patrick.net

I would rather buy foreign currency in the U.S. Branches of these banks due to convenience but I no longer trust our government, so I am looking for the safest way possible to own foreign currency.

It does seemed like the safest way is to open an account in person, besides, Vancouver is a mighty fine city.

danville woman Says:
Since HSBC and CIBC have Branch offices in the U.S wouldn’t FX be just as capital controlled as with Everbank?

It all comes down to jurisdiction and treaties.

If you open an account in a US branch, it does not matter which bank it is. Also, as far as I know, they will not hold forex for you in a bank account - it has to be in USD. They will be happy to sell you forex, but you have to take it with you.

If you cross over to Canada and open an account at a branch there, normal Canadian laws apply - however, if you are a US citizen, any banking treaty with the US will be enforced. If the US imposes capital controls, I don't know what impact that will have on foreign accounts held by US nationals, especially in a treaty country. You should talk to a Canadian banker or lawyer specifically.

For Suisse accounts in general - under _current_ treaties - US citizens get a lousy deal. They make you sign an affidavit declaring that you have no IRS liabilities, and have complied with tax laws on foreign accounts, etc. If you lie on this form, it counts as tax-fraud - which pierces the normal Suisse secrecy laws. In addition, US citizens also are subject to some disclosure and withholding rules if any US securities are traded via that account. However, -under existing treaty terms-, I don't think any US capital or forex controls will be enforceable inside a suisse bank, but since the IRS knows you have the account, the US government will probably turn the screws on you somehow anyway.

For various reasons, even though I am eligible, I have not taken up US citizenship, so I don't have first-hand experience with all the shackles US nationals are under w.r.t. suisse accounts. You may want to consult a large Suisse bank (like BCGE (bcge.ch)) - they are very helpful and deal with a lot of US citizens, so they know all the rules.

OO Says:
HSBC is a UK bank, CIBC is a Canadian bank. US capital control, if there is one, can only apply to banks operating in the US (branches of foreign bank operation and US-based banks), or (very unlikely) to the foreign branches of US-based banks.

However, if push comes to shove, it is unlikely that a bank with business interests in the US will resist pressure from the US Gov.

danville woman Says:
I would rather buy foreign currency in the U.S. Branches of these banks due to convenience but I no longer trust our government, so I am looking for the safest way possible to own foreign currency.

If you buy foreign currency for mattress-stuffing, you can do it here. However, the transaction will leave a paper trail, and who knows what rules will be imposed later. In extremis, the gov. could make possession of forex illegal and force you to exchange it for fiat. Also, you can't have an account at a US bank in foreign currency, according to my BofA rep.

If you are talking about a large enough sum, then I would take the hit and make a trip abroad to open a forex account in a non-US jurisdiction with minimal paper-trail, rather than worry about convenience. You can open the account with as little as $100, and then wire the larger sum later. If you are a US citizen, your options may be limited though, since the US has arm-twisted most countries (including Switzerland) on banking secrecy and confidentiality.

@Danville,

you should concern yourself more with the exchange rate differences than where to exchange. As long as your money eventually leaves US border, you are pretty much home free even with the pre-existing treaties and clauses.

Law is only useful if it is enforceable. If the US has to resort to capital and exchange control, it will have too many things on its plate to deal with than going after people like you. At that point, Canada or Switzerland or whatever country will be more concerned about KEEPING the foreign capital in their border than obeying US to send back the money (unless you are a drug dealer of course).

For example, during the Vietnam War, lots Americans went north of the border to escape the draft, technically the US could ask Canada to send these "traitors" back, but in practice this was unenforceable.

Traditionally, the US has been able to secure international cooperation because of two things. One, we had the moral high ground in WWII, and Cold war against Russia and Gulf War I. Well, Bush the idiot pretty much blew off all the goodwill the Americans won over several generations. Two, American consumers are the growth engine for the world economy, so you'd better not piss of America which may shut you outta its lucrative market. Now our consumers are completely maxed out, this lucrative market is far less attractive to foreigners. Therefore, the US' ability to secure international cooperation on almost any issues will be greatly reduced.

If you are talking about a large enough sum, then I would take the hit and make a trip abroad to open a forex account in a non-US jurisdiction with minimal paper-trail, rather than worry about convenience.

If the account pays interest and you don't report them in US tax return, the IRS can go after you though.

I recently read news reports that Fannie Mae was forgiving a mortgage debt because a 90 year old woman attempted suicide.

