One of the nice features about getting the Verizon edition of the new iPad is that you get the Personal Hotspot feature free with any data plan. Not familiar with the concept of a Personal Hotspot? It’s the way to use your iPad as a mobile Wi-Fi hotspot, sharing your 3G or 4G connection with up to 5 other people. After I had my Verizon data plan set up, I found it perplexing that the Personal Hotspot button in Settings wasn’t visible. There’s a simple trick to try that will make the button appear if it doesn’t show up automatically in Settings.

Normally, once you sign up for a Verizon data plan the Personal Hotspot button appears in the Settings sidebar as you see in the image at the top of this post. For me, it still hadn’t shown up after 36 hours of waiting. The trick to making it magically appear was to go into Settings, tap General, and then tap Network. At the top of this panel is the Personal Hotspot button, which can be toggled on with a tap. Strangely enough, just opening the Network panel also made the Personal Hotspot button in the Settings sidebar visible.

Now, to turn on the Personal Hotspot, tap the button and a Personal Hotspot settings panel appears. Before you do anything else, you may wish to change the Wi-Fi password that is provided by default to something that’s more memorable. To do so, tap on Wi-Fi Password (see screenshot below) and enter your new password, then tap Done.

When you’re ready to share your Wi-Fi connection, tap the On button to toggle the Personal Hotspot on. You can also connect to the Personal Hotspot through Bluetooth or a USB cable.

For me, having Personal Hotspot as part of my Verizon data plan is going to save me money. Right now, it’s an add-on on my AT&T iPhone data plan — I’ll be able to cancel that add-on and save a few bucks.

Using Verizon Personal Hotspot on your new iPad: the basic setup originally appeared on TUAW – The Unofficial Apple Weblog on Sun, 18 Mar 2012 16:45:00 EST. Please see our terms for use of feeds.

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There are lots of reviews of the new iPad. Lots and lots. My review? In deeply abbreviated form, here it is:

The screen is amazing. You must see it before you make up your mind. It’s pretty much every superlative people have thrown at it, aside from the glare and brightness all of these suffer from in direct sunlight. Everything else is nearly the same as the iPad 2, save slightly more weight and thickness, but if you’re going from an iPad 1 to the new one (as I did), you won’t be bothered a bit — you’re still saving weight and thickness over the first-gen.

Charging takes forever; it’s a big mother of a battery in there, capacity-wise. 4G is flipping awesome, I watch my bandwidth like I used to count my minutes on AOL. The graphics are insane in terms of fluidity; Infinity Blade 2 wasn’t as detailed as a PS3, but the polygons and texturing in such a small device are getting close fast. Battery life is great in my limited usage so far. Fingerprint magnet, as always.

I don’t care for the more recessed power button versus the topmost button on the iPad 1. The camera is just like my 4S: gorgeous stills and video, and that makes photo and video apps fun to use, unlike my 4S. FaceTime on this screen is really some Jetsons-age business (but that’s not new). Everything is zippy, and I feel like using gestures more often. I’m guessing the additional RAM is why apps aren’t crashing left and right.

If you have a first generation iPad, update. If you have an iPad 2, you’re probably fine unless you feel you need the better screen or 4G. I chose the Verizon 32 GB model because I wanted plenty of room for apps and I wanted to use it as a hotspot. Still the best tablet available at any price. Five stars.

Rather than add another thousand words to the review pile, let’s spend some time looking at why the iPad matters and where Apple may be going with it. I suggest Apple is working towards the invisible computer, towards a seamless integration of technology and humanity, and the iPad is one of the last abstractions of technology between man and computer. Think of it as a battery-powered window to the future…

The Magic of Faking Reality

The haptic screen rumor that hit the wires just before the new iPad was unveiled was just the sort of crazy tidbit that kicks things up to the next level in the preamble to any major Apple announcement. But it made sense because it’s an evolutionary step towards the goal of “invisible” computers — or, computers which aren’t called computers at all.

Why did we want to believe the haptic rumor? When I look back, it seems ridiculously gimmicky — for now. But a lot of crazy things are bandied about before an iPad announcement. The one we all knew had to be true was the Retina display screen, and it not only makes a big difference, it does an incredible job (as Apple nearly always does) of transitioning us from the less-than-real to the I-can’t-believe-it’s-not-real. That’s why the first iPad was called “magical” and that’s why this iPad is just called iPad, while Tim Cook said Apple is revolutionizing the category it created. It’s also why the transition to Retina on the iPad works so well. And again, the iPad is just one slab of metal and glass between us and pervasive technology.

Something that has surprised me is how good even very old apps look on the new iPad. Apple has made some stunning technology transitions. From classic Mac OS to OS X, from PowerPC to Intel chips, from beige boxes to leading the way in design — so it’s no real surprise that the transition from one resolution to another would be handled well. iOS developers also have the example of the iPhone 4′s Retina transition to work from. But I was struck by the display, and I think it speaks to the future where Apple will continue to work towards duplicating reality as much as possible.

Speaking of reality, as I said before, sometimes Apple uses familiar design cues, and sometimes it reinvents them. Take the “no home button” weirdness that swirled around Apple’s invitation. Add to this the Apple TV iteration and people wound up declaring a voice-enabled iPad HDTV Apple Docking Coffee Table was on the way.

Here’s my point: Apple called the new iPad just “iPad” for a reason: it is everything, and it is nothing. If you were nonplussed by the design, or even “let down” that it was slightly heavier or thicker, you were missing the point. You really missed the point if you think the Retina display was a disappointment. Apple will sell a ton of these for the same reason samurai warriors went to a very few guys for their swords — because they did it exactly right. The iPad continues a relentless pursuit towards the creation of the perfect tablet, the tabula rasa, or even the Young Lady’s Illustrated Primer. Either way, in the end the technology disappears. The iPad is the invisible computer, or at least a step on the way.

Apple likes to use skeuomorphic, “realistically rendered” design for apps like GarageBand and your contacts, notes and calendar. Not everyone enjoys this look (some really hate it) because the apps are, like Siri, merely an abstracted simulation of reality — and a leaky abstraction at that. Where the apps abandon real world models (iMovie or iPhoto as examples) they help make complex tasks simple by making interfaces work for the user.

Haptics will happen on Apple devices, but only when the technology creates a seamless experience, from buttons to sliders to knobs or feathers. I wrote this entire analysis/slash review on the new iPad, but I’m reminded of the old 40-column text word processor I used on my Apple II. You knew that was a computer. Despite using a Bluetooth keyboard, this new iPad feels so much less like a “computer” and more like a “word machine” or even just a quiet, brilliant typewriter.

Does the Retina Display help? Yes it does, quite a bit. On the iPad 1, I could still see pixels, which reminded me of that old phosphorescent monitor. The new iPad merely presents the letters. I’m using Byword to write, so all I see are words and a word count. It’s lovely. It no longer feels appropriate to compare this to a “computer,” it’s more like an appliance — which was the point all along.

A Computer for the Rest of Us

There’s a spot in Walter Isaacson’s biography of Steve Jobs where, just before the Macintosh launched, Steve pulls out a prototype of a laptop using a folio, and shows it to the Mac team. “This is the computer we’ll be making some day,” he tells them. Of course the MacBook Air is basically what that turned out to be, but if you look at someone using a small folio case with keyboard and an iPad… That sure seems aligned with Steve’s vision.

More than that, the iPad’s interface, “pictures under glass” that it may be, is such a powerful illusion that the original was called “magical” but I would say the new iPad is truly magical. Interfaces look real. We wanted to believe in haptics because it makes sense to take the illusion further. As an aspiring magician myself, the struggle is to perfect an illusion in a way that what you are saying you are doing is exactly what you appear to be doing (even if it isn’t).

In the case of an iPad, turning a knob in GarageBand is a somewhat less than satisfactory experience versus doing the same thing in real life. There’s no click, no force feedback in your fingers, etc. Simulating this on as elegant a machine as an iPad, as of today, would be clunky. So I’m glad they didn’t go gimmicky. But the tech will advance, and we’ll keep seeing ever more magical things.

These advances will be iterations, logical and relentless and wonderful. That’s the type of company and culture that exists at Apple, despite the issues people write about (us included). If people talk about the spark being gone from Apple, I would suggest that while it may have lost its greatest showman, his genius lives on in the form of the ethos and passion behind every Apple product. The climbing stock price and sales numbers are good evidence of this.

You Say You Want a Resolution

I sort of chuckle when Tim Cook says that the iPhone and iPad’s success has startled them. That’s true, of course, because the transformation of consumer electronics has been sweeping. Going to CES for just a couple of years has shown me how rapidly the uptake in “pictures under glass” has become. I mean, before the iPhone, look at what Engadget was excited about at CES back in 2005! So yes, the adoption rate of touchscreen devices by consumers has been shocking. How fortuitous that Apple dropped “computer” from the company name before the iPad!

Let’s revisit the Pepper Pad from that dark CES many years ago. Can you imagine normal people using that as we use iPads? Of course not. It reeks of computer. It declares, “I am for people who may be inclined to read manuals, and I require a learning curve and many settings.”

Now, there’s something to be said for not catering to the lowest common denominator if you want to make beautiful things. I have been guilty of thinking some people are just too dumb to be allowed to use an iPhone, for example. But when Apple dropped “computer” from its title, it was prescient for so many reasons. The company has allowed itself to become transformed by a revolution we all knew was coming; the integration of technology into our society, not as a compartmentalized, specialized job track or skill set, but a pervasive use of technology to augment our minds and bodies to do amazing things. The iPad, remember, is made to disappear.

Some might say that our better and better machines are like the wings of Icarus, but I like Steve’s description of “bicycles for the mind.” And once you step out of the “computer” paradigm, anything is possible. We’re starting the post-PC era not just because we have new ways of synchronizing, hosting or sharing our data. We’re starting the post-PC era because “personal computers” no longer necessarily need to be traditional “computers” — they merely need to be personal.

Cloud aside: On my new iPad I’m experimenting with a hybrid cloud approach. I don’t yet use iTunes Match (hundreds of mashups won’t match anything), so I’m only using my 13″ MacBook Air for iTunes music sync. Everything else is via iCloud or WiFi sync (apps, mostly). The biggest pain point thus far has just been waiting to download apps on my miserable Internet connection at home (my ISP is AT&T). I am careful not to download dozens of large apps on Verizon’s 4G because it’ll blow through that data cap in a hurry. So far it’s worked well, however, as I avoid many of the weird and annoying iTunes sync issues I have had with numerous other iDevices going all the way back to my monochrome iPods.


The iPad, especially the new iPad, with a screen that will make you believe anything is real within its borders, is Apple’s next step towards the future, where devices merely work to assist us, and specialized knowledge is only needed in the field where one works. In other words, the tools get out of the way.

We’ve seen patents for haptics, 3D, advanced image and motion sensing and lots of other great ideas. I think what we can expect going forward is a refining of the tools we use, and a natural evolution of the product lines. The Apple TV of the future, for example, will be revolutionary, perhaps, but not so much in raw technology as in implementation. The new iPad is not revolutionary so much in raw technology (the screen, made by Apple’s phone rival Samsung, will soon be incorporated by others) as it is in implementation. From old apps holding up well to new apps looking incredible, Apple has moved the game further down the road without being beholden to the past or leaving its customers too far behind. Eventually the screen won’t be the point because the screen will be everywhere.

Apple doesn’t have to build a car or a refrigerator. Manufacturers already have incentives to make their devices compatible, and they have. What I look forward to is a deepening of the ecosystem, perhaps even widening it a bit, and a continuing investment in materials science, software and hardware engineering, and more. Apple’s influence goes beyond its own ecosystem, clearly impacting the consumer electronics industry, education, research, design, manufacturing and more. Look for more of that in the future as well.

The iPad represents the future direction of technology, I believe, more so than any other Apple product available. It is the high-tech made simple, potent and distilled into a simple slab of metal and glass, designed to become the tool you need when you need it. If you’re wondering what Apple will do next, just look at what it continues to do each year and add a little magic once in a while when it knocks our socks off with a real revolution.

The iPad may someday give way to wrist-based holographic “eyePads” or add scratch-and-sniff capabilities, but the philosophy behind it will remain. It’s that philosophy that will continue to shape our lives by integrating so seamlessly with them.

This is not our review of the new iPad originally appeared on TUAW – The Unofficial Apple Weblog on Sun, 18 Mar 2012 15:30:00 EST. Please see our terms for use of feeds.

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And you thought Post-Its were only good for sticking to surfaces…

Post It Structures by Yo Shimada

Yo Shimada of Tato Architects thought, why not stick Post-Its to each other to create structures? Shimada recently made this giant installation of 30,000 Post-Its in collaboration with students from the Kyoto University of Art and Design. Located at Artzone Gallery in Kyoto, the neon cell-like creation resembles a tiny metropolis. Is it wrong that I want to jump into it and roll around like it’s a pile of leaves?

Post It Structures by Yo Shimada

Post It Structures by Yo Shimada

Post It Structures by Yo Shimada

[via Designboom]

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© 2012 Design Milk | Posted by Jaime in Architecture, Art | Permalink | No comments


2013 Ford Mustang GT CarFull disclosure: Ford flew me to a damp Portland, OR to drive the 2013 Mustang and covered all expenses. While I was there I also ate the greatest donut of my life.

Nearly 50 years ago, the iconic Ford Mustang became the first pony car and started an American tradition. For the Mustang’s 49th birthday, Ford decided to celebrate a little early with a facelift and some work under the skin.

The result? We think the 2013 Mustang is getting ready to leave the pony car ranks to become a full-fledged sports car.

Increased competition from Chevy’s Camaro and Dodge’s Challenger means that there are more pony cars for consumers to choose from than in a long time. Add in powerful imports like the Nissan 370Z and Hyundai Genesis Coupe, and the Mustang needs to do far more than just look good and go straight.

2013 Ford Mustang GT CarAt Ford’s first-drive event in Portland, we had our pick of the Mustang range. While the Boss 302 and GT500 were not on hand, there were a number of different V6 and GT models to drive for the day.

The night before, we compiled a detailed list of features that would make the ideal Mustang tester. Two of them were must haves: It had to be the 5.0 V8 GT and it had to have the six speed manual transmission.

We tackled a number of other journalists and beat them to a beautiful white GT Coupe, complete with the manual transmission, glass roof, and the “California Special” package.

All of these options brought the MSRP up to $42,075.

We drove on roads that ran the gamut from damp to slushy with varying levels of rain and wind for the entire test.

So even though the conditions weren’t close to ideal, how was the 2013 Mustang GT overall?


The 5.0 V8 in the GT gains a whopping eight horsepower over the 2011 model to bring the total to 420. While it isn’t much, it certainly doesn’t make the GT any slower.

In reality, the Mustang is stupid fast. The GT will be breaking the speed limit of nearly every road by the time you get into second gear. This is a car that will help you make a lot of friends with local and state law enforcement.

We also rowed the gears of the silky smooth gearbox as much as possible just to hear that throaty rumble out of the dual exhausts. The clutch felt great, but it engaged a little low in the pedal travel for our taste. The clutch also has a hill-start assist, which holds the brakes for two seconds on an incline. We didn’t need it, but it’s a good feature for inexperienced manual drivers.

The big disc brakes were also awesome. They can make the eyes pop out of your head.

But in a nice twist, the new Mustang really shines when you show it some corners.

The rear of the car is glued on entry which gave us confidence to really attack the twisty stuff. It also has strong initial bite from the front end. Steering is communicative and the rack felt very quick.

We found a tendency towards understeer in the middle of the corner, but we are attributing this to the wet roads and the all-season tires that Ford fitted due to the iffy weather conditions.


The uninitiated will be hard pressed to notice the changes for the 2013 model. But a number of subtle updates are present that do make a difference.

For those who want to compare it to pop culture, think of the changes as a brow lift and not the full-on Michael Jackson.

Lighting is the biggest update. In the front, Ford has followed industry trends and incorporated LED running lights into the standard HID headlamps. LEDs also take over the new rear lights. We think they look aggressive and are a nice touch.

A cool little extra is the under mirror light. At night, it projects an image of a pony onto the ground. It doesn’t help performance at all, but it is a nice little Easter egg.


Inside the car, the 1960s meet the 2010s. The retro gauges and three-spoke steering wheel are offset by LCD screens and electronics galore.

Ford added new Shaker audio systems with huge power. We’re sure some Huey Lewis and The News would sound great, but we preferred to hear that fantastic V8 rumble.

A large 4.2-inch screen between the gauges has normal fare like a trip computer and MPG, but it is highly customizable. It can show oil temperature, cylinder head temperature, and even the air fuel ratio. There is also a suite called “Track Apps” that measures acceleration times, g-forces, and braking distances.

While the apps were cool, we did find them a bit distracting. If we paid enough attention to the apps, the car would be in a ditch right now.

Probably better to only use them on an actual track.

See the rest of the story at Business Insider

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From Louis Peitzman at Gawker, comes the story of two guys who apparently wanted to protest at a Rick Santorum rally. 

They kissed, and one of them took a bow before they were thrown out to cheers from the crowd of ‘USA! USA!’ 

For a second it looks like one of them could just be an unattractive woman in a green Chicago Blackhawks jersey, but it is apparently a wig. 

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rock climber mountain

In his latest Bedtime With BTIG note, Dan Greenhaus passes on a crucial observations:

Needless to say, clients of ours know that the current equity market rally has gone further than we anticipated, trading roughly 5% above levels when we moved to the sidelines to assess incoming data. While we have maintained a generally improving view of near term fundamentals, our reluctance to fully embrace this last 5% pales in comparison to the outright bearish views put forth in many client discussion.

For many, they simply don’t believe as much of this equity rally is based on “faulty” economic data, particularly in relation to one of two things; seasonal distortions skewed by the still lingering credit crisis and, perhaps more immediately, a warm weather which has biased many data points, specifically housing, to the upside.

With the market hitting new post-crisis highs, it feels like there’s exuberance, but then there’s the above, a statement that could have been made almost anytime since the March, 2009 market bottom.

People just don’t believe the whole thing, and so there are plenty more converts yet to come over to the optimist’s camp. The “wall of worry” lives.

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Mitt Romney

It wasn’t even remotely close. 

Puerto Rico doesn’t vote in the general election, or its residents don’t pay taxes to Washington on income they earn on their home island. But the island does award 20 delegates to the Republican convention – just four fewer than Maine. 

And because Mitt Romney won over 50 percent of the vote, he will take all 20 delegates with him to the convention in Tampa later this summer. 

In the past two days Romney looked like he was taking a very-public vacation in Puerto Rico, wearing his shirt collar open in the tropical weather, and occasionally turning up at a big rallies that ended in fireworks. 

Santorum has also campaigned in Puerto Rico, but created controversy when he told residents that if they wanted statehood they would have to speak English – which most already do. 

As we’ve been saying, Romney has basically put this entire nominating contest away. If Santorum wanted to pull ahead of Romney in delegates, it would require an insane run in which Santorum picked up more than 50 percent of all delegates through the end. That will be impossible when the next round of contests run through New York, Connecticut, Washington D.C. and other Romney-friendly territories. 

Read a whole story about the Puerto Rican Caucuses at Politico

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goldman jim o'neill

One of the themes of the latest bull run in stocks has been the lack of volume.

Low volume, as Doug Short describes it, “doesn’t offer strong confirmation.

Bruce Krasting thinks that it means there are people on the sidelines waiting for a reason to sell, and at the first sign of bad news, things could turn ugly quick.

Jim O’Neill, chairman of Goldman Sachs Asset Management isn’t quite as pessimistic.  His thinking is quite the opposite of Krasting’s.  O’Neill believes that low volume reflects investors with cash on the sidelines who are just waiting for a better reason to buy.  This is a sentiment recently shared by BlackRock’s Bob Doll.

And this pent-up buying pressure could be bullish for stocks.

From Jim O’Neill’s latest Viewpoints:

While many bears cite the lack of daily trading volume as a sign that the market lacks real conviction about these positive signs, it can also be argued that this reflects just how many investors have abandoned the equity culture and can still return. Amongst the usual array of interesting snippets, I was attracted to an FT article Tuesday entitled, “Big British funds cut UK stocks ownership”. The piece suggests that these funds own less than 9 pct of their home market. I hear similar things everywhere in the US and Europe. By coincidence, I spoke to a group of UK pension fund Chairs that same morning and goaded them up to get their buying boots on. My confidence in equities was further boosted after a breakfast with a hedge fund pal of mine who told me he had decided that the ERP was so high at the end of last year that he put all of his devoted family savings into equities. He is one of the most thoughtful – and in recent years, successful – hedge fund investors I know.

SEE ALSO: Goldman’s Jim O’Neill Presents His 11 Predictions For 2012 >

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The surprising tale that I will attempt to pen in this blog entry has a very familiar cast of characters; the Obama Administration, the Housing Bubble, “Toxic Mortgages”, and Too Big To Fail “TBTF” Banks among others.  While the headline of TBTF banks in a $25bil mortgage settlement is known to many, the underlying details of the settlement are less known and quite appalling when you pull back the covers.

The wounds on past and present homeowners are still fresh from the housing crisis.  As Jonathan Laing points out in this weekend’s Barron’s cover story, “five million of the country’s 76million mortgage holders have lost their homes to foreclosure or lender ordered short sales since 2006, and an estimated 14million more own more on their homes than their properties are currently worth.  In all, some $7.4 trillion in homeowners’ equity has been destroyed according to Mark Zandi…”  

Cries for Accountability

While blame deserves to be cast upon numerous parties for the housing bubble, Americans have rightly called for accountability on the TBTF banks.  Accountability for what? Among other faults, robo-signing became prevalent among TBTF banks as they forged mortgage documents in order to ensure proper paperwork was done to foreclose on properties. 

 Details of the $25bil Settlement (in the words of HUD) & Public Lauding

“On February 9, the Department of Justice, the U.S. Department of Housing and Urban Development, other federal agencies, and 49 state attorneys general announced the largest federal and state settlement agreement in history with the five major mortgage servicers for their mortgage servicing practices. The agreement has the potential to help nearly two million American homeowners through a variety of means, including loss mitigation tools such as principal reduction and refinancing of loans for borrowers who owe more on their house than it is worth (“underwater” homeowners), payments of billions of dollars to federal and state parties, and payments directly to individuals who lost their homes to foreclosure and meet certain other criteria.” The public seemed to buy right into this news.  After all, $25bil being paid by the bank sounds pretty tough right? Upon news of the $25bil Mortgage settlement many media members gushed over President Obama’s “accountability” of these banks.  President Obama said himself that it was about “standing up for the American people” and “holding those who broke the law accountable.”

What’s the Truth?

Only $5bil of the $25bil is actual cash being paid out by the banks.  The banks earn “credits” for the remaining $20bil by modifying either loans that they own on their own books or securitized private label MBS that they service. Which will they choose to modify?  Alison Frankel described the incentives last week in this article, “Banks receive a $1 credit for every dollar of principal they reduce in a loan they own outright. They earn a 45 cent credit for every dollar written down on a securitized loan. That incentive, in combination with the strictures of the pooling and servicing agreements with investors, was intended to limit the number of securitized mortgages the banks would modify.”  

The major question you should be asking yourself, and the overall premise of this article, is why are non-agency mortgage investors who did no harm being asked to foot the bill for the sins of the TBTF robo-signers?  If you were a bank holding a loan at par, would you rather modify a given loan and take a dollar for dollar capital hit to get a credit towards the $20bil bogey, or modify twice as much of a MBS holders loan that you service (taking no capital hit yourself) and get the same credit?  As former SIGTARP Neil Barofsky tells Bloomberg, ”this would be comical if it wasn’t so tragic”.

Massive 1st Lien vs 2nd Lien Conflict of Interest-  It isn’t even as simple as an “all else equal” decision for banks. Frankel continued to hit the nail on the head “Most securitized mortgages, remember, are first-lien loans. The vast majority of second-lien loans, by contrast, are bank-owned. When banks reduce the principal in a first-lien mortgage, they improve their own prospects as a second-lien holder….The Association of Mortgage Investors highlighted the conflict between first and second lien owners in a statement issued immediately after the settlement documents were released. “The settlement is expected to also draw billions of dollars from those not a party to the settlement (because) it places first and second lien priority in conflict with its original construct,” the AMI press release said. “It is unfair to settle claims against the robosigners with other people’s funds.”  

Curious Responses By HUD, Frustration for Main Street Investors

-On a mid-February conference call, the HUD’s secretary Sean Donovan reportedly promised the MBS bondholders on the call that a maximum of 15% of modified loans by the five banks could be on securitized loans.  Others were under the impression that the final settlement would have this 15% cap in writing.  Needless to say, when the final report was released, there was no sign of any limit.  ”If we’ve missed (documentation of the 15 percent cap), please Secretary Donovan, let us know where it is,” said Vincent Fiorillo, a portfolio manager at DoubleLine Capital and president of the board of the Association of Mortgage Investors.

-Just this past week, and presumably in response to heat they are feeling, the HUD put out a “Myth vs Fact” blog post on the HUD website. A few curious statements are written within the modifications within securitized trusts section including: 

“…principal write down modifications must be NPV positive…”.  If these loans are NPV positive, shouldn’t they have been modified already?

“…Fourth, 2nd liens are written down according to HAMP 2MP. Fifth, 2nd liens greater than 180 days delinquent are extinguished.”  Why is it even a question of whether 1st liens or 2nd liens should be extinguished first?  Further, there are ways for banks to avoid having 180 day delinquent loans in second liens. They can either change the amortization to negative-am or simply advance to make them current.


-The AMI, Association for Mortgage Investors, reportedly reached out to numerous Attorney Generals with no success.  It’s easy to see the frustrations of this organization which represents pension funds, mutual funds common in 401k plans etc…As they write on their website, “AMI supports long-term, effective, sustainable solutions to the housing foreclosure crisis. It is generally supportive of a settlement if it ensures that responsible borrowers are treated fairly throughout the foreclosure process; while at the same time providing clarity as to investor rights and servicer responsibilities. The ultimate settlement should ensure that our clients, who were not involved in the alleged activities and, who likewise were not a participant in any negotiations, do not bear the cost of the settlement. Specifically, mortgage servicers, if at all, should only receive limited, reasonable credit for modifying mortgages held by third parties, which are often pension plans, 401K plans, endowments and “Main Street” mutual funds. To do otherwise, will damage the RMBS markets further and limit the ability of average Americans to obtain credit for homes for generations to come.”  I’d have to take the side of AMI here as it appears that they are willing to work with the AG’s, HUD, and the White House to find the best solution possible.

Detrimental to Resumption of Private-Label Mortgage Finance?

The irony of this whole debacle might be that the AG’s and Obama Administration could be missing “the forest for the trees”.  With private-label mortgage investors potentially bearing the costs of this settlement, could this shake the confidence of a resumption of private label origination?  The GSE’s have been under fire and continuous cries have been heard for the eventual wind down, if not at least a reduction of the reliance upon them  A healthy private MBS market would be essential to any move away from nearly complete reliance on the GSE’s.  Placing the costs of the settlement on the very investors who are an integral part of the private label MBS market is NOT a way to instill confidence.


It’s hard to believe that such decisions are being made on such a hot button issue.  I suppose the general public sees the $25bil stick and assumes the Banks are being appropriately punished.  In reality it is quite the scam.  The Attorney Generals and White House look like they are dropping the hammer on evil Wall Street TBTF banks while simultaneously sticking up for the average American borrower.  The banks pretend they’re paying the price for past sins (with the money of the victims, the investors).

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It’s nothing too dramatic, but markets are drifting higher in early going.

It’s conceivable that the Apple cash announcement is having some modest positive effect on the market.

Here’s a look at S&P futures, via FinViz:


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