michael Jackson\u2019s dance moves, Pamela Anderson\u2019s age, and why Spam and Twinkies are such good food items.\u00a0 If we never mentioned banking or mortgage banking ever again, would anyone notice?\u00a0 And if we dropped the human interest stuff, would anyone even read it?\u00a0 Two sobering questions.<\/li>\n
- Here\u2019s another comment on how much you lose when buying back loans: \u201cI have settled mine for an average of 60 cents on the dollar, and usually no cash, just a volume clip over 12 months.\u201d<\/li>\n<\/ul>\n
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- How big is New York City ? Its $59 billion annual budget is bigger than all but 36 countries. Its 260,000 municipal workers would make it one of the 50 largest employers in the world. Its police force of 37,000 uniformed officers is larger than the FBI.<\/li>\n<\/ul>\n
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- We were reading an analyst\u2019s report on banks of the Pacific Northwest .\u00a0 Banks they cover there are trading at 44% of tangible book value.\u00a0 If you invest in a basket of community bank stocks and can wait 2-3 years, a few will have been shut down, but many will be 10-baggers.<\/li>\n<\/ul>\n
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- Guess what we just saw at the grocery store? Budweiser in a can pre-mixed with Clamato juice. Mixing beer with tomato juice sounds bad enough, but clam<\/em>-flavored tomato juice????\u00a0 Does that sound disgusting, or what?\u00a0<\/em><\/li>\n<\/ul>\n
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- We wrote last week about how irritating the French can be, and we got this from Pete Davis : \u201cWhen Dean Rusk, Kennedy’s Secretary of State, was in France and Charles DeGaulle told him that he wanted “All US Troop off French soil, immediately” Rusk responded “Does that include the ones that are buried here?\u201d\u00a0 You wonder if he came up with that on the spot or had been holding it in reserve for years and just waiting for the perfect moment.
\n<\/em><\/em><\/em><\/em><\/li>\n- The Pete Davis who sent this item about France is sort of a legend in California .\u00a0 He took over a floundering Bank of Commerce in San Diego , grew it, and sold it for just shy of 5.0 times book!\u00a0 That was around 1998 or 1999 if we remember correctly.<\/li>\n
- We accidentally listed Rafael Palmeiro as a home run hitter who didn\u2019t<\/em> take steroids.\u00a0 What were we possibly thinking? A few dozen of you wrote to us about this. One of these days when we\u2019re really huge, we\u2019ll hire a fact checker.<\/li>\n
- Weren\u2019t The Who<\/em> pretty pathetic at the Super Bowl?\u00a0 When we saw them at 19 at an upstairs joint at Geary & Fillmore in San Francisco , the energy on stage had a few hundred people jumping up and down.\u00a0 But 40+ years later, it\u2019s, like, embarrassing.\u00a0 Guys, what are you talking about, teenage wasteland?\u00a0 You\u2019re in your late sixties.\u00a0\u00a0 By the way, they ended their show that night by smashing their guitars and drums to pieces. And any members of the Grammar Police: Is it \u201cWeren\u2019t<\/span> The Who<\/em> pathetic?\u201d or is it \u201cWasn\u2019t<\/span> The Who <\/em>pathetic?\u201d\u2019<\/li>\n
- One of the more interesting questions having to do with troubled banks is why they did so many construction loans.\u00a0 One answer is that they had yields quite a bit higher than many other loans. But if you assume the construction loan balance is essentially zero on day one and not fully funded till day 365, that means that the loan balance outstanding averages around 50% during the year.\u00a0 On a $3.0 million construction loan, doesn\u2019t it then throw off the revenue of a $1.5 million loan? And doesn\u2019t the smaller outstanding balance offset much or the entire higher yield?\u00a0
\nTake your choice, a $3 million construction loan yielding 6.0% or a $3 million C&I loan yielding only 4.0%?\u00a0 All else being the same, 6% sounds much better than 4%, right?\u00a0 No way, Jose. And no way, Jose Conseco!\u00a0 Assuming an average balance on the construction loan during the year of $1.5 million, that loan throws off (at interest only) $90,000 during the year, but the loan at only 4% but which is fully disbursed on day one would throw off $120,000!\u00a0 You\u2019d make an extra $30,000 on the lower yielding loan.<\/li>\n- This writer never got much past being a Weblos, but did you know that Mike McAuley was an Eagle Scout?\u00a0 Not only that, but both his brothers also became Eagle Scouts, possibly one of the only families with three such high achievers.
\n![\"j1\"](\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2010\/02\/j1_thumb.jpg\" "\\"j1\\"")
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- We take it quite seriously when we see people who were Eagle Scouts. When going through resumes to hire someone, we\u2019ll put a resume at the top of the A-pile if it shows that the person was an Eagle Scout.\u00a0<\/li>\n
- We just finished re-reading The Ugly American<\/em>, Eugene Burdick\u2019s 1958 fictional book about American foreign policy. This book pre-saged the Peace Corp and applies just as much today to our relationships with the Muslim world as it did about our dealings with Asian nations fifty years ago. Burdick was a Cal Professor of Politic Science who also wrote Fail Safe<\/em>, the ultimate Cold War thriller.\u00a0 Burdick died at a young age on his Berkeley tennis court, and to this day conspiracy minded lefties believe the CIA knocked him off for knowing too much.<\/li>\n
- Have you noticed fourth quarter earnings releases show that about half the banks are reporting profits?\u00a0 You can\u2019t have a healthy economy without healthy banks, so this is a very positive sign.<\/li>\n<\/ul>\n
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- This Saturday is the 65th<\/sup> anniversary of the bombing of Dresden , Germany . In the evening of February 13, 1945, the British Royal Air Face Force sent 796 bombers<\/span> that dropped 2,600 tons<\/span> of incendiary bombs, starting a firestorm that burned 13 square miles of the Dresden \u2019s urban center.\u00a0 A second wave of bombers later that night dropped bombs eastward and south of the city, and the next day, 431 Americans B-17\u2019s released 700 tons of bombs over residential areas as well as rail yards. An estimated 25-40,000 people died within 24 hours.\u00a0 A massive attack one a population center was a rational move to hasten the end of the war, but it was still immoral. Generals should stick to bombing military targets, not population centers.<\/li>\n<\/ul>\n
The three of us will be, separately, in Sacramento , Seattle , North Carolina , Houston , Dallas , Baltimore and Pennsylvania in the next two weeks. And come see us February 23 where we\u2019ll be the speakers at the Seattle Mortgage Bankers.<\/p>\n
Garrett, Watts & Co.<\/a><\/p>\n
Today\u2019s bonus: TEN KEYS IN TOUGHT TIMES<\/a><\/strong><\/p>\n
\u201cHelping <\/em>lenders increase revenues, control costs, and better manage risk.\u201d<\/em><\/p>\n
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- Mike McAuley\u00a0\u00a0 (MMcAuley@GarrettWatts.com)<\/em><\/li>\n
- Corky Watts\u00a0\u00a0\u00a0\u00a0\u00a0 (CWatts@GarrettWatts.com<\/a>)\u00a0<\/li>\n
- Joe Garrett\u00a0\u00a0\u00a0\u00a0\u00a0 (JGarrett@GarrettWatts.com)<\/li>\n<\/ul>\n
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<\/p>\n","protected":false},"excerpt":{"rendered":"
\u00a0 \u00a0 To Our Clients, Colleagues and Friends, Another comment from a client on the cost of repurchases:\u00a0 \u201cOne had so much equity that the investor allowed us to indemnify in lieu of repurchase. Unless the housing market falls another 35%, we’ll never pay a penny out on it. The others we settled for about […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-301351","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/301351","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=301351"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/301351\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=301351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=301351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=301351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- Corky Watts\u00a0\u00a0\u00a0\u00a0\u00a0 (CWatts@GarrettWatts.com<\/a>)\u00a0<\/li>\n
- Mike McAuley\u00a0\u00a0 (MMcAuley@GarrettWatts.com)<\/em><\/li>\n
- Have you noticed fourth quarter earnings releases show that about half the banks are reporting profits?\u00a0 You can\u2019t have a healthy economy without healthy banks, so this is a very positive sign.<\/li>\n<\/ul>\n
- We wrote last week about how irritating the French can be, and we got this from Pete Davis : \u201cWhen Dean Rusk, Kennedy’s Secretary of State, was in France and Charles DeGaulle told him that he wanted “All US Troop off French soil, immediately” Rusk responded “Does that include the ones that are buried here?\u201d\u00a0 You wonder if he came up with that on the spot or had been holding it in reserve for years and just waiting for the perfect moment.
- Guess what we just saw at the grocery store? Budweiser in a can pre-mixed with Clamato juice. Mixing beer with tomato juice sounds bad enough, but clam<\/em>-flavored tomato juice????\u00a0 Does that sound disgusting, or what?\u00a0<\/em><\/li>\n<\/ul>\n
- We were reading an analyst\u2019s report on banks of the Pacific Northwest .\u00a0 Banks they cover there are trading at 44% of tangible book value.\u00a0 If you invest in a basket of community bank stocks and can wait 2-3 years, a few will have been shut down, but many will be 10-baggers.<\/li>\n<\/ul>\n
- This is an interesting 1939 photo of members of the baseball Hall of Fame.\u00a0 At that time, the Hall had only eleven inductees, ten of whom are in this photo.\u00a0 The reason we like it is that nine of them are wearing ties, Base Ruth, front and center, being the only one who didn\u2019t.\u00a0 Just further proof of what a cool guy he was.\u00a0 Did you notice that Ruth and Eddie Collins sitting next to him are both wearing two-tone shoes?