Please say this isn't so and the news reports are false.

This is wrong on so many levels.

First, the moral hazard is of the highest variety. How many more people will resort to shooting themselves or family members or other violence as a result of rewarding this behavior?

Secondly, she made poor financial decisions that should not be rewarded. If there was fraud or predatory lending involved, then investigate that. But she should not be gifted the house for no reason other than she tried to off herself.

Thirdly, as a taxpayer and hence a forced investor in Fannie Mae, I believe the company has a responsibility to me to at least try to maximize my return on investment (and not give houses away), and certainly should not reward those that made bad financial decisions, and again I surely don't want my money rewarding criminal violence in and around foreclosed homes!

Are we going to leave this kind of socialist/fascist future to our children?

Which grandmas get free homes? The ones that almost die from gunshots or the ones that almost or do die from stabbing themselves? What if she did die? Would you take the house then, or give it to the estate? What about middleaged people or men? Do they get free homes? How about lesser injuries? It is a slippery slope indeed!

A more rational decision would have been to try to work out loan modification of some sort in accordance with a companywide policy or protocol, to be fair to everyone, to try to keep her in the home and paying what she could. That would be a win-win-win for the lady, for Fannie Mae, and for taxpayers. If this were not feasible, contract law should not be ignored, and the house should be taken to avoid all of the above moral, ethical, and financial hazards I described.

Patrick,
New Zealand does have property bubles - in 2 areas. Near Auckland, where most of the country works and lives. And in the Hawke's Bay region because of the climate and nice wine-growing feel (much niceer than the Marlborough region on the South Island).
New Zealand is faced with claims to repatriate their lands from the indiginous Mauri. New Zealand is a Socialist state - so the taxes are vry high on the weathy. New Zealand is ina recession. With all of this said, it is a wonderful place full of great people. As a programmer I would think you could do well there.
As for you claims about being ripped of Patrick. . .I am not so sure. I think you will eaily find properties in Palo Alto in the coming years. Staying in the BA will just be a matter of securing employment.
The future crushing debt burden of the US will be. . .crushing. I would till council patience as all of this is relative. I can easily see Europe either not spending as much and thus wracking their economies. Or, they spend like we do and we all play the great game of who can claw out faster.
In the near term, cash risch states will do well. I suspect we will see legislation preventing oil-rich nations from buying hard assets in the US. We have France's example all too well in our mind.
So, after we all calm down a bit just remember you can still getwhat you want and that your prudence was exactl the right thing.

Danville,
Inflation is a longggg way off. As we follow Japan down the rabbit hole of the lost decade we will see, probably, just what they saw. Our govt will jam money into the banks which will either sit on it, or send it abroad. As some have mentioned here, we may well provide the best opportunity ever to industrialize the African nations.
I would predict that inflation is at least 2 years away if not more. So, be calm about trying to move money abroad. No nation on the face of this earth has ever faced inflation during property deflation. Ever. And we are still deflating property.
With this said, I think sitting on the sidelines from the market is a decent idea. I cannot imagine a scenario in which the Dow does not fall to 8500, and it will not take much for it to get worse than that. All, of course, with lots of gyrations as the govt pushed for people to invest. Investment tax credits, the new zero reserve bank policy, etc.
Still, there is simply too much money, too much leverage. We have a planet full of liquidity looking to chase yeields that just do not exist. There will be a global GDP cntraction simply because there must be.
Lots of advice out there. This is just my 2 cents.

oops moderation hell because of "socialist"?

oops moderation hell twice now because of "social..T"

I recently read news reports that Fannie Mae was forgiving a mortgage debt because a 90 year old woman attempted suicide.

Please say this isn’t so and the news reports are false.

This is wrong on so many levels.

First, the moral hazard is of the highest variety. How many more people will resort to shooting themselves or family members or other violence as a result of rewarding this behavior?

Secondly, she made poor financial decisions that should not be rewarded. If there was fraud or predatory lending involved, then investigate that. But she should not be gifted the house for no reason other than she tried to off herself.

Thirdly, as a taxpayer and hence a forced investor in Fannie Mae, I believe the company has a responsibility to me to at least try to maximize my return on investment (and not give houses away), and certainly should not reward those that made bad financial decisions, and again I surely don’t want my money rewarding criminal violence in and around foreclosed homes!

Are we going to leave this kind of socialt/fascist future to our children?

Which grandmas get free homes? The ones that almost die from gunshots or the ones that almost or do die from stabbing themselves? What if she did die? Would you take the house then, or give it to the estate? What about middleaged people or men? Do they get free homes? How about lesser injuries? It is a slippery slope indeed!

A more rational decision would have been to try to work out loan modification of some sort in accordance with a companywide policy or protocol, to be fair to everyone, to try to keep her in the home and paying what she could. That would be a win-win-win for the lady, for Fannie Mae, and for taxpayers. If this were not feasible, contract law should not be ignored, and the house should be taken to avoid all of the above moral, ethical, and financial hazards I described.

Explaining the consequences of the Wall Street disintegration, Rockefeller emphasized “I absolutely share your anger and frustration. We should not be in this situation. [But] failure to act will severely hurt West Virginia families and that is a risk I am not willing to take.”

Ironically, a 90-year-old Akron, Ohio, woman’s failed suicide attempt over her home foreclosure was mentioned in a Congressional speech before passage.

Addie Polk attempted to kill herself with a self-inflicted gunshot as deputies knocked at the door at least the 31st time to serve her with an eviction notice. Ms. Polk fell behind on the mortgage on the house she lived in for 38 years apparently due to predatory lending practices. Often, home buyers have adjustable rate mortgage rates and they cannot keep up with the rising interest rates or did not understand that their payments would rise.

“This bill does nothing for the Addie Polks of the world,” states Rep. Dennis Kucinich (D-Ohio) during House debate Friday, Oct. 3.

Polk has been taken to a hospital suffering from a wound to her shoulder. Her condition has been described as “critical” by a member of Akron’s City Council. Late Friday afternoon, a spokesman for Fannie Mae announced that they would “forgive whatever outstanding balance she had on the loan and give her the house.”

90 year old Addie Polk, of Akron, Ohio, Is becoming the symbol of the home mortgage crisis. She attempted to kill herself when the Sheriff came to evict her from her home. A home she has lived in since 1970. Public records indicate the tragedy was more a consequence of predatory lenders then 90 year old Addie’s want to live large on credit with no means to repay.

It began in1997 when she started borrowing on her home to make ends meet, a home that was first paid off in1982…What Addie may have needed was a senior reverse mortgage. For those who haven’t seen Robert Wagner or Jim Garners senior reverse mortgage commercials. It’s a loan that allows the lender to give a homeowner 62 years or older government backed access to all the equity in their home without having to worry about making monthly payments. Depending on individual needs seniors can take a lump sum or receive monthly payments and the loan is paid off only after the senior dies and the estate is settled.

Since Addie has remortgaged her home three times since 97 and the market only kept going up from 97 till her last loan with country wide in 2004, I would have to agree with others in the press who initially suspect Addie may have been the victim of predatory loan agents. But in a happy note Fannie Mae spokesman Brian Faith announced the mortgage association had decided to halt action against Polk and sign the property “outright” to her after her plight was brought up in the United States congress. “We’re going to forgive whatever outstanding balance she had on the loan and give her the house,” Faith said. “Given the circumstances, we think it’s appropriate.”

Residents of Akron have also rallied behind Polk, who is being treated at Akron General Medical Center. She was listed in critical condition Friday afternoon having shot herself twice, according to Akron City Council President Marco Sommerville. And double kudos’s to U.S. Rep. Dennis Kucinich, D-Ohio, who mentioned Polk on the House floor Friday during debate over the rescue proposal.”This bill does nothing for the Addie Polk’s of the world,” Kucinich said after telling her story. “This bill fails to address the fact that millions of homeowners are facing foreclosure, are facing the loss of their home. This bill will take care of Wall Street, and the market may go up for a few days, but democracy is going downhill.”

Want your mortgage forgiven? Shoot yourself

I think it's beyond obvious that this is the wrong way to deal with this tragedy and will inspire copycats and general mayhem. Lots of people will shoot themselves if it means their mortgage balance will be wiped out.

(CNN) -- Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home.

Fannie Mae foreclosed on the Akron, Ohio, home of Addie Polk, 90, after acquiring the mortgage in 2007.

Polk became a symbol of the nation's home mortgage crisis when she was hospitalized after shooting herself at least twice in the upper body Wednesday afternoon.

On Friday, Fannie Mae spokesman Brian Faith said the mortgage association had decided to halt action against Polk and sign the property "outright" to her.

"We're going to forgive whatever outstanding balance she had on the loan and give her the house," Faith said. "Given the circumstances, we think it's appropriate."

My question is if she wanted to kill herself, there are surer ways of doing it. I think she wanted to survive shooting. In other words suicide intent is suspect.

Obama worked as a Lawyer for Acorn, Acorn forced banks to give risky loans to uncreditworthy people with no money down, ie no vested interest. People with no real vested interest buy property increasing the price of real estate creating the housing bubble, and while artifially inflating the value of real estate which also increased your property tax. The republicans fought over and over for more regulation and oversight, but Andrew Mozillo, Countrywide/ Raines & Johnson of Fannie Mae along with their Counterparts and reciepients of the largest campaign contributions who are supposed to work for you the people not Fannie Mae, Barney Frank, Chris Dodd, in fact all the Democratic Memebers of Congress voted against it. So Fannie sells these worthless mortgages to the Stock market and now we have a Crisis. The bad loans that should not have been made are being forclosed on and those foreclosures have now driven down the value of your property. Who wins Jim Johnson/Franklin Raines who made millions from Fannie Mae & The recipients of campaign contribushions , Dodd , Obama, Frank, Angelo Mozilo owner of Countrywide who did his bailout by selling his stock before things really got bad THEY SHOULD ALL BE IN PRISON. Who are the losers, You the American Taxpayer who has to pay for the Bailout that the Dems not only rushed to push through, (Jeez they wanted to help a Lame Duck Republican President) Quickly .We can blame it on Wall Street Greed like any one who buys an investment they bought it in droves because they were led to believe it was sound. And now your Retirement Fund your 401K is not worth S***, So when you open your earnings report and go to vote in Nov. remember who got you into this mess.

I haven't yet seen any MSM stories about the reported (on this blog) 200B Chinese purchase of treasury debt. IS there anything out?

Permarenter,

I agree. The Addie Polk story does not add up. She is already home from the hospital after less than 2 days? She shot herself "in the shoulder" while lying in bed. And she is 90 years old?

It sounds like a very superficial injury, inflicted to get attention and sympathy, quite frankly. That is my initial guess. I'd like to get more details before deciding for certain. I just think it sounds suspect.

In any case, I think that FNM should not have acted so hastily in forgiving the loan. FNM's actions may indeed cause a rash of fake and real shootings.

The problem is not the housing bubble. Which is a natural reaction to low interest rates.
The problem is the reaction to the bubble popping, which is what we are seeing with the gov taking our money and giving it to the bankers.
You either believe in free markets or you do not...

Over on Bigpicture blog: Did JPM Cash Call Bring Down Lehman ?

It is becoming more and more clear that that the non-rescue of Lehman is at the epicenter of the financial crisis, and indeed also the main event that lead up to creating of the 700B bailout fund.

No way shorting of the financial 799+ will be allowed again on Wed at 24:00.

permarenter wrote :

Obama worked as a Lawyer for Acorn, Acorn forced banks to give risky loans to uncreditworthy people with no money down, ie no vested interest.

Do you have any reference to any rule which forces banks to give loans to uncreditworthy people.

Fannie mai/mac were there for many years . Did something suddenly change recently ( 2000 +) that it caused a bubble ?

I am not saying that you are wrong in your assertions but more info would certainly help.

I personally pledge $100 to anyone running against each of the 263 “members” (pun intended) of congress, and the 74 sphincters from the senate.

Well, you can save some money here. These two have outraged thier constituents by voting for the Senate bailout bill, an act that is expected to cost them re-election.

Chambliss, Saxby R-Ga.
McConnell, Mitch R - Ky

I don't know if any Democrats who voted "yes" will be hurt. Ironic though, that the Dems may gain a 60 seat majority in the Senate after Nov, in no small part to Republicans not being re-elected because they voted for the bill.

BBC business editor Robert Peston says the German decision is momentous, and that all other EU countries - including the UK - will almost certainly follow suit.

"We tell all savings account holders that your deposits are safe. The federal government assures it," Ms Merkel said.

"We will not allow the distress of one financial institution to distress the entire system. For that reason, we are working hard to secure Hypo Real Estate."
...
Finance Minister Peer Steinbrueck said he was "appalled" that the problems at Hypo had not been revealed earlier.
...
On Saturday, leaders of the major European economies met in Paris for talks hosted by French President Nicolas Sarkozy.

Britain, Germany, Italy and France all agreed to work together to support financial institutions - but stopped short of agreeing US-style bank bail-out plan.

Just ten days ago, citing Anglo-Saxon greed and poor regulation, German finance minister Peer Steinbrueck said the U.S. was in the process of losing its "superpower status" due to the financial crisis that we Americans caused.

Yep, Europe is following us. Expect that German bank bailout to eventually hit around 100 billion Euros. Look for more bank bailouts to come along in France, Britain, Belgium, and Iceland. Huge bailouts, especially considering the relative sizes of their economies.

Real estate may be local, but if real estate prices correct in the USA they will correct world-wide. Same results - banks fail on non-performing loans, stock values fall, nervous gov does bailout.

Peer Steinbrueck said the U.S. was in the process of losing its “superpower status”

EuroPuds have been making that claim as early as 1965. I suspect we will still be hearing it in 2065.

“We tell all savings account holders that your deposits are safe. The federal government assures it,” Ms Merkel said.

The German version of FDIC (although more private) is only about $35k insured, and then only for 90% of the deposit, and not supported at all banks. This is why Reich Chancellor Merkle had to make that policy.

* Free house may be in Detroit or Akron.

"the U.S. was in the process of losing its “superpower status” due to the financial crisis that we Americans caused."

Pure BS, but many Euros will believe it. Europe was also living it up on the credit bubble--both in real estate and retail spending. It might not be the complete credit clusterf*ck that many American did to themselves, but there are many parallels. The UK shouldn't blame their mess on us either.

The US is losing it superpower status, we cannot maintain such a large military presence in the world any more. Either we send the old folks to gas chambers, or we cut our military expenditure.

Oh, raising the marginal tax rate to 80%? Aren't you aware that over 50% of the tax of this country is being paid by 5% of the population, and this 5% has a rather high international mobility when it comes to choice of abode? The most mobile population in the US are those making the highest income, and don't count on their patriotism to pay tax.

Something has to give.

The loss of US' superpower status doesn't mean that Europe is going to come fill the void, nobody can.

It just means that the world will be again unstable, each region with only regional superpowers, and there will be a new age Cold War. I am ok with cold war as long as it doesn't turn hot. The US got a lot of things done during the Cold War, an enemy keeps you alert and on focus, you don't get your country buy property in droves on negative amortization if you are constantly under the risk of a military attack. You will do something useful for yourself and the human civilization.

Sorry PermaRenter, American's aren't buying the GOP bucket o' BS anymore, go peddle your fables somewhere else.

If you want a good analysis of what really happened in the financial system, which was mostly a failure of regulation, check out this blog:

http://economistsview.typepad.com/economistsview/2008/10/barry-ritholtz.html

Asian market down big, now that the all the "good news" are out, what's left to rally the market?

Incidentally, I check the CIBC (a Cdn bank) website, 3 year GIC over $10000 pays about 4% interests. You can also buy them in a number of foreign currency (just don't pick the USD) :)

I think we may have an emergency rate cut.

>> Sorry PermaRenter, American’s aren’t buying the GOP bucket

Majority of DEMs voted for bailout -- how can I vote for DEM in November?

Yep, Europe is following us. Expect that German bank bailout to eventually hit around 100 billion Euros.

It's worldwide -- 24 hour party people!

I have never been so disgusted.

PermaRenter,

vote for Fiorina instead, she will make sure that you get outsourced as well.

But at this stage, I think it doesn't matter. I will probably outsource myself voluntarily. Seriously, if you are worried about illegal or legal immigrants threatening your job prospect, you probably are not that up the ladder anyway and you are stuck here in the US no matter what.

One should always aspire to be a global citizen to migrate to whichever country that serves his best interest at the moment. Therefore I am all for immigration in all countries so that I can pick and choose which one to go to. In fact, most immigrants bring money and skill the host countries lack at a fairly low cost. I am not the type that wants to shut the door once I am in, because where I am right now may be rotten in a few years and I don't want the other countries to shut the door on me, even if I bring enough to the table.

TOB,

news for you, the American elites are precisely this attitude. You don't think the American elites will stick around to bear the consequences do you?

Just heard that Vanguard is being cagey about how they insure their mutual funds - apparently they are insured "privately"

Anyone know if their Treasury Money Market Funds are totally safe and if buying Treasuries through their brokerage is totally safe.

Maybe I should be buying treasuries directly from the government.

TOB,

see what the elites are getting away with? More money and even more power. See, what the working class Americans hate or not hate doesn't make any difference, and I doubt if they care either way. They are busy watching American Idol.

Only the people who aspire to become American Elite but failed will understand what a raw deal they ended up with, and get pissed